>> From theCUBE Studios in Palo Alto and Boston, bringing you data-driven insights from theCUBE in ETR. This is "Breaking Analysis" with Dave Vellante. >> Cisco is a company at the crossroads. It's transitioning from a high margin hardware business to a software subscription-based model, which also should be high margin through both organic moves and targeted acquisitions. It's doing so in the context of massive macro shifts to digital in the cloud. We believe Cisco's dominant position in networking combined with a large market opportunity and a strong track record of earning customer trust, put the company in a good position to capitalize on cloud momentum. However, there are clear challenges ahead for Cisco, not the least of which is the growing complexity of its portfolio, a large legacy business, and the mandate to maintain its higher profitability profile as it transitions into a new business model. Hello and welcome to this week's Wiki-bond cube insights powered by ETR. In this breaking analysis, we welcome in Zeus Kerravala, who's the founder and principal analyst at ZK Research, long time Cisco watcher who together with me crafted the premise of today's session. Zeus, great to see you welcome to the program. >> Thanks Dave. It's always a pleasure to be with you guys. >> Okay, here's what we're going to talk about today, set the agenda. The catalyst for this session, Zeus and I attended Cisco's financial analyst day. We received a day and a half of firehose presentations, drill downs, interactions, Q and A with Cisco execs and one key customer. So we're going to share our takeaways from these sessions and add our additional thoughts. Now, in particular, we're going to talk about Cisco's TAM, its transformation to a subscription-based model, and how we see that evolving. As always, we're going to bring in some ETR spending data for context and get Zeus' take on what that tells us. And we'll end with a summary of Cisco's cloud strategy and outlook for how it could win in the cloud. So let's talk about Cisco's sort of structure and TAM opportunities. First, Zeus, Cisco has four main lines of business where it's organized it's executives around sort of four product areas. And it's got a large service component as well. Network equipment, SP routing, data center, collaboration that security, and as I say services, that's not necessarily how it's going to market, but that's kind of the way it organizes its ELT, its executive leadership team. >> Yeah, the in fact, the ELT has been organized around those products, as you said. It used to report to the street three product segments, infrastructure platforms, which was by far the biggest, it was all their networking equipment, then applications, and then security. Now it's moved to five new segments, secure agile networks, hybrid work, end to end security, internet for the future and optimized app experiences. And I think what Cisco's trying to do is align their, the way they report along the lines of the way customers buy. 'Cause I think before, you know, they had a very simplistic model before. It was just infrastructure, apps, and security. The ELT is organized around product roadmap and the product innovation, but that's not necessarily the way customers purchase things and so, purchase things so I think they've tried to change things a little bit there. When you look at those segments though, you know, by, it's interesting. They're all big, right? So, by far the biggest distilled networking, which is almost a hundred billion dollar TAM as they reported and they have it growing a about a 9% CAGR as reported by other analyst firms. And when you think about how mature networking is Dave, the fact that that's still growing at high single digit CAGR is still pretty remarkable. So I think that's one of those things that, you know, watchers of Cisco historically have been calling for the network to be commoditized for decades. For as long as I've been watching Cisco, we've been, people have been waiting for the network to be commoditized. My thesis has always been, if you can drive enough innovation into things, you can stave off commoditization and that's what they've done. But that's really the anchor for them to sell all their other products, some of which are higher margin, some which are a little bit sore, but they're all good high margin businesses to your point. >> Awesome. We're going to dig into that. So, so they flattened the organization when Geckler left. You've got Todd Nightingale, Jonathan Davidson, Liz Centoni, and Jeetu Patel who we heard from and we'll make some comments on what we heard from them. One of the big takeaways at the financial analysts meeting was on the TAM, as you just mentioned. Liz Centoni who also is heavily involved in strategy and the CFO Scott Herren, showed this slide, which speaks to the company's TAM and the organizational structure that you were just talking about. So the big message was that Cisco has got a large and growing market, you know, no shortage of available market. Somewhere between eight and 900 billion, depending on which of the slides you pull out of the deck. And ironically Zeus, when you look at the current markets number here on the right hand side of this slide, 260 billion, it just about matches the company's market cap. Maybe an interesting coincidence, but at any rate, what was your takeaway from this data? >> Well, I think, you know, the big takeaway from the data is there's still a lot of room ahead for Cisco to grow, right? Again, this is a, it's a company that I think most people would put in the camp of legacy IT vendor, just because of how long they've been around. But they have done a very good job of staving off innovation. And part of that is just these markets that they play in continue to grow and they continue to have challenges that they can solve. I think one of the things Cisco has done though, since the arrival of Chuck Robbins, is they don't fight these trends anymore, Dave. I know prior to Chuck's arrival, they really fought the tide of software defined networking and you know, trends like that, and even cloud to some extent. And I remember one of the first meetings I had with Chuck, I asked him about that and he said that Cisco will never do that again. That under his watch, if customers are going through a market transition, Cisco wants to lead them through it, not try and hold them back. And I think for that reason, they're able to look at, all of those trends and try and take a leadership position in them, even though you might look at some of those and feel that some of them might be detrimental to Cisco's business in the short term. So something like software defined WANs, which you would throw into secure agile networks, certainly doesn't, may not carry the same kind of RPOs and margins with it that their traditional routers did, but ultimately customers are going to buy it and Cisco would like to be the ones to sell it to them. >> You know, you bring up a great point. This industry is littered, there's a graveyard of executives who fought the trend. Many people, some people remember Ken Olson of Digital Equipment Corporation. "Unix is snake oil," is what he said. IBM mainframe guys said, "PCs are a toy." And of course the history, they were the wrong side of history. The other big takeaway was the shift to software in subscription. They really made a big point of this. Here's a chart Cisco showed a couple of times to make the point that it's one of the largest software companies in the world. You know, in the top 10. They also made the point that Chuck Robbins, when he joined in 2015, and since that time, it's nearly 4x'ed it's subscription software revenue, and roughly doubled its software sales. And it now has an RPO, remaining performance obligations, that exceeds 30 billion. And it's committing to grow its subscription business in the forward-looking statements by 15 to 17% CAGR through 25, which would imply about a doubling of these, the blue lines. Zeus, it's unclear if that forward-looking forecast is just software. I presume it includes some services, but as Herren pointed out, over time, these services will be bundled into the product revenue, same way SAS companies do it. But the point is Cisco is committed, like many of their peers, to moving to an ARR model. But please, share your thoughts on Cisco's move to software subscriptions and how you see the future of consumption-based pricing. >> Yeah, this has been a big shift for Cisco, obviously. It's one that's highly disruptive. It's one that I know gave their partners a lot of angst for a long time because when you sell things upfront, you get a big check for selling that, right? And when you sell things in a subscription model, you get a much smaller check for a number of months over the period of the contract. It also changes the way you deal with the customer. When you sell a one-time product, you basically wipe your hands. You come back in three or four years and say, "it's time to upgrade." When you sell a subscription, now, the one thing that I've tried to talk to Cisco and its partners about is customers don't renew things they don't use. And so it becomes incumbent on the partner, it becomes incumbent upon Cisco to make sure that things that the customer is subscribing to, that they do use. And so Cisco's had to create a customer success organization. They've had to help their partners create those customer success organizations. So it's really changed the model. And Cisco not only made the shift, they've done it faster than they actually had originally forecast. So during the financial analyst day, they actually touted their execution on software, noting that it hit it's 30% revenue as percent of total target well before it was supposed to, it's actually exceeded its targets. And now it's looking to increase that to, it actually raised its guidance in this area a little bit by a few percentage points, looking out over the next few years. And so it's moved to the subscription model, Dave, the thing that you brought up, which I do see as somewhat of a challenge is the shift to consumption-based pricing. So subscription is one thing in that I write you a check every month for the same amount. When I go to the consumption-based pricing, that's easy to do for cloud services, things like WebEx or Duo or, you know, CloudLock, some of the security products. That that shift should be relatively simple. If customers want to buy it that way. It's unclear as to how you do that when you're selling on-prem equipment with the software add-on to it because in that case, you have to put metering technology in to understand how much they're using. You have to have a minimum baseline to start with. They've done it in some respects. The old HCS product that they sold, the Telcos, actually was sold with a minimum commit and then they tacked on a utilization on top of that. So maybe they move into that kind of model. But I know it's something that they've, they get asked about a lot. I know they're still thinking about it, but it's something that I believe is coming and it's going to come pretty fast. >> I want to pick up on that because I think, you know, they made the point that we're one of the top 10 software companies in the world. It's very difficult for hardware companies to make the transition to software. You know, HP couldn't do it. >> Well, no one's done it. >> Well, IBM has kind of done it, but