(upbeat music) >> Welcome back to Supercloud 2. This is Dave Vellante. We're here exploring the intersection of data and analytics in the future of cloud and data. In this segment, we're going to look deeper into the life sciences business with Jesse Cugliotta, who leads the Healthcare and Life Sciences industry practice at Snowflake. And Nicholas Nick Taylor, who's the executive director of Informatics at Ionis Pharmaceuticals. Gentlemen, thanks for coming in theCUBE and participating in the program. Really appreciate it. >> Thank you for having us- >> Thanks for having me. >> You're very welcome, okay, we're go really try to look at data sharing as a use case and try to understand what's happening in the healthcare industry generally and specifically, how Nick thinks about sharing data in a governed fashion whether tapping the capabilities of multiple clouds is advantageous long term or presents more challenges than the effort is worth. And to start, Jesse, you lead this industry practice for Snowflake and it's a challenging and vibrant area. It's one that's hyper-focused on data privacy. So the first question is, you know there was a time when healthcare and other regulated industries wouldn't go near the cloud. What are you seeing today in the industry around cloud adoption and specifically multi-cloud adoption? >> Yeah, for years I've heard that healthcare and life sciences has been cloud diverse, but in spite of all of that if you look at a lot of aspects of this industry today, they've been running in the cloud for over 10 years now. Particularly when you look at CRM technologies or HR or HCM, even clinical technologies like EDC or ETMF. And it's interesting that you mentioned multi-cloud as well because this has always been an underlying reality especially within life sciences. This industry grows through acquisition where companies are looking to boost their future development pipeline either by buying up smaller biotechs, they may have like a late or a mid-stage promising candidate. And what typically happens is the larger pharma could then use their commercial muscle and their regulatory experience to move it to approvals and into the market. And I think the last few decades of cheap capital certainly accelerated that trend over the last couple of years. But this typically means that these new combined institutions may have technologies that are running on multiple clouds or multiple cloud strategies in various different regions to your point. And what we've often found is that they're not planning to standardize everything onto a single cloud provider. They're often looking for technologies that embrace this multi-cloud approach and work seamlessly across them. And I think this is a big reason why we, here at Snowflake, we've seen such strong momentum and growth across this industry because healthcare and life science has actually been one of our fastest growing sectors over the last couple of years. And a big part of that is in fact that we run on not only all three major cloud providers, but individual accounts within each and any one of them, they had the ability to communicate and interoperate with one another, like a globally interconnected database. >> Great, thank you for that setup. And so Nick, tell us more about your role and Ionis Pharma please. >> Sure. So I've been at Ionis for around five years now. You know, when when I joined it was, the IT department was pretty small. There wasn't a lot of warehousing, there wasn't a lot of kind of big data there. We saw an opportunity with Snowflake pretty early on as a provider that would be a lot of benefit for us, you know, 'cause we're small, wanted something that was fairly hands off. You know, I remember the days where you had to get a lot of DBAs in to fine tune your databases, make sure everything was running really, really well. The notion that there's, you know, no indexes to tune, right? There's very few knobs and dials, you can turn on Snowflake. That was appealing that, you know, it just kind of worked. So we found a use case to bring the platform in. We basically used it as a logging replacement as a Splunk kind of replacement with a platform called Elysium Analytics as a way to just get it in the door and give us the opportunity to solve a real world use case, but also to help us start to experiment using Snowflake as a platform. It took us a while to A, get the funding to bring it in, but B, build the momentum behind it. But, you know, as we experimented we added more data in there, we ran a few more experiments, we piloted in few more applications, we really saw the power of the platform and now, we are becoming a commercial organization. And with that comes a lot of major datasets. And so, you know, we really see Snowflake as being a very important part of our ecology going forward to help us build out our infrastructure. >> Okay, and you are running, your group runs on Azure, it's kind of mono cloud, single cloud, but others within Ionis are using other clouds, but you're not currently, you know, collaborating in terms of data sharing. And I wonder if you could talk about how your data needs have evolved over the past decade. I know you came from another highly regulated industry in financial services. So what's changed? You sort of touched on this before, you had these, you know, very specialized individuals who were, you know, DBAs, and, you know, could tune databases and the like, so that's evolved, but how has generally your needs evolved? Just kind of make an observation over the last, you know, five or seven years. What have you seen? >> Well, we, I wasn't in a group that did a lot of warehousing. It was more like online trade capture, but, you know, it was very much on-prem. You know, being in the cloud is very much a dirty word back then. I know that's changed since I've left. But in, you know, we had major, major teams of everyone who could do everything, right. As I mentioned in the pharma organization, there's a lot fewer of us. So the data needs there are very different, right? It's, we have a lot of SaaS applications. One of the difficulties with bringing a lot of SaaS applications on board is obviously data integration. So making sure the data is the same between them. But one of the big problems is joining the data across those SaaS applications. So one of the benefits, one of the things that we use Snowflake for is to basically take data out of these SaaS applications and load them into a warehouse so we can do those joins. So we use technologies like Boomi, we use technologies like Fivetran, like DBT to bring this data all into one place and start to kind of join that basically, allow us to do, run experiments, do analysis, basically take better, find better use for our data that was siloed in the past. You mentioned- >> Yeah. And just to add on to Nick's point there. >> Go ahead. >> That's actually something very common that we're seeing across the industry is because a lot of these SaaS applications that you mentioned, Nick, they're with from vendors that are trying to build their own ecosystem in walled garden. And by definition, many of them do not want to integrate with one another. So from a, you know, from a data platform vendor's perspective, we see this as a huge opportunity to help organizations like Ionis and others kind of deal with the challenges that Nick is speaking about because if the individual platform vendors are never going to make that part of their strategy, we see it as a great way to add additional value to these customers. >> Well, this data sharing thing is interesting. There's a lot of walled gardens out there. Oracle is a walled garden, AWS in many ways is a walled garden. You know, Microsoft has its walled garden. You could argue Snowflake is a walled garden. But the, what we're seeing and the whole reason behind the notion of super-cloud is we're creating an abstraction layer where you actually, in this case for this use case, can share data in a governed manner. Let's forget about the cross-cloud for a moment. I'll come back to that, but I wonder, Nick, if you could talk about how you are sharing data, again, Snowflake sort of, it's, I look at Snowflake like the app store, Apple, we're going to control everything, we're going to guarantee with data clean rooms and governance and the standards that we've created within that platform, we're going to make sure that it's safe for you to share data in this highly regulated industry. Are you doing that today? And take us through, you know, the considerations that you have in that regard. >> So it's kind of early days for us in Snowflake in general, but certainly in data sharing, we have a couple of examples. So data marketplace, you know, that's a great invention. It's, I've been a small IT shop again, right? The fact that we are able to just bring down terabyte size datasets straight into our Snowflake and run analytics directly on that is huge, right? The fact that we don't have to FTP these massive files around run jobs that may break, being able to just have that on tap is huge for us. We've recently been talking to one of our CRO feeds- CRO organizations about getting their data feeds in. Historically, this clinical trial data that comes in on an FTP file, we have to process it, take it through the platforms, put it into the warehouse. But one of the CROs that we talked to recently when we were reinvestigate in what data opportunities they have, they were a Snowflake customer and we are, I think, the first production customer they have, have taken that feed. So they're basically exposing their tables of data that historically came in these FTP files directly into our Snowflake instance now. We haven't taken advantage of that. It only actually flipped the switch about three or four weeks ago. But that's pretty big for us again, right? We don't have to worry about maintaining those jobs that take those files in. We don't have to worry about the jobs that take those and shove them on the warehouse. We now have a feed that's directly there that we can use a tool like DBT to push through directly into our model. And then the third avenue that's came up, actually fairly recently as well was genetics data. So genetics data that's highly, highly regulated. We had to be very careful with that. And we had a conversation with Snowflake about the data white rooms practice, and we see that as a pretty interesting opportunity. We are having one organization run genetic analysis being able to send us those genetic datasets, but then there's another organization that's actually has the in quotes "metadata" around that, so age, ethnicity, location, et cetera. And being able to join those two datasets through some kind of mechanism would be really beneficial to the organization. Being able to build a data white room so we can put that genetic data in a secure place, anonymize it, and then share the amalgamated data back out in a way that's able to be joined to the anonymized metadata, that could be pretty huge for us as well. >> Okay, so this is interesting. So you talk about FTP, which was the common way to share data. And so you basically, it's so, I got it now you take it and do whatever you want with it. Now we're talking, Jesse, about sharing the same copy of live data. How common is that use case in your industry? >> It's become very common over the last couple of years. And I think a big part of it is having the right technology to do it effectively. You know, as Nick mentioned, historically, this was done by people sending files around. And the challenge with that approach, of course, while there are multiple challenges, one, every time you send a file around your, by definition creating a copy of the data because you have to pull it out of your system of record, put it into a file, put it on some server where somebody else picks it up. And by definition at that point you've lost governance. So this creates challenges in general hesitation to doing so. It's not that it hasn't happened, but the other challenge with it is that the data's no longer real time. You know, you're working with a copy of data that was as fresh as at the time at that when that was actually extracted. And that creates limitations in terms of how effective this can be. What we're starting to see now with some of our customers is live sharing of information. And there's two aspects of that that are important. One is that you're not actually physically creating the copy and sending it to someone else, you're actually exposing it from where it exists and allowing another consumer to interact with it from their own account that could be in another region, some are running in another cloud. So this concept of super-cloud or cross-cloud could becoming realized here. But the other important aspect of it is that when that other- when that other entity is querying your data, they're seeing it in a real time state. And this is particularly important when you think about use cases like supply chain planning, where you're leveraging data across various different enterprises. If I'm a manufacturer or if I'm a contract manufacturer and I can see the actual inventory positions of my clients, of my distributors, of the levels of consumption at the pharmacy or the hospital that gives me a lot of indication as to how my demand profile is changing over time versus working with a static picture that may have been from three weeks ago. And this has become incredibly important as supply chains are becoming more constrained and the ability to plan accurately has never been more important. >> Yeah. So the race is on to solve these problems. So it start, we started with, hey, okay, cloud, Dave, we're going to simplify database, we're going to put it in the cloud, give virtually infinite resources, separate compute from storage. Okay, check, we got that. Now we've moved into sort of data clean rooms and governance and you've got an ecosystem that's forming around this to make it safer to share data. And then, you know, nirvana, at least near term nirvana is we're going to build data applications and we're going to be able to share live data and then you start to get into monetization. Do you see, Nick, in the near future where I know you've got relationships with, for instance, big pharma like AstraZeneca, do you see a situation where you start sharing data with them? Is that in the near term? Is that more long term? What are the considerations in that regard? >> I mean, it's something we've been thinking about. We haven't actually addressed that yet. Yeah, I could see situations where, you know, some of these big relationships where we do need to share a lot of data, it would be very nice to be able to just flick a switch and share our data assets across to those organizations. But, you know, that's a ways off for us now. We're mainly looking at bringing data in at the moment. >> One of the things that we've seen in financial services in particular, and Jesse, I'd love to get your thoughts on this, is companies like Goldman or Capital One or Nasdaq taking their stack, their software, their tooling actually putting it on the cloud and facing it to their customers and selling that as a new monetization vector as part of their digital or business transformation. Are you seeing that Jesse at all in healthcare or is it happening today or do you see a day when that happens or is healthier or just too scary to do that? >> No, we're seeing the early stages of this as well. And I think it's for some of the reasons we talked about earlier. You know, it's a much more secure way to work with a colleague if you don't have to copy your data and potentially expose it. And some of the reasons that people have historically copied that data is that they needed to leverage some sort of algorithm or application that a third party was providing. So maybe someone was predicting the ideal location and run a clinical trial for this particular rare disease category where there are only so many patients around the world that may actually be candidates for this disease. So you have to pick the ideal location. Well, sending the dataset to do so, you know, would involve a fairly complicated process similar to what Nick was mentioning earlier. If the company who was providing the logic or the algorithm to determine that location could bring that algorithm to you and you run it against your own data, that's a much more ideal and a much safer and more secure way for this industry to actually start to work with some of these partners and vendors. And that's one of the things that we're looking to enable going into this year is that, you know, the whole concept should be bring the logic to your data versus your data to the logic and the underlying sharing mechanisms that we've spoken about are actually what are powering that today. >> And so thank you for that, Jesse. >> Yes, Dave. >> And so Nick- Go ahead please. >> Yeah, if I could add, yeah, if I could add to that, that's something certainly we've been thinking about. In fact, we'd started talking to Snowflake about that a couple of years ago. We saw the power there again of the platform to be able to say, well, could we, we were thinking in more of a data share, but could we share our data out to say an AI/ML vendor, have them do the analytics and then share the data, the results back to us. Now, you know, there's more powerful mechanisms to do that within the Snowflake ecosystem now, but you know, we probably wouldn't need to have onsite AI/ML people, right? Some of that stuff's very sophisticated, expensive resources, hard to find, you know, it's much better for us to find a company that would be able to build those analytics, maintain those analytics for us. And you know, we saw an opportunity to do that a couple years ago and we're kind of excited about the opportunity there that we can just basically do it with a no op, right? We share the data route, we have the analytics done, we get the result back and it's just fairly seamless. >> I mean, I could have a whole another Cube session on this, guys, but I mean, I just did a a session with Andy Thurai, a Constellation research about how difficult it's been for organization to get ROI because they don't have the expertise in house so they want to either outsource it or rely on vendor R&D companies to inject that AI and machine intelligence directly into applications. My follow-up question to you Nick is, when you think about, 'cause Jesse was talking about, you know, let the data basically stay where it is and you know bring the compute to that data. If that data lives on different clouds, and maybe it's not your group, but maybe it's other parts of Ionis or maybe it's your partners like AstraZeneca, or you know, the AI/ML partners and they're potentially on other clouds or that data is on other clouds. Do you see that, again, coming back to super-cloud, do you see it as an advantage to be able to have a consistent experience across those clouds? Or is that just kind of get in the way and make things more complex? What's your take on that, Nick? >> Well, from the vendors, so from the client side, it's kind of seamless with Snowflake for us. So we know for a fact that one of the datasets we have at the moment, Compile, which is a, the large multi terabyte dataset I was talking about. They're on AWS on the East Coast and we are on Azure on the West Coast. And they had to do a few tweaks in the background to make sure the data was pushed over from, but from my point of view, the data just exists, right? So for me, I think it's hugely beneficial that Snowflake supports this kind of infrastructure, right? We don't have to jump through hoops to like, okay, well, we'll download it here and then re-upload it here. They already have the mechanism in the background to do these multi-cloud shares. So it's not important for us internally at the moment. I could see potentially at some point where we start linking across different groups in the organization that do have maybe Amazon or Google Cloud, but certainly within our providers. We know for a fact that they're on different services at the moment and it just works. >> Yeah, and we learned from Benoit Dageville, who came into the studio on August 9th with first Supercloud in 2022 that Snowflake uses a single global instance across regions and across clouds, yeah, whether or not you can query across you know, big regions, it just depends, right? It depends on latency. You might have to make a copy or maybe do some tweaks in the background. But guys, we got to jump, I really appreciate your time. Really thoughtful discussion on the future of data and cloud, specifically within healthcare and pharma. Thank you for your time. >> Thanks- >> Thanks for having us. >> All right, this is Dave Vellante for theCUBE team and my co-host, John Furrier. Keep it right there for more action at Supercloud 2. (upbeat music)

(upbeat music) >> Welcome back to Vegas, baby. Lisa Martin here with theCUBE. We are live at Caesar's Forum covering Snowflake Summit 22. This is day two of our wall to wall coverage on theCUBE you won't want to miss. We've got an exciting customer story to talk to you about next with Novartis and Snowflake. Please welcome two guests to theCUBE. Loïc Giraud, Global head digital delivery, Novartis. I hope I got the name right. >> Yes. Hi, thank you. >> I did my best. >> Absolutely. >> Lisa: (laughs) Jesse Cugliotta also joins us. Global Industry Lead, Healthcare and Life Sciences at Snowflake. Welcome with theCUBE, gentlemen. >> Thank you for having us. Good morning. >> So it was great to hear Novartis is a household word now, especially with what's gone on in the last two years. I had a chance to see the Keynote yesterday, heard Novartis mention in terms of a massive outcome that Snowflake is delivering that we're going to get to. But Loic talk to us about Novartis global 500 organization. You rank among the world's top companies investing in R&D, the massive portfolio and you're reaching nearly 800 million patients worldwide. That's huge, but there's been a lot of change in the healthcare and life sciences industry, especially recently. Talk to us about the industry landscape. What are you seeing? >> As you described, Novartis is one of the top life science company in the world. We are number three. We operate in 150 countries, and we have almost 120,000 employees. Our purpose is actually to reimagine medicine for the use of data science and technology and to extend people's life. And we really mean it. I think, as you mentioned, we treat eight or 9 million patient per year with our drugs. We expect to treat more than a billion patients in near time soon. Over the last few years, especially during COVID, our digital transformation help us to accelerate the drug discovery and then the commiseration of our drug to markets. As it was mentioned in the Keynote yesterday, we have actually been able to reduce our time to market. It used to take us up to 12 years and cost around 1.2 billion to discover and commercialize drug. And now we've actually use of technology like Snowflake, we have been able to reduce by two to three years, which ultimately is a benefit for our patients. >> Absolutely. Well, we're talking about life and death situations. Talk about... You mentioned Novartis wants to reimagine medicine. What does that look like? Where is data in that and how is Snowflake an enabler of reimagining medicine? >> So data is core for our asset, is a core of enterprise process. So if you look at our enterprise, we are using data from the research, for drug development, in manufacturing process, and how do we market and sell our product through HCPs and distribute it to reach our patients. If you build through our digital transformation we have created this integrated data ecosystem, where Snowflake is a core component. And through that ecosystem, we are able to identify compounds and cohorts, perform clinical trials, and engage HCPs and HGOs so that can prescribe drugs to serve our patient needs. >> Jesse, let's bring you into the conversation. Snowflake recently launched its healthcare and life sciences data cloud. I believe that was back in March. >> It was. >> Just a couple of months ago. Talk to us about the vertical focus. Talk to us about what this healthcare and life sciences data cloud is aiming to help customers like Novartis achieve. >> Well, as you mentioned there, Snowflake has made a real pivot to kind of focus on the various different industries that we serve in a new way. I think historically, we've been engaged in really, all of the industries across the major sectors where we participate today. But historically we've been often engaging with the office of IT. And there was a recognition as a company that we really need to be able to better speak the language of our customers in with our respective industries. So the entire organization has really made a pivot to start to build that capability internally. That's part of the team that I support here at Snowflake. And with respect to healthcare and life sciences, that means being able to solve some of the challenges that Loic was just speaking about. In particular, we're seeing the industry evolve in a number of ways. You bring up clinical research in the time that it takes to actually bring a drug to market. This is a big one that's really changed a lot over the last couple of years. Some of the reasons are obvious and other ones are somewhat opportunistic. When we looked at what it takes to get a drug to market, there's several stages of clinical research that have to be participated in, and this can often take years. What we saw in the last couple of years, is that all of a sudden, patients didn't want to physically participate in those anymore, because there was fear of potential infection and being in a healthcare facility. So the entire industry realized that it needed to change in terms of way that it would engage with patients in that context. And we're now seeing this concept of decentralized clinical research. And with that, becomes the need to potentially involve many different types of organizations beyond the traditional pharma, their research partners, but we're starting to see organizations like retail pharmacies, like big box retailers, who have either healthcare delivery or pharmaceutical arms actually get involved in the process. And of course, one of the core things that happens here is that everyone needs a better way to collaborate and share data amongst one another. So bringing this back to your original question, this concept of being able to do exactly that is core to the healthcare and the life sciences data cloud. To be able to collaborate and share data amongst those different types of organizations. >> Collaboration and data sharing. It seems to me to be a differentiator for Snowflake, in terms of being able to deliver secure, governed powerful analytics and data sharing to customers, partners to the ecosystem. You mentioned an example of the ecosystem there and how impactful to patients' lives, that collaboration and data sharing can be. >> That's absolutely right. It's something that if you think about all of the major challenges that the industry has had historically, whether it is high costs, whether it are health inequities, whether it is physicians practicing defensive medicine or repeat testing, what's core to each one of these things is kind of the inability to adequate collaborate and share data amongst all of the different players. So the industry has been waiting for the capability or some sort of solution to be able to do this, I think for a long, long time. And this is probably one of the most exciting parts of the conversations that we have with our customers, is when they realize that this is possible. And not only that it's possible within our platform, but that most of the organizations that they work with today are also Snowflake customers. So they realize that everyone's already here. It's just a matter of who else can we work with and how do we get started? >> Join the party. >> Exactly. >> Loic talk to us about Novartis's data journey. I know you guys have been, I believe using Snowflake since 2017 pre pandemic. But you had a largely on-premises infrastructure. Talk to us about the decision of Novartis to go to the cloud, do it securely and why you chose to partner with Snowflake. >> So when we started our journey in 2018, I think the ambition that our CEO, was to transform all enterprise processes for the use of digital tech. And at the core of this digital tech is data foundation. So we started with a large program called Formula One, which aim to integrate all our internal and external data asset into an integrated platform. And for that, I think we've built this multicloud and best upgrade platform, where Snowflake is a core component. And we've been able to integrate almost 1,000 data asset, internal and external for the platform to be able to accelerate the use of data to create insight for our users. In that transformation, we've realized that Snowflake could be a core component because of the scalability and the performance with large dataset. And moreover, when Snowflake started to actually open collaboration for their marketplace, we've been able to integrate new data set that are publicly available at the place that we could not do on ourself, on our own. So that is a core component of what we are trying to do. >> Yeah, and I think that's a great example of really what we're talking about here is that, he's mentioning that they're going out to our marketplace to be able to integrate data more easily with some of the vendors there. And that is kind of this concept of the healthcare and life sciences data cloud realized, where all of a sudden, acquiring and bringing data in and making it ready for analysis becomes much faster, much easier. We continually see more and more vendors coming to us saying, I get it now, I want in. Who else can I work with in this space? So I think that's a perfect example of how this starts to become real for folks. >> Well, it sounds like the marketplace has been an enabler, Loic, of the expansion of use cases. You've grown this beyond drug development. I read that you're developing new products and services for healthcare providers to personalize treatments for patients, which we all are demanding patients. We want that personalized care. But talk about the marketplace as a facilitator of those expanding use cases that Snowflake is powering. >> Yes. That's right. I mean we have currently almost 65 use cases in production and we are in advanced progress for over 200 use cases and they go across all our business sector. So if you look at drug development, we are monitoring our clinical trials using Snowflake. If you look at our omnichannel marketing, we are looking at personalization of information with our HCPs and HGOs using snowflake. If you look at our manufacturing process, we are looking at yet management, freight optimization, inventory, insight. So almost across all the industry sectors that we have, I think we are using the platforms to be able to deliver faster information to our users. >> And that's what we all want. Faster information. I think in the pandemic we learned that access to real time data in every industry wasn't a nice to have. That was a- >> Necessity. >> Absolute necessity. >> Yeah. >> And made the difference for companies that survived and thrived and those that didn't. That's something that we learned. But we also learned that the volume of data just continues to proliferate. Loic, you've been in the industry a couple of decades. What do you see? And you've got, obviously this great foundation now with Snowflake. You've got 65 use cases you said in production. What's the future of the data culture in healthcare and life sciences from your perspective? >> So my perspective. It is time now we give the access to our business technologies to be able to be self-sufficient using digital product. We need to consumerize digital technology so they can be self-sufficient. The amount of problems that we have to solve, and we can now solve with new technology has never been there. And I think where in the past, where in the next few years that you will see an accelerated generation of insight and an accelerated process of medicine by empowering the business technologies to use a technology that like Snowflake and over progress. >> What are your thoughts Loic, of some of the, obviously a lot of news coming out yesterday from Snowflake, we mentioned standing room only in the Keynote. This I believe is north of 10,000 attendees. People are ready to engage in person with Snowflake, but some of the news coming out, what is your perspective? You've been a partner of theirs for a while. What do you see from Snowflake in terms of the news, the volume of customers it's adding, all that good stuff? >> I must say I was blown away yesterday when Frank was talking about the ramp up of customers using Snowflake. But also, and I think in Benoit and Christian, and they talk about the innovation. When you look at native application or you look at hybrid tables, we saw a thing there. And the expansion of the marketplace by monetization application, that is something that is going to accelerate the expansion, not only on the company, but the integration and the utilization of customers. And to Jesse's point, I think that it is key that people collaborate using the platform. I think we want to collaborate with suppliers and providers and they want to collaborate with us. But we want to have a neutral environment where we can do that. And Snowflake can be that environment. >> And do it securely, right? Security is absolutely- >> Of course. I mean that's really table stake for this industry. And I think the point that you just made Loic, is very important, is that, the biggest question that we're often asked by our customers is who else is a customer within this industry that I can collaborate with? I think as Loic here will attest to, one of the challenges within life sciences in particular is that it is a highly regulated industry. It is a highly competitive industry, and folks are very sensitive about referenceability. So about things like logo usage. So to give some ideas here, people often have no idea that we're working with 28 of the top 50 global pharma today, working with seven of the top 12 global medical device companies today. The largest CROs, the largest distributors. So when I say that the party is here, they really are. And that's why we're so excited to have events like these, 'cause people can physically introduce themselves to one another and meet, and actually start to engage in some of these more collaborative discussions that they've been waiting for. >> Jesse, what's been some of the feedback that you've heard the last couple of days on the healthcare and life sciences data cloud? You've obviously finally gotten back to engaging with customers in person. But what are some of the things, feed on this street have said that you've thought, we made the absolute right decision on this pivot? >> Yeah, well I think some of it speaks to the the point I was just speaking about, is that they had no idea that so many of their peers were actually working with Snowflake already and that how mature their implementations have actually been. The other thing that folks are realizing is that, a lot of the technologies that serve this ecosystem, whether they're in the health tech space, whether they're clinical management or commercial engagement or supply chain planning technologies, those companies are also now pivoting to Snowflake, where they're either building a part or the entirety of their platform on top of ours. So it offers this great way to start to collaborate with the ecosystem through some of those capabilities that we spoke about. And that's driving new use cases in commercial, in supply chain, in pharmacovigilance, in clinical operations. >> Well, I think you just sum up beautifully why the theme of this conference is the world of data collaboration. >> Yes, absolutely. >> The potential there, that Snowflake is unleashing to the world is I think is what's captivating to me. That you just scratch on the surface about connecting and facilitating this collaboration and this data sharing in a secure way across industries. Loic, last question for you. Take us home with what is next for Novartis. You've done a tremendous amount of digitalization. 65 use cases in production with Snowflake. What's next for the company? >> See, I think that in next year's to come, open collaboration with the ecosystem, but also personalization. If you look at digital medicine and access to patient's informations, I think this is probably the next revolution that we are entering into. >> Excellent. And of course those demanding patients aren't going to want anything slower or less information. Guys, thank you for joining me on the program talking about the Novartis-Snowflake collaboration. The partnership, the outcomes that you're achieving and how this is really dramatically impacting the lives of hundreds of millions of people. We appreciate your time and your insights. >> Thank you for having us. This was fun. >> My pleasure. >> Thank you. >> For my guests, I'm Lisa Martin. You're watching theCUBE. This is live from Las Vegas, day two of our coverage of Snowflake Summit 22. I'll be right back with my next guest, so stick around. (upbeat music)

