[Music] when welcome to the special exclusive cube conversation here in Palo Alto in our studios I'm John for your host of the cube we have a very special guest speaking for the first time around some alleged alleged accusations and also innuendo around the Amazon Web Services Jedi contract and his firm c5 capital our guest as Andre Pienaar who's the founder of c5 capital Andre is here for the first time to talk about some of the hard conversations and questions surrounding his role his firm and the story from the BBC Andre thanks for a rat for meeting with me John great to have me thank you so you're at the center of a controversy and just for the folks who know the cube know we interviewed a lot of people I've interviewed you at Amazon web sources summit Teresa Carl's event and last year I met you and bought a rein the work you're doing there so I've met you a few times so I don't know your background but I want to drill into it because I was surprised to see the BBC story come out last week that was basically accusing you of many things including are you a spy are you infiltrating the US government through the Jedi contract through Amazon and knowing c-5 capital I saw no correlation when reading your article I was kind of disturbed but then I saw I said a follow-on stories it just didn't hang together so I wanted to press you on some questions and thanks for coming in and addressing them appreciate it John thanks for having me so first thing I want to ask you is you know it has you at the center this firm c5 capital that you the founder of at the center of what looks like to be the fight for the big ten billion dollar DoD contract which has been put out to multiple vendors so it's not a single source deal we've covered extensively on silicon angle calm and the cube and the government the government Accounting Office has ruled that there are six main benefits of going with a sole provider cloud this seems to be the war so Oracle IBM and others have been been involved we've been covering that so it kind of smells like something's going along with the story and I just didn't believe some of the things I read and I want to especially about you and see five capitals so I want to dig into what the first thing is it's c5 capital involved in the Jedi contract with AWS Sean not at all we have absolutely no involvement in the Jedi contract in any way we're not a bidder and we haven't done any lobbying as has been alleged by some of the people who've been making this allegation c5 has got no involvement in the general contract we're a venture capital firm with a British venture capital firm we have the privilege of investing here in the US as a foreign investor and our focus really is on the growth and the success of the startups that we are invested in so you have no business interest at all in the deal Department of Defense Jedi contract none whatsoever okay so to take a minute to explain c5 firm I read some of the stories there and some of the things were intricate structures of c5 cap made it sound like there was like a cloak-and-dagger situation I want to ask you some hard questions around that because there's a link to a Russian situation but before we get to there I want to ask you explain what is c5 capital your mission what are the things that you're doing c5 is a is a British venture capital firm and we are focused on investing into fast-growing technology companies in three areas cloud computing cyber security and artificial intelligence we have two parts our business c5 capital which invests into late stage companies so these are companies that typically already have revenue visibility and profitability but still very fast-growing and then we also have a very early stage startup platform that look at seed state investment and this we do through two accelerators to social impact accelerators one in Washington and one in Bahrain and it's just size of money involved just sort of order magnitude how many funds do you have how is it structure again just share some insight on that is it is there one firm is there multiple firms how is it knows it work well today the venture capital business has to be very transparent it's required by compliance we are a regulated regulated firm we are regulated in multiple markets we regulated here in the US the sec as a foreign investor in london by the financial conduct authority and in Luxembourg where Afonso based by the regulatory authorities there so in the venture capital industry today you can't afford to be an opaque business you have to be transparent at all levels and money in the Western world have become almost completely transparent so there's a very comprehensive and thorough due diligence when you onboard capital called know your client and the requirements standard requirement now is that whenever you're onboard capital from investor you're gonna take it right up to the level of the ultimate beneficial ownership so who actually owns this money and then every time you invest and you move your money around it gets diligence together different regulators and in terms of disclosure and the same applies often now with clients when our portfolio companies have important or significant clients they also want to know who's behind the products and the services they receive so often our boards our board directors and a shell team also get diligence by by important clients so explain this piece about the due diligence and the cross country vetting that goes on is I think it's important I want to get it out because how long has been operating how many deals have you done you mentioned foreign investor in the United States you're doing deals in the United States I know I've met one of your portfolio companies at an event iron iron on it iron net general Keith Alexander former head of the NSA you know get to just work with him without being vetted I guess so so how long a c5 capital been in business and where have you made your investments you mentioned cross jurisdiction across countries whatever it's called I don't know that so we've been and we've been in existence for about six years now our main focus is investing in Europe so we help European companies grow globally Europe historically has been underserved by venture capital we on an annual basis we invest about twenty seven billion dollars gets invested in venture capital in Europe as opposed to several multiples of that in the US so we have a very important part to play in Europe to how European enterprise software companies grow globally other important markets for us of course are Israel which is a major center of technology innovation and and the Middle East and then the u.s. the u.s. is still the world leader and venture capital both in terms of size but also in terms of the size of the market and of course the face and the excitement of the innovation here I want to get into me early career because again timing is key we're seeing this with you know whether it's a Supreme Court justice or anyone in their career their past comes back to haunt them it appears that has for you before we get there I want to ask you about you know when you look at the kind of scope of fraud and corruption that I've seen in just on the surface of government thing the government bit Beltway bandits in America is you got a nonprofit that feeds a for-profit and then what you know someone else runs a shell corporation so there's this intricate structures and that word was used which it kind of implies shell corporations a variety of backroom kind of smokey deals going on you mentioned transparency I do you have anything to hide John in in in our business we've got absolutely nothing to hide we have to be transparent we have to be open if you look at our social media profile you'll see we are communicating with the market almost on a daily basis every time we make an investment we press release that our website is very clear about who's involved enough who our partners are and the same applies to my own personal website and so in terms of the money movement around in terms of deploying investments we've seen Silicon Valley VCS move to China get their butts handed to them and then kind of adjust their scenes China money move around when you move money around you mentioned disclosure what do you mean there's filings to explain that piece it's just a little bit so every time we make an investment into a into a new portfolio company and we move the money to that market to make the investment we have to disclose who all the investors are who are involved in that investment so we have to disclose the ultimate beneficial ownership of all our limited partners to the law firms that are involved in the transactions and those law firms in turn have applications in terms of they own anti-money laundering laws in the local markets and this happens every time you move money around so I I think that the level of transparency in venture capital is just continue to rise exponentially and it's virtually impossible to conceal the identity of an investor this interesting this BBC article has a theme of national security risk kind of gloom and doom nuclear codes as mentioned it's like you want to scare someone you throw nuclear codes at it you want to get people's attention you play the Russian card I saw an article on the web that that said you know anything these days the me2 movement for governments just play the Russian card and you know instantly can discredit someone's kind of a desperation act so you got confident of interest in the government national security risk seems to be kind of a theme but before we get into the BBC news I noticed that there was a lot of conflated pieces kind of pulling together you know on one hand you know you're c5 you've done some things with your hat your past and then they just make basically associate that with running amazon's jedi project yes which i know is not to be true and you clarified that joan ends a problem joan so as a venture capital firm focused on investing in the space we have to work with all the Tier one cloud providers we are great believers in commercial cloud public cloud we believe that this is absolutely transformative not only for innovation but also for the way in which we do venture capital investment so we work with Amazon Web Services we work with Microsoft who work with Google and we believe that firstly that cloud has been made in America the first 15 companies in the world are all in cloud companies are all American and we believe that cloud like the internet and GPS are two great boons which the US economy the u.s. innovation economy have provided to the rest of the world cloud computing is reducing the cost of computing power with 50 percent every three years opening up innovation and opportunities for Entrepreneurship for health and well-being for the growth of economies on an unprecedented scale cloud computing is as important to the global economy today as the dollar ease as the world's reserve currency so we are great believers in cloud we great believers in American cloud computing companies as far as Amazon is concerned our relationship with Amazon Amazon is very Amazon Web Services is very clear and it's very defined we participate in a public Marcus program called AWS activate through which AWS supports hundreds of accelerators around the world with know-how with mentoring with teaching and with cloud credits to help entrepreneurs and startups grow their businesses and we have a very exciting focus for our two accelerators which is on in Washington we focus on peace technology we focus on taking entrepreneurs from conflict countries like Sudan Nigeria Pakistan to come to Washington to work on campus in the US government building the u.s. Institute for peace to scale these startups to learn all about cloud computing to learn how they can grow their businesses with cloud computing and to go back to their own countries to build peace and stability and prosperity their heaven so we're very proud of this mission in the Middle East and Bahrain our focus is on on female founders and female entrepreneurs we've got a program called nebula through which we empower female founders and female entrepreneurs interesting in the Middle East the statistics are the reverse from what we have in the West the majority of IT graduates in the Middle East are fimo and so there's a tremendous talent pool of of young dynamic female entrepreneurs coming out of not only the Gulf but the whole of the MENA region how about a relation with Amazon websites outside of their normal incubators they have incubators all over the place in the Amazon put out as Amazon Web Services put out a statement that said hey you know we have a lot of relationships with incubators this is normal course of business I know here in Silicon Valley at the startup loft this is this is their market filled market playbook so you fit into that is that correct as I'm I get that that's that's absolutely correct what we what is unusual about a table insists that this is a huge company that's focused on tiny startups a table started with startups it double uses first clients with startups and so here you have a huge business that has a deep understanding of startups and focus on startups and that's enormous the attractor for us and terrific for our accelerators department with them have you at c5 Capitol or individually have any formal or conversation with Amazon employees where you've had outside of giving feedback on products where you've tried to make change on their technology make change with their product management teams engineering you ever had at c5 capital whore have you personally been involved in influencing Amazon's product roadmap outside they're just giving normal feedback in the course of business that's way above my pay grade John firstly we don't have that kind of technical expertise in C 5 C 5 steam consists of a combination of entrepreneurs like myself people understand money really well and leaders we don't have that level of technical expertise and secondly that's what one our relationship with AWS is all about our relationship is entirely limited to the two startups and making sure that the two accelerators in making sure that the startups who pass through those accelerators succeed and make social impact and as a partner network component Amazon it's all put out there yes so in in a Barren accelerator we've we formed part of the Amazon partner network and the reason why we we did that was because we wanted to give some of the young people who come through the accelerator and know mastering cloud skills an opportunity to work on some real projects and real live projects so some of our young golf entrepreneurs female entrepreneurs have been working on building websites on Amazon Cloud and c5 capital has a relationship with former government officials you funded startups and cybersecurity that's kind of normal can you explain that positioning of it of how former government if it's whether it's US and abroad are involved in entrepreneurial activities and why that is may or may not be a problem certainly is a lot of kind of I would say smoke around this conversation around coffin of interest and you can you explain intelligence what that was it so I think the model for venture capital has been evolving and increasingly you get more and more differentiated models one of the key areas in which the venture capital model is changed is the fact that operating partners have become much more important to the success of venture capital firms so operating partners are people who bring real world experience to the investment experience of the investment team and in c-five we have the privilege of having a terrific group of operating partners people with both government and commercial backgrounds and they work very actively enough firm at all levels from our decision-making to the training and the mentoring of our team to helping us understand the way in which the world is exchanging to risk management to helping uh portfolio companies grow and Silicon Valley true with that to injuries in Horowitz two founders mr. friendly they bring in operating people that have entrepreneurial skills this is the new model understand order which has been a great source of inspiration to us for our model and and we built really believe this is a new model and it's really critical for the success of venture capitals to be going forward and the global impact is pretty significant one of things you mentioned I want to get your take on is as you operate a global transaction a