they really struggle. It's kind of this mishmash of tooling and software products that aren't really well-integrated. But, I would say this, everybody now, Cisco, Dell, HPE with GreenLake, Lenovo, pretty much all the traditional hardware players are trying to move to an as a service model or at least for a portion of their business. HPE's all in, Dell transitioning. And for the most part, I would make the following observation. And I'd love to get your thoughts on this. They're pretty much following a SAS like model, which in my view is outdated and kind of flawed from a customer standpoint. All these guys say, "Hey, we're doing this because "this is what the customers want." I think the cloud is really a true consumption based model. And if you look at modern SAS companies, a lot of the startups, they're moving to a consumption based model. You see that with Snowflake, you see that with Stripe. Now they will offer incentives. But most of the traditional enterprise players, they're saying, "Okay, pay us upfront, "commit to some base level. "If you go over it, you know, "we'll charge you for it. "If you go under it, you're still going to pay "for that base level." So it's not true consumption base. It's not really necessarily the customer's best interest. So that's, I think there's some learnings there that are going to have to play out. >> Yeah, the reason customers are shying away from that SAS type model, I think during the pandemic, the one thing we learned, Dave, is that the business will ebb and flow greatly from month to month sometimes. And I was talking with somebody that worked for one of the big hotel chains, and she was telling me that what their CRM providers, she wouldn't tell me who it was, except said it rhymed with Shmalesforce, that their utilization of it went from, you know, from a nice steady level to spiking really high when customers started calling in to cancel hotel rooms. And then it dropped down to almost nothing as we went through that period of stay at home. And now it's risen back up. And so for her, she wanted to move to a consumption-based model because what happens otherwise is you wind up buying for peak utilization, your software subscriptions go largely underutilized the majority of the year, and you wind up paying, you know, a lot more than you need to. If you go to more of a true consumption model, it's harder to model out from a financial perspective 'cause there's a lot of ebbs and flows in the business, but over a longer period of time, it's more cost-effective, right? And so the, again, what the pandemic taught us was we don't really know what we're going to need from a consumption standpoint, you know, nevermind a year from now, maybe even six months from now. And consumption just creates a lot more flexibility and agility. You can scale up, you can scale down. You can bring in users, you can take out users, you can add consultants, things like that. And it just, it's much more aligned with the way businesses are run today. >> Yeah, churn is a silent killer of a software company. And so there's retention is the key here. So again, I think there's lots of learning. Let's put Cisco into context with some of its peers. So this chart we developed compares five companies to Cisco. Core Dell, meaning Dell, without VMware. VMware, HPE, IBM, we've put an AWS, and then Cisco as, IBM, AWS and Cisco is the integrated plays. So the chart shows the latest quarterly revenue multiplied by four to get a run rate, a three-year growth outlook, gross margin percentage, market cap, and revenue multiple. And the key points here are that one, Cisco has got a pretty awesome business model. It's got 60% gross margin, strong operating margins, not shown here, but in the mid twenties, 25%. It's got a higher growth rate than most of its peers. And as such, a much better, multiple than say, for instance, Core Dell gets 33 cents on the revenue dollar. HPE is double that. IBM's below two X. Cisco's revenue multiple rivals VMware, which is a pure software company. Now in a large part that's because VMware stock took a hit recently, but still the point is obvious. Cisco's got a great business. Now for context, we've added AWS, which blows away any company on this chart. We've inferred a market cap of nearly 600 billion, which frankly is conservative at a 10 X revenue multiple given it's inferred margins and growth rate. Now Zeus, if AWS were a separate company, it could have a market cap that approached 800 billion in my view. But what does this data tell you? >> Well, it just tells me that Cisco continues to be a very well-run company that has staved off commoditization, despite the calling for it for years. And I think the big lesson, and I've talked to financial analysts about this over the years, is that if, I don't really believe anything in this world is a commodity, Dave. I think even when Cisco went to the server market, if you remember back then, they created a new way of handling memory management. They were getting well above average margins for service, albeit less than Cisco's network margins, but still above average for server margins. And so I think if you can continue to innovate, you will see the margin stay where they are. You will see customers continue to buy and refresh. And I think one of the challenges Cisco's had in the past, and this is where the subscription business will help, is getting customers to stay with the latest and greatest. Prior to this refresh of network equipment, some of the stuff that I've seen in the fields, 10, 15 years old, once you move to that sell me a box and then tack on the subscription revenue that you pay month by month, you do drive more consistent refresh. Think about the way you just handle your own mobile phone. If you had to go pay, you know, a thousand dollars every three years, you might not do it at that three-year cycle. If you pay 40 bucks a month, every time there's a new phone, you're going to take it, right? So I think Cisco is able to drive greater, better refresh, keep their customers current, keep the features in there. And we've seen that with a lot of the new products. The new Cat 9,000, some of the new service provider products, the new wifi products, they've all done very well. In fact, they've all outpaced their previous generation products as far as growth rate goes. And so I think that is a testament to the way they've run the business. But I do think when people bucket Cisco in with HP and Dell, and I understand why they do, their businesses were similar at one time, it's really not a true comparison anymore. I think Cisco has completely changed their business and they're not trying to commoditize markets, they're trying to drive innovation and keep the margins up, where I think HP and Dell tend to really compete on price versus innovation. >> Well, and we are going to get to this point about the tailwinds and headwinds and cloud, and how Cisco to do it. But, to your point about, you know, the cell phone analogy. To the extent that Cisco can make that seamless for customers could hide that underlying complexity, that's going to be critical for the cloud. Now, but before we get there, I want to talk about one of the reasons why Cisco such a high multiple, and has been able to preserve its margins, to your point, not being commoditized. And it's been able to grow both organically, but also has a strong history of M and A. It's this chart shows a dominant position in core networking. So this shows, so ETR data within the Fortune 500. It plots companies in the ETR taxonomy in two dimensions, net score on the vertical axis, which is a measure of spending velocity, and market share on the horizontal axis, which is a measure of presence in the survey. It's not like IDC market share, it's mentioned market share if you will. The point is Cisco is far and away the most pervasive player in the market, it's generally held its dominant position. Although, it's been under pressure in the last few years in core networking, but it retains or maintains a very respectable net score and consistently performs well for such a large company. Zeus, anything you'd add with respect to Cisco's core networking business? >> Yeah, it's maintained a dominant network position historically. I think part of because it drives good products, but also because the competitive landscape, historically has been pretty weak, right? We saw companies like 3Com and Nortel who aren't around anymore. It'll be interesting to see moving forward now that companies like VMware are involved in networking. AWS is interested in networking. Arista is a much stronger company. You know, Juniper bought Mist and is in better position. Even Extreme Networks who most people thought was dead a few years ago has made a number of acquisitions and is now a billion dollar company. So while Cisco has done a great job of execution, they've done a great job on the innovation side, their competitive landscape, looking out over the next five years, I think is going to be more difficult than it has been over the previous five years. And largely, Dave, I think that's good for Cisco. I think whenever Cisco's pressed a little bit from competition, they tend to step on the innovation gas a little bit more. And I look back and even just the transition when VMware bought Nicira, that got Cisco's SDN business into gear, like nothing else could have, right? So competition for that company, they always seem to respond well to it. >> So, let's break down Cisco's net score a little bit. Explain why the company has been able to hold its spending momentum despite its large size. This will give you a little insight to the survey. So this chart shows the granular components of net score. The lime green is new adoptions to Cisco. The forest green is spending more than 6%. The gray is flat plus or minus 5%. The pink is spending drops by more than 5%. And the red is we're chucking the platform, we're getting off. And Cisco's overall net score here is 25%, which for a company of its size speaks to the relationships that it has with customers. It's of course got a fat middle in the gray area, like all sort of large established companies. But very low defections as well, it's got low new adoptions. But very respectable. So that is background, Zeus. Let's look at spending momentum over time across Cisco's portfolio. So this chart shows Cisco's net score by that methodology within the ETR taxonomy for Cisco over three survey periods. And what jumps out is Meraki on the left, very strong. Virtualization business, its core networking, analytics and security, all showing upward momentum. AppD is a little bit concerning, but that could be related to Cisco's sort of pivot to full stack observability. So maybe AppD is being bundled there. Although some practitioners have cited to us some concerns in that space. And then WebEx at the end of the chart, it's showing some relative strength, but not that high. Zeus, maybe you could comment on Meraki and any other takeaways across the portfolio. >> Yeah, Meraki has proven to be an excellent acquisition for Cisco. In fact, you might, I think it's arguable to say it's its best acquisition in history going all the way back to camp Kalpana and Grand Junction, the ones that brought up catalyst switches. So, in fact, I think Meraki's revenue might be larger than security now. So, that shows you the momentum it has. I think one of the lessons it brought to Cisco