>> Announcer: Live from Las Vegas, it's theCUBE. Covering AWS re:Invent 2019, brought to you by Amazon Web Services, and Intel, along with its ecosystem partners. >> Welcome back, this is theCUBE seventh year of coverage of the mega AWS re:Invent show, here in Las Vegas. Somewhere between 60 and 65,000, up and down the street. We are here in the Sands Convention Center. I am Stu Miniman, my cohost for this segment is Justin Warren. And happy to welcome back to the program, one of our CUBE alumni Jesse Rothstein, who is the co-founder and CTO of ExtraHop, Jesse, great to see you. >> Thank you for having me again. >> So, we caught up with you at AWS re:Inforce-- >> We did. >> Not that long ago, in Boston. Where, it rains more often in Boston than it does in Vegas and it's raining here in Vegas, which is a little odd. >> Strangely it is raining here in Vegas, but re:Inforce at the end of June in Boston was the first AWS security conference. Great energy, great size, we had a lot of fun at that show. >> Yeah, so Dave Vellante, who was one of the ones at re:Inforce, and he actually came out of the three-hour keynote yesterday with Andy Jassy and said, "I'm a little surprised there wasn't as much security talk." You know, it's not like we can remove security from the discussion of cloud, it is you know one of the top issues here. So I want to get your viewpoint, were we missing something? Is it just there, what grabbed you? >> I know this thing as well. I think, perhaps, they're saving some announcements for, you know, re:Inforce coming again in June in Houston this year. There was at least one announcement around IAM Access Analyzer as I recall. But generally the announcements seem to focus in some other areas. You know some big announcements around data warehousing, you know for federated red shift queries I think. And some big announcements around machine learning tooling, like the SageMaker Studio. But I noticed that as well, not as many security announcements. >> You never know, Werner still has his keynote tomorrow. So we're sure there'll still be another 50 or 100 announcements before the week is done. ExtraHop also has something new this week, so why don't we make sure-- >> Well first I can assure you that cloud security is not solved. It's not a solved problem, in fact, unfortunately despite record spend year after year after year, we still continue to see record numbers of compromises and data breaches that are published. I think cloud security in particular remains a challenge. There's a lot of energy there and I think a lot of attention, people recognize it's a problem. But we're dealing with massive cyber security skill shortages. It's very hard to find people with the expertise needed to really secure these workloads. We're dealing with more sophisticated attackers. I think in many cases, attackers with nation state sponsorship. Which is scary, you know five or 10 years ago we didn't see that quite as much. More cyber criminals, fewer nation states. And of course, we're seeing an ever increasing attack surface. So ExtraHop's right in the mix here, and we focus on network detection and response. I'm a huge believer in the power of network security, and I'll talk more about that. At re:Inforce last June, we announced ExtraHop Reveal(x) Cloud, which is a SaaS offering using AWS's recent VPC Traffic Mirroring capability. So the idea is, all you do is you mirror a copy of the traffic, using VPC Traffic Mirroring, to our SaaS, and then we provide all of the sophisticated detection, investigation and response capabilities, as a product. So that's hosted, you still do the work of investigating it, but you know we provide the entire offering around that. Very low TCO, very turnkey capabilities. And of course, it wouldn't be a modern day security offering if we didn't leverage very sophisticated machine learning, to detect suspicious behaviors and potential threats. But this is something I think we do better than anybody else in the world. >> So walk us through some of what the machine learning actually does. 'Cause I feel that the machine learning and AI is kind of hitting peak hype cycle maybe. >> You know I almost can't say it with a straight face because it's so overused. But, it is absolutely real, that's where the state of the art is. Machine learning allows us to recognize behaviors, and behaviors are very important because we're looking for post-breach behaviors and indicators of compromise. So there are a million ways that you can be breached. The attack surface is absolutely enormous. But there's actually a relatively small number, and a relatively tractable set of post-breach behaviors that attackers will do once you're compromised. And I think more and more organizations are realizing that it's a matter of when and not if. So what we've done is we've built the machine learning behavioral model so that we can detect these suspicious behaviors. In some cases we have an entire team of threat researchers that are simulating attacks, simulating pen testing tools, lateral movement, exfiltration so we can train our models on these behaviors. In some cases, we're looking for very specific indicators of compromise. But in just about all cases, this results in very high quality detections. And because just detections alone are completely insufficient, ExtraHop is built on top of an entire analytics platform, so that you're always one or two clicks away from being able to determine, is this something that requires immediate attention and requires kind of an incident response scenario? One of the capabilities that we announced here at this show, is automated response. So we integrate with the AWS API, so that we can automatically isolate and quarantine a workload that's behaving suspiciously. You know in cyber security, some attacks are low and slow but some are very fast and destructive. And for the fast and destructive ones, you move faster than a human's ability to respond, so we need that automated response. And we also announced a continuous packet capture capability for forensics, because sometimes you need the packets. >> That's a response, a lot of different things that we'd actually like to bring the capability a little bit earlier than that so that we don't actually get breached. It's great that we can detect it and say, great we've got the indication of compromise and we can react very, very quickly to that. Are you able to help us get one step ahead of the cyber crimes? >> So I'll actually be a little contrarian on that. I'm going to say that organizations have really been investing in protection and prevention, for the last decade or two. You know this strategy's called defense and depth, and you should do it, everybody should, that's a best practice. But, you know, with defense and depth, you have lots of layers of defense at the perimeters. You know keep the attackers out of the perimeter, gateways, firewalls, proxies. Lots of layers of defense at the end point, you know keep attackers off of my workstations, my instances, my laptops, things like that. But, you know, I think again, organizations have learned that attackers can fire, you know, 1,000 arrows, or 100,000 arrows, or 100 million arrows and only one needs to land. So the pendulum is really swung toward detection response. How do I know if I'm breached right now? How can I detect it quickly? The industry average dwell time is over three months, which is unacceptably long, and we always hear about cases in the news that are three years or more. And what I like to say is if it were three weeks, that would be too long. If it were three days, that would be too long, if it were three hours, I think you could do a lot of damage in three hours. If you can start getting this down to three minutes, well maybe, you know, we can limit the blast radius in three minutes. >> So Jesse, you brought up the ever growing surface area of attack and one of the big themes we've seen at the show is AWS is pushing the boundaries of where they touch customers. You know I said if Amazon is the everything store, AWS is becoming the everywhere cloud. Outposts, from Amazon's perspective, they said Outposts just extends their security models. I see and hear a lot of the ecosystem talking about how they're leveraging that and integrating with that. Does Outposts or any of their other Edge solutions impact what your customers and your solutions are doing? >> So it's funny you say that, I was wondering that myself. My expectation is that Outposts are a good thing because they the have same security controls that we expect to see in any AWS kind of VPC enabled environment. Where I haven't gotten full clarification is do we have the full capabilities that we expect with VPCs? In particular, you know VPC Traffic Mirroring, which is the capability that was announced at re:Inforce, that I'm so excited about, because it allows us to actually analyze and inspect that traffic. Another capability that I think slipped in under the radar but it was announced yesterday is VPC Ingress Routing. This doesn't really effect ExtraHop that much, but as a network head, I like seeing Amazon enable organizations to kind of make their own choices around how they want to inspect and control traffic. And with VPC Ingress Routing, it actually allows you to run in-line devices between your VPCs, which previously you were unable to do. So I think that one slipped in under the radar, maybe you have to be a network head like me to really appreciate it. But I'm seeing more flexibility and not less and that's something that I'm really pleased with. >> That one thing that we definitely see with cloud is that explosion of customer choice, and all of these different methods that are available. And Amazon just keeps pushing the boundaries on how quickly they can release new features. What does that mean for ExtraHop in being able to keep up with the pace of change that customers are using all of these different features? >> That's a good question, I think that's just the reality, so I don't think about what it means or doesn't mean, that's just the way it is. In general though, I've seen this trend toward more flexibility. You know VPC Traffic Mirroring, to use that example again, was one of the few examples I could point to a year ago as something really useful and valuable that I could do on-premises, you know for diagnostic purposes, for forensics purposes, that for some reason wasn't available in public cloud, at least not easily. And, you know, with this announcement six months ago, and going to general availability, Amazon finally ticked that one off. And we're starting to see the rest of the public cloud ecosystem move that way as well. So I'm seeing more flexibility, and more control. Maybe that comes with a pace of innovation, but I think that's just the world we live in. >> You do mention that the customers are having to adopt this new regime, of look we need to look at compromise, can we detect if we've been compromised, and can we do it quickly. We have a lot of tools that are now being made available, like Igress Routing, but, sorry Ingress Routing. But what does that mean for customers in changing their mindset? One of the themes that we had from the keynote yesterday was transformation, so do customers need to just transform the way they think about security? >> Yes and no. You know certainly customers who are used to a certain set of on-prem tool set, tool chain can't necessarily just shoehorn that into their public cloud workloads. But on the other hand, I think that public cloud workloads have really suffered from an opacity problem, it's very difficult to see what's going on, you know its hard to sift through all those logs, it's hard to get the visibility that you expect. And I think that the cyber security tool set, tool chain, has been pretty fragmented. There are a lot of vulnerability scanners, there are a lot of kind of like API inspectors and recommendation engines. But I think the industry is still really trying to figure out what this means. So I'm seeing a lot of innovation, and I'm seeing kind of a rapid maturing of that kind of cloud security ecosystem. And for products like ExtraHop, I'm just a huge believer in the power of the network for security, because it's got these great properties that other sources of data don't have. It's as close to ground truth as you could possibly get, very hard to tamper with and impossible to turn off. With VPC Traffic Mirroring, we get the full power of network security and it's really designed with the controls and kind of the IAM roles and such that you would expect for these security use cases, which, I just, great, great advance. >> So along the discussion of transformation, one of the things Andy Jassy talked about is the you know, the senior leadership, the CEOs need to be involved. Something we've been saying in the security industry for years. Not only CEOs, the board is you know, talking about this and it's there, so you know, what are you seeing? You stated before that we haven't solved security yet, but so, bring us inside the mindset of your customers today, and what's the angst and you know, where are we making progress? >> That's a very interesting question. I'll probably be a little contrarian here as well, maybe not but I think we see a lot of pressure is regulatory pressure. You know were seeing a lot of new regulations come out around data privacy and security, GDPR was you know pretty transformative in terms of how organizations thought about that. I also think it's important that there are consequences. I was worried that for a few years data breaches were becoming so commonplace that people were getting kind of desensitized to it. Like, there was once a time that if, when there was a massive data breach kind of heads would roll. And there was a sense of consequences all the way up into the C-suite. But a few years ago I was starting to get concerned that people were getting a little lackadaisical like, "Oh just another data breach." My perception is that the pendulum's swinging back again. I think for truly massive data breaches, there really is a sense of brand. And I'm seeing the industry starting to demand better privacy. The consumer industry is perhaps leading the way. I think Apple's doing a very good job of actually selling privacy. So when you see the economics, I mean we're, it's a capitalist system. And when you see kind of the market economics align with the incentives, then that's when you actually see change. So I'm very encouraged by the alignment of kind of the market economics for paying greater attention to privacy and security. >> All right, want to give you a final word here, you said you'd like to have some contrarian viewpoints. So you know, the last question is just you know, what would you like to kind of just educate the marketplace on that maybe goes against the common perception when it comes to security in general, maybe network security specifically? >> Well, I'll probably just reiterate what I said earlier. Network security is a fundamental capability, and a fundamental source of data. I think organizations pay a lot of attention to their log files. I think organizations do invest in protection and prevention. But I think the ability to observe all of the network communications, and then the ability to detect suspicious behaviors and potential threats, bring it to your attention, take you through an investigative workflow, make sure that you're one click away from determining you know, whether this requires an actual incident response, and in some cases take an automated response. I think that is a very powerful solution and one that drastically increases an organization's cyber security posture. So I would always encourage organizations to invest there regardless of whether it's our solution or somebody else's. I'm a huge believer in the space. >> All right so, Jesse, thank you so much for sharing. We know that the security industry still has lots of work to do. So we look forward to catching ExtraHop soon at another event. And we have lots of work to do to cover all of the angles of this sprawling ecosystem here at AWS re:Invent. For Justin Warren, I'm Stu Miniman, be back with lots more right after this, and thank you for watching theCUBE. (bouncy electronic music)

>> Narrator: From the Cosmopolitan Hotel in Las Vegas Nevada, it's the CUBE. Covering Coupa Inspire 2019. Brought to you by Coupa. >> Welcome to the CUBE from Coupa Inspire'19 at the Cosmopolitan in Las Vegas. It's a pretty swanky place here. Very excited to welcome to the CUBE for the first time from Accenture, Jesse Hanger, Director of Capability Network Sourcing and Procurement. Jesse, welcome. >> Thank you, glad to be here. >> Oh, our pleasure to have you. So here we are day two of the main stuff going on here. All talking about Business Spend Management, BSM, this new category that Coupa is defining. We had the chance yesterday to speak with Rob Bernshteyn their CEO. Ravi Thakur was there. And it's one of the cool things that Coupa is doing is it's now, it's procurement, it's invoicing, it's expenses, it's payments, but it's also helping to redefine procurement and finance. >> And it is. I mean it's a huge shift when we think about, in industry, the same shift that Salesforce had years ago when it comes to CRM. When Coupa started talking about this, maybe two years ago, I had a little bit of a head-scratcher, I saw some of their slides and I thought to myself, that's a bit much to say you're going to change this, but the funny thing was, no one else had come up with a real definition of this. We finally had procurement technology that was at a level that you could capture this type of data and information, and it could go broader than just my MRP system and bills of materials, and to everything. Into your traveling expenses, into how you're sourcing things, into your basic inventory, and so it took me awhile to come around, but it was a slow journey for me, but clearly Business Spend Management is the future, what we look at with procurement. Because for a CPO, it can't just be about saving money or reducing costs, you have to start driving business and you can't drive business if all you do is save money. >> Exactly, and that's been something that I've learned a lot from in the last a week or so, alone, is how influential a CPO can be. This person can be, not just the money saver, it's shareholder value. >> Jesse: Right, bottom line growth of the business. >> Yes, and one of the things that I really appreciate is Coupa's done a great job the last two days of sharing the voice of the customer. Because I said to you, before we went live, I said, I don't as a marketer, I'm a little bias, but I don't think there's anything that's more brand validating than the voice of a successful customer that actually shows measurable business outcomes and they showed that this morning. That transcends any industry whether you're manufacturing or a retailer. >> Yep, and so when you do think about it from their customer's perspective, from our client's perspective at Accenture, this is not easy. Changing the way you do things and changing your overall procurement operating model it's not a easy stuff. There's a reason why there're so many big companies like Accenture that do this kind of work. Because it's hard and it's needed. We come in with a different perspective. Having a platform like Coupa to really initiate that transformation, to be the to be the lever that moves the company from where they were to where they want to be and where they need to be to be competitive in the market, it makes our job so much easier across the broader supply chain practice to really, not just make the change, but you know we use a big consulting word, to instantiate it, so that it stays. We don't make it better this year, we make it better moving forward. >> It's an evolution. >> Jesse: It is. >> But that requires the right mindsets to go from a tactical role, of managing budgets and things, to being strategic, being able to identify fraud detection, for example. >> Well and again, when they talk about their suite synergy and the fact that all of these components of the platform, they're not separate modules, they hate when we say modules, so it's the T&E module. All of these components because they are all natively integrated and the data structure is the same on the back end, things like the fraud detection become easy. for Coupa, not in other platforms. Again, the more things you are doing with Coupa, the more data you have and the more you can get the benefit from the broader ecosystem, from the over 1 trillion dollars in spend that's gone through, that's fully classified, coded, detailed, now all of that spend helps that fraud engine do a better job. >> The community that you mentioned they were saying, I think Rob Bernshteyn CEO Coupa said yesterday that since 2016, around the time they went public, it's been a 5X increase in the amount of spend being managed through the Coupa platform. Accenture has over 50 deployments of Coupa in 72 countries, you guys are also managing over 100 billion of that, but this community that they described yesterday, so eloquently, is very collaborative, allowing not just customers to leverage from peer's best practices, but suppliers, as well. Talk to us about some of the things, like the wave that they're riding now, in terms of this community intelligence, and how is it going to help Accenture really be able to help more companies get that visibility and that control of all their spend? >> So as an example, at Accenture when you look at the analyst reports, we do very well when it comes to our procurement practice and the spend that we're helping companies manage outside of a platform. So we've got I think the latest number I saw was like 1.8 trillion dollars that we have helped companies source in the last handful of years. >> Wow. So that is something that gives us a huge competitive advantage. The same thing is true of Coupa and you said, how they're riding this wave, honestly, I don't think they're riding the wave yet, I think the wave is still building and they're about to start riding it, I think that what we're going to see over the next one to four years is going to be a fairly significant shift in how that data is going to drive very discrete and concrete value to all the members of the community. >> Wow, that is exciting. One of the things that we talk about in terms of changes to the CPO's role and CFO are these ways of disruption. One of them is consumerization. And you know I think Raja talked about that this morning, it was talked about a number of times yesterday, we spoke about it on the program, we're consumers all the time. Whether we're getting up in the morning at a conference and going to buy a coffee at Starbucks, or something that we want to order from a vendor like an Amazon, we have this expectation that we can get it, or if you want to buy a car, we have all of this data that we've never had before, so empowered, but then we go to our work lives, and if we're in whatever role we're in, maybe I'm in marketing and I need to do a trip, so I've got to go and do it, travel expense, we want the same ease of consumerization. Your thoughts on Coupa Pay, the expansion of Coupa with open buying the AWS Marketplace, on bringing that consumerization in, do you think like, (hand clapping) yes, that's exactly what we need? >> The first place of bringing in the consumerization was really how Coupa was engineered, years ago. When we go back to before they had released numbers and it was fall of 2007, they had numbers like that, Coupa really did give you an experience that was like Amazon. It was, we used to say, we're going to bring your shopping experience from Sunday afternoon to your desk Monday morning. And as that happened, now you start to see a different piece and that is a greater uptake in terms of the usage of procurement platforms. So instead of people, it's easier to pick up the phone and call Bill over at my supplier and say I need a case of whatever, it's actually easier to do it in the platform, and I can still give Bill a call and go have a beer with him if I want to maintain the relationship, but I don't have to make every one of my transactions start with a phone call that necessitates three additional phone calls later on to check on the status. Instead, I can do it in the platform very quickly. When you expand that out to what now Coupa Pay is going to offer, especially when we look at our clients that have challenges with multiple financial systems, multiple banks that are processing their payments, as you shift it away from that multiple outlet situation and you can move it large, if not all of that, into Coupa Pay, you're streamlining things for dozens if not scores of people in your company and making it better for them. >> Some of the stats I saw on the press release about the amount of payment processes that are still manual, and still 40% of it by paper check? >> I've got one client that writes 40,000 paper checks a year. >> How receptive are they to digital transformation? >> They almost think it's too good to be true. When you when you talk to clients like that, Fortune 500 companies, and when we talk to clients like that and you tell them, what you heard from Coupa is true, they're not just selling you, or trying to sell you something, they're telling you how it really works for clients and we've seen it. I look at the last dozen or so clients I've worked with, last year and a half I was doing some analysis, 51 billion dollars, 50.8 billion dollars in revenues is the average for those clients. So big companies. >> Big, yes. Really big companies. And as we look at those, you'd be surprised at how many of them have challenges with a lot of manual processes, still. They're the top of their field but they still have those challenges. So bringing this to them as they are deploying Coupa and seeing what they can realize in terms of efficiencies, it actually makes my job really fun because everybody's going to be happy. >> That is a win-win. One of the things Rob said yesterday, I know a little bit about Rob, and some of his proudest moments are hearing clients articulate success and he goes, one of my favorite things that's going into, whether it's a 50 billion dollar a year company or not, where there's someone maybe in the C-suite that just is skeptical, and he goes, and that just takes one champion who sees this vision, to convert that person to, oh my gosh, we can have this crystal ball of visibility of everything, and really leverage that to drive digital transformation so that the business is faster to identify new products, new revenues, convert customers faster, increase customer lifetime value and, and, and, the impact there is exponential. >> Well and that's one of the reasons why I think our partnership with Coupa is so rich, is because Accenture is more a technology company. We're not just focused on accounting, we're not just focused on finance, we have a lot of technology resources. We usually have a lot of connection into the CIO and the IT suite of leadership. They're the ones that are typically the most skeptical. They've been through dozens of roll outs of different things and they've seen them go anywhere from 0% to 50% effective. So because we've got the relationships there and we can have these conversations with the CIO, and say, this is different. This is going to be a very different kind of program for you and we're coming in and telling you that we can work this together as your partner and be successful, and again, you get six months into it and the lights fully on at that point and they're on board. In fact next year we're looking forward to bringing one or two CIOs on stage with us at Inspire'20 to talk about it from an IT perspective. >> Awesome, well I look forward to hearing that. Jesse, thank you so much for joining me on the Cube this afternoon. Exciting stuff. Control, visibility, who doesn't want that? >> Exactly, it's good times. >> Excellent, thanks Jesse, appreciate it. >> Thank you, appreciate being here. >> For Jesse Hanger, I'm Lisa Martin. You're watching the Cube from Coupa Inspire'19. Thanks for watching. (upbeat music)