lots happened a lot has to happen I mean we look at the ICO market on the cryptocurrency side its kind of you know plummeting obsoletes it's over now the mood security children's regulatory and transparency becomes critical you feel fully confident that you haven't you know from a regulatory standpoint c5 capital everything's out there absolutely risk management and regulated compliance and legal as the workstream have become absolutely critical for the success of venture capital firms and one of the reasons why this becomes so important John is because the venture capital world over the last few years have changed dramatically historically all the people involved in venture capital had very familiar names and came from very familiar places over the last few years with a diversification of global economic growth we've seen it's very significant amounts of money being invest invested in startups in China some people more money will invest in startups this year in China than in the US and we've seen countries like Saudi Arabia becoming a major source of venture capital funding some people say that as much as 70% of funding rounds this year in some way or another originated from the Gulf and we've seen places like Russia beginning to take an interest in technology innovation so the venture capital world is changing and for that reason compliance and regulation have become much more important but if Russians put 200 million dollars in face book and write out the check companies bright before that when the after 2008 we saw the rise of social networking I think global money certainly has something that I think a lot of people start getting used to and I want on trill down into that a little bit we talked about this BBC story that that hit and the the follow-on stories which actually didn't get picked up was mostly doing more regurgitation of the same story but one of the things that that they focus in on and the story was you and the trend now is your past is your enemy these days you know they try to drum up stuff in the past you've had a long career some of the stuff that they've been bringing in to paint you and the light that they did was from your past so I wanted to explore that with you I know you this is the first time you've talked about this and I appreciate you taking the time talk about your early career your background where you went to school because the way I'm reading this it sounds like you're a shady character I like like I interviewed on the queue but I didn't see that but you know I'm going to pressure here for that if you don't mind I'd like to to dig into that John thank you for that so I've had the I've had the privilege of a really amazingly interesting life and at the heart of at the heart of that great adventures been people and the privilege to work with really great people and good people I was born in South Africa I grew up in Africa went to school there qualified as a lawyer and then came to study in Britain when I studied international politics when I finished my studies international politics I got head hunted by a US consulting firm called crow which was a start of a 20 years career as an investigator first in crawl where I was a managing director in the London and then in building my own consulting firm which was called g3 and all of this led me to cybersecurity because as an investigator looking into organized crime looking into corruption looking into asset racing increasingly as the years went on everything became digital and I became very interested in finding evidence on electronic devices but starting my career and CRO was tremendous because Jules Kroll was a incredible mentor he could walk through an office and call everybody by their first name any Kroll office anywhere in the world and he always took a kindly interest in the people who work for him so it was a great school to go to and and I worked on some terrific cases including some very interesting Russian cases and Russian organized crime cases just this bag of Kroll was I've had a core competency in doing investigative work and also due diligence was that kind of focus yes although Kroll was the first company in the world to really have a strong digital practice led by Alan Brugler of New York Alan established the first computer forensics practice which was all focused about finding evidence on devices and everything I know about cyber security today started with me going to school with Alan Brolin crawl and they also focused on corruption uncovering this is from Wikipedia Kroll clients help Kroll helps clients improve operations by uncovering kickbacks fraud another form of corruptions other specialty areas is forensic accounting background screening drug testing electronic investigation data recovery SATA result Omar's McLennan in 2004 for 1.9 billion mark divested Kroll to another company I'll take credit risk management to diligence investigator in Falls Church Virginia over 150 countries call Kroll was the first CRO was the first household brand name in this field of of investigations and today's still is probably one of the strongest brand names and so it was a great firm to work in and was a great privilege to be part of it yeah high-end high-profile deals were there how many employees were in Kroll cuz I'd imagine that the alumni that that came out of Kroll probably have found places in other jobs similar to yes do an investigative work like you know they out them all over the world many many alumni from Kroll and many of them doing really well and doing great work ok great so now the next question want to ask you is when you in Kroll the South Africa connection came up so I got to ask you it says business side that you're a former South African spy are you a former South African spy no John I've never worked for any government agency and in developing my career my my whole focus has been on investigations out of the Kroll London office I did have the opportunity to work in South Africa out of the Kroll London office and this was really a seminal moment in my career when I went to South Africa on a case for a major international credit-card company immediately after the end of apartheid when democracy started to look into the scale and extent of credit card fraud at the request of this guy what year was there - how old were you this was in 1995 1996 I was 25 26 years old and one of the things which this credit card company asked me to do was to assess what was the capability of the new democratic government in South Africa under Nelson Mandela to deal with crime and so I had the privilege of meeting mr. Mandela as the president to discuss this issue with him and it was an extraordinary man the country's history because there was such an openness and a willingness to to address issues of this nature and to grapple with them so he was released from prison at that time I remember those days and he became president that's why he called you and you met with him face to face of a business conversation around working on what the future democracy is and trying to look at from a corruption standpoint or just kind of in general was that what was that conversation can you share so so that so the meeting involved President Mandela and and the relevant cabinet ministers the relevant secretaries and his cabinet - responsible for for these issues and the focus of our conversation really started with well how do you deal with credit card fraud and how do you deal with large-scale fraud that could be driven by organized crime and at the time this was an issue of great concern to the president because there was bombing in Kate of a Planet Hollywood cafe where a number of people got very severely injured and the president believed that this could have been the result of a protection racket in Cape Town and so he wanted to do something about it he was incredibly proactive and forward-leaning and in an extraordinary way he ended the conversation by by asking where the Kroll can help him and so he commissioned Kroll to build the capacity of all the black officers that came out of the ANC and have gone into key government positions on how to manage organized crime investigations it was the challenge at that time honestly I can imagine apartheid I remember you know I was just at a college that's not properly around the same age as you it was a dynamic time to say the least was his issue around lack of training old school techniques because you know that was right down post-cold-war and then did what were the concerns not enough people was it just out of control was it a corrupt I mean just I mean what was the core issue that Nelson wanted to hire Kroll and you could work his core issue was he wanted to ensure the stability of South Africa's democracy that was his core focus and he wanted to make South Africa an attractive place where international companies felt comfortable and confident in investing and that was his focus and he felt that at that time because so many of the key people in the ANC only had training in a cold war context that there wasn't a Nessy skill set to do complex financial or more modern investigations and it was very much focused he was always the innovator he was very much focused on bringing the best practices and the best investigative techniques to the country he was I felt in such a hurry that he doesn't want to do this by going to other governments and asking for the help he wanted to Commission it himself and so he gave he gave a crawl with me as the project leader a contract to do this and my namesake Francois Pienaar has become very well known because of the film Invictus and he's been he had the benefit of Mandela as a mentor and as a supporter and that changed his career the same thing happened to me so what did he actually asked you to do was it to train build a force because there's this talk that and was a despite corruption specifically it was it more both corruption and or stability because they kind of go hand in hand policy and it's a very close link between corruption and instability and and president Ellis instructions were very clear to Crowley said go out and find me the best people in the world the most experienced people in the world who can come to South Africa and train my people how to fight organized crime so I went out and I found some of the best people from the CIA from mi6 the British intelligence service from the Drug Enforcement Agency here in the US form officers from the Federal Bureau of Investigation's detectives from Scotland Yard prosecutors from the US Justice Department and all of them for a number of years traveled to South Africa to train black officers who were newly appointed in key roles in how to combat organized crime and this was you acting as an employee he had crow there's not some operative this is he this was me very much acting as a as an executive and crow I was the project leader Kroll was very well structured and organized and I reported to the chief executive officer in the London office nor Garret who was the former head of the CIA's Near East Division and Nelson Mandela was intimately involved in this with you at Krall President Mandela was the ultimate support of this project and he then designated several ministers to work on it and also senior officials in the stories that had been put out this past week they talked about this to try to make it sound like you're involved on two sides of the equation they bring up scorpions was this the scorpions project that they referred to so it was the scorpions scorpion sounds so dangerous and a movie well there's a movie a movie does feature this so at the end of the training project President Mandela and deputy president Thabo Mbeki who subsequently succeeded him as president put together a ministerial committee to look at what should they do with the capacity that's been built with this investment that they made because for a period of about three years we had all the leading people the most experienced people that have come out of some of the best law enforcement agencies and some of the best intelligence services come and trained in South Africa and this was quite this was quite something John because many of the senior officers in the ANC came from a background where they were trained by the opponents of the people came to treat trained them so so many of them were trained by the Stasi in East Germany some of them were trained by the Russian KGB some of them were trained by the Cubans so we not only had to train them we also had to win their trust and when we started this that's a diverse set of potential dogma and or just habits a theory modernised if you will right is that what the there was there was a question of of learning new skills and there was a question about also about learning management capabilities there was also question of learning the importance of the media for when you do difficult and complex investigations there was a question about using digital resources but there was also fundamentally a question of just building trust and when we started this program none of the black officers wanted to be photographed with all these foreign trainers who were senior foreign intelligence officers when we finished that everyone wanted to be in the photograph and so this was a great South African success story but the President and the deputy president then reflected on what to do with his capacity and they appointed the ministerial task force to do this and we were asked to make recommendations to this Minister ministerial task force and one of the things which we did was we showed them a movie because you referenced the movie and the movie we showed them was the untouchables with Kevin Costner and Sean Connery which is still one of my favorite and and greatest movies and the story The Untouchables is about police corruption in Chicago and how in the Treasury Department a man called Eliot Ness put together a group of officers from which he selected from different places with clean hands to go after corruption during the Probie and this really captured the president's imagination and so he said that's what he want and Ella yeah okay so he said della one of the untouchables he wanted Eliot Ness exactly Al Capone's out there and and how many people were in that goodness so we asked that we we established the government then established decided to establish and this was passed as a law through Parliament the director of special operations the DSO which colloquy became known as the scorpions and it had a scorpion as a symbol for this unit and this became a standalone anti-corruption unit and the brilliant thing about it John was that the first intake of scorpion officers were all young black graduates many of them law graduates and at the time Janet Reno was the US Attorney General played a very crucial role she allowed half of the first intake of young cratchits to go to Quantico and to do the full FBI course in Quantico and this was the first group of foreign students who've ever been admitted to Quantico to do the full Quantico were you involved at what score's at that time yes sir and so you worked with President Mandela yes the set of the scorpions is untouchable skiing for the first time as a new democracy is emerging the landscape is certainly changing there's a transformation happening we all know the history laugh you don't watch Invictus probably great movie to do that you then worked with the Attorney General United States to cross-pollinate the folks in South Africa black officers law degrees Samar's fresh yes this unit with Quantico yes in the United States I had the privilege of attending the the graduation ceremony of the first of South African officers that completed the Quantico course and representing crow they on the day you had us relationships at that time to crawl across pollen I had the privilege of working with some of the best law enforcement officers and best intelligence officers that has come out of the u.s. services and they've been tremendous mentors in my career they've really shaped my thinking they've shaped my values and they've they've shaved my character so you're still under 30 at this time so give us a is that where this where are we in time now just about a 30 so you know around the nine late nineties still 90s yeah so client-server technologies there okay so also the story references Leonard McCarthy and these spy tapes what is this spy tape saga about it says you had a conversation with McCarthy me I'm thinking that a phone tap explain that spy tape saga what does it mean who's Lennon