was that simpler is better, sometimes. I think when they first bought Meraki, the way Meraki's deployed, it's very easy to set up. There's a lot of engineering work though that goes into making a product simple to use. And I think a lot of Cisco engineers historically looked at Meraki as, that's a little bit of a toy. It's meant for small businesses, things like that, but it's not for enterprise. But, Rocky's done a nice job of expanding the portfolio, of leveraging the cloud for analytics and showing you a lot of things that you wouldn't necessarily get from traditional networking equipment. And one of the things that I was really delighted to see was when they put Todd Nightingale in charge of all the networking business, because that showed to me that Chuck Robbins understood that the things Meraki were doing were right and they infuse a little bit of Meraki into the rest of the company. You know, that's certainly a good thing. The other areas that you showed on the chart, not really a surprise, Dave. When you think of the shift hybrid work and you think of the, some of the other transitions going on, I think you would expect to see the server business in decline, the storage business, you know, maybe in a little bit of decline, just because people aren't building out data centers. Where the other ones are related more to hybrid working, hybrid cloud, things like that. So it is what you would expect. The WebEx one was interesting too, because it did show somewhat of a dip and then a rise. And I think that's indicative of what we've seen in the collaboration space since the pandemic came about. Companies like Zoom and RingCentral really got a lot of the headlines. Again, when you, the comment I made on competition, Cisco got caught a little bit flat-footed, they've caught up in features and now they really stepped on the gas there. Chuck joked that he gave the WebEx team a bit of a blank check to go do what it had to do. And I don't think that was a joke. I think he actually did that because they've added more features into WebEx in the last year then I think they did the previous five years before that. >> Well, let's just drill into video conferencing real quick here, if we could. Here's that two dimensional view, again, showing net score against market share or pervasiveness of mentions, and you can see Microsoft Teams in the upper right. I mean, it's off the chart, literally. Zoom's well ahead of Cisco in terms of, you know, mentions presence. And that could be a spate of freemium, you know, but it's basically a three horse race in this game. And Cisco, I don't think is trying to take Zoom head on, rather it seems to be making WebEx a core part of its broader collaboration agenda. But Zeus, maybe you could comment. >> Well, it's all coming together, right? So, it's hard to decouple calling from video from meetings. All of the vendors, including Teams, are going after the hybrid work experience. And if you believe the future is hybrid and not just work from home, then Cisco does have a pretty interesting advantage because it's the only one that makes its own end points, where Teams and Zoom doesn't. And so that end to end experience it can deliver. The Microsoft Teams one's interesting because that product, frankly, when you talk to users, it doesn't have a great user score, like as far as user satisfaction goes, but the one thing Microsoft has done a very good job of is bundling it in to the Office365 licenses, making it very easy for IT to deploy. Zoom is a little bit in the middle where they've appealed to the users. They've done a better job of appealing to IT, but there is a, there is a battleground now going on where video's not just video. It includes calling, includes meetings, includes room systems now, and I think this hybrid work friend is going to change the way we think about these meeting tools. >> Now we'd be remiss if we didn't spend a moment talking about security as a key part of Cisco's business. And we have a graphic on this same kind of X, Y. And it's been, we've seen several quarters of growth. Although, the last quarter security growth was in the low single digits, but Cisco is a major player in security. And this X, Y graph shows, they've got both a large presence and a solid spending momentum. Not nearly as much momentum as Okta or Zscaler or a CrowdStrike and some of the smaller companies, but they're, these guys are on a rocket ship, but others that we featured in these episodes, but much more than respectable for Cisco. And security is critical to the strategy. It's a big part of the subscriber base. And the last thing, Zeus, I'll say about Cisco made the point in analyst day, that this market is crowded. You can see that in this chart. And their goal is to simplify this picture and make it easier for customers to secure their data and apps. But that's not easy, Zeus. What are your thoughts on Cisco's security opportunities? >> Yeah, I've been waiting for Cisco go to break up in security a little more than it has. I do think, I was talking with a CSO the other day, Dave, that said to me he's starting to understand that you don't have to have best of breed everywhere to have best in class threat protection. In fact, there's a lot of buyers now will tell you that if you try and have best of breed everywhere, it actually creates a negative when it comes to threat protection because keeping all the policies and things up to date is very, very difficult. And so the industry is moving more to a platform model, right? Now, the challenge for Cisco is how do you get that, the customer to think of the network as part of the platform? Because while the platform model, I think, is starting to gain traction, FloridaNet, Palo Alto, even McAfee, companies like that also have their own version of a security platform. And if you look at the financial performance of companies like FloridaNet and Palo Alto over the past, you know, over the past couple of years, they've been through the roof, right? And so I think an interesting and unique challenge for Cisco is can they convince the security buyer that the network is as important a part of that platform as any other component? If they can do that, I think they can break away from the pack. If not, then they'll stay mixed in with those, you know, Palo, FloridaNet, Checkpoint, and, you know, and Cisco, in that mix. But I do think that may present their single biggest needle moving opportunity just because of how big the security TAM is, and the fact that there is no de facto leader in security today. If they could gain the same kind of position in security as they have a networking, who, I mean, that would move the needle like no other market would. >> Yeah, it's really interesting that they're coming at security, obviously from a position of networking strength. You've got, to your point, you've got best of breed, Okta in identity, you got CrowdStrike in endpoint, Zscaler in cloud security. They're all growing like crazy. And you got Cisco and you know, Palo Alto, CSOs tell us they want to work with Palo Alto because they're the thought leader and they're obviously a major player here. You mentioned FloridaNet, there's a zillion others. We could talk all day about security. But let's bring it back to cloud. We've talked about a number of the piece in Cisco's portfolio, and we haven't really spent any time on full stack observability, which is a big push for Cisco with AppD, Intersight and the ThousandEyes acquisition. And that plays into this equation. But my take, Zeus, is Cisco has a number of cloud knobs that it can turn, it sells core networking equipment to hyperscalers. It can be the abstraction layer to connect on-prem to the cloud and hybrid and across clouds. And it's in a good position with Telcos too, to go after the 5G. But let's use this chart to talk about Cisco's cloud prospects. It's an ETR cut of the cloud customer spending. So we cut it by cloud customers. And they're are, I don't know, 800 or so in the survey. And then looking at various companies performance within that cut. So these are companies that compete, or in the case of HashiCorp, partner with Cisco at some level. Let me just set this up and get your take. So the insert on the chart by the way shows the raw data that positions each dot, the net score and the shared n, i.e. the number of accounts in the survey that responded. The key points, first of all, Azure and AWS, dominant players in cloud. GCP is a distant third. We've reported on that a lot. Not only are these two companies big, they have spending momentum on their platforms. They're growing, they are on that flywheel. Second point, VMware and Cisco are very prominent. They have huge customer bases. And while they're often on a collision course, there's lots of room in cloud for multiple players. When we plotted some other Cisco properties like AppD and Meraki, which as we said, is strong. And then for context, we've placed Dell, HPE, Aruba, IBM and Oracle. And also VMware cloud and AWS, which is notable on its elevation. And as I say, we've added HashiCorp because they're critical partner of Cisco and it's a multi-cloud play. Okay, Zeus, there's the setup. What does Cisco have to do to make the cloud a tailwind? Let's talk about strategy, tailwinds, headwinds, competition, and bottom line it for us. >> Yeah, well, I do think, well, I talked about security being the biggest needle mover for Cisco, I think its biggest challenge is convincing Wall Street in particular, that the cloud is a tailwind. I think if you look at the companies with the really high multiples to their stock, Dave, they're all ones where they're viewed as, they go along with the cloud ride, Right? So the, if you can associate yourself with the cloud and then people believe that the cloud is going to, more cloud equals more business, that obviously creates a better multiple because the cloud has almost infinite potential ahead of it. Now with respect to Cisco, I do think cloud has presented somewhat of a double-edged sword for Cisco. I don't believe the current consumption model for cloud is really a tailwind for Cisco, not really a headwind, but it doesn't really change Cisco's business. But I do think the very definition of cloud is changing before our eyes, Dave. And it's shifting away from centralized clouds. If you think of the way customers bought cloud before, it might have used AWS, it might've used Azure, but it really, that's not really multi-cloud, it's just multiple clouds in which I put things in these centralized resources. It's shifting more to this concept of distributed cloud in which a single application can be built using resources from your private cloud, for AWS, from Azure, from Edge locations, all the cloud providers have built their portfolios to support this concept of distributed cloud and what becomes important there, is a highly agile dynamic network. And in that case with distributed cloud, that is a tailwind for Cisco because now the network is that resource that ties all those distributed cloud components together. Now the network itself has to change. It needs to become a lot more agile and microservices and container friendly itself so I can spin up resources and, you know, in an Edge location, as fast as I can on-prem and things like that. But I do think it creates another wave of innovation and networking, and in that case, I think it does act as a tailwind for Cisco, aside from just