>> Hello friends and welcome back to Fabulous Las Vegas, Nevada. We are here at AWS re:Invent in the heat of day three. Very exciting time. My name is Savannah Peterson, joined with John Furrier here on theCUBE. John, what's your, what's your big hot take from the day? Just from today. >> So right now the velocity of content is continuing to flow on theCUBE. Thank you, everyone, for watching. The security conversations. Also, the cost tuning of the cloud kind of vibe is going on. You're hearing that with the looming recession, but if you look at the show it's the bulk of the keynote time spent talking is on data and security together. So Security, Security Lake, Amazon, they continue to talk about security. This next segment's going to be awesome. We have a multi-, eight-time CUBE alumni coming back and great conversation about security. I'm looking forward to this. >> Alumni VIP, I know, it's so great. Actually, both of these guests have been on theCUBE before so please welcome Dan and Haiyan. Thank you both for being here from F5. How's the show going? You're both smiling and we're midway through day three. Good? >> It's so exciting to be here with you all and it's a great show. >> Awesome. Dan, you having a good time too? >> It's wearing me out. I'm having a great time. (laughter) >> It's okay to be honest. It's okay to be honest. It's wearing out our vocal cords for sure up here, but it is definitely a great time. Haiyan, can you tell me a little bit about F5 just in case the audience isn't familiar? >> Sure, so F5 we specialize in application delivery and security. So our mission is to deliver secure and optimize any applications, any APIs, anywhere. >> I can imagine you have a few customers in the house. >> Absolutely. >> Yeah, that's awesome. So in terms of a problem that, well an annoyance that we've all had, bots. We all want the anti-bots. You have a unique solution to this. How are you helping AWS customers with bots? Let's send it to you. >> Well we, we collect client side signals from all devices. We might study how it does floating point math or how it renders emojis. We analyze those signals and we can make a real time determination if the traffic is from a bot or not. And if it's from a bot, we could take mitigating action. And if it's not, we just forward it on to origin. So client side signals are really important. And then the second aspect of bot protection I think is understanding that bot's retool. They become more sophisticated. >> Savannah: They learn. >> They learn. >> They unfortunately learn as well. >> Exactly, yeah. So you have to have a second stage what we call retrospective analysis where you're looking over all the historical transactions, looking for anything that may have been missed by a realtime defense and then updating that stage one that real time defense to deal with the newly discovered threat. >> Let's take a step back for a second. I want to just set the table in the context for the bot conversation. Bots, automation, that's, people know like spam bots but Amazon has seen the bot networks develop. Can you scope the magnitude and the size of the problem of bots? What is the problem? And give a size of what this magnitude of this is. >> Sure, one thing that's important to realize is not all bots are bad. Okay? Some bots are good and you want to identify the automation from those bots and allow listed so you don't interfere with what they're doing. >> I can imagine that's actually tricky. >> It is, it is. Absolutely. Yeah. >> Savannah: Nuanced. >> Yeah, but the bad bots, these are the ones that are attempting credential stuffing attacks, right? They're trying username password pairs against login forms. And because of consumer habits to reuse usernames and passwords, they end up taking over a lot of accounts. But those are the bookends. There are all sorts of types of bots in between those two bookends. Some are just nuisance, like limited time offer bots. You saw some of this in the news recently with Ticketmaster. >> That's a spicy story. >> Yeah, it really is. And it's the bots that is causing that problem. They use automation to buy all these concert tickets or sneakers or you know, any limited time offer project. And then they resell those on the secondary market. And we've done analysis on some of these groups and they're making millions of dollars. It isn't something they're making like 1200 bucks on. >> I know Amazon doesn't like to talk about this but the cloud for its double edged sword that it is for all the greatness of the agility spinning up resources bots have been taking advantage of that same capability to hide, change, morph. You've seen the matrix when the bots attacked the ship. They come out of nowhere. But Amazon actually has seen the bot problem for a long time, has been working on it. Talk about that kind of evolution of how this problem's being solved. What's Amazon doing about, how do you guys help out? >> Yeah, well we have this CloudFront connector that allows all Amazon CloudFront customers to be able to leverage this technology very, very quickly. So what historically was available only to like, you know the Fortune 500 at most of the global 2000 is now available to all AWS customers who are using CloudFront just by really you can explain how do they turn it on in CloudFront? >> Yeah. So I mean CloudFront technologies like that is so essential to delivering the digital experience. So what we do is we do a integration natively. And so if your CloudFront customers and you can just use our bot defense solution by turning on, you know, that traffic. So go through our API inspection, go through our bot inspection and you can benefit from all the other efficiencies that we acquired through serving the highest and the top institutions in the world. >> So just to get this clarification, this is a super important point. You said it's native to the service. I don't have to bolt it on? Is it part of the customer experience? >> Yeah, we basically built the integration. So if you're already a CloudFront customer and you have the ability to turn on our bot solutions without having to do the integration yourself. >> Flick a switch and it's on. >> Haiyan: Totally. >> Pretty much. >> Haiyan: Yeah. >> That's how I want to get rid of all the spam in my life. We've talked a lot about the easy button. I would also like the anti-spam button if we're >> Haiyan: 100% >> Well we were talking before you came on camera that there's a potentially a solution you can sit charge. There are techniques. >> Yeah. Yeah. We were talking about the spam emails and I thought they just charge, you know 10th of a penny for every sent email. It wouldn't affect me very much. >> What's the, are people on that? You guys are on this but I mean this is never going to stop. We're going to see the underbelly of the web, the dark web continue to do it. People are harvesting past with the dark web using bots that go in test challenge credentials. I mean, it's just happening. It's never going to stop. What's, is it going to be that cat and mouse game? Are we going to see solutions? What's the, when are we going to get some >> Well it's certainly not a cat and mouse game for F5 customers because we win that battle every time. But for enterprises who are still battling the bots as a DIY project, then yes, it's just going to be a cat and mouse. They're continuing to block by IP, you know, by rate limiting. >> Right, which is so early 2000's. >> Exactly. >> If we're being honest. >> Exactly. And the attackers, by the way, the attackers are now coming from hundreds of thousands or even millions of IP addresses and some IPs are using one time. >> Yeah, I mean it seems like such an easy problem to circumnavigate. And still be able to get in. >> What are I, I, let's stick here for a second. What are some of the other trends that you're seeing in how people are defending if they're not using you or just in general? >> Yeah, maybe I'll add to to that. You know, when we think about the bot problem we also sort of zoom out and say, Hey, bot is only one part of the problem when you think about the entire digital experience the customer experiencing, right? So at F5 we actually took a more holistic sort of way to say, well it's about protecting the apps and applications and the APIs that's powering all of those. And we're thinking not only the applications APIs we're thinking the infrastructure that those API workloads are running. So one of the things we're sharing since we acquired Threat Stack, we have been busy doing integrations with our distributed cloud services and we're excited. In a couple weeks you will hear announcement of the integrated solution for our application infrastructure protection. So that's just another thing. >> On that Threat Stack, does that help with that data story too? Because it's a compliance aspect as well. >> Yeah, it helps with the telemetries, collecting more telemetries, the data story but is also think about applications and APIs. You can only be as secure as the infrastructure you're running on it, right? So the infrastructure protection is a key part of application security. And the other dimension is not only we can help with the credentials, staffing and, and things but it's actually thinking about the customer's top line. Because at the end of the day when all this inventory are being siphoned out the customer won't be happy. So how do we make sure their loyal customers have the right experience so that can improve their top line and not just sort of preventing the bots. So there's a lot of mission that we're on. >> Yeah, that surprise and delight in addition to that protection. >> 100% >> If I could talk about the evolution of an engagement with F5. We first go online, deploy the client side signals I described and take care of all the bad bots. Okay. Mitigate them. Allow list all the good bots, now you're just left with human traffic. We have other client side signals that'll identify the bad humans among the good humans and you could deal with them. And then we have additional client side signals that allow us to do silent continuous authentication of your good customers extending their sessions so they don't have to endure the friction of logging in over and over and over. >> Explain that last one again because I think that was, that's, I didn't catch that. >> Yeah. So right now we require a customer to enter in their username and password before we believe it's them. But we had a customer who a lot of their customers were struggling to log in. So we did analysis and we realized that our client side signals, you know of all those that are struggling to log in, we're confident like 40% of 'em are known good customers based on some of these signals. Like they're doing floating point math the way they always have. They're rendering emojis the way they always have all these clients that signals are the same. So why force that customer to log in again? >> Oh yeah. And that's such a frustrating user experience. >> So true. >> I actually had that thought earlier today. How many time, how much of my life am I going to spend typing my email address? Just that in itself. Then I could crawl back under the covers but >> With the biometric Mac, I forget my passwords. >> Or how about solving CAPTCHA's? How fun is that? >> How many pictures have a bus? >> I got one wrong the other day because I had to pick all the street signs. I got it wrong and I called a Russian human click farm and figured out why was I getting it wrong? And they said >> I love that you went down this rabbit hole deeply. >> You know why that's not a street sign. That's a road sign, they told me. >> That's the secret backdoor. >> Oh well yeah. >> Talk about your background because you have fascinating background coming from law enforcement and you're in this kind of role. >> He could probably tell us about our background. >> They expunge those records. I'm only kidding. >> 25, 30 years in working in local, state and federal law enforcement and intelligence among those an FBI agent and a CIA cyber operations officer. And most people are drawn to that because it's interesting >> Three letter agencies can get an eyebrow raise. >> But I'll be honest, my early, early in my career I was a beat cop and that changed my life. That really did, that taught me the importance of an education, taught me the criminal mindset. So yeah, people are drawn to the FBI and CIA background, but I really value the >> So you had a good observation eye for kind of what, how this all builds out. >> It all kind of adds up, you know, constantly fighting the bad guys, whether they're humans, bots, a security threat from a foreign nation. >> Well learning their mindset and learning what motivates them, what their objectives are. It is really important. >> Reading the signals >> You don't mind slipping into the mind of a criminal. It's a union rule. >> Right? It actually is. >> You got to put your foot and your hands in and walk through their shoes as they say. >> That's right. >> The bot networks though, I want to get into, is not it sounds like it's off the cup but they're highly organized networks. >> Dan: They are. >> Talk about the aspect of the franchises or these bots behind them, how they're financed, how they use the money that they make or ransomware, how they collect, what's the enterprise look like? >> Unfortunately, a lot of the nodes on a botnet are now just innocent victim computers using their home computers. They can subscribe to a service and agree to let their their CPU be used while they're not using it in exchange for a free VPN service, say. So now bad actors not, aren't just coming from you know, you know, rogue cloud providers who accept Bitcoin as payment, they're actually coming from residential IPs, which is making it even more difficult for the security teams to identify. It's one thing when it's coming from- >> It's spooky. I'm just sitting here kind of creeped out too. It's these unknown hosts, right? It's like being a carrier. >> You have good traffic coming from it during the day. >> Right, it appears normal. >> And then malicious traffic coming from it. >> Nefarious. >> My last question is your relationship with Amazon. I'll see security center piece of this re:Invent. It's always been day zero as they say but really it's the security data lake. A lot of gaps are being filled in the products. You kind of see that kind of filling out. Talk about the relationship with F5 and AWS. How you guys are working together, what's the status? >> We've been long-term partners and the latest release the connector for CloudFront is just one of the joint work that we did together and try to, I think, to Dan's point, how do we make those technology that was built for the very sophisticated big institutions to be available for all the CloudFront customers? So that's really what's exciting. And we also leverage a lot of the technology. You talked about the data and our entire solution are very data driven, as you know, is automation. If you don't use data, you don't use analytics, you don't use AI, it's hard to really sort of win that war. So a lot of our stuff, it's very data driven >> And the benefit to customers is what? Access? >> The customer's access, the customer's top line. We talked about, you know, like how we're really bringing better experiences at the end of the day. F5's mission is try to bring a better digital world to life. >> And it's also collaborative. We've had a lot of different stories here on on the set about companies collaborating. You're obviously collaborating and I also love that we're increasing access, not just narrowing this focus for the larger companies at scale already, but making sure that these companies starting out, a lot of the founders probably milling around on the floor right now can prevent this and ensure that user experience for their customers. throughout the course of their product development. I think it's awesome. So we have a new tradition here on theCUBE at re:Invent, and since you're alumni, I feel like you're maybe going to be a little bit better at this than some of the rookies. Not that rookies can't be great, but you're veterans. So I feel strong about this. We are looking for your 30-second Instagram reel hot take. Think of it like your sizzle of thought leadership from the show this year. So eventually eight more visits from now we can compile them into a great little highlight reel of all of your sound bites over the evolution of time. Who wants to give us their hot take first? >> Dan? >> Yeah, sure. >> Savannah: You've been elected, I mean you are an agent. A former special agent >> I guess I want everybody to know the bot problem is much worse than they think it is. We go in line and we see 98, 99% of all login traffic is from malicious bots. And so it is not a DIY project. >> 98 to 99%? That means only 1% of traffic is actually legitimate? >> That's right. >> Holy moly. >> I just want to make sure that everybody heard you say that. >> That's right. And it's very common. Didn't happen once or twice. It's happened a lot of times. And when it's not 99 it's 60 or it's 58, it's high. >> And that's costing a lot too. >> Yes, it is. And it's not just in fraud, but think about charges that >> Savannah: I think of cloud service providers >> Cost associated with transactions, you know, fraud tools >> Savannah: All of it. >> Yes. Sims, all those things. There's a lot of costs associated with that much automation. So the client side signals and multi-stage defense is what you need to deal with it. It's not a DIY project. >> Bots are not DIY. How would you like to add to that? >> It's so hard to add to that but I would say cybersecurity is a team sport and is a very data driven solution and we really need to sort of team up together and share intelligence, share, you know, all the things we know so we can be better at this. It's not a DIY project. We need to work together. >> Fantastic, Dan, Haiyan, so great to have you both back on theCUBE. We look forward to seeing you again for our next segment and I hope that the two of you have really beautiful rest of your show. Thank you all for tuning into a fantastic afternoon of coverage here from AWS re:Invent. We are live from Las Vegas, Nevada and don't worry we have more programming coming up for you later today with John Furrier. I'm Savannah Peterson. This is theCUBE, the leader in high tech coverage.

(upbeat music) >> Hello and welcome to theCUBE's presentation of the AWS Startup Showcase. This is season two, episode four of the ongoing series covering the exciting hot startups from the AWS ecosystem. Here we're talking about cybersecurity in this episode. I'm your host, John Furrier here we're excited to have CUBE alumni who's back Snehal Antani who's the CEO and co-founder of Horizon3.ai talking about exploitable weaknesses and vulnerabilities with autonomous pen testing. Snehal, it's great to see you. Thanks for coming back. >> Likewise, John. I think it's been about five years since you and I were on the stage together. And I've missed it, but I'm glad to see you again. >> Well, before we get into the showcase about your new startup, that's extremely successful, amazing margins, great product. You have a unique journey. We talked about this prior to you doing the journey, but you have a great story. You left the startup world to go into the startup, like world of self defense, public defense, NSA. What group did you go to in the public sector became a private partner. >> My background, I'm a software engineer by education and trade. I started my career at IBM. I was a CIO at GE Capital, and I think we met once when I was there and I became the CTO of Splunk. And we spent a lot of time together when I was at Splunk. And at the end of 2017, I decided to take a break from industry and really kind of solve problems that I cared deeply about and solve problems that mattered. So I left industry and joined the US Special Operations Community and spent about four years in US Special Operations, where I grew more personally and professionally than in anything I'd ever done in my career. And exited that time, met my co-founder in special ops. And then as he retired from the air force, we started Horizon3. >> So there's really, I want to bring that up one, 'cause it's fascinating that not a lot of people in Silicon Valley and tech would do that. So thanks for the service. And I know everyone who's out there in the public sector knows that this is a really important time for the tactical edge in our military, a lot of things going on around the world. So thanks for the service and a great journey. But there's a storyline with the company you're running now that you started. I know you get the jacket on there. I noticed get a little military vibe to it. Cybersecurity, I mean, every company's on their own now. They have to build their own militia. There is no government supporting companies anymore. There's no militia. No one's on the shores of our country defending the citizens and the companies, they got to offend for themselves. So every company has to have their own military. >> In many ways, you don't see anti-aircraft rocket launchers on top of the JP Morgan building in New York City because they rely on the government for air defense. But in cyber it's very different. Every company is on their own to defend for themselves. And what's interesting is this blend. If you look at the Ukraine, Russia war, as an example, a thousand companies have decided to withdraw from the Russian economy and those thousand companies we should expect to be in the ire of the Russian government and their proxies at some point. And so it's not just those companies, but their suppliers, their distributors. And it's no longer about cyber attack for extortion through ransomware, but rather cyber attack for punishment and retaliation for leaving. Those companies are on their own to defend themselves. There's no government that is dedicated to supporting them. So yeah, the reality is that cybersecurity, it's the burden of the organization. And also your attack surface has expanded to not just be your footprint, but if an adversary wants to punish you for leaving their economy, they can get, if you're in agriculture, they could disrupt your ability to farm or they could get all your fruit to spoil at the border 'cause they disrupted your distributors and so on. So I think the entire world is going to change over the next 18 to 24 months. And I think this idea of cybersecurity is going to become truly a national problem and a problem that breaks down any corporate barriers that we see in previously. >> What are some of the things that inspired you to start this company? And I loved your approach of thinking about the customer, your customer, as defending themselves in context to threats, really leaning into it, being ready and able to defend. Horizon3 has a lot of that kind of military thinking for the good of the company. What's the motivation? Why this company? Why now? What's the value proposition? >> So there's two parts to why the company and why now. The first part was what my observation, when I left industry realm or my military background is watching "Jack Ryan" and "Tropic Thunder" and I didn't come from the military world. And so when I entered the special operations community, step one was to keep my mouth shut, learn, listen, and really observe and understand what made that community so impressive. And obviously the people and it's not about them being fast runners or great shooters or awesome swimmers, but rather there are learn-it-alls that can solve any problem as a team under pressure, which is the exact culture you want to have in any startup, early stage companies are learn-it-alls that can solve any problem under pressure as a team. So I had this immediate advantage when we started Horizon3, where a third of Horizon3 employees came from that special operations community. So one is this awesome talent. But the second part that, I remember this quote from a special operations commander that said we use live rounds in training because if we used fake rounds or rubber bullets, everyone would act like metal of honor winners. And the whole idea there is you train like you fight, you build that muscle memory for crisis and response and so on upfront. So when you're in the thick of it, you already know how to react. And this aligns to a pain I had in industry. I had no idea I was secure until the bad guy showed up. I had no idea if I was fixing the right vulnerabilities, logging the right data in Splunk, or if my CrowdStrike EDR platform was configured correctly, I had to wait for the bad guys to show up. I didn't know if my people knew how to respond to an incident. So what I wanted to do was proactively verify my security posture, proactively harden my systems. I needed to do that by continuously pen testing myself or continuously testing my security posture. And there just wasn't any way to do that where an IT admin or a network engineer could in three clicks have the power of a 20 year pen testing expert. And that was really what we set out to do, not build a autonomous pen testing platform for security people, build it so that anybody can quickly test their security posture and then use the output to fix problems that truly matter. >> So the value preposition, if I get this right is, there's a lot of companies out there doing pen tests. And I know I hate pen tests. They're like, cause you do DevOps, it changes you got to do another pen test. So it makes sense to do autonomous pen testing. So congratulations on seeing that that's obvious to that, but a lot of other have consulting tied to it. Which seems like you need to train someone and you guys taking a different approach. >> Yeah, we actually, as a company have zero consulting, zero professional services. And the whole idea is that build a true software as a service offering where an intern, in fact, we've got a video of a nine year old that in three clicks can run pen tests against themselves. And because of that, you can wire pen tests into your DevOps tool chain. You can run multiple pen tests today. In fact, I've got customers running 40, 50 pen tests a month against their organization. And that what that does is completely lowers the barrier of entry for being able to verify your posture. If you have consulting on average, when I was a CIO, it was at least a three month lead time to schedule consultants to show up and then they'd show up, they'd embarrass the security team, they'd make everyone look bad, 'cause they're going to get in, leave behind a report. And that report was almost identical to what they found last year because the older that report, the one the date itself gets stale, the context changes and so on. And then eventually you just don't even bother fixing it. Or if you fix a problem, you don't have the skills to verify that has been fixed. So I think that consulting led model was acceptable when you viewed security as a compliance checkbox, where once a year was sufficient to meet your like PCI requirements. But if you're really operating with a wartime mindset and you actually need to harden and secure your environment, you've got to be running pen test regularly against your organization from different perspectives, inside, outside, from the cloud, from work, from home environments and everything in between. >> So for the CISOs out there, for the CSOs and the CXOs, what's the pitch to them because I see your jacket that says Horizon3 AI, trust but verify. But this trust is, but is canceled out, just as verify. What's the product that you guys are offering the service. Describe what it is and why they should look at it. >> Yeah, sure. So one, when I back when I was the CIO, don't tell me we're secure in PowerPoint. Show me we're secure right now. Show me we're secure again tomorrow. And then show me we're secure again next week because my environment is constantly changing and the adversary always has a vote and they're always evolving. And this whole idea of show me we're secure. Don't trust that your security tools are working, verify that they can detect and respond and stifle an attack and then verify tomorrow, verify next week. That's the big mind shift. Now what we do is-- >> John: How do they respond to that by the way? Like they don't believe you at first or what's the story. >> I think, there's actually a very bifurcated response. There are still a decent chunk of CIOs and CSOs that have a security is a compliance checkbox mindset. So my attitude with them is I'm not going to convince you. You believe it's a checkbox. I'll just wait for you to get breached and sell to your replacement, 'cause you'll get fired. And in the meantime, I spend all my energy with those that actually care about proactively securing and hardening their environments. >> That's true. People do get fired. Can you give an example of what you're saying about this environment being ready, proving that you're secure today, tomorrow and a few weeks out. Give me an example. >> Of, yeah, I'll give you actually a customer example. There was a healthcare organization and they had about 5,000 hosts in their environment and they did everything right. They had Fortinet as their EDR platform. They had user behavior analytics in place that they had purchased and tuned. And when they ran a pen test self-service, our product node zero immediately started to discover every host on the network. It then fingerprinted all those hosts and found it was able to get code execution on three machines. So it got code execution, dumped credentials, laterally maneuvered, and became a domain administrator, which in IT, if an attacker becomes a domain admin, they've got keys to the kingdom. So at first the question was, how did the node zero pen test become domain admin? How'd they get code execution, Fortinet should have detected and stopped it. Well, it turned out Fortinet was misconfigured on three boxes out of 5,000. And these guys had no idea and it's just automation that went wrong and so on. And now they would've only known they had misconfigured their EDR platform on three hosts if the attacker had showed up. The second question though was, why didn't they catch the lateral movement? Which all their marketing brochures say they're supposed to catch. And it turned out that that customer purchased the wrong Fortinet modules. One again, they had no idea. They thought they were doing the right thing. So don't trust just installing your tools is good enough. You've got to exercise and verify them. We've got tons of stories from patches that didn't actually apply to being able to find the AWS admin credentials on a local file system. And then using that to log in and take over the cloud. In fact, I gave this talk at Black Hat on war stories from running 10,000 pen tests. And that's just the reality is, you don't know that these tools and processes are working for you until the bad guys have shown. >> The velocities there. You can accelerate through logs, you know from the days you've been there. This is now the threat. Being, I won't say lazy, but just not careful or just not thinking. >> Well, I'll do an example. We have a lot of customers that are Horizon3 customers and Splunk customers. And what you'll see their behavior is, is they'll have Horizon3 up on one screen. And every single attacker command executed with its timestamp is up on that screen. And then look at Splunk and say, hey, we were able to dump vCenter credentials from VMware products at this time on this host, what did Splunk see or what didn't they see? Why were no logs generated? And it turns out that they had some logging blind spots. So what they'll actually do is run us to almost like stimulate the defensive tools and then see what did the tools catch? What did they miss? What are those blind spots and how do they fix it. >> So your price called node zero. You mentioned that. Is that specifically a suite, a tool, a platform. How do people consume and engage with you guys? >> So the way that we work, the whole product is designed to be self-service. So once again, while we have a sales team, the whole intent is you don't need to have to talk to a sales rep to start using the product, you can log in right now, go to Horizon3.ai, you can run a trial log in with your Google ID, your LinkedIn ID, start running pen test against your home or against your network against this organization right now, without talking to anybody. The whole idea is self-service, run a pen test in three clicks and give you the power of that 20 year pen testing expert. And then what'll happen is node zero will execute and then it'll provide to you a full report of here are all of the different paths or attack paths or sequences where we are able to become an admin in your environment. And then for every attack path, here is the path or the kill chain, the proof of exploitation for every step along the way. Here's