McCarthy explain yourself so so so Leonard McCarthy it's a US citizen today he served two terms as the vice president for institutional integrity at the World Bank which is the world's most important anti-corruption official he started his career as a prosecutor in South Africa many years ago and then became the head of the economic crimes division in the South African Justice Department and eventually became the head of the scorpions and many years after I've left Kroll and were no longer involved in in the work of the scorpions he texted me one evening expressing a concern and an anxiety that I had about the safety of his family and I replied to him with two text messages one was a Bible verse and the other one was a Latin saying and my advice name was follow the rule of law and put the safety of your family first and that was the advice I gave him so this is how I imagined the year I think of it the internet was just there this was him this was roundabout 2000 December 2007 okay so there was I phone just hit so text messaging Nokia phones all those big yeah probably more text message there so you sitting anywhere in London you get a text message from your friend yep later this past late tonight asking for help and advice and I gave him the best advice I can he unfortunately was being wiretapped and those wiretaps were subsequently published and became the subject of much controversy they've now been scrutinized by South Africa's highest court and the court has decided that those wiretaps are of no impact and of importance in the scheme of judicial decision-making and our unknown provenance and on and on unknown reliability they threw it out basically yeah they're basically that's the president he had some scandals priors and corruption but back to the tapes you the only involvement on the spy tapes was friend sending you a text message that says hey I'm running a corruption you know I'm afraid for my life my family what do I do and you give some advice general advice and that's it as there was there any more interactions with us no that's it that's it okay so you weren't like yeah working with it hey here's what we get strategy there was nothing that going on no other interactions just a friendly advice and that's what they put you I gave him my I gave him my best advice when you when you work in when you work as an investigator very much as and it's very similar in venture capital it's all about relationships and you want to preserve relationships for the long term and you develop deep royalties to its people particularly people with whom you've been through difficult situations as I have been with Leonard much earlier on when I was still involved in Kroll and giving advice to South African government on issues related to the scorpius so that that has a lot of holes and I did think that was kind of weird they actually can produce the actual tax I couldn't find that the spy tapes so there's a spy tape scandal out there your name is on out on one little transaction globbed on to you I mean how do you feel about that I mean you must've been pretty pissed when you saw that when you do it when when you do when you do investigative work you see really see everything and all kinds of things and the bigger the issues that you deal with the more frequently you see things that other people might find unusual I are you doing any work right now with c5 at South Africa and none whatsoever so I've I retired from my investigative Korea in 2014 I did terrific 20 years as an investigator during my time as investigator I came to understood the importance of digital and cyber and so at the end of it I saw an opportunity to serve a sector that historically have been underserved with capital which is cyber security and of course there are two areas very closely related to cyber security artificial intelligence and cloud and that's why I created c5 after I sold my investigator firm with five other families who equally believed in the importance of investing private capital to make a difference invest in private capital to help bring about innovation that can bring stability to the digital world and that's the mission of c-5 before I get to the heart news I want to drill in on the BBC stories I think that's really the focal point of you know why we're talking just you know from my standpoint I remember living as a young person in that time breaking into the business you know my 20s and 30s you had Live Aid in 1985 and you had 1995 the internet happened there was so much going on between those that decade 85 to 95 you were there I was an American so I didn't really have a lot exposure I did some work for IBM and Europe in 1980 says it's co-op student but you know I had some peak in the international world it must been pretty dynamic the cross-pollination the melting pot of countries you know the Berlin Wall goes down you had the cold war's ending you had apartheid a lot of things were going on around you yes so in that dynamic because if if the standard is you had links to someone you know talked about why how important it was that this melting pot and how it affected your relationships and how it looks now looking back because now you can almost tie anything to anything yes so I think the 90s was one of the most exciting periods of time because you had the birth of the internet and I started working on Internet related issues yet 20 million users today we have three and a half billion users and ten billion devices unthinkable at the time but in the wake of the internet also came a lot of changes as you say the Berlin Wall came down democracy in South Africa the Oslo peace process in the time that I worked in Kroll some of them made most important and damaging civil wars in Africa came to an end including the great war in the Congo peace came to Sudan and Angola the Ivory Coast so a lot of things happening and if you have a if you had a an international career at that time when globalization was accelerating you got to no a lot of people in different markets and both in crow and in my consulting business a key part of what it but we did was to keep us and Western corporations that were investing in emerging markets safe your credibility has been called in questions with this article and when I get to in a second what I want to ask you straight up is it possible to survive in the international theatre to the level that you're surviving if what they say is true if you if you're out scamming people or you're a bad actor pretty much over the the time as things get more transparent it's hard to survive right I mean talk about that dynamic because I just find it hard to believe that to be successful the way you are it's not a johnny-come-lately firms been multiple years operating vetted by the US government are people getting away in the shadows is it is is it hard because I almost imagine those are a lot of arbitrage I imagine ton of arbitrage that you that are happening there how hard or how easy it is to survive to be that shady and corrupt in this new era because with with with investigated with with intelligence communities with some terrific if you follow the money now Bitcoin that's a whole nother story but that's more today but to survive the eighties and nineties and to be where you are and what they're alleging I just what's your thoughts well to be able to attract capital and investors you have to have very high standards of governance and compliance because ultimately that's what investors are looking for and what investors will diligence when they make an investment with you so to carry the confidence of investors good standards of governance and compliance are of critical importance and raising venture capital and Europe is tough it's not like the US babe there's an abundance of venture capital available it's very hard Europe is under served by capital the venture capital invested in the US market is multiple of what we invest in Europe so you need to be even more focused on governance and compliance in Europe than you would be perhaps on other markets I think the second important point with Gmail John is that technology is brought about a lot of transparency and this is a major area of focus for our piece tech accelerator where we have startups who help to bring transparency to markets which previously did not have transparency for example one of the startups that came through our accelerator has brought complete transparency to the supply chain for subsistence farmers in Africa all the way to to the to the shelf of Walmart or a big grocery retailer in in the US or Europe and so I think technology is bringing a lot more more transparency we also have a global anti-corruption Innovation Challenge called shield in the cloud where we try and find and recognize the most innovative corporations governments and countries in the space so let's talk about the BBC story that hit 12 it says is a US military cloud the DoD Jedi contractor that's coming to award the eleventh hour safe from Russia fears over sensitive data so if this essentially the headline that's bolded says a technology company bidding for a Pentagon contract that's Amazon Web Services to store sensitive data has close partnerships with a firm linked to a sanctioned Russian oligarch the BBC has learned goes on to essentially put fear and tries to hang a story that says the national security of America is at risk because of c5u that's what we're talking about right now so so what's your take on this story I mean did you wake up and get an email said hey check out the BBC you're featured in and they're alleging that you have links to Russia and Amazon what Jon first I have to go I first have to do a disclosure I've worked for the BBC as an investigator when I was in Kroll and in fact I let the litigation support for the BBC in the biggest libel claim in British history which was post 9/11 when the BBC did a broadcast mistakenly accusing a mining company in Africa of laundering money for al-qaeda and so I represented the BBC in this case I was the manager hired you they hired me to delete this case for them and I'm I helped the BBC to reduce a libel claim of 25 million dollars to $750,000 so I'm very familiar with the BBC its integrity its standards and how it does things and I've always held the BBC in the highest regard and believed that the BBC makes a very important contribution to make people better informed about the world so when I heard about the story I was very disappointed because it seemed to me that the BBC have compromised the independence and the independence of the editorial control in broadcasting the story the reason why I say that is because the principal commentator in this story as a gentleman called John Wheeler who's familiar to me as a someone who's been trolling our firm on internet for the last year making all sorts of allegations the BBC did not disclose that mr. Weiler is a former Oracle executive the company that's protesting the Jedi bidding contract and secondly that he runs a lobbying firm with paid clients and that he himself often bid for government contracts in the US government context you're saying that John Wheeler who's sourced in the story has a quote expert and I did check him out I did look at what he was doing I checked out his Twitter he seems to be trying to socialise a story heavily first he needed eyes on LinkedIn he seems to be a consultant firm like a Beltway yes he runs a he runs a phone called in interoperability Clearing House and a related firm called the IT acquisition Advisory Council and these two organizations work very closely together the interoperability Clearing House or IC H is a consulting business where mr. Weiler acts for paying clients including competitors for this bidding contract and none of this was disclosed by the BBC in their program the second part of this program that I found very disappointing was the fact that the BBC in focusing on the Russian technology parks cocuwa did not disclose the list of skok of our partners that are a matter of public record on the Internet if you look at this list very closely you'll see c5 is not on there neither Amazon Web Services but the list of companies that are on there are very familiar names many of them competitors in this bidding process who acted as founding partners of skok about Oracle for example as recently as the 28th of November hosted what was described as the largest cloud computing conference in Russia's history at Skolkovo this is the this is the place which the BBC described as this notorious den of spies and at this event which Oracle hosted they had the Russian presidential administration on a big screen as one of their clients in Russia so some Oracle is doing business in Russia they have like legit real links to Russia well things you're saying if they suddenly have very close links with Skolkovo and so having a great many other Khayyam is there IBM Accenture cisco say Microsoft is saying Oracle is there so Skolkovo has a has a very distinguished roster of partners and if the BBC was fair and even-handed they would have disclosed us and they would have disclosed the fact that neither c5 nor Amazon feature as Corcovado you feel that the BBC has been duped the BBC clearly has been duped the program that they broadcasted is really a parlor game of six degrees of separation which they try to spun into a national security crisis all right so let's tell us John while ago you're saying John Wyler who's quoted in the story as an expert and by the way I read in the story my favorite line that I wanted to ask you on was there seems to be questions being raised but the question is being raised or referring to him so are you saying that he is not an expert but a plant for the story what's what's his role he's saying he works for Oracle or you think do you think he's being paid by Oracle like I can't comment on mr. Wireless motivation what strikes me is the fact that is a former Oracle executive what's striking is that he clearly on his website for the IC H identifies several competitors for the Jedi business clients and that all of this should have been disclosed by the BBC rather than to try and characterize and portray him as an independent expert on this story well AWS put out a press release or a blog post essentially hum this you know you guys had won it we're very clear and this I know it goes to the top because that's how Amazon works nothing goes out until it goes to the top which is Andy chassis and the senior people over there it says here's the relationship with c5 and ATS what school you use are the same page there but also they hinted the old guard manipulation distant I don't think they use the word disinformation campaign they kind of insinuate it and that's what I'm looking into I want to ask you are you part are you a victim of a disinformation campaign do you believe that you're not a victim being targeted with c5 as part of a disinformation campaign put on by a competitor to AWS I think what we've seen over the course of this last here is an enormous amount of disinformation around this contract and around this bidding process and they've a lot of the information that has been disseminated has not only not been factual but in some cases have been patently malicious well I have been covering Amazon for many many years this guy Tom Wyler is in seems to be circulating multiple reports invested in preparing for this interview I checked Vanity Fair he's quoted in Vanity Fair he's quoted in the BBC story and there's no real or original reporting other than those two there's some business side our article which is just regurgitating the Business Insider I mean the BBC story and a few other kind of blog stories but no real original yes no content don't so in every story that that's been written on this subject and as you say most serious publication have thrown this thrown these allegations out but in the in those few instances where they've managed to to publish these allegations and to leverage other people's credibility to their advantage and leverage other people's credibility for their competitive advantage John Wheeler has been the most important and prominent source of the allegations someone who clearly has vested commercial interests someone who clearly works for competitors as disclosed on his own website and none of this has ever been surfaced or addressed I have multiple sources have confirmed to me that there's a dossier that has been created and paid for by a firm or collection of firms to discredit AWS I've seen some of the summary documents