the work it's done with the web scalers, you know, those types of companies. So, but I do think that Cisco needs to rethink its delivery model on network services somewhat to take advantage of that. >> At the analyst meeting, Cisco made the point that it does sell to the hyperscalers. It talked about the top six hyperscalers. You know, you had mentioned to me, maybe IBM and Oracle were in there. I always talk about four hyperscalers and only four, but that's fine. Here's my question. Practitioners have told me, buyers have told me, the more money and more workloads I put in the cloud, the less I spend with Cisco. Now, even though that might be Cisco gear powering those clouds, do you see that as a potential threat in that they don't own that relationship anymore and value will confer to the cloud players? >> Yeah, that's, I've heard that too. And I don't, I believe that's true when it comes to general purpose compute. You're probably not buying as many UCS servers and things like that because you are putting them in the cloud. But I do think you do need a refresh the network. I think the network becomes a very important role, plays a very important role there. The variant, the really interesting trend will be, what is your WAM look like? Do you have thousands of workers scattered all over the place, or do you just have a few centralized locations? So I think also, you know, Cisco will wind up providing connectivity within the cloud. If you think of the transition we've seen in other industries, Dave, as far as cloud goes, you think of, you know, F5, a company like that. People thought that AWS would commoditize F5's business because AWS provides their own load balancers, right? But what AWS provides is a very basic, very basic functionality and then use F5's virtual edition or a cloud edition for a lot of the advanced capabilities. And I think you'll see the same thing with the cloud that customers will start buying versions of Cisco that go in the cloud to drive a lot of those advanced capabilities that only Cisco delivers. And so I think you wind up buying more Cisco over time, although the per unit price of what you buy might be a little bit lower. If that makes sense here. >> It does, I think it makes a lot of sense and that fits into the cloud model. You know, you bring up a good point, the conversation with the customer was Rakuten. And that individual was essentially sharing with us, somebody was asking, one of the analysts was asking, "Well, what about the cloud guys? "Aren't they going to really threaten the whole Telco "industry and disrupt it?" And his point was, "Look at, this stuff is not trivial." So to your point, you know, maybe they'll provide some basic functionality. Kind of like they do in a lot of different areas. Data protection is another good example. Security is another good example. Where there's plenty of room for partners, competitors, of on-prem players to add value. And I've always said, "Look, the opportunity "is the cloud players spend 100 billion dollars a year "on CapEx." It's a gift to companies like Cisco who can build an abstraction layer that connects on-prem, cloud for hybrid, across clouds, out to the edge, and really be that layer that is that layer that takes advantage of cloud native, but also delivers that experience, I don't want to use the word seamlessly, but that experience across those clouds as the cloud expands. And that's fundamentally Cisco's cloud strategy, isn't it? >> Oh yeah. And I think people have underestimated over the years, how hard it is to build good networking products. Anybody can go get some silicon and build a product to connect two things together. The question is, can you do it at scale? Can you do it securely? And lots of companies have tried to commoditize networking, you know, White Boxes was looked at as the existential threat to Cisco. Huawei was looked at as the big threat to Cisco. And all of those have kind of come and gone because building high quality network equipment that scales is tough. And it's tougher than most people realize. And your other point on the cloud providers as well, they will provide a basic level of functionality. You know, AWS network equipment doesn't work in Azure. And Azure stuff doesn't work in Google, and Google doesn't work in AWS. And so you do need a third party to come in and act as almost the cloud middleware that can connect all those things together with a consistent set of policies. And that's what Cisco does really well. They did that, you know back when they were founded with routing protocols and you can think this is just an extension of what they're doing just up at the cloud layer. >> Excellent. Okay, Zeus, we're going to leave it there. Thanks to my guest today, Zeus Kerravala. Great analysis as always. Would love to have you back. Check out ZKresearch.com to reach him. Thank you again. >> Thank you, Dave. >> Now, remember I publish each week on Wikibond.com and siliconangle.com. All these episodes are available as podcasts, just search "Braking Analysis" podcast, and you can connect on Twitter at DVallante or email me David.Vallante@siliconangle.com. Thanks for the comments on LinkedIn. Check out etr.plus for all the survey action. This is Dave Vallante for theCUBE insights powered by ETR. Be well and we'll see you next time. (light music)

(upbeat music) >> 2020 was the most unpredictable year of our lives, a forced shutdown of global economies left everyone have the conclusion that the tech industry spending would decline and of course it did, but you'd hardly know it if you watch the stock market and the momentum of several well-positioned companies. Those firms that had products and services that catered to the pivot to work from home, SAS based solutions were focused on business resiliency and cloud saw huge growth. The forced match to digital turned a buzzword into reality overnight, where if you weren't a digital business, you were out of business. And one of the companies participating in that growth trend was Veeam. Veeam virtual is scheduled to take place on May 25th and 26th. And it's one of our favorite physical events and the Cube will be there again as a virtual participant. One of our traditions prior to VeeamON has always been to bring in an executive into the Cube and talk not only about what to expect at the show, but what's happening in the market. And with me is many times Cube alum Danny Allan is the chief technology officer at Veeam. Danny welcome is always great to see you. >> I am delighted to be here again. Disappointed it's virtual, but excited to talk with you. >> Yeah, me too. You know, it's coming. It's getting jabbed but you know, you look at the surprises here. I mean, look at the chip shortage, you know everybody thought, Oh, well stop ordering chips. I mean furniture, et cetera, cars. And it's just kind of crazy. What was your expectation going into the pandemic and what did you actually see looking back? >> Well, it's funny, you never know what's going to happen. And for the first few weeks I would say there's a lot of disruption because all of a sudden you have people who've been going into an office for a long time, working from home and you know, from an R&D perspective at Veeam those people weren't used to working from home. So there's a lot of uncertainty I'll say for the first three or four weeks but what very quickly picked up was the opportunity. I'll say to focus more specifically on delivering things for our customers. And one of the things obviously that just exploded was use of digital technologies like Slack and Microsoft teams. And as you say, Veeam was well positioned to help customers as they move towards this new normal, as they say. >> So what were some of the growth vectors that you guys saw specifically that were helping your customers going to get get through this time? >> Yeah well, people always associate Veeam with knowing data protection for the virtual environment but two things really stood out last year as our emerging markets. One was Office365, and I think that's due to the uptake of Microsoft teams. I mean, if you look at the Microsoft results, you can see that people are doing SaaS. And we were very well positioned to take advantage of that. Help customers move towards collaborating online. So that was a huge growth vector for us. And the second one was cloud. We had more data moving to cloud than ever before in Veeam history. And that continues on into 2021. >> You guys, well, yeah, let's talk more about that set SAS piece of your business. You were very early on in terms of SAS data protection. You kind of had to educate the market. People are like, well, why do I need to back up my SAS doesn't the cloud provider do that? And then you sort of you had to educate, so it was you were early and but it's really paid off. Maybe talk about how that trend has benefited some of your customers. >> Yeah. So if you go back four years, we didn't even have data protection for Office365. And over the last four years, we've emerged into the market leader the largest in protection for Office365. And as you say, it was about education. Early on people knew that they needed to protect exchange when they ran it on premises. And when they first went to the cloud there was this expectation of, Hey Microsoft or my provider will do that for me. And very quickly they realized that's not the case and there's still the same threats. It might not be hardware failure, but certainly misconfiguration or deleted items or ransomware in 2021, sorry, 2020 was massive. And so we do data protection for Exchange, for SharePoint online, for one drive, and most recently for Microsoft teams. And so that data protection obviously helps organizations as they adopt Office365 and SaaS technologies. >> I sent him my last breaking analysis. When you look at the ETR data, Veeam has been really steady. You know, some competitors spike up and come down, others, you know, maybe aren't doing so well or the larger established players don't have as much momentum. It just seems like Veeam even though you cross the billion dollar revenue mark, you've been able to keep that spending momentum up. And I think it's, I would observe it's a function of your ability to identify that the waves and ride those waves and anticipate them. We just talked about SAS, talked about virtualization. You were there cloud, we'll talk about that more as well, plus your execution. It seems like since the acquisition by insight you guys have continued to execute. I wonder if you could help the audience understand how do you think about the phases that Veeam has gone through in its ascendancy and where you're headed? >> Yeah. And so I look at it as three things, it's having the right product, but it's not just enough to have the right product, the right product it's the right timing and it's the right execution. So if you think about where Veeam started, it was all in data protection for vSphere, for the hypervisor. And that was right at the time when VMware was taking off and the modernized data center was being virtualized. And so that helped us grow, I'll say into a $600 million company, but then about four years ago, we see the ascendancy of SaaS and specifically Office365. And so, you know, we weren't first to market but I would argue the timing with the best product, with the right execution has turned that into a massive a very significant contribution to our bottom