exactly what you've got to do to fix it. And then once you've fixed it, here's how you verify that you've truly fixed the problem. And this whole aha moment is run us to find problems. You fix them, rerun us to verify that the problem has been fixed. >> Talk about the company, how many people do you have and get some stats? >> Yeah, so we started writing code in January of 2020, right before the pandemic hit. And then about 10 months later at the end of 2020, we launched the first version of the product. We've been in the market for now about two and a half years total from start of the company till present. We've got 130 employees. We've got more customers than we do employees, which is really cool. And instead our customers shift from running one pen test a year to 40, 50 pen test. >> John: And it's full SaaS. >> The whole product is full SaaS. So no consulting, no pro serve. You run as often as you-- >> Who's downloading, who's buying the product. >> What's amazing is, we have customers in almost every section or sector now. So we're not overly rotated towards like healthcare or financial services. We've got state and local education or K through 12 education, state and local government, a number of healthcare companies, financial services, manufacturing. We've got organizations that large enterprises. >> John: Security's diverse. >> It's very diverse. >> I mean, ransomware must be a big driver. I mean, is that something that you're seeing a lot. >> It is. And the thing about ransomware is, if you peel back the outcome of ransomware, which is extortion, at the end of the day, what ransomware organizations or criminals or APTs will do is they'll find out who all your employees are online. They will then figure out if you've got 7,000 employees, all it takes is one of them to have a bad password. And then attackers are going to credential spray to find that one person with a bad password or whose Netflix password that's on the dark web is also their same password to log in here, 'cause most people reuse. And then from there they're going to most likely in your organization, the domain user, when you log in, like you probably have local admin on your laptop. If you're a windows machine and I've got local admin on your laptop, I'm going to be able to dump credentials, get the admin credentials and then start to laterally maneuver. Attackers don't have to hack in using zero days like you see in the movies, often they're logging in with valid user IDs and passwords that they've found and collected from somewhere else. And then they make that, they maneuver by making a low plus a low equal a high. And the other thing in financial services, we spend all of our time fixing critical vulnerabilities, attackers know that. So they've adapted to finding ways to chain together, low priority vulnerabilities and misconfigurations and dangerous defaults to become admin. So while we've over rotated towards just fixing the highs and the criticals attackers have adapted. And once again they have a vote, they're always evolving their tactics. >> And how do you prevent that from happening? >> So we actually apply those same tactics. Rarely do we actually need a CVE to compromise your environment. We will harvest credentials, just like an attacker. We will find misconfigurations and dangerous defaults, just like an attacker. We will combine those together. We'll make use of exploitable vulnerabilities as appropriate and use that to compromise your environment. So the tactics that, in many ways we've built a digital weapon and the tactics we apply are the exact same tactics that are applied by the adversary. >> So you guys basically simulate hacking. >> We actually do the hacking. Simulate means there's a fakeness to it. >> So you guys do hack. >> We actually compromise. >> Like sneakers the movie, those sneakers movie for the old folks like me. >> And in fact that was my inspiration. I've had this idea for over a decade now, which is I want to be able to look at anything that laptop, this Wi-Fi network, gear in hospital or a truck driving by and know, I can figure out how to gain initial access, rip that environment apart and be able to opponent. >> Okay, Chuck, he's not allowed in the studio anymore. (laughs) No, seriously. Some people are exposed. I mean, some companies don't have anything. But there's always passwords or so most people have that argument. Well, there's nothing to protect here. Not a lot of sensitive data. How do you respond to that? Do you see that being kind of putting the head in the sand or? >> Yeah, it's actually, it's less, there's not sensitive data, but more we've installed or applied multifactor authentication, attackers can't get in now. Well MFA only applies or does not apply to lower level protocols. So I can find a user ID password, log in through SMB, which isn't protected by multifactor authentication and still upon your environment. So unfortunately I think as a security industry, we've become very good at giving a false sense of security to organizations. >> John: Compliance drives that behavior. >> Compliance drives that. And what we need. Back to don't tell me we're secure, show me, we've got to, I think, change that to a trust but verify, but get rid of the trust piece of it, just to verify. >> Okay, we got a lot of CISOs and CSOs watching this showcase, looking at the hot startups, what's the message to the executives there. Do they want to become more leaning in more hawkish if you will, to use the military term on security? I mean, I heard one CISO say, security first then compliance 'cause compliance can make you complacent and then you're unsecure at that point. >> I actually say that. I agree. One definitely security is different and more important than being compliant. I think there's another emerging concept, which is I'd rather be defensible than secure. What I mean by that is security is a point in time state. I am secure right now. I may not be secure tomorrow 'cause something's changed. But if I'm defensible, then what I have is that muscle memory to detect, respondent and stifle an attack. And that's what's more important. Can I detect you? How long did it take me to detect you? Can I stifle you from achieving your objective? How long did it take me to stifle you? What did you use to get in to gain access? How long did that sit in my environment? How long did it take me to fix it? So on and so forth. But I think it's being defensible and being able to rapidly adapt to changing tactics by the adversary is more important. >> This is the evolution of how the red line never moved. You got the adversaries in our networks and our banks. Now they hang out and they wait. So everyone thinks they're secure. But when they start getting hacked, they're not really in a position to defend, the alarms go off. Where's the playbook. Team springs into action. I mean, you kind of get the visual there, but this is really the issue being defensible means having your own essentially military for your company. >> Being defensible, I think has two pieces. One is you've got to have this culture and process in place of training like you fight because you want to build that incident response muscle memory ahead of time. You don't want to have to learn how to respond to an incident in the middle of the incident. So that is that proactively verifying your posture and continuous pen testing is critical there. The second part is the actual fundamentals in place so you can detect and stifle as appropriate. And also being able to do that. When you are continuously verifying your posture, you need to verify your entire posture, not just your test systems, which is what most people do. But you have to be able to safely pen test your production systems, your cloud environments, your perimeter. You've got to assume that the bad guys are going to get in, once they're in, what can they do? So don't just say that my perimeter's secure and I'm good to go. It's the soft squishy center that attackers are going to get into. And from there, can you detect them and can you stop them? >> Snehal, take me through the use. You got to be sold on this, I love this topic. Alright, pen test. Is it, what am I buying? Just pen test as a service. You mentioned dark web. Are you actually buying credentials online on behalf of the customer? What is the product? What am I buying if I'm the CISO from Horizon3? What's the service? What's the product, be specific. >> So very specifically and one just principles. The first principle is when I was a buyer, I hated being nickled and dimed buyer vendors, which was, I had to buy 15 different modules in order to achieve an objective. Just give me one line item, make it super easy to buy and don't nickel and dime me. Because I've spent time as a buyer that very much has permeated throughout the company. So there is a single skew from Horizon3. It is an annual subscription based on how big your environment is. And it is inclusive of on-prem internal pen tests, external pen tests, cloud attacks, work from home attacks, our ability to harvest credentials from the dark web and from open source sources. Being able to crack those credentials, compromise. All of that is included as a singles skew. All you get as a CISO is a singles skew, annual subscription, and you can run as many pen tests as you want. Some customers still stick to, maybe one pen test a quarter, but most customers shift when they realize there's no limit, we don't nickel and dime. They can run 10, 20, 30, 40 a month. >> Well, it's not nickel and dime in the sense that, it's more like dollars and hundreds because they know what to expect if it's classic cloud consumption. They kind of know what their environment, can people try it. Let's just say I have a huge environment, I have a cloud, I have an on-premise private cloud. Can I dabble and set parameters around pricing? >> Yes you can. So one is you can dabble and set perimeter around scope, which is like manufacturing does this, do not touch the production line that's on at the moment. We've got a hospital that says every time they run a pen test, any machine that's actually connected to a patient must be excluded. So you can actually set the parameters for what's in scope and what's out of scope up front, most again we're designed to be safe to run against production so you can set the parameters for scope. You can set the parameters for cost if you want. But our recommendation is I'd rather figure out what you can afford and let you test everything in your environment than try to squeeze every penny from you by only making you buy what can afford as a smaller-- >> So the variable ratio, if you will is, how much they spend is the size of their environment and usage. >> Just size of the environment. >> So it could be a big ticket item for a CISO then. >> It could, if you're really large, but for the most part-- >> What's large? >> I mean, if you were Walmart, well, let me back up. What I heard is global 10 companies spend anywhere from 50 to a hundred million dollars a year on security testing. So they're already spending a ton of money, but they're spending it on consultants that show up maybe a couple of times a year. They don't have, humans can't scale to test a million hosts in your environment. And so you're already spending that money, spend a fraction of that and use us and run as much as you want. And that's really what it comes down to. >> John: All right. So what's the response from customers? >> What's really interesting is there are three use cases. The first is that SOC manager that is using us to verify that their security tools are actually working. So their Splunk environment is logging the right data. It's integrating properly with CrowdStrike, it's integrating properly with their active directory services and their password policies. So the SOC manager is using us to verify the effectiveness of their security controls. The second use case is the IT director that is using us to proactively harden their systems. Did they install VMware correctly? Did they install their Cisco gear correctly? Are they patching right? And then the third are for the companies that are lucky to have their own internal pen test and red teams where they use us like a force multiplier. So if you've got 10 people on your red team and you still have a million IPs or hosts in your environment, you still don't have enough people for that coverage. So they'll use us to do recon at scale and attack at scale and let the humans focus on the really juicy hard stuff that humans are successful at. >> Love the product. Again, I'm trying to think about how I engage on the test. Is there pilots? Is there a demo version? >> There's a free trials. So we do 30 day free trials. The output can actually be used to meet your SOC 2 requirements. So in many ways you can just use us to get a free SOC 2 pen test report right now, if you want. Go to the website, log in for a free trial, you can log into your Google ID or your LinkedIn ID, run a pen test against your organization and use that to answer your PCI segmentation test requirements, your SOC 2 requirements, but you will be hooked. You will want to run us more often. And you'll get a Horizon3 tattoo. >> The first hits free as they say in the drug business. >> Yeah. >> I mean, so you're seeing that kind of response then, trial converts. >> It's exactly. In fact, we have a very well defined aha moment, which is you run us to find, you fix, you run us to verify, we have 100% technical win rate when our customers hit a find, fix, verify cycle, then it's about budget and urgency. But 100% technical win rate because of that aha moment, 'cause people realize, holy crap, I don't have to wait six months to verify that my problems have actually been fixed. I can just come in, click, verify, rerun the entire pen test or rerun a very specific part of it on what I just patched my environment. >> Congratulations, great stuff. You're here part of the AWS Startup Showcase. So I have to ask, what's the relationship with AWS, you're on their cloud. What kind of actions going on there? Is there secret sauce on there? What's going on? >> So one is we are AWS customers ourselves, our brains command and control infrastructure. All of our analytics are all running on AWS. It's amazing, when we run a pen test, we are able to use AWS and we'll spin up a virtual private cloud just for that pen test. It's completely ephemeral, it's all Lambda functions and graph analytics and other techniques. When the pen test ends, you can delete, there's a single use Docker container that gets deleted from your environment so you have nothing on-prem to deal with and the entire virtual private cloud tears itself down. So at any given moment, if we're running 50 pen tests or a hundred pen tests, self-service, there's a hundred virtual private clouds being managed in AWS that are spinning up, running and tearing down. It's an absolutely amazing underlying platform for us to make use of. Two is that many customers that have hybrid environments. So they've got a cloud infrastructure, an Office 365 infrastructure and an on-prem infrastructure. We are a single attack platform that can test all of that together. No one else can do it. And so the AWS customers that are especially AWS hybrid customers are the ones that we do really well targeting. >> Got it. And that's awesome. And that's the benefit of cloud? >> Absolutely. And the AWS marketplace. What's absolutely amazing is the competitive advantage being part of the marketplace has for us, because the simple thing is my customers, if they already have dedicated cloud spend, they can use their approved cloud spend to pay for Horizon3 through the marketplace. So you don't have to, if you already have that budget dedicated, you can use that through the marketplace. The other is you've already got the vendor processes in place, you can purchase through your existing AWS account. So what I love about the AWS company is one, the infrastructure we use for our own pen test, two, the marketplace, and then three, the customers that span that hybrid cloud environment. That's right in our strike zone. >> Awesome. Well, congratulations. And thanks for being part of the showcase and I'm sure your product is going to do very, very well. It's very built for what people want. Self-service get in, get the value quickly. >> No agents to install, no consultants to hire. safe to run against production. It's what I wanted. >> Great to see you and congratulations and what a great story. And we're going to keep following you. Thanks for coming on. >> Snehal: Phenomenal. Thank you, John. >> This is the AWS Startup Showcase. I'm John John Furrier, your host. This is season two, episode four on cybersecurity. Thanks for watching. (upbeat music)

>>You want us to >>Look at that camera? Okay. We're back in Boston, everybody. This is Dave ante for the cube, the leader in enterprise tech coverage. This is reinforce 2022 AWS's big security conference. We're here in Boston, the convention center where the cube started in 2010. Highend song is here. She's head of security and distributed cloud services at F five. And she's joined by Dan woods. Who's the global head of intelligence at F five. Great to see you again. Thanks for coming in the cube, Dan, first time I believe. Yeah. Happy to be here. All right. Good to see you guys. How's the, how's the event going for? Y'all >>It's been just fascinating to see all those, uh, new players coming in and taking security in a very holistic way. Uh, very encouraged. >>Yeah. Boston in, in July is, is good. A lot of, a lot of action to Seaport. When I was a kid, there was nothing here, couple mob restaurants and that's about it. And, uh, now it's just like a booming, >>I'm just happy to see people in, in person. Finally, is >>This your first event since? Uh, maybe my second or third. Third. Okay, >>Great. Since everything opened up and I tell you, I am done with >>Zoom. Yeah. I mean, it's very clear. People want to get back face to face. It's a whole different dynamic. I think, you know, the digital piece will continue as a compliment, but nothing beats belly to belly, as I like absolutely say. All right. Hi on let's start with you. So you guys do a, uh, security report every year. I think this is your eighth year, the app security report. Yeah. Um, I think you, you noted in this report, the growing complexity of apps and integrations, what did you, what are, what were your big takeaways this year? >>And so, like you said, this is our eighth year and we interview and talk to about 1500 of like companies and it decision makers. One of the things that's so prevalent coming out of the survey is complexity that they have to deal with, continue to increase. It's still one of the biggest headaches for all the security professionals and it professionals. And that's explainable in a way, if you look at how much digital transformation has happened in the last two years, right? It's an explosion of apps and APIs. That's powering all our digital way of working, uh, in the last two years. So it's certainly natural to, to see the complexity has doubled and tripled and, and we need to do something about it. >>And the number of tools keeps growing. The number of players keeps growing. I mean, so many really interesting, you know, they're really not startups anymore, but well funded new entrance into the marketplace. Were there any big surprises to you? You know, you're a security practitioner, you know, this space really well, anything jump out like, whoa, that surprised >>Me. Yeah. It's been an interesting discussion when we look at the results, right. You know, some of us would say, gosh, this is such a big surprise. How come people still, you know, willing to turn off security for the benefits of performance. And, and, and as a security professional, I will reflect on that. I said, it's a surprise, or is it just a mandate for all of us in security, we got to do better. And because security shouldn't be the one that prevents or add friction to what the business wants to do, right? So it's a surprise because we, how can, after all the breaches and, and then security incidents, people are still, you know, the three quarters of the, uh, interviewees said, well, you know, if we were given a choice, we'll turn off security for performance. And I think that's a call to action for all of us in security. How do we make security done in a way that's frictionless? And they don't have to worry about it. They don't have to do a trade off. And I think that's one of the things, you know, Dan in working our entire anti automation, uh, solution one is to PR protect. And the other thing is to enable. >>Yeah. You think about Dan, the, I always say the, the adversary is extremely capable. The ROI of cyber tech just keeps getting better and better. And your jobs really is to, to, to lower the ROI, right. It decrease the value, increase the cost, but you're, I mean, fishing continues to be prevalent. You're seeing relatively new technique island hopping, self forming malware. I mean, it's just mind boggling, but, but how are you seeing, you know, the attack change? You know, what what's the adversary do differently over the last, you know, several years maybe pre and post pandemic, we've got a different attack service. What are you seeing? >>Well, we're seeing a lot higher volume attacks, a lot higher volume and velocity. Mm-hmm, <affirmative> it isn't uncommon at all for us to go in line and deploy our client side signals and see, uh, the upper 90%, um, is automated, unwanted automation hitting the application. Uh, so the fact that the security teams continue to underestimate the size of the problem. That is something I see. Every time we go in into an enterprise that they underestimate the size of the problem, largely because they're relying on, on capabilities like caps, or maybe they're relying on two of a and while two of a is a very important role in security. It doesn't stop automated attacks and cap certainly doesn't stop automated >>Tax. So, okay. So you said 90% now, as high as 90% are, are automated up from where maybe dial back to give us a, a marker as to where it used to be. >>Well, less than 1% is typically what all of our customers across the F five network enjoy less than 1% of all traffick hitting origin is unwanted, but when we first go online, it is upper 90, we've seen 99% of all traffic being unwanted >>Automation. But Dan, if I dial back to say 2015, was it at that? Was it that high? That, that was automated >>Back then? Or, you know, I, I don't know if it was that high then cuz stuffing was just, you know, starting to kind take off. Right? No. Right. Um, but as pre stuffing became better and better known among the criminal elements, that's when it really took off explain the pays you're right. Crime pays >>Now. Yeah. It's unfortunate, but it's true. Yeah. Explain the capture thing. Cause sometimes as a user, like it's impossible to do the capture, you know, it's like a twister. Yeah. >>I >>Got that one wrong it's and I presume it's because capture can be solved by, by bots. >>Well, actually the bots use an API into a human click farming. So they're humans to sit around, solving captures all day long. I actually became a human capture solver for a short time just to see what the experience was like. And they put me to the training, teaching me how to solve, captures more effectively, which was fascinating, cuz I needed that training frankly. And then they tested to make sure I solve caps quickly enough. And then I had solved maybe 30 or 40 caps and I hadn't earned one penny us yet. So this is how bots are getting around caps. They just have human solve them. >>Oh, okay. Now we hear a lot at this event, you gotta turn on multifactor authentication and obviously you don't want to use just SMS based MFA, but Dan you're saying not good enough. Why explain >>That? Well, most implementations of two a is, you know, you enter in username and password and if you enter in the correct username and password, you get a text message and you enter in the code. Um, if you enter in the incorrect username and password, you're not sent to code. So the, the purpose of a credential stocking attack is to verify whether the credentials are correct. That's the purpose. And so if it's a two, a protected log in, I've done that. Admittedly, I haven't taken over the account yet, but now that I have a list of known good credentials, I could partner with somebody on the dark web who specializes in defeating two, a through social engineering or port outs or SIM swaps S so seven compromises insiders at telcos, lots of different ways to get at the, uh, two, a text message. >>So, wow, <laugh>, this is really interesting, scary discussion. So what's the answer to, to that problem. How, how have five approach >>It highend touched on it. We, we want to improve security without introducing a lot of friction. And the solution is collecting client side signals. You interrogate the users, interactions, the browser, the device, the network, the environment, and you find things that are unique that can't be spoof like how it does floating point math or how it renders emojis. Uh, this way you're able to increase security without imposing friction on, on the customer. And honestly, if I have to ever have to solve another capture again, I, I, I just, my blood is boiling over capture. I wish everyone would rip it out >>As a user. I, I second that request I had, um, technology got us into this problem. Can technology help us get out of the problem? >>It has to. Um, I, I think, uh, when you think about the world that is powering all the digital experiences and there's two things that comes to mind that apps and APIs are at the center of them. And in order to solve the problem, we need to really zero in where, you know, the epic center of the, the, uh, attack can be and, and had the max amount of impact. Right? So that's part of the reason from a F five perspective, we think of application and API security together with the multitier the defense with, you know, DDoS to bots, to the simple boss, to the most sophisticated ones. And it has to be a continuum. You don't just say, Hey, I'm gonna solve this problem in this silo. You have to really think about app and APIs. Think about the infrastructure, think about, you know, we're here at AWS and cloud native solutions and API services is all over. You. Can't just say, I only worry about one cloud. You cannot say, I only worry about VMs. You really need to think of the entire app stack. And that's part of the reason when we build our portfolio, there is web application firewall, there's API security there's bot solution. And we added, you know, application infrastructure protection coming from our acquisition for threat stack. They're actually based in Boston. Uh, so it's, it's really important to think holistically of telemetry visibility, so you can make better decisions for detection response. >>So leads me to a number of questions first. The first I wanna stay within the AWS silo for a minute. Yeah. Yeah. What do you, what's the relationship with AWS? How will you, uh, integrating, uh, partnering with AWS? Let's start there. >>Yeah, so we work with AWS really closely. Uh, a lot of our solutions actually runs on the AWS platform, uh, for part of our shape services. It's it's, uh, using AWS capabilities and thread stack is purely running on AWS. We just, uh, actually had integration, maybe I'm pre announcing something, uh, with, uh, the cloud front, with our bot solutions. So we can be adding another layer of protection for customers who are using cloud front as the w on AWS. >>Okay. So, um, you integrate, you worry about a APIs, AWS APIs and primitives, but you have business on prem, you have business, other cloud providers. How do you simplify those disparities for your customers? Do you kind of abstract all that complexity away what's F fives philosophy with regard then and creating that continuous experience across the states irrespective of physical >>Location? Yeah, I think you're spot on in terms of, we have to abstract the complexity away. The technology complexity is not gonna go away because there's always gonna be new things coming in the world become more disaggregated and they're gonna be best of brain solutions coming out. And I think it's our job to say, how do we think about policies for web application? And, you know, you're, on-prem, you're in AWS, you're in another cloud, you're in your private data center and we can certainly abstract out the policies, the rules, and to make sure it's easier for a customer to say, I want this particular use case and they push a button. It goes to all the properties, whether it's their own edge or their own data center, and whether it's using AWS, you know, cloud front as you using or web. So that is part of our adapt. Uh, we call it adaptive application. Vision is to think delivery, think security, think optimizing the entire experience together using data. You know, I come from, uh, a company that was very much around data can power so many things. And we believe in that too. >>We use a, we use a term called super cloud, which, which implies a layer that floats above the hyperscale infrastructure hides the underlying complexity of the primitives adds value on top and creates a continuous experience across clouds, maybe out to the edge even someday on prem. Is that, does that sound like, it sounds like that's your strategy and approach and you know, where are you today? And that is that, is that technically feasible today? Is it, is it a journey? Maybe you could describe >>That. Yeah. So, uh, in my title, right, you talked about a security and distribute cloud services and the distribute cloud services came from a really important acquisition. We did last year and it's about, uh, is called Wil Tara. What they brought to F five is the ability not only having lot of the SAS capabilities and delivery capabilities was a very strong infrastructure. They also kept have capability like multi-cloud networking and, you know, people can really just take our solution and say, I don't have to go learn about all the, like I think using super cloud. Yeah, yeah. Is exactly that concept is we'll do all the hard work behind the scenes. You just need to decide what application, what user experience and we'll take care of the rest. So that solutions already in the market. And of course, there's always more things we can do collect more telemetry and integrate with more solutions. So there's more insertion point and customer can have their own choice of whatever other security solution they want to put on top of that. But we already provide, you know, the entire service around web application and API services and bot solution is a big piece of that. >>So I could look at analytics across those clouds and on-prem, and actually you don't have to go to four different stove pipes to find them, is that >>Right? Yeah. And I think you'd be surprised on what you would see. Like you, you know, typically you're gonna see large amounts of unwanted automation hitting your applications. Um, it's, I, I think the reason so many security teams are, are underestimating. The size of the problem is because these attacks are coming from tens of thousands, hundreds of thousands, even millions of IP addresses. So, you know, for years, security teams have been blocking by IP and it's forced the attackers to become highly, highly distributed. So the security teams will typically identify the attack coming from the top hundred or 1500 noisiest IPS, but they missed the long tail of tens of thousands, hundreds of thousands of IPS that are only used one or two times, because, you know, over time we forced the attackers to do this. >>They're scaling. >>Yeah, they are. And, and they're coming from residential IPS now, uh, not just hosting IPS, they're coming from everywhere. >>And, and wow. I mean, I, we know that the pandemic changed the way that organization, they had to think more about network security, rethinking network security, obviously end point cloud security. But it sounds like the attackers as well, not only did they exploit that exposure, but yeah, yeah. They were working from home and then <laugh> >>The human flick farms. They're now distributor. They're all working from home. >>Now we could take advantage >>Of that when I was solving captures, you could do it on your cell phone just by walking around, solving, captures for money. >>Wow. Scary world. But we live in, thank you for helping making it a little bit safer, guys. Really appreciate you coming on the queue. >>We'll continue to work on that. And our motto is bring a better digital world to life. That's what we can set out >>To do. I love it. All right. Great. Having you guys. Thank you. And thank you for watching. Keep it right there. This is Dave ante from reinforce 2022. You're watching the cube right back after this short break.