of that and that is being peddled around to journalists we have not been approached yet I'm not sure they will because we actually know the cloud what cloud computing is so I'm sure we could debunk it by just looking at it and what they were putting fors was interesting is this an eleventh-hour a desperation attempt because I have the Geo a report here that was issued under Oracle's change it says there are six conditions why we're looking at one sole cloud although it's not a it's a multiple bid it's not an exclusive to amazon but so there's reasons why and they list six service levels highly specialized check more favorable terms and conditions with a single award expected cause of administration of multiple contracts outweighs the benefits of multiple awards the projected orders are so intricately related that only a single contractor can reasonably be perform the work meaning that Amazon has the only cloud that can do that work now I've reported on the cube and it's looking angle that it's true there's things that other clouds just don't have anyone has private they have the secret the secret clouds the total estimated value of the contract is less than the simplified acquisition threshold or multiple awards would not be in the best interest this is from them this is a government report so it seems like there's a conspiracy against Amazon where you are upon and in in this game collect you feel that collateral damage song do you do you believe that to be true collateral damage okay well okay so now the the John Wheeler guys so investigate you've been an investigator so you mean you're not you know you're not a retired into this a retired investigator you're retired investigated worked on things with Nelson Mandela Kroll Janet Reno Attorney General you've vetted by the United States government you have credibility you have relationships with people who have have top-secret clearance all kinds of stuff but I mean do you have where people have top-secret clearance or or former people who had done well we have we have the privilege of of working with a very distinguished group of senior national security leaders as operating partisan c5 and many of them have retained their clearances and have been only been able to do so because c5 had to pass through a very deep vetting process so for you to be smeared like this you've been in an investigative has you work at a lot of people this is pretty obvious to you this is like a oh is it like a deep state conspiracy you feel it's one vendor - what is your take and what does collateral damage mean to you well I recently spoke at the mahkum conference on a session on digital warfare and one of the key points I made there was that there are two things that are absolutely critical for business leaders and technology leaders at this point in time one we have to clearly say that our countries are worth defending we can't walk away from our countries because the innovation that we are able to build and scale we're only able to do because we live in democracies and then free societies that are governed by the rule of law the second thing that I think is absolutely crucial for business leaders in the technology community is to accept that there must be a point where national interest overrides competition it must be a point where we say the benefit and the growth and the success of our country is more important to us than making commercial profits and therefore there's a reason for us either to cooperate or to cease competition or to compete in a different way what might takes a little bit more simple than that's a good explanation is I find these smear campaigns and fake news and I was just talking with Kara Swisher on Twitter just pinging back and forth you know either journalists are chasing Twitter and not really doing the original courting or they're being fed stories if this is truly a smear campaign as being fed by a paid dossier then that hurts people when families and that puts corporate interests over the right thing so I think I a personal issue with that that's fake news that's just disinformation but it's also putting corporate inches over over families and people so I just find that to be kind of really weird when you say collateral damage earlier what did you mean by that just part of the campaign you personally what's what's your view okay I think competition which is not focused on on performance and on innovation and on price points that's competition that's hugely destructive its destructive to the fabric of innovation its destructive of course to the reputation of the people who fall in the line of sight of this kind of competition but it's also hugely destructive to national interest Andrae one of the key stories here with the BBC which has holes in it is that the Amazon link which we just talked about but there's one that they bring up that seems to be core in all this and just the connections to Russia can you talk about your career over the career from whether you when you were younger to now your relationship with Russia why is this Russian angle seems to be why they bring into the Russia angle into it they seem to say that c-5 Cable has connections they call deep links personal links into Russia so to see what that so c5 is a venture capital firm have no links to Russia c5 has had one individual who is originally of Russian origin but it's been a longtime Swiss resident and you national as a co investor into a enterprise software company we invested in in 2015 in Europe we've since sold that company but this individual Vladimir Kuznetsov who's became the focus of the BBC's story was a co investor with us and the way in which we structure our investment structures is that everything is transparent so the investment vehicle for this investment was a London registered company which was on the records of Companies House not an offshore entity and when Vladimir came into this company as a co investor for compliance and regulatory purposes we asked him to make his investment through this vehicle which we controlled and which was subject to our compliance standards and completely transparent and in this way he made this investment now when we take on both investors and Co investors we do that subject to very extensive due diligence and we have a very robust and rigorous due diligence regime which in which our operating partners who are leaders of great experience play an important role in which we use outside due diligence firms to augment our own judgment and to make sure we have all the facts and finally we also compare notes with other financial institutions and peers and having done that with Vladimir Kuznetsov when he made this one investment with us we reached the conclusion that he was acting in his own right as an independent angel investor that his left renova many years ago as a career executive and that he was completely acceptable as an investor so that you think that the BBC is making an inaccurate Association the way they describe your relationship with Russia absolutely the the whole this whole issue of the provenance of capital has become of growing importance to the venture capital industry as you and I discussed earlier with many more different sources of capital coming out of places like China like Russia Saudi Arabia other parts of the world and therefore going back again to you the earlier point we discussed compliance and due diligence our critical success factors and we have every confidence in due diligence conclusions that we reached about vladimir quits net source co-investment with us in 2015 so I did some digging on c5 razor bidco this was the the portion of the company in reference to the article I need to get your your take on this and they want to get you on the record on this because it's you mentioned I've been a law above board with all the compliance no offshore entities this is a personal investment that he made Co investment into an entity you guys set up for the transparency and compliance is that true that's correct no side didn't see didn't discover this would my my children could have found this this this company was in a transparent way on the records in Companies House and and Vladimir's role and investment in it was completely on the on the public record all of this was subject to financial conduct authority regulation and anti money laundering and no your client standards and compliance so there was no great big discovery this was all transparent all out in the open and we felt very confident in our due diligence findings and so you feel very confident Oh issue there at all special purpose none whatsoever is it this is classic this is international finance yes sir so in the venture capital industry creating a special purpose vehicle for a particular investment is a standard practice in c-five we focus on structuring those special-purpose vehicles in the most transparent way possible and that was his money from probably from Russia and you co invested into this for this purpose of doing these kinds of deals with Russia well we just right this is kind of the purpose of that no no no this so in 2015 we invested into a European enterprise software company that's a strategic partner of Microsoft in Scandinavian country and we invested in amount of 16 million pounds about at the time just more than 20 million dollars and subsequent in August of that year that Amir Kuznetsov having retired for nova and some time ago in his own right as an angel investor came in as a minority invest alongside us into this investment but we wanted to be sure that his investment was on our control and subject to our compliance standards so we requested him to make his investment through our special purpose vehicle c5 raised a bit co this investment has since been realized it's been a great success and this business is going on to do great things and serve great clients it c5 taking russian money no see if I was not taking Russian money since since the onset of sanctions onboarding Russian money is just impossible sanctions have introduced complexity and have introduced regulatory risk related to Russian capital and so we've taken a decision that we will not and we can't onboard Russian capital and sanctions have also impacted my investigative career sanctions have also completely changed because what the US have done very effectively is to make sanctions a truly global regime and in which ever country are based it doesn't really matter you have to comply with US sanctions this is not optional for anybody on any sanctions regime including the most recent sanctions on Iran so if there are sanctions in place you can't touch it have you ever managed Russian oligarchs money or interests at any time I've never managed a Russian oligarchs money at any point in time I served for a period of a year honest on the board of a South African mining company in which Renova is a minority invest alongside an Australian company called South 32 and the reason why I did this was because of my support for African entrepreneurship this was one of the first black owned mining companies in South Africa that was established with a British investment in 2004 this business have just grown to be a tremendous success and so for a period of a year I offered to help them on the board and to support them as they as they looked at how they can grow and scale the business I have a couple more questions Gabe so I don't know if you wanna take a break you want to keep let's take a break okay let's take a quick break do a quick break I think that's great that's the meat of it great job by the way fantastic lady here thanks for answering those questions the next section I want to do is compliment

(upbeat techno music) >> Live from Bahrain, it's theCUBE. Covering AWS Summit Bahrain. Brought to you by Amazon Web Services. >> Okay welcome back everyone, we are here in Bahrain for exclusive coverage for AWS Summit, part of Amazon's new region being launched here in the Middle East. I'm John Furrier, your host, we have two great guests from C5 Accelerator in Washington D.C., now kicking it out in Bahrain. Hadyah Fathalla, executive director C5 Accelerate and Eva Dimitriadis, good to see you again. >> Thank you. >> Chief operating officer. >> Great to be here. >> Guys, congratulations. Bahrain, D.C. >> The world. >> The world, it's global. >> Thank you, yeah. >> C5 Global. >> It's great to be here. >> It's an exciting time. I mean, I got to ask you Eva, because we had previously met, talked about interviews in D.C. Smart people that known Amazon, because Teresa and Andy Jassy and Jeff Bezos always say, "We're going to be misunderstood for a while." Come on, that's not true. (laughing) A region in this area is going to explode the entrepreneurial scene. What's your take? >> I think that's absolutely true. As we see today at the Summit, there's just such a growing number of entrepreneurs and people who are excited to embrace digital innovation. Three years ago I think the story would have been different but ever since we set up the accelerator here, which was the first once in Bahrain, we've just seen an explosion of interest and not just from Bahrain but from around the GCC. Even start ups from abroad coming and setting up here as their Middle East practice. >> Talk about C5 for a second. Let's take a minute, to explain what you guys do. I jumped ahead a little bit because I'm excited because I just love the entrepreneurial energy. This is a really important thing happening and you guys are playing a role. Talk about C5 Accelerate, what are you guys doin'? What's your business model? Just take a minute to explain as a set up. >> So I'll let Eva talk maybe more about our global operations but really C5 Accelerate a few years ago, branch the business which was largely an investment business, including innovation business and we built Bahrain's first and one the regions, in fact, first cloud enabled accelerators and Bahrain's very first technology accelerator and we did that in partnership with the Economic Development Board, the labor firm Tamkeen and obviously with AWS. Really we benefited from the first mover advantage and the thinking around that was that as Amazon grows it's geographic footprint there is great opportunity to build on the cloud in places like the Middle East where the ecosystem is nascent and there is an amazing first mover advantage. >> Yeah. >> So when we partnered with the government to build this, we realized as we do that, we also need to contribute to building a healthy ecosystem so we built this first accelerator and we have felt-- >> When was that, by the way? >> 2016. >> Great, thank you. >> Actually September marks our two year. We've since graduated five cohorts. We're gearing up for six and we have 34 start ups under our belt. Our first cohort was an all Bahraini cohort and today we're very proud to say that actually half of the start ups that have graduated from this program that is based out of Bahrain are international start ups. That's what we're doing locally. Maybe Eva can tell you a little bit more about what we're doing on a global scale. >> You know and that's important. I want to make sure you got that out about having a bunch of start ups under your belt because when I went to the start up Bahrain session yesterday I was really, really impressed by two things. One is, just the smart energy, the smart people who like understand entrepreneurship. Either went to school for it or have learned through the scar tissue of trial and tribulations like myself. And then the entrepreneurs were there themselves. >> Mm-hmm. >> And you know a healthy entrepreneurial community when they start bitchin' and moanin', they're all chirping away, they're hungry. There's a hungry appetite for entrepreneurship here and creating but it's not fake entrepreneurship. They're really hungry. They're, where's the cash? Where's the capital? So this is really a positive sign. >> It is and I want to add something really quick before Eva jumps in, I think in the past two years what's great about a small ecosystem and the ability to pivot and build fast is you actually see the impact that you can have as an individual and as a company and as a community really on the landscape. But also regionally we've had great collaborative efforts across the GCC and in the region with partners in Saudi and Kuwait and Egypt and in Jordan so I think there's a lot of momentum that we're riding on now, and I think it's a great time to be building in the tech space. >> Well Eva, before you get to your comments. I just