line. And then actually the third wave through 2020 is the adoption of cloud. We moved last year, 242 petabytes into cloud storage and already in the first quarter of 2021, we've moved to 100 petabytes. So there's this massive adoption or migration of data into the cloud. And Veeam has been positioned with the right product, at the right time, with the right execution, to take advantage of that. >> So I wonder if you could help us quantify that IDC data you know, the IDC did a good job quantifying the market. Maybe you could share with us sort of your position there, maybe some of the growth that we're seeing. Can you add some color to that? >> Yeah. We have some very exciting results from the recent IDC report. So in the second half of 2020, we saw 17.9% year over year growth in our revenue. That was actually triple the closest competitor. And our sequential growth was over 21%. So massive growth and all of that is in the second half of the year, 563 million in revenue. So over a billion dollar company. So these aren't just, you know, 20% growth on small numbers. This is on a very significant number. And we see that continuing forward, we'll be announcing some things I'm sure at VMR coming up in a few weeks here, but that trend continues. And again, it's the right product, right time, with the right execution. >> Cloud continues to roll on. You're seeing, you know, solid weather. If you add them all up the big four 30 plus percent growth you're seeing Azure, even higher growth. You know, AWS is huge, Google growing, Google cloud, probably in the 60 to 70% range. So cloud still hot, it's kind of gone mainstream but there's still feels like there's a long way to go there. What's happening in cloud? You guys, again, leaning in, riding that wave. What can you tell us? >> We are leaning in, you're going to see some things coming up at Veeam related to that. But two things I would say, one is we're in the marketplace of all three of the major hyperscalers. So there's a Veeam backup for AWS, Veeam backup for Azure, and a Veeam backup for GCP. And not only is there products that are purpose-built for those clouds in the marketplace, all three of them have integrations to the core Veeam platform. And so this isn't just standalone products while it is in the marketplace, it's integrated into the full strategy around modern data protection for the organizations. And so I am thrilled about some of the things that we're going to be showing in there but we're leaning in very closely with those. We think we're in early days, like I say maybe first, second year, and it will be the next decade as they truly emerge into their dominant position. But even more than cloud if you asked me what I get excited about looking forward certainly cloud adoption is massive, but Kubernetes, that's what's enabling some of the models of both on-prem and cloud hosted. And we're clearly doing some things there as well. >> So I'm glad you brought that up because I think the first time I ever sort of stumbled into a company that was actually doing data protection for containers was out of a VeeamON event. It was one of your exhibitors. And I was like, Hmm, that's an interesting name. And yeah, of course he ended up buying the company. But so, you know, it's funny, right? Because containers have been around forever. And then when you started to see Kubernetes come to for, containers are really ephemeral they really didn't, you know, they weren't persistent but they didn't have state, but that's changing. I wonder if you could give us your perspective as to how you're thinking about that whole space. >> I truly believe that the third big wave of technology transformation, the first was around physical systems and mainframes and things. And then we went into the virtualized era. I think that the third world is not the cloud. I actually think it is containers. Now why containers? Because as you mentioned, Dave, they're a femoral, they're designed for the world of consumption. Everything else is designed for you, install it. And then you build to the high watermark. The whole thing about containers is that they're a femoral and they're built for the consumption model. The other thing about containers is that they're highly portable. So you can run it on premises with OpenShift but then you can move it to GKE or HKS or EKS or any of the big cloud platforms. So it definitely aligns with organization's desire to modernize and to choose the infrastructure of best choice. Now, at the same time, the reason why they haven't taken off I would argue as quickly as they could have is because they've been really complex, in early days the complexity of containers was very difficult, but the model, the platform or ecosystem is evolving, they are becoming more simple. And what is happening is IT operations teams are now considering the developer, their customer and they're building self-service models for the developers to be more productive. So I think of this as platform apps and certainly backup and security is a part of this but it is moving and we're seeing traction actually faster than it would have predicted in early 2020. >> Yeah. We've been putting forth this vision of a layer that abstracts the complexity of the underlying clouds whether it's on prem, across clouds, eventually the edge and containers are linchpin to enabling that. Let's talk about VeeamON 2021. Show us a little leg, give us a preview. >> So we always come with the excitement and we always come with showing a sneak peek of what's to come. So certainly we're going to celebrate some of the big successes. We brought version 11 to market earlier this year that had security capabilities around ransomware type, continuous data protection it at a whole lot of things. So we're going to celebrate some of the products have already recently launched but we're also going to give a sneak peek of what's coming over 2021. Now, if you ask me what that is, we talk an awful lot about cloud. So you should expect to see things around Veeam backup for AWS and Azure and GCP. You should expect to see things around our Kubernetes data protection with our casting Cape 10 product, you should expect to see evolution of capabilities with our SaaS data protection with Office365. So we're going to give a sneak peek of lots of things to come. And as always, we bring lots of innovation to the market. It's not just another checkbox theme has always said, how can we do it differently? How can we do a better? And then we're going to show that to our customers at VeeamON. >> Well, we're always super excited to participate in the Veeam community. We've always had a lot of fun. They're great events. Yes, it's virtual, but you guys always have an interesting spin on things and make it fun. It's May 25th and 26th. It starts at 9:00 AM Eastern time. You go to Veeam V-E-E-A-M.com and sign up, make sure you do that and check out all the content. The Cube of course will be there. I will be interviewing executives, customers, partners. There's tons of content for practitioners. And, you know, as always you guys got the great demos and always a few surprises. So Danny, really looking forward to that and really appreciate your time and the Cube today. >> Thank you, Dave. >> All right. And thank you for watching. This is Dave Vellante for the Cube. Again, May 25th and 26th 9:00 AM. Eastern time, go to veeam.com and sign up. We'll see you there. (upbeat music)

>> From theCUBE Studios in Palo Alto and Boston, connecting with thought leaders all around the world, this is a Cube Conversation. >> Hi, I'm Stu Miniman and welcome to this Cube Conversation. I'm coming to you from our Boston area studio, and we always love when we get to talk to practitioners, and not just any practitioner. CIOs, obviously under huge pressures in general, but in today's day and age, lots of pressures on the CIO. So, I'm happy to welcome to the program Rich Gagnon. He is the CIO from the city of Amarillo in Texas. Rich, thank you so much for joining us. >> Glad to be here. Thanks for inviting me. >> All right, so, you know, CIO in a city in Texas, why don't you give us a little bit of what your role entails, a little bit of your background, and looking forward to the conversation. >> So, my background is actually more from the private sector side of the house. Previous to coming to the city of Amarillo, I was the Vice President of Systems Engineering for Palo Alto Networks, for the Americas. Before that, the Global Vice President of Systems Engineering for F5 Networks, and before that, the Director of Global Infrastructure for GameStop. So I stepped into government with a very private-sector, profit-centered mindset, if you will, coming from very high-growth companies. My role with the city is really to be an enabler for local government, to drive not only IT direction, but as a smaller community, I also have to wear the CSO hat, and the Data Privacy Officer hat. Pretty much anything when it comes to leadership of IT and technology, as an enabler to the government, that role falls on me. >> Wow, so a pretty broad mandate that you have there. Rich, give us a little bit, how does that span? How many constituents do you have in your infrastructure, your IT? Maybe you can sketch that out a little bit for us, too. >> Sure, so, I've had peers from the private sector ask me, "What's it like to actually lead in local government?" And the best comparison I can come up with is someone like GE. I have 49 different subsidiaries, different departments that operate as individual business units, only I don't have GE's money or their staff. We have 200,000 people and the departments we support span everything, from the obvious, like public safety, police, fire. We have an airport, a public clinic, water treatment plants, public health. There are streets, all the infrastructure departments. It's very diverse. >> Wow. And with all of those constituents that you have, why don't you give us the pre-COVID-19 discussion first, which is, what are some of those pressures there, from a budgeting standpoint? Are there specific initiatives you've been driving? And how are you responding to all those variables? >> Sure. Well, coming in, it was a little jarring. City leadership was very transparent that the city had sort of stood still for about a decade. I come from a high-growth environment where money was not the precious resource, really. It was always time. It was about speed to market. How do we get competitive advantage and move fast enough to maintain it? That was not the case here. I stepped into an environment where the limitations were Cat 3 cable and switches that still ran CatOS. The year before I came in, the big IT accomplishment was finally completing the migration to Windows 7 and Office 2007. That's where we started. So, for the past three years, I guess I'm starting my fourth year, we have undergone massive transformation. I think my staff thinks I'm a bit of a maniac, because we've run like we were being chased by a rabid dog. We have updated, obviously, the Layer 1 infrastructure, replaced the entire network. We've rolled out a new data center that's all hyper-converged. That enabled us to move our security model from the traditional Layer 3 firewall at the edge to a contextually-based data center with regulation on east-west traffic and segregation. We have rolled out VDI and Office 2016 and Windows 10. It's been a lot. >> Yeah, it really sounds like