>> live from Boston, Massachusetts. It's the Cube covering A W s reinforce 2019 brought to you by Amazon Web service is and its ecosystem partners come >> back, Everyone live Coverage of AWS reinforced their first conference, The Cube here in Boston. Messages some jumper. MacOS David Lattin escapes Jesse rusting >> CT on co >> founder of Extra Cube alumni. Great to see you again. VM World Reinvent >> Now the new conference reinforce not a team. A >> summit reinforced a branded event around Cloud security. This is in your wheelhouse. >> Thank you for having me. Yeah, it's a spectacular event. Unbelievable turnout. I think there's 8000 people here. Maybe more. I know that's what they were expecting for an event that was conceived of, or at least announced barely six months ago. The turnout's just >> wait. Many conversation in the past on the Cube and others cloud security now having its own conference. It's not like a like a security conference like Black at Def Con, which is like a broader security. This is really focused on cloud security and the nuances involved for on premises and cloud as it's evolving. It's certainly a lot more change coming on this kind of spins into your direction you would talking this year in the front end. >> It absolutely does. First, it speaks to market demand. Clearly, there was demand for a cloud security focused conference, and that's why this exists. Every survey that I've seen lists security extremely high on the list of anxieties or even causes for delay for shifting workloads to the cloud. So Amazon takes security extremely seriously. >> And then my own personal >> view is that cloud security has been somewhat nascent and immature. And we're seeing, you know, hopefully kind of Ah, somewhere rapid, a >> lot of motivation in that market. Certainly a lot of motivated people want to see it go faster and there spitting in building that out. So I gotta ask >> you before you get off the show, I actually say something if I may. I mean, it's been a long time coming. Yeah, this to your point, Jesse. There was a real need for it, and I think Amazon deserves a lot of credit for that. But at the same time, I think Amazon. There's a little criticism there. I mean, I think that the message that reinvent that's always been we got the best security. We got the most features as I come on in, and the whole theme here of the shared responsibility model, which I'd love to get into, I think was somewhat misunderstood by some of those high high level messaging. So I didn't want to put that out there as a topic that we might touch on. Great. Let's talk about it. Okay, so I do think it was misunderstood. The shared responsibility model. I think the messaging was Hey, the cloud is more secure than your existing data centers. Come on in. And I think a lot of people naively entered waters and then realized, Oh, wait a minute. There's a lot that we still have toe secure. We can't just set it and forget it. I mean, you agree with that? >> I I think that's a controversial topic. I do agree with it. I think it continues to be misunderstood. Shared responsibility model in some ways is Amazon saying We're going the security infrastructure and we're going to give you the tools. But organizations air still expected to follow best practices, certainly, and implement their own, hopefully best in class security operations. >> It's highly nuanced. You can say sharing data see increases visibility into into threats and also of making quality alerts. But I think it's a little bit biased, Dave for Amazon to satiate responsibility because they're essentially want to share in the security posture because they're saying we'll do this. You do that as inherently shared. So why wouldn't they say that? >> Well, I guess we're gonna say way want to own everything? Well, I guess my weight So this show is that I really like their focus on that. I think they shone a light on it and for the goodness of the the industry in the community they have. But it is a bit >> nuanced, and they've said some controversial, perhaps even trajectory statements. In the keynote yesterday, I was I was amused to hear that security is everybody everyone's job, which is something I wholeheartedly believe in. But at the same time, you know, David said that he didn't believe Stephen Step Rather said that he didn't believe in depth set cops, and that seemed a little bit of odds because I but I think they're probably really Steven Schmidt. Steven >> so eight of us. But at the same time, there was a narrative around. Security is code. So, yes, there were some contradictions in messaging, so this smaller remains small ones. They were nuanced but remains some confusion. And that's why people look to the ecosystem to help acorns. And this goes back to >> my earlier point. I I believe that cloud security is really quite nascent. When we look at the way we look at the landscape of vendors, we see a number of vendors that really are kind of on Prem security solutions. They're trying to shoehorn into the cloud way, see a lot of essentially vulnerability scanning and static image scanning. But wait, don't see, in my opinion, that much really best in class security so solutions. And I think until relatively recently it was very hard to enable some of them. And that's why I'd love to talk about the VPC traffic marrying announcement, because I think that was actually the most impactful announcement >> that I want to get to it. So So this is ah, a new on the way. By the way, the other feedback up ahead on the Cube is the sessions here have been so good because you can dig deeper than what you can get it re invent given tries. This is a good example. Explained that the that story because this has been one of the most important stories, the traffic mirroring >> well, unlike >> reinvent. I think this show is Is Maura about education than it is about announcements? No, Amazon announced. A few new service is going into G ET, but these were service is, for the most part, that we already knew you were coming here like God Watchtower in security hub. But the BBC traffic mirroring was really the announcement of this show. And, gosh, it's been a long time in coming 11 closely held belief I've had for a long time is that in the fullness of time, there's really nothing of value that that you can do on Prem that you wouldn't eventually be able to do in the cloud. And it's just been a head scratcher for me. WIFE. For so many years, we've been unable to get any sort of view, mirror or tap of the traffic for diagnostic or analytic purpose is something you could do on prim so easily, with a span porter and network tap and in the cloud we've been having to do kind of back flips and workarounds and software taps and things like that. But with this announcement, it's finally here. It's native >> explain VPC Chapman. What is it for? The folks watching might not know it. Why it's wife. What is it and why is it important? >> So BBC traffic marrying is a network tap that is built into E. C. To networking. What it means is that you can configure a V p c traffic mirror four individual E C two instances actually down to the e n I. Level. You can configure filters and you can send that to a target for analysis purposes. And this analysis could be for diagnostics. But I think much more important is for security. Extra hop is is really began as a network analytics platform way do network detection and response. So this type of this ability to analyze the traffic in real time to run predictive models against it to detect in real time suspicious behaviors and potential threats, I think is absolutely game changing for someone security posture. >> And you guys have been on the doorstep of this day in day out. So this is like a great benefit to you guys. As a company, I can see that. I see That's a great thing for you guys. What's the impact of the customers? Because what is the good news that comes out of the traffic nearing for them? What's the impact of their environment? >> Well, it's all about >> friction. First, I wantto clarify that we've been running in a WS for over six years, six or seven years, so we've had that solution. But it's required some friction in the deployment process because our customers had to install some sort of software tap, which was usually an agent, that was analyzing that there was really gathering the packets in some sort of promiscuous mood and then sending them to us in a tunnel. Where is now? This is This is built into the service into the infrastructure. There's no performance penalty at all. You can configure it. You have I am rolls and policies to secure it. All of the friction goes away. I think, for the kind of the first time in in cloud history, you can now get extremely high quality network security analytics with practically the flip of a switch. >> So It's not another thing do manage. It's like you say, inherit to the network. John and I have heard this this week at this event from practitioners that they want to see less just incremental security products and Maur step function and what they mean by that is way want products that actually take action or give us a script that we can implement, or or actually fix the problem for us. Will this announcement on others that you guys were involved in take that next step more proactive security that these guys so a couple of thoughts >> on that first, the answer is yes, it can, and you're absolutely right. Remediation is extremely important, especially for attacks that they're fast and destructive. When you think about kind of the when you think about attack patterns, their attacks are low and slow. Their attacks their advanced in persistent but the taxes, air fast and destructive movie the speed that is really beyond the ability for humans to respond. And for those sorts of attacks, I think you absolutely need some sort of automated remediation. The most common solutions are some form of blocking the traffic, quarantining the traffic or maybe locking the accounts, and you're kind of blocking. Quarantining and locking are my top three, and then various forms of auditing and forensics go along the way. Amazon actually has a very good tool box for that already. And there are security orchestration, products that can help. And for products like extra hop, the ability to feed a detection into an action is actually a trivial form of integration that we offer out of the box. So the answer is yes. >> But let me go >> back to kind of the incrementalist approach as well that you mentioned. I kind of think about the space and really, really broad strokes and organizations for the last 10 years or so have really highly invested in prevention and protection. So a lot of this is your perimeter defense and in point protection, and the technologies have gotten better. Firewalls have turned into next generation firewalls and antivirus agents have turned into next generation anti virus or in point detection and response. But I strongly believe that network security has and in some ways just kind of lagged behind, and it's really ripe for innovation. And that's why that's what we've really spent the last decade >> building. And that's why you're excited about the traffic BPC traffic nearing because it allows for parallel analytics and so more real time, >> more real >> time. But the network has great properties that nothing else has. When you think about network security with the network itself is close to ground Truth as you can get, it's very hard to tamper with, and it's impossible to turn off those air great properties for cyber security. And you can't say that about something like that. Logs, which are from time to time disabled and scrubbed on. You certainly can't say that about en Pointe agents, which are often worked around and in some cases even used as a better for attack. >> I'm gonna ask you Okay, on that point, I get that. So the next question would come to my mind is okay with the surface here. With coyote expanding and with cloud, you have a sprawling surface area. So the surface area is growing just by default by natural evolution, connecting to the cloud people of back hauling their data into the cloud. All this is good stuff. >> Absolutely. Call it the attack surface, and it is absolutely glowing perhaps in an exponential >> about that dynamic, one sprawling attack air. Because that's just the environment now. And what's the best practice to kind of figure out security posture? Great, great >> question. People talk a lot about the dissolution of the perimeter, and I think I think that's a bit of the debate. And regardless of your views on that, we can all believe that the perimeter is changing and that workloads are moving around and that users are becoming more mobile. But I think an extremely important point is that every enterprise just about is hybrid. So we actually need protection for a hybrid attack surface. And that's an area where I believe extra hop offers a great solution because we have a solution that runs on premises in physical data centers are on campuses, which, no matter how much work, would you move to the cloud. You still have some sort of user on some sort of laptop or some sort of work station in some sort of campus environment, way workin in private cloud environments that are virtualized. And then, of course, we work in public cloud environments, and another announcement that we just made it this show, which I also think is game changing, is our revealed ex cloud offering. So this is an SAS. This is a sass based, network detection and response solution, which means that I talked about removing friction by marrying the traffic. But in this case, all >> you have to >> do is mirror the traffic, pointed to our sass, and we'll do all of the management mean that So is that in the streets for you that is in the marketplace. We launched it yesterday, >> So it's great integration point for you guys. Get it, get on board more customers. >> And I think I think solutions like ours are absolutely best practices and required to secure this hybrid attacks in the >> marketplace. What was that experience like, you know, Amazon >> was actually great to work with. I don't mean to say that with disbelief. You work with you work with such a large company. You kind of have certain expectations, and they exceeded all of my expectations in terms of their responsiveness. They worked with us extremely closely to get into the marketplace. They made recommendations with partners who could help accelerate our efforts. But >> in addition to the >> marketplace, we actually worked with them closely on the VPC traffic marrying feature. There was something we began talking with them about a SW far back, as I think last December, even before reinvent, they were extremely responsive to our feedback. They move very, very quickly. They've actually just >> been a delight to work. There's a question about you talking about the nana mutability of logs, and they go off line sometimes. And yet the same time there's been tens of $1,000,000,000 of value creation from that industry. Are there things that our magic there or things that you can learn from the analytics of analyzing logs that you could bring over to sort of what you're positioning is a more modern and cloud like approach? Or is there some kind of barrier to entry doing that? Can you shed some light on Jesse? That's >> a great question, and this is where I'll say it's a genius of the end situation, not a tyranny of the or so I'm not telling people. Don't collect your logs or analyze them. Of course you should do that, you know that's the best practice. But chances are that that space, you know, the log analysis and the, you know, the SIM market has become so mature. Chances are you're already doing that. And I'm not gonna tell organizations that they shouldn't have some sort of point protection. Of course you should. But what I am saying is that the network itself is a very fundamental data source that has all of those properties that are really good for cyber security and the ability that analyze what's going on in your environment in real time. Understand which users air involved? Which resource is air accessed? And are these behavioral patterns of suspicious and do they represent potential threats? I think that's very powerful. I have a I have a whole threat research team that we've built that just runs attacks, simulations and they run attack tools so that we can take behavioral profiles and understand what these look like in the environment. We build predictive models around how we expect you re sources and users and end points to behave. And when they deviate from those models, that's how we know something suspicious is going on. So this is definitely a a genius of the end situation. John >> reminds me of your you like you're very fond of saying, Hey, what got you here is not likely to move you forward. And that's kind of the takeaway for practitioners is >> yeah. I mean, you gotta build on your success. I mean, having economies of scale is about not having Disick onyx of scale, meaning you always constantly reinventing your product, not building on the success. And then you're gonna have more success if you can't trajectory if you it's just basic competitive strategy product strategy. But the thing that's interesting here is is that as you get more successful and you continue to raise the bar, which is an Amazon term, they work with you better. So if you're raising the bar and you did your own network security probably like OK, now we get parallel traffic mirroring so that >> that's true. But I think we've also heard the Amazon is I think they caught maniacally customer focused, right? And so I think that this traffic marrying capability really is due to customer demand. In fact, when you when you were if you were at the Kino when they made the announcement, that was the announcement where I feel like every phone in the in the whole auditorium went up. That's the announcement where I think there's a lot of excitement and for security practitioners in particular, and SEC ops teams I think this. I think this really reduces some anxiety they have, because cloud workloads really tend to be quite opaque. You have logs, you have audit logs, but it's very difficult to know what actually going on there and who is actually accessing that environment. And, even more important, where is my data going? This is where we can have all sorts of everything from a supply chain attack to a data exfiltration on. It's extremely important to to be able to have that visibility into these clouds >> way agree. We've been saying on the cue many, many years now that the network is the last bottleneck, really, where that script gets flipped upside down where Workloads air dictating Dev ops. Now the network piece is here, so I think this is going to create a lot of innovation. That's our belief. Love to follow up Mawr in Palo Alto. When we get back on this hybrid cloud, I think that's a huge opportunity. I think there's a create a blind spot for companies because that's where the the attackers will go, because they'll know that the hybrids rolling out and that'll be a vulnerability area >> one that's, you know, it's an arms race. Network security is not new. It's been around for decades. But the attack the attackers in the attacks have become more sophisticated, and as a result, you know the defenders need to raise their game as well. This is why, on the one hand, there's there's so much hype and I think machine learning in some ways is oversold. But in other ways, it is a great tool in our arsenal. You know, the machine learning the predictive models, the behavioral models, they really do work. And it really is the next evolution for defensive >> capabilities. Thanks for coming on. Great insight. >> One last question. The beer. Extra guys have been here way did in the past. It's been a while since >> we've done that, but it comes from early days when when I founded the company, people would ask you in the name extra hoppy. Oh, are you guys an online brewery? And we were joking. We said no, that that was extra hops way embraced it and We actually worked with a local brewer that has since been acquired by a major beverage brands. I >> don't know that. I just heard way built our own >> label, and it was the ex Rob Wired P. A. It was it was extremely well received. Every time we visit a customer they'd ask us to bring here. >> That's pretty. You gotta go back to proven formula. Thanks for the insights. Let's follow up when we get back in Palo Alto in our studio on his high breathing's a compelling conversation network Security Network analytics innovation areas where all the action's happening here in Boston, 80 best reinforced. Keep coverage. We'll be right back.

>> Live from Las Vegas, it's theCUBE. Covering AWS re:Invent 2018 Brought to you by Amazon Web Services, Intel, and their ecosystem partners. >> Hey, welcome back. And we're live here at Las Vegas AWS re:Invent 2018 live coverage from theCUBE. I'm John Furrier. Dave Vellante, my co-host, wall to wall coverage. Dave, six years covering Amazon, watching it grow. Watching it just an unstoppable force of new services. Web services being realized from the original vision years and many, many years ago, over a decade. Jesse Rothstein, CTO and co-founder of ExtraHops our next guest, welcome back to theCUBE, good to see you. >> Thanks for having me. >> So first of all before we get into the conversation, what's your take on this madness, here? It's pretty crazy. >> You know this is, I think this is my sixth year, as well, and this show must double in size every year. It's enormous, spread across so many venues, so much going on, it's almost overwhelming. >> I remember six years ago, we used to be on theCUBE, and I think we just kept the stream open, "Hey, come on up! We have an opening!" Now it's like two cubes, people tryin' to get on, no more room, we're dyin', we go as hard as we can, 16 interviews, hundreds of interviews, lots of change. So I got to ask you, what is your view of the ecosystem? Because back then, handful of players in there. You guys were one of 'em. Lot of opportunities around the rising tide here. What's your thought on the ecosystem evolution? >> Well, of course the ecosystem has grown, this show has really become recognized as the pre-eminent Cloud show, but I see some themes that I think have certainly solidified, for example I spent a bunch of time on the security track. That's the largest track by far, I'm told. They're actually breaking it out into a separate add-on conference coming up in the summer. So clearly there's a great deal of interest around Cloud security as organizations follow their... >> Did they actually announce for that security conference? >> They did, they did. >> Okay, so Boston in June, I think right? >> June, that's correct. They announced, I think, I don't want to mess up the dates, June, late June. >> I think June 26. Breaking News here, that's new information. That's a really good signal for Amazon. They're taking security serious. When I interviewed Andy Jassy last week, he said to me, "Security used to be a blocker. Oh the Cloud's not secure!" Couple short years ago, now it's actually competitive advantage, but still a lot more work to get done. Network layer all the way up, what's your take? Never done. >> Well, so that's what Andy says, and I think that I would rephrase that slightly differently. Security used to be a blocker and it used to be an area of anxiety and organizations would have huge debates around, you know, whether the Cloud is less secure, or not, inherently. I think, today, there's a lot more acceptance that the Cloud can be just as secure as on-prem or just as insecure. You know, for my view, it relies on the same people, processes, and technologies, that are inherently insecure as we have on-prem, and therefore it's just as insecure. There are some advantages, the Cloud has great API logging, building blocks like CloudTrail. New services like GuardDuty, but at the same time it's hard to hire Cloud security expertise, and there is an inherent opacity in public Cloud that I think is a real challenge for security. >> Well, and bad human behavior always trumps good security. >> Well, of course. >> Talk about ExtraHop, how you guys are navigating, you guys have been in the ecosystem for a while. Always an opportunity to grow, I love this TAM's expanding, huge expansion in the adjustable market, new use cases. What's up with you guys? Give us an update. Where's the value proposition resonating? What's the focus? >> Well you can probably tell from my interests that we see a lot of market pull and opportunity around Cloud security. ExtraHop is an analytics product for IT ops and security, so there's a certain segment of what we do for IT operations use cases. Delivering essentially a better level of service, we attach to use cases like Cloud migrations, and new application roll-outs. But we also have a cyber security offering, that's a very advanced offering, around network behavioral analytics, where we actually can detect suspicious behaviors and potential threats, bring them to your attention. And then since we leverage our broader analytics platform, you're a click away from being able to investigate or disposition these detections and see, hey is this something I really need to be concerned about. >> Give an example of some of the network behavior, because I think this is a real critical one, because with no perimeter, you got no surface area, you got API's, this is the preferred architecture but, you got to watch the traffic. How will you guys be specific and give an example. >> So, some of my favorite examples have to do with detecting when you've already been breached. Organizations have been investing in defense and depth for decades, you know, keep the attackers out at the perimeter, keep the attackers away from the endpoint, but how would you know if you've already been breached. And it turns out, your Verizon does a great data breach investigation report annually. And they determine that they're only nine or so behaviors that count for 90% of what all breaches do, what they look like. So, you look for things like, parts of the cyber security attaching. You look for reconnaissance, you look for lateral movement, you look for some form of ex-filtration. Where ExtraHop is taking this further, is that we've built sophisticated behavioral models. We're able to understand privilege. We're able to understand what are the most important systems in your environment, the most important instances. Who has administrative control over them, and then when that changes, you want to know about it, because maybe this thing, this instance, in an on-prem environment, could be like a contractor laptop, or an HVAC system. It now exercises some administrative control over a critical system, and it's never done that before. We bring that to your attention, maybe you want to take some automated action, and quarantine it right away, maybe you want to go through some sort of approval process and bring it to someone's attention. But either way, you want to know about it. >> I'm going to get your reaction to a comment I saw yesterday morning at a keynote on Teresa Carlson's breakfast, her public sector breakfast, Christine Halvorsen, FBI. Said, we're in a data crisis. And she talked about that they can't react to some of these bad events, and a lot of it's post event, That's the basic stuff they need now, and she said, I can't put the puzzle pieces together fast enough. So you're actually taking that from a network Ops standpoint, IT Ops. How do you get the puzzle pieces together fast? What's the secret? >> Well so, the first secret is that we're very focused on real time network data, and network telemetry. I often describe ExtraHop as like Splunk for the network. The idea requires completely different technology, but the idea's the same. Extract value and insight out of data you already have, but the advantage of the network for security, and what I love about it, is that, it's extremely real-time, it's as close to ground truth as you can get, It's very hard to hide from, and you can never turn it off. >> Yeah. >> So with all of those properties, network analytics, makes for, has just tremendous implications for cyber security. >> I mean honestly, you're visibly excited, I'm a data geek myself, but you made a good point, I want to double down on, is that, moving packets from A to B is movement. And movement is part of how you detect it right, so? >> It is, so packets itself, that's data in motion, but if you're only looking at the packets you're barely scratching the surface. Companies have tried to build security analytics based on flow data for a long time. And flow data, flow records, it's like a phone bill. It tells you who's talking to whom and how long they spoke, but there's no notion of what was said in the conversation. In order to do really high quality security analytics, you need to go much deeper. So we understand resources, we understand users, we understand what's normal, and we're not using statistical baselines, we're actually building predictive models around how we expect end points and instances to behave. And then when they deviate from their model, that's when we say, "Hey, there's something strange going on. >> That's the key point for you guys. >> And that means you can help me prioritize... >> Absolutely. >> Because that's the biggest challenge these guys have. They oftentimes don't know where to go, they don't know how to weight the different... >> So that's one challenge and I think another really big challenge, and we see this even with offerings that have been publicized recently, is that detection itself isn't good enough, that's just an alert cannon, and there was a session that actually talked about alarm deafness that occurs, it occurs in hospitals, and other environments, were all you get is these common alarms, and people stopped paying attention to them. So, in addition to the ability to perform high quality detections, you need a very streamline investigative work flow. You know, one click away so you can say, "Okay, what's going on here?" Is this something that requires additional investigation. >> Well, I think you guys are on the right track, and I think what's different about the Cloud is that, you know, they call the show re:invent, but rethinking, existing stuff for Cloud scale, is a different mindset, it's a holistic. Like, you're taking more of a holistic view saying, "I'm not going to focus on a quote packet path, or silo that I'm comfortable with, you kind of got to look at the bigger picture, and then have a data strategy, or a some competitive unique IP." >> I think that's an excellent summary. What I would add is that organizations, as they kind of follow their Cloud journey, we're seeing a lot of interest from security teams in particular, that don't want to do swivel chair integration. Where I have something on-prem and I have something in the Cloud. They want something much more holistic, much more unified. >> Seamless, automated. >> Much more seamless, much more automated. (laughing) You know, I sat in about five different securities track sections, and every single one of them kind of ended with the, "So we automated it with a Lambda Function." (laughing) Clearly a lot of capability for automation, in public Cloud. >> Jesse great to have you on theCube, CTO, Co-founder of ExtraHop. What's next for you? What's goin' on? What's next? >> Well, we continue to make really big investments on security, I wish I could say that cyber security would be done at some point, but it will never be done. It's an arms race. Right now I think we're seeing some really great advancements on the defense side, that will translate into big success. Always focusing on the data problem, as data goes from 10 gigabits to 100 gigabits. You know Amazon just announced their seat five accelerated 100 gigabit network adapter. Always looking at how can we extract more value from that data at scale. >> Leverage to power, leverage to power. Well, we got to get you back on the program. We're going to increase our cyber security coverage, we certainly will be at the security event, I didn't know it was announced publicly, June 26th and 27th, in Boston. Give or take a day on either side, could be 27th, 28th, 26th, 27th. This is a big move for Amazon, we'll be there. >> I think it is. >> Great job, live coverage here, from the floor, on the Expo floor at Amazon re:Invent in 2018, will be right back more Cube coverage, after this short break, two sets. We'll be right back. (soft electronic music)