(upbeat music) >> We're back. This is Dave Vellante of theCUBE, and we're here with Ray Wang, who just wrote a book reminiscent of the famous Tears for Fears song, Everybody Wants to Rule the World: Surviving and Thriving in a World of Digital Giants. Ray, great to see again, man. >> What's going on, man, how are you? >> Oh great, thanks for coming on. You know, it was crazy, been crazy, but it's good to see you face-to-face. >> Ray: This is, we're in the flesh, it's live, we're having conversations, and the information that we're getting is cut right. >> Dave: Yeah, so why did you write this book and how did you find the time? >> Hey, we're in the middle of pandemic. No, I wrote the book because what was happening was digital transformation efforts, they're starting to pop up, but companies weren't always succeeding. And something was happening with digital giants that was very different. They were winning in the marketplace. And never in the form of, if you think about extreme capitalism, if we think about capitalism in general, never in the history of capitalism have we seen growth of large companies. They get large, they fall apart, they don't have anything to build, they can't scale. Their organizations are in shambles. But what happened? If you look at 2017, the combined market cap of the FAANGs and Microsoft was 2 trillion. Today, it is almost 10.2 trillion. It's quintupled. That's never happened. And there's something behind that business model that they put into place that others have copied, from the Airbnbs to the Robloxes to what's going to happen with like a Starlink, and of course, the Robinhoods and you know, Robinhoods and Coinbases of the world. >> And the fundamental premise is all around data, right? Putting data at the core, if you don't do that, you're going to fly blind. >> It is and the secret behind that is the long-term platforms called data-driven digital networks. These platforms take the ability, large memberships, our large devices, they look at that effect. Then they look at figuring out how to actually win on data supremacy. And then of course, they monetize off that data. And that's really the secret behind that is you've got to build that capability and what they do really well is they dis-intermediate customer account control. They take the relationships, aggregate them together. So food delivery app companies are great example of that. You know, small businesses are out there that hundreds and thousands of customers. Today, what happens? Well, they've been aggregated. Millions of customers together into food delivery app. >> Well, I think, you know, this is really interesting what you're saying, because if you think about how we deal with Netflix, we don't call the Netflix sales department or the marketing department of the service, just one interface, the Netflix. So they've been able to put data at their core. Can incumbents do that? How can they do that? >> Incumbents can definitely do that. And it's really about figuring out how to automate that capture. What you really want to do is you start in the cloud, you bring the data together, and you start putting the three A's, analytics, automation, and AI are what you have to be able to put into place. And when you do do that, you now have the ability to go out and figure out how to create that flywheel effect inside those data-driven digital networks. These DDDNS are important. So in Netflix, what are they capturing? They're looking at sentiment, they're looking at context. Like why did you interact with, you know, one title versus another? Did you watch Ted Lasso? Did you switch out of Apple TV to Netflix? Well, I want to know why, right? Did you actually jump into another category? You switched into genres. After 10:00 p.m., what are you watching? Maybe something very different than what you're watching at 2:00 p.m.. How many members are in the home, right? All these questions are being answered and that's the business graph behind all this. >> How much of this is kind of related to the way organizations or companies are organized? In other words, you think about, historically, they would maybe put the process at the core or the, in a bottling plant, the manufacturing facility at the core and the data's all dispersed. Everybody talks about silos. So will AI be the answer to that? Will some new database, Snowflake? Is that the answer? What's the answer to sort of bringing that data together and how do you deal with the organizational inertia? >> Well, the trick to it is really to have a single plane to be able to access that data. I don't care where the data sits, whether it's on premise, whether it's in the cloud, whether it's in the edge, it makes no difference. That's really what you want to be able to do is bring that information together. But the glue is the context. What time was it? What's the weather outside? What location are you in? What's your heart rate? Are you smiling, right? All of those factors come into play. And what we're trying to do is take a user, right? So it could be a customer, a supplier, a partner, or an employee. And how do they interact with an order doc, an invoice, an incident, and then apply the context. And what we're doing is mining that context and information. Now, the more, back to your other point on self service and automation, the more you can actually collect those data points, the more you can capture that context, the more you're able to get to refine that information. >> Context, that's interesting, because if you think about our operational systems, we've contextualized most of them, whether it's sales, marketing, logistics, but we haven't really contextualized our data systems, our data architecture. It's generally run by a technical group. They don't necessarily have the line of business context. You see what HPE is doing today is trying to be inclusive of data on prem. I mentioned Snowflake, they're saying no way. Frank Slootman says we're not going on prem. So that's kind of interesting. So how do you see sort of context evolving with the actually the business line? Not only who has the context actually can, I hate to use the word, but I'm going to, own the data. >> You have to have a data to decisions pathway. That data decisions pathway is you start with all types of data, structured, unstructured, semi-structured, you align it to a business process as an issue, issue to resolution, order to cash, procure to pay, hire to retire. You bring that together, and then you start mining and figuring out what patterns exist. Once you have the patterns, you can then figure out the next best action. And when you get the next best action, you can compete on decisions. And that becomes a very important part. That decision piece, that's going to be automated. And when we think about that, you and I make a decision one per second, how long does it get out of management committee? Could be a week, two weeks, a quarter, a year. It takes forever to get anything out of management committee. But these new systems, if you think about machines, can make decisions a hundred times per second, a thousand times per second. And that's what we're competing against. That asymmetry is the decision velocity. How quickly you can make decisions will be a competitive weapon. >> Is there a dissonance between the fact that you just mentioned, speed, compressing, that sort of time to decision, and the flip side of that coin, quality, security, governance. How do you see squaring that circle? >> Well, that's really why we're going to have to make that, that's the automated, that's the AI piece. Just like we have all types of data, we got to spew up automated ontologies, we got to spit them up, we got to be using, we've got to put them back into play, and then we got to be able to take back into action. And so you want enterprise class capabilities. That's your data quality. That's your security. That's the data governance. That's the ability to actually take that data and understand time series, and actually make sure that the integrity of that data is there. >> What do you think about this sort of notion that increasingly, people are going to be building data products and services that can be monetized? And that's kind of goes back to context, the business lines kind of being responsible for their own data, not having to get permission to add another data source. Do you see that trend? Do you see that decentralization trend? Two-part question. And where do you see HPE fitting into that? >> I see, one, that that trend is definitely going to exist. I'll give you an example. I can actually destroy the top two television manufacturers in the world in less than five years. I could take them out of the business and I'll show you how to do it. So I'm going to make you an offer. $15 per month for the next five years. I'm going to give you a 72 inch, is it 74? 75 inch, 75 inch smart TV, 4k, big TV, right? And it comes with a warranty. And if anything breaks, I'm going to return it to you in 48 hours or less with a brand new one. I don't want your personal information. I'm only going to monitor performance data. I want to know the operations. I want to know which supplier lied to me, which components are working, what features you use. I don't need to know your personal viewing habits, okay? Would you take that deal? >> TV is a service, sure, of course I would. >> 15 bucks and I'm going to make you a better deal. For $25 a month, you get to make an upgrade anytime during that five-year period. What would happen to the two largest TV manufacturers if I did that? >> Yeah, they'd be disrupted. Now, you obviously have a pile of VC money that you're going to do that. Will you ever make money at that model? >> Well, here's why I'll get there and I'll explain. What's going to happen is I lock them out of the market for four to five years. I'm going to take 50 to 60% of the market. Yes, I got to raise $10 billion to figure out how to do that. But that's not really what happens at the end. I become a data company because I have warranty data. I'm going to buy a company that does, you know, insurance like in Asurion. I'm going to get break/fix data from like a Best Buy or a company like that. I'm going to get at safety data from an underwriter's lab. It's a competition for data. And suddenly, I know those habits better than anyone else. I'm going to go do other things more than the TV. I'm not done with the TV. I'm going to do your entire kitchen. For $100 a month, I'll do a mid range. For like $500 a month, I'm going to take your dish washer, your washer, your dryer, your refrigerator, your range. And I'll do like Miele, Gaggenau, right? If you want to go down Viking, Wolf, I'll do it for $450 a month for the next 10 years. By year five, I have better insurance information than the insurance companies from warranty. And I can even make that deal portable. You see where we're going? >> Yeah so each of those are, I see them as data products. So you've got your TV service products, you've got your kitchen products, you've got your maintenance, you know, data products. All those can be monetized. >> And I went from TV manufacturer to underwriter overnight. I'm competing on data, on insurance, and underwriting. And more importantly, here's the green initiative. Here's why someone would give me $10 billion to do it. I now control 50% of all power consumption in North America because I'm also going to do HVAC units, right? And I can actually engineer the green capabilities in there to actually do better power purchase consumption, better monitoring, and of course, smart capabilities in those, in those appliances. And that's how you actually build a model like that. And that's how you can win on a data model. Now, where does HPE fit into that? Their job is to bring that data together at the edge. They bring that together in the middle. Then they have the ability to manage that on a remote basis and actually deliver those services in the cloud so that someone else can consume it. >> All right, so if you, you're hitting on something that some people have have talked about, but it's, I don't think it's widely sort of discussed. And that is, historically, if you're in an industry, you're in that industry's vertical stack, the sales, the marketing, the manufacturing, the R&D. You become an expert in insurance or financial services or whatever, you know, automobile manufacturing or radio and television, et cetera. Obviously, you're seeing the big internet giants, those 10 trillion, you know, some of the market caps, they're using data to traverse industries. We've never seen this before. Amazon in content, you're seeing Apple in finance, others going into the healthcare. So they're technology companies that are able to traverse industries. Never seen this before, and it's because of data. >> And it's the collapsing value chains. Their data value chains are collapsing. Comms, media, entertainment, tech, same business. Whether you sell me a live stream TV, a book, a video game, or some enterprise software, it's the same data value stream on multi-sided networks. And once you understand that, you can see retail, right? Distribution, manufacturing collapsed in the same kind of way. >> So Silicon Valley broadly defined, if I can include, you know, Microsoft and Amazon in there, they seem to have a dual disruption agenda, right? One is on the technology front, disrupting, you know, the traditional enterprise business. The other is they're disrupting industries. How do you see that playing out? >> Well the problem is, they're never going to be able to get into new industries going forward because of the monopoly power that people believe they have, and that's what's going on, but they're going to invest in creating joint venture startups in other industries, as they power the tools to enable other industries to jump and leap frog from where they are. So healthcare, for example, we're going to have AI in monitoring in ways that we never seen before. You can see devices enter healthcare, but you see joint venture partnerships between a big hyperscaler and some of the healthcare providers. >> So HPE transforming into a cloud company as a service, do you see them getting into insurance as you just described in your little digital example? >> No, but I see them powering the folks that are in insurance, right? >> They're not going to compete with their customers maybe the way that Amazon did. >> No, that's actually why you would go to them as opposed to a hyperscale that might compete with you, right? So is Google going to get into the insurance business? Probably not. Would Amazon? Maybe. Is Tesla in the business? Yeah, they're definitely in insurance. >> Yeah, big time, right. So, okay. So tell me more about your book. How's it being received? What's the reaction? What's your next book? >> So the book is doing well. We're really excited. We did a 20 city book tour. We had chances to meet everybody across the board. Clients we couldn't see in a while, partners we didn't see in a while. And that was fun. The reaction is, if you read the book carefully, there are $3 trillion market cap opportunities, $1000 billion unicorns that can be built right there. >> Is, do you have a copy for me that's signed? (audience laughing) >> Ray: Sorry (coughs) I'm choking on my makeup. I can get one actually, do you want one? >> Dave: I do, I want, I want one. >> Can someone bring my book bag? I actually have one, I can sign it right here. >> Dave: Yeah, you know what? If we have a book, I'd love to hold it. >> Ray: Do you have any here as well? >> So it's obviously you know, Everybody Wants to Rule the World: Surviving and Thriving in a world of Digital Giants, available, you know, wherever you buy books. >> Yeah, so, oh, are we still going? >> Dave: Yeah, yeah, we're going. >> Okay. >> Dave: What's the next book? >> Next book? Well, it's about disrupting those digital giants and it's going to happen in the metaverse economy. If we think about where the metaverse is, not just the hardware platforms, not just the engines, not just what's going on with the platforms around defy decentralization and the content producers, we see those as four different parts today. What we're going to actually see is a whole comp, it's a confluence of events that's going to happen where we actually bring in the metaverse economy and the stuff that Neal Stephenson was writing about ages ago in Snow Crash is going to come out real. >> So, okay. So you're laying out a scenario that the big guys, the disruptors, could get disrupted. It sounds like crypto is possibly a force in that disruption. >> Ray: Decentralized currencies, crypto plays a role, but it's the value exchange mechanisms in an Algorand, in an Ether, right, in a Cardano, that actually enables that to happen because the value exchange in the smart contracts power that capability, and what we're actually seeing is the reinvention of the internet. So you think, see things like SIOM pop-up, which actually is creating the new set of the internet standards, and when those things come together, what we're actually going to move from is the seller is completely transparent, the buyer's completely anonymous and it's in a trust framework that actually allows you to do that. >> Well, you think about those protocols, the internet protocols that were invented whenever, 30 years ago, maybe more, TCP/IP, wow. I mean, okay. And they've been co-opted by the internet giants. It's the crypto guys, some of the guys you've mentioned that are actually innovating and putting, putting down new innovation really and have been well-funded to do so. >> I mean, I'll give you another example of how this could happen. About four years ago, five years ago, I wanted to buy Air Canada's mileage program, $400 million, 10 million users, 40 bucks a user. What do I want them in a mileage program? Well think about it. It's funded, a penny per mile. It's redeemed at 1.6 cents a mile. It's 2 cents if you buy magazines, 2 1/2 cents if you want, you know, electronics, jewelry, or sporting equipment. You don't lose money on these. CFOs hate them, they're just like (groans) liability on the books, but they mortgage the crap out of them in the middle of an ish problem and banks pay millions of dollars a year pour those mileage points. But I don't want it for the 10 million flyers in Canada. What I really want is the access to 762 million people in Star Alliance. What would happen if I turned that airline mileage program into cryptocurrency? One, I would be the world's largest cryptocurrency on day one. What would happen on day two? I'd be the world's largest ad network. Cookie apocalypse, go away. We don't need that anymore. And more importantly, on day three, what would I do? My ESG here? 2.2 billion people are unbanked in the world. All you need is a mobile device and a connection, now you have a currency without any government regulation around, you know, crayon banking, intermediaries, a whole bunch of people like taking cuts, loansharking, that all goes away. You suddenly have people that are now banked and you've unbanked, you've banked the unbanked. And that creates a whole very different environment. >> Not a lot of people thinking about how the big giants get disintermediated. Get the book, look into it, big ideas. Ray Wang, great to see you, man. >> Ray: Hey man, thanks a lot. >> Hey, thank you. All right and thank you for watching. Keep it right there for more great content from HPE's big GreenLake announcements. Be right back. (bright music)

>>From around the globe. It's the cube with digital coverage of AWS reinvent 2020, sponsored by Intel and AWS. >>Welcome back to the queue. It's virtual coverage of Avis reinvent 2020 I'm John furry, your host. Um, this is a cute virtual we're here. Not in, in remote. We're not in person this year, so we're doing the remote interviews. And then this segment is going to build on the quantum conversation we had last year, Richard moles, general manager of Amazon bracket and aid was quantum computing and Fernando Brandao head of quantum algorithms at AWS and Brent professor of theoretical physics at Caltech. Fernando, thanks for coming on, Richard. Thanks for joining us. >>You're welcome to be here. >>So, Fernando, first of all, love your title, quantum algorithms. That's the coolest title I've heard so far and you're pretty smart because you're a theoretical professor of physics at Caltech. So, um, which I'd never be able to get into, but I wish I could get into there someday, but, uh, thanks for coming on. Um, quantum has been quite the rage and you know, there's a lot of people talking about it. Um, it's not ready for prime time. Some say it's moving faster than others, but where are we on quantum right now? What are, what are you, what are you seeing Fernanda where the quantum, where are peg us in the evolution of, of, uh, where we are? >>Um, yeah, what quantum, uh, it's an emerging and rapidly developing fields. Uh, but we are see where are you on, uh, both in terms of, uh, hardware development and in terms of identifying the most impactful use cases of one company. Uh, so, so it's, it's, it's early days for everyone and, and we have like, uh, different players and different technologies that are being sport. And I think it's, it's, it's early, but it's exciting time to be doing quantum computing. And, uh, and it's very interesting to see the interest in industry growing and, and customers. Uh, for example, Casa from AWS, uh, being, uh, being willing to take part in this journey with us in developmental technology. >>Awesome. Richard, last year we talked to bill Vass about this and he was, you know, he set expectations really well, I thought, but it was pretty much in classic Amazonian way. You know, it makes the announcement a lot of progress then makes me give us the update on your end. You guys now are shipping brackets available. What's the update on your end and Verner mentioned in his keynote this week >> as well. Yeah, it was a, it was great until I was really looking at your interview with bill. It was, uh, that was when we launched the launch the service a year ago, almost exactly a year ago this week. And we've come a long way. So as you mentioned, we've, uh, we've, uh, we've gone to general availability with the service now that that happened in August. So now a customer can kind of look into the, uh, to the bracket console and, uh, installed programming concept computers. You know, there's, uh, there's tremendous excitement obviously, as, as you mentioned, and Fernando mentioned, you know, quantum computers, uh, we think >>Have the potential to solve problems that are currently, uh, uh, unsolvable. Um, the goal of bracket is to fundamentally give customers the ability to, uh, to go test, uh, some of those notions to explore the technology and to just start planning for the future. You know, our goal was always to try and solve some of the problems that customers have had for, you know, gee, a decade or so now, you know, they tell us from a variety of different industries, whether it's drug discovery or financial services, whether it's energy or there's chemical engineering, machine learning, you know, th the potential for quantum computer impacts may industries could potentially be disruptive to those industries. And, uh, it's, it's essential that customers can can plan for the future, you know, build their own internal resources, become experts, hire the right staff, figure out where it might impact their business and, uh, and potentially disrupt. >>So, uh, you know, in the past they're finding it hard to, to get involved. You know, these machines are very different, different technologies building in different ways of different characteristics. Uh, the tooling is very disparate, very fragmented. Historically, it's hard for companies to get access to the machines. These tend to be, you know, owned by startups or in, you know, physics labs or universities, very difficult to get access to these things, very different commercial models. Um, and, uh, as you, as you suggested, a lot of interests, a lot of hype, a lot of claims in the industry, customers want to cut through all that. They want to understand what's real, uh, what they can do today, uh, how they can experiment and, uh, and get started. So, you know, we see bracket as a catalyst for innovation. We want to bring together end-users, um, consultants, uh, software developers, um, providers that want to host services on top of bracket, try and get the industry, you know, rubbing along them. You spoke to lots of Amazonians. I'm sure you've heard the phrase innovation flywheel, plenty of times. Um, we see the same approach that we've used successfully in IOT and robotics and machine learning and apply that same approach to content, machine learning software, to quantum computing, and to learn, to bring it together. And, uh, if we get the tooling right, and we make it easy, um, then we don't see any reason why we can't, uh, you know, rapidly try and move this industry forward. And >>It was fun areas where there's a lot of, you know, intellectual computer science, um, technology science involved in super exciting. And Amazon's supposed to some of that undifferentiated heavy. >>That's what I am, you know, it's like, >>There's a Maslow hierarchy of needs in the tech industry. You know, people say, Oh, why five people freak out when there's no wifi? You know, you can't get enough compute. Right. So, you know, um, compute is one of those things with machine learning is seeing the benefits and quantum there's so much benefits there. Um, and you guys made some announcements at, at re-invent, uh, around BRACA. Can you share just quickly share some of those updates, Richard? >>Sure. I mean, it's the way we innovate at AWS. You know, we, we start simple and we, and we build up features. We listen to customers and we learn as we go along, we try and move as quickly as possible. So since going public in, uh, in, in August, we've actually had a string of releases, uh, pretty consistent, um, delivering new features. So we try to tie not the integration with the platform. Customers have told us really very early on that they, they don't just want to play with the technology. They want to figure out how to, how to envisage a production quantum computing service, how it might look, you know, in the context of a broad cloud platform with AWS. So we've, uh, we launched some integration with, uh, other AWS capabilities around security, managing limits, quotas, tagging resources, that type of thing, things that are familiar to, uh, to, to, to current AWS users. >>Uh, we launched some new hardware. Uh, all of our partners D-Wave launched some, uh, uh, you know, a 5,000 cubit machine, uh, just in September. Uh, so we made that available on bracket the same day that they launched that hardware, which was very cool. Um, you know, we've made it, uh, we've, we've made it easier for researchers. We've been, you know, impressed how many academics and researchers have used the service, not just large corporations. Um, they want to have really deep access to these machines. They want to program these things at a low level. So we launched some features, uh, to enable them to do their research, but reinvent, we were really focused on two things, um, simulators and making it much easier to use, uh, hybrid systems systems that, uh, incorporate classical compute, traditional digital computing with quantum machinery, um, in the vein that follow some of the liens that we've seen, uh, in machine learning. >>So, uh, simulators are important. They're a very important part of, uh, learning how to use concepts, computers. They're always available 24, seven they're super convenient to use. And of course they're critical in verifying the accuracy of the results that we get from quantum hardware. When we launched the service behind free simulator for customers to help debug their circuits and experiments quickly, um, but simulating large experiments and large systems is a real challenge on classical computers. You know, it, wasn't hard on classical. Uh, then you wouldn't need a quantum computer. That's the whole point. So running large simulations, you know, is expensive in terms of resources. It's complicated. Uh, we launched a pretty powerful simulator, uh, back in August, which we thought at the time was always powerful managed. Quantum stimulates circuit handled 34 cubits, and it reinvented last week, we launched a new simulator, which actually the first managed simulator to use tensor network technology. >>And it can run up to 50 cubits. So we think is, we think is probably the most powerful, uh, managed quantum simulator on the market today. And customers can flip easily between either using real quantum hardware or either of our, uh, stimulators just by changing a line of code. Um, the other thing we launched was the ability to run these hybrid systems. You know, quantum computers will get more, no don't get onto in a moment is, uh, today's computers are very imperfect, you know, lots of errors. Um, we working, obviously the industry towards fault-tolerant machines and Fernando can talk about some research papers that were published in that area, but right now the machines are far from perfect. And, uh, and the way that we can try to squeeze as much value out of these devices today is to run them in tandem with classical systems. >>We think of the notion of a self-learning quantum algorithm, where you use a classical optimization techniques, such as we see machine learning to tweak and tune the parameters of a quantum algorithm to try and iterate and converge on the best answer and try and overcome some of these issues surrounding errors. That's a lot of moving parts to orchestrate for customers, a lot of different systems, a lot of different programming techniques. And we wanted to make that much easier. We've been impressed with a, a, an open projects, been around for a couple of years, uh, called penny lane after the Beatles song. And, um, so we wanted to double down on that. We were getting a lot of positive feedback from customers about the penny lane talk it, so we decided to, uh, uh, make it a first class citizen on bracket, make it available as a native feature, uh, in our, uh, in our Jupiter notebooks and our tutorials learning examples, um, that open source project has very similar, um, guiding principles that we do, you know, it's open, it's cross platform, it's technology agnostic, and we thought he was a great fit to the service. >>So we, uh, we announced that and made it available to customers and, uh, and, and, uh, already getting great feedback. So, uh, you know, finishing the finishing the year strongly, I think, um, looking forward to 2021, you know, looking forward to some really cool technology it's on the horizon, uh, from a hardware point of view, making it easy to use, um, you know, and always, obviously trying to work back from customer problems. And so congratulations on the success. I'm sure it's not hard to hire people interested, at least finding qualified people it'd be different, but, you know, sign me up. I love quantum great people, Fernando real quick, understanding the relationship with Caltech unique to Amazon. Um, tell us how that fits into the, into this, >>Uh, right. John S no, as I was saying, it's it's early days, uh, for, for quantum computing, uh, and to make progress, uh, in abreast, uh, put together a team of experts, right. To work both on, on find new use cases of quantum computing and also, uh, building more powerful, uh, quantum hardware. Uh, so the AWS center for quantum computing is based at Caltech. Uh, and, and this comes from the belief of AWS that, uh, in quantum computing is key to, uh, to keep close, to stay close of like fresh ideas and to the latest scientific developments. Right. And Caltech is if you're near one computing. So what's the ideal place for doing that? Uh, so in the center, we, we put together researchers and engineers, uh, from computer science, physics, and other subjects, uh, from Amazon, but also from all the academic institutions, uh, of course some context, but we also have Stanford and university of Chicago, uh, among others. So we broke wrongs, uh, in the beauty for AWS and for quantum computer in the summer, uh, and under construction right now. Uh, but, uh, as we speak, John, the team is busy, uh, uh, you know, getting stuff in, in temporary lab space that we have at cottage. >>Awesome. Great. And real quick, I know we've got some time pressure here, but you published some new research, give a quick a plug for the new research. Tell us about that. >>Um, right. So, so, you know, as part of the effort or the integration for one company, uh, we are developing a new cubix, uh, which we choose a combination of acoustic and electric components. So this kind of hybrid Aquacel execute, it has the promise for a much smaller footprint, think about like a few microliters and much longer storage times, like up to settlements, uh, which, which is a big improvement over the scale of the arts sort of writing all export based cubits, but that's not the whole story, right? On six, if you have a good security should make good use of it. Uh, so what we did in this paper, they were just put out, uh, is, is a proposal for an architecture of how to build a scalable quantum computer using these cubits. So we found from our analysis that we can get more than a 10 X overheads in the resources required from URI, a universal thought around quantum computer. >>Uh, so what are these resources? This is like a smaller number of physical cubits. Uh, this is a smaller footprint is, uh, fewer control lines in like a smaller approach and a consistent, right. And, and these are all like, uh, I think this is a solid contribution. Uh, no, it's a theoretical analysis, right? So, so the, uh, the experimental development has to come, but I think this is a solid contribution in the big challenge of scaling up this quantum systems. Uh, so, so, so John, as we speak like, uh, data blessed in the, for quantum computing is, uh, working on the experimental development of this, uh, a highly adequacy architecture, but we also keep exploring other promising ways of doing scalable quantum computers and eventually, uh, to bring a more powerful computer resources to AWS customers. >>It's kind of like machine learning and data science, the smartest people work on it. Then you democratize that. I can see where this is going. Um, Richard real quick, um, for people who want to get involved and participate or consume, what do they do? Give us the playbook real quick. Uh, so simple, just go to the AWS console and kind of log onto the, to the bracket, uh, bracket console, jump in, you know, uh, create, um, create a Jupiter notebook, pull down some of our sample, uh, applications run through the notebook and program a quantum computer. It's literally that simple. There's plenty of tutorials. It's easy to get started, you know, classic cloud style right now from commitment. Jump in, start simple, get going. We want you to go quantum. You can't go back, go quantum. You can't go back to regular computing. I think people will be running concert classical systems in parallel for quite some time. So yeah, this is the, this is definitely not a one way door. You know, you go explore quantum computing and see how it fits into, uh, >>You know, into the, into solving some of the problems that you wanted to solve in the future. But definitely this is not a replacement technology. This is a complimentary technology. >>It's great. It's a great innovation. It's kind of intoxicating technically to get, think about the benefits Fernando, Richard, thanks for coming on. It's really exciting. I'm looking forward to keeping up keeping track of the progress. Thanks for coming on the cube coverage of reinvent, quantum computing going the next level coexisting building on top of the shoulders of other giant technologies. This is where the computing wave is going. It's different. It's impacting people's lives. This is the cube coverage of re-invent. Thanks for watching.