you went through multiple generations of change there. It's almost like going a decade forward, not just one step forward. Bring us through a little bit, that transformation. Obviously, there should be some clear efficiencies you had, but give us kind of the before and after as you started to deploy some of these technologies. Was there some reskilling? Did you hire some new people? How did that all go? >> Very much so. And like everything, it starts with financials, right? All of the resources at the city within IT were focused on operations, so there was literally no capital budget. As where typically you would update as you go, and update infrastructure, what happened was, as the infrastructure aged, the approach was to hire more staff to try to keep aging infrastructure up and running. That's a failing strategy. So, by moving to HCI, we've actually recovered about 26% of our operating budget, which allowed us to move that money into innovation and infrastructure updating. It took a tremendous amount of reskilling. Fortunately, the one thing that's been, I think, most surprising to me coming to local government, is the creativity of the staff. They were hungry for change. They were excited by the opportunity to move things forward. So, we spent an entire year doing nothing but training. We had a massive amount of budget poured into, "Let's bring the staff up to speed. "Let's get as many vendors in front of them as possible. "Let's get them educated on where the trends are going. "What is hyper-converged architecture "and why does it matter? "What is DevOps and why is the industry heading that way?" So as I said, we started, really, Layer 2-3, established that, built out the new data center, and now our focus is now, we built that platform, and our focus is starting to shift onto business relationship management. We've met with all 49 departments. We do that every six months. We're building 49 different roadmaps for every department, on "What applications are you using? "How do we help you modernize? "How do we help you serve the citizens better?" Because that's how IT serves the community. We serve the community by serving the departments that serve them directly, and being an innovation engine, if you will, for local government, to drive through new applications and ways to serve. So the transition has really started to happen is we've gotten that base platform out of the way and the things that were blocking us from saying, "Yes, and we can do more." >> Wow, so Rich, it's been an interesting discussion as the global pandemic has hit, so many people have talked about, "Boy, when I think about working from home "or managing in this environment, if I was using "10- or 15-year-old technology, "I don't know how, "or if I'd be able to do any of what I had." So, I know Dell brought you over, you're talking HCIs, so I believe you're talking about VxRail as your HCI platform. Talk to us about what HCI enabled as you needed to shift to remote workforce and support, that overall urgent need. >> It's been massive. And it's been interesting to see the IT team absorb it. As we matured, I think they embraced the ability to be innovative and to work with our departments, but this instance really justified why I was driving progress so fervently, why it was so urgent to me. Three years ago, the answer would have been no. We wouldn't have been in a place where we could adapt. With VxRail in place, in a week, we spun up hundreds of instant clones. We spun up a 75-person call center in a day and a half for our public health. We rolled out multiple applications for public health so they could do remote clinics. It's given us the flexibility to be able to roll out new solutions very quickly and be very adaptive. And it's not only been apparent to my team, but it's really made an impact on the business, and now what I'm seeing is those of my customers that were a little lagging or a little conservative are understanding the impact of modernizing the way they do business because it makes them adaptable as well. >> All right, so, Rich, you talked a bunch about the efficiencies that HCI put in place. How about that overall management? You talked about how fast you spun up these new VDI instances. You need to be able to do things much simpler. How does the overall lifecycle management fit into this discussion? >> It makes it so much easier. In the old environment, one, it took a lot of man hours to make change. It was very disruptive when we did make change. It overburdened, I guess that's the word I'm looking for. It really overburdened our staff to cause disruption to business. It wasn't cost-efficient. And then, simple things, like, I've worked for multi-billion dollar companies where we had massive QA environments that replicated production. You simply can't afford that at local government. Having this sort of environment lets me do a scaled-down QA environment, and still get the benefit of rolling out non-disruptive change. As I said earlier, it's allowed us to take all of those cycles that we were spending on lifecycle management, because it's greatly simplified, and move those resources and reskill them in other areas where we can actually have more impact on the business. It's hard to be innovative when 100% of your cycles are just keeping the ship afloat. >> Well, it's definitely a great proof point. So often, you deploy a solution, and when push comes to shove, will it deliver on that value that we're hoping for? HCI has been around for quite a while, but a crisis like this, how can you move past, how can your team respond? Congratulations to your team on that. The Dell team has recently done a number of updates on the VxRail platform. I'm curious, as someone who's been using the platform, what particularly is interesting to you, and what pieces of that have the most relevance to your organization? >> There are a few. So we're starting to look at our SCADA environments, industrial controls. And we're looking at some processing at the edge in those environments. So the new organized D series are interesting. There's some plant environments where that might really make sense to us. We've also partnered with our local counties and we have a DR site where being able to extend the network out to that DR site is going to be very powerful for us. And then there's just some improvements in vSphere that will allow us to do a little QA-ing, if you will, on new code before we roll it out, that I think will have a pretty huge impact for us as well. >> Excellent. So, Rich, when you think about the services that you need to deliver to all of your constituencies, walk us through how the pandemic has affected the team, how you're making sure that your employees are taken care of, but that you can still deliver all of those services. >> So from an internal perspective, not running a legacy architecture has made that a whole lot easier. We've remoted most of the IT team. Our entire development team is at home. Most of our support team is at home. Most of the city is still at home. So being able to do that, one, just having the capability has been huge for us. But also, from a business perspective, it's allowed most of our city functions just to keep running. So, modified services, for sure, but we're still functioning, and I just don't think that would have been capable, we wouldn't have been capable of supporting that, even two and a half years ago. >> So, Rich, we've talked a bit about your infrastructure. I'm curious, is the city, are you leveraging any public cloud environments, or any specific SaaS solutions that are enabling some of what you're doing today also? >> Yes, and we could probably have a 30-minute discussion on what is hybrid cloud and what is multicloud. In our instance, we are leveraging quite a bit of SaaS. We've migrated a lot of our services to SaaS offerings. We have spun up several applications in the cloud. I wouldn't call them truly hybrid. In my mind, hybrid is, I am able to take the workload and very seamlessly move it between my private infrastructure and one or more clouds. This is more, workloads specifically assigned to a public cloud. But yes, we've leveraged that. Simple things like Office365 and Outlook, but just as powerful for us has been VDI and being able to offer Horizon to our employees at home. And, with my other hat on, still maintain the contextual-based security, right? So I didn't have to open up the kingdom. I can still maintain the control that I need to to be able to sleep at night. >> Yeah, it's interesting. One of the questions I love to ask someone in your position is the role of data, how you think of security, how you think of the technology and put those together. Does it help that you wear both the CSO hat and the CIO hat? How do you think about leveraging data? Is there anything that you're sharing with other municipalities, without giving up, of course, personal information? >> Sure. It causes a lot of internal arguments, right? Because there's the two halves of my brain: the CIO half that wants to roll out as much service as I can and be innovative, and the CSO half of my brain that thinks about the exposure of the service that I'm about to roll out. That's part of where we're migrating now as we start to look into our whole approach to data. We've got the platform in place. We're now really migrating our thinking into revamping the way we look at data. I have seven sources for the same data. How do I consolidate and have one source of truth, and where does that reside? My development team is really starting to migrate out of classic development and more into the automation side of the house. How are we interfacing with all of our vendors? That's in review now. And how are we tying to third-party apps? Yeah, that's really the point we're at in our maturity that, now that the infrastructure is in place, we're now migrating to, "what is our data plan?" >> Excellent. Final question I have for you, Rich. I'd love your thoughts on the changing role of CIO. I loved the discussion you had at the beginning going from, really, the private sector to the public sector. Obviously, unique pressures on all businesses right now dealing with the global pandemic, but how do you see the role of the CIO today and how has it been changing? >> I think there's an expectation that you bring value to the business, whether that's local government, or retail, or banking. I think the expectation is that you're not just managing an infrastructure or managing a team, and providing service, but how do you bring actual value to the organization that you serve? And that means that you have to understand the business and all aspects of the business. I think you have to, at least I do as a CIO, I have to spend a tremendous amount of time understanding my internal customer and what are they trying to accomplish, and often, to show them a new way that they just may not be aware of. So I think there's a little more expectation as a CIO that you're going to drive value to whatever business that you're serving. >> Well, Rich, thank you so much. Really enjoyed the conversation. Congratulations on being able to react fast. So glad that you were able to get the transformation project done ahead of this hitting, because otherwise, it would have been a very different conversation. Thanks so much for joining us. >> Thank you. >> All right, I'm Stu Miniman. Stay safe and thank you for watching theCUBE.