(pulsing music) >> Live from Las Vegas, it's theCUBE, covering VMworld 2018. Brought to you by VMware and its ecosystem partners. >> Good morning from day three of theCUBE's coverage of VMworld 2018 from the Mandalay Bay, Las Vegas. I'm Lisa Martin, and I'm joined by my co-host, Justin Warren. Good morning, Justin. >> Good morning, Lisa. >> We're excited to welcome to the first time to theCUBE Jesse Rothstein, co-founder and CTO of ExtraHop. Jesse, it's nice to meet you. >> Nice to meet you, Lisa. Thank you for having me. >> Absolutely, so ExtraHop, you guys are up in Seattle. You are one of Seattle's-- >> Sunny Seattle (Jesse chuckles). >> Sunny Seattle. So, one of the best companies up there to work for. Tell us about ExtraHop. What to you guys do in the software space? >> Great. Well, ExtraHop does network traffic analysis, and that can be applied to both performance, performance optimization, as well as cybersecurity. Now, I'm not unbiased, but what I would tell you is that ExtraHop extracts value from the wired data better than anybody else in the world, and that's our fundamental belief. We believe that if you can extract value from that wired data and insights and apply in real-time analytics and machine-learning, then this can be applied to a variety of use cases, as I said. >> That's quite interesting. Some of the use cases we were talking about off camera, some of the things around micro-segmentation, particularly for security, as you mentioned, is really important, and also in software-defined networking, the fact that you are software, and software-defined networking we've had a few guests on theCUBE so far over the last couple of days, that's something which is really experiencing a lot of growth. We have VMware who's talking about their NSX software-defined networking. Maybe you could give us a bit of detail on how ExtraHop helps in those situations. >> Well, I'm paying a lot of attention to VMware's vision and kind of the journey of NSX and software, really software-defined everything, as well as, and within NSX, you see a lot of applications towards security, kind of a zero-trust, least-privileged model, which I think is very exciting, and there's some great trends around that, but as we've also seen, it's difficult to execute. It's difficult to execute to build the policies such that they maybe don't break. From my perspective, a product like ExtraHop, as solution like ExtraHop, we work great with software-defined environments. First, because they have enabled the type of visibility that we offer in that you can tap traffic from a variety of locations for the purposes of analysis. If left to its own devices, I think these increased layers of abstraction and increased kind of policy frameworks have the potential to introduce complexity and to limit visibility, and this is where solutions like ExtraHop can provide a great deal of value. We apply to both your traditional on-prem environment as well as these hybrid and even public cloud environments. The ability to get visibility across a wide range of environments, really pervasively, in the hybrid enterprise is I think a big value that we offer. >> We are at VMworld and on day one, on Monday, Pat Gelsinger talked about the average enterprise has eight or nine clouds. I heard somebody the other day say that they had four and a half clouds. I didn't know you could have a half a cloud, but you can. Multi-cloud, a big theme here, that's more the vision and direction that VMware's going to go into, but to your point, customers are living in this world, it's not about embracing it, they're in it, but that also I think by default that can create silos that enterprises need to understand or to wrap their heads around. To your point, they have to have visibility, because the data is the power and the currency only if you can have visibility into it and actually extract insights and take action. >> Absolutely. ExtraHop customers are primarily large enterprises and carriers, and everyone single one of them is somewhere on their own cloud journey. You know, maybe they're just beginning it, maybe their quite mature, maybe their doing a lot of data center consolidation or some amount of workload migration to public cloud. No matter where they are in that journey, they require visibility into those environments, and I think it's extremely important that they have the same level of visibility that they're accustomed to in their on-prem environment, with their traditional workloads, as well as in these sort of borne-in-the-cloud workloads. But, I want to stress visibility for its own sake isn't very useful. Organizations are drowning in data, you can drown in visibility. For us, the real trick is to extract insights and bring them to your attention, and that's where we've been investing in data science and machine-learning for about four and a half to five years. This is before it became trendy as it is today. >> Superpower, like Pat called it. >> There's so much ML watching, when you walk in the show floor, almost every vendor talks about their AI and machine-learning. A lot of it's exaggerated, but what I'll say for ExtraHop, of course, ours is real, and we've been investing in this for years. Our vision was that we had this unbelievable amount of data, and when you're looking at the wired data, you're not just drinking from the firehose, you're drinking from Niagara Falls. You have all of this data, and then with machine-learning, you need to perform feature extraction on the data, that's essentially what data science teams are very good at, and then, build the ML models. Our vision was that we don't want to just give you a big pile of data or a bunch of charts and graphs, we actually want to bring things to your attention so that we can say, "Hey, Lisa, look over here, "there's something unusual happening here", or in many cases there's a potential threat or there's suspicious behavior, an indicator of compromise. That's where that sort of machine-learning I believe is the, kind of the-- well, certainly the current horizon or the state of the art for cybersecurity, and it's extremely important. >> Jessie, can you give us an example of one of your enterprise customers and how they've used ExtraHop to manage that complexity that Lisa was talking about, that visibility that they need to get through all the different layers of abstraction, and maybe, if there's one, an example of how they've done some cybersecurity thing, particularly around that machine-learning of detecting an anomaly that they need to deal with? >> Sure, I can think of a lot. One customer of mine, that unfortunately, I can't actually name them, is a very large retail customer, and what I love about them is the actually have ExtraHop deployed at thousands of retail sites, as well as their data centers and distribution centers. Not only does ExtraHop give them visibility into the logistics operations, and they've used ExtraHop to detect performance degradation and things like that, that we're preventing them from, literally preventing the trucks from rolling out. But they're also starting to use ExtraHop more and more to monitor what's going on at the retail sites, in particular, looking for potential compromises in the point-of-sale systems. We've another customer that's a large, telco carrier, and they used ExtraHop at one point to actually monitor phone activations, because this is something that can be frustrating if you buy a new phone, and maybe it's an iPhone, and you go to activate it, it has to communicate to all these different servers, it has to perform some sort of activation, and if that process is somehow slow or could take a long time, that's very frustrating to your users and your customers. They needed the ability to see what was happening, and certainly, if it was taking longer than it usually does. That's a very important use case. And then we have a number of customers on the cybersecurity side who are looking for both the ability to detect potential breaches and maybe ransomware infections, but also the ability to investigate them rapidly. This is extremely important, because in cybersecurity, you have a lot of products that are essentially alert cannons, a product that just says, "Hey, hey, look at this, look at this, look at this. "I think we found something." That just creates noise. That just creates work for cybersecurity teams. The ability to actually surface high-quality anomaly and threats and streamline and even automate the workflows for investigation is super important. It's not just, "Hey, I think I found something", but let's take a click or two and investigate what it is so we can make a decision, does this require immediate action or not. Now, for certain sort of detections, we can actually take an automated response, but there are a variety of detections where you probably want to investigate a little more. >> Yeah. >> I also noticed the Purdue Pharma case study on your website, and looking at some of the bottom line impacts that your technology is making where they saved, reduced their data center footprint by 70% and increased app response times by 70%. We're talking about pharmaceutical data. You guys are also very big in the healthcare space, so we're talking about literally potentially life-saving situations that need to be acted on immediately. >> Certainly that can be true. Healthcare, there can be life-and-death situations, and timely access to medical records, to medical data, whether it's a workstation inside an exam room or an iPad or something like that can be absolutely critical. You often see a lot of desktop and application virtualization in the healthcare environment, primarily due to the protection of PHI, personal health information, and HIPPA constraints, so very common deployments in those environments. If the logins are slow or if there's an inability to access these records, it can be devastating. We have a large number of customers who are essentially care providers, hospital chains, and such that use ExtraHop to ensure that they have timely access to these records. That's more on the performance side. We also have healthcare customers that have used our ability to detect ransomware infections. Ransomware is just a bit of a plague within healthcare. Unfortunately, that industry vertical's been hit quite hard with those infections. The ability to detect a ransomware infection and perform some sort of immediate quarantining is extremely important. This is where I think micro-segmentation comes into play, because as these environments are more and more virtualized, natural micro-segmentation can help limit damage to ransomware, but, more often than not, these systems and workstations do have access to something like a network drive or a share. What I like about micro-segmentation is the flexibility to configure the policies, so when a ransomware infection is detected, we have the ability to quarantine it and shut it down. Keep in mind that there's defense in depth, it's kind of a security strategy that we've been employing for decades. You know, literally multiple layers of protection, so there are always protections at your gateway, and your firewall, at the perimeter, your NGFW, and there are protections at the endpoint, but if these were 100% effective, we wouldn't have ransomware infections. Unfortunately, they're not, and we always require that last, and maybe a last line of defense where we examine what's going on in the east-west corridor, and we look for those potential threats and that sort of suspicious activity or even known behaviors that are known to be bad. >> Well, Jesse, thanks so much for stopping by theCUBE and sharing with us what ExtraHop is doing, and what differentiates you in the market. We appreciate your time. >> My pleasure, Lisa, Justin. Thank you so much for having me. >> And we want to thank you for watching theCUBE. I'm Lisa Martin with Justin Warren. Stick around, we'll be back. Day three of the VMworld 2018 coverage in just a moment. (pulsing music)

>> Announcer: Live from Las Vegas, it's The Cube covering IBM Think 2018. Brought to you by IBM. >> Hello and welcome to The Cube here in IBM Think 2018, I'm John Furrier. It's The Cube, our flagship program, we go out to the events and extract the signal in the noise. We're the number one live event coverage. We're here with The Cube with IBM Think 2018. Our next guess is Jesse Lund who's the vice president of IBM Blockchain. He's in the financial services side. Into blockchain, into crypto, into token economics, seeing the future, how money flows, Jesse great to have you on The Cube, thanks for joining me. >> Yeah, thanks for having me. It's great to be here. >> We were talking before on camera about blockchain, and we love blockchain, IBM certainly put it out there as part of the innovation sandwich. Blockchain, data, AI, kind of making that innovation, but it's really what it enables, and I want to talk to you about. You are involved in payments. We've been saying on The Cube that the killer app is money in this market. >> I agree, yeah. >> You agree, and you talk about it. This is a new market, so a stack is kind of developing. You got blockchain, then you got crypto which as protocols and you got infrastructure, then you got decentralized applications which you could call ICOs up top, certainly a little bit scammy and bubbly, but that's as arbitraging and optimizing the capital markets, you could argue that. But so this is a really big dynamic. Your thoughts on this trend. >> Sure, well so I joined IBM from 18 years at Wells Fargo. I spent really the majority of my career in financial services and when blockchain came along, I sort of immediately saw the impact, the potential for, I'll call it positive disruption, disruption in the positive sense. Transformational paradigm shift kind of stuff in terms of how money moves around the world and how we classify assets and how we transfer ownership of assets, I mean that's just, it's, the possibilities are limitless. And you're right, IBM is the place where I think blockchain has started as a mainstream focus for enterprises around building private networks, but that's really just the beginning. What we talked about earlier was it gets really interesting when data and money are connected together and they move at high velocities together. >> Let's get into that. I mean first let's just address the IBM thing. They got to put a stake in the ground, blockchain, it's a safe harbor to say supply chain stuff because that's their business, they've been building technologies for supply chains for companies, that's what enterprises do, that's IBM. But the game is where the money is and that's where the businesses are going to be transformed. We're talking about disrupting structural industries. This is where the money power comes in. Money's flowing, I mean if you want to move money from China, go to bitcoin. If you want to move it from anywhere, this is what's happening. >> Yeah, so think about bitcoin. It's kind of what started it all. It's a little bit of a bad word in banks and in regulated financial circles, but let's face it, the only real mainstream blockchain application today is still bitcoin, but you know we're only three years in to the blockchain industry, right? I mean think about when we were three years in to the internet industry, where we were still talking about which browser is going to win and then it went on to which application server's going to win, and it wasn't til a decade later we were really focused on what are the applications, the killer apps that are enabled by an interconnected world and that's exactly what's happening now. Other industries have already been completely disrupted. Look at retail, it's just, it's banking's turn. It's financial services turn. >> One of the founders, the co-founders of Ethereum, Anthony Diiorio, who I interviewed a couple weeks ago at the Bahamas, he said "While it is the new browser," to your points, browser wars, if you think about the payment, wallets are now becoming part of the mechanism for money transfer. If you don't have a wallet, if you want to send me some Ripple, you want to send me some Ethereum, I need a wallet. This is a no brainer, right? I mean if you want to leverage any money, that's one thing. The second thing I want to get your thoughts on besides the wallets, the fiat conversion, right? These are two threshold conversations that are going on. Your thoughts, wallet and conversion to fiat. >> Well I mean I think wallets are really important because this whole thing is based on key management, this whole concept is based on cryptography. It only works on a public, private key notion and you got to keep that private key private, but you got to keep it, right? You got to keep it safe and you got to keep it, it's like your wallet. You've got a wallet, you've got cash in your wallet, you lose your wallet, you lose your cash. It's the same kind of analogy, so wallets are really important and you're going to want to turn to providers who have made their business in encryption, who have made their business in security, I mean-- >> And cold storage, old school is kind of coming back, people are taking their keys and they're spreading them across multiple lock boxes, multiple states. People are getting broken into their house or their PCs are getting broken into. >> Right, yeah. >> I mean security, going old school. >> And why not? I mean, it works. >> Because if someone knows you got 100 million dollars in your house, they're going to get it if you don't lock it. Okay back to the reality of the money transfer. We were talking before you came on, I've been saying on The Cube, token economics really is where the action is, at least in my opinion. I want to get your thoughts because really the business model innovation is on the table because whoever can innovate the business model has more of a chance to disrupt an existing industry. This is where tokenization becomes part of the money piece of it, so how do you convert that value into capture? Is that token? Is that where you see it? What's your thoughts? >> Yeah so well first of all, I mean if you think of tokens as another form of currency, and by the way, I think we have to be careful about what we say, cryptocurrencies, the industry talks about thousands of cryptocurrencies out there where there's really not. There's maybe dozens and they're all derivatives of just a few models, bitcoin being one prominent model and there's a lot of offshoots off of that. But the rest of what we call cryptocurrencies are really tokens that represent primarily securities, which is why the SCC's getting involved. But the really interesting thing about this is these tokens move at high velocity because they're digital and so, but these digital things represent a claim on real world value, and that's where it becomes really interesting. IBM's built and launched as kind of its first foray into the solution space of financial services where IBM is an investor in this technology, a cross-border payment solution that inherently re-engineers this whole correspondent banking, this international wire process, and where FX, foreign exchange, becomes a real time capability in a series of operations that execute as an atomic unit. That's novel today. When you want to send money from here to somewhere else in the world, you go to your bank, your bank sends an instruction to another bank, and they respond and say "Yeah you know it's okay "because the person you're sending it to is not a terrorist, "is not on a some sort of sanctions list," great, now the bank has to actually go settle and it settles through another network, so the novelty is why can't the messages and the data and the value itself, the digital asset, why can't they exist and move together at the same time? That's what we've really built. But as we've built and deployed that and are getting banks and non-bank financial institutions to sign up for it because the cost of moving money goes way, way, way down and the user experience goes way, way, way up because instead of taking two or three days and you don't know how much it's going to cost until it gets there, it takes 10 or 15 seconds and you know before you even press send how much it's going to cost to get there. It all boils down to this notion of digital assets, that's what it all comes down to, is the way to settle value with finality in real time is for one party to exchange a digital asset with another party. Today, initially, the only form of negotiable digital assets are cryptocurrencies which has banks a little scared, but as we start talking through what we've learned in the enterprise blockchain space, we realized that we can tokenize all sorts of other asset classes, commodities, securities, and even fiat currencies where central banks or commercial banks can issue a token that represents a claim on deposits held at some financial institution and that's, that's a-- >> So you see tokenization as a big deal. >> It's a huge deal. I mean it's everything, I think it's-- >> It's the economic value of the ... >> I think it's the tipping point for blockchain. The irony is it goes back to bitcoin kind of started this all. You know we said "Well we like the idea of the technology "underneath bitcoin, but we want to focus on blockchain," I mean forget for a second blockchain is actually terminology that's invented by the bitcoin primer that was published nine years ago by Satoshi, so yeah it's their, whoever they are, it's their terminology, and it's kind of coming back full circle where you're seeing the convergence of all of these cool optimization capabilities, you know, immutability and workflow optimization, supply chain management-- >> And there's a lot of work to be done on performance and whatnot, but the concept of decentralized immutability data is fine, store the data. Now there's, it's got to get fixed, but I think that what that enables and I think you agree that tokenization's critical. So for a company that wants to token their business or raise money via tokens or get involved in this new economic value creation, innovation trend, how do they do it? And by the way are there tools available? You mentioned banking, and the banking business got to where it was because you had to build the picks and shovels to make it happen, you had to do a swift and you had to have this stuff go on. Now developers don't necessarily have the tools, so there's a picks and shovel market and there's also the real innovation. >> Yeah and that's I think the value contribution that IBM brings. I mean we bring 107 years of credibility in developing and operating mission critical, transactional, and financial systems, and I could do just an ad for a second, that's what the IBM blockchain platform is all about and as the industry evolves, as our platform offering evolves, what we want to be able to bring to small business, medium sized businesses, large businesses is the ability to develop solutions using our toolkit. >> So Jesse I want you to put your financial hat on and at the same time put your payments hat on and your token economics hat on, three hats. Hey I want to tokenize my business, I really want to get in. So we have an innovative team, we're seeing new business model formulas and logic that we want to disrupt, what do I do? I got an existing, growing business that I know has assets and I'm not a startup, but I'm not trying to pivot like Kodak, so I'm not dying, throwing the hail Mary, or I'm not a startup and got to build a whole product. I'm a real business, I'm growing, and I see tokenization as a way for me to be successful. What do I do? What's your advice? >> Well I think you look at it from all potential angles. If you look at any business, they're always looking to improve the bottom line by shrinking costs, right? They're also looking to improve the bottom line by increasing the top side, increasing revenue, and I think as a mid-sized business or a growing business, you have the opportunity to use tokenization, to use blockchain and digital currencies to do both of those things. You have the ability to accelerate the adoption of whatever your good or service or product is by if it's tokenizable, and most things are whether it's a utility, access to some service you provide, or whether it's an asset, some widget that you sell, you enable primary and secondary markets by creating a digital asset that can be bought by anybody anywhere around the world. I mean that's one way to do it and so I think getting people to realize the potential there-- >> You got programs, they call up IBM or get some developers, make it happen. Okay so killer apps money, that's going to be a 30 plus year trend and certainly this highlights that, but the other thing that's happened, it's coming out of either, in the open source community as well as cloud, the notion of marketplaces and communities so marketplaces and communities become a very important role in the token economics piece. What's your thoughts and opinion on that narrative? >> Well again for me, it goes back, I always go back to digital assets. We in the U.S. and around the world, when we start talking about financial instruments, we classify assets differently, but when it comes to an ecosystem and a community that becomes inherently peer to peer and inherently democratic, it's about an asset class agnostic distributed exchange where I can sell you my security token in exchange for your fiat token, or I can sell you my commodity token or utility token for the same. I think the ecosystem gets built automatically by way of new assets coming to a common network or interoperable set of networks, and that's what's missing today by the way, same in capital markets, right? The holy grail in the capital market space today is how do I shrink the time between trade and settlement? There's this whole t plus three and we're spending billions of dollars to go to t plus two, we gain a day, so the trade day and the settlement date are two days apart. I mean you just think about kind of the absurdity of that. If you just say well if the security that you're buying is a digital asset, and the money that you're buying it with is a digital asset, and they both exist on either the same network or an interoperable network, the transfer of ownership and the transfer of value happen together as two operations or a single operation in one atomic transaction, you've solved the problem. >> Speed of light can make it happen. >> Right, delivery versus payment, that's what the capital markets industry is trying to optimize for, right? Because it improves the balance sheet of all sorts of finance-- >> You had a phrase you mentioned before we came on camera, something about money, the future of money. What was that phrase? >> Programmable money? >> Programmable money. >> Yeah, right, right. >> I want you to take a minute to explain. Love this concept, Miko Matsumura, thought leader friend of ours, has a vision called open source money which is more of an open source, this hey money's flowing, it's open, it's out there, but you have a different perspective which I like too which is programmable money. What does that mean? Describe the concept and take a minute to unpack that. >> The concept of programmable money comes out of a paper that I jointly authored with Jed McCaleb who is the founder of Stellar and was the co-founder of Ripple and is a really smart guy so I feel like I have a small brain when I'm around him but we really wrote it in the context of central banking and the ultimate issuer of an asset because central banks are the issuers of currencies. Right now the primary dealers, if you will, for currencies are commercial banks and so that whole commercial, central, fractional reserve banking model has been replicated from the western world to everywhere else in the world and you can't get access to central bank money as they say. But if the central banks were to issue digital currencies which is essentially a token of fiat currency, so you own the token, you own a claim of fiat deposits held on the balance sheet of the central bank, now you have the ability to move that around. You can actually program the movement of money because it's a digital thing, it's a digital asset that's as good as cash and if you are working with a central bank who's issuing it, not only is it electronic money, it's actually legal tender because if the central bank issues it, it becomes legal tender which means everybody who accepts it has to accept that form of payment. That's pretty profound if we can get to that point and we're working with-- >> And software's a big driver in that because you need software to manage digital assets. >> Oh yeah, absolutely. >> The software's driving it. Bill Tai is an investor, I interviewed him, and he had an interesting topic and I made a highlight of it. He said after World War II, we talked about the oil situation when the dala was pegged to OPEC, that was essentially tokenizing oil. Then okay that's good, so that was their ICO. >> Right, right, yeah, essentially. >> That's what you're saying, you can actually put fiat to the digital token and take advantage of the efficiencies of digital. >> Right, yeah, okay-- >> Taking down all the structural inefficiencies that were built prior to digital. Is that ... >> It is. You fast forward a little bit and think where that takes us. It's no secret that the U.S. dollar is the trade currency of the world, and I want to be careful what I say because, you know, I'm an American patriot here but there are other large G20 nations who wouldn't mind dethroning the U.S. dollar as the trade currency of the world and so as you see central banks starting to get involved in the issuance of digital currency, you create a situation where all of a sudden well maybe oil could be traded heresy in other currencies besides the U.S. dollar which is all it's traded in today. Goes back to your ecosystem question. >> This is a great point. We could riff on this stuff, let's riff on this. The UK just signed a deal with Coinbase, this is a major signal. >> Sign, yeah. >> You got a legitimate country saying we're going to give a license to Coinbase, now they have Brexit to deal with so they're looking at it as an opportunity. Outside of the UK coming in and doing that deal with Coinbase, it's on the web, look up Coinbase in the UK, you'll see the deal. You have other companies trying to jockey for who's going to be the Wall Street for crypto? Meaning I want to convert crypto to fiat, where do I go? Do I go to Estonia? Do I go to Dubai? Bahrain? Armenia? China? There is no place yet. Your thoughts, what's going to happen? What shoe will drop first? Is there a domino effect? >> Yeah, well there's a couple things as it relates to the UK and kind of the extension to Coinbase of access to the national payment system which is really what enables them to then convert fiat to crypto and back. That's pretty interesting. Going back to the programmable money thing, though. If you have a central bank issued token, you've essentially extended the real time gross settlement system which has been only accessible by commercial banks to anybody that holds that token, right? It's a trend, I think the UK sees it coming, I think the Federal Reserve sees it coming. It's going to happen. >> Is it winner take all or winner take most? >> I think it creates a much more purely efficient market. It's a democratic system so I don't think there is going to be a new Wall Street, I think it's going to be-- >> John: Decentralized. >> Exactly, I mean that's the beauty of it. It's scary though for establishments like Wall Street to look at this and it-- >> I mean are the banks scared? You're dealing with the banks right now. >> Yes, they're scared. I mean I've actually read a recent article that Bank of America, the headline was "Bank of America's afraid of digital currency." You've seen Jamie Dimon who came out with a kind of a hard stance against bitcoin and has since kind of backed away from that. >> Of course you probably bought in when it dropped and now it's back up again. >> Well I think part of the bank was actually facilitating their clients and trading bitcoin so that might've been it. There's a natural reaction to it, especially if you're part of the mainstream establishment. >> There's no proof of that, I'm just saying we're posting on Reddit and whatnot. >> No we're just joking around. Jamie's a, he's a good guy, right? >> Can I get your thoughts on digital nations? We've been talking about this. Just a few years ago, smart cities, IoT was kind of the narrative, oh be a smart city, control the traffic lights, and instrument the physical goods and services. Now with crypto and blockchain front and center conversation is digital nations with sovereignty around their cash. This is kind of your point earlier. How are you seeing that? What's your view? Are you seeing that trend? Are there dots connecting for you? Because again, people are jockeying for a position on the global digital backbone to be a major part of the money flow, the fiat conversion, what is the goods and services? Who's going to clear the values? All digital, it's a perfect storm. >> Well I think there's always going to be the need for trusted entities to be the issuers of these assets because it all comes down to trust at the end of the day. The thing with bitcoin is that it's purely autonomous and people are a little bit skeptical of it because they're like, "Well who's controlling "the monetary policy?" and the answer is the market, you know, the users of the network are controlling it and that's why you see such volatility, right? Because the traders love it, they can go in and trade the up trends and the down trends. As long as there's volatility, traders are making money. I think there is still going to be a place for central authorities to add value, but that's going to be the pressure, is for them to prove that they're adding value not, you know, bureaucracy masquerading as process. >> I was reading an article that Telegram, which is doing a huge ICO, just got shut down by the Russian government, they went to turn over their keys, their private keys of their users. Say goodbye to the-- >> Jesse: I didn't read that, that's crazy. >> It's really crazy, so that's going to put a damper on their ICO but regulatory and then government issues around countries becomes a big deal. In your experience as Wells Fargo, at a bank, looking forward in the new digital world, is it one of those situations where path of least resistance, the countries that go more friendly get around that in a sovereignty where you domicile, where you start your company, where you do your banking. I mean I could start a company in Gibraltar and bank in Switzerland. >> Well transparency is part of the benefit or the downside of this, right? I think there may be advantages that pop up but I think they will equalize over time. I've been around the world now for IBM talking to 20 plus central banks, and I had a really interesting conversation with one of them recently in Asia. We're in the room with deputy director level people who are responsible for things like the NA money laundering policy and the economics and monetary policy and things like that and one person said, "You know, we're really torn "between two equally unacceptable decisions. "One is to ignore cryptocurrencies altogether, "and the other end of the spectrum is "to make them illegal, to ban them." I thought it was poignant that they see those as unacceptable, they have to do something in the middle. >> Do they weigh or ban? I mean look, the banning's happening. >> But okay so you saw that Trump used the executive order to prevent Americans from using or trading in the Venezuelan crypto that was issued on Ethereum, right? I saw that Venezuelan thing as a publicity stunt more than anything, an active of global defiance. So there's precedent now for, and the Russia thing with Telegram-- >> The United States of America has to step up its game because look at it, we have a lot of, I mean I remember back in the crypto days when I was just getting into the business, late 80s, early 90s, you couldn't even do it in the U.S., you go to Canada, that's why Canada's got a lot of innovation up there. We're risking our country, and I had one guy tell me in Puerto Rico, he's from South Africa, and he shouldn't be throwing any stones either but his point was, he says, "America's becoming Europe. "There's a shrinking middle class "while other emerging markets have a growing middle class," so the global impact of blockchain, cryptocurrency, and these applications are significant and have to be factored into policy decision making for governments. The U.S. can't just think about itself anymore in a vacuum. >> Right, not anymore. >> Because there's implications otherwise the U.S. will turn into Europe, regulated, all these rules, byzantine stuff. It's a real problem. Your thoughts on that. >> It is. It's cliche, but we live and work in a global economy. The flow of information globally in real time has been around now for a while and it's about time it came to money. The internet of money is a term I've heard. It's just, it's unavoidable. >> Jesse Lund here inside The Cube. Great guest, great conversation. >> Yeah, thanks. >> How do people get ahold of you on IBM's, you mentioned you got some great stuff going on, you've written a paper, you've got a lot of content, where does someone go to discover some of the stuff that you're working on they could get involved with you guys? >> Yeah well I mean the best place to go is IBM.com/blockchain, that'll tell you a lot about what we're doing and the different industry-- >> And the programmable money paper you wrote, is that there? >> It's out there as well, there's a link to that. >> On IBM.com? >> You can get me directly on LinkedIn, I try to be pretty responsive with that because I really enjoy the dialogue. This is a revolution of the peoples, man, it's all over the world, so it's great, it's great to be a part of it. >> And people tokenizing their business, there's real opportunities to change the game to bring consensus, data driven, new kind of supply chain whatever to the markets you're in, great opp-, and you need banking. >> Yeah of course. >> You need to have money. Money, marketplaces, and communities, that's my mantra. >> I subscribe to it. >> Thanks for coming on. >> Thank you, thanks for having me. >> Jesse Lund. I'm John Furrier here at IBM Think 2018. Cube coverage continues after this short break. (upbeat music)