want to follow up on the comment around Saudi and different regions because this is a trend that has been happening for a while in Silicon Valley, as you know. People have been leaving Silicon Valley, because it's cost to live there, but people have been putting engineering teams outside of Silicon Valley. I mean, 20 years ago, you only went outside of Silicon Valley or the US to outsource which is not really product development, it's just coding. Then the trend became real engineering and product development, real chops outside. We just had Abdul on from Saudi and he was talking about his shape of his team, the psychology, the make up of the people, it's just not in Saudi Arabia. It's in China, it's all over the world. As developers are working across the world, this is a really big deal. I mean this is the new dynamic. >> Yep. >> Diverse teams, geo located, no borders, this is going to change the political landscape. It's a cultural shift. >> Definitely, I mean I think it's a while before we have here the same secret sauce that exists in Silicon Valley or that has existed there for the past decade or so. But the emphasis on training and upscaling is huge and as we've heard a number of times today, there are so many incentives to do so for free so you can actually learn to code, you can become a certified AWS coder for free in Bahrain. Which is a phenomenal advantage and step up. I mean, no one would pay me to do that in the UK. I think that, along with a number of other initiatives are really going to leap frog the development here. And in terms of what you talk about, the sort of the landscape and geo location, it goes in so many different directions now. There's no single focus so we had a Swiss company last year come and incorporate in Bahrain, and hire developers here to grow their business. It can go in so many different directions. >> Yeah, the winner take all business model is an old business model and now it's everyone's winning so it's a little bit of flattening of the wealth and the opportunities but the pie is getting bigger. >> Yes. >> I think this is the dynamic that cloud and Amazon continues to demonstrate that the Oracles, for instance, of the world, we got to win it all, lock everyone in and we got to own it. That ethos is not, that dog's not hunting, as they say. This is changing the entrepreneurial landscape and the other thing I observe is the younger generation. Leveling up is very easy to them. It's like a video game, right? Leveling up is AI, blockchain, I think one of your companies I talked to, oh we're doing a blockchain implementation. They will eat up the cloud. >> Mm. >> I mean it's going to be like, pretty fast. >> You mentioned-- >> So I'm expecting some accelerated. >> Definitely. I mean you mentioned hungry but they're also fearless. The entrepreneurs that we work with have that perfect mix of a super smart idea and an understanding of a niche sector of the market but also this resilience and recklessness that you need to embrace the opportunity. And all the scary stuff that comes with it. >> And I think adding to that, I think what's great with Amazon coming to Bahrain, with us working across the globe, it's a cross pollination that happens because whether we like it or not, like Eva said, we are not Silicon Valley yet and maybe we don't aspire to be specifically Silicon Valley and we want to build our own unique ecosystem but the lessons learned from the likes of Silicon Valley and London and Singapore and China and everywhere else in the world. >> Yeah. >> Really helps build, not just the skills required but the grit that could otherwise be absent. >> The grit's key, yeah. >> And it can engender the kind of cultural shift that's necessary so you need, so you can develop these robust and resilient qualities that are necessary for a founder. >> Well, that's a really great point. I moved from the east coast in the US to California with my first start up because that's where the action was and I can tell ya, I've been there 20 years and I've been an entrepreneur doing things ever since. And there's a fallacy of trying to emulate Silicon Valley. Every i dotted, t crossed and trying to take the playbook. There's no direct match, however, there's some consistencies in there. That's grit, creativity, openness, capital markets and community and this is something that you guys kind of have in place. And then adapting that to your culture. Now I will say that my impression here is it feels a little bit Silicon Valley because it's a little bit more open and loose. People like to go fast. Fast and loose is the Silicon Valley way. Dubai's a little bit more like New York to me. So I can feel more, valley-like here. I'm not saying that Dubai's bad, I'm just saying it's different cultures. Bigger, its more ... >> There's definitely a lot of agility here. I think one of the other advantages which leads back into what C5 is as a whole, we're primarily an investment business. We have a venture capital fund based in the UK. What we're really looking for is investible, scalable business models where we're de risking the cost of capital with cloud computing because that is how ultimately these start ups scale. Another benefit that we really see in this market is value for money. If you're a start up in Silicon Valley and you get to the stage that some of our start ups get to when they finish their program, your valuation is pretty much always triple what we would see here, so valuation's a very sensitive subject. Our start ups hate talking about it. We structure our deals with them in a way that generally avoids having a valuation. >> It's very easy to do business here. You just keep on increasing the valuation, all the stars will come dropping to your doorstep. >> It's a nuanced area. >> Yeah. >> But that being said, you can get really good value for money businesses but more importantly you're investing in the teams and the entrepreneurs and there's no shortage of that here. >> Let's talk about the ecosystem here and then let's talk about the women in tech because one of the things that blew me away yesterday was Teresa Carlson held a women breakfast and for the first time I got kicked off a table because they wanted to make room for the workshop. >> Sorry about that. (laughing) >> I'm like, wait a minute. This is not an inclusive environment. Sorry, no, we need the table. Okay, I know, I was happy to tap out. But I wasn't expecting that and the energy and the, just really, again, this event, they had to lock the doors for the keynote so there's really a big interest across the board. Talk about the ecosystem and then the women in tech situation. >> So I think the ecosystem is an interesting question because, I mean, we work very collaboratively. Like I said, even though this initiative largely was kind of envisioned by the government and mainly by the Economic Development Board and I'm sure you got a chance to speak to Khalid Humaidan, he might have given you a bit of an idea of how this started off but really the EBD threw this idea of start up Bahrain to the community and said, "Look, you guys lead on it." And it took a little bit of time for the community to figure out what that really means and what it's going to look like but it really made the community and ourselves also think pragmatically about what we want this ecosystem to look like. So even though it's not as mature, like I said, as other ecosystems further away and especially in the west, it is coming together very nicely because it's coming together as a collaborative effort. You see a very good continuous consultative work between private sector, public sector, the start ups and then the other stakeholders, including ourselves, and academia. We still have a long way to go, I think specially in areas and this is something that I always emphasize, is to shift the culture you really need to start at a much younger age so at schools, at universities. We engage with them and are keen to do more on that front but I think we are laying the foundation for what I hope in the next five, 10 years will be a pretty competitive entrepreneurial and start up-- >> It might be sooner. >> Hopefully sooner. >> Yeah. >> I think we have the right recipe now to build a robust ecosystem. >> Yeah, I can say I can attest to that after what I saw yesterday. Your thoughts? >> Yeah I mean our team in Bahrain is 100% Bahraini. I'm based in London, but Hadyah here leads a phenomenal team who are all Bahraini citizens. Being the island that it is, we know everybody so Hadyah's done an excellent job of engaging with everyone from schools to universities to post grads to public sector, private sector. So really all the stakeholders in the ecosystem are engaged and everyone from the oil and gas industry to the finance sphere are thinking about how innovation can advance their businesses so that they don't get left behind at the train station. >> Yeah. >> It's really top of mind and top of agenda which is a very invigorating scenario. I think, going back to some of the initiatives, from bankruptcy laws to having a fintech bay with the Central Bank of Bahrain, there's just so much, like they're constantly pushing the envelope to make this a friendly environment for entrepreneurs to come and do business. >> And I want to add one thing. There's always this question of, does government have a role to drive innovation and create an ecosystem? >> They do. >> I think Bahrain is a good example for others in the region and even beyond to say actually government does have an important role. >> They do. >> If you look at Bahrain, it's government that has been very flexible and nimble in terms of moving to accommodate. Whether it's the new bankruptcy laws or allowing for the fintech sandbox and a cloud first policy and shaping the start up Bahrain. The government has taken the lead on a lot of these initiatives so it's a good example of how there can be a top down approach to building an entrepreneurial landscape but also where the bottom needs to come and meet the top so I think Bahrain a good example. >> Just to reiterate, my observation is that they know how to get things going and sponsor but they're also listening and self aware and even on theCUBE here, we heard comments like, we'll get out of the way. >> Mm-hmm. >> Now that's the difference between good judgment. >> Mm-hmm. >> You know? And, no, no I funded you, I own you, I mean I've seen that in the public sector or, we're going to fund you as an NGO and then I kind of own you so come to my receptions and be my show horse-- >> Mascot. >> Show all of my people how good I am, donating money. So there's a little bit of a balance between enabling. >> Yep. >> But at the end of the day, this is going to be a fast pace and that's where I think the speed, knowing when to get out of the way and letting the community go. I mean, people like speed here. Cars are driving fast, you got a Formula 1 race track up at 14 months. >> They like speed but sometimes things are surprisingly slow. >> Yes. >> So it's incredible that we are where we are. You asked about women in tech and I think there's something there that we're really proud of. C5 globally, 43% of the start up founders that we've supported through our accelerators are women. In terms of diversity, we're thrilled about that statistic. We'd like it be 50%. >> Yep. >> And I think that the Middle East, we're seeing so much hunger from women entrepreneurs and women who want to learn to code to be founders and we want to do everything in our power to enable that. >> Computer science degrees coming out of the university? >> Absolutely. Hadyah here had this fantastic idea a year ago to found what we call C5 Nebula. I'll let Hadyah talk about why we came up with that name and how it relates to our business but this is now a new stream of our business which really it's a membership platform where all women globally are invited to join and we provide education, upscaling, jogs, connectivity, mentorships and through this network we are allowing a complete globalization of the talent and skills that we have. >> Yeah. >> So you can be a student in D.C. wanting to come and volunteer to work for a company here and we will make that match happen. I think it's a very exciting phase for us and we've seen so much demand for this program. Maybe Hadyah can talk about why we came up with this name? >> Yeah, so like Eva said, we, I'm Bahraini, we've always had, we've been lucky to have been pioneering and have work very closely men and have had really equal opportunity but in industries like tech, globally, women's representation is lower than that of men and there are areas where there's still work to be done. >> A lot of work to be done, yeah. >> So last year, actually, with the first AWS Summit, when Teresa was out here, we figured we do a women in tech breakfast. When we were curating that guest list we couldn't find that many women and we didn't know if wasn't that we didn't know them or that they didn't exist and we realized really we need to put together something to bring all the women together and work more closely so we built Nebula, really to, like Eva said, do three things and a little more. One is the connectivity side of things and then the upscaling but also to raise awareness and appreciation. >> What is Nebula? >> What is? >> What is Nebula? >> So Nebula, scientifically it's an astrological, astronomical phenomenon-- >> But it's your network group, is that what it's called? >> It's a platform. >> Okay. >> So it's actually been officially launched three weeks ago, you can go online and visit it and it's a platform that allows you to become a member of Nebula and gives you access to mentorship, to opportunities to upscale and train but also to raise awareness and appreciation for the amazing opportunities for women in the tech space. >> Is there a URL? >> There is a URL, it's-- >> We've been debating what is is today. (laughing) >> It's www.c5nebula.com. >> Okay, I'll put it up, publish it with the video. >> And what it means, it's the Latin word for cloud and it's where stars are born. >> Yeah. It's also, what's important, is it's a compilation of a bunch of different clouds and electrons and it's a mess, it's a bit of a mess but it's a lot of forces working together and I guess the moral of the story is, we can create stars in the space but we all have to work together and it all has to come together to-- >> And it's powerful when you work together. >> Only 10% of VC funding worldwide goes to women founder companies and 1% of that goes to women of color so there's some staggering statistics there. Globally, this is not a Middle East problem, this is globally a real big area of disparity that we're trying to help address. >> Well you guys know our door's open in California and Boston, and certainly the women in tech, we got a big network, we can merge them into the Nebula connect our networks. >> We would love that. >> We would love that. >> We're open and anything you guys have to share with us we love co-creating with the communities, that's what we do at theCUBE. Thanks for coming on and sharing. >> Thanks for having us. >> Thank you, John. It's been a pleasure. >> You got a great mission. Big supporter. C5 Accelerate, they're the ones on the ground, making things happen, gettin' those sparks of entrepreneurship and helping them capture them into one community, create some energy and some momentum and help people create value and also capture the value, that's what it's all about here. You got Amazon Web Services' region in the Middle East, CUBE coverage continues after this short break. (upbeat techno music)