>> Voiceover: From theCUBE Studios in Palo Alto in Boston, connecting with thought leaders all around the world, this is a CUBE conversation. >> Hi, I'm Stu Miniman, and welcome to this announcement with VMware cloud on AWS update. Happy to welcome back to the program, Matt Morgan. He is the Vice President of global marketing with VMware cloud services. And welcome into the program Fred Wurden, he's the general manager of EC2 enterprise at Amazon Web Services. Thank you so much both for joining us. >> Good to see you Stu. >> Same, thanks Stu. >> Matt, and Fred, the VMware AWS partnership is one that has gotten a lot of attention. I know any time back in the day when we used to go to physical trade shows, I could know when there was a session talking about this because it was usually full and overflowing. When I've written about this topic or doing videos about it it definitely gets quite a lot of attention. So it's been over three years since the partnership was announced but still, when I talk to people, they don't necessarily really understand the depth of the integration and the work that gets done on both sides even though you get clear messages from both Andy Jassy and Pat Gelsinger about how important this is. Matt, maybe start with you and Fred would love your commentary as to this three year partnership and where we are today here in 2020. >> Absolutely, since the initial announcement of the VMware AWS relationships, we have actually built a very special cloud service. And today, we're actually deepening our partnership. In fact, today, VMware goes to market saying that AWS and only AWS is our preferred public cloud partner for all vSphere based workloads. VMware cloud on AWS is a jointly engineered service. Meaning, our product teams our r&d teams are all working together to deliver VMware enterprise class Software Defined data center solution to the AWS cloud. VMware Cloud foundation is the core technology that's behind our service. And it gives us the capability to deliver that same level of infrastructure familiarity and consistency that our customers use today, across every data center location, the edge and of course inside the public cloud. VMware cloud on AWS attracts an enormous amount of interest from customers. And these customers are in every vertical, whether you're speaking of healthcare, media and entertainment, transportation, financial services, manufacturing, energy, government, education, professional services, and of course technology. And together with AWS, we're bringing together services that are being used across the whole portfolio of cloud optionality. This includes cloud migration from whether you're talking about a single app or complete data center, disaster recovery, whether you're talking about replacing a legacy system or building new disaster recovery in the cloud. Data center extension building that hybrid cloud. And of course, modernizing applications which we classify under the term application modernization. >> Great, and Fred from the Amazon side. >> Yeah, the partnership is been fantastic over three years. And I can't express enough how hard it is to actually deliver a simple solution that customers are asking for from all levels of both organizations. And to do that it takes both AWS and VMware to deliver a solution that allows companies to leverage what they know today and extend that into the cloud. And leverage all of the benefits that we're going to go over and a rapid delivery of new features which they haven't had before ever. So it's fantastic a partnership. I love what we've been doing at all levels. And I say it's going to continue. The scale at which we're growing is fantastic. And with that, I'm happy to go over some of the announcements and why we're doing what we're doing which is all based on listening and what our customers want. >> Excellent. Well, Fred, hey, we're glad first of all, that it did not get called VMC on AWS SS. Because we have enough acronyms already in tech. Matt, VMware and AWS, of course, clear leadership in the marketplace. With three years, bring us inside as to you talked about all the verticals that were used, but where's the proof on the adoption of this technology? Love to hear a little bit about that. >> Yeah, absolutely. So we have customer examples across the verticals we spoke of, but it's the customer stories that are the real value demonstrator. Let's pick up a couple of those. IHS market, they were able to move 1000 plus workloads to the public cloud. And that story is kind of common in the world. But what's unique about this particular story is IHS market moved them in just six weeks. If you look at the cloud migration strategy in general, for someone to move that fast with that many workloads, it's unheard of. VMware empowers that because the operating setup that organizations have standardized in their data center is identical in the public cloud. So organizations can move workloads we see them move hundreds of workloads in a week from their data center up to the public cloud. In addition to that, we have customer examples like the Pennsylvania Lumberman's Mutual Insurance Company. They were able to demonstrate 20% cost savings by moving their disaster recovery systems to VMware cloud on AWS. And that was initial savings right off the rip. Other customers like William Hill, George St. PA, Stage Coast, PHS Mortgage, they're all demonstrating the significant value adds when people move over to the public cloud, but leverage that VMware cloud solution. >> And Fred obviously, AWS also plays across these environments. We would like to hear your side too. >> Yeah, a couple examples like S&P global ratings, they spin up a new application environment in a few hours instead of months. Let alone taking all the burden off of their supply chain and management of that. Like Matt said in terms of seeing cost savings. So agility and speed allows them to really focus on their applications and start to modernize and innovate in areas that really differentiate them. They've had 100% uptime for regulatory applications and a 50% improved disaster recovery time. Other customers have built out a disaster recovery plan and then actually spun to VMware cloud on AWS as their primary because they had better performance. So it's the whole range of options in terms of better performance, better TCL and economics and mostly agility on what they can do going forward with applications that may already be built on AWS as well with native services. >> Matt, you touched on some great customer examples, maybe maybe give us some, broad themes as to what are the key drivers as to why customers are adopting VMware cloud on AWS? >> Yeah, absolutely. As with any infrastructure conversation, total cost of ownership is a big piece of the equation. Organizations want to look at their footprint today. They want to look at their footprint next year, and then of course, many years out. So when you look at the public cloud, cloud economics are a big driver. VMware, of course adopts the whole concept of cloud economics whole full horse. Meaning that we give you the capability to recognize the advantages of an apex object model, the ability to have on demand services, the ability to have a managed IaaS, all of that is part and parcel to our service. But on top of that, there's unique capabilities that VMware cloud on AWS delivers that deliver unique economic value. The first is this concept of zero refactoring. Our customers tell us that this alone allows them to eliminate what they call is rework, sometimes called the rework tax. Which prevents organizations from moving applications to the cloud without reworking them, without working their data layer, re architecting how they run, they can move them because the operating layer is consistent. Another area of value that's unique to VMware cloud on AWS is the leverage of existing skill sets. Today's operators are trained on vCenter. They're trained on all the supporting infrastructure around VMware. All of that applies with VMware cloud on AWS. So the ability to translate those skills into a cloud skill set right off the bat is of enormous value. Of course flexibilities another big one, as organizations embrace what it being seen as composite applications, which are applications that span the data center, the public cloud out to the edge. The ability to move logic as needed to be able to have portability is something we deliver. Again, that's an economic value that we are able to provide. Now this has been quantified by third parties. There's been several major third parties, including Forrester, including IDC, that have published value added statements around the total economic impact of VMware cloud on AWS. In fact, just last year, there was a study that was commissioned by Forrester that demonstrated a 59% reoccurring savings in terms of infrastructure and operating savings, compared to an on premise implementation. When you look at migration that accelerates to 69% 'cause organizations can save almost 70% of moving applications by eliminating rework and refactoring. That's an IDC statistic. >> All right Matt. Maybe it would make sense to talk about just overall adoption of the solution. I believe you've got some stats you can share. >> So yeah, if you look at the adoption, we have delivered enormous growth over the last year of the service. Total number of hosts year over year are up 2.5x. Total number of running VMs year over year is actually larger at 3.5x. Which indicates that customers are not just adopting, but they're accelerating their adoption. We now have 21,000 plus number of hands on labs that have been consumed since July of 2019, a year ago. And there are now 300 plus validated technology partner solutions available. And on top of that, 530 channel partners with VMware cloud service competency are now registered and available to assist. These are tremendous statistics for 12 short months. >> Well, congratulations on to both VMware and AWS on that progress. Maybe talk a little bit about trends. Just briefly, if I look over the last three months we've talked about AWS and VMware customers. Obviously, with the global pandemic, there's been certain things that they've needed to rapidly do things like, VDI, end user computing, remote contact centers are something that they need to rapidly expand on. But, is there anything different or general trends that that you would both like to share? Matt, we'll once again, start with you and then Fred get your take on it. >> Yeah, there's a regional school district in the US that in light of COVID, needed to spin up 10,000 plus people working remotely. And by leveraging VMware cloud on AWS, they were able to conduct virtual classrooms in very short order by leveraging this broad scale infrastructure powered by VMware cloud on AWS. Over time, that provided flexibility and agility, but it also reduced their costs. They've been able to eliminate hardware replacement plans that were going to cost significant amount of money. In fact, they're showing and telling us that they're able to save 75% of those forecasted costs. But everything is really about business continuity today. Today's unfortunate economic environment where we're working through this pandemic, this global pandemic, IT organizations and businesses, they're embracing a tried and true understanding of what it means to move to the cloud. But they're embracing it in a more aggressive way because the supply chain has been disrupted. If you think about a traditional supply chain, where organizations have to receive machines, set up those machines, have them wired in have certain people on site to get those machines configured, move application. That's a lot of steps in the process, many of which have been totally disrupted during the pandemic. The idea of VMware cloud on AWS is that you replace an analog supply chain with a digital supply chain. We can now help organizations get new equipment, new capacity, new resources up and running instantly. They don't have to worry about all the steps that were previously required that have been disrupted in a pandemic. The cloud provides that operating environment that maps one for one to the realities of today's world. And they're also able to understand that looking forward, that that setup enables them to be more future ready. Ready for whatever comes next to deliver what the business needs. >> Yeah, there's a number of reasons that you just touched on Matt, that are examples that we can bring out on that elasticity. For example, Penny Mac, anytime there are changes in the market, for example, on either both for VDI or just on processing of loans. When the pandemic hit, a lot of people actually paused on both looking and or changing their patterns. And this solution has been fantastic for either scaling up or scaling down both ways. And they can do it very quickly. They can do it within a number of a variety of means whether it's a single VM, or it's moving an entire migration into VMware cloud on AWS. So great results there. The case studies speak for themselves. There's a lot of examples that we have up on both of our sites. We'd really be good to take a look at those in detail if you're interested, it's fun to see. Helps a lot of people out. >> If I could follow up with you on something here. I want to talk about I go to the cloud, often that movement is step one, how do I take advantage of modernization, whether that be for my application standpoint, or leveraging new services? I wonder you can give me the AWS side there? And, Matt would love to hear how VMware is helping customers along this journey too. >> Well, the first is we want to meet people they're at with their knowledge set and their skill set. And this is a fantastic part. Customers can move quickly with the domain knowledge that they've go. We can assist in translating and making sure that the environment and the STDC is set up in a way that is tailored to what their needs are. Whether it's an extension, or if it's a complete migration of step one. But step two really is once they're leveraging VMware cloud on AWS is they have a lot of needs in terms of their CICD, their development tools, or samples and applications around automation. And we can take and help them with that. That content is already posted on our developer tool site and our developer center for this solution. It really assists them in learning about how to leverage the elasticity and the security and the networking capabilities that allow them to go in and then use all the rest of the rich AWS services as well. So, if you look at some of the things that are coming out for example, VMware Transit Connect. Which allows, a layer three solution to be built on top of our AWS transit gateway so that we can interconnect multiple VPCs in an environment that may be running either software as a solution on AWS or a native application that was built with managed services, completely in sync and in harmony, with VMware cloud on AWS. So that's what's happening at a rapid pace. It allows people to bite off the chunks that they want to modernize and reuse tools that are either familiar with them, and or automation improvements that we've got between code tools across the board. So it's great to see the work that they're doing >> Great, and Matt on the modernization piece. >> Yeah, so our surveys tell us that customers want to modernize their existing applications. But those same customers don't want to start over. So this is an important value proposition that we deliver in partnership with AWS. Organizations can take a business process application, they can migrate it to the cloud, they can extend and reach that application with AWS services. They can extend and reach that applications with additional machine learning capabilities, they can extend it with containerized extensions. They can support a broader modern agenda without having to start over. And I think that that is a value proposition that resonates with everyone, because people often need must leverage what they already have built with what the baseline is for the business itself. In addition to this, composite applications are now becoming the norm. With data and processing being more CO located, end to end Applications often consist of processing and data for certain tasks to be either pushed out to the edge or remain on premises in the data center in addition to the cloud. That value proposition of VMware delivering a hybrid cloud with consistent infrastructure and operations enables those composite applications to be built and deployed in a highly efficient way, which is a big piece to the modernization story. In addition to this with tons of Kubernetes grid as a customer managed option, organizations can run those containerized components right on top of our service, all of which integrates very cleanly with a whole library of services that AWS offers. End to end, you have all the optionality you need plus the speed of migration and capabilities once you get up to the public cloud. >> All right, let's get into the new pieces of the partnership here. Matt, first of all, when I think about VMware cloud on AWS, the customers that I've mostly spoken to over the last couple of years have tended to be some of the larger enterprises. I've heard you're alluding towards some capabilities to the small and medium business. I know I'm looking forward to talking to PLM insurance, one of the companies that are leveraging this solution as part of this announcement. What's new and the impact that this will have on the addressable market that VMware cloud can hit for AWS? >> Yeah, so with this announcement, VMware cloud on AWS, we're extending it to offer three new capabilities. Three new announcements of capabilities. The first one is all about what you just spoke of. Which is about extending the VMware cloud on AWS value proposition to more customers. So currently, customers can spin up production clusters with three hosts are, of course much more than that. But three hosts was kind of the entry level for a production cluster. What we're announcing is the ability to create production clusters with all the capable abilities that go into what we define as a production cluster with just two hosts. That means customers will be able to deploy production environments with two hosts in a cluster, dramatically reducing their costs. In fact, the traditional costs will come down by 33%. So this is all about providing the full capabilities of VMware cloud on AWS, but to be able to do it at a smaller investment envelope. So in addition to this, we're rolling out enhancements to VMware cloud director offering it as a service. VMware cloud director now will deliver multi tenancy to VMware cloud on AWS specifically designed for MSPs. As you know VMware partner ecosystem is filled with managed service providers. We have a mean enormous collection of these that add value on top of VMware cloud on AWS. Here by using VMware vcloud director service, they can deliver multi tenancy to their customers. And this is designed specifically to serve the needs of small to medium sized enterprises. These capabilities enable MSPs to serve those needs and it will be available initially in North America. And this will give them the opportunity to say, hey, if you want to get started on VMware cloud on AWS, we can give you bite sized pools designed specifically for what you need. And this is a very asset light pay as you grow model, which aligns specifically to that market. >> It's fascinating to watch Matt, I think, not that many years ago, if I had attended VMworld and talked to the MSPs. And they talk how deeply they appreciate the VMware partnership and that cloud company was the enemy. And, today AWS and VMware partnering with them, helping to make sure that in this hybrid world that they play a role to help get to the enterprise. Fred, anytime we go to reinvent, new announcements usually come to a huge fanfare, even something like a new bare metal instance. Last year it was the I3en metal instance. People get pretty excited. Help us understand you know what this really means, what advantages it has? Are there any limitations? What should we know about the capabilities AWS has now available to the VMware cloud? >> Well, first off, thanks Stu, I3en is really exciting that we're launching. It will meet the need of storage intensive workloads. And it'll do it far better than what we've had before. It takes advantage of all the learnings and the investments that we put into instances across the board for AWS such as Nitro. If you have, high random IO access, such as needed for relational database or workloads that have additional security that we have baked in, it's going to meet those needs. Compared to I3 metal, it has more memory, more usable, high performance storage and additional security. The example of a yield compared to I3 is about a 22% performance improvement and value. We're delivering four times the raw storage for about 2.2 times the cost. So in essence, you're getting raw storage at half the cost of an I3. So customers are excited. it's one of many instances that we will launch in the future for VMware cloud on AWS. And that's one of the advantages, is people can instantly take advantage of these innovations that we have. Just like we've done across all of the other instance families to meet workloads that customers are talking to us about that they want to run on this platform. >> Excellent, well, we really look forward. I know we're going to have a deep dive with Colbert to go into a little bit under the hood. And as I mentioned, got one of your joint customers PLM Insurance to understand their use case and how they're doing it. Matt and Fred, if you could just give us final takeaway, VMware cloud on AWS, Matt, and then Fred. >> Well, first off, thank you Stu for this opportunity to speak. I always enjoy spending time with you and certainly with Fred. We're just super excited and thrilled about our partnership. VMware couldn't be happier with our partnership with AWS from engineering to marketing, customer experience. Our teams are working together hand in glove to ensure success for our customers. VMware cloud on AWS is a truly unique service. Customers can continue business operations with minimal disruption in case of any uncertain event, they can migrate their workloads fast in a very cost effective manner with minimal risk. And we're really all about helping large enterprises as well as small and medium businesses accelerate their cloud migration and modernization journey. In fact, if you look across the board, we have seen enormous uptake. And now with these new offerings that we talked about, especially the two hosts production cluster, and VMware cloud Director service, we believe we're going to be more attractive to more organizations of various sizes. We're excited about the road ahead. >> And Fred. >> Customers are excited about this road, I would add. One, thank you guys for having us on. It's great to tell this story. The feedback has been phenomenal . The growth in the adoption and what we're seeing in terms of the use cases across the board is much stronger than we could have imagined. So it's really great to see this work that is hard to do to really merge the best of VMware and the best of AWS in a true deep partnership. And that takes work at all layers, whether it's a commerce system integration, or if it's the instance engineering and roadmap work across the board or networking. And customer support across the board for solutions that run on this platform. Both of us are joined to make sure customers are satisfied regardless of what it takes. That's something that no one else has. And it is unique. And it's a long term commitment that we have with each other to do the right thing for the solution. 'Cause we can't do it individually. This is something that truly only a joint partnership as strong as this is, and has gotten stronger can deliver. So we're super excited about it. I think you're going to continue to see the pace of innovation on what we're delivering increase. And so, with that, it's been great to work with VMware on this. It's really fun. >> Well, thank you, Fred. Thank you, Matt. Yeah, congratulation to your team. And of course, love hearing the customer stories and feedback. >> Thank you Stu. >> All right. Be sure to check out the other interviews as part of this announcement and check out theCUBE.net of course, we're covering VMware and AWS deeply including their shows whether they are in person or virtual. I'm Stu Miniman and thank you for watching theCUBE.

>> From the KIPP studios in Palo Alto in Boston, connecting with thought leaders all around the world, this is a CUBE conversation. >> IBM's new CEO has an opportunity to reset the direction of the company. Outgoing CEO Ginni Rometty, inherited a strategy that was put in place over two decades. It became fossilized in a lower-margin services-led model that she helped architect. Ginni spent a large portion of her tenure, shrinking the company so it could grow. But unfortunately, she ran out of time. For decades, IBM has missed opportunities to aggressively invest in the key waves that are now powering the tech economy. Instead, IBM really tried to balance investing innovation with placating Wall Street. We believe IBM has an opportunity to return to the Big Blue status that set the standard for the tech industry. But several things have to change, some quite dramatically. So we're going to talk about what it's going to take for IBM to succeed in this endeavor. Welcome to this special Wikibon CUBE Insights powered by ETR. In this breaking analysis, we're going to address our view of the future of IBM and try to accomplish three things. First, I want to review IBM's most recent earnings, the very first one under new CEO Arvind Krishna, and we'll discuss IBM's near-term prospects. Next, we'll look at how IBM got to where we are today. We want to review some of the epic decisions that it has made over the past several years and even decades. Finally, we'll look at some of the opportunities that we see for IBM to essentially remake itself and return to that tech titan that was revered by customers and feared by competitors. First, I want to look at the comments from new CEO Arvind Krishna. And let's try to decode them a bit. Arvind in the first earnings call that he held, and in interviews as well, and also internal memos, he's given some clues as to how he's thinking. This slide addresses a few of the key points. Arvind has clearly stated that he's committed to growing the IBM company, and of course, increasing its value. This is no surprise, as you know, every IBM CEO has been under pressure to do the same. And we'll look at that further a little later on in the segment. Arvind, also stated that he wants the company, he said it this way, "To lead with a technical approach." Now as we reported in January when Krishna was appointed to CEO. We're actually very encouraged that the IBM board chose a technical visionary to lead the company. Arvind's predecessors did not have the technical vision needed to make the bold decisions that we believe are now needed to power the company's future. As a technologist, we believe his decisions will be more focused on bigger tactical bets that can pay bigger returns, potentially with more risk. Now, as a point of just tactical commentary, I want to point out that IBM noted that it was doing well coming into the March month, but software deals especially came to a halt as customers focused on managing the pandemic and other parts of the business were okay. Now, this chart pulls some of the data from IBM's quarter. And let me make a few comments here. Now, what was weird here, IBM cited modest revenue growth on this chart, this was pulled from their slides. But revenue was down 2% for the quarter relative to last year. So I guess that's modest growth. Cloud revenue for the past 12 months, the trailing 12 months, was 22 billion and grew 23%. We're going to unpack that in a minute. Red Hat showed good growth, Stu Miniman and I talked about this last week. And IBM continues to generate a solid free cash flow. Now IBM, like many companies, they prudently suspended forward guidance. Some investors bristled at that, but I really have no problem with it. I mean, just way too much uncertainty right now. So I think that was a smart move by IBM. And basically, everybody's doing it. Now, let's take a look at IBM's business segments and break those down and make a few comments there. As you can see, in this graph, IBM's 17 plus billion dollar quarter comprises their four reporting segments. Cloud and cognitive software, which is, of course, its highest margin and highest growth business at 7%. You can see its gross margin is really, really nice. But it only comprises 30% of the pie. Services, the Global Business Services and GTS global technology services are low-growth or no growth businesses that are relatively low margin operations. But together they comprise more than 60% of IBM's revenue in the quarter and consistently throughout the last several years. Systems, by the way, grew nicely on the strength of the Z15 product cycles, it was up by 60% and dragged storage with it. But unfortunately power had a terrible quarter and hence the 4% growth. But decent margins compared to services of 50%. IBM's balance sheet looks pretty good. It took an advantage of some low rates recently and took out another $4 billion in corporate debt. So it's okay, I'm not too concerned about its debt related to the Red Hat acquisition. Now, welcome back to cloud at 22 billion for the past 12 months and growing at 23%. What, you say? That sounds very large, I don't understand. It's understandable that you don't understand. But let me explain with this next graphic. What this shows is the breakdown of IBM's cloud revenue by segment from fiscal year 19. As you can see, the cloud and cognitive segments, or segment which includes Red Hat comprises only 20% of IBM's cloud business. I know, kind of strange. Professional services accounts for 2/3 of IBM's Cloud revenue with systems at 14%. So look, IBM is defining cloud differently than most people. I mean, actually, that's 1% of the cloud business of AWS, Azure and Google Cloud come from professional services and on-prem hardware. This just doesn't have real meaning. And I think frankly, it hurts IBM's credibility as it hides the ball on cloud. Nobody really believes this number. So, I mean, it's really not much else I can say there. But look, why don't we bring in the customer angle, and let's look at some ETR data. So what this chart shows is the results of an ETR survey. That survey ran, we've been reporting on this, ran from mid March to early April. And more than 1200 respondents and almost 800 IBM customers are in there. If this chart shows the percentage of customers spending more on IBM products by various product segments that we chose with three survey samples April last year, January 2020, and the most recent April 2020 survey. So the good news here is the container platforms, OpenShift, Ansible, the Staples of Red Hat are showing strength, even though they're notably down from previous surveys. But that's the part of IBM's business that really is promising. AI and machine learning and cloud, they're right there in the mix, and even outsourcing and consulting and really across the board, you can see a pretty meaningful and respectable number or percent of customers are actually planning on spending more. So that's good, especially considering that the survey was taken right during the middle of the COVID-19 pandemic. But, if you look at the next chart, the net scores across IBM's portfolio, they're not so rosy. Remember, net score is a measure of spending momentum. It's derived by essentially subtracting the percent of customers that are spending less from those that are spending more. It's a nice simple metric. Kind of like NPS and ETR surveys, every quarter with the exact same methodology for consistency so we can do some comparisons over time series, it's quite nice. And you can see here that Red Hat remains the strongest part of IBM's portfolio. But generally in my experience as net scores starts to dip below 25% and kind of get into the red zone, that so called danger zone. And you can see many parts of IBM's portfolio are showing softness as we measure in net score. And even though you see here, the outsourcing and consulting businesses are up relative to last year, if you slice the data by large companies, as we showed you with Sagar Kadakia last week, that services business is showing deceleration, same thing we saw for Accenture, EY, Deloitte, etc. So here's the takeaway. Red Hat, of course, is where all the action is, and that's where IBM is going to invest in our opinion, and we'll talk a little bit more about that and drill into that kind of investment scenario a bit later. But what I want to do now is I want to come back to Arvind Krishna. Because he has a chance to pull off a Satya Nadella like move. Maybe it's different, but there are definite similarities. I mean, you have an iconic brand, a great company, that's in many technology sectors, and yes, there are differences, IBM doesn't have the recurring software revenue that Microsoft had, it didn't have the monopoly and PCs. But let's move on. Arvind has cited four enduring platforms for IBM, mainframes, services, middleware, and the newest hybrid cloud. He says that IBM must win the architectural battle for hybrid cloud. Now, I'm going to really share later what we think that means. There's a lot in that statement, including the role of AI in the edge. Both of which we'll address later on in this breaking analysis. But before we get there, I want to understand from a historical perspective where we think Arvind is going to take IBM. And to do that, we want to look back over the modern history of IBM, modern meaning of the post mainframe dominance era, which really started in 1993 when Louis Gerstner took over. Look, it's been well documented how Louis Gerstner pivoted into services. He wrote his own narrative with the book, "Who Says Elephants Can't Dance". And you know, look, you can't argue with his results. The graphic here shows IBM's rank in the fortune 500, that's the green line over time. IBM was sixth under Gerstner, today it's number 38. The blue area chart on the Insert, it shows IBM's market cap. Now, look, Gerstner was a hero to Wall Street. And IBM's performance under his tenure was pretty stellar. But his decision to pivot to services set IBM on a path that to this day marks company's greatest strength, and in my view, its greatest vulnerability. Name a product under the mainframes in which IBM leads. Again, middleware, I guess WebSphere, okay. But you know, IBM used to be the leader in the all important database market, semiconductors, storage servers, even PCs back in the day. So, I don't want to beat on this too much, I can say it's been well documented. And I said earlier, Ginni essentially inherited a portfolio that she had to unwind, and hence the steep revenue declines as you see here, and it's 'cause she had to jettison the so called non-strategic businesses. But the real issue is R&D, and how IBM has used it's free cash. And this chart shows IBM's breakdown of cash use between 2007 and 2019. Blue is cash return to shareholders, orange is research and development, and gray is CapEx. Now I chose these years because I think we can all agree that this was the period of tech defined by cloud. And you can see, during those critical early formative years, IBM consistently returned well over 50%, and often 60% plus of its free cash flow to shareholders in the form of dividends and stock buybacks. Now, while the orange appears to grow, it's because of what you see in this chart. The point is the absolute R&D spend really didn't change too much. It pretty much hovered, if you look back around 5 1/2 to $6 billion annually, the percentage grew because IBM's revenue declined. Meanwhile, IBM's competitors were spending on R&D and CapEx, what were they doing? Well, they were building up the cloud. Now, let me give you some perspective on this. In 2007 IBM spent $6.2 billion on R&D, Microsoft spent 7 billion that same year, Intel 5.8 billion, Amazon spent 800 million, that's it. Google spent 2.1 billion that year. And that same year, IBM returned nearly $21 billion to shareholders. In 2012 IBM spent $6.3 billion on R&D, Microsoft that year 9.8 billion, Intel 10 billion, Amazon 4.6 billion, less than IBM, Google 6.1 billion, about the same as IBM. That year IBM returned almost $16 billion to shareholders. Today, IBM spends about the same 6 billion on R&D, about the same as Cisco and Oracle. Meanwhile, Microsoft and Amazon are spending nearly $17 billion each. Sorry, Amazon 23 billion, and IBM could only return $7 billion to shareholders last year. So while IBM was returning cash to its shareholders, its competitors were investing in the future and are now reaping the rewards. Now IBM suspended its stock buybacks after the Red Hat deal, which is good, in my opinion. Buybacks have been a poor use of cash for IBM, in my view. Recently, IBM raised its dividend by a penny. It did this so it could say that it has increased its dividend 25 years in a row. Okay, great, not expensive. So I'm glad that that investors were disappointed with that move. But since 2007, IBM has returned more than $175 billion to shareholders. And somehow Arvind has to figure out how to tell Wall Street to expect less while he invests in the future. So let's talk about that a little bit. Now, as I've reported before, here is the opportunity. This chart shows data from ETR. It plots cloud landscape and is a proxy for multi-cloud and hybrid cloud. It plots net score or spending momentum on the y-axis, and market share, which really isn't market share, as we've talked about, it's a measure of pervasiveness in the data set, that's plotted on the x-axis. So, the point is, IBM has presence, it's pervasive in the marketplace, Red Hat and OpenShift, they have relevance, they have momentum with higher net scores. Arvind's opportunity is to really plug OpenShift into IBM's, large install base, and increase Red Hat's pervasiveness, while at the same time lifting IBM momentum. This, in my view, as Stu Miniman and I reported last week at the Red Hat Summit, puts IBM in a leading position to go after multi and hybrid cloud and the edge. So let's break that down a little bit further. When Arvind talks about winning the architectural battle for hybrid cloud, what does he mean by that? Here's our interpretation. We think IBM can create the de facto standard for cloud and hybrid cloud. And this includes on-prem, public cloud, cross clouds, or multi cloud, and importantly, the edge. Here's the opportunity, is to have OpenShift run natively, natively everywhere, on-premises in the AWS cloud, in the Azure Cloud, GCP, Alibaba, and the IBM Cloud and the Oracle Cloud, everywhere natively, so we can take advantage of the respective services within all those clouds. Same thing for on-prem, same thing for edge opportunities. Now I'll talk a little bit more about that in a moment. But what we're talking about here is the entire IT stack running natively, if I haven't made that point on OpenShift. The control plane, the security plane, the transport, the data management plane, the network plane, the recovery plane, every plane, a Red Hat lead stack with a management of resources is 100% identical, everywhere the same cloud experience. That's how IBM is defining cloud. Okay, I'll give them a mulligan on that one. IBM can be the independent broker of this open source standard covering as many use cases and workloads as possible. Here's the rub, this is going to require an enormous amount of R&D. Just think about all the startups that are building cloud native services and imagine IBM building or buying to fill out that IT stack. Now I don't have enough time to go in too deep to all other areas, but I do want to address the edge, the opportunity there and weave in AI. Beyond what I said above, which I want to stress, the points I made above about hybrid, multi-cloud include edge, the edge is a huge opportunity. But IBM and in many other, if not most other traditional players, we think are kind of missing the boat on that. I'll talk about that in a minute. Here's the opportunity, AI inference is going to run at the edge in real-time. This is going to be incredibly challenging. We think about this, a car running inference AI generates a billion pixels per second today, in five years, it'll be 15 times that. The pressure for real-time analysis at the edge is going to be enormous, and will require a new architecture with new processing models that are likely going to be ARM-based in our opinion. IBM has the opportunity to build end-to-end solutions powered by Red Hat to automate the data pipeline from factory to data center to cloud and everywhere. Anywhere there's instruments, IBM has an opportunity to automate them. Now rather than toss traditional Intel-based IT hardware over the fence to the edge, which is what IBM and most people are doing right now, IBM can develop specialized systems and make new silicon investments that can power the edge with very low cost and efficient systems that process data in real-time. Hey look, I'm out of time, but some other things I want you to consider, IBM transitioning to a recurring revenue model. Interestingly, Back to the Future, right? IBM used to have a massive rental revenue stream before it converted that base to sales. But if Arvind can recreate a culture of innovation and win the day with developers via its Red Hat relationships, as I said recently, he will be CEO of the decade. But he has to transform the portfolio by investing more in R&D. He's got to convince the board to stop pouring money back to investors for a number of years, not just a couple of quarters and do Whatever they have to do to protect the company from corporate raiders. This is not easy, but with the right leader, IBM, a company that has shown resilience through the decades, I think it can be done. All right, well, thanks for watching this episode of the Wikibon CUBE Insights powered by ETR. This is Dave Vellante. And don't forget, these episodes are available as podcasts, wherever you listen, I publish weekly on siliconangle.com, where you'll find all the news, I publish on wikibon.com which is our research site. Please comment on my LinkedIn posts, check out etr.plus, that's where all the data lives. And thanks for watching everybody. This is Dave Vellante for Breaking Analysis, we'll see you next time. (soft music)