>> Announcer: Live from Madrid, Spain, it's The Cube covering HPE Discover Madrid 2017, brought to you by Hewlett-Packard Enterprise. >> Welcome back to HPE Discover Madrid 2017. This is The Cube, the leader in live tech coverage. My name is Dave Vellante. I'm here with my co-host Peter Burris. Jesse St. Laurent is here. He's the CTO of Hyperconverged at Hewlett-Packard Enterprise and he's joined by Jacobus Steyn, who is the GM of IT Operations at Key Price Insurance at South Africa. >> That's correct. King Price Insurance, yeah. >> Welcome to The Cube. >> Thank you. >> Dave: Jesse, good to see you again. >> Yeah, good to be here. >> What's happenin' at Discover? Hyperconverged, all the rage. Taking over the world. >> Yeah. (laughs) Hyperconverged taking over the world. I think, yeah, virtual machines continue to be a big challenge for customers, right? They're still exploding. As much as we talk about all the other cool things that are happening in the industry, a lot of times, it's the old unsolved problems that just won't go away, right? And it's funny to call VMs the old problem, but in some ways, they're kind of forgotten at times as we talk about next generation stuff. But, the reality is, you know, hyperconvergence still growing like crazy, still helping the customers simplify that management experience. So, for us, that's, you know, running on the Gen 10 platform from Hewlett-Packard Enterprise. You know, just rock solid server platform in terms of delivering customers the same thing we've been delivering, right, which is that predictable performance and simple management experience to provide IT for them. >> Yeah, VM ware's the new legacy and we should all have such a legacy. And okay, Jacobus, let's get into it. First, tell us about your organization, Key Price. >> Yeah, so, King Price is a short term insurance company in South Africa started off about five years ago by a very innovative CIO. So, he's been in the insurance industry most of his life. But, he didn't like what he was doing in the insurance industry, so he kinda like wanted to reinvent the whole insurance industry. So, he came up with this one of a kind business model. And our biggest selling point today is that as your car value depreciates on a monthly basis, so does your insurance premium, and that is our biggest selling point in the short term industry when it comes to vehicles. And that's really been taking off in South Africa. And I was telling some other guys this morning, it's actually surprising that nobody else in South Africa has tried to copy that 'cause it's a winning model for us. >> Dave: Sorry, that happens monthly? >> Monthly, yeah, we decrease your premium on a monthly basis. >> You guys sell it to the U.S.? (laughing) >> (laughs) Not yet. But yeah, definitely on the maps. >> Dave: I mean, it's so logical, right? The replacement costs are going down, so why wouldn't your premiums go down? >> Yeah, one thing, it is quite logical. So it is, there's obviously a lot of questions about how your repair costs goes up on a monthly basis, on a yearly basis, and the RAND dollar is not always very healthy for us. But, I mean, we do all the math in the background and it makes sense. It's more valuable to retain a customer on the book, than having to replace a customer every five or six months. So, keeping a customer on the books while decreasing it's premium, in the long run, it make a lot more sense. >> So if you could keep churn below a threshold and maintain that customer relationship for a long enough period of time, you get profitable. >> Yeah, 'cause I mean, in South Africa, especially, the short term insurance industry is extremely competitive. So, the acquisition cost of the customer is very high. We've got various forms of leads coming in via websites and partners and things like that. But the price just to get a customer on the books is extremely high, so the longer the customer stays on the book, the sooner he pays off all his acquisition. And that way, we actually return that into the customer. >> Radio ads are the big thing in the U.S. for-- I don't know if that's the case in South Africa, I mean... >> We've tried a few radio ads. It's not-- >> It's not the main technique? >> No, no, definitely not- >> What is? What is the main channel? Is it online or-- >> So, we're very big on social media. So, the one thing that we've adopted from the get-go is definitely technology. And that is evident in every aspect of our business. So, we really push social media. We've got a whole team looking after social media. We've got brand ambassadors working at our business. We do some TV ads, but again, that's quite pricey. Some billboards still, yeah, little radio ads, but predominantly-- >> Social's productive, then. >> It is. >> Alright, let's get it. I love talking about your business, especially disruptors to the insurance business. I mean, it's just sitting there waiting to get disrupted, so-- Let's get into the infrastructure side, maybe paint a picture for us. What's that look like? >> Yeah, so, when I joined the company about two and a half years ago, they were just starting with this whole virtualization thing, so it was kind of like new to them. Having started up just five years ago, it was like a hundred IT guys working there, but some of them were working in marketing and some of them were working in management. So, it was all over the show. And my main job was actually just to consolidate in that entire environment and get them on this journey. With the competitive of the market, it's really important for us to get proper product to market quickly and that's one of the challenges that I faced from day one is that our inability to actually get product to market because of a lack of proper infrastructure, the turn around times in getting environments up and running. And it was literally to the point where we were detrimental to the business. We were causing serious downtime. Business was running major losses almost on a monthly basis because systems were down. They were ill managed. And then, luckily for us, we came across the guys from HP SimpliVity and they came in there. We deployed some of their technology on a proof of concept basis, you know, development space 'cause that was our biggest burning challenge at that point. The developers shouting for environments and we just couldn't provide that. So, we thought, you know what, let's invest this in a development space and see how it goes and if it works, we'll see how it goes from there. I think they dropped three cubes there, commissioned them, started moving their development teams across and two months, three months later, when the guys from HP were there to pick up their POC cubes, we just said, "No way, guys. Where do we sign for this? (laughing) You're not taking this out of my server room." And from there, it just, the adoption into the production environment was so quick. We instantly order three more cubes for the production environment. So, there's still that definite split between production and development. And that just allowed us to actually allow the developers, again, to get almost fresh daily copies of the production environment, to allow them to develop products to do some modeling against the production environment in their own spaces. And that's really lifted their performance to such an extent that we now got that whole agile sprint running in two week cycles. >> So, we've done some research. It suggests that when you bring this kind of infrastructure into the development world, you can actually get as high as seven X productivity improvement in developers. Have you seen those kinds of jumps? >> Yeah, definitely. The one challenge that we had, so the guys from development were really trying to adopt a whole agile development methodology. But, again, the infrastructure was a detriment to them 'cause they were hoping to have the environments up and running by Tuesday morning when their sprint would start, but then, two, three days later, we were still trying to restore copies of the databases onto their environments. So, they ended up with three days left of their two week sprint. So, I mean, that alone, the fact that we can have the environments up and running within hours, that's definitely a major improvement for them. And mid sprint, we can actually just decommission their environment, restore it back for them. So, infrastructure is no longer the showstopper in the development team and it's definitely just taken off for them. >> Common story of land and expand, dev impact, productivity impact. How's that compare? >> I think it is a common thread. And I think, you know, one of the other things that happens typically is from a land and expand perspective, those first systems go in. They're for POC, they're for development environment, and the theory is, they're isolated. And then, what happens is everybody realizes that it's easier to provision. It's more agile for the development team. It's easier for IT. And suddenly, the old environment just kind of atrophies and the new environment keeps growing. So, if you look at your environment, you had some traditional infrastructure within your environment. How much has that expanded versus the SimpliVity environment since you went live with SimpliVity? >> Yeah, we have actually-- We no longer are investing in that portion of our infrastructure 'cause it's... It's still, I mean, it's good technology and it's still valuable to us, but we will just put that on a normal run out. Things that we cannot get value from a SimpliVity perspective like, well, like, I think I was telling Jesse this morning, we've got a method of contracting because we are entirely paperless, our method of contracting is literally the call that you make to the client to close this policy deal. So, that is our proof if there is a claim or whatever the case might be. So, all those recordings we need to keep for seven years. So, those are the type of things that we saw in an all traditional infrastructure currently 'cause there's no deduplication there. There's no compression of any value there, so we're just chipping all that old kinda like-- >> Pure archive. >> Yeah, pure archive type of approach to that environment, yeah. >> Did you feel like you've achieved a substantially similar operating model to what people talk about with the public Cloud on PRIM? >> I think that the ease of deployment and the fact that it is so so simple-- I mean, the guy that's currently doing it, it's one guy, so again, our team is not very big. We've got the one guy looking after the entire server infrastructure environment. But the ease of deploying that and the fact that it's so simple, he can do it from anywhere and it's literally one or two clicks and he's got it up and running. It's, for us, it's definitely really very similar. >> I mean, that's the goal, right? I mean, it's kinda why you got into this business is-- >> So, before the acquisition, SimpliVity's theme was to simplify IT. With Hewlett-Packard Enterprise, it's to simplify hybrid IT. But the message in the approach hasn't changed. If we can give IT cycles back to focus on things that return value to the business, that's the goal at the end of the day, right? It's taking time away back from all those tasks that, the classic keeping the lights on tasks, allow the business to do something productive. >> But it's also to make the cycles that remain that much more valuable as well. >> Yeah, absolutely, and anything we can do that takes, you know, day to day management tasks off the plate of the IT organization, allows them to be that much more productive, you know, developers having their whole sprints, I mean, that's night and day in terms of productivity back to the business. In terms of the performance that customers see in their environment, what you're-- You have a critical nightly batch job in your environment, right? >> Yeah. >> And what was your pre and post experience there? >> So, the one thing that we do, I mean, the monthly decrease, that's a big cycle job that runs very often in our environment. So, it's all part of the financial billing cycles that run, so we've got this one job that runs at, I think it's actually on a weekly basis, and that would kick off on a Sunday evening and we would literally have the guys from the finance team getting up, starting the job, and sitting there, waiting for 14 hours for this job to complete. Number one, the environment was not very trustworthy, so they had to be up to make sure that it actually completes. And post or actually migrate-- Us migrating them onto the SimpliVity environment, the guy phoned me up the next morning and said, so he got up at one, kicked off the job, and two hours later, it was done. And he said, something must be wrong. This can't be happening. (laughs) So, that's literally, that's 12 hours saved time. The challenge we had that that job actually ran into our production environment or office hours, so the effect that health had on our entire business was just bad, bad for IT, bad for rep for IT. >> Alright, last question. >> When it failed. >> Sorry? >> When it failed. >> Well, even if it ran, it ran for 14 hours. It had ran into business hours. If it failed-- >> But it wasn't bad for the business after you got to two hours. >> No, no, no, I mean, that was like by three in the morning it's all sorted. And even if you had the failure on the job itself, you could just rerun it like once or twice and it would still be outside business hours. >> Alright, last question. For each of you. Your respective to dos. Jacobus, what on your to do list, then Jesse what's on HPE's HCI to do list? You first. >> Yeah, so King Price is definitely seriously looking at expanding internationally. So, what we are busy doing is to actually redesign our entire architecture structure of our infrastructure and our network and our security. So, we are busy planning to deploy another active data center. We'll probably be in South Africa still, but to get that full value of the RAM optimization that the SimpliVity offer, the compression that we can see to actually have a proper duplicate data center up and running to ensure business continuity. >> Yeah, for us, the market knows us for our product in the VCR market, in the VMR market. Real next growth area for us is around Hyper-V, so big excitement there around seeing that market expand. We've seen a lot of excitement from customers around multi-hypervisor. That's an area both with what's happening with SimpliVity from a platform perspective, as well as the other technologies from Hewlett-Packard Enterprise really coming together to offer that multi-Cloud experience for customers. >> Excellent, gentlemen, thanks very much for coming on The Cube. It's great to see you again. >> Thanks for having us. Jesse, Jacobus. >> Thank you so much for having us. >> Dave: Good luck, go forward. >> Yeah, great stuff. >> Okay, keep it right there, everybody. Peter and I will be back at Discover Madrid to wrap right after this short break. (techy music)

>> Narrator: Live from Las Vegas, it's theCUBE covering VMworld 2017 brought to you by VMware and its ecosystem partners. >> Hi, I'm Stu Miniman here with Keith Townsend, and you're watching theCUBE SiliconANGLE Media's production of VMworld 2017 here in Las Vegas. For the last few years, hyper-converged infrastructure has been one of the hot topics, and I'm happy to welcome back to the program Jesse St. Laurent, who is the chief technologist of hyper-converged software group-- Sorry, software-defined hyper-converged and cloud group at Hewlett Packard Enterprise. A slightly longer title than last time I interviewed Jesse. Thanks so much for joining us. >> Yeah, thanks Stu, it's great to be here. >> Alright, so hyper-converged has had a lot of hype. Hyper-converged has also had a lot of customers, a lot of dollars. First of all, I have to say, I think it's the-- You're the first employee of SimpliVity that we've had on since the acquisition. We've had the pleasure of knowing-- I've known you since before SimpliVity, but we've been watching SimpliVity since stealth mode, a $650 million acquisition in cash for HPE, so congratulations on that. >> Thanks. >> Stu: What have you been doing since the acquisition? >> I think one of the biggest changes, really, is going from being a product company, where, in reality, startups, if you're going to be successful, you have to focus on one thing, and you have to do it well. And for SimpliVity, well, we spent a lot of time building technology that was much more broadly applicable from an industry perspective. Taking it to market, it had to be narrow, and that's why we focused specifically on hyper-convergence. But we always felt that, and you and I have talked about this long ago, that some of the underpinnings of our technology really were about this concept of a data fabric. So, fast-forward to today, SimpliVity is no longer a single-product company, right? We're part of a portfolio company that has technology that spans the entire hybrid IT marketplace. >> Jesse, I want you to look back for a little bit for us. >> Sure. >> As I've said, you've ridden this wave. I sometimes joke, I'm still yet to find a CIO that had a convergence problem. (Keith laughs) But you're solving real customer problems. Obviously, you've got a lot of customers. As you look back, what have you learned along the way? What are some of those key drivers that kind of got you to where you are, and what's changed in the conversations recently for your customers? >> I think it's always been about simplification. The strange thing is SimpliVity always talked about simplifying IT, right? Whenever any of us talked about what the company did, the first slide was, "Our mission is to simplify IT," and I didn't know it prior, but after the acquisition, HP's, one of the core strategies of the company, is to simplify hybrid IT, which aligns remarkably well. I think that's the common thread for SimpliVity, is we've seen the product evolve, and the use cases of all of early on, smaller customers, much larger enterprises over time, different use cases, ranging from data centers to kind of extreme robo examples. I think, really, the thread through that is hybrid IT's complicated, right, and what I think is a common thread through all of what we see on the floor here, for the most part, is IT is really hard. I always use the term, "the messy middle." In the end of the day, vendors like to make the world seem binary, right? It's either, you're either public cloud or you're private cloud, or you're either x or y, and the reality is no customer I've ever seen has come in in the morning and said, "You know what? "Today, we're going to flip this switch, "and everything is going to go from the mainframe "to open systems, or open systems, you know, bare metal, "to virtualization, or virtualization to containers." Customers live in a very messy world, and that's where simplification is that theme. >> So Jesse, no matter the technology, technologists, we love to say scale break stuff. SimpliVity is used to scale, but coming into HPE, much different sized organization, organization that looks at the industry a little bit differently than SimpliVity does, how has things changed for your view now that you're inside of HP? >> Yeah, I mean one of the things that is a huge change is we're everywhere, right? SimpliVity talked about being in tens of countries before, and we were excited about that, and for a startup, the number was huge. >> Keith: Right. >> It paled in comparison to the footprint of Hewlett Packard Enterprise. In one of the first couple weeks of the acquisition, I was presenting to some customers, and Meg Whitman was part of the discussion as well, and I said, "One of the biggest changes will be "we will be in 90% of the opportunities "where somebody's talking about hyper-convergence," and Meg stopped me and said, "No, no no. "We will be in 100% of the opportunities where someone's talking about hyper-convergence." And just to a scale perspective, that's a scale that no startup has ever experienced. You can't be everywhere, and that's a huge transition just in terms of enabling a global sales force to be able to be everywhere. >> Jesse, I'd like to get your take. People talk about software's eating the world. We live in a software-defined world right now. You know, cloud's a lot of software, but hardware still has an impact. We all know virtualization, boy, you know, some of those underlying things. The devil's in the details on networking and storage specifically. Hewlett Packard Enterprise, obviously your solution is predominantly software, but now you have a lot more hardware that goes with it. I know you've done a lot of the integration on that. What, has anything changed as to how you think of the software and hardware? And I'd love to hear a little insight as to that integration work. Anything surprise you or excite you coming into the HPE family? >> Yeah, I think, let me talk about a little bit of the SimpliVity hardware view and how that's evolved because I think it's an interesting transition, which is we've always based our technology on one, our accelerator that just made everything faster and more predictable. It was a core part of our technology, but we've always talked about having a software-optimized version of the stack, as well, and doing that across a whole suite of hardware platforms was never a simple thing to do because there was one SimpliVity, and there were a lot of hardware platforms out there. What we've seen now is, we're going into an environment where there's one suite of hardware technology, and it's a company that has a massive amount of expertise in Hewlett Packard Enterprise, developing hardware technologies. So where SimpliVity had an accelerator, one of the things that I didn't think about in advance of the acquisition is a whole bunch of people coming to us, saying, "We've got some really interesting ideas "on how to take what you've built around this accelerator, "and make it really fast." You imagine when you own the chassis, when you own the motherboard, when you own everything about the platform, the idea of putting a card in, well, yeah, well that's easy, but what else can you do? When you have an army of people that can build hardware, you can do all sorts of really cool stuff. So I think what you'll see is, actually, us doing two separate things more. You'll continue to see a hardware-optimized version of everything SimpliVity's done for years now. It seems a little strange to say "years," but years now. That's not going to go away, in fact, it's going to get even better, but at the same time, there're form factors and there're places where you want to run in software, whether it's to be extra small, whether it's to bounce down the road in a Humvee, whether it's to be in an airplane; there's a whole bunch of reasons you want to do that. So you'll actually see us having a portfolio that embraces both sides of that. >> So one last question around that hardware and software abstraction. HPE, while a lot of expertise, you have to be a little bit overwhelmed. DL380, which you guys are supporting now, DL580, Synergy, where are we going to see SimpliVity next in HPE's massive hardware profile? >> Yeah, my hope is you see it everywhere, but it takes time to get there. I think one of the things that's most exciting about this transformation that SimpliVity will go through is really becoming a data fabric company. So hyper-convergence isn't going away, and hyper-convergence will come to other platforms, whether it's a one-year platform or a four-year platform, more sockets, higher density. I think you'll see all those things over time. You'll also see, what does it mean to be part of a software-defined stack, living in a composable world, right? I think those things fit together really well, and you'll see a lot of cool stuff coming around that. We're seeing the biggest boost in terms of exposure in the market. It has caused huge SimpliVity product growth in the market. Now what we want to do is broaden that portfolio to be in a lot of other places in the market. >> Alright, well Jesse, we really appreciate catching the update. We're surely going to be watching as to how composable infrastructure and the portfolio of the HPE offerings fit in with SimpliVity, so thanks so much for joining us. For Keith Townsend, I'm Stu Miniman. We'll be back with lots more coverage here from VMworld 2017 Las Vegas. You're watching theCUBE. (upbeat music)

(gentle music) >> Narrator: "TheCUBE's" live coverage is made possible by funding from Dell Technologies, creating technologies that drive human progress. (upbeat music) >> Hello everybody, welcome back to day four of "theCUBE's" coverage of MWC '23. We're here live at the Fira in Barcelona. Wall-to-wall coverage, John Furrier is in our Palo Alto studio, banging out all the news. Really, the whole week we've been talking about the disaggregation of the telco network, the new opportunities in telco. We're really excited to have AT&T and Snowflake here. Dave Whittington is the AVP, at the Chief Data Office at AT&T. Roddy Tranum is the Assistant Vice President, for Channel Performance Data and Tools at AT&T. And Phil Kippen, the Global Head Of Industry-Telecom at Snowflake, Snowflake's new telecom business. Snowflake just announced earnings last night. Typical Scarpelli, they beat earnings, very conservative guidance, stocks down today, but we like Snowflake long term, they're on that path to 10 billion. Guys, welcome to "theCUBE." Thanks so much >> Phil: Thank you. >> for coming on. >> Dave and Roddy: Thanks Dave. >> Dave, let's start with you. The data culture inside of telco, We've had this, we've been talking all week about this monolithic system. Super reliable. You guys did a great job during the pandemic. Everything shifting to landlines. We didn't even notice, you guys didn't miss a beat. Saved us. But the data culture's changing inside telco. Explain that. >> Well, absolutely. So, first of all IoT and edge processing is bringing forth new and exciting opportunities all the time. So, we're bridging the world between a lot of the OSS stuff that we can do with edge processing. But bringing that back, and now we're talking about working, and I would say traditionally, we talk data warehouse. Data warehouse and big data are now becoming a single mesh, all right? And the use cases and the way you can use those, especially I'm taking that edge data and bringing it back over, now I'm running AI and ML models on it, and I'm pushing back to the edge, and I'm combining that with my relational data. So that mesh there is making all the difference. We're getting new use cases that we can do with that. And it's just, and the volume of data is immense. >> Now, I love ChatGPT, but I'm hoping your data models are more accurate than ChatGPT. I never know. Sometimes it's really good, sometimes it's really bad. But enterprise, you got to be clean with your AI, don't you? >> Not only you have to be clean, you have to monitor it for bias and be ethical about it. We're really good about that. First of all with AT&T, our brand is Platinum. We take care of that. So, we may not be as cutting-edge risk takers as others, but when we go to market with an AI or an ML or a product, it's solid. >> Well hey, as telcos go, you guys are leaning into the Cloud. So I mean, that's a good starting point. Roddy, explain your role. You got an interesting title, Channel Performance Data and Tools, what's that all about? >> So literally anything with our consumer, retail, concenters' channels, all of our channels, from a data perspective and metrics perspective, what it takes to run reps, agents, all the way to leadership levels, scorecards, how you rank in the business, how you're driving the business, from sales, service, customer experience, all that data infrastructure with our great partners on the CDO side, as well as Snowflake, that comes from my team. >> And that's traditionally been done in a, I don't mean the pejorative, but we're talking about legacy, monolithic, sort of data warehouse technologies. >> Absolutely. >> We have a love-hate relationship with them. It's what we had. It's what we used, right? And now that's evolving. And you guys are leaning into the Cloud. >> Dramatic evolution. And what Snowflake's enabled for us is impeccable. We've talked about having, people have dreamed of one data warehouse for the longest time and everything in one system. Really, this is the only way that becomes a reality. The more you get in Snowflake, we can have golden source data, and instead of duplicating that 50 times across AT&T, it's in one place, we just share it, everybody leverages it, and now it's not duplicated, and the process efficiency is just incredible. >> But it really hinges on that separation of storage and compute. And we talk about the monolithic warehouse, and one of the nightmares I've lived with, is having a monolithic warehouse. And let's just go with some of my primary, traditional customers, sales, marketing and finance. They are leveraging BSS OSS data all the time. For me to coordinate a deployment, I have to make sure that each one of these units can take an outage, if it's going to be a long deployment. With the separation of storage, compute, they own their own compute cluster. So I can move faster for these people. 'Cause if finance, I can implement his code without impacting finance or marketing. This brings in CI/CD to more reality. It brings us faster to market with more features. So if he wants to implement a new comp plan for the field reps, or we're reacting to the marketplace, where one of our competitors has done something, we can do that in days, versus waiting weeks or months. >> And we've reported on this a lot. This is the brilliance of Snowflake's founders, that whole separation >> Yep. >> from compute and data. I like Dave, that you're starting with sort of the business flexibility, 'cause there's a cost element of this too. You can dial down, you can turn off compute, and then of course the whole world said, "Hey, that's a good idea." And a VC started throwing money at Amazon, but Redshift said, "Oh, we can do that too, sort of, can't turn off the compute." But I want to ask you Phil, so, >> Sure. >> it looks from my vantage point, like you're taking your Data Cloud message which was originally separate compute from storage simplification, now data sharing, automated governance, security, ultimately the marketplace. >> Phil: Right. >> Taking that same model, break down the silos into telecom, right? It's that same, >> Mm-hmm. >> sorry to use the term playbook, Frank Slootman tells me he doesn't use playbooks, but he's not a pattern matcher, but he's a situational CEO, he says. But the situation in telco calls for that type of strategy. So explain what you guys are doing in telco. >> I think there's, so, what we're launching, we launched last week, and it really was three components, right? So we had our platform as you mentioned, >> Dave: Mm-hmm. >> and that platform is being utilized by a number of different companies today. We also are adding, for telecom very specifically, we're adding capabilities in marketplace, so that service providers can not only use some of the data and apps that are in marketplace, but as well service providers can go and sell applications or sell data that they had built. And then as well, we're adding our ecosystem, it's telecom-specific. So, we're bringing partners in, technology partners, and consulting and services partners, that are very much focused on telecoms and what they do internally, but also helping them monetize new services. >> Okay, so it's not just sort of generic Snowflake into telco? You have specific value there. >> We're purposing the platform specifically for- >> Are you a telco guy? >> I am. You are, okay. >> Total telco guy absolutely. >> So there you go. You see that Snowflake is actually an interesting organizational structure, 'cause you're going after verticals, which is kind of rare for a company of your sort of inventory, I'll say, >> Absolutely. >> I don't mean that as a negative. (Dave laughs) So Dave, take us through the data journey at AT&T. It's a long history. You don't have to go back to the 1800s, but- (Dave laughs) >> Thank you for pointing out, we're a 149-year-old company. So, Jesse James was one of the original customers, (Dave laughs) and we have no longer got his data. So, I'll go back. I've been 17 years singular AT&T, and I've watched it through the whole journey of, where the monolithics were growing, when the consolidation of small, wireless carriers, and we went through that boom. And then we've gone through mergers and acquisitions. But, Hadoop came out, and it was going to solve all world hunger. And we had all the aspects of, we're going to monetize and do AI and ML, and some of the things we learned with Hadoop was, we had this monolithic warehouse, we had this file-based-structured Hadoop, but we really didn't know how to bring this all together. And we were bringing items over to the relational, and we were taking the relational and bringing it over to the warehouse, and trying to, and it was a struggle. Let's just go there. And I don't think we were the only company to struggle with that, but we learned a lot. And so now as tech is finally emerging, with the cloud, companies like Snowflake, and others that can handle that, where we can create, we were discussing earlier, but it becomes more of a conducive mesh that's interoperable. So now we're able to simplify that environment. And the cloud is a big thing on that. 