>> Announcer: Live from Vancouver, Canada. It's theCUBE covering OpenStack Summit North America 2018, brought to you by Red Hat, the OpenStack Foundation and its ecosystem partners. >> Welcome back, I'm Stu Miniman and my cohost John Troyer and you're watching theCUBE, the worldwide leader in tech coverage and this is exclusive coverage from OpenStack Summit 2018 in Vancouver. Usually this time of year it is a little bit overcast, but for the second time the OpenStack Summit has been here, the sun is shining. It has been gorgeous weather but we are in here really digging in and understanding it One of the people I have gotten to know through this community especially, is our wrap up guest today, Sean Michael Kerner, who is a senior editor with eWeek, amongst other bi-lines that you have. Pleasure to see you. >> Great, good seeing you too Stu. >> Alright, so we let you keep on the Toronto Bluejays hat >> Thank you, there we go. >> We have had quite a few Canadians on our program here. >> Well, seeing as how you're here in Canada, it's not all that surprising. >> It's lovely. They have you working on Victoria Day. >> Yeah, that's unfortunate but I will take Memorial Day off in a week, so it works out. >> Excellent. So Sean, for our audience that might not know you, give us a little bit about your background. You've been to umpteen of these shows. >> Sure. I have been with the same publication roughly, I guess 15-16 years at this point. I've been writing before there was cloud, core living and Opensource stuff, networking. And then through the magic of technology, I shifted a little bit to security, which is a core focus for me. I have been to every OpenStack Summit since the San Diego Summit, I guess, 2011. Somebody can correct me afterwards. I did miss the Sydney Summit for various reasons, but yeah, I've been to a bunch of these things, so interesting to see how things have shifted over the years from nothing to certain heights to where we are now. >> Alright, so bring us up to that, as to where we are now. Attendance is down a little bit. They haven't been talking a lot about it but quality I guess is here. Sessions, they've broadened down a bit of the scope. We have been digging into it, but want to get your take so far. >> Yeah, well it's like anything else, there are standard hype cycles, as it were and there's a trough of disillusionment. I wouldn't call this a trough of disillusionment, but when you get to a certain plateau, people just, there'sn't as much interest. In the early days, I remember the San Diego Summit I went to. They didn't schedule it properly. They didn't know how many people they were going to have, and they had to line up around the corner and stuff. That was six years ago, but that is when OpenStack was new. There was no such thing as the Foundation, and everyone was trying to figure out what was what. And, there was no clue at this point. Cloud is a well understood thing. There are competitive efforts or complimentary efforts, as the Foundation would probably like to put it; whether it's CNCF, there's the public cloud and it's different. There is, with all respect to the OpenStack Foundation and its member projects, there's not as much excitement. This in now a stable, mature ecosystem and because of that, I don't think there's as much of a draw. When something is brand new and shiny, you get more of a draw. If they would have put the name Blockchain somewhere, maybe, maybe they would have had a few more. They put Kubernetes in there, which is fine, but no machine learning or artificial intelligence quite yet, though that's a topic somewhere in there too. >> Yeah, John, you've been making a lot of comments this week talking about we've matured and the lower layer pieces just work a bit more. Give us your take about that. >> Sure. That's the way it seems. There wasn't a whole lot of talk about the release, news release, and all the different components, even the keynotes. But, the people we have talked to, both on the vendor and the customer side, they have working production OpenStack environments. They're very large. They require very few admins. They work. They're embedded in telecom and banking, et cetera. It's here and it's working. >> Yeah, that's so something that happened, maybe three cycles ago at this point, because they used to have the release the same time as the Summit and the Design Summit. It was together, so, there was essentially a celebration of the release. People would talk about the release and then they desegrigated that. I think that took a lot of steam out of the reason why you got developers to attend. So, when you don't have the Design Summit, there's this separate open endeavor, there's the forum, I don't quite understand how that works here now. There isn't as much momentum. Yeah, I agree with you. There has been very little talk about Queens. In each of the project update sessions I have been to, and I have been to a couple, there has always been a slight on Rocky, what's coming. I think we are on the second milestone of Rocky, at this point, so there's some development, but at this point it is incremental featurettes. There is no whiz bang. OK, we're going to have flying cars, you know send a Tesla to outer space kind of Earth shattering kind of news, literally, because that's not where it's at. It's just incremental tuck in features in stability and that kind of thing. >> Alright, you talk space and thinks like that and it brings to mind a certain attendee of the program that has actually been to outer space and maybe one of the more notable moments of the show so far. Give us your take on Mr. Shuttleworth. >> Well, I'm a big fan of Mr. Shuttleworth, top to bottom. Hey Mark. Big fan, always have been. He has his own opinion on things of course. Usually in a keynote you don't tend to take direct aim at competitors and he chose to do that. It made some people a little uncomfortable. I happened to be sitting in the front row, where I like to sit, and there was some Red Hat people, and there were some frantic emails going back and forth. And people were trying to see what was going on et cetera. I think, for me, a little bit of drama is okay. You guys go to more shows than I do, and sometimes you get these kind of sales kind of things. But in an open community, there's almost an unwritten rule, which perhaps will be written after this conference, that whether or not everybody is a business competitor or not, is that this is neutral territory as it were and everybody is kind of friendly. In the exhibit hall, you can say this and that, we are better, whatever, but on the stage you don't necessarily do that, so there was some drama there. Some of my peers wrote about that and I will be writing about it as well. It's a, I prefer to write about technology and not necessarily drama. Whether somebody is faster, better, stronger than others, you let the number prove them out. When we talk about Opensource, Opensource Innovation without Canonical, there probably wouldn't have been an OpenStack. All the initial OpenStack reference and limitations are on Canonical. They got a number of large public clouds, as does Red Hat. I think they both have their tactical merits and I'm sure on some respects Red Hat's better and on some respects Canonical is better, but him standing up there and beating on the competition was something that across the 13 summits I have been I have never seen before. One guy I talked to my first OpenStack Summit was in San Diego and the CTO of VMware at the time came up to, VMware was not an OpenStack contributor at the time, they were thinking about it, and he was fielding questions about how it was competitive or not and he was still complimentary. So there has always been that kind of thing. So, a little bit of an interesting shift, a little bit of drama, and gives this show something memorable, because you and I and others will be able to talk about this five years from now, et cetera. >> You talked about something you would write up. I mean part of your job is to take things back to the readers at eWeek. >> Yeah. >> What are the things, highlights you're going to be covering? >> The highlights for me, Stu and I talked about this at one point off the camera, this is not an OpenStack Summit necessarily, they're calling it Open Infrastructure. I almost thought that they would change, we almost thought that they would change the name of the entire organization to the Open Infrastructure Foundation. That whole shift, and I know the foundation has been talking about that since Sydney last year, that they're going to shift to that, but, that's the take away. The platform itself is not the only thing. Enabling the open infrastructure is nice. They're going to try and play well and where it fits within the whole stack. That gets very confusing because talking about collaboration is all fine and nice, but that is not necessarily news. That is how the hot dog is made and that's nice. But, people want to know what's in that dog and how it is going to work. I think it's a tougher show for me to cover than it has been in past years, because there has been less news. There's no new release. There was Kata 1.0 release and there was the Zuul project coming out on its own. Zuul project, they said it was 3.0, it was actually March was Zuul 3.03. Kata Container project, okay, interesting, we'll see how it goes. But a tougher project, tougher event for me to cover for that reason. Collaboration is all fine and nice. But, the CNCF CloudNativeCon KubeCon event two weeks ago, or three weeks ago, had a little bit more news and a lot it's same kind of issues come up here. So, long winded answer, tough to come up with lessons learned out of this, other than everyone wants to be friends, well some people want to be. And, collaboration is the way forward. But that is not necessarily a new message. >> When I think about Kubernetes, we are talking about the multi cloud world and that's still, the last few years, where it's been. Where does OpenStack really fit in that multi cloud world? One of the things I have been a little disappointed actually, is most of the time, when I'm having a conversation, it's almost the, yeah, there's public cloud, but we are going to claw things back and I need it for governments, and I need all of these other things. When I talk to customers, it is I'm going to choose what I put in my data center. I'm going to choose how I use probably multiple public cloud finders. It is not an anti-public cloud message, and it feels a little bit on the anti-public cloud mass. I want to work with what you're hearing when you >> talk to users? >> When I talk to users, vast majority of people, unless it's something, where there's regulatory issues or certain legacy issues or private cloud, public cloud period. The private cloud idea is gone or mostly gone. When I think about private clouds, it's really VmWare. We have virtualized instances that sitting there. >> What's OpenStack? >> OpenStack is fine, but how many are running OpenStack as a private cloud premise? >> Yeah, so what's OpenStack then? >> When I think of OpenStack, Oracles public cloud. Oracle is not here surprisingly. Oracle's public cloud, Larry Ellison, who I know you guys have spoken to more than once on theCUBE at various points on Oracle World and other things. Oracle's public cloud, they want to compete against AWS. That's all. OpenStack IBM cloud, all OpenStack. The various big providers out of China are OpenStack based. OEH is here. So that's where it fits in is that underlying infrastructure layer. Walmart uses it. Bestbuy, all these other places, Comcast, et cetera; ATT. But individual enterprises, not so much. I have a hard time finding individual enterprises that will tell me we are running our own private cloud as OpenStack. They will tell me they're running VmWare, they will tell me they're running REV or even some flavor of Citrix end server, but not a private cloud. They may have some kind of instances and they will burst out, but it's not, I don't think private cloud for mid tier enterprises ever took off the way some people thought five years ago. >> That's interesting. Let's go meta for a second. You talked about things you do and don't write about, you don't necessarily write the VC's are not here necessarily, but you don't write about necessarily financial stuff. >> Sometimes. There was actually at the Portland summit, I did a panel with press and analysts at the time and afterwards there might have been four different VC's that came up to me and asked me what I thought about different companies. They were looking at different things where they would invest. And I remember, we looked at the board and one VC who shall remain nameless, and I said you know what, we'll look at this board with all these companies and five years from now, three quarters of them will not be here. I think I was probably wrong because it is more than that. There are so many. I wrote a story, I don't remember the exact name of it, but I wrote a story not that long ago about OpenStack deadpool. There are so, multiple companies that raised funding that disappeared. In the networking space, there were things like Plumgrid, they mminorly acquired for assets by Vmware, if I'm not mistaken. There was Pivotal, Joshua McKenzie, one of the co-founders of OpenStack itself, got acquired by Cisco. But they would have collapsed perhaps otherwise. Nebula Computing is perhaps, it still shocks me. They raised whatever it was 50 odd million, someone will correct me afterward. Chris Kemp, CTO of NASA who helped start it. Gone. So, there has been tremendous consolidation. I think when VC's lose money, they lose interest really fast. The other thing you have to think about, from the VC side, they don't write too much on the financial. My good friend Fredrick, who didn't make it, Where are you, Fredrick, where are you? Does more on that funding side. But has there been a big exit for an OpenStack company? Not really, not really. And without that kind of thing, without that precedence it's a tough thing, especially for a market that is now eight years old, give or take. >> Even the exits that had a decent exit, you know that got bought into the say IBM's, Cisco's of the world, and when you look a couple of years later, there's not much left of those organizations. >> Yeah. It's also really hard. People really don't want to compete against, well, some people want to compete against AWS. But, if you're going to try to go toe to toe with them, it's a challenge. >> Okay, so what brings you back here every year? You're speaking at the show. You're talking to people. >> What brings me back here is regardless of the fact that momentum has probably shifted, it's not in that really hype stage, OpenStack's core infrastructure, literally, core infrastructure that runs important assets. Internet assets, whether it certain public cloud vendors, large Fortune 500 companies, or otherwise. So it's an important piece of the stack, whether it's in the hype cycle or not, so that brings me back, because it's important. It brings me back because I have a vested interest. I have written so much about it so I'm curious to see how it continues to evolve. Specifically, I'm speaking here on Thursday doing a panel on defending Cloud Counsel Security as a core competence, a core interest for me. With all these OpenStack assets out there, how they're defended or not is a critical interest. In the modern world, cyber attacks are a given. Everybody should assume they're always under a constant state of attack and how that security works is a core area of interest and why I will keep coming back. I will also keep coming back because I expect there to be another shift. I don't think we have heard the end of the OpenStack story yet. I think the shift towards open infrastructure will evolve a little bit and will come to an interesting conclusion. >> Alright, last thing is what's your favorite question you're asking at this show. Any final things you want to ask us as we wrap? >> Yeah, my favorite, well, I want to ask you guys, what the most interesting answer you got from all the great people you interviewed because I'm sure some of it was negative and you got mostly positive as well. >> Well, we aren't used to answering the questions Stu. >> I'm used to being on the other side here, right. >> Well, I do say we got a lot of stuff about some interesting and juicy cases, like I say, the practitioners I talked to were real. I was always impressed by how few administrators it takes to run a huge OpenStack based cloud once it's set up. I think that's something interesting to me. You asked some folks about a public cloud a lot. >> Yeah, so it has been interesting. For me, it's, we've reached that certain maturity level. I was looking at technology. What's kind of the watermark that this is going to come to? We had said years ago, I don't think you're going to have somebody selling a billion dollars worth of distribution on OpenStack. So, that story with how Kubernetes and Containers and everything fits in, OpenStack is part of the picture, and it might not be the most exciting thing, but then again, if you watch Linux as long as most of us have, Red Hat took a really long time to get a billion dollars and it was much more than just Linux that got them there. This still has the opportunity to be tooling inside the environment. We have talked to a number of users that use it. It's in there. It's not that the flagpole, we're an OpenStack company anymore because there really aren't many companies saying that that is the core of their mission, but that is still an important piece of the overall fabric of what we are covering. >> Exactly right. >> Alright, we on that note, Sean Michael Kerner, we really appreciate you joining us. Please support good technology journalism because it is people like him that help us understand the technology. I read his stuff all the time and always love chatting with him off the record and dragged him on here and Fredrick from Techron Show we are disappointed you could not join us, but we'll get you next time. For Jon Troyer, I'm Stu Miniman, be sure to join us for the third day tomorrow of three days of wall to wall live coverage here from OpenStack Summit 2018 in Vancouver. And once again, thank you for watching theCUBE. (upbeat music)