>> From the SiliconANGLE Media office in Boston massachusetts, it's theCUBE. (techno music) Now, here's your host Stu Miniman. >> Hi, and welcome to a special CUBE conversation here in our Boston area studio. One of the biggest topics we've been digging into as we head through 2020, has really been multi-cloud and as the customers as they're really going through their own transformations understanding what they're doing in their data center to modernize what's happening between all of the public clouds they use, and all the services that fit amongst them. Happy to bring back one of our CUBE alumni to dig into a specific topic. Simon Taylor, who's the CEO of HYCU. Of course data protection, a big piece. A big buzz in the industry for a number of years, in one of those areas, in multi-cloud, that's definitely of big importance. Simon, great to see you, thanks so much for joining us. >> Thank you so much for having me back on, it's exciting to be here. >> All right, so, Simon, first, give us the update. >> Sure. >> It's 2020. We've seen you at many of the conferences we go to. You're based in Boston, so not to far for you to come out to our Boston area studio here. You know a 40 minute drive without traffic so, >> Not bad at all. >> give us the latest on HYCU. >> Certainly well and Stu, thanks again for having me into your studio, it's gorgeous, everything looks great. It's a lot easier than traveling over to Europe to see you. So this is very very convenient actually. But since we last spoke, which I think was about six months ago now, HYCU has been growing fast and furiously, you know we started out with the world's first purpose built backup and recovery product for Nutanix Of course, we added VMware we added Google Cloud, we wrapped all the data together into multi-cloud data protection as a service, and we called that HYCU Protege. Well I am so thrilled to announce that in just the three months since we've launched Protege, we have seen hundreds of customers flocking to it. And what we're finding is that customers are calling us and they're saying things like, "let me get this straight, "I'm already backing up my data on-prem with you, "I can now migrate to the cloud, "bring it back again for disaster recovery as a service, "and it's all part of HYCU?" and we say yes, you know, and they say, "and this is all offered as a service?" Yes, "and it's natively integrated "into all the platforms that I'm using?" Yes. And I think so customers today, are more and more in need of the kind of expertise that HYCUs providing because they're looking now much more strategically than ever before, at what workloads to leave on-prem and which workloads to migrate to the cloud, and they want to make sure that, that entire data pathway is protected from beginning to end. >> Yeah, it's really interesting stuff, I think back to early in my career that you know that data protection layer was like, "well, this is what I'm running "and don't change it." Think about like when you've rolled out like virtual tape as a technology it was, you know, "I don't want to have to change my backup "because that is just something that runs "and I don't do it." For last five years or so it feels like customers. There's so much change in their environment that they are looking for things that are more flexible, you talked about some of the flexible adoption models for payment and the like that they're looking for. So, you know, what do you think customers are just more embracing of that change, is it just that changes their daily business and therefore data protection needs to come along with that. Well it's funny you asked because just a few years ago I was on theCUBE with you and you said to me, "you guys have a perpetual license model, "what are you doing about that?" and I said, "don't worry, it is shifting to as a service it's going subscription," which was super important for the market is, I've had conversations with folks who are selling cooking gear and they're trying to sell that as a service, I saw yesterday, somebody, I think Panera Bread, is offering a coffee as a service. You know, I think what we've started to realize is that the convenience of the as a service model, the flexibility, which I would argue was probably driven by cloud technology and cloud technology adoption, is something the market has truly embraced and I think anybody who's not moved in that direction at this point is probably very much being left behind. >> Okay, another technology that often goes hand in hand in discussion with data protection is security. Of course ransomware is a hot topic conversation the last few years, how does that fit into your conversations with customers, what are you saying? >> That's a great question. So you know one of our advisory board members, his name is Kevin Powers, and he runs the Boston College cyber security program. I had the privilege and the honor of attending the FBI Boston College cyber program recently at a large scale event at Boston College, and FBI Director Ray was actually on hand to talk about this problem, and it was incredible you know he said, "cyber crime as a service "is becoming a major issue," you're talking about the commoditization of hard to build malware, that's now just skyrocketing off the charts, the amount of cyber exploitation that's going on across the world. This is creating massive massive issues for the FBI because they've got so many thousands of cases, they've got to deal with. And while they're doing a fantastic job. We believe prevention is certainly the key. So one of the things that has been really really wonderful as a CEO to watch has been the way that some of our customers have actually been able to crack the code in terms of not having to give in to these bad actors. We've had actual customers who have had ransomware attacks had millions of dollars in data, literally stolen from them, and they've been told, "you've got to deposit, "$5 million on this Bitcoin account by midnight, "or we're deleting the data." Right? Because HYCU is Linux based because HYCU is not Windows Server based because HYCU is natively integrated into all the platforms that we support. We were able to help those customers get their data back without paying a penny. So I think that that's one of those moments where you really sort of say to yourself, "God I'm glad I'm in this business here," we've built a product that doesn't just do what we say it's going to do, it does a heck of a lot more. And I think it's it's absolutely a massive problem and data protection is really a key part of the answer, >> You know it's great to hear their success stories there, you know I think back to earlier days where it'd be like well you know what if I set up for disasters and data protection and things like that, well maybe I haven't thought about it or maybe I kind of implemented it but I've never really tested it, but there's more and more reasons why I might actually need to leverage these technologies that I've deployed, and it's nice to know that they're there. You know it's not just an insurance thing that I've never used. >> Oh absolutely. Yeah, absolutely. >> All right. So I started off our discussion time in talking about multi-cloud So you talked about earlier we first first met it was at the Nutanix shows in their environments, and some of that you've gone along with Nutanix as they've gone through hybrid and multi-cloud what they call enterprise Cloud Messaging. >> Sure. >> And play with those environments so bring us up to speed. What have your big customers doing with cloud where does HYCU fit in and what are the updates on your product. >> Yeah, sure. And I'll start off by saying that at this point about a third of all AHV customers are using a HYCU for backup AND recovery. >> And just for our audience that doesn't know, AHV of course is Nutanix's >> Yes. >> Acropolis Hypervisor >> Absolutely. >> That comes baked into their solution as an alternative to people like VMware. >> Perfectly said as always sir, yes very much, and you know we've been thrilled as the rise of AHV and Nutanix has sort of taken the market by storm. And when we started out, you know we use to came on the show with zero customers and a new product and said, "we believe in AHV and we think it's going to be great "and we're going to back it up." And that's really paid off in spades for us, which was wonderful, but we also recognize that customers needed that VMware backups. We built a VADP integration and then we started going after the public cloud. So we started with Google Cloud, and we said we're going to build the world's first purpose built backup and recovery as a service for GCP. We launched that last year and it was tremendous you know some of the world's largest companies and organizations and governments are actually now running HYCU specifically for Google Cloud. So we've been thrilled about that. I think the management team at GCP has done a terrific job of making sure that Google can be really competitive in the cloud wars, and we're thrilled to support them. >> Yeah, and I'm glad you've got some customer stories on Google because you know the industry watchers out there it's like, "well you know Google they're number three," and you know we know that Google has some really strong data products Where they're very well known but I'm curious when you're talking to your customers. Is there anything that's kind of commonalities to why customers are using Google and you know what feedback you're hearing from your customers out there. >> Sure I mean I'll start off by saying this, we've polled our customers and we've now got over 1,300 customers in 56 countries. So we polled all of them and we just said, "how many data silos do you have, "how many platforms, how many clouds?" The average was five. Right, so the first thing to say is that I think almost all of these large enterprise customers in public sector and private sector are really using all of them, the extent to which they may be using AWS versus Azure versus GCP, versus Nutanix versus VMware on-prem. we can argue and debate but I think all customers at this point of any size and scale are trying them all out. I think what Google's done really well is they've started to build a really strong partner program. I think where they were a little bit sort of late to the party in terms of AWS and Azure being there sort of first. But I think what Thomas Kurian did when he came in is he sort of tripled down on sort of building out that ecosystem and saying, "what's really important "to make cloud customers comfortable "that their data is going to be as safe on Google Cloud, "as it was on-prem," and I'm thrilled that they've elected to make data protection sort of one of the key pillars of that strategy, not just because we're a data protection company, but because I do think that that was one of the encumbrances in terms of that evolution to cloud. >> Yeah, absolutely, seen a huge growth in the ecosystem around Google. The other big cloud provider that has a very strong partner ecosystem is the one when I went to the show last year, their CEO Satya Nadella talked about trust, so of course talking about Microsoft and Azure, very large ecosystem there, trying to emphasize, maybe against others and by the way you saw this as much of a shot against Google >> Sure. >> you know, how do I trust Google with my data and information from the consumer side as AWS is I might be concerned that they might be competing against them. So, how about the Microsoft relationship? >> It's a great question. So again, so when we started on-prem, with our initial purpose built backup recovery products. We added Google Cloud. You know I'm now thrilled to announce that we're also going to be launching Azure backup and recovery. It's also native, it is purpose built into the Azure Marketplace. All the things you've come to expect from HYCU backup. The simplicity, the fact that it's SLO based. The fact that you can actually go in and decide how many times a day you want a different recovery point et cetera. All of those levels of configuration are now baked in to HYCUs own purpose built backup and recovery as a service for Azure. But I think the important thing to remember about this wonderful wonderful new addition to our portfolio. Is that, it is a critical component of HYCU Protege. So getting back to your question from before about multi-cloud data protection and what we're seeing, we call this the year of migration, because for all of these cloud platforms, what are they really trying to do they need to move massive amounts of data in a safe and resilient manner, to the cloud. So remember after we built out these purpose built backup recovery services, Azure is now one of those. We then pulled all that data together under a single pane of glass we called it HYCU Protege. We then said to customers, we're going to enable you to automatically migrate with the touch of a button an entire workload to the cloud, and then bring it back again for disaster recovery, and we will protect the data on-prem in the cloud and back again. >> Yeah, it's interesting 'cause when we kind of look at what's happening in the marketplace, for many years it was a discussion of what's moving from the data center to the public cloud, some things are moving back from the environment edge, of course, pulls things even further. Often it's, I say it's not even migration anymore it's just mobility, because we are going to be moving things and spinning things up and building things in many more places, and it's going to change. As we started out that conversation, there's so much change going on that so you're giving customers some optionality there, so that this isn't just a one way, you know, let's stick it on a truck put it on this thing and get it to that environment but I need to be able to enable some of that optionality and know what I'm doing today but also knowing that you know six months a year from now, we know things are going to be different >> Yes, yes! >> And in each of these some of those environments. >> Absolutely. We call it the three Ds data assurance, data mobility, and disaster recovery. So I think the ability to not only protect your data, whether it's on-prem as it journeys to the cloud or whether it's in the cloud, the ability to actually assist the customer in the migration. And what I hear time and time again is, "oh but Azure has a tool," or "Google has a tool for migration." Of course they have tools for migration, but I think the challenge for customers is, how do I affect that data resiliency, how do I ensure that I can move the data as a complete workload. Moving an entire SAP HANA instance, for example, to the cloud. And it protected the entire time as it journeys up there, and then bring it back for the disaster recovery without professional services. Because again, you know HYCU it's about simplicity, we want to make sure that these customers can get the same level of readiness, the same ease of deployment that they get from their cloud vendor, when they're thinking about the data protection and the migration. >> All right, I want to click down one layer >> Please. >> in here. We're talking about multi-cloud, you talk about simplicity. >> Sure. >> Well, Kubernetes might not be the simplest thing out there but it absolutely is a fundamental piece of the infrastructure in a multi-cloud environment so you know your partners, Google with GKE, Azure with AKS and >> And Carbon. >> Carbon with a K from Nutanix everyone now, I say it's not about distributions it's really every platform that you're going to use is going to have Kubernetes built into it so what does that mean from a data protection standpoint? Do you just plug into all of these environments you've tested it got customers using it? >> It's a great question it comes up, as you can imagine, all the time. I think it's something that is becoming more and more ready for prime time. A lot of the major vendors are moving to it, making heavy investments in Kubernetes, we ourselves have over 100 customers that are actively using Kubernetes in one form or another and backing the data up using HYCU so there's no question in my mind that HYCU is Kubernetes ready. I think what's really exciting for us is some of the native integrations we're working on with Google and with Nutanix so whether it's Carbon whether it's GKE, we want to make sure that when we work with these platforms that we mimic, how the platform is supporting Kubernetes, so that our customers can get the same experience from HYCU that they're getting from the platform provider itself. >> All right, Simon want to give you the final word. Bring us inside your customers what they're doing with multi-cloud and where HYCU fits there, here in 2020. Sure, we talked about prime time. Cloud for many years has been something that I think large enterprises have talked a big game about, but have been really dipping their toe in the water with. What we've seen the last two years, is a massive massive at scale migration to the largest three public clouds, whether that's GCP, whether that's Azure or the other one. (laughing) We're thrilled to support GCP and Azure because GCP and Azure, we believe do provide the most value to our customers. But I think the name of the game here is not just supporting a customer in the cloud, it's understanding that every customer today is to is on a journey, whether they're on-prem, whether their journeying to cloud or they're in cloud those three Ds, data assurance, which is our backup, data mobility, which is the automated migration, or disaster recovery readiness. That's the name of the game and that's how HYCU wants to help. >> All right, Simon Taylor. Always a pleasure to catch up with you thank you so much for the HYCU updates, >> Stu thanks so much for having us on. >> All right, be sure to check out www.thecube.net for all of our inventory of the shows that we've been at the videos we've done, you can even search on keywords in companies, I'm Stu Miniman and thank you for watching theCUBE. (Techno Music)

>>from Santa Clara, California In the heart of Silicon Valley, it's the queue covering altitude 2020. Brought to you by aviatrix. >>Okay, welcome back to altitude. 2020 for the folks on the Livestream. I'm John Furrier Steve Mullaney with CEO of aviatrix for our first of two customer panels on cloud with Cloud Network Architects. We got Bobby. Will be They gone. Luis Castillo, National Instruments. David should nick with fact set. Guys, welcome >>to the stage for this digital >>event. Come on up. >>Hey, good to see you. Thank you. Okay. Okay. Yeah. >>Okay. Customer panel. This is my favorite part. We get to hear the real scoop. Get the gardener. Given this the industry overview. Certainly multi clouds, very relevant. And cloud native networking is the hot trend with live stream out there in the digital events of guys. Let's get into it. The journey is you guys are pioneering this journey of multi cloud and cloud native networking and soon going to be a lot more coming. So I want to get into the journey. What's it been like? Is it really got a lot of scar tissue? Uh, what is some of the learnings >>Yeah, absolutely. So multi Cloud is whether or not we accepted as network engineers is a reality. Um, like Steve said about two years ago, companies really decided to to just to just bite the bullet and move there. Whether or not whether or not we accept that fact, we need to now create a consistent architecture across across multiple clouds and that that is challenging, um, without orchestration layers as you start managing different different tool sets and different languages across different clouds. So that's it's it's really important to start thinking about that. You >>guys are on the other Panelists here this different phases of this journey. Some come at it from a networking perspective. Some comment from a problem. Troubleshooting. Which What's your experiences? >>Yeah, so, uh, from a networking perspective, it's been incredibly exciting. It's kind of a once in a generational opportunity to look at how you're building out your network. You can start to embrace things like infrastructure as code that maybe your peers on the systems teams have been doing for years. But it just never really worked on Prem, so it's really it's really exciting to look at all the opportunities that we have And then all the interesting challenges that come up that you, uh, that you get to tackle >>and in fact said, you guys are mostly aws, right? >>Right now, though, where we are looking at multiple clouds, we have production workloads running in multiple clouds today. But a lot of the initial work has been with them, >>and you see it from a networking perspective. That's where you guys are coming at it from. Yep. Yeah. So >>we evolved more from a customer requirement. Perspective started out primarily is AWS. But as the customer needed mawr resources manager like HPC, you know, Azure A D. Things like that. Even recently, Google do analytics. Our journey has evolved into more of a multi cloud environment. >>Steve weigh in on the architecture because this has been the big conversation. I want you to lead this sector. >>Yeah, so I mean, I think you guys agreed that journey. It seems like the journey started a couple of years ago got real serious. The need for multi cloud, whether you're there today. Of course it's going to be there in the future, so that's really important. I think the next thing is just architecture. I love to hear what you you had some comments about architecture matters. It all starts. I mean, every enterprise I talked to maybe talk about architecture in the importance of architecture. Maybe Bobby >>is from architectural perspective. We started our journey five years ago. Wow. Okay. And we're just now starting our fourth evolution of our network architect. Okay? And we call it networking security. Net sec versus just network on that. Fourth generation architectures be based primarily upon Palo Alto networks and aviatrix aviatrix doing the orchestration piece of it. But that journey came because of the need for simplicity, the need for a multi cloud orchestration without having to go and do reprogramming efforts across every cloud as it comes along. >>Right? I guess. The other question, I I also had around architectures also, Louise, maybe just talk about I know we've talked a little bit about scripting right and some of your thoughts on that. Yeah, absolutely. So, um, so for us, we started, We started creating Ah, the network constructs with cloud formation. And we've stuck with that, for the most part. What's interesting about that is today on premise, we have a lot of a lot of automation around around how we provision networks, but confirmation has become a little bit like the new manual for us. So we're now having issues with having the automate that component and making it consistent with our on premise architecture, making it consistent with azure architecture and Google Cloud. So it's really interesting to see to see companies now bring that layer of abstraction that SD Wan brought to the to the wan side. Now it's going up into into the cloud networking architectures, >>right? So on the fourth generation of you mentioned, you're 1/4 gen architecture. What do you guys? What have you learned? Is there any lessons? Scar tissue, what to avoid? What worked? What was some of the >>one of the biggest lesson there is that when you think you finally figured it out, you haven't right? Amazon will change something as you change something, you know, transit gateway, the game changer eso uh, and listening to the business requirements is probably the biggest thing we need to do up front. But I think from a simplicity perspective, we said We don't want to do things four times. We want two things. One time we want to have a right to an AP I, which aviatrix has and have them do the orchestration for us so that we don't have to do it four times. How >>important is architecture in the progression, is it? You guys get thrown in the deep end to solve these problems or you guys zooming out and looking at it. I mean, how are you guys looking at the architecture? >>I mean, you can't get off the ground if you don't have the network there. So all of those things we've gone through similar evolutions. We're on our fourth or fifth evolution. Uh, I think about what We started off with Amazon without a direct connect gateway without a transit gateway without ah, a lot of the things that are available today kind of the 80 20 that Steve was talking about. Just because it wasn't there doesn't mean we didn't need it, so we >>needed to figure out a way to do it. We >>couldn't say. You need to come back to the network team in a year. Maybe Amazon will have a solution for you. We need to do it now and evolve later and maybe optimize or change. Really, you're doing things in the future, But don't sit around and wait. You can't. >>I'd love to have you guys each individually answer this question for the livestream that comes up a lot. A lot of cloud architects out in the community. What should they be thinking about? The folks that are coming into this proactively and are realizing the business benefits are there? What advice would you guys give them? An architecture, which should be they be thinking about and what some guiding principles you could share. >>So I would start with, ah, looking at an architectural model that that can, that can spread and and give consistency the different two different cloud vendors that you will absolutely have to support. Um, cloud vendors tend to want to pull you into using their native tool set, and that's good. If only it was realistic, too. Talk about only one cloud, but because it doesn't, it's it's, um, it's super important to talk about and have a conversation with the business and with your technology teams about a consistent model. >>How do I do my day one work so that I'm not spending 80% of my time troubleshooting or managing my network. Because if I'm doing that, then I'm missing out on ways that I can make improvements to embrace new technologies. So it's really important early on to figure out how do I make this as low maintenance as possible so that I can focus on the things that the team really should be focusing on. >>Bobby. Your advice? The architect. I >>don't know what else I can add to. That simplicity of operations is gives key. >>Alright, so the holistic view of Day two operation you mentioned let's could jump in. Day one is you're getting stuff set up. Day two is your life after. This is what you're getting at, David. So what does that look like? What are you envisioning as you look at that 20 mile stare out post multi cloud world one of the things that you want in a day to operations? >>Yeah, infrastructure as code is really important to us. So how do we How do we design it so that we can fit start making network changes and putting them into like, a release pipeline and start looking at it like that rather than somebody logging into a router cli and troubleshooting things on an ad hoc nature. So moving more towards the Devil Ops model. >>Here's the thing I had on that day two. >>Yeah, I would. I would love to add something. So in terms of day two operations, you can you can either sort of ignore the day two operations for a little while where you get well, you get your feet wet, um, or you can start approaching it from the beginning. The fact is that the cloud native tools don't have a lot of maturity in that space. And when you run into an issue, you're gonna end up having a bad day, going through millions and millions of logs just to try to understand what's going on. So that's something that the industry just now is beginning to realize. It's It's such a such a big gap. >>I think that's key, because for us, we're moving to more of an event driven or operations. In the past. Monitoring got the job done. It is impossible to modern monitor something that's not there when the event happens, right, so the event driven application and then detection is important. >>I think Gardner is about the Cloud Native wave coming into networking. That's going to be a serious thing. I want to get you guys perspective. I know you have different views of how you came into the journey and how you're executing. And I always say the beauty's in the eye of the beholder and that kind of applies the networks laid out. So, Bobby, you guys do a lot of high performance encryption both on AWS and Azure. That's kind of a unique thing for you. How are you seeing that impact with multi cloud? >>And that's a new requirement for us to where we, uh we have a requirement to encrypt, and they never get the question Should encryption and encrypt. The answer is always yes, you should encrypt. You should get encrypt for perspective. We we need to moderate a bunch of data from our data centers. We have some huge data centers on. Getting that data to the cloud is is timely experiencing some cases, So we have been mandated that we have to encrypt everything, leaving the data center. So we're looking at using the aviatrix insane mode appliances to be able to decrypt you know 10 20 gigabytes of data as it moves to the cloud itself. David, you're using >>terra form. You've got fire net. You've got a lot of complexity in your network. What do you guys look at the future for your environment? >>Yes. So something exciting that we're working on now is fire net. So for our security team, they obviously have a lot of a lot of knowledge based around Polito on with our commitments to our clients, you know, it's it's it's not very easy to shift your security model to a specific cloud vendor it So there's a lot of stock to compliance and things like that where being able to take some of what you've you know you've worked on for years on Prem and put it in the cloud and have the same type of assurance that things were gonna work and be secure in the same way that they are on Prem helps make that journey into the cloud a lot easier. >>And you guys got scripting and get a lot of things going on. What's your what's your unique angle on this? >>Um, yeah. No, absolutely so full disclosure. I'm not not not an aviatrix customer yet. >>It's okay. We want to hear the truth. So that's good. Tell >>us what you're thinking about. What's on your mind. >>No, really, Um, when you when you talk about, um, implementing the to like this, it's It's really just really important. Teoh talk about automation and focus on on value. So when you talk about things like encryption and thinks like so you're encrypting tunnels and encrypting the path and those things are, should it should should be second nature, Really? When you when you look at building those back ends and managing them with your team, it becomes really painful. So tools like aviatrix that that had a lot of automation. It's out of out of sight, out of mind. You can focus on the value you don't have to focus on. >>I got to ask, You guys are seeing the traces here. They're their supplier to the sector, but you guys are customers. Everyone's pitching your stuff that people are not going to buy my stuff. How >>do you >>guys have that conversation with the suppliers, like the cloud vendors and other folks? What's the What's the leg or a P? I all the way you got to support this. What are some >>of the >>what are some of your requirements? How do you talk to and evaluate people that walk in and want Teoh knock on your door and pitch you something? What's the conversation like? >>It's definitely It's definitely a p. I driven. Um, we we definitely look at the at the structure of the vendors provide before we select anything. Um, that that is always first of mine. And also, what problem are we really trying to solve? Usually people try to sell or try to give us something that isn't really valuable. Like implementing Cisco solution on the on the cloud isn't really doesn't really add a lot of value. >>David, what's your conversations like with suppliers? So you have a certain new way to do things as becomes more agile, essentially networking and more dynamic. What are some of the conversations with the other incumbents or new new vendors that you're having what you require? >>So ease of use is definitely, definitely high up there. We've had some vendors come in and say, Hey, you know, when you go to set this up, we're gonna want to send somebody on site and they're going to sit with you for a day to configure. And that's kind of a red flag. Wait a minute. You know, we really if one of my really talented engineers can't figure it out on his own, what's going on there and why is that? So, uh, you know, having having some ease of use and the team being comfortable with it and understanding it is really important. >>How about you in the old days was Do a bake off winner takes all. I mean, is it like that anymore? What's evolving Bake off >>last year for us to win, So But that's different now, because now when you when you get the product, you install the product in AWS in azure or have it up and running a matter of minutes. And the key is, can you be operational within hours or days instead of weeks? But we also have the flexibility to customize it to meet your needs, because you want to be. You would be put into a box with the other customers who have needs that pastor cut their needs. >>You can almost see the challenge of you guys are living where you've got the cloud immediate value, how you can roll a penny solutions. But then you have might have other needs. So you got to be careful not to buy into stuff that's not shipping. So you're trying to be proactive in the same time. Deal with what you got here. How do you guys see that evolving? Because multi cloud to me is definitely relevant. But it's not yet clear how to implement across. How do you guys look at this? Bakes versus, you know, future solutions coming? How do you balance that? >>Um, so again. So right now we were. We're taking the the ad hoc approach and experimenting with the different concepts of cloud on demand, really leveraging the native constructs of each cloud. But but there's there's a breaking point. For sure you don't you don't get to scale this like like Simone said, and you have to focus on being able to deliver Ah, developer their their sandbox play area for the things that they're trying to build quickly. And the only way to do that is with some sort of consistent orchestration layer that allows you to. >>So you spent a lot more stuff becoming pretty quickly. >>I was very. I do expect things to start to start maturing quite quite quickly this year, >>and you guys see similar trends. New stuff coming fast. >>Yeah, the one of the biggest challenge we've got now is being able to segment within the network, being able to provide segmentation between production, non production workloads, even businesses, because we support many businesses worldwide and and isolation between those is a key criteria there. So the ability to identify and quickly isolate those workloads is key. >>So the cios that are watching are saying, Hey, take that hill, do multi cloud and then the bottoms up organization cause you're kind of like off a little bit. It's not how it works. I mean, what is the reality in terms of implementing, you know, and as fast as possible because the business benefits are clear, but it's not always clear in the technology how to move that fast. What are some of the barriers of blockers? One of the enabler, >>I think the reality is, is that you may not think of multi cloud, but your businesses, right? So I think the biggest barriers there is understanding what the requirements are and how best to meet those requirements. I think in a secure manner, because you need to make sure that things are working from a latency perspective, that things work the way they did and get out of the mind shift that, you know, if the Tier three application in the data center it doesn't have to be a Tier three application in the cloud, so lift and shift is not the way to go. >>Scale is a big part of what I see is the competitive advantage of all of these clouds, and it used to be proprietary network stacks in the old days and then open systems came. That was a good thing. But as clouds become bigger, there's kind of an inherent lock in there with the scale. How do you guys keep the choice open? How you guys thinking about interoperability? What is some of the conversations that you guys were having around those key concepts? >>Well, when we look at when we look at the from a networking perspective, it's really key for you to just enable enable all the all the clouds to be able to communicate between them. Developers will will find a way to use the cloud that best suits their business. Um and and like Like you said, it's whether whether you're in denial or not of the multi cloud fact that your company is in already, Um, that's it becomes really important for you to move quickly. >>Yeah, and the A lot of it also hinges on how well is the provider embracing what that specific cloud is doing? So are they swimming with Amazon or azure and just helping facilitate things? They're doing the heavy lifting AP I work for you or are they swimming upstream? And they're trying to hack it all together in a messy way, and so that helps you stay out of the lock in, because there, you know if they're doing if they're using Amazon native tools to help you get where you need to be, it's not like Amazon's going to release something in the future that completely, uh, you know, makes you have designed yourself into a corner. So the closer they're more cloud native, they are, the more, uh, the easier it is to, uh >>to the boy. But you also need to be aligned in such a way that you can take advantage of the cloud Native technology of limits sets. T J W. Is a game changer in terms of cost and performance. Right. So to completely ignore, that would be wrong. But, you know, if you needed to have encryption teaching double encrypted, so you need to have some type of a gateway to do the VPN encryption. So the aviatrix, too, will give you the beauty of both worlds. You can use T. W or the gateway real >>quick in the last minute we have. I want to just get a quick feedback from you guys. I hear a lot of people say to me, Hey, the pick The best cloud for the workload you got, then figure out multi cloud behind the scenes. So that seems to be Do you guys agree with that? I mean, is it doing one cloud across the whole company or this workload works great on AWS. That work was great on this from a cloud standpoint. Do you agree with that premise? And then what is multi cloud stitch them all together? >>Yeah, um, from from an application perspective, it it can be per workload, but It can also be an economical decision. Certain enterprise contracts will will pull you in one direction that value. Um, but the the network problem is still the same. >>It doesn't go away. Yeah, Yeah. I mean, you don't want to be trying to fit a square into a round hole, right? So if it works better on that cloud provider, then it's our job to make sure that that service is there. People can use >>it. Yeah, I agree. You just need to stay ahead of the game. Make sure that the network infrastructure is there. Secure is available and is multi cloud capable. >>Yeah. At the end of the day, you guys just validating that. It's the networking game now. Cloud storage. Compute Check. Networking is where the action is. Awesome. Thanks for your insights. Appreciate you coming on the Cube. Appreciate it. >>Yeah, yeah, yeah.