'Cause you could not do this on-prem with on-prem technologies. It would be just too cost prohibitive, and too heavy of lifting, going back and forth, and managing the data. The simplicity the cloud brings with a smaller set of tools, and I'll say in the data space specifically, really allows us, maybe not a single instance of data for all use cases, but a greatly reduced ecosystem. And when you simplify your ecosystem, you simplify speed to market and data management. >> So I'm going to ask you, I know it's kind of internal organizational plumbing, but it'll inform my next question. So, Dave, you're with the Chief Data Office, and Roddy, you're kind of, you all serve in the business, but you're really serving the, you're closer to those guys, they're banging on your door for- >> Absolutely. I try to keep the 130,000 users who may or may not have issues sometimes with our data and metrics, away from Dave. And he just gets a call from me. >> And he only calls when he has a problem. He's never wished me happy birthday. (Dave and Phil laugh) >> So the reason I asked that is because, you describe Dave, some of the Hadoop days, and again love-hate with that, but we had hyper-specialized roles. We still do. You've got data engineers, data scientists, data analysts, and you've got this sort of this pipeline, and it had to be this sequential pipeline. I know Snowflake and others have come to simplify that. My question to you is, how is that those roles, how are those roles changing? How is data getting closer to the business? Everybody talks about democratizing business. Are you doing that? What's a real use example? >> From our perspective, those roles, a lot of those roles on my team for years, because we're all about efficiency, >> Dave: Mm-hmm. >> we cut across those areas, and always have cut across those areas. So now we're into a space where things have been simplified, data processes and copying, we've gone from 40 data processes down to five steps now. We've gone from five steps to one step. We've gone from days, now take hours, hours to minutes, minutes to seconds. Literally we're seeing that time in and time out with Snowflake. So these resources that have spent all their time on data engineering and moving data around, are now freed up more on what they have skills for and always have, the data analytics area of the business, and driving the business forward, and new metrics and new analysis. That's some of the great operational value that we've seen here. As this simplification happens, it frees up brain power. >> So, you're pumping data from the OSS, the BSS, the OKRs everywhere >> Everywhere. >> into Snowflake? >> Scheduling systems, you name it. If you can think of what drives our retail and centers and online, all that data, scheduling system, chat data, call center data, call detail data, all of that enters into this common infrastructure to manage the business on a day in and day out basis. >> How are the roles and the skill sets changing? 'Cause you're doing a lot less ETL, you're doing a lot less moving of data around. There were guys that were probably really good at that. I used to joke in the, when I was in the storage world, like if your job is bandaging lungs, you need to look for a new job, right? So, and they did and people move on. So, are you able to sort of redeploy those assets, and those people, those human resources? >> These folks are highly skilled. And we were talking about earlier, SQL hasn't gone away. Relational databases are not going away. And that's one thing that's made this migration excellent, they're just transitioning their skills. Experts in legacy systems are now rapidly becoming experts on the Snowflake side. And it has not been that hard a transition. There are certainly nuances, things that don't operate as well in the cloud environment that we have to learn and optimize. But we're making that transition. >> Dave: So just, >> Please. >> within the Chief Data Office we have a couple of missions, and Roddy is a great partner and an example of how it works. We try to bring the data for democratization, so that we have one interface, now hopefully know we just have a logical connection back to these Snowflake instances that we connect. But we're providing that governance and cleansing, and if there's a business rule at the enterprise level, we provide it. But the goal at CDO is to make sure that business units like Roddy or marketing or finance, that they can come to a platform that's reliable, robust, and self-service. I don't want to be in his way. So I feel like I'm providing a sub-level of platform, that he can come to and anybody can come to, and utilize, that they're not having to go back and undo what's in Salesforce, or ServiceNow, or in our billers. So, I'm sort of that layer. And then making sure that that ecosystem is robust enough for him to use. >> And that self-service infrastructure is predominantly through the Azure Cloud, correct? >> Dave: Absolutely. >> And you work on other clouds, but it's predominantly through Azure? >> We're predominantly in Azure, yeah. >> Dave: That's the first-party citizen? >> Yeah. >> Okay, I like to think in terms sometimes of data products, and I know you've mentioned upfront, you're Gold standard or Platinum standard, you're very careful about personal information. >> Dave: Yeah. >> So you're not trying to sell, I'm an AT&T customer, you're not trying to sell my data, and make money off of my data. So the value prop and the business case for Snowflake is it's simpler. You do things faster, you're in the cloud, lower cost, et cetera. But I presume you're also in the business, AT&T, of making offers and creating packages for customers. I look at those as data products, 'cause it's not a, I mean, yeah, there's a physical phone, but there's data products behind it. So- >> It ultimately is, but not everybody always sees it that way. Data reporting often can be an afterthought. And we're making it more on the forefront now. >> Yeah, so I like to think in terms of data products, I mean even if the financial services business, it's a data business. So, if we can think about that sort of metaphor, do you see yourselves as data product builders? Do you have that, do you think about building products in that regard? >> Within the Chief Data Office, we have a data product team, >> Mm-hmm. >> and by the way, I wouldn't be disingenuous if I said, oh, we're very mature in this, but no, it's where we're going, and it's somewhat of a journey, but I've got a peer, and their whole job is to go from, especially as we migrate from cloud, if Roddy or some other group was using tables three, four and five and joining them together, it's like, "Well look, this is an offer for data product, so let's combine these and put it up in the cloud, and here's the offer data set product, or here's the opportunity data product," and it's a journey. We're on the way, but we have dedicated staff and time to do this. >> I think one of the hardest parts about that is the organizational aspects of it. Like who owns the data now, right? It used to be owned by the techies, and increasingly the business lines want to have access, you're providing self-service. So there's a discussion about, "Okay, what is a data product? Who's responsible for that data product? Is it in my P&L or your P&L? Somebody's got to sign up for that number." So, it sounds like those discussions are taking place. >> They are. And, we feel like we're more the, and CDO at least, we feel more, we're like the guardians, and the shepherds, but not the owners. I mean, we have a role in it all, but he owns his metrics. >> Yeah, and even from our perspective, we see ourselves as an enabler of making whatever AT&T wants to make happen in terms of the key products and officers' trade-in offers, trade-in programs, all that requires this data infrastructure, and managing reps and agents, and what they do from a channel performance perspective. We still ourselves see ourselves as key enablers of that. And we've got to be flexible, and respond quickly to the business. >> I always had empathy for the data engineer, and he or she had to service all these different lines of business with no business context. >> Yeah. >> Like the business knows good data from bad data, and then they just pound that poor individual, and they're like, "Okay, I'm doing my best. It's just ones and zeros to me." So, it sounds like that's, you're on that path. >> Yeah absolutely, and I think, we do have refined, getting more and more refined owners of, since Snowflake enables these golden source data, everybody sees me and my organization, channel performance data, go to Roddy's team, we have a great team, and we go to Dave in terms of making it all happen from a data infrastructure perspective. So we, do have a lot more refined, "This is where you go for the golden source, this is where it is, this is who owns it. If you want to launch this product and services, and you want to manage reps with it, that's the place you-" >> It's a strong story. So Chief Data Office doesn't own the data per se, but it's your responsibility to provide the self-service infrastructure, and make sure it's governed properly, and in as automated way as possible. >> Well, yeah, absolutely. And let me tell you more, everybody talks about single version of the truth, one instance of the data, but there's context to that, that we are taking, trying to take advantage of that as we do data products is, what's the use case here? So we may have an entity of Roddy as a prospective customer, and we may have a entity of Roddy as a customer, high-value customer over here, which may have a different set of mix of data and all, but as a data product, we can then create those for those specific use cases. Still point to the same data, but build it in different constructs. One for marketing, one for sales, one for finance. By the way, that's where your data engineers are struggling. >> Yeah, yeah, of course. So how do I serve all these folks, and really have the context-common story in telco, >> Absolutely. >> or are these guys ahead of the curve a little bit? Or where would you put them? >> I think they're definitely moving a lot faster than the industry is generally. I think the enabling technologies, like for instance, having that single copy of data that everybody sees, a single pane of glass, right, that's definitely something that everybody wants to get to. Not many people are there. I think, what AT&T's doing, is most definitely a little bit further ahead than the industry generally. And I think the successes that are coming out of that, and the learning experiences are starting to generate momentum within AT&T. So I think, it's not just about the product, and having a product now that gives you a single copy of data. It's about the experiences, right? And now, how the teams are getting trained, domains like network engineering for instance. They typically haven't been a part of data discussions, because they've got a lot of data, but they're focused on the infrastructure. >> Mm. >> So, by going ahead and deploying this platform, for platform's purpose, right, and the business value, that's one thing, but also to start bringing, getting that experience, and bringing new experience in to help other groups that traditionally hadn't been data-centric, that's also a huge step ahead, right? So you need to enable those groups. >> A big complaint of course we hear at MWC from carriers is, "The over-the-top guys are killing us. They're riding on our networks, et cetera, et cetera. They have all the data, they have all the client relationships." Do you see your client relationships changing as a result of sort of your data culture evolving? >> Yes, I'm not sure I can- >> It's a loaded question, I know. >> Yeah, and then I, so, we want to start embedding as much into our network on the proprietary value that we have, so we can start getting into that OTT play, us as any other carrier, we have distinct advantages of what we can do at the edge, and we just need to start exploiting those. But you know, 'cause whether it's location or whatnot, so we got to eat into that. Historically, the network is where we make our money in, and we stack the services on top of it. It used to be *69. >> Dave: Yeah. >> If anybody remembers that. >> Dave: Yeah, of course. (Dave laughs) >> But you know, it was stacked on top of our network. Then we stack another product on top of it. It'll be in the edge where we start providing distinct values to other partners as we- >> I mean, it's a great business that you're in. I mean, if they're really good at connectivity. >> Dave: Yeah. >> And so, it sounds like it's still to be determined >> Dave: Yeah. >> where you can go with this. You have to be super careful with private and for personal information. >> Dave: Yep. >> Yeah, but the opportunities are enormous. >> There's a lot. >> Yeah, particularly at the edge, looking at, private networks are just an amazing opportunity. Factories and name it, hospital, remote hospitals, remote locations. I mean- >> Dave: Connected cars. >> Connected cars are really interesting, right? I mean, if you start communicating car to car, and actually drive that, (Dave laughs) I mean that's, now we're getting to visit Xen Fault Tolerance people. This is it. >> Dave: That's not, let's hold the traffic. >> Doesn't scare me as much as we actually learn. (all laugh) >> So how's the show been for you guys? >> Dave: Awesome. >> What're your big takeaways from- >> Tremendous experience. I mean, someone who doesn't go outside the United States much, I'm a homebody. The whole experience, the whole trip, city, Mobile World Congress, the technologies that are out here, it's been a blast. >> Anything, top two things you learned, advice you'd give to others, your colleagues out in general? >> In general, we talked a lot about technologies today, and we talked a lot about data, but I'm going to tell you what, the accelerator that you cannot change, is the relationship that we have. So when the tech and the business can work together toward a common goal, and it's a partnership, you get things done. So, I don't know how many CDOs or CIOs or CEOs are out there, but this connection is what accelerates and makes it work. >> And that is our audience Dave. I mean, it's all about that alignment. So guys, I really appreciate you coming in and sharing your story in "theCUBE." Great stuff. >> Thank you. >> Thanks a lot. >> All right, thanks everybody. Thank you for watching. I'll be right back with Dave Nicholson. Day four SiliconANGLE's coverage of MWC '23. You're watching "theCUBE." (gentle music)

>>Hello friends and welcome back to Fabulous Las Vegas, Nevada, where we are live from the show floor at AWS Reinvent. My name is Savannah Peterson, joined by my fabulous co-host John Furrier. John, how was your lunch? >>My lunch was great. Wasn't very complex like it is today, so it was very easy, >>Appropriate for the conversation we're about >>To have. Great, great guests coming up Cube alumni and great question around complexity and how is wellbeing teams be good? >>Yes. And, and and on that note, let's welcome John from DeWit as well as Danny from Inox. I swear I'll be able to say that right by the end of this. Thank you guys so much for being here. How's the show going for you? >>Excellent so far. It's been a great, a great event. You know, back back to pre Covid days, >>You're still smiling day three. That's an awesome sign. John, what about you? >>Fantastic. It's, it's been busier than ever >>That that's exciting. I, I think we certainly feel that way here on the cube. We're doing dozens of videos, it's absolutely awesome. Just in case. So we can dig in a little deeper throughout the rest of the segment just in case the audience isn't familiar, let's get them acquainted with your companies. Let's start with do it John. >>Yeah, thanks Savannah. So do it as a global technology company and we're partnering with deleted cloud providers around the world and digital native companies to provide value and solve complexity. John, to your, to your introductory point with all of the complexities associated with operating in the cloud, scaling a business in the cloud, a lot of companies are just looking to sort of have somebody else take care of that problem for them or have somebody they can call when they run into, you know, into problems scaling. And so with a combination of tech, advanced technology, some of the best cloud experts in the world and unlimited tech support or we're offloading a lot of those problems for our customers and we're doing that on a global basis. So it's, it's an exciting time. >>I can imagine pretty much everyone here on the show floor is dealing with that challenge of complexity. So a couple customers for you in the house. What about you Danny? >>I, I come from a company which operates in a financial industry market. So we essentially a global broker, financial trading broker. Which what this means for those people who don't really understand, essentially we allow clients to be able to trade digitally and speculate with different pricing, pricing tools online. We offer a different products for different type of clients. We have institutional clients, we've got our affiliates, partners programs and we've got a retail clients and this is where AWS and Doit comes handy allows us to offer our products digitally across the globe. And one of the key values for us here is that we can actually offer a product in regions where other people don't. So for example, we don't compete in North America, we don't compete in EME in Europe, but we just do it in AWS to solve our complex challenges in regions that naturally by, depending on where they base, they have like issues and that's how we deliver our product. >>And which regions, Latin >>America, Latin, the entire Africa, subcontinent, middle East, southeast Asia, the culture is just demographic is different. And what you used to have here is not exactly what you have over there. And obviously that brings a lot of challenges with onboarding and clients, deposit, trading activities, CDN latency, all of >>That stuff. It's interesting how each region's different in their, their posture with the cloud. Someone roll their own, someone outta the box. So again, this brings up this theme this year guys, which is about end to end seeing purpose built like specialty solutions. A lot of solutions going end to end with data makes kind of makes it more complicated. So again, we got more complexity coming, but the greatest the cloud is, you can abstract that away. So we are seeing this is a big opportunity for partners to innovate. You're seeing a lot of joint engineering, a lot more complexities coming still, but still end to end is the end game so to speak. >>A absolutely John, I mean one, one of the sort of ways we describe what we try to do for our customers like Equinox is to be your co-pilot in the cloud, which essentially means, you know, >>What an apt analogy. >>I think so, yeah, >>Well, well >>Done there. I think it works. Yvanna. Yeah, so, so as I mentioned, these are the majority or almost all of our customers are pretty sophisticated tech savvy companies. So they don't, you know, they know for most, for the most part what they're trying to achieve. They're approaching scale, they're at scale or they're, or they're through that scale point and they, they just wanna have somebody they can call, right? They need technology to help abstract away the complex problem. So they're not doing so much manual cloud operational work or sometimes they just need help picking the next tech right to solve the end to end use case that that they're, that they're dealing with >>In business. And Danny, you're rolling out solutions so you're on, you're on the front lines, you gotta make it easier. You didn't want to get in the weeds on something that should be taken care of. >>Correct. I mean one of the reasons we go do it is you need to, in order to involve do it, you need to know your problems, understand your challenges, also like a self review only. And you have to be one way halfway through the cloud journey. You need to know your problems, what you want to achieve, where you want to end up a roadmap for the next five years, what you want to achieve. Are we fixing or developing a building? And then involve those guys to come and help you because they cannot just come with magic one and fix all your problems. You need to do that yourself. It's not like starting the journey by yourself. >>Yeah. One thing that's not played up in this event, I will say they may, I don't, they missed, maybe Verner will hit it tomorrow, but I think they kind of missed it a little bit. But the developer productivity's been a big issue. We've seen that this year. One of the big themes on the cube is developer productivity, more velocity on the development side to keep pace with what's on, what solutions are rolling out the customers. And the other one is skills gap. So, and people like, and people have old skills, like we see VMware being bought by Broadcom for instance, got a lot of IT operators at VMware, they gotta go cloud somewhere. So you got new talent, existing talent, skill gaps, people are comfortable, yet the new stuff's there, developers gotta be more productive. How do you guys see that? Cuz that's gonna be how that plays now, it's gonna impact the channel, the partnership relationship, your ability to deliver. >>What's your reaction to that first? Well I think we obviously have a tech savvy team. We've got developers, we've got dev, we've got infrastructure guys, but we only got so much resource that we can afford. And essentially by evolving due it, I've doubled our staff. So we got a tech savvy senior solution architects which comes to do the sexy stuff, actually develop and design a new better offering, better product that makes us competitive. And this is where we involved, essentially we use the due IT staff as an staff employees that our demand is richly army of qualified people. We can actually cherry pick who we want for the call to do X, Y, and Z. And they're there to, to support you. We just have to ask for help. And this is how we fill our gap from technical skills or budget constrained within, you know, within recruitment. >>And I think, I think what, what Danny is touching on, John, what you mentioned is, is really the, the sort of the core family principle of the company, right? It's hard enough for companies like Equinox to hire staff that can help them build their business and deliver the value proposition that they're, that they see, right? And so our reason for existence is to sort of take care of the rest, right? We can help, you know, operate your cloud, show you the most effective way to do that. Whether they're finops problems, whether they're DevOps problems, whether dev SEC ops problems, all of these sort of classic operational problems that get 'em the way of the core business mission. You're not in the business of running the cloud, you're in the business of delivering customer value. We can help you, you know, manage your cloud >>And it's your job to do it. >>It is to do it >>Can, couldn't raise this upon there. How long have y'all been working together? >>I would say 15 months. We took, we took a bit of a conservative approach. We hope for the baseball, prepare for the worst. So I didn't trust do it. I give them one account, start with DEF U A C because you cannot, you just have to learn the journey yourself. So I think I would, my advice for clients is give it the six months. Once you establish a relationship, build a relationship, give them one by one start slowly. You actually understand by yourself the skills, the capacity that they have. And also the, for me consultants is really important And after that just opens up and we are now involving them. We've got new project, we've got problem statement. The first thing we do, we don't Google it, we just say do it. Log a ticket, we got the team. You're >>A verb. >>Yeah. So >>In this case we have >>The puns are on list here on the Cuban general. But with something like that, it's great. >>I gotta ask you a question cuz this is interesting John. You know, we talked last year on the cube and, and again this is an example of how innovations playing out. If you look at the announcements, Adam Celski did and then sw, he had 13 or so announcements. I won't say it's getting boring, but when you hear boring, boring is good. When you start getting into these, these gaps in the platforms as it grows. I won't say they was boring cause that really wasn't boring. I like the data >>Itself. It's all fascinating, John, >>But it, but it's a lot of gap filling, you know, 50 connectors you got, you know, yeah. All glue layers being built in AI's critical. The match cloud is there. What's the innovation? You got a lot of gaps being filled, boring is good. Like Kubernetes, we say there boring means, it's being invisible. That means it's going away. What's the exciting things from your perspective in cloud here? >>Well, I think, I mean, boring is an interesting word to use cuz a company with the heritage of AWS is constantly evolving. I mean, at the core of that company's culture is innovation, technology, development and innovation. And they're building for builders as, as you know, just as well as I do. Yeah. And so, but what we find across our customer base is that companies that are scaling or at scale are using maybe a smaller set of those services, but they're really leveraging them in interesting ways. And there is a very long tail of deeper, more sophisticated fit for purpose, more specific services. And Adam announced, you know, who knows him another 20 or 30 services and it's happening year after year after year. And I think one of the things that, that Danny might attest to is, I, I spoke about the reason we exist and the reason we form the company is we hold it very, a very critical part of our mission is to stay abreast of all of those developments as they emerge so that Danny and and his crew don't have to, right? And so when they have a, a, a question about SageMaker or they have a question about sort of the new big data service that Adam has announced, we take it very seriously. Our job is to be able to answer that question quickly and >>Accurately. And I notice your shirt, if you could just give a little shirt there, ops, cloud ops, DevOps do it. The intersection of the finance, the tuning is now we're hearing a lot of price performance, cost recovery, not cost recovery, but cost management. Yeah. Optimizing. So we're seeing building scale, but now, now tuning almost a craft, the craft of the cloud is here. What's your reaction to that? It, >>It absolutely is. And this is a story as old as the cloud, honestly. And companies, you know, they'll, they'll, companies tend to follow the same sort of maturity journey when they first start, whether they're migrating to the cloud or they were born in the cloud as most of our customers are. There's a, there's a, there's an, there's an access to visibility and understanding and optimization to tuning a craft to use your term. And, and cost management truly is a 10 year old problem that is as prevalent and relevant today as it was, you know, 10 years ago. And there's a lot of talk about the economics associated with the cloud and it's not, certainly not always cheaper to run. In fact, it rarely is cheaper to run your business from any of the public cloud providers. The key is to do it and right size it and make sure it's operating in accordance and alignment with your business, right? It's okay for cloud process to go up so long as your top line is also >>Selling your proportion. You spend more cloud to save cloud. That's it's >>Penny wise, pound full. It's always a little bit, always a little bit of a, of a >>Dilemma on, on the cost saving. We didn't want to just save money. If you want to save money, just shut down your services, right? So it's about making money. So this is where do it comes, like we actually start making, okay, we spend a bit more now, but in about six months time I will be making more money. And we've just did that. We roll out the new application for all the new product offering host to AWS fully with the guys support, a lot of long, boring, boring, boring calls, but they're productive because we actually now have a better product, competitive, it's tailored for our clients, it's cost effective. And we are actually making money >>When something's invisible. It's working, you know, talking about it means it's, it's, it's operational. >>It's exactly, it's, >>Well to that point, John, one of the things we're most proud of in, you know, know this year was, was the launch of our product we called Flex Save, which essentially does exactly what you've described. It's, it's looking for automation and, and, and, and automatic ways of, yes. Saving money, but offering the opportunities to, to to improve the economics associated with your cloud infrastructure. >>Yeah. And improving the efficiency across the board. A hundred percent. It, it's, oh, it's awesome. Let's, and, and it's, it's my understanding there's some reporting and insights that you're able to then translate through from do it to your CTO and across the company. Denny, what's that like? What do you get to see working >>With them? Well, the problem is, like the CTO asked me to do all of that. It is funny he thinks that he's doing it, but essentially they have a excellent portal that basically looks up all of our instances on the one place. You got like good analytics on your cost, cost, anomalies, budget, costal location. But I didn't want to do that either. So what I have done is taken the next step. I actually sold this to the, to my company completely. So my finance teams goes there, they do it themselves, they log in, check, check, all the billing, the costal location. I actually has zero iteration with them if I don't hear anything from them, which is one of the benefits. But also there is lot of other products like the Flexe is virtually like you just click a finger and you start saving money just like that. Easy >>Is that easy button we've been talking about on >>The show? Yeah, exactly, exactly how it is. But there is obviously outside of the cost management, you actually can look at what is the resource you using do actually need it, how often you use it, think about the long term goal, what you're trying to achieve, and use the analytics to, and actually I have to say the analytics much better than AWS in, in, in, in cmp. It's, it's just more user friendly, more interactive as opposed to, you know, building the one in aws. >>It's good business model. Make things easy for your customers. Easy, simple >>To use. >>It's gotta be nice to hear John. >>Well, so first of all, thank you daddy. >>We, we work, but in all seriousness, you know, we, we work, Danny mentioned the trust word earlier. This is at the core of if we don't, if we're not able to build trust with our clients, our business is dead. It, it just doesn't exist. It can't scale. In fact, it'll go the opposite direction. And so we're, we work very, very hard to earn that trust and we're willing to start small to Danny's example, start small and grow. And that's why we're very, one of the things we're most proud of is, is how few customers tend to leave us year over year. We have customers that have been with us for 10 years. >>You know, Andy, Jesse always has, I just saw an interview, he was on the New York Times event in New York today as a CEO of Amazon. But he's always said in these build out phases, you gotta work backwards from the customer and innovate on behalf of the customer. Cause that's the answer that will always be a good answer for the outcome versus optimizing for just profit, you know what I'm saying? Or other things. So we're still in build out mode, >>You know, as a, as a, as a core fundamental sort of product concept. If you're not solving important problems for our customer, what are you, why, why are you investing? It just >>Doesn't make it. This is the beauty we do it. We actually, they wait for you to come to do the next step. They don't sell me anything. They don't bug me with emails. They're ready. When you're ready to make that journey, you just log a ticket and then come and help you. And this is the beauty. You just, it's just not your, your journey. >>I love it. That's a, that's a beautiful note to lead us to our new tradition on the cube. We have a little bit of a challenge for the both of you. We're looking for your 32nd Instagram real thought leadership sizzle anecdote. Either one of you wanna go first. John looks a little nauseous. Danny, you wanna give it a go? >>Well, we've got a few expressions, but we don't Google it. We just do it. And the key take, that's what we do now at, at, and also what we do is actually using their stuff as an influence employees richly. Like that's what we do. >>Well done, well done. Didn't even need the 30 seconds. Fantastic work, Danny. I love that. All right, John, now you do have to go. Okay, >>I'll goodness. You know, I'll, I'll, I'll, I'll I'll go back to what I mentioned earlier, if that's okay. I think we, you know, we exist as a company to sort of help our customers get back to focusing on why they started the business in the first place, which is innovating and delivering value to customers. And we'll help you take care of the rest. It's as simple as that. Awesome. >>Well done. You absolutely nailed it. I wanna just acknowledge your fan club over there watching. Hello everyone from the doit team. Good job team. I love, it's very cute when guests show up with an entourage to the cube. We like to see it. You obviously deserve the entourage. You're, you're both wonderful. Thanks again for being here on the show with Oh yeah, go ahead >>John. Well, I would just like to thank Danny for, for agreeing to >>Discern, thankfully >>Great to spend time with you. Absolutely. Let's do it. >>Thank you. Yeah, >>Yeah. Fantastic gentlemen. Well thank you all for tuning into this wonderful start to the afternoon here from AWS Reinvent. We are in Las Vegas, Nevada with John Furier. My name's Savannah Peterson, you're watching The Cube, the leader in high tech coverage.