(upbeat music) >> Announcer: Live from Atlanta, Georgia, it's theCUBE. Covering Citrix Synergy Atlanta 2019. Brought to you by Citrix. >> Hello, and welcome to theCUBE's coverage of Citrix Synergy 2019 from Atlanta, Georgia. I'm Lisa Martin with my co-host Keith Townsend, the CTO Advisor. Keith, it's so great to see you. >> Lisa, good to be on the show with you again. >> So we're going to geek out the next two days. >> Oh isn't it so good? >> We've been geeking out already just coming from the keynote. This is ... >> Yeah This is, it was really good there was meat, there was announcements, there was news, partnerships. Citrix is a 30 year old company, who's done a lot in the last 12/18 months, to transform. From rebranding, product names, et cetera, lots of launches and announcements. And something that really peaked my interest as a marketer this morning, is hearing the influence of consumerization. Them talking about leveraging Citrix Workspace, and the things that they have done to beef it up which we'll talk about, to deliver a stellar employee experience, to delight the users. And those are words that we hear often in the marketing space, like customer lifetime value, they talked about the employee lifetime value because employee attraction, talent attraction and retention, is critical for every business. Really meaty stuff. What was some of your take on some of the announcements on Workspace? >> So I was really interested because as I'm coming off of SAP SAPPHIRE, where I'm accustomed to hearing terms like customer experience, employee experience, you know, the kind of X-data versus O-data conversation. We heard a lot of that here today. And it's weird coming from an infrastructure company. Citrix in the past I like to put into a box, it's about VDI, application virtualization and networking, and that's pretty much the conversation, it stayed at the IT infrastructure leader perspective. Today we heard a lot that broke out of that, and it was going into the C-Suite and delivering not just technology results, but business results. There was a lot about making transformation real. >> You're right it was about making it real, and if you think at the end of the day, I think I heard a stat the other day, that by 2020, which is literally around the corner, 50% of workers are going to be remote. You and I are great examples of that, we're on the road all the time, we have multiple devices we need to have connectivity that ... to all the apps, SAS apps, mobile apps, web, that allow us to be productive from wherever we are, done in a way that our employers, are confident there is security behind this. But delivering that exceptional employee experience is absolutely business critical. They gave some stats today about the trillions of dollars that are spent, or rather work that's lost, with employees that have so many apps each day that they're working with that really distract from their actual day to day function. >> Yeah I think one of the stats that they gave from an ambitious perspective, they want to give one day back to every employee, 20% of their time, back, I think the stat you referred to some seven trillion dollars of productivity is lost from just hunting and pecking inside of applications. Both of us work remotely, you work from your tablet, I work from a tablet or my phone a lot. Because I just, you know, it's low power to, it lasts the day, but yeah I still need to edit video, I need to sign invoices, I need to create statements that worked. I need to be just as creative on the road as I am at home. It helps me to compete against larger competitors, but more importantly, offer a different customer experience and this is what Citrix was talking about today, was more than just VDIs, about picking up any device asking basic logical questions like what is the status of the latest deal, the big deal, and getting that status from Salesforce without again hunting and pecking, from whatever device you're on. >> Which is critical, especially to have that seamless experience going from desktop to mobile. I think they also said ... there was a lot of stats this morning, which I really geek out on. But that the average person is using seven to 10 apps a day and I loved the video that they showed this morning that really brought that to life. Looking at a senior marketing manager for some enterprise company, who, as she starts her day, there's 10 minutes that goes by which is lie, oh, I forgot I got to log into Workday and request my PTO, oh, one of my employees needs me to approve an expense report, and oh, my boss wants to know about this big deal that's closed. And the time that is spent logging into different applications is really as you mentioned that number seven trillion dollars lost, what they're doing with Citrix, with the intelligent, the workspace intelligence experience is bringing all of that to the end user. So it's much more an activities focus rather than an app focus experience. And I loved what you said that they're very ambitiously aiming to give each person back one day a week, yes please. I will take that. In any organization. >> So I was at a government conference a few weeks ago and they talked very much about this CFO of GSA presented to a crowd of fellow government workers, and they were talking about eliminating waste, they were talking about automating processes, taking the PDF, taking a document and scanning it into a system, and then kicking off a real workflow. And this is done, the industry's been working on this problem for the past 10 years, it's called RPA, Robotic Process Automation. One of Citrix's partners and I guess now competitors in that space just received $560,000,000 in funding, in a single round, to enable artificial intelligence to do this. What I thought was interesting, is that Citrix didn't use the term bots, I think other than one time ... >> Lisa: That's right. ... on the stage. But these are essentially bots, that take redundant processes, automates them, to ultimately add value. I'm anxious to dive in and talk about how Citrix is taking stuff like, they mentioned Mainframe, AS/400 applications, integrating that in Salesforce without having this huge multi-million dollar project to re-write these core business applications and processes. So, you know it's a really exciting time in the industry Citrix has really stepped up in saying, you know what, we won't settle for just having a good business, and this application virtualization and network space, we're going to go all in. >> So one of the things I saw in Twitter this morning, is you and I are both tweeting during the keynote, which we just came from is you talked about PRA right away on Twitter and it's something that you heard instinctively with what they were saying. What are your thoughts as to why RPA as a term wasn't discussed? Did you think it's the type of audience that's here? Is it just not a term that resonates as well as AI and machine learning, which are buzz words at every event we go to? >> And I think a good portion of that is a mix. We're at a conference that's very IT-centric. Citrix is a you know, one of the core IT infrastructure vendors. So when you throw out a term like Robotic Process Automation you constantly, you instantly think, you know, gain of productivity from me or your level maybe, but from an IT infrastructure practitioner perspective, Robotic Processing Automation has a resonance with being equal to eliminating jobs. If, you know, you're going to automate the integration between VMware VSphere and Citrix desktop virtualization and that administration piece, which these solutions definitely can do that, what's left for me to do the work on. If you're going to automate the provisioning of DNS and IP addressing and all these mundane tasks that administrators probably spend 50-60% of their day doing, you know what, that's threatening. To say that you know what, we're going to give you the same tools that we give to make the workspace available today from an application perspective and to tackle that from the concept of this is just extending that ideal and you're a what, your job and what you do today to adding true business value, I think it was smart on their part to kind of avoid the bot conversation. >> Okay, I'm glad that you shared that insight, that makes perfect sense. So, PJ Hough was up there, the Chief Product Officer, who's going to be on tomorrow, talking about what Citrix is doing to distill apps and make this experience much more personalized. And of course he was joined on stage with a big Microsoft announcement today. I think I've been to so many shows this year I've lost count but I think Satya Nadella has either been on stage, he was at Dell Technologies World with Michael Dell and Pat Gelsinger, or in a video like he was today. So the partnership with Microsoft expanding here a little bit of a teaser at Microsoft Ignite a couple of months ago. Gimme your thoughts on what Microsoft, I should say what Citrix is doing to facilitate their users being much more proficient at using Microsoft Team, which I believe the gentleman from Microsoft said there's over 300,000 active users already. Fastest growing product in Microsoft's history. >> So when you talk about collaboration, you can't collaborate without these tools, whether Teams, Slack, whatever, it's become an integral part of how we communicate, how we interact, I know a lot of friends that I have are moving from Slack to Teams, just because of the integration with Office365 they can collaborate around, and I think here on theCUBE we talk about data as being the key. You have to talk about data. One of the things that was prepared to go kind of head on with Citrix today, and tomorrow about, was about data. You know it's great to present applications, but how are you helping to help users collaborate and use and access data and the combination of RPA with the intelligent experi- intelligent, it's going to take us some time to used to this ... >> I keep wanting to say enterprise. >> Yeah enterprise >> Intelligent experience >> Experience product, with Teams, with the Azure announcement, integration with Azure and full support of the Citrix platform inside Azure will just make the employee experience at least potentially seamless, a lot more seamless, I'm super excited about, you can't tell in my voice, I haven't gotten excited about Citrix in a long time. And this is the first time they've had theCUBE at Synergy since 2011, I think it was a great time to reignite that partnership, and this coverage is going to be an interesting two days. >> It is. So we talked about digital workspace, the other two areas of Citrix's business that you touched on a little bit, security and analytics. Let's talk about the security piece first as it relates to Microsoft Teams and Azure. SD-WAN is becoming more and more absolutely critical to ensure that because as people we are the number one threat vector in any organization. Not that we're all bad actors. >> Keith: Right. >> But because we need to get things done, as frictionless or seamless, as you said, as possible, and efficiently as possible. What did you hear today with respect to security, that might really make some of those IT folks take notice? >> Well, we want to work from any device. Like, I want to be able to, ideally if I say, you know what, I want to pick up a new Surface tablet, when I go to Atlanta I don't want to pack my iPad. I want to be able to pick that up, and work. If I go to a kiosk, I want to be able to, even if it's running Windows XP, I want to be able to do my work, I want to be able to do my work from any device. This is a nightmare for system administrators to say how do I control security, while making the experience frictionless? Those two things don't seem to go together. So Citrix, whether it's with this new announcement with Microsoft with Teams, it's traditional applications around SD-WAN, enabling access from remote locations, and Citrix is kind ... this is their bread and butter, offering remote access to applications securely and fast, this is you know, Citrix is starting to formulate a really great end to end story about making applications, data and more importantly, business answers and capability available anywhere securely, so it's a great story. >> It really is. So if you're excited, you already know how excited I am. I think we're going to have a fantastic day today, and tomorrow. We've got a whole bunch of the C-Suite from Citrix on, we're also going to be talking with some partners and customers, and interestingly as a marketer this peaked my interest as well, they have the innovation awards. There are three finalists, we will be talking with all three over the next two days, and this is a customer awards program, that anybody can vote on. So I haven't seen that before, so I'm excited to understand how Citrix is enabling them to have this great employee experience which is more and more critical as the shortages and the gaps are becoming more and more prevalence. And also, how these customers are reacting to just some of the news announced today, with Microsoft, the intelligent enterprise, and how they see their employees, and attracting and retaining top talent as actually really mission critical. So we're going to have fun Keith. >> I agree. >> All right, you're watching Keith Townsend and Lisa Martin live from theCUBE, we are on the show floor at Citrix Synergy 2019 from Atlanta, Georgia. Stick around, Keith and I will be right back with our first guest after a short break. (upbeat electronic music)