>>live >>from Denver, Colorado. It's the Q covering com vault Go 2019. Brought to you by combo. >>Hey, welcome to the Cube. Lisa Martin in Colorado for CONMEBOL Go 19. Statement. A man is with me this week, and we are pleased to welcome one of combos, longtime customers from the University of Leicester. We have Mark Penny, the systems specialist in infrastructure. Mark. Welcome to the Cube. >>Hi. It's good to be here. >>So you have been a convo customer at the UNI for nearly 10 years now, just giving folks an idea of about the union got 51 different academic departments about five research institutes. Cool research going on, by the way and between staff and students. About 20,000 folks, I'm sure all bringing multiple devices onto the campus. So talk to us about you came on board in 20 ton. It's hard to believe that was almost 10 years ago and said, All right, guys, we really got to get a strategy around back up, talk to us about way back then what? You guys were doing what you saw as an opportunity. What you're doing with combo today, a >>time and the There's a wide range of backup for us. There was no really assurance that we were getting back up. So we had a bit of convert seven that was backing up the Windows infrastructure. There was tyranny storage manager backing up a lot of Linux. And there was Amanda and open source thing. And then there was a LL sorts of scripts and things. So, for instance, of'em where backups were done by creating an array snapshot with the script, then mounting that script into that snapshot into another server backing up the server with calm bolt on the restore process is an absolute takes here. It was very, very difficult, long winded, required a lot of time on the checks. For this, it really was quite quite difficult to run it. Use a lot of stuff. Time we were, as far as the corporate side was concerned it exclusively on tape resource manager, we're using disc. Amanda was again for tape in a different, completely isolated system. Coupled with this, there had been a lack of investment in the data centers themselves, so the network hadn't really got a lot of throughput. This men that way were using data private backup networks in order to keep back up data off the production networks because there was really challenges over bandwidth contention backups on. So consider it over around and so on. If you got a back up coming into the working day defect student So Way started with a blank sheet of paper in many respects on went out to see what was available on Dhe. There was the usual ones it with the net back up, typically obviously again on convert Arc Serve has. But what was really interesting was deed Implication was starting to come in, But at the time, convo tonight just be released, and it had an absolutely killer feature for us, which was client side duplication. This men that we could now get rid of most of this private backup network that was making a lot of complex ISI. So it also did backup disk on back up to tape. So at that point, way went in with six Media agents. Way had a few 100 terabytes of disk storage. The strategy was to keep 28 days on disk and then the long term retention on tape into a tape library. WeII kept back through it about 2013 then took the decision. Disc was working, so let's just do disco only on save a whole load of effort. In even with a take life, you've got to refresh the tapes and things. So give it all on disk with D Duplication way, basically getting a 1 to 1. So if we had take my current figures about 1.5 petabytes of front side protected data, we've got about 1.5 petabytes in the back up system, which, because of all the synthetic fools and everything, we've got 12 months retention. We've got 28 days retention. It works really, really well in that and that that relationship, almost 1 to 1 with what's in the back up with all the attention with plants like data, has been fairly consistent since we went all disc >>mark. I wonder if you'd actually step back a second and talks about the role in importance of data in your organization because way went through a lot of the bits and bytes in that is there. But as a research organization, you know, I expect that data is, you know, quite a strategic component of the data >>forms your intellectual property. It's what is caught your research. It's the output of your investigations. So where were doing Earth Operational science. So we get data from satellites and that is then brought down roars time, little files. They then get a data set, which will consist of multiple packages of these, these vials and maybe even different measurements from different satellites that then combined and could be used to model scenarios climate change, temperature or pollution. All these types of things coming in. It's how you then take that raw data work with it. In our case, we use a lot of HPC haIf of computing to manipulate that data. And a lot of it is how smart researchers are in getting their code getting the maximum out of that data on. Then the output of that becomes a paper project on dhe finalized final set of of date, which is the results, which all goes with paper. We've also done the a lot of genetics and things like that because the DNA fingerprinting with Alec Jeffrey on what was very interesting with that one is how it was those techniques which then identified the bones that were dug up under the car park in Leicester, which is Richard >>Wright documentary. >>Yeah, on that really was quite exciting. The way that well do you really was quite. It's quite fitting, really, techniques that the university has discovered, which were then instrumental in identifying that. >>What? One of the interesting things I found in this part of the market is used to talk about just protecting my data. Yeah, a lot of times now it's about howto. Why leverage my data even Maur. How do I share my data? How do I extract more value out of the data in the 10 years you've been working with calm Boulder? Are you seeing that journey? Is that yes, the organization's going down. >>There's almost there's actually two conflicting things here because researchers love to share their data. But some of the data sets is so big that can be quite challenging. Some of the data sets. We take other people's Day to bring it in, combining with our own to do our own modeling. Then that goes out to provide some more for somebody else on. There's also issues about where data could exist, so there's a lot of very strict controls about the N. H s data. So health data, which so n hs England that can't then go out to Scotland on Booth. Sometimes the regulatory compliance almost gets sidelines with the excitement about research on way have quite a dichotomy of making sure that where we know about the data, that the appropriate controls are there and we understand it on Hopefully, people just don't go on, put it somewhere. It's not because some of the data sets for medical research, given the data which has got personal, identifiable information in it, that then has to be stripped out. So you've got an anonymous data set which they can then work with it Z assuring that the right data used the right information to remove so that you don't inadvertently go and then expose stuff s. So it's not just pure research on it going in this silo and in this silo it's actually ensuring that you've got the right bits in the right place, and it's being handled correctly >>to talk to us about has you know, as you pointed out, this massive growth and data volumes from a university perspective, health data perspective research perspective, the files are getting bigger and bigger In the time that you've started this foundation with combo in the last 9 10 years. Tremendous changes not just and data, but talking about complaints you've now got GDP are to deal with. Give us a perspective and snapshot of your of your con vault implementation and how you've evolved that as all the data changes, compliance changes and converts, technology has evolved. So if you take >>where we started off, we had a few 100 petabytes of disk. It's just before we migrated. Thio on Premise three Cloud Libraries That point. I think I got 2.1 petabytes of backup. Storage on the volume of data is exponentially growing covers the resolution of the instruments increases, so you can certainly have a four fold growth data that some of those are quite interesting things. They when I first joined the great excitement with a project which has just noticed Betty Colombo, which is the Mercury a year for in space agency to Demeter Mercury and they wanted 50 terabytes and way at that time, that was actually quite a big number way. We're thinking, well, we make the split. What? We need to be careful. Yes. Okay. 50 terrorizes that over the life of project. And now that's probably just to get us going. Not much actually happened with it. And then storage system changed and they still had their 50 terabytes with almost nothing in it way then understood that the spacecraft being launched and that once it had been launched, which was earlier this year, it was going to take a couple of years before the first data came back. Because it has to go to Venus. It has to go around Venus in the wrong direction, against gravity to slow it down. Then it goes to Mercury and the rial bolt data then starts coming back in. You'd have thought going to Mercury was dead easy. You just go boom straight in. But actually, if you did that because of gravity of the sun, it would just go in. You'd never stop. Just go straight into the sun. You lose your spacecraft. >>Nobody wants >>another. Eggs are really interesting. Is artfully Have you heard of the guy? A satellite? >>Yes. >>This is the one which is mapping a 1,000,000,000 stars in the Milky Way. It's now gone past its primary mission, and it's got most of that data. Huge data sets on DDE That data, there's, ah, it's already being worked on, but they are the university Thio task, packaging it and cleansing it. We're going to get a set of that data we're going to host. We're currently hosting a national HPC facility, which is for space research that's being replaced with an even bigger, more powerful one. Little probably fill one of our data centers completely. It's about 40 racks worth, and that's just to process that data because there's so much information that's come from it. And it's It's the resolution. It's the speed with which it can be computed on holding so much in memory. I mean, if you take across our current HPC systems, we've got 100 terabytes of memory across two systems, and those numbers were just unthinkable even 10 years ago, a terrible of memory. >>So Mark Lease and I would like to keep you here all way to talk about space, Mark todo of our favorite topics. But before we get towards the end, but a lot of changes, that combo, it's the whole new executive team they bought Hedvig. They land lost this metallic dot io. They've got new things. It's a longtime customer. What your viewpoint on com bold today and what what you've been seeing quite interesting to >>see how convoy has evolved on dhe. These change, which should have happened between 10 and 11 when they took the decision on the next generation platform that it would be this by industry. Sand is quite an aggressive pace of service packs, which are then come out onto this schedule. And to be fair, that schedule is being stuck to waken plan ahead. We know what's happening on Dhe. It's interesting that they're both patches and the new features and stuff, and it's really great to have that line to work, too. Now, Andi way with platform now supports natively stone Much stuff. And this was actually one of the decisions which took us around using our own on Prem Estimate Cloud Library. We were using as you to put a tear on data off site on with All is working Great. That can we do s3 on friend on. It's supported by convoy is just a cloud library. Now, When we first started that didn't exist. Way took the decision. It will proof of concept and so on, and it all worked, and we then got high for scale as well. It's interesting to see how convoy has gone down into the appliance 11 to, because people want to have to just have a box unpack it. Implicated. If you haven't got a technical team or strong yo skills in those area, why worry about putting your own system together? Haifa scale give you back up in a vault on the partnerships with were in HP customer So way we're using Apollo's RS in storage. Andi Yeah, the Apollo is actually the platform. If we bought Heifer Scale, it would have gone on an HP Apollo as well, because of the way with agreements, we've got invited. Actually, it's quite interesting how they've gone from software. Hardware is now come in, and it's evolving into this platform with Hedvig. I mean, there was a convoy object store buried in it, but it was very discreet. No one really knew about it. You occasionally could see a term on it would appear, but it it wasn't something which they published their butt object store with the increasing data volumes. Object Store is the only way to store. There's these volumes of data in a resilient and durable way. Eso Hedvig buying that and integrating in providing a really interesting way forward. And yet, for my perspective, I'm using three. So if we had gone down the Hedvig route from my perspective, what I would like to see is I have a story policy. I click on going to point it to s three, and it goes out it provision. The bucket does the whole lot in one a couple of clicks and that's it. Job done. I don't need to go out, create the use of create the bucket, and then get one out of every little written piece in there. And it's that tight integration, which is where I see benefits coming in you. It's giving value to the platform and giving the customer the assurance that you've configured correctly because the process is an automated in convoy has ensured that every step of the way the right decisions being made on that. Yet with metallic, that's everything is about it's actually tried and tested products with a very, very smart work for a process put round to ensure that the decisions you make. You don't need to be a convoy expert to get the outcome and get the backups. >>Excellent. Well, Mark, thank you for joining Student on the Cape Talking about tthe e evolution that the University of Leicester has gone through and your thoughts on com bolts evolution in parallel. We appreciate your time first to Minutemen. I'm Lisa Martin. You're watching the cue from combo go 19.

>> Announcer: Live, from San Francisco, celebrating 10 years of high-tech coverage, it's theCUBE. Covering VMworld 2019. Bought to you by VMware and its ecosystem partners. >> Welcome back to theCUBE's live coverage here at Vmworld 2019, San Francisco, California. We're in Moscone North Lobby. I'm John Furrier, with my co-host Dave Vellante. Dave, 10 years of covering VMworld. This is our 10th year. Pat, you've been on every year since 2010. We have photos. >> That's sort of scary. >> You had a goatee back then. (Pat laughs) We've heard your rap going way back. Welcome back, good to see you. >> Oh man, scary. You guys probably got some dirt on me. Boy, I better be careful. >> John: Pat Gelsinger, the CEO of VMware on theCUBE. Thanks for coming on this evening. >> Oh, always a pleasure to be on with you guys, love it. >> Don't end up as driftwood. Security is a do over. We're going to talk about all that. >> We're going to spend the entire segment just talking about Pat Gelsinger's predictions. We'll recycle some of them, but let's get into the core news here, VMworld. You've done such an amazing job. We've given you a lot of props on theCUBE over the years, but still continuing, even in the market climate that's swinging up and down right now, VMware still producing great results. The team is executing. Their transition since October 2016 when you kind of made that move, cloud is it, clear vision, a lot's been falling into place. Pivotal has dropped on your lap, and you got the engineering stuff coming out on top of vSphere and a bunch of other things. Great stuff, I mean, you must be geeking out. >> Well, thank you. At the US gymnastics finals, Simone Biles did a triple double. First time ever in competition. And I think of our last week as a triple double, right, two major acquisitions, an earnings call, and now VMworld and all the announcements as part of it. It's like wow. >> John: You stick the landing, you stick the landing. >> That's right, we did yesterday morning. We stuck the landing and Ray did that today as well. So super proud of the team in bringing these across the line. And I think certainly meeting with many of the customers and the partners here everybody's sort of going wow. And I was excited about VMware before I got here. Now I'm just euphoric, and it's really-- >> I'm told Ray did an exceptional job. I'm going to talk to him later today on theCUBE. Today in his keynote he was great. He repeated the messages over and over again, but he nailed the tech piece. I got to ask you, as the engine of VMware is continuing to be put together and expand it's like a new turbo engine gets pulled in here. There's a lot of really good engineering going on. What are you most excited about? How would you describe all the action going on? If someone says, "Pat, what's the underlying engine here?" What's being built? What's going to be the outcome of all this? >> Well, I think it sort of boils down to, right, these two phrases that you heard from me yesterday. We're going to engineer for good, the tech for good stuff, we're going to do good engineering. And doing both of those is just okay. And you sort of say, "Hmm, we got vSAN," right? We're not being able to optimize the performance because big blocks, little blocks, latency, buffer size, all this other kind of stuff, so now we're doing Magna, right? And when you see that demonstration there, it's like we're going to do it automatically for you to be a fine-grain optimizing your storage. Wow, that's pretty cool, and it's intelligence, right? It's sort of saying, "Wow, this is really cool." So let's go automatically produce an understanding of the underlying network, understand what's going on, give you the rules that we recommend, and allow you to simulate them, which is super cool, right? Within minutes, we will give the network engineer more understanding of what's really going on in our applications, and then allow them to see it in real time and then apply it. Every one of these, and it's just 10 or 15 tremendous engineers who are doing these little innovations that are fundamentally changing the industries that they're in, in addition to the big stuff. It's just thrilling. >> Dave did a survey before coming into VMworld with customers with a panel. 41% said they're not going to change their spending habits with VMware so creating the-- >> Dave: They said they're going to increase-- >> Increase. >> In the second half, only 7% said they're going to decrease. >> So great customer loyalty, and remember, VMware's moving so fast and transit. Customers aren't moving as fast as you guys are, and you've talked about that before. What are you hearing from customers as they look at it and say, "Wow, is it too much new stuff?" 'Cause they want to continue to operate, but they also want to enable the developer piece. Because remember, DevOps means dev and ops. You guys got the ops piece down. You're adding stuff to it. There's always concerns there making sure it's smooth and you guys work on that. The dev piece becomes super critical. That's where Amazon really shined with public cloud. So hybrid cloud's here. What is the DevOps equation for hybrid? I mean Kubernetes is a good start. Where do you see it going? >> Yeah, and that's really the center. To me, that is the most important news of VMworld this year is the entire Tanzu message, the coming together of Pivotal, the coming together of Pacific, coming together with Mission Control, so really leveraging VMware in the run layer, leveraging Pivotal in the build, and Heptio in the manage, right, and those coming together into Tanzu. I think that's the most important thing that we're doing. And I think for operators, which is really the center of our audience here at VMworld, they've always struggled with those crazy developers. They do this cool new stuff. It's not operational, it's not secure. But in bringing those together, the magic formula for that is Kubernetes. And that's why we're making these big bets. The move with Pivotal, obviously the Heptio guys, I mean Joe Beda and Craig, they're just the rock stars of that community because they really are solving in an industry-consensual standard way. That's really the magic of Kubernetes. This ain't a VMware thing, this is an industry thing. >> Is Kubernetes the technology enabler? I mean, TCP/IP was that in the old networking days. It enabled a lot of shifts in the industry. You were part of that wave. Is Kubernetes that disruptive enabler? >> Yeah, I really see it as one of those key transition points in the industry. And as I sort of joked, if my name was Scott, and we were 20 years ago, I'd be banging the table calling it Java. And Java defined enterprise software development for two decades. By the way, Scott's my neighbor. He's down the hill, so I look down on Mr. McNealy. I always sort of like that. (everybody laughs) >> He looks up to you. >> But it changed how people did enterprise software development for the last two decades. And Kubernetes has that same kind of transformative effect, but maybe even more important, it's not just development but also operations. And I think that's what we're uniquely bringing together with Project Pacific, really being able to bridge those two worlds together. And if we deliver on this, I think the next decade or two will be the center of innovation for us, how we bridge those two roles together and really give developers what they need and make it operator friendly out of the box, cross the history to the future. This is pretty powerful. >> So that does lead to the big question. You just mentioned developers. And when you look out the VMworld audience, it's not comprised of huge developers. I know you're thinking about this, so what's your plan to attract those developers? You're giving them platform now, and the technologies. but those builders, what are you going to do for them? Is it build community, more events, more training? What's the plan there? >> Yeah, and I'd say I think about it in a couple of different context. One is if we were here six years ago, and you would have asked me about open source, right? I mean, VMware's reputation in the open source community wasn't good, right? We hired Dirk, we started to build momentum, make contributions. One of the litmus tests for Joe and Craig on Heptio, 'cause remember, a lot of people could have bought Heptio. Because some was who's going to be the buyer, but also will they be a willing seller. And their litmus test was are you really serious about open source, right? Are you really committed to the open source, Kubernetes tree and development and cloud-native computing foundation? Are you really there? 'Cause they were also looking do I want to be bought by you? Do I want to be part of the VMware family? And we passed the test. That's why Heptio's part of the team. Clearly, this has been central to Pivotal and their views. So we have to be open-source credible. We also have to be developer credible, and those two are tightly linked. And that's why we noted on stage Pivotal, particularly the Java community, is three-plus million developers. Bitnami is two million-ish developers. We now have high volume connections to the developer community, and you're going to see us show up in dramatically more profound ways at places like Kubicon and SpringOne is coming up, just start to be in the developer spaces. And ultimately, you got to do stuff that they care about. At the end of the day, winning developers has nothing to do with great marketing, even though that's important. You have to do great code, right, and bring them value to their development assignments. And we think with the assets that we're lining up, that's why we did Pivotal, Bitnami, Heptio, some of our organic things, Dirk's leadership here. I believe that a year or two from now VMware could be seen as the most developer and open source enterprise company in the industry. And that's the goal that I'm on. >> Well, I have an idea for you. Allocate 1,000 engineers to open source and start having them build new applications, new workloads, give it away to the open source community, and then sell your products and services to them. That would get you in fast. >> Well, by the way, we now have hundreds of engineers who are committed to open source, who their full-time job is open source contributions. So I'm not to 1,000 yet, but I'm now several hundred that their day job, night job, weekend job is open source contribution. So we're becoming very credible, and as you heard me say in the keynote, we are now top three contributor to Kubernetes. This is big, and some areas like the networking area we're clearly the leader in a number of the key networking open source technologies, and you'll see us do more of those kind of projects. >> One of the things you mentioned, I mean you mentioned about open source six years ago, you might have rolled your eyes, or you might not have had an opinion on it 'cause the timing of where VMware was. But one thing you've been banging the drum on since 2012 is hybrid cloud. And so you see certain things early. You see those waves. That's what you're known for, in my opinion. You're really good about it. You see blockchain as a great wave, but as a headline I'm reading on Fortune it says, "VMware CEO Pat Gelsinger, "Bitcoin is bad for humanity." >> Sold all my bitcoin (laughs). >> Okay, so now are you implying then, and blockchain is a lot of open source components there. It's evolving, you've a lot of blockchain projects. So is that an indictment on the unregulated currency market or is it the underlying infrastructure? And are you excited about blockchain as an underlying? Is it one of those hybrid cloud moments for you, or is it more of we'll see how it develops? What's your thoughts? And explain the bitcoin comment too. >> Yeah, the idea of distributed ledger technology, immutable distributed trust, I've said I think of that and blockchain as the underlying technology as almost like public private key encryption, right? If we go back 40 years before RSA or Vashumi and Ari, it's that important. This is breakthrough, innovative technology in how you do distributed secure trust. That's powerful, so we are huge believers, strongly committed to blockchain and distributed leverager technology. Now, why do I make my comments like I do on bitcoin? So bitcoin, as it's implemented, and implementation of blockchain and distributed ledger, I assert is bad. It's bad for two reasons. One is it's an environmental crisis, right? A single ledger, if you and I transacted a penny, right, I would consume enough energy to power your house for half a day. I mean, it's incredible, and I mean, that's why you have these crazy bitfarms being built and people finding GPUs. >> So you think from a sustainability standpoint. >> Absolutely. >> That's where you came from. >> Climate sustainability, right, this is a terrible implementation of blockchain. Secondly, the way it's also done as well in this totally unregulated environment, almost all of its uses are for illicit and criminal purposes. That's who's trading in bitcoin as well. So its purpose is almost all illicit, right, and it's environmental crisis. I say bad. Now, I'm not saying that blockchain is bad. I think this is revolutionizing. >> I want to make sure we clarify that because obviously unregulated outside the United States has been a big problem. We see it in the SEC crackdown, and results are-- >> Studies have shown over 95% of the use of bitcoin is criminal, so say bad. Let's go make it good, and that's what I mean these two phrases, do good engineering, and engineer for good. How do we make blockchain, and this is part of the reason, we had just announced on Sunday a partnership with Australian Stock Exchange and Data Asset, that they're leveraging the VMware distributed ledger technology, right, as part of their go-forward strategy for the stock exchange of Australia. Well, that's good, right? We're making it suitable for enterprises, meeting the regulatory requirements and-- >> John: Are you happy with the progress of where the blockchain is for you guys? >> Absolutely, and we're order-plus magnitude better in terms of performance and energy consumption. So yeah, and we're just getting started. >> And it's consensus-based, which is great. A quick question for you on multicloud. So hybrid cloud you said in 2012, I challenged you on it, and you've been banging the drum since 2012. It's a couple years into it, and hybrid cloud is pretty much standard. People see it, recognize it as the cloud 2.0. Multicloud is all the buzz and all the rage. I hear it everywhere. What does it actually mean is a different debate, so I want to get your thoughts on defining what multicloud is and is it going to have that same gestation period of the same kind of years? 