(soft techno upbeat music) >> Hi there. Welcome back to Las Vegas. This is Dave Villante with Paul Gillon. Reinvent day one and a half. We started last night, Monday, theCUBE after dark. Now we're going wall to wall. Today. Today was of course the big keynote, Adam Selipsky, kind of the baton now handing, you know, last year when he did his keynote, he was very new. He was sort of still getting his feet wet and finding his guru swing. Settling in a little bit more this year, learning a lot more, getting deeper into the tech, but of course, sharing the love with other leaders like Peter DeSantis. Tomorrow's going to be Swamy in the keynote. Adrian Cockcroft is here. Former AWS, former network Netflix CTO, currently an analyst. You got your own firm now. You're out there. Great to see you again. Thanks for coming on theCUBE. >> Yeah, thanks. >> We heard you on at Super Cloud, you gave some really good insights there back in August. So now as an outsider, you come in obviously, you got to be impressed with the size and the ecosystem and the energy. Of course. What were your thoughts on, you know what you've seen so far, today's keynotes, last night Peter DeSantis, what stood out to you? >> Yeah, I think it's great to be back at Reinvent again. We're kind of pretty much back to where we were before the pandemic sort of shut it down. This is a little, it's almost as big as the, the largest one that we had before. And everyone's turned up. It just feels like we're back. So that's really good to see. And it's a slightly different style. I think there were was more sort of video production things happening. I think in this keynote, more storytelling. I'm not sure it really all stitched together very well. Right. Some of the stories like, how does that follow that? So there were a few things there and some of there were spelling mistakes on the slides, you know that ELT instead of ETL and they spelled ZFS wrong and something. So it just seemed like there was, I'm not quite sure just maybe a few things were sort of rushed at the last minute. >> Not really AWS like, was it? It's kind of remind the Patriots Paul, you know Bill Belichick's teams are fumbling all over the place. >> That's right. That's right. >> Part of it may be, I mean the sort of the market. They have a leader in marketing right now but they're going to have a CMO. So that's sort of maybe as lack of a single threaded leader for this thing. Everything's being shared around a bit more. So maybe, I mean, it's all fixable and it's mine. This is minor stuff. I'm just sort of looking at it and going there's a few things that looked like they were not quite as good as they could have been in the way it was put together. Right? >> But I mean, you're taking a, you know a year of not doing Reinvent. Yeah. Being isolated. You know, we've certainly seen it with theCUBE. It's like, okay, it's not like riding a bike. You know, things that, you know you got to kind of relearn the muscle memories. It's more like golf than is bicycle riding. >> Well I've done AWS keynotes myself. And they are pretty much scrambled. It looks nice, but there's a lot of scrambling leading up to when it actually goes. Right? And sometimes you can, you sometimes see a little kind of the edges of that, and sometimes it's much more polished. But you know, overall it's pretty good. I think Peter DeSantis keynote yesterday was a lot of really good meat there. There was some nice presentations, and some great announcements there. And today I was, I thought I was a little disappointed with some of the, I thought they could have been more. I think the way Andy Jesse did it, he crammed more announcements into his keynote, and Adam seems to be taking sort of a bit more of a measured approach. There were a few things he picked up on and then I'm expecting more to be spread throughout the rest of the day. >> This was more poetic. Right? He took the universe as the analogy for data, the ocean for security. Right? The Antarctic was sort of. >> Yeah. It looked pretty, >> yeah. >> But I'm not sure that was like, we're not here really to watch nature videos >> As analysts and journalists, You're like, come on. >> Yeah, >> Give it the meat >> That was kind the thing, yeah, >> It has always been the AWS has always been Reinvent has always been a shock at our approach. 100, 150 announcements. And they're really, that kind of pressure seems to be off them now. Their position at the top of the market seems to be unshakeable. There's no clear competition that's creeping up behind them. So how does that affect the messaging you think that AWS brings to market when it doesn't really have to prove that it's a leader anymore? It can go after maybe more of the niche markets or fix the stuff that's a little broken more fine tuning than grandiose statements. >> I think so AWS for a long time was so far out that they basically said, "We don't think about the competition, we are listen to the customers." And that was always the statement that works as long as you're always in the lead, right? Because you are introducing the new idea to the customer. Nobody else got there first. So that was the case. But in a few areas they aren't leading. Right? You could argue in machine learning, not necessarily leading in sustainability. They're not leading and they don't want to talk about some of these areas and-- >> Database. I mean arguably, >> They're pretty strong there, but the areas when you are behind, it's like they kind of know how to play offense. But when you're playing defense, it's a different set of game. You're playing a different game and it's hard to be good at both. I think and I'm not sure that they're really used to following somebody into a market and making a success of that. So there's something, it's a little harder. Do you see what I mean? >> I get opinion on this. So when I say database, David Foyer was two years ago, predicted AWS is going to have to converge somehow. They have no choice. And they sort of touched on that today, right? Eliminating ETL, that's one thing. But Aurora to Redshift. >> Yeah. >> You know, end to end. I'm not sure it's totally, they're fully end to end >> That's a really good, that is an excellent piece of work, because there's a lot of work that it eliminates. There's are clear pain points, but then you've got sort of the competing thing, is like the MongoDB and it's like, it's just a way with one database keeps it simple. >> Snowflake, >> Or you've got on Snowflake maybe you've got all these 20 different things you're trying to integrate at AWS, but it's kind of like you have a bag of Lego bricks. It's my favorite analogy, right? You want a toy for Christmas, you want a toy formula one racing car since that seems to be the theme, right? >> Okay. Do you want the fully built model that you can play with right now? Or do you want the Lego version that you have to spend three days building. Right? And AWS is the Lego technique thing. You have to spend some time building it, but once you've built it, you can evolve it, and you'll still be playing those are still good bricks years later. Whereas that prebuilt to probably broken gathering dust, right? So there's something about having an vulnerable architecture which is harder to get into, but more durable in the long term. And so AWS tends to play the long game in many ways. And that's one of the elements that they do that and that's good, but it makes it hard to consume for enterprise buyers that are used to getting it with a bow on top. And here's the solution. You know? >> And Paul, that was always Andy Chassy's answer to when we would ask him, you know, all these primitives you're going to make it simpler. You see the primitives give us the advantage to turn on a dime in the marketplace. And that's true. >> Yeah. So you're saying, you know, you take all these things together and you wrap it up, and you put a snowflake on top, and now you've got a simple thing or a Mongo or Mongo atlas or whatever. So you've got these layered platforms now which are making it simpler to consume, but now you're kind of, you know, you're all stuck in that ecosystem, you know, so it's like what layer of abstractions do you want to tie yourself to, right? >> The data bricks coming at it from more of an open source approach. But it's similar. >> We're seeing Amazon direct more into vertical markets. They spotlighted what Goldman Sachs is doing on their platform. They've got a variety of platforms that are supposedly targeted custom built for vertical markets. How do successful do you see that play being? Is this something that the customers you think are looking for, a fully integrated Amazon solution? >> I think so. There's usually if you look at, you know the MongoDB or data stacks, or the other sort of or elastic, you know, they've got the specific solution with the people that really are developing the core technology, there's open source equivalent version. The AWS is running, and it's usually maybe they've got a price advantage or it's, you know there's some data integration in there or it's somehow easier to integrate but it's not stopping those companies from growing. And what it's doing is it's endorsing that platform. So if you look at the collection of databases that have been around over the last few years, now you've got basically Elastic Mongo and Cassandra, you know the data stacks as being endorsed by the cloud vendors. These are winners. They're going to be around for a very long time. You can build yourself on that architecture. But what happened to Couch base and you know, a few of the other ones, you know, they don't really fit. Like how you going to bait? If you are now becoming an also ran, because you didn't get cloned by the cloud vendor. So the customers are going is that a safe place to be, right? >> But isn't it, don't they want to encourage those partners though in the name of building the marketplace ecosystem? >> Yeah. >> This is huge. >> But certainly the platform, yeah, the platform encourages people to do more. And there's always room around the edge. But the mainstream customers like that really like spending the good money, are looking for something that's got a long term life to it. Right? They're looking for a long commitment to that technology and that it's going to be invested in and grow. And the fact that the cloud providers are adopting and particularly AWS is adopting some of these technologies means that is a very long term commitment. You can base, you know, you can bet your future architecture on that for a decade probably. >> So they have to pick winners. >> Yeah. So it's sort of picking winners. And then if you're the open source company that's now got AWS turning up, you have to then leverage it and use that as a way to grow the market. And I think Mongo have done an excellent job of that. I mean, they're top level sponsors of Reinvent, and they're out there messaging that and doing a good job of showing people how to layer on top of AWS and make it a win-win both sides. >> So ever since we've been in the business, you hear the narrative hardware's going to die. It's just, you know, it's commodity and there's some truth to that. But hardware's actually driving good gross margins for the Cisco's of the world. Storage companies have always made good margins. Servers maybe not so much, 'cause Intel sucked all the margin out of it. But let's face it, AWS makes most of its money. We know on compute, it's got 25 plus percent operating margins depending on the seasonality there. What do you think happens long term to the infrastructure layer discussion? Okay, commodity cloud, you know, we talk about super cloud. Do you think that AWS, and the other cloud vendors that infrastructure, IS gets commoditized and they have to go up market or you see that continuing I mean history would say that still good margins in hardware. What are your thoughts on that? >> It's not commoditizing, it's becoming more specific. We've got all these accelerators and custom chips now, and this is something, this almost goes back. I mean, I was with some micro systems 20,30 years ago and we developed our own chips and HP developed their own chips and SGI mips, right? We were like, the architectures were all squabbling of who had the best processor chips and it took years to get chips that worked. Now if you make a chip and it doesn't work immediately, you screwed up somewhere right? It's become the technology of building these immensely complicated powerful chips that has become commoditized. So the cost of building a custom chip, is now getting to the point where Apple and Amazon, your Apple laptop has got full custom chips your phone, your iPhone, whatever and you're getting Google making custom chips and we've got Nvidia now getting into CPUs as well as GPUs. So we're seeing that the ability to build a custom chip, is becoming something that everyone is leveraging. And the cost of doing that is coming down to startups are doing it. So we're going to see many, many more, much more innovation I think, and this is like Intel and AMD are, you know they've got the compatibility legacy, but of the most powerful, most interesting new things I think are going to be custom. And we're seeing that with Graviton three particular in the three E that was announced last night with like 30, 40% whatever it was, more performance for HPC workloads. And that's, you know, the HPC market is going to have to deal with cloud. I mean they are starting to, and I was at Supercomputing a few weeks ago and they are tiptoeing around the edge of cloud, but those supercomputers are water cold. They are monsters. I mean you go around supercomputing, there are plumbing vendors on the booth. >> Of course. Yeah. >> Right? And they're highly concentrated systems, and that's really the only difference, is like, is it water cooler or echo? The rest of the technology stack is pretty much off the shelf stuff with a few tweets software. >> You point about, you know, the chips and what AWS is doing. The Annapurna acquisition. >> Yeah. >> They're on a dramatically different curve now. I think it comes down to, again, David Floyd's premise, really comes down to volume. The arm wafer volumes are 10 x those of X 86, volume always wins. And the economics of semis. >> That kind of got us there. But now there's also a risk five coming along if you, in terms of licensing is becoming one of the bottlenecks. Like if the cost of building a chip is really low, then it comes down to licensing costs and do you want to pay the arm license And the risk five is an open source chip set which some people are starting to use for things. So your dis controller may have a risk five in it, for example, nowadays, those kinds of things. So I think that's kind of the the dynamic that's playing out. There's a lot of innovation in hardware to come in the next few years. There's a thing called CXL compute express link which is going to be really interesting. I think that's probably two years out, before we start seeing it for real. But it lets you put glue together entire rack in a very flexible way. So just, and that's the entire industry coming together around a single standard, the whole industry except for Amazon, in fact just about. >> Well, but maybe I think eventually they'll get there. Don't use system on a chip CXL. >> I have no idea whether I have no knowledge about whether going to do anything CXL. >> Presuming I'm not trying to tap anything confidential. It just makes sense that they would do a system on chip. It makes sense that they would do something like CXL. Why not adopt the standard, if it's going to be as the cost. >> Yeah. And so that was one of the things out of zip computing. The other thing is the low latency networking with the elastic fabric adapter EFA and the extensions to that that were announced last night. They doubled the throughput. So you get twice the capacity on the nitro chip. And then the other thing was this, this is a bit technical, but this scalable datagram protocol that they've got which basically says, if I want to send a message, a packet from one machine to another machine, instead of sending it over one wire, I consider it over 16 wires in parallel. And I will just flood the network with all the packets and they can arrive in any order. This is why it isn't done normally. TCP is in order, the packets come in order they're supposed to, but this is fully flooding them around with its own fast retry and then they get reassembled at the other end. So they're not just using this now for HPC workloads. They've turned it on for TCP for just without any change to your application. If you are trying to move a large piece of data between two machines, and you're just pushing it down a network, a single connection, it takes it from five gigabits per second to 25 gigabits per second. A five x speed up, with a protocol tweak that's run by the Nitro, this is super interesting. >> Probably want to get all that AIML that stuff is going on. >> Well, the AIML stuff is leveraging it underneath, but this is for everybody. Like you're just copying data around, right? And you're limited, "Hey this is going to get there five times faster, pushing a big enough chunk of data around." So this is turning on gradually as the nitro five comes out, and you have to enable it at the instance level. But it's a super interesting announcement from last night. >> So the bottom line bumper sticker on commoditization is what? >> I don't think so. I mean what's the APIs? Your arm compatible, your Intel X 86 compatible or your maybe risk five one day compatible in the cloud. And those are the APIs, right? That's the commodity level. And the software is now, the software ecosystem is super portable across those as we're seeing with Apple moving from Intel to it's really not an issue, right? The software and the tooling is all there to do that. But underneath that, we're going to see an arms race between the top providers as they all try and develop faster chips for doing more specific things. We've got cranium for training, that instance has they announced it last year with 800 gigabits going out of a single instance, 800 gigabits or no, but this year they doubled it. Yeah. So 1.6 terabytes out of a single machine, right? That's insane, right? But what you're doing is you're putting together hundreds or thousands of those to solve the big machine learning training problems. These super, these enormous clusters that they're being formed for doing these massive problems. And there is a market now, for these incredibly large supercomputer clusters built for doing AI. That's all bandwidth limited. >> And you think about the timeframe from design to tape out. >> Yeah. >> Is just getting compressed It's relative. >> It is. >> Six is going the other way >> The tooling is all there. Yeah. >> Fantastic. Adrian, always a pleasure to have you on. Thanks so much. >> Yeah. >> Really appreciate it. >> Yeah, thank you. >> Thank you Paul. >> Cheers. All right. Keep it right there everybody. Don't forget, go to thecube.net, you'll see all these videos. Go to siliconangle.com, We've got features with Adam Selipsky, we got my breaking analysis, we have another feature with MongoDB's, Dev Ittycheria, Ali Ghodsi, as well Frank Sluman tomorrow. So check that out. Keep it right there. You're watching theCUBE, the leader in enterprise and emerging tech, right back. (soft techno upbeat music)

from the cube studios in Palo Alto in Boston bringing you data-driven insights from the cube and ETR this is breaking analysis with Dave vellante the ascendancy of AWS under the leadership of Andy jassy was marked by a tsunami of data and corresponding cloud services to leverage that data now those Services they mainly came in the form of Primitives I.E basic building blocks that were used by developers to create more sophisticated capabilities AWS in the 2020s being led by CEO Adam solipski will be marked by four high-level Trends in our opinion one A Rush of data that will dwarf anything we've previously seen two a doubling or even tripling down on the basic elements of cloud compute storage database security Etc three a greater emphasis on end-to-end integration of AWS services to simplify and accelerate customer adoption of cloud and four significantly deeper business integration of cloud Beyond it as an underlying element of organizational operations hello and welcome to this week's wikibon Cube insights powered by ETR in this breaking analysis we extract and analyze nuggets from John furrier's annual sit-down with the CEO of AWS we'll share data from ETR and other sources to set the context for the market and competition in cloud and we'll give you our glimpse of what to expect at re invent in 2022. now before we get into the core of our analysis Alibaba has announced earnings they always announced after the big three you know a month later and we've updated our Q3 slash November hyperscale Computing forecast for the year as seen here and we're going to spend a lot of time on this as most of you have seen the bulk of it already but suffice to say alibaba's cloud business is hitting that same macro Trend that we're seeing across the board but a more substantial slowdown than we expected and more substantial than its peers they're facing China headwinds they've been restructuring its Cloud business and it's led to significantly slower growth uh in in the you know low double digits as opposed to where we had it at 15 this puts our year-end estimates for 2022 Revenue at 161 billion still a healthy 34 growth with AWS surpassing 80 billion in 2022 Revenue now on a related note one of the big themes in Cloud that we've been reporting on is how customers are optimizing their Cloud spend it's a technique that they use and when the economy looks a little shaky and here's a graphic that we pulled from aws's website which shows the various pricing plans at a high level as you know they're much more granular than that and more sophisticated but Simplicity we'll just keep it here basically there are four levels first one here is on demand I.E pay by the drink now we're going to jump down to what we've labeled as number two spot instances that's like the right place at the right time I can use that extra capacity in the moment the third is reserved instances or RIS where I pay up front to get a discount and the fourth is sort of optimized savings plans where customers commit to a one or three year term and for a better price now you'll notice we labeled the choices in a different order than AWS presented them on its website and that's because we believe that the order that we chose is the natural progression for customers this started on demand they maybe experiment with spot instances they move to reserve instances when the cloud bill becomes too onerous and if you're large enough you lock in for one or three years okay the interesting thing is the order in which AWS presents them we believe that on-demand accounts for the majority of AWS customer spending now if you think about it those on-demand customers they're also at risk customers yeah sure there's some switching costs like egress and learning curve but many customers they have multiple clouds and they've got experience and so they're kind of already up to a learning curve and if you're not married to AWS with a longer term commitment there's less friction to switch now AWS here presents the most attractive plan from a financial perspective second after on demand and it's also the plan that makes the greatest commitment from a lock-in standpoint now In fairness to AWS it's also true that there is a trend towards subscription-based pricing and we have some data on that this chart is from an ETR drill down survey the end is 300. pay attention to the bars on the right the left side is sort of busy but the pink is subscription and you can see the trend upward the light blue is consumption based or on demand based pricing and you can see there's a steady Trend toward subscription now we'll dig into this in a later episode of Breaking analysis but we'll share with you a little some tidbits with the data that ETR provides you can select which segment is and pass or you can go up the stack Etc but so when you choose is and paths 44 of customers either prefer or are required to use on-demand pricing whereas around 40 percent of customers say they either prefer or are required to use subscription pricing again that's for is so now the further mu you move up the stack the more prominent subscription pricing becomes often with sixty percent or more for the software-based offerings that require or prefer subscription and interestingly cyber security tracks along with software at around 60 percent that that prefer subscription it's likely because as with software you're not shutting down your cyber protection on demand all right let's get into the expectations for reinvent and we're going to start with an observation in data in this 2018 book seeing digital author David michella made the point that whereas most companies apply data on the periphery of their business kind of as an add-on function successful data companies like Google and Amazon and Facebook have placed data at the core of their operations they've operationalized data and they apply machine intelligence to that foundational element why is this the fact is it's not easy to do what the internet Giants have done very very sophisticated engineering and and and cultural discipline and this brings us to reinvent 2022 in the future of cloud machine learning and AI will increasingly be infused into applications we believe the data stack and the application stack are coming together as organizations build data apps and data products data expertise is moving from the domain of Highly specialized individuals to Everyday business people and we are just at the cusp of this trend this will in our view be a massive theme of not only re invent 22 but of cloud in the 2020s the vision of data mesh We Believe jamachtagani's principles will be realized in this decade now what we'd like to do now is share with you a glimpse of the thinking of Adam solipsky from his sit down with John Furrier each year John has a one-on-one conversation with the CEO of AWS AWS he's been doing this for years and the outcome is a better understanding of the directional thinking of the leader of the number one Cloud platform so we're now going to share some direct quotes I'm going to run through them with some commentary and then bring in some ETR data to analyze the market implications here we go this is from solipsky quote I.T in general and data are moving from departments into becoming intrinsic parts of how businesses function okay we're talking here about deeper business integration let's go on to the next one quote in time we'll stop talking about people who have the word analyst we inserted data he meant data data analyst in their title rather will have hundreds of millions of people who analyze data as part of their day-to-day job most of whom will not have the word analyst anywhere in their title we're talking about graphic designers and pizza shop owners and product managers and data scientists as well he threw that in I'm going to come back to that very interesting so he's talking about here about democratizing data operationalizing data next quote customers need to be able to take an end-to-end integrated view of their entire data Journey from ingestion to storage to harmonizing the data to being able to query it doing business Intelligence and human-based Analysis and being able to collaborate and share data and we've been putting together we being Amazon together a broad Suite of tools from database to analytics to business intelligence to help customers with that and this last statement it's true Amazon has a lot of tools and you know they're beginning to become more and more integrated but again under jassy there was not a lot of emphasis on that end-to-end integrated view we believe it's clear from these statements that solipsky's customer interactions are leading him to underscore that the time has come for this capability okay continuing quote if you have data in one place you shouldn't have to move it every time you want to analyze that data couldn't agree more it would be much better if you could leave that data in place avoid all the ETL which has become a nasty three-letter word more and more we're building capabilities where you can query that data in place end quote okay this we see a lot in the marketplace Oracle with mySQL Heatwave the entire Trend toward converge database snowflake [ __ ] extending their platforms into transaction and analytics respectively and so forth a lot of the partners are are doing things as well in that vein let's go into the next quote the other phenomenon is infusing machine learning into all those capabilities yes the comments from the michelleographic come into play here infusing Ai and machine intelligence everywhere next one quote it's not a data Cloud it's not a separate Cloud it's a series of broad but integrated capabilities to help you manage the end-to-end life cycle of your data there you go we AWS are the cloud we're going to come back to that in a moment as well next set of comments around data very interesting here quote data governance is a huge issue really what customers need is to find the right balance of their organization between access to data and control and if you provide too much access then you're nervous that your data is going to end up in places that it shouldn't shouldn't be viewed by people who shouldn't be viewing it and you feel like you lack security around that data and by the way what happens then is people overreact and they lock it down so that almost nobody can see it it's those handcuffs there's data and asset are reliability we've talked about that for years okay very well put by solipsky but this is a gap in our in our view within AWS today and we're we're hoping that they close it at reinvent it's not easy to share data in a safe way within AWS today outside of your organization so we're going to look for that at re invent 2022. now all this leads to the following statement by solipsky quote data clean room is a really interesting area and I think there's a lot of different Industries in which clean rooms are applicable I think that clean rooms are an interesting way of enabling multiple parties to share and collaborate on the data while completely respecting each party's rights and their privacy mandate okay again this is a gap currently within AWS today in our view and we know snowflake is well down this path and databricks with Delta sharing is also on this curve so AWS has to address this and demonstrate this end-to-end data integration and the ability to safely share data in our view now let's bring in some ETR spending data to put some context around these comments with reference points in the form of AWS itself and its competitors and partners here's a chart from ETR that shows Net score or spending momentum on the x-axis an overlap or pervasiveness in the survey um sorry let me go back up the net scores on the y-axis and overlap or pervasiveness in the survey is on the x-axis so spending momentum by pervasiveness okay or should have share within the data set the table that's inserted there with the Reds and the greens that informs us to how the dots are positioned so it's Net score and then the shared ends are how the plots are determined now we've filtered the data on the three big data segments analytics database and machine learning slash Ai and we've only selected one company with fewer than 100 ends in the survey and that's databricks you'll see why in a moment the red dotted line indicates highly elevated customer spend at 40 percent now as usual snowflake outperforms all players on the y-axis with a Net score of 63 percent off the charts all three big U.S cloud players are above that line with Microsoft and AWS dominating the x-axis so very impressive that they have such spending momentum and they're so large and you see a number of other emerging data players like rafana and datadog mongodbs there in the mix and then more established players data players like Splunk and Tableau now you got Cisco who's gonna you know it's a it's a it's a adjacent to their core networking business but they're definitely into you know the analytics business then the really established players in data like Informatica IBM and Oracle all with strong presence but you'll notice in the red from the momentum standpoint now what you're going to see in a moment is we put red highlights around databricks Snowflake and AWS why let's bring that back up and we'll explain so there's no way let's bring that back up Alex if you would there's no way AWS is going to hit the brakes on innovating at the base service level what we call Primitives earlier solipsky told Furrier as much in their sit down that AWS will serve the technical user and data science Community the traditional domain of data bricks and at the same time address the end-to-end integration data sharing and business line requirements that snowflake is positioned to serve now people often ask Snowflake and