>> Announcer: Live, from Boston, Massachusetts, it's The Cube, covering OpenStack Summit 2017. Brought to you by the OpenStack Foundation, Red Hat, and additional ecosystem support. (upbeat techno music) >> Welcome back, I'm Stu Miniman, joined by my co-host for the week, John Troyer. We've been talking this week about how OpenStack, there's real clouds, there's real deployments. I'm happy to welcome to the program two people that have done this with Adobe Advertising Cloud. We have Joseph Sandoval, who is the engineering manager at Adobe Advertising Cloud, and Nicolas Brousse, who is director of operations engineering. Gentlemen, thanks so much for joining us. >> Thank you for letting us join. >> Thank you. >> Nicolas, I'm sorry Joseph, we actually had you on the program at the Silicon Valley OpenStack Days a little while ago. Refresh our audience, though, a little bit, your background, how OpenStack fits in with your role, and what you do. >> Sure. Now, I've been in, a long time, in the OpenStack community, at that time when I was at the Silicon Valley event, I was with Lithium Technologies, so we also were an OpenStack user, but we were also kind of going through some transformation, I think, I would say we kind of really pushed the Kubernetes button for the community at that time. So I think I kind of got a little rep about being kind of like an agitator in this community to try to make the product really, you know, work for people who are actually consuming it. >> Right, so not only have you deployed OpenStack, you've done it at two different jobs now already. >> Joseph: Yes. >> People think we're still so early there, but we're already seeing that progression. Alright, Joseph, a little bit of background, yourself, what brought you to the current role in interaction with OpenStack? >> Yeah, so it's Nicolas. >> I'm sorry, yeah Nicolas, sorry, yeah. >> It's okay. >> I come from this startup company called TubeMogul that got acquired by Adobe last year, and one of our challenges as a startup was to be able to scale our cloud infrastructure and our infrastructure in general. We were a newer user of a public cloud at that time, but over the years we faced multiple challenges, not only as a cost challenge, where it gets like easily out of control with public clouds, but also technical challenge. We were in like an IP goals environment with very lean team operation. So we had to figure out a way where we can scale some of our technology and some of our platforms. And so my first technical prime was to have a reasonable cost control. And so we started to look at different cloud solutions. At the time it was like Eucalyptus, CloudStack, Open Nebula, and we tried many of these to get control, to get some time to figure out what was the solution. And we moved quickly to OpenStack and started to implement and get like some known, couple of here a journey to implement that and scale a little faster too. >> Stu, I want to point out something. In that story, at least what I took away from it, usually when you have a problem state of a lean team and you're trying to hyper growth >> Stu: In scaling. >> In scaling, the answer is public cloud. Oh, we'll just go to the public cloud, that'll solve all that problem. You chose a different way and chose a different architecture. >> Nicholas: Correct. >> Anything that brought you to that decision? >> Yeah, so there was a few factors. First one was like, well cost growth on public clouds was growing faster than the revenue in some ways, so that doesn't line up. You need to have a story that makes more sense. And the second one was really like technical. We had some very specific challenge where we're in the real-time bidding advertising, so we have a huge amount of traffic. We do want to try billions, HTTP request on the platform. All of those need to be answered in a few milliseconds, so the proximity of our partner, you can always see that as a smaller stock exchange for advertising. So we need to be close to our partner so all this auction process is happening very quickly. And we have to store huge amount of data. Any of the solution you will find on the public cloud will end up having like 50 minutes ago that's 50 milliseconds that doesn't necessarily fit our use case. >> Yeah, just maybe you can bring us inside the architecture a little bit. >> Joseph: Sure. >> Talk about, look, public cloud isn't simple, obviously costs people, you know, we understand that and there's the debate as to where those pieces fit. But you know, OpenStack, speak a little bit to how it is to put that together. Simplicity is not usually what we hear when we talk, but what worked, what didn't work, what did you have to kind of customize to kind of get things working? >> You know, I think the one thing is just coming through like, you know, two different implementations is that, yeah there is complexity. And what I really got out of this was that you know, you really just have to consume the things that you need, so we've been very lean about the APIs that we consume, what services that we think are meaningful to our business. Instead of taking really all as a service type parts of this framework, we really narrowed it down to what matched our business requirements. I think as well as kind of like how you're consuming, and I think if you noticed the keynote on Monday, all of a sudden we're seeing this new pivot of like, let us manage your cloud. And it still kind of speaks to some of the challenges that you know, the end users of OpenStack have. And I think the part that's really important for anyone that's really going on this journey is that, you know, it's how you decide to consume it, like can you start really running it within like a CICD model so that you're really getting into that dev-ops aspect of it. Even within Amazon, I think in my journey, that's one thing that I think a lot of people miss is that when they try to lift and shift, like they want to race to the public cloud, you're going to still be challenged because you haven't really fundamentally changed how you're consuming the cloud product. You're not making yourself cloud native. And I think in my journey, I've made those same mistakes. I've learned from it enough. I'm actually really realizing that it's almost bigger than OpenStack. It's almost like how as business you operate and how your teams fundamentally build their tools and how they kind of like make open source a true strategy. >> I'd love to hear about the applications that you're using in this environment. We hear it in some of the keynotes on some of the users, you know, rapid move from where they started to adding applications. You mentioned cloud native. What are the class of applications, what percentage of your business runs on that? >> Sure, yeah so the code name we've given our platform is CloudMogul. And really it comprises bare metal, primarily OpenStack, and yet we still also use Amazon, so we have all different frameworks in there, depending on the type of, you know, workload that's there. As far as like OpenStack specifically, we really just consume the court. It's compute, storage, and network. Storage is probably a little bit secondary for us, the way we have designed our platform. Network is the really key thing. And as Nicholas mentioned earlier, I mean, that's the thing that in Amazon, you'll see great choices for compute, great choices for memory, but if you try to find an affordable network, you know, intensive instance, and that's what you know, we have decided why we're doing the data center. So we really have stuck really with just the core OpenStack services. Currently our developers are looking at now rolling out Kubernetes, and they're kind of doing it in a more, you know, dev POC. And as well as we're trying to balance out like the broader Adobe strategies, like they want to move to multi-cloud, they want to use Azure. So there's quite a bit that we're trying to consume, but with the lean team, we have to really be judicious about what we decide to roll in. >> Nicholas, can you comment maybe on the applications you mentioned some of the costs. The keynote, cost compliance capabilities, does that resonate with you, and how do you choose between the public and >> I think it's more like to get back to this lean operation, it would drive like some of our info on it, like we're a technology company in some way. I mean, we are building software, we are building certain solutions. You know, our goal is to develop like an advertising solution and trend solutions at several customer. So we're on a tier to be like a storage solution for OpenStack or compute solution for OpenStack or public cloud. So we really had to focus on what is selling or best use case or solve one problem, as that's where we had like to really look at cutting the fat in some way on OpenStack and really just looking at what is going to be the best use case for us. So we liberate OpenStack for most of our bidding system and manage all those calculating for the VMs, but we also integrate that very easily with like a flat network designed with open maker, so we are about to really like get the best of both worlds, between like Permital, OpenStack, and virtualization, and know we are also like implementing like reverting on the, be able to offload some of the workload back to Amazon in Ozone, we are starting to look at Ozone like a cloud provider but for trying to revert like what's the best and consider like all the terms we have. >> Can you give us a little insight to that cloud bursting is a term that, you know, gets attention because data's tough to move, you know, where the application lives, is that you know, container, Kubernetes stuff that you're doing, expand that a little for us. >> So it's definitely challenging. It's not something that, and then we got a very quick iteration and we have been able to liberate it easily first because we are like a very simple design on the way we were managing our kernel environment on OpenStack prime mount. So it was to very easily integrate, have a direct connect to a VPC on Amazon and just offload some of the compute of these onto this VPC. So a challenge we had to learn is we are trying to understand we're in the workload and that was in iteration, when we did move back to in house, understanding like the network traffic you are getting and understanding like the back and forth between your backend and your frontend. That's something you don't really see or understand easily on public cloud. When you move back in house, then you start to see the bottlenecks and you start to learn about what is really your workload, and we are to do this again, like with cloud bursting, okay, what kind of back and forth are going between our compute services and all the backend service that it needs to access. And latency being very critical for us, we had to really measure that. >> Yeah, you never know til you try it, right? >> Exactly. >> You crawl, walk, run. Hey Joseph, you talked about CICD and rate of change. I'm kind of curious how you're seeing the rate of change of your infrastructure stack, so OpenStack, versus you said you're now kind of experimenting with Kubernetes containers in the talk. A lot of talk about containers here at the show. For me, it's becoming a little more clear where in the architectural pie, layer cake, that that, pie, layer cake, that that fits in. Can you talk about rate of change? Are you looking at, does your infrastructure need to change at the same rate as the application on top of it, or how are you all looking at it? >> You know, in just beginning this journey, the one thing that I've really took away and that was one guy on my team when I was at Lithium, where he would always talk about like really meeting your developers where they're at. And yes, there's so much change, and you have to really kind of balance it. And you know, some of these companies we've been with, we've had some software stacks that are almost a decade old. They're just not made with cloud nativeness in mind. And that's where, you know, I've always been a really like let's move forward, and that was one of the early individuals saying, you know, I was at OpenStack Prague and we were doing, you know, Kubernetes under the control plane. In hindsight I was like, well, it was a little kind of premature. It was almost a little reckless. But I think that the thing that I'm trying to do now is really just try to leverage like where our product's at. Can I help evolve the platform so that, are we 12-factored, can we get there? You know, we have big data kind of workloads. How do we like start taking frameworks that allow us so that you know, we can be in this multi-cloud world. So I think there is a challenge, you know, you're hearing all these new great things that are happening. You know, you're coming to these summits, and you're getting all this hype. But then you really got to walk away. And I just kind of do that sniff test, testing something out to see like, is it really ready? And especially with where we're at in enterprise, you know, we really have to map to security compliance. And I think those are some of the gates that we're challenged with, as well as like, is the workload that we're bringing in, have we adapted it enough so that we can really kind of push what we're doing. Cause I'd love to see us get to the point where we have the frameworks of containers and Kubernetes. But not everything for us can get there. You know, so like on the edge, we're doing billions of requests per second. Bare metal is the key thing for us. And we're running HA proxy on the edge. So the key thing for us is like, run it as code, let's count how much can we do to get this so that we can fully automate this and make it repeatable. And I think that's kind of the core ethos for the team. >> You talked about coming to different summits over the years, kind of the sniff test. What's the mood of the attendees here at OpenStack summit here in Boston this year in 2017 and is it different from previous years? >> You know, I think we seen kind of some interesting ebb and flows. I think when I was in Barcelona, it was definitely different. I was kind of like surprised, it just felt like it was a little bit less energy. Austin I thought was tremendous, it was a great event. And I kind of feel like, I think there's a little bit more pragmatism that set in, which I think is really healthy and a sign of maturity that you know, people are really kind of understanding instead of getting caught up in that, the cloud hype, you know, public versus private and all these things. I think now we're starting to see a more mature audience. I think OpenStack foundation and the community has also kind of adapted as well. I know they try to be everything for everybody under the cloud in a data center. And I think now we're actually seeing a more healthy approach, so for me I think there's still a lot of energy there. Maybe it's getting a little boring, which to me in my world, that's a good thing. >> Nicholas, I'm curious, do you either at this show or at other events, how are you working with your peers in the industry to understand that kind of hybrid multi-cloud model and sort that out, you know, resources you go to, conversations you have, you know, how do you create that learning? >> So, first it's I come from the culture that's from the startup to Mogul that got a prior where we're ready for costs on the customer and the end goal of what we are trying to build. And we are not necessarily driven by the technology itself, we really try to devise technology to solve a problem. We have a lot of geek on our