'Cause if it's seven years to get or six years to get hybrid cloud mainstream, is multicloud going to have a similar trajectory? >> Yeah, so let's try to be very crisp with the definition. Multicloud is simply that. Customers using multiple clouds for different business purposes. And what we said is is that we're going to help them manage. That's the center point of cloud health, right? Help customers manage, cost optimize, secure in a multicloud environment where the underlying infrastructure is dissimilar, not compatible, right? And in that sense, you sort of say you can have consistent operations if we do our job well with cloud health, but you're not going to have consistent infrastructure, meaning I can't VMotion between these things, I can't have higher these things. So that's the multicloud. Now a proper subset of multicloud is hybrid cloud. And hybrid cloud is where you have both consistent operations and consistent infrastructure. And that's when we can do things like you saw on the demo today, right? We're running a VMware stack on Azure. We're moving Azure running workloads in real time, right, without stunning them, pausing them, to an Amazon VMC instead of moving workloads from Amazon VMC onto an Azure instance. That's the hybrid cloud, and that's the power at work, from private data centers to multiple different targets in the public cloud where you can be optimizing the location of work nodes based on the proper business requirements. And that might be governance. That might be performance. It might be latency. It might be the time of the day of the week when you have capacity available, right? And that's really what we're saying. Consistent operations and consistent infrastructure, proper subset of multicloud. >> I have a question on something you said yesterday. You said, "Strength lies in differences not similarities." True, I buy that. There's a number of difference between you and your preferred public cloud partner. AWS doesn't use the term multicloud. They say you shouldn't say security's not broken. And there are a number. You want to be the best infrastructure and developer software company. They want to be that platform. They want to be the security cloud, on and on and on. So I see this impending collision course, maybe not tomorrow, but what are your thoughts on the differences and the good or bad that does for the industry? >> Yeah, well, we appreciate Amazon, the investments that we're making. We've both bet big with each other, and they've been a great partner. And in fact, I'm going to talk to Andy before the end of the week, update some of the announcements and some of the things. Great partner, we have regular cadence of our activities with each other. And as we said, they're our preferred public cloud partner. And with it, it's preferred in two senses. It's a go to market and how we position that, but it's also an R&D statement, right? This is where we're doing a lot of core engineering, and that will flow into private cloud embodiments, flow into our other public cloud and our cloud-verified partners. But that's the point of the arrow in terms of the innovations, the go to market, and the R&D aspects of the partnership. And I expect we're going to be here five years from now and we're going to have this conversation, and I'm going to answer it exactly the same way. >> That'll be our CUBE's 15th anniversary, and so we'll be excited for that. It's our 10 year, so I want to last question put you on the spot, looking back over 10 years, pick the moments that you think were key inflection points. What were key notable good things that happened, bad things that happened, or things that didn't happen, right? And then going forward 10 years, you laid out a few of them with Kubernetes. Just past 10 years, could be CUBE memories, but in VMware's world, you were at EMC first, then became CEO, a lot's changed. Paul Maritz laid out the original vision. And where we are today, what's your key moments? >> Yeah, well, I think if you go all the way back, obviously, hey when the first WSX, right, people could run Linux and Windows on their client. Wow, right? The first VMotion, right, oh my gosh, and that sort of ushered in ESX. Obviously the transition from Diane to Paul, the public offering, boy, that was a pretty tumultuous time. And from Paul to Pat was very much we lay it out pretty much this any cloud vision, and that model, it was formative and we're sort of bringing it together. It was get rid of some assets, bring together, so sort of that transition was challenging for the company. But then we've started to sort of systematically say build from the core. What do we have? What do we need as we started to build these layers in the concentric circles? The Nicira acquisition, boom, that was the shot that changed the world of networking. And obviously, that doesn't change quickly, but we have a multibillion dollar networking business, Avi Networks, VeloCloud, we're building that set of assets. >> Software-defined data centers. The Core engine, that was a key point. >> Dave: That was a total game changer. >> You cannot build a software-defined data center if you don't address the networking. It's just that simple, and that's why I was so passionate about that. Obviously, the HCI move with vSAN. Joe Tucci was so pissed off at me, right? (everybody laugh) What are you doing? It's operative. It's part of the ingredients of the data center, Joe. I got to do it, wait. >> John: Just being a software company. >> Yeah, yeah, right, so that was a pretty tense moment. The period of the Dell EMC merger, a tough period, right, as well, and just where the company's going to go. And within a week, right, I'm going to be fired. I'm going to be spun out, right? I'm going to be the new CEO of Dell, right? I mean, it was going to be HP. >> John: All the rumor. >> Stock is 40, obviously the Amazon moment, when we did that partnership. vCloud Air, hey, we had the right idea. We didn't implement it properly, and then we did it right with the Amazon partnership, and that just changed the cloud industry. And I think we're going to look at today, this week, and the moves with Heptio, Kubernetes, Pivotal, those pieces coming together, and to this audience Project Pacific, right, it's just like okay, wow, everyone of them will become Kubernetes enabled. 20,000 selfies with Joe Beda, right, have now been ushered because it is that game changing, we believe. This is the biggest free architecture of the Core platform in a decade, so. >> My favorite quote from you was if you're not out on that next wave, you're driftwood. You said that on the QA, I forget which year it was. >> And mine's security's the do over. (Pat laughs) >> You're doing it over, you're doing it, Mr. Gelsinger. >> Next 10 years, what's the big wave everyone should be on? What's the wave that you identify? You've seen many waves, you've created waves, you've been part of waves. What's the wave for the next 10 years that people should pay attention to, that they need to be on? >> Well, if they're not on the networking wave, get on it, right? They got to be on this multicloud hybrid wave. Could it be louder? The Kubernetes one is the one, right? That's the one I'm going to put at the front of the list. And this move in security, I am just passionate about this, and as I've said to my team, if this is the last thing I do in my career is I want to change security. We just not are satisfying our customers. They shouldn't put more stuff on our platforms if they can't-- >> John: National defense issues, huge problems. >> It was just terrible. And I said if it kills me, right, I'm going to get this done. And they says, "It might kill you, Pat." >> Mount Kilimanjaro right there. Pat, thank you for all your commentary, and great look back 10 years. You've been one of our favorite guests coming on theCUBE, bringing A game, you're bringing the tech chops, the historian aspect, also you're running one of the most valuable open source companies in the cloud. (Pat and John laugh) >> Love you guys, thanks so much. >> Thanks, Pat. Pat Gelsinger here inside theCUBE. Our 10th year, VM's looking good off the tee right now, middle of the fairway, as they say, for the next 10 years. I'm John Furrier, Dave Vallante, thanks for watching. (upbeat music)

>> Narrator: From the Cosmopolitan Hotel in Las Vegas, Nevada, it's theCUBE, covering Coupa Inspire 2019. Brought to you by Coupa. >> Welcome to theCUBE! Lisa Martin at Coupa Inspire on the ground in Las Vegas, and I'm super super super excited to welcome Suze Orman to theCUBE! Suze, host of the Women and Money podcast. >> Suze: How much money have you lost? >> Lisa: Oprah's friends. Oh, I don't gamble. >> Oh yeah, girlfriend! >> Lisa: No way! >> Suze: I know. >> I do spend too much money on Starbucks every day and I felt I needed to confess that to you. >> Oh God! >> But I know-- >> Really? >> A million dollars in forty years, I'm going to curb my habits, Suze. >> All right, there we go, all right! >> Confessing it to you on camera. >> You have been forgiven (laughs). >> Oh thank you! So love listening to your podcast, watched your show on CNBC for a long time, Women and Money, is something that, obviously as a woman in technology, is really imperative to me and something that really captures my attention, because the pay gap is so obvious, has been for so long, but one of the things that always think when I hear you give advice, whether you're at a tech conference like we are now, or anywhere else, is so much of it is common sense that as humans, we just don't want to hear because it's easy to ignore it. >> It's, here's the thing, is that women in particular have so much on their plate, most of them have their parents they're taking care of, their husband or their spouse, their children, and they're bringing in an income. So they don't have a second to breathe. They can't, like (imitating garbled chaotic noise) all the way around. And the truth is, their husbands don't know anything more about money than they do. Men are financial fakers, I've always said that. So women are really, they want to know more, but they're really overloaded right now. So you got to give it to them in a way that they can digest it when they can. >> One of the things, being in software and tech now for 14 years, you know, when you're in a room, whatever meeting you're in, you think, "I didn't understand that." But you think, "I don't want to be the one to ask a stupid question," so you don't ask, and it's sort of the same thing in the financial situation. Somebody might be explaining something to you, and it's happened to me recently, and I'm like, "I don't understand it." But then I default, "Well, they're the expert." >> Suze: No. >> Lisa: And you're saying, >> "No, trust your guts." >> No, you have got to trust yourself more than you trust others. You know when I was seeing clients, you know what I used to do? First of all, it was mandatory that if you were married, you came in with your spouse. Now it was normally, back then, a male and a female, okay? Now, I'm like, greatest thing is it's a woman and a woman or a man and a man, but that's another thing. And the woman would go to the bathroom, because our meetings were long, and while she was at the bathroom, I would say the most complicated strategy to her husband that made no sense on any level. And I would say, "Do you understand this?" "I do." I go, "So you know, if you do this and then this, this will be the result?" "Got it." "Okay." His wife would come back and sit down, and I would then say to him, "All right, explain to your wife what I just explained to you." And he couldn't do it. So then the conversation was, "Why did you pretend to understand something that there was nothing to understand about?" What is that? So you really have to say, "I don't get it." And here's the thing: money is so easy. Money is not complicated. It really is not. Wall Street wants you to think it's complicated, so that you go ahead and hire a financial advisor, a bank-- You can do this. You can do this. But everybody is so afraid of it, they're they just, you know, and they don't want to deal with it because they're so afraid. >> Or even if we do take that step and start working with a financial planner, there's that, I call it 'conscious incompetence'. "They know what they're doing." >> Suze: They don't. >> "I'm going to let them handle it." >> Suze: They don't, they don't, they don't. I would not work with a financial advisor that wasn't at least 15 years into it. >> Lisa: Fifteen? Okay! >> Fifteen, because the past ten years the market's gone straight up. You could have been a monkey and made money in the stock market the past ten years. You want somebody who went through the recession, who's been through it all. And they've seen the ups, they've the downs, and now they can keep their calm. Don't give me a ten year track record. Give me a twenty year track record. Give me a 15 year. Start with the year that the markets crashed, and how did you do? So if you don't have an advisor that has been through all of that, danger! Number two, if they talk to you about an insurance product, universal life, whole life, variable life insurance, I'm here to tell you, that is-- don't ever ever mix insurance and investments. You want to buy life insurance policy, fine. Buy a term life insurance policy. Do not buy an insurance policy that's also an investment. Crazy out there! Crazy! >> I just heard your podcast on Women and Money, just the other day about mistakes to avoid, so of course I listened to it. I was shocked. You were saying nurses and teachers are too-- >> Suze: Are targeted. >> Lisa: Yes. >> Suze: Nurses. >> And there was this one woman who invested, I think it was like, seventy-five bucks a month, for-- >> Twenty years. >> And only made $4000! >> Yeah, and it's, I had one yesterday that wrote in, that has been doing $200 a month for twenty years, and they have no money. They have like, it's-- Anyway, just, here's the thing. If you don't know what to do, let me tell you what not to do. Do not buy a whole life, universal, or variable life insurance policy. Do not buy a variable annuity within a retirement account. Do not buy loaded mutual funds that have a letter A or B on it. Just those few things alone, great. >> So, getting back to women and money, women and technology, you know, like I mentioned a minute ago, the pay gap. We all know it. How do we, how do women, how do you advise us to to find that inner voice, to find that power to ask for the better job, the promotion, the better opportunities. How do we find that? >> You have to make those that you are dependent on a paycheck for dependent upon you. When I started the Suze Orman Show at CNBC, all right, so 2001, they offered me, it was like, "I'm not doing this show and signing for five years for whatever this little amount of money is." And since I didn't need money, it was like, "I'll do it for free." I did that show the very first year, and I did not make one penny. >> Lisa: Really? >> In one year, it became the number one show on CNBC of all CNBC-produced shows. Now, CNBC needed me. Now, CNBC paid me what I wanted. Not what I needed, what I wanted. And I got what I wanted because I came from a place of power. So women, we have to put ourselves in a position where you're powerful with your own money. And when you're powerful, and you don't need that pay raise, you don't need that job promotion, you want it, but you don't need it, you'll get it because they need you. So when you make somebody dependent upon you, you become valuable to them. And if they don't value you, then get out of there. >> That's great advice, because oftentimes people will think, "Well they can just replace me." Or we think, >> Suze: So then let them. >> "I'm not replaceable." So then, okay >> Suze: Then let them. >> What if that happens? What do I do? >> You have to be always prepared that that can happen. Because that can happen if there's a downsizing, if there's a downturn in the economy. That's why I always say, an eight month emergency fund, don't have any debt, put yourself in a situation that if anything were to happen, you get sick, you're in a car accident, and you can't work, that it's okay. It's okay! When you come from that place, then magic starts to happen. When you come from a place of, "Oh please, when was my paycheck? Is it in another two days? I need it. It's another two days!" So that-- Keep a car forever. You know, I have a car that's now going on eight years old. I keep my cars 10 to 13 years. I don't get a new car just because I can! I don't, what is that about? It's so, live below your means but within your needs. Only purchase needs, not wants, and get as much save pleasure out of saving as you do spending. Those three things alone will absolutely change your life. >> So, we're at a tech conference. Let's talk about tech and how do we, we're bombarded with ads all the time, we're on Instagram, and there's, "Oh, there's that cute dress I wanted." Click! And I don't have any accountability for it because all I did was tap something. I didn't see that transaction going to my bank account. How do you see technology, how do we utilize it for actually getting better control over our own financial freedom and not letting it-- >> I never ever, because I'm on the internet all the time. If an ad comes in, I immediately turn it off. I never click on an ad that has come to me. I only purchase things, and I can purchase anything I want, but I only purchase things that I go after and I look at it. Then I put it in the cart. And I don't buy it. >> Lisa: You think about it. >> And I think about, did I really want it, was it an impulse? Whatever. But you know what I found out, when I put it in the cart, a day later, I get something from them with a discount code. So if I just waited, I'm going to get it for cheaper. And so, I always thought because it's so easy, put it in your cart, and just wait a day or two before you push, yet you won't even remember it's there. >> Right, well it's a little bit of self-control. I think that's just that opening up to, and Oprah's other friend, I know you're friends with Oprah, Brene Brown taught me vulnerability is awesome! It's not weakness! It's the courage to say to your financial planner, "I don't get this." Or, to your point, if this person doesn't have fifteen years experience, and they haven't been through the tumults of the economy, "I'm sorry, I'm sure you're a great person. I need to go somewhere else because this is my money for the rest of my life!" >> You know there's a law that I live by, which is, "It's better to do nothing than something you do not understand." Now I apply it to other things in life, like I'm really into being a boat captain and fishing, but I don't go places in my boat that I don't understand how the waters work, where the ledges are. I don't venture out because I don't want to get in trouble. So it's better to do nothing than something you do not understand, and just do something else that you understand. >> And again, one of the things I love about your advice, Suze, is it's so simple. But I think as a society, we're so governed by technology. It's our alarm clock in the morning, the first thing we do is check email or Instagram, or something on .com, we're listening to podcasts. It's so easy to have a shoppable moment anywhere. Yes, it's probably just as easy-- >> And it's going to be a whole lot easier as time and artificial intelligence and everything takes over, it's going to be really easy. So the question is, "Do you want to have things, or do you want to have money? What do you want?" >> Yeah, because you say, what is it? >> People first-- >> Both: People first, then money, then things. >> Lisa: Tell me about that. >> The reason that I did that, it's a long story as to how that came about, but when I said, "People first," I always meant women. Meant you. Do not put everybody else in front of you. Don't go buying gifts for all your friends and everybody when you have absolutely no money. Put yourself first for once. Next is money. You want more money in your bank account than things that you have in your closet. So make your priorities. Those are your priorities. Put yourself first, then your money, and then if you have those things together, then if you want to buy things, okay. >> I love it. "People first, then money, then things." So you've been doing this for so long, and before we went live I was asking you, "How do you not clunk people's heads together because sometimes it's like, 'What!'" But you're saying these are the same problems that persist over and over because people don't know. >> Well, two things. It shows you that money's not that complicated. That people still ask the same questions over and over again. There aren't all these little gadgets and these little widgets and these things. It's usually Roth 401(k), traditional 401(k)? Roth IRA, 401(k)? Credit card debt first or student loans? Saving, they're the same over and over again. And but each question, to that person, is the most important question in the world to that person. And that one person is important to me. Because if I can save or help one person change their life, that one person can go on and change this whole world. Never know who that one person's going to turn out and be. And so, I mean, if I think back on it, Fred Hasbrook, who is the man who gave me money when I worked at the >> Both: Buttercup Bakery! >> Lisa: Which isn't there anymore. >> And that one man who gave me $2000 with all these other people that took-- He, those actions, to me, created me. And I've changed millions of lives with people, with the information that I've given people. They actually changed their own life. But, so one action can change a whole world >> I love that. >> You never know who that person will be. >> Lisa: You don't. You never know. Well Suze, when are we going to do our next show together? This has been so much fun! >> I don't know, we have to come back here! It seems I'm, have you, where are you out of? >> Palo Alto, California. >> Palo Alto, well we come back there. >> Lisa: All right! All right! >> Suze: We come back there. >> Well good, I'll say I'll look forward to our next show together, Suze. >> You got it, Lise. Thank you, sweetheart, bye bye. >> Been a pleasure, thank you. For Suze Orman, I am Lisa Martin. Thank you for watching theCUBE at Coupa Inspire 19! (upbeat techno music)

>> Live from Barcelona, Spain, it's theCUBE, covering KubeCon CloudNativeCon Europe 2019. Brought to you by Red Hat, the Cloud Native Computing Foundation, and ecosystem partners. >> Hi and welcome back, I'm Stu Miniman with my co-host Corey Quinn, and you're watching theCUBE, the worldwide leader in live tech coverage of KubeCon CloudNativeCon 2019. Happy to welcome to the program a first-time guest, Jeff Brewer, who's the Vice President and Chief Architect of Small Business and Self-Employed Group at Intuit. He's going to talk about your cloud journey. Jeff, thanks so much for joining us. >> You're welcome, I'm glad to be here. >> All right, so, Jeff, the easy part of this is, I think, most of our audience has probably heard of Intuit, but maybe give us that first setting of, you know, the part of the group you're in, and your role, and then we want to get into that journey. >> Yeah, yeah, no, it's great. So, yeah, first of all, thanks for having me here and I'm what's called the Chief Architect of the Small Business and Self-Employed Group. Intuit is about powering prosperity around the world. That's our fairly new mission. And helping both taxpayers with TurboTax and QuickBooks is our other big project. So, think of me as the Chief Architect for the QuickBooks group. And so, mostly for small businesses, helping small businesses survive through their first year, survive and prosper continuing on, so. >> And your charter there, is that the infrastructure there, you're not trying to help the world rid those malicious attacks of like, oh no, I got the new TurboTax and it didn't work well because, disclaimer, you know, I'm not paid, I've used it for many years and it's super easy for me. >> Yeah so, as a Chief Architect, I set the technical direction of the overall QuickBooks franchise both the desktop version which is our older version that, you know, has been around for 20, 25 years, and our QuickBooks Online version, which is about, only about 15 years old and is our SAS offering. And so, I do things like choose technologies that we adopt. I do things like set what are the most important technology priorities whether it's breaking things up into microservices, our cloud strategy, Kubernetes, going to cloud native, all that kind of stuff. >> Okay, so, you are a member of the Technical Oversight Committee, but we're actually going to bring you back a little bit later to talk about that, so, we'll put a pin in that. But give us a little bit as to kind of what led to this journey towards cloud and, you know, all of those pieces that you were just talking about. >> Yes, so, like many other companies with, you know, lots of legacy and lots of code that we've developed over about 35 years of existence, we actually started out in the early 2000's with building our own data centers, right. And it's very expensive, very ambitious, but at the time, there really wasn't a public cloud. But we realized that, you know, putting servers under our desks and stuff like that, you know, we really needed to grow to a more robust data center. And, you know, as we progressed in that journey, we figured out we're not the experts at maintaining and developing all the complicated networking you have to do, reliability, resiliency. We had some outages, this is 10 years ago or so, where a truck drove into a light post outside one of our data centers and took us down for a day. And that's just not acceptable for our customers. The public cloud was just starting out, AWS was a big partner out there, and our CIO, and CEO, met with the AWS executives and really decided that we needed a great partner in public cloud that really was their technical expertise. And so, we began this journey, mostly I would describe it as lift and shift, of technologies and services that we already had. We had to rewrite a few of them to make them actually work with the cloud. But by and large, most of our code is written in Java and that ports pretty well. So, we started on that journey and really right now, we are mostly running in the public cloud. We have a few legacy systems that are still running in our private data centers, but we're planning on decommissioning those. And with the public cloud, a journey we really have seen quite a, improvement in our reliability, our downtime, we can fail over between availability zones, it's just been fantastic from our overall availability, recoverability standpoint. But what we realized during that journey was that the, that the AWS native experience for our developers, while AWS is just an amazing, amazing partner, it wasn't quite the developer experience we wanted. >> It had some sharp edges. >> Yeah, we worked with them on that, and that's why we started looking at cloud-native technologies, things already developed by the community. AWS is part of the community, as well, and so they were extremely supportive in our journey to want to, from the developer experience standpoint, really start to press on these cloud-native technologies. >> Wonderful. As you went down that entire path, whenever a company goes public and they put in their S1 that they're doing some committed level of giant deal with AWS, people immediately chime in with, oh, they could save so much money by building and running their own data centers. How do you stand on that particular perspective? >> So, what's really interesting about our, our public cloud journey, right, it's not necessarily about saving a lot of money, right? And we realized that, you know, Intuit, as a mature company, you know, we're not a start-up looking to shave every little penny off of every little server. What we really want is reliability for our customers, we want awesome operations, and so, the public cloud journey actually hasn't been a huge, huge cost savings, but it has been a huge improvement in all these other levels, so it does amazing things for our customers. And we're looking to cloud native as just another, you know, bump up in that overall thing, where we get immediate mean time to recovery, where things go down, things go wrong, and we get those pods and those services right back up and running. >> Can you elaborate a little bit about the application that you're talking about, like when I first heard you say, you know, we just lifted and shifted there, it's like, oh wait, you know, a lot of times that is when we kind of claw things back because it's costs more than I thought or it didn't run as well as I thought. >> It turns out the mainframe's hard to move because they didn't build an AWS 400 yet, something doesn't happen. >> So, the challenges there, and then, you know, connect the dots with that to what you're calling the cloud native piece of this, as to what your application development looks like. >> So, I'll use QuickBooks Online as an example. Massive property, over four million customers. >> I'm one of them. >> And it started out as a, as kind of our first really big foray into SAS, right? And luckily, at the time we wrote it, mostly in Java. But it was written as this huge, monolithic piece of code, right. And so, millions of lines of code, you can imagine, large memory footprints, all that kind of stuff. And so, during our first, for public cloud, we just looked at, well, we're not going to rewrite these millions and millions of lines of code, but we want to get into public cloud. Lucky for us, EC2 instances, things like that, can run those large memory footprints. But once there, we really started examining, okay, what does this look like as microservices? Because when you have over 400 engineers working on a single code base, imagine what doing a release, a release is a ceremony, right? It's like this huge thing, you have-- >> It takes a many page calendar in order to do those things. >> Exactly, and so, what we really wanted to do is press into the microservices journey and say, okay, what if instead of having this huge oil tanker, you know, driving down the, you know, sailing down the ocean, what if we could be a bunch of speedboats, right, and use that analogy. And that's where cloud native comes in, because that's really what it's meant to do, right? A bunch of independent teams doing dev ops, you build it, you run it, right? You write the code, you run the code. And so, it plays right into to this, this ability to be very agile, give each team, you can imagine at a scale of 4000 engineers, you want little pizza team, you know, to be independent and do their own releases, and not have to coordinate all with each other. >> So, Jeff, which of the, you know, CNTF pieces are you using at Intuit, and I would like you to go in a little bit, you know, Kubernetes, a lot of people, it's like, oh well, I want portability, and it sounds like you're all in, primarily, on one public cloud, so that's probably not the first thing on your list, so, help us understand the landscape from your eyes. >> So, really it's about, it's about developer productivity. So yes, we do have this very good, strong partnership with AWS, and that is our public cloud provider. And so, the cloud-native technology, using, obviously, Kubernetes, obviously, you know, we're running Docker in the background for running the containers and all that infrastructure. We have our own open source called Argo, which we're using for deployments in the community, so we're contributing a little bit back to community, as well. We're using Istio and Envoy as a service match to really secure the interservice communications and support all the routing and whatnot. And we're also leaning very heavily now into serverless technologies, and so, we write our app, QBO or QuickBooks Online, as a stateful application, but we're realizing the power of having these really stateless small functions, and so we want to do that, as well. And the way we look at it as, Lambda is a fantastic technology for something like that, but the developer experience, we want the same developer experience for our containers that we do from our functions, right? And if you really think about it, it's just about deploying, it's how you deploy. Do I deploy into containers and then a pod structure, like in Kubernetes? Or do I deploy to a functions as a service? It should run on the infrastructure, and so, from a developer standpoint, from the end developer that's actually developing the applications and services that our customers are using, we want the declarative infrastructure of Kubernetes, we want the ease of deployment and of operations. You can just imagine a development team not having to learn the huge depth that's behind that Kubernetes, that developer experience is just unbelievable and second to none. And you can imagine these teams sitting around, you know, at lunch time, doing their release, something goes wrong, they're on the call, they're solving the problems for their customers, in fact, doing another release, if there's any problems. And so, that's where we really, really lean in heavily to these cloud technologies, the cloud-native technologies, so we can get even faster at the developers. >> Do you find that making it more accessible and having a consistent developer experience has, I guess, broadened the ability of your