databricks how will you compete with the likes of AWS and we know the answer focus on data exclusively they have their multi-cloud plays perhaps the more interesting question is how will AWS compete with the likes of Specialists like Snowflake and data bricks and the answer is depicted here in this chart AWS is going to serve both the technical and developer communities and the data science audience and through end-to-end Integrations and future services that simplify the data Journey they're going to serve the business lines as well but the Nuance is in all the other dots in the hundreds or hundreds of thousands that are not shown here and that's the AWS ecosystem you can see AWS has earned the status of the number one Cloud platform that everyone wants to partner with as they say it has over a hundred thousand partners and that ecosystem combined with these capabilities that we're discussing well perhaps behind in areas like data sharing and integrated governance can wildly succeed by offering the capabilities and leveraging its ecosystem now for their part the snowflakes of the world have to stay focused on the mission build the best products possible and develop their own ecosystems to compete and attract the Mind share of both developers and business users and that's why it's so interesting to hear solipski basically say it's not a separate Cloud it's a set of integrated Services well snowflake is in our view building a super cloud on top of AWS Azure and Google when great products meet great sales and marketing good things can happen so this will be really fun to watch what AWS announces in this area at re invent all right one other topic that solipsky talked about was the correlation between serverless and container adoption and you know I don't know if this gets into there certainly their hybrid place maybe it starts to get into their multi-cloud we'll see but we have some data on this so again we're talking about the correlation between serverless and container adoption but before we get into that let's go back to 2017 and listen to what Andy jassy said on the cube about serverless play the clip very very earliest days of AWS Jeff used to say a lot if I were starting Amazon today I'd have built it on top of AWS we didn't have all the capability and all the functionality at that very moment but he knew what was coming and he saw what people were still able to accomplish even with where the services were at that point I think the same thing is true here with Lambda which is I think if Amazon were starting today it's a given they would build it on the cloud and I think we with a lot of the applications that comprise Amazon's consumer business we would build those on on our serverless capabilities now we still have plenty of capabilities and features and functionality we need to add to to Lambda and our various serverless services so that may not be true from the get-go right now but I think if you look at the hundreds of thousands of customers who are building on top of Lambda and lots of real applications you know finra has built a good chunk of their market watch application on top of Lambda and Thompson Reuters has built you know one of their key analytics apps like people are building real serious things on top of Lambda and the pace of iteration you'll see there will increase as well and I really believe that to be true over the next year or two so years ago when Jesse gave a road map that serverless was going to be a key developer platform going forward and so lipsky referenced the correlation between serverless and containers in the Furrier sit down so we wanted to test that within the ETR data set now here's a screen grab of The View across 1300 respondents from the October ETR survey and what we've done here is we've isolated on the cloud computing segment okay so you can see right there cloud computing segment now we've taken the functions from Google AWS Lambda and Microsoft Azure functions all the serverless offerings and we've got Net score on the vertical axis we've got presence in the data set oh by the way 440 by the way is highly elevated remember that and then we've got on the horizontal axis we have the presence in the data center overlap okay that's relative to each other so remember 40 all these guys are above that 40 mark okay so you see that now what we're going to do this is just for serverless and what we're going to do is we're going to turn on containers to see the correlation and see what happens so watch what happens when we click on container boom everything moves to the right you can see all three move to the right Google drops a little bit but all the others now the the filtered end drops as well so you don't have as many people that are aggressively leaning into both but all three move to the right so watch again containers off and then containers on containers off containers on so you can see a really major correlation between containers and serverless okay so to get a better understanding of what that means I call my friend and former Cube co-host Stu miniman what he said was people generally used to think of VMS containers and serverless as distinctly different architectures but the lines are beginning to blur serverless makes things simpler for developers who don't want to worry about underlying infrastructure as solipsky and the data from ETR indicate serverless and containers are coming together but as Stu and I discussed there's a spectrum where on the left you have kind of native Cloud VMS in the middle you got AWS fargate and in the rightmost anchor is Lambda AWS Lambda now traditionally in the cloud if you wanted to use containers developers would have to build a container image they have to select and deploy the ec2 images that they or instances that they wanted to use they have to allocate a certain amount of memory and then fence off the apps in a virtual machine and then run the ec2 instances against the apps and then pay for all those ec2 resources now with AWS fargate you can run containerized apps with less infrastructure management but you still have some you know things that you can you can you can do with the with the infrastructure so with fargate what you do is you'd build the container images then you'd allocate your memory and compute resources then run the app and pay for the resources only when they're used so fargate lets you control the runtime environment while at the same time simplifying the infrastructure management you gotta you don't have to worry about isolating the app and other stuff like choosing server types and patching AWS does all that for you then there's Lambda with Lambda you don't have to worry about any of the underlying server infrastructure you're just running code AS functions so the developer spends their time worrying about the applications and the functions that you're calling the point is there's a movement and we saw in the data towards simplifying the development environment and allowing the cloud vendor AWS in this case to do more of the underlying management now some folks will still want to turn knobs and dials but increasingly we're going to see more higher level service adoption now re invent is always a fire hose of content so let's do a rapid rundown of what to expect we talked about operate optimizing data and the organization we talked about Cloud optimization there'll be a lot of talk on the show floor about best practices and customer sharing data solipsky is leading AWS into the next phase of growth and that means moving beyond I.T transformation into deeper business integration and organizational transformation not just digital transformation organizational transformation so he's leading a multi-vector strategy serving the traditional peeps who want fine-grained access to core services so we'll see continued Innovation compute storage AI Etc and simplification through integration and horizontal apps further up to stack Amazon connect is an example that's often cited now as we've reported many times databricks is moving from its stronghold realm of data science into business intelligence and analytics where snowflake is coming from its data analytics stronghold and moving into the world of data science AWS is going down a path of snowflake meet data bricks with an underlying cloud is and pass layer that puts these three companies on a very interesting trajectory and you can expect AWS to go right after the data sharing opportunity and in doing so it will have to address data governance they go hand in hand okay price performance that is a topic that will never go away and it's something that we haven't mentioned today silicon it's a it's an area we've covered extensively on breaking analysis from Nitro to graviton to the AWS acquisition of Annapurna its secret weapon new special specialized capabilities like inferential and trainium we'd expect something more at re invent maybe new graviton instances David floyer our colleague said he's expecting at some point a complete system on a chip SOC from AWS and maybe an arm-based server to eventually include high-speed cxl connections to devices and memories all to address next-gen applications data intensive applications with low power requirements and lower cost overall now of course every year Swami gives his usual update on machine learning and AI building on Amazon's years of sagemaker innovation perhaps a focus on conversational AI or a better support for vision and maybe better integration across Amazon's portfolio of you know large language models uh neural networks generative AI really infusing AI everywhere of course security always high on the list that reinvent and and Amazon even has reinforce a conference dedicated to it uh to security now here we'd like to see more on supply chain security and perhaps how AWS can help there as well as tooling to make the cio's life easier but the key so far is AWS is much more partner friendly in the security space than say for instance Microsoft traditionally so firms like OCTA and crowdstrike in Palo Alto have plenty of room to play in the AWS ecosystem we'd expect of course to hear something about ESG it's an important topic and hopefully how not only AWS is helping the environment that's important but also how they help customers save money and drive inclusion and diversity again very important topics and finally come back to it reinvent is an ecosystem event it's the Super Bowl of tech events and the ecosystem will be out in full force every tech company on the planet will have a presence and the cube will be featuring many of the partners from the serial floor as well as AWS execs and of course our own independent analysis so you'll definitely want to tune into thecube.net and check out our re invent coverage we start Monday evening and then we go wall to wall through Thursday hopefully my voice will come back we have three sets at the show and our entire team will be there so please reach out or stop by and say hello all right we're going to leave it there for today many thanks to Stu miniman and David floyer for the input to today's episode of course John Furrier for extracting the signal from the noise and a sit down with Adam solipski thanks to Alex Meyerson who was on production and manages the podcast Ken schiffman as well Kristen Martin and Cheryl Knight helped get the word out on social and of course in our newsletters Rob hoef is our editor-in-chief over at siliconangle does some great editing thank thanks to all of you remember all these episodes are available as podcasts wherever you listen you can pop in the headphones go for a walk just search breaking analysis podcast I published each week on wikibon.com at siliconangle.com or you can email me at david.valante at siliconangle.com or DM me at di vallante or please comment on our LinkedIn posts and do check out etr.ai for the best survey data in the Enterprise Tech business this is Dave vellante for the cube insights powered by ETR thanks for watching we'll see it reinvent or we'll see you next time on breaking analysis [Music]

from the cube studios in Palo Alto in Boston bringing you data-driven insights from the cube and ETR this is breaking analysis with Dave vellante over the past decade cloudflare has built a Global Network that has the potential to become the fourth us-based hyperscale class cloud in our view the company is building a durable Revenue model with hooks into many important markets these include the more mature DDOS protection space to other growth sectors such as zero trust a serverless platform for application development and an increasing number of services such as database and object storage and other network services in essence cloudflare could be thought of as a giant distributed supercomputer that can connect multiple clouds and act as a highly efficient scheduling engine at scale its disruptive DNA is increasingly attracting novel startups and established Global firms alike looking for Reliable secure high performance low latency and more cost-effective alternatives to AWS and Legacy infrastructure Solutions hello and welcome to this week's wikibon Cube insights powered by ETR in this breaking analysis we initiate our deeper coverage of cloudflare we'll briefly explain our take on the company and its unique business model we'll then share some peer comparisons with both the financial snapshot and some fresh ETR survey data finally we'll share some examples of how we think cloudflare could be a disruptive force with a super cloud-like offering that in many respects is what multi-cloud should have been cloudflare has been on our peripheral radar Ben Thompson and many others have written about their disruptive business model and recently a breaking analysis follower who will remain anonymous emailed with some excellent insights on cloudflare that prompted us to initiate more detailed coverage let's first take a look at how cloudflare seize the world in terms of its view of a modern stack this is a graphic from cloudflare that shows a simple three-layer Stack comprising Storage and compute the lower level and application layer and the network and their key message is basically that the big four hyperscalers have replaced the on-prem leaders apps have been satisfied and that mess of network that you see and Security in the upper left can now be handled all by cloudflare and the stack can be rented via Opex versus requiring heavy capex investment so okay somewhat of a simplified view is those companies on the the left are you know not standing still and we're going to come back to that but cloudflare has done something quite amazing I mean it's been a while since we've invoked Russ hanneman of Silicon Valley Fame on breaking analysis but remember when he was in a meeting one of his first meetings if not the first with Richard Hendricks it was the whiz kid on the show Silicon Valley and hanneman said something like if you had a blank check and you could build anything in the world what would it be and Richard's answer was basically a new internet and that led to Pied Piper this peer-to-peer Network powered by decentralized devices and and iPhones and this amazing compression algorithm that enabled high-speed data movement and low latency uh up to no low latency access across the network well in a way that's what cloudflare has built its founding premise reimagined how the internet should be built with a consistent set of server infrastructure where each server had lots of cores lots of dram lots of cash fast ssds and plenty of network connectivity and bandwidth and well this picture makes it look like a bunch of dots and points of presence on a map which of course it is there's a software layer that enables cloudflare to efficiently allocate resources across this Global Network the company claims that it's Network utilization is in the 70 percent range and it has used its build out to enter the technology space from the bottoms up offering for example free tiers of services to users with multiple entry points on different services and selling then more services over time to a customer which of course drives up its average contract value and its lifetime value at the same time the company continues to innovate and add new services at a very rapid cloud-like Pace you can think of cloudflare's initial Market entry as like a lightweight Cisco as a service the company's CFO actually he uses that term he calls it that which really must tick off Cisco who of course has a massive portfolio and a dominant Market position now because it owns the network cloudflare is a marginal cost of adding new Services is very small and goes towards zero so it's able to get software like economics at scale despite all this infrastructure that's building out so it doesn't have to constantly face the increasing infrastructure tax snowflake for example doesn't own its own network infrastructure as it grows it relies on AWS or Azure gcp and and while it gives the company obvious advantages it doesn't have to build out its own network it also requires them to constantly pay the tax and negotiate with hyperscalers for better rental rates now as previously mentioned Cloud Fair cloudflare claims that its utilization is very high probably higher than the hyperscalers who can spin up servers that they can charge for underutilized customer capacity cloudflare also has excellent Network traffic data that it can use to its Advantage with its Analytics the company has been rapidly innovating Beyond its original Core Business adding as I said before serverless zero trust offerings it has announced a database it calls its database D1 that's pretty creative and it's announced an object store called R2 that is S3 minus one both from the alphabet and the numeric I.E minus the egress cost saying no egress cost that's their big claim to fame and they've made a lot of marketing noise around about that and of course they've promised in our a D2 database which of course is R2D2 RR they've launched a developer platform cloudflare can be thought of kind of like first of all a modern CDN they've got a simpler security model that's how they compete for example with z-scaler that brings uh they also bring VPN sd-wan and DDOS protection services that are that are part of the network and they're less expensive than AWS that's kind of their sort of go to market and messaging and value proposition and they're positioning themselves as a neutral Network that can connect across multiple clouds now to be clear unlike AWS in particular cloudflare is not well suited to lift and shift your traditional apps like for instance sap Hana you're not going to run that in on cloudflare's platform rather the company started by making websites more secure and faster and it flew under the radar and much in the same way that clay Christensen described the disruption in the steel industry if you've seen that where new entrants picked off the low margin rebar business then moved up the stack we've used that analogy in the semiconductor business with arm and and even China cloudflare is running a similar playbook in the cloud and in the network so in the early part of the last decade as aws's ascendancy was becoming more clear many of us started thinking about how and where firms could compete and add value as AWS is becoming so dominant so for instance take an industry Focus you could do things like data sharing with snowflake eventually you know uh popularized you could build on top of clouds again snowflake is doing that as are others you could build private clouds and of course connect to hybrid clouds but not many had the wherewithal and or the hutzpah to build out a Global Network that could serve as a connecting platform for cloud services cloudflare has traction in the market as it adds new services like zero trust and object store or database its Tam continues to grow here's a quick snapshot of cloudflare's financials relative to Z scalar which is both a competitor and a customer fastly which is a smaller CDN and Akamai a more mature CDN slash Edge platform cloudflare and fastly both reported earnings this past week Cloud Fair Cloud flare surpassed a billion dollar Revenue run rate but they gave tepid guidance and the stock got absolutely crushed today which is Friday but the company's business model is sound it's growing close to 50 annually it has sas-like gross margins in the mid to high 70s and it's it it's got a very strong balance sheet and a 13x revenue run rate multiple in fact it's Financial snapshot is quite close to that of z-scaler which is kind of interesting which zinc sailor of course doesn't own its own network that's a pure play software company fastly is much smaller and growing more slowly than cloudflare hence its lower multiple well Akamai as you can see is a more mature company but it's got a nice business now on its earnings call this week cloudflare announced that its head of sales was stepping down and the company has brought in a new leader to take the firm to five billion dollars in sales I think actually its current sales leader felt like hey you know my work is done here bring on somebody else to take it to the next level the company is promising to be free cash flow positive by the end of the year and is working hard toward its long-term financial model or so working towards sorry it's a long-term financial model with gross margin Targets in the mid 70s it's targeting 20 non-gaap operating margins so so solid you know very solid not like completely off the charts but you know very good and to our knowledge it has not committed to a long-term growth rate but at that sort of operating profit level you would like to see growth be consistently at least in the 20 range so they could at least be a rule of 40 company or perhaps even even five even higher if they're going to continue to command a premium valuation okay let's take a look at the ETR data ETR is very positive on cloudflare and has recently published a report on the company like many companies cloudflare is seeing an across the board slowdown in spending velocity we've reported on this quite extensively using the ETR data to quantify the degree to that Slowdown and on the data set with ETR we see that many customers they're shifting their spend to Flat spend you know plus or minus let's say you know single digits you know two three percent or even zero or in the market we're seeing a shift from paid to free tiers remember cloudflare offers a lot of free services as you're seeing customers maybe turn off the pay for a while and going with the freebie but we're also seeing some larger customers in the data and the fortune 1000 specifically they're actually spending more which was confirmed on cloudflare's earnings call they did say everything across the board was softer but they did also indicate that some of their larger customers are actually growing faster than their smaller customers and their churn is very very low here's a two-dimensional graphic we'd like to share this view a lot it's got Net score or spending momentum on the vertical axis and overlap or pervasiveness in the survey on the horizontal axis and this cut isolates three segments in the etrs taxonomy that cloudflare plays in Cloud security and networking now the table inserted in that upper left there shows the raw data which informs the position of each company in the dots with Net score in the ends listed in that rightmost column the red dotted line indicates a highly elevated Net score and finally we posted the breakdown those colors in the bottom right of cloudflare's Net score the lime green that's new adoptions the forest green is we're spending more six percent or more the gray is flat plus or minus uh five percent and you can see that the majority of customers you can see that's the majority of the customers that gray area the pink is we're spending Less in other words down six percent or worse and the bright red is churn which is minimal one percent very good indicator for for cloudflare what you do to get etr's proprietary Net score and they've done this for many many quarters so we have that time series data you subtract the Reds from the greens and that's Net score cloudflare is at 39 just under that magic red line now note that cloudflare and zscaler are right on top of each other Cisco has a dominant position on the x-axis that cloudflare and others are eyeing AWS is also dominant but note that its Net score is well above the red dotted line it's incredible Palo Alto networks is also very impressive it's got both a strong presence on the horizontal axis and it's got a Net score that's pretty comparable to cloudflare and z-scaler to much smaller companies Akamai is actually well positioned for a reasonably mature company and you can see fastly ATT Juniper and F5 have far less spending momentum on their platforms than does cloudflare but at least they are in positive Net score territory so what's going to be really interesting to see is whether cloudflare can continue to hold this momentum or even accelerate it as we've seen with some other clouds as it scales its Network and keeps adding more and more services cloudflare has a couple of potential strategic vectors that we want to talk about and it'll be going to be interesting to see how that plays out Now One path is to compete more directly as a Cloud Player offering secure access Edge services like firewall as a service and zero Trust Services like data loss prevention email security from its area one acquisition and other zero trust offerings as well as Network Services like routing and network connectivity this is The Sweet Spot of the company load balancing many others and then add in things like Object Store and database Services more Edge services in the future it might be telecom like services such as Network switching for offices so that's one route and cloudflare is clearly on that path more services more cohorts at innovating and and growing the company and bringing in more Revenue increasing acvs and and increasing long-term value and keeping retention high now the other Vector is what we're just going to refer to as super cloud as an enabler of cross-cloud infrastructure this is new value uh relative to the former Vector that we were just talking about now the title of this episode is what multi-cloud should have been meaning cloudflare could be the control plane providing a consistent experience across clouds one that is fast and secure at global scale now to give you Insight on this let's take a look at some of the comments made by Matthew Prince the CEO and co-founder of cloudflare cloudflare put its R2 Object Store into public beta this past May and I believe it's storing around a petabyte of data today I think that's what they said in their call here's what Prince said about that quote we are talking to very large companies about moving more and more of their stored objects to where we can store that with R2 and one of the benefits is not only can we help them save money on the egress fees but it allows them to then use those object stores or objects across any of the different Cloud platforms they're that they're using so by being that neutral third party we can let people adopt a little bit of Amazon a little bit of Microsoft a little bit of Google a little bit of SAS vendors and share that data across all those different places so what's interesting about this in the super cloud context is it suggests that customers could take the best of each Cloud to power their digital businesses I might like AWS for in redshift for my analytic database or I love Google's machine learning Microsoft's collaboration and I'd like a consistent way to connect those resources but of course he's strongly hinting and has made many public statements that aws's egress fees are a blocker to that vision now at a recent investor event Matthew Prince added some color to this concept when he talked about one metric of success being how much R2 capacity was consumed and how much they sold but perhaps a more interesting Benchmark is highlighted by the following statement that he made he said a completely different measure of success for R2 is Andy jassy says I'm sick and tired of these guys meaning cloudflare taking our objects away we're dropping our egress fees to zero I would be so excited because we've then unlocked the ability to be the network that interconnects the cloud together now of course it would be Adam solipski who would be saying that or maybe Andy Jesse you know still watching over AWS and I think it's highly unlikely that that's going to happen anytime soon and that of course but but in theory gets us closer to the super cloud value proposition and to further drive that point home and we're paraphrasing a little bit his comments here he said something the effect of quote customers need one consistent control plane across clouds and we are the neutral Network that can be consistent no matter which Cloud you're using interesting right that Prince sees the world that's similar to if not nearly identical to the concepts that the cube Community has been putting forth around supercloud now this vision is a ways off let's be real Prince even suggested that his initial vision of an application running across multiple clouds you know that's like super cloud Nirvana isn't what customers are doing today that's that's really hard to do and perhaps you know it's never going to happen but there's a little doubt that cloudflare could be and is positioning itself as that cross-cloud control plane it has the network economics and the business model levers to pull it's got an edge up on the competition at the edge pun intended cloudflare is the definition of Edge and it's distributed platform it's decentralized platform is much better suited for Edge workloads than these giant data centers that are you know set up to to try and handle that today the the hyperscalers are building out you know their Edge networks things like outposts you know going out to the edge and other local zones Etc now cloudflare is increasingly competitive to the hyperscalers and those traditional Stacks that it depositioned on an earlier slide that we showed but you know the likes of AWS and Dell and hpe and Cisco and those others they're not sitting in their hands they have a huge huge customer install bases and they are definitely a moving Target they're investing and they're building out their own Super clouds with really robust stacks as well let's face it it's going to take a decade or more for Enterprises to adopt a developer platform or a new database Cloud plus cloudflare's capabilities when compared to incumbent stacks and the hyperscalers is much less robust in these areas and even in storage you know despite all the great conversation that R2 generated and the buzz you take a specialist like Wasabi they're more mature they're more functional and they're way cheaper even than cloudflare so you know it's not a fake a complete that cloudflare is going to win in those markets but we love the disruption and if cloudflare wants to be the fourth us-based hyperscaler or join the the big four as the as the fifth if we put Alibaba in the mix it's got a lot of work to do in the ecosystem by its own admission as much to learn and is part of the value by the way that it sees in its area one acquisition it's email security company that it bought but even in that case much of the emphasis has been on reseller channels compare that to the AWS ecosystem which is not only a channel play but is as much an innovation flywheel filling gaps where companies like snowflake Thrive side by side with aws's data stores as well all the on-prem stacks are building hybrid connections to AWS and other clouds as a means of providing consistent experiences across clouds indeed many of them see what they call cross-cloud services or what we call super cloud hyper cloud or whatever you know Mega Cloud you want to call it we use super cloud they are really eyeing that opportunity so very few companies frankly are not going after that space but we're going to close with this cloudflare is one of those companies that's in a position to wake up each morning and ask who can we disrupt today and very few companies are in a position to disrupt the hyperscalers to the degree that cloudflare is and that my friends is going to be fascinating to watch unfold all right let's call it a wrap I want to thank Alex Meyerson who's on production and manages the podcast as well as Ken schiffman who's our newest addition to the Boston Studio Kristen Martin and Cheryl Knight help us get the word out on social media and in our newsletters and Rob Hof is our editor-in-chief over at silicon angle thank you to all remember all these episodes are available as podcasts wherever you listen all you're going to do is search breaking analysis podcasts I publish each week on wikibon.com and siliconangle.com you can email me at david.velante at siliconangle.com or DM me at divalante if you comment on my LinkedIn posts and please do check out etr.ai they got the best survey data in the Enterprise Tech business this is Dave vellante for the cube insights powered by ETR thank you very much for watching and we'll see you next time on breaking analysis