team, and that's what drives some of our discussion. But we're really more trying to look at how we drive the product for our world. And that's really like most of the discussion, even with our product, like we started a year ago to use the Fastly file pen to sort some specific problem where we can't have like a global footprint as much as the city and provider. And they were able to address like some of a specific use case, where they can do like a synchronous looking for us. And that was something like a specific business case for us, and every time we go like to an event or technology, we are trying to see like what are we trying to solve? And that's what drives most of our discussions. >> Joseph, sounds like you've given feedback and been on some of the leading edge of some of the activities. Is there anything you look at where you're hoping for a little bit more maturity, either OpenStack in general or the vendor community out there, you know, what are you hoping to see, you know, as we mature this even further? >> Sure, I mean I would say one thing about, you know, the OpenStack community. And I know this was always kind of one of my early beefs about it. It felt so vendor-centric, and very vendor-influenced that it just didn't really for me feel like the actual consumers, the individuals who really are using these platforms are really being heard. So I think they need to still kind of really force it, really listen to that feedback from the community, what's working, what's not working. As far as what I'd love to see, is you know, I think there's been a little bit more of like a correction I guess in a sense of like all the kind of like services that were out there, these side projects. I think there was a lot of messaging about like let's all work together, which I think is kind of, I just kind of wince a little bit. But I'm like, it's good, I'm glad that they've kind of come to this recognition. I'd love to see more and more of that. But I also want to make sure that the OpenStack community, like stay distinct. I'm not sure if I 100% think like, leveraging off the Kubernetes community, like yes, work together, let's make these things, you know, coexist and stuff. But I do hear some things where like, hey, we should just make this service be the backend for Kubernetes. I'm like, hmm. I don't think you've really looked at the framework of some of these APIs and how they're going to integrate in that environment. And I actually would like to see them develop, you know, distinctly, but you know, find some really friendly integration points so that me as a consumer, I can like easily use these as we evolve and our platform evolves, I can easily kind of start roadmapping these into our platform. >> Alright, Nicholas and Justin, really appreciate you giving us the update, and we'd love to get that real practitioner viewpoint. John and I will be back with more coverage here from OpenStack 2017 in Boston. You're watching The Cube. (upbeat techno music)

>> Wait. Welcome back to Boston, everybody. This is the Cube. We're live on a special presentation of BMC Day atop of sixty State Street in Boston, Massachusetts. Beautiful view of Boston Harbor. Evelyn Ehrlich is here. She's the vice president and research director for service delivery at Force that we're going to talk about job control, language and cobalt. No, I'm just kidding. We're talking about service delivery. Who'd Evelyn? Yes. So you have a really deep background in it, And I know what J C l stands for, So I had to make that joke. So anyway, uh, welcome to the cubes. Great to see you gave a fantastic presentation today. Who doesn't need better service delivery? It's an imperative for the digital transformation. So, again, welcome to the Cube. Thank you. So tell us a little bit about what you do at Forrester, what your area is, and I want to get into your presentation today. >> Sure. So service delivery. Basically, when the application development team is ready to hand us something, whatever that issa Web service and application a service, we actually make sure that that gets to the work force or to the customer. So anything from Police Management Service Management, the front end relative to the service desk. Tell them anything around management after a performance of the applications operations. Anything like that is all about service delivery. >> And they were two. Two pieces of your talk really struck out to me on Dino. No George for a long time. So two things to majorities that you don't like to use one is users, right end users use it, and then the other really was. So talk about it. Why those terms don't make sense in this digital economy. And what does make sense? >> Yeah, so your users, it almost seems like to me, it is something where people are putting folks into a box that they are that they can like addicts. You know, user. Like I said, in a camp in the drug industry, we have users because they're addicts way have to somehow keep them at bay. We have to somehow keep them low and our engagement with them. It's no, it's not going to be enjoyable. It's not going to be fun, and it's not going to be actually effective. Unfortunately, these users today those are our workforce. There's our employees There's our partners and customers. They have other places to go. They don't need us and technology. So if we don't shift that thinking into that, their customers, so that we can actually enable them, we're might be able to lose our jobs. Because there's outsourcers service providers to workplace services, for example, as many companies out there who provide the service desk who provide of VD I who provide the services cheaper, faster and better. But what we have been lost or what if that's gonna happen? We are losing the understanding of the business for losing the connection to the business, and is that that could be a strategic conversation right? There should be a strategic conversations, not justa cost conversation. And when we think about user, it's all about cost. If you think about customer, its value and relevancy, >> okay, And of course, that leads to not its business. There's no such thing as a project. >> No, there isn't because anything we do if we think of information technology is anything almost like in the back room. It's something which is hidden in a data center somewhere in a storage or a server or in a device and it doesn't really add any value. >> Boiler, the boy, the room >> Exactly and way have done that. We have massaged it, what with whatever way measured the heck out of it. We measure meantime to repair. Well, who cares? It's time to business impact. This what we need to think about. So if we start thinking about customers to empty, TR becomes time to business impact. We're now thinking outside in and the same is true with I t. If we just use it for technology sake to Dr Information, we're not connected if the business, because it is about business technology, is dear to win, retain and sustain our customers. If we don't do that, we become borders. We become the, you know, the companies who all have not focused on the winning technology to make them successful. >> You had a really nice graph, simple sort of digital failing digital masters, and I were in between talked a little about things like I Till and Deb ops, and they feel sometimes like counter counter to each other. Once one's fast one feels home. As you talk to customer, you talk to customers. What can they expect? How long might these transformations take? Or what of the one of those key stepping stones you talked about? It being a journey? >> How do you >> will think about all this change? >> But that that's a good question. It's a very difficult question to have an answer to, and I think it has to. It has to be a little bit more compartmentalized. We have to start thinking a little bit more in smaller boxes, off influences or or areas where we can make some progress. So let's take, for example, Dev Ops and Vital and connect the process release, which is an I told process into this notion. If we combine Deaf ops and Tyto release, we're starting to see that the police management process. It's now a process which is done very agile very much. There is a lot more things behind that process and a lot more collaboration between a D and D and I, you know, to make the process of faster process. So we're now married, I told release management with the journey of Death, Bob's as we're starting to see release cycles off one day. Lookit, lookit Amazon. What they do I mean again, Amazon is a very extreme. Not everybody needs a police processes Amazon has, because it's just not that not every pieces is in the Amazon business. Maybe in ten years, who knows? Maybe in five, but those kinds of things that marriage happens through, more off for design thinking. And I think that's the practical way. Let's not adopt a Iittle blandly and say, All right, we're going to just redo our entire twenty six processes. Let's look at where is the problem? What, where? Where's the pain? What is the ninety day journey to solve that pain? Where's the six months? Nine months, twelve months, twenty four months? And if twenty four months is too far out, which I believe it's staying a twelve month road map and start adjusting it that way and measure it, measure where you are. Measure where you want to go and prove that you have done to Delta. Because if I don't measure that, I won't get funding for support, right? I think that's key. >> Devlin. You talked about the, you know, pray or a predator, right? That's good of a common theme that you hear conferences like this isn't a zero sum game, is is the taxi drivers. You know, the taxi companies screwed is, you know, the hotels in big trouble. I mean, Ken, cos you know who are sort of caught flat footed transform and begin to grow again. Talk about that zero sum game nous. >> Yeah, I think I think there is. There is hope. So I hope it's what dies last week saying right. But there is hope, hope if customers of organizations he's enterprise to see that there's a challenger out there. And if they don't necessarily stand up to fight that challenges start innovating in either copying or leveraging or ten. Gently do something else. Let me give you an example. When about two years we had a two years ago with an event in London and stuff I got Square was completely blocked off by the taxi drivers because uber was there were striking against uber or they were going on. It wasn't really a real strike was in London. It's a little bit of a challenge with unions, but anyway, instead, off going on a strike, why did they not embrace whatever they needed to and example is in the cab At that time, you could not use American Express or discover credit card uber. I never have tipple any money out of my pocket because that's a convenience. It's easy. It's enjoyable. >> Love it, >> We love it. It's simple. So why don't these other companies this cos the taxi cannot? Why don't the equip that technology in such a way? They can at least start adopting some of those innovations to make it a even part right. Some of the other things, maybe they will never get there, because there whatever limitations are there. And so that's what that's what I think needs to happen. These innovators will challenge all these other companies and those who want to stay alive. I mean, they want to because they have for street is forcing them to stay alive. They are the ones who will hopefully create a differentiation because of that >> essay, really invention required. It's applying technology and process that's well established. >> Thinking outside in thinking of you and him and me as >> customers, it becomes, you know, who just does the incumbent get innovation before the the challenger gets distribution? Exactly. You know, Huber, lots of cars. I don't have to buy them, but somebody like Tesla isn't necessarily disrupting forward because they don't have the men. They can't distribute it faster than you know. It depends where you are in the distribution versus innovation. So it's in the brief time. We have love to talk about the landscape. So and that's particularly the transformation of beings. BMC Public Company to private They were under a lot of fire, you know, kind of flattish revenues. Wall Street pound. You got companies like service now picking away at the established SM players. We're talking off camera, saying that's begun to change. Give us the narrative on that that sequence and where we are today. Yeah, we're going. >> Yeah, so if you go back, maybe me way back seven years ago or so you know, it started service now they had a fairly easy game because BMC with a very old platform, it wasn't really it wasn't. There was no fight. Um, and I think they were the enterprises. We're ready for something new, and it is always some new vendor out there is a new shiny object, and I have teenagers, so they always spent the next latest iPhone or whatever. I would >> sort of wave >> so So. And and it kept going in the other vendors into space hp, cia, IBM really had no challenge had no, no, didn't give service now a challenge either because the SAS cloud, the adoption of the cloud in this space was absolutely important. And service now was the first one to be on the cloud. BMC was not really doing much with remedy force at the time. Itis them on demand was in an A S P model. Not really an itis, um, and so service not just took names and numbers and that just grew and grew and steamrolled. Really? All of them and customers just were like, Oh, my God, this is easy. I loved it. Looks it loves it looks beautiful. It's exciting >> over for the >> same thing that innovation, right, That challenge, they served the customers. Then suddenly what happened is service now grew faster than native. You experienced some growing pains Customer saying my account rep. I haven't seen him for a while. They changed the pricing model a little bit too started to blow up their solution. And now board nebula, which is the ninety operations management solution der extending into financials and they're bolstering themselves into more of an enterprise solution, which is where BMC already has been. But they lost the connection to the customer. BMC did not love the customers at that time. Now, through some executive changes to really starting to realize that the install base they need to hug them, they're back in the game >> and watching >> service now. And they're going private. As you were asking the question earlier, try about giving them the funding to invest in R and D. >> It's so necessary if I want to give me your take on icy service now. Is someone on the collision course with sales Force? In a way, where does BMC go for to expand their their tam and to grow? >> Yeah, I said, I think so. So on the first comment Sales force and service. Now, absolutely now the CEO of service now does not think that sales force is his target off competition. I think it has to. He has to, because it is about business applications, everything. It's everything exactly So sales force and service now in I don't know. Is that the year you know, wherever Chris >> No, no, no, >> no. But they will there will collapse. Deborah Crash or you'LL see a fight. I think BMC should stay and really extend in this digital performance management in this operational management and really make it intelligent, intelligent decisions for operation for operations to become automated. To have a staff of eighty eight PM solution the application dependency mapping solution happening to be one of the best, really one of the best in the market. And customers love it. Tying that into two side intelligence, giving them the ability to understand before it happens not when it happens or after and then drive intelligence into different organizations to cmo the CEO, the CFO. Because that's what basis technology is all about. It's not about the journey anymore. They have that capability with products where service now does not have that >> great insight from a sharp analyst. Evan are like Evelyn Evelyn Ehrlich. Thanks very much for coming on the Cube. Forced to research wicked, we find more about the research that you do force the dotcom, obviously, but anything new for you, any upcoming events that we should know about where people should watch >> you go into Crystal Rica, Nicaragua >> mochi ice all right. We'LL leave you alone for a while, right, Evelyn? Great to meet you. Thanks for coming on. I keep right there, buddy. We're back with our next guest Is the Q ber live from BMC Day in Boston right back.