developers to iterate more rapidly, or is more about ensuring consistency across the board? In other words, is it a speed value for you or is it more about just consistency, so you can wind-up up-to-point to multiple architectures? >> It's really about both. We see, you know, agility is often confused with speed and velocity, but we see that enabling a developer to release code to production in just a few minutes is extremely, extremely powerful to the overall velocity because what they're more likely to do is they're more likely to experiment, be bold, try new things, and then get immediate feedback for the customer. There's this experimentation loop that you want it to move as fast as possible. And so, not only that, but to your second part about the consistency, for a company like Intuit with 4000 developers, you want mobility in your organizations, and so, you want someone to feel very natural going from one small pizza team to another, and have the same tools, the same deployment architecture, and the same thing, right? So, you're not retraining them on a ton of different technologies. >> Alright, so, Jeff, you know, what could the ecosystem, you know, the partners you're working with, the various ecosystem, what could they do to make your life easier? I mean, the one that comes to mind for me is, you know, today, serverless, you know, Lambda, specifically, and Kubernetes. There are some ways to get them, you know, work at little bit, but, you know, is that top of your mind or are there other things? >> That is actually really top of my mind. We have a lot of teams experimenting with Lambda. We're running huge workloads in Lambda, but we're very much worried about this. If there's teams working on that and it's very, it's very fragmented. Some teams are deploying Lambdas off their laptops, other teams are, you know, using CICD processes. And so, we want that experience to be consistent, secure and everything. And so, as it moves to more production workloads, right, we would really like the Kubernetes and the CNCF Foundation to really have a story about serverless itself. I think it's probably more aptly called functions as a service or running functions. And I think a lot of thing happens is that it's treated as a versus. It's like, oh, I'm going to skip over that containers to Kubernetes thing and go to serverless, because it's versus, right? It's not versus, it's a choice for the developer about what to I want to deploy in functions, in short-running functions, or do I want to deploy in containers? Everything else up to that point is the same. And so, I'd really like to see, and that, as my role on the Technical Oversight Committee, that's something I'm really focused on for the end users 'cause I see that a lot in the end user's communities. They're dealing with the same things that we are on that functions as a service. >> Alright, so, Jeff, before I let you go, Intuit's an award winner, so, congratulations on that. >> Thank you. >> I want final word from you. Talk a little bit about the award and two, talk your peers that might be, you know, they've heard about Kubernetes, but, you know, we're into the, we've crossed the chasm in the majority, but that means there's a lot of people that are still relatively early. What do you recommend to them, what tips would you give them, and start with the award though. >> Yeah, so, we're extremely honored to be the CNCF end user award winner. Our cloud journey has been a really interesting one that came really out of a, also, out of an acquisition that we did of some fantastic Kubernetes experts about 14 of them, a little company called Applatix that had this Argo project. And their mission was to make Kubernetes accessible to the overall community. And by acquiring them, we left their mission the same, but they're really helping Intuit, and we're not selling their, they're helping the community for free, when they were charging before as enterprise customers. And that's something I'd overall recommend for the peers and the companies thinking about going on a cloud native journey is it's about those people that you can find here at the conference, right, about those experts that you can hire, just a few of them, have them come into your company, explain these things, and it turns the entire company around. We now have hundreds and hundreds of teams going through and onboarding, we call it modern SAS, internally, onboarding onto this technology because they started out with that nugget or that kernel. >> Alright, well, Jeff, modern SAS, love the story, thank you so much and thanks for joining us and we will see you later to talk about the TOC. >> Glad to be here, thank you very much. >> Thank you very much. >> For Corey Quinn, I'm Stu Miniman, and that was Jeff Brewer from Intuit, we'll be back with lots more coverage and thank you for watching theCUBE. (dynamic digital music)

(upbeat music) >> Hi everybody, welcome back to London. I'm Dave Vellante and you're watching theCUBE. We go out to the events, we extract the signal from the noise and we've been following AWS generally and the public sector specifically for a number of years now. We've seen the ascendancy of an expansion of public sector. We've covered the career of Teresa Carlson, and we're here in London ahead of AWS Summit London. There's a pre-day here, there's a number of public sector companies, there's a focus on healthcare. Kieron James is here, he's the founder of Wonderful.org. Wonderful.org is a fundraising vehicle, it's a really setup platform essentially for self-service. Kieron, welcome to theCUBE, thanks for coming up. >> Hello. >> So, tell me about Wonderful, why you started this organization? >> Wonderful was kicked off when I got to my 50th birthday, essentially, it's a way to give back. I've been involved in the tech sector for many years and we were sitting on quite a lot of infrastructure. We thought we had some spec paucity as well and we thought what we can do with the resource, human and physical, in terms of giving something back to charities. So, one of the things that looked like a great opportunity was to setup a completely fee-free fundraising platform. And essentially, that's what we kicked off with a brief of concept in 2016. >> So, fee-free meaning I can come in, I can setup my own fundraising vehicle so all the money goes to the recipients. >> A 100%, we have no charges whatsoever to charities, to donors, to fundraisers. And essentially, all the card processing fees as well are covered, and through the generosity of AWS and its NPO program, we've been able to also cover things like hosting as well which has been phenomenal for us, 'cause it really does enable us to give every single penny to charity. >> So, how do you fund your staff? >> The staff currently on our model going forward, if it's one that we continue, if we can continue to support is through secondment. So, we seconded our technical resource from my day job which is essentially running a telecoms business, and those guys are incredibly generous with their time. So, evenings and weekends have been devoted to setting up and maintaining the platform. We've called in favors from people we have networked with over the years. So again, when we moved beyond proof of concept into the current website now, the current build, we were able to get that done with some cost but albeit, a fraction of what we would've paid commercially. And essentially as we move forward, we want the whole concept to Wonderful.org to be something much bigger than just the organization. It's a vehicle for commercial organizations to do good. >> So, lots of in-kind contributions, lots of your time obviously so, when did you start the organization? >> 2016 and essentially, we went through what I describe as a proof of concept. We set three broad milestones, one was the first 100 charities onboard, first 100,000 pounds of a revenue or charity not really revenue but charity donations through the website. And we launched our first Wonderful week where we brought some sports celebrities including Phil Neville, now the manager of the England women's football team. He came on board to do some charity work for us with his family. Once we passed through those three milestones, it was then a case of saying, okay we've achieved all of these now, let's push the button and actually do this properly in inverted commas, and that's when we looked at hosting the thing properly, looked at the commercial build and so on. >> So that those milestones were really the prove the concept. >> Yeah. >> But they're pretty substantial milestone, >> Sure. >> And you hit them pretty fast though. >> We did hit them fast but again to give you some context on that, the first 100,000 through the website probably took us I would guess between 12 and 14 months. In the last 28 days, we've processed about a quarter of a million pounds through the website. So, the growth's been phenomenal and the appetite from the charities is enormous. What's particularly interesting about our sector is that whilst the lot of the events that take place like the London Marathon and so on, are very predictable, we know exactly the date and time that people are gonna be donating. Clearly, you get events that are completely unpredictable. We've gotta be able to respond and be available for donors to give when those kinds of things happen. >> Okay so, this leads me to the conversation about your infrastructure and obviously the Cloud. When you started the organization, you had your own owned premises infrastructure, correct? >> Correct. >> So take us through what that looked like and your decision to move to the Cloud. >> Expensive, disjointed, very complex. So, we were running essentially a full stock on a number of servers that were hosted independently. Co-location was expensive, maintenance was expensive, even things like getting to site were expensive, and if the rare occasions when you do have to do that in a hurry it can be quite time-consuming, particularly as I say given our profile where these guys are really doing it for love not money. So, it became apparent to us, I think learning from some scenarios that we've seen in the real world with other platforms as well when even the predictable events had still created some concerns for some of the charities in terms of availability. So, we've took a long hard look at what we had and said, are we scalable, are we fully available? Probably not, we need to look at this in some detail now. So, that was when we completely re-architected the website and looked at AWS. >> So, it was not only a matter of say scaling up for high demand and unpredictability but you had a fragile infrastructure. >> We did. >> And essentially, (chuckles) you're volunteers trying to keep it together. >> Exactly. >> So that's not a good formula for high availability, right? >> No, absolutely not. >> So, how does that change with the Cloud? >> With the Cloud, I think what we've got now is we've got a really good view of everything. We've got a view of the whole of our infrastructure in one place, so it gives our operations director a lot more peace of mind 'cause he can see all of the resources at his disposal. I think in terms of security, it's far far better for us as well, because we can manage access to various components, available US, depending on who needs access. So, our web developers are currently remote, they're not formally part of the organization. So, we can strict access to things that we don't want 'em to have access and so on and give them full access where it's required. So, I think that's been a lot of peace of mind for the operations director. And just having that confidence in clearly a brand that's got a huge reputation and people feel immensely confident about seeing. So, for us being to put the AWS badge on the website to reinforce to our users, to our donors that we're here, we're solid, we're stable, we're not going anywhere, it's really really important. >> Anyway, you said upfront that Adobe has some skin in the game, they're providing some services, >> They are. >> Some contributions. >> Yeah. >> So, that's gotta be pretty substantial. >> Massive. >> For you guys, yeah. >> Absolutely massive. I mean in all honesty, it's second only to card processing which is a significant cost of doing our business and one which is paid for by our other corporate sponsors. It's our second biggest cost without a doubt or would be if it were a cost but mercifully, AWS has come to the rescue and we're able to do what we're doing now. >> So corporate sponsors, give a little commercial, how does that work? >> Well essentially, our biggest corporate sponsor, our main partner at the moment is The Co Operative Bank and they have underwritten all of our card processing fees for the duration of that partnership. The big caveat with that is that we don't know what they will be and whilst we can provide some forecast based on empirical evidence, worst case scenario, there's another tragedy, people reach for their wallets and give, and suddenly that can go through the roof in the course of a couple of weeks. So, the difficulty in bringing corporate sponsors on for us is just that kind of unpredictability of the sector that we're operating in, but they've been tremendous. >> That's amazing right? >> Yeah. >> 'cause I could say that's a big junk of your cost >> For sure. >> Along with your infrastructure but, I'm fascinated by this organization and just wanna congratulate you on the mission and actually getting it off the ground because we all when we give to a charity, we always ask okay, what are the administrative cost behind this? You go to the website and you look it up and sometimes you just don't feel comfortable, and so what you've done is actually just eliminated that overhead. >> Completely. >> And where do you see this going? I mean you've got like 15 hundred registered charities now. >> Yes, yeah we're up to 15 hundred, again we've had a couple of fairly major events we were endorsed by the Money Saving Expert at number one but how could they not put us at number one. (they both laugh) Would've been very odd if they hadn't, given that we're the only completely fee-free platform. That clearly creates the demand and I think that endorsement was a huge catalyst to the growth. More recently, we've seen other things, BT MyDonate actually pulled out of this sector which has caused a lot of charities to migrate to our platform as well. In terms of where we see it going, we will need to continue to raise money from corporate sponsors to support it. But, there is a real step game in that, we have to manage that growth to meet their expectations as best as we can. But equally, new corporate sponsors coming onboard will want to see that we've got enough eyeballs to make it worth their while getting behind the organization. So, it's that constant game of trying to bring on the next round of funding and getting people through. >> How global do you see this getting? How is it today and in the future? >> Conceptually, there's no reason at all why this shouldn't be a global phenomenon but, we're now very concentrated on the UK, just because of our resource and we do get requests all of the time for international charities, for international fundraisers and so on, but we've gotta be realistic about what we can support. But going back to the point that I made earlier, it really isn't about Wonderful.org, it's about just corporations, fundraisers, charities, donors, we see all of the last three being wonderful all of the time by the nature of what they do, we're just trying to get more corporations to be as wonderful as, sounds terribly sick and fancy, but as AWS has been in supporting what we're doing, it's that sense of what we're trying to achieve here goes beyond one organization. >> Well, and the Cloud allows you to scale potentially to the extent that you can get the resource. There's no reason you can't go global. >> No. >> I'm gonna check it out and see even for a little local charity, can I (he chuckles), >> Absolutely. >> Can I participate, what does that involve? Do you have to have some minimum threshold or? >> No? >> No, anybody can-- >> Anybody, but you need to be a registered UK charity with one of the UK registrars. Beyond that, we go through a little bit of due diligence with the charity, so we will need to see some documentation. So, there's a little manual step in onboarding charities, but for all the right reasons, we wanna be diligent about the people using the platform to give the fundraisers the confidence that they're donating to a charity. So, we don't do any peer-to-peer fundraising, it is literally you'll register as a charity and the fundraisers can support your charity, often led by the fundraisers rather than the charities, interestingly, so the fundraisers will be saying to the charities, why are you not on this platform which gives you everything and you're already on this platform which doesn't. So, there's quite a lot of pressure now coming from the fundraisers to pull the charities in. >> So, there's a lot of word-of-mouth, a lot of peer-to-peer. >> Absolutely. >> Right, you don't really have the funding. >> There is no. >> The budget to go market. >> Not at all. >> Yeah, that's remote. >> Absolutely not. >> Well, hopefully this will help. >> Thank you very much. >> Thanks so much for coming to theCUBE, really appreciate your time. >> Thank you. >> Alright, thank you for watching everybody. This is Dave Vellante, you're watching theCUBE. We'll be back right after this short break from AWS HQ in London, right back. (upbeat music)

>> Live from Las Vegas, it's theCUBE! Covering AWS re:Invent 2018. Brought to you by Amazon Web Services, Intel, and their ecosystem partners. >> Welcome back everybody, Jeff Frick here with theCUBE. We're at AWS re:Invent 2018 at the Sands Convention Center and all over Vegas. I don't know how many people are here. We haven't gotten the official word. 60,000, 70,000, I don't know. There's a lot of people. We're excited to have our next guest, but before we get in, happy to be joined by Lauren Cooney. Lauren, great to see you, as always. >> Great to see you, as well. >> You know, one of my favorite things about doing Cube interviews is we learn about new industries that we didn't even know about. So, while we're here talking about IT, it's really about the application of IT that I think is really more interesting, more fun, and a great learning experience. So, we're really excited to have our next guest on. He is Kevin Smith, the director of MIS for Transcore. Kevin, great to see you. >> Hello. >> And many time Cube alumni, Sazzala Reddy. He is the CTO and co founder of Datrium. Sazzala, great to see you. >> Happy to be here. >> So, Kevin before we get into it, tells us a little about Transcore. What are you guys all about? >> Basically, we are the leading toll authority for kind of of Continental United States and we are trying to expand that throughout the world. We do the whole engineer all the way through manufacturing of toll systems for vehicles and cars throughout the U.S. So, the little stickers in you car all the way up to the readers that read them. They're coming through my place some how or some other. >> So, everything from the reader in the car-- >> Yup, the little sticker tag that sticks in your window or suction cups in. Wherever you are, yes you may hate us, but I'm not the one collecting the tolls. (laughs) >> I don't like it when you miss the picture. >> Well, let's input some design here. (laughs) >> Trust me, I've tried. (laughs) >> But then the huge back in process to pull that up, get it into the system, billing systems. >> Yeah, all integrated. Yep. >> And how big is the company? How long has it been around? >> We were acquired by Roper. We've been many divisions, but Los Alamos was technically, founding fathers 1954. >> 1954, so you've been around a long time >> Oh yeah, yes. They started with cows. >> RFID's on cows? >> Yes, tracking cows in the pastures of New Mexico. (laughs) >> With the little tags in their ears I imagine. Alright, great. We can talk about traffic probably all day long, but that's not why were here. That's not your day job you're not out there with the little RFID scanner. >> Not anymore, thank God. >> Let's talk about some of the challenges 'cause you know, obviously, the toll business has been around for a long time. But the automation of tolls has really changed a lot over the last five years. You probably know better than me from somebody in the booth taking my money and giving me a receipt to some places it's almost exclusively electronic. So, how's that business grown, and what have been some of the accompanying challenges have you seen that been grown? >> Part of the performance issues we were running into was the quantity. Because the man is gone from the booth, we have to produce more tags that become more readable. So, that creates more back in work, more transactions. And, in the long run, producing more tags. You know, we've gone to millions and millions of tags being produced, in a quarter, to where it was just hundreds of thousands. So, with that requires scalability that we can grow with our systems and our systems we had just wasn't doing it. >> So, you got the manufacturing of the tags as well, I didn't even think of the manufac- you got to make them in the first place, too. >> That is our bread and butter. Manufacturing those tags and the millions of millions of transactions that we test, because we have to test every tag that goes out the door. Every tag gets tested. >> How far away do they work, on those readers? I'm just curious. >> It depends on your speed. We've tested up to 200 miles an hour. And I think it's, like, 40-50 feet? So, as long as you're going under 200 miles an hour, we can get ya. >> Okay, so, how did you meet Sazzala in Datrium? How did that come about? >> We went looking for a product that could give us a one stop solution. We wanted something that was basically, I wanted to get out of the storage business, I wanted to get out of the management business. I didn't want to be having to worry about all these different vendors, all these different solutions. And Datrium was able to provide that. Compared to some of the other products that we were looking at, we did test with other products, and Datrium came out on top. They gave us the total package. >> Sazzala, when you looked at this oppurtunity, what did you see? Anything unique and different? What were some of the challenges that you tried to figure out how to help Kevin? >> So, what we are finding is that more and more companies, every company is a software company, every company is a data company, right? Every body wants to move faster. Everybody wants to things faster. I can't wait for my movie to start in two seconds. I'm like, Why is it taking two seconds? So, everybody wants things faster. We live in this instant economy where everything needs to be either you transform or you die. So, how do we make that transition into the speed? How do you build your data center, whatever your doing, to match that speed of innovation? Any system you're going to deploy in a data center, has to be not in the way. It has to be less management, less overhead. Look at Amazon, very successful because there is less to manage. And, you mostly manage your applications. That's what the business moral is going to be going forward. That's why people like the Cloud. Why does CIO like the Cloud? Not because it's cooler, or whatever, but because it makes things faster. It's expensive, yeah, but it makes things faster in some ways. >> Go ahead. >> I was going to say, on issue we ran into and we came to him with was our CAD designers. 'Cause we designed the product. And, the rendering was just dragging on our old systems. And, we went from two to three minutes rendering to seconds rendering new graphics. And, so, before they were like I'm not going to save it yet, I'm not going to re-render it. Now, they're re-rendering every time they're making a change. It helps in performance, it helps the application, and it helps increase the productivity of my CAD designers. >> Right. I was going to say, it was probably the customer service pretty significant, as well, so they can get the version that they want. >> Definitely, definitely. And, you know, the nice thing is is Datrium allowed us to scale. We couldn't go out and just Okay, revamp everything. You got to do baby steps. And Datrium gave us that scaleabilty, to where I could add anything from 1 to 128 nodes. You know, I was able to increase performance by just adding a server node, or increase the rights by adding a data node. That's the flexibilty that I needed from a vendor. >> So, when you said that Datrium had the whole package, you looked at some other solutions out there. When you were trying to find the whole package at the beginning of the process, what were the key attributes that you said I would love to get all these from one place? >> I was looking for performance and scale. Which I got. I was looking for back-up. God, I wanted to get out of the back-up business. I was tired of tapes, I was tired of third-party solutions. >> Tire of tapes? (laughs) >> Trust me. Shh, don't tell the tape vendors here. >> Tape is good, if you have the right application. >> Security, I stay awake at night. I lead our security teams. I stay awake worrying about Is my data protected? You know, with their encryption, that gave me that whole protection. And the last thing was DR. DR is adorned in every IT manager, every IT director, every, you know, CTO. And, with their whole Cloud shift, that DR? What DR, it's done. It just happens. And those four things is kind of what led us to finding Datrium. 'Cause some of them gave us one or two, but not everyone could give us all four of the options that we were looking for. >> What I love about the story is those are kind of concrete savings and doing your job easier. What your excited about is enabling your CAD designer, your kind of proactive sales process, your proactive design, your proactive innovation to actually move faster. That's not a cost saving mechanism. That's really a transformational, kind of positive revenue, side of the tale that I don't think is told enough. People focus on the cost savings and execution. That's not what it's about. It's really about innovating and growing your business faster. Do you think? >> Oh no, our ROI, that we calculated in, was just on hardware. Just on my cost savings that I could put a penny to. The time, it's so great. I mean, my CAD designers producing product faster, my developers are asking for more VMs. For me to spin up because the speed is so much faster. We're used to being Oh, don't touch it. I got this guy tuned exactly where I want it. We got the memory. But now, they're asking for more and more, and it's my in users, who are really the engineers, my manufacturing people, they're wanting more and more out of the product and Datirum is delivering. I don't go to dashboard and look to try and figure out how to tweak it anymore. I don't have any complaints. And, if I don't have any complaints, were doing something right. >> That's a good thing. >> So, it just works? >> Oh, it was beyond just works. >> Literally. >> Trust me, I was ready when we bought product to bring in a whole team and I was like, Oh, I'm going to have to hire all these people. And the guy came in and he goes, Okay, turn it on. Okay we're done. I was like, Nu-uh. He goes, Oh yeah, you have to plug that cord in back there. I was like, Wow. 'Cause, you know, usually it's-- >> I'm looking at a number right now, and it is 617% three year ROI. >> It's across many customers (mumbles) >> I totally believe you with what-- >> So we are aiming for a U.S. designer came and asked me one day, What should I aim for as a design principle? I said, We should aim for zero UI. That's what we should do. It should be transparent, it should just work. That's what we really aim for. I'm not saying we have zero UI today, but that's our goal. >> It's good to have goals. >> Let's just make it work automatically, right? That's kind of the goal. >> Well, and that was one thing, we wanted something integrated, so we didn't have to go looking. And, that's one thing I tell the engineers all the time. I go into the UI just to kind of see how cool the systems running. You know, because there is no issues. It just works. Everything's integrated, I don't have to go in and click and click and click and click to get through stuff. It just works and integrates well. We're a big Vmware shop, big Dell server shop. All of that, one-stop shop. I was telling Sazzala, you know, it's great when I get the e-mail that there's a problem with my Datrium system before my help desk is getting the notification. I can't buy that service. >> So, Kevin, there's a lot of peers that will be watching this show. Peers of you. Having gone through this process and now you are on the other side and you're on to some new things, in terms of innovation, what would you share with a peer whose trying to sort some of this out? It's a confusing landscape. There's so many options, and you got to do your day job, too. Besides, putting out new technology. What would you share with a peer if you're sitting down over a beverage on a Friday afternoon? >> You know, I would talk to them about having that capability, really a performance scale. Being able to not worry about controllers, not worrying about what SSDs you got to put into something to make it work. Pop 'em in. SSDs are cheap nowadays. Pop 'em in. It increases your reads. Going back to the whole no more third-party solutions for back-ups. Every SIS admin, every manager knows, back-ups are only good for restores. That's the only reason you do a back-up, is 'cause you got to do that restore. And, it becomes invisible. It's all running in the background. I don't even think about it anymore. My old systems, we still think about. That aren't on the Datrium product yet, but all our production (scoffs) When I'm backing up every hour, and my RTO almost becomes zero if something happens, you can't ask for that. That's critical, I think, for every manager, every director, even the SIS admins. No one wants to really think about back-ups. And, when you're comparing your products, take a look at that. How quick can you get something back up when that hard drive went out, you know? That's critical. And, of course, DR is, you know, everyone needs that checkbox checked for recovering. It just comes right away, with that. >> We've run out of time. Going to ask you the big question. Do you sleep better? >> Oh, much better. (laughs) Easily now. Yes. Now I get to worry about other things. Like keeping my CFO happy about something else. >> And, I've got a list of people we need to introduce to you. Definitely. >> Fortunately, you always move through your next point of failure. Once you fix one spot. Watch Lucy check out the chocolate-- >> Hey, but if I can have this one off my plate, that's one better for me. >> Well, Kevin, thanks a lot for telling your story. It's a really impressive story And, I'll think of you as I go across a Dumbarton Bridge some time. >> Think about that, yes! >> Absolutely. >> Thank you for having me. >> Sazzala, great to see you, as always. Lauren, lots of fun. I'm Jeff Frick, you're watching theCube. We're at AWS re:Invent 2018. Thanks for watching. (electronic music)