(upbeat music) >> Live from Barcelona Spain, it's theCUBE. Covering Cisco Live! Europe. Brought to you by Cisco and its ecosystem partners. >> Hi everyone welcome back to the theCUBE's live coverage here in Barcelona, Spain for Cisco Live! Europe 2019. I'm John Furrier and my co-host Stu Miniman, Dave Vellante is out there as well co-hosting this week. Our next guest is John Apostolopoulos who's the VP and CTO for the Enterprise Networking Business, Unit Lab Director for the Innovation Labs. Here to talk with us about AI and some great innovations. John thanks for coming on theCUBE, great to see you. >> Thank you for inviting me, pleasure to be here. >> So, Cisco has some big announcements, the messages coming together certainly the bridge for the future, bridge for tomorrow, whatever the phrase is. You know, kind of looking at that new world connecting on premise, cloud, ACI anywhere, hyper-flex anywhere, lot of complexity, being mis-tracked the way with software, separate from the V-Comp from the hardware, lot of scale in the cloud and IoT and all around the edge. So software is a big part of this. >> Oh yes. >> So can't help but think, okay complexity, scale, you see Facebook using machine learning. Machine learning and AI operations now, a real conversation for Cisco. >> Yeah. >> Talk about what that is, how are you guys looking at AI, and machine learning in particular, it's been around for a while. What's your thoughts on Cisco's position and opportunity? >> Sure, yeah. Cisco's been investing or using AI for many, many years. What happens to Cisco, like most companies, we haven't really talked about the machine learning as a term because machine learning is a tool used to solve different problems. So you talk about, what are the customer problems we have? And then we saw, no matter how good our solution is, but we haven't really talked about the details about the how but, we've using at Cisco, like myself from past careers and so forth for many many years some machine learning. Security has been using it for multiple decades for example. >> And where's the use case for machine learnering, because it's one of things where there's different versions and flavors of machine learning. Machine learning we know powers AI and data feeds machine learning, so do you have all these dependencies and all these things going on, how do you...how should someone think about sorting through machine learning? >> Well machine learner itself that term is a very broad term, it's almost as big as computer science, right? So that's where a lot of the confusion comes in. But what happens is you can look up what types of problems we want to solve, and when you try to look at what types of problems we want to solve, some of them...for example some problems you can exploit the fact that the laws of physics that apply and if the laws of physics apply, you should use those laws. We can either figure out that if we drop this, this will fall at some speed by measuring it and using a machine learning or we have gravitational force and friction with the air and re-account for that and figure it out. So the many ways to solve these problems and we want to choose the best method for solving each one of them. >> And when the people think about Cisco, the first reaction isn't "Oh machine learning... innovator." What are you guys using machine learning for? Where has it been successful? What are you investing in? Where's the innovation? >> Sure sure, so there's a lot of problems here that come into play. If you look at...if you look at a customer problems, one example is all the digital disruption. We have on the order of a million devices, new devices coming on to the network every hour throughout the world. Now, what are those devices? How should you treat them? With machine learning we're able to identify what the devices are and then figure out what the network caches should be. For instance when IoT device you want to protect it, protect it from others. Another big topic is operations. As you know people spend, I think it was The Gardner identified that people spend about sixty-billion dollars per year on operations costs, why is it so much? Because most of the operations are manual, about 95% manual, which also means that these changes are slow and error-prone. What we do there is we basically use machine learning to do intelligent automation and we get a whole bunch of insights about what's happening and use that to drive intelligent automation. You may have heard about Assurance, which was announced at Cisco Live, one year ago at Barcelona and both in the campus with DNA Center we announced Cisco DNA Center Assurance and the data center went out, network and network analytic engine. And what both of these do is they look at what's happened to the network, they apply machine learning to identify patterns and from those patterns, identify, is there a problem, where's the problem? How can we...what's the root cause and then how can we solve that problem quickly? >> John, can you help us connect where this fits in a multi-cloud environment? Because what we've seen the past couple of years is when we talk about managing the network, a lot of what I might be in charge of managing, is really outside of my purview and therefore I could imagine something like ML is going to be critically important because I'm not going to be touching it but therefore I still need to have data about it and a lot of that needs to happen. >> Yeah, well one of the places ML helps with multi-cloud is the fact you need to figure out which...where to send your packets, and this comes with SD-WAN. So with SD-WAN we often have multiple paths available to us and let's say with the move to Office365, people are using the SaaS service and they want to have very good interactivity. One of the things we realized is that by carefully selecting which path we can use, at the branch and the campus too, we could get a 40% reduction in the latency. So that's a way we choose which colo or which region or which side of Office365 to send the packets to, to dramatically reduce latency. >> What's the role of data? Because when you think about it, you know, moving a packet from point A to point B, that's networking. Storage acts differently 'cause you store data data's got to come back out and be discovered. Now if you have this horizontal scalability for cloud, edge, core coming into the middle, get of the data 'cause machine learning needs the data, good data, not dirty data you need clean data. How do you see that evolving, how should customers then be thinking about preparing for either low-hanging use-cases. Just what's your thoughts and reaction to that? >> Yeah well the example you gave is a very interesting example. You described how you need to get data from one point to another, for instance, for my device to a data center with applications over the cloud. And you also mentioned how the many things between. What we care about, not necessarily the application data, we care about... You know we want to have the best network performance so your applications are working as well as possible. In that case we want to have an understanding of what's happening across a path so we want to pull to telemetry in all kinds of contexts to be able to understand, is there problem, where's the problem, what is it, and how to solve it. And that's what Assurance does. We pull this data from the access points the switches, from the routers, we pour, pull in all kinds of contextual information to get a rich understanding of the situation, and try to identify if there's a problem or not, and then how to solve it. >> Its the classic behavioral, contextual, paradigm of data but now you guys are looking at it from a network perspective and as the patterns changed the applications centric, programmability of the network, the traffic patterns are changing. Hence the announcements here but intent-based networking and hyper-flexed anywhere. This is now a new dynamic. Talk about the impact of that from an AI perspective. How are you guys getting out front on that? It's not just North, South, East, West, it's pretty much everywhere. The patterns are, could be application specific at any given point, on a certain segment of a network, I mean it's complex. >> Yeah, its complex. One of the really nice things about intent-based network and those, it fits in really nicely and that was by design, 'cause what happens with intent-based networking, as you know, a user expresses some intent if it's something they want to do. I want to securely onboard the SIoT device, and then it gets activated in the network, and then we use Assurance to see if it's doing the right thing. But what happens is that Assurance part, that's basically gathering visibility and insight in terms of what's happening. That's using machine learning to understand what's happening in the network across all these different parts that you mentioned. And then, what happens is we take those insights and then we make intelligent actions and that's part of the activation. So this...with intent based network in this feedback loop that we have directly ties with using the data for getting insights and then for activation, for intelligent actions. >> John, always want to get the update on the innovation lab, is there anything particular here at the show or, what's new that you can share? >> So we're looking at extending IBN to the cloud, to multi-cloud, to multiple devices so there's a lot of really fascinating work happening there. I believe you're going to be talking to one of my colleagues later, too, T.K. He's, I think, hopefully going to talk about some of the machine learning that's been done and that's already prioritized as you know in encrypted thread analytics. That's an example of where we use machine learning to identify if there's malware in encrypted traffic. Which is really a fascinating problem. >> That's a hard problem to solve. I'm looking forward to that conversation. >> So some members of Cisco, Dave McGrew, in particular, Cisco Fellow, started working on that problem four and a half years ago. Because of his work with other colleagues, he was able and they were able to come up with a solution. So it was a very complicated problem as you saw but through the use of machine learning and many years of investment, plus the fact that Cisco's access to Talos which has, they know the threats throughout the world. They're a list of data in terms of all kinds of threats that's massive. That's pretty powerful. >> The volume, that's where machine learning shines. I mean you see the amount of volume of data coming in, that's where it could do some heavy lifting. >> Exactly, that's one of Cisco's strengths. The fact that we have this massive view on all the threats throughout the world and we can bring it to bear. >> Network security foundation only just creates so much value for apps. Final question for you, for the folks watching, what's in you opinion the most important story here at Cicso Live Barcelona, that people should be paying attention to? >> I think how we are trying to extend across all these different domains and make it like one network for our customers. This is still a journey and it's going to take time but with intent based networking we can do that. We're going across campus, WAN, data center to multi-cloud. >> How hard is cross domain, just put it in perspective. Cross domains reversal and having visibility into these, from a latency, from a physics standpoint, how hard is it? >> It's quite hard, there's all kinds of technical challenges but there's even other sorts of challenges. This is WiFi, right? IEEE 802.11 defines the QoS standard for wireless and that's completely different than how the internet group ITEF defined it for wired. So even between wireless and wired, there's a lot of work that has to be done and Cisco's leading that effort. >> And having all that data. Great to have you on John, thanks for spending the time and demystifying machine learning and looking forward to this encrypted understanding with machine learning, that's a hard problem, looking forward to digging into that. Again, truly, the breakthroughs are happening with machine learning and adding values with application centric world. It's all about the data, it's theCUBE bringing you the data from Barcelona, I'm John with Stu Mini, stay with us for more coverage after this short break. (upbeat music)

(upbeat music) >> Hello everyone, I'm John Furrier here in the Palo Alto theCUBE studios. I'm the co-host of theCUBE. Also co-founder of SiliconANGLE Media. We're here for some big news from Veritas. We're with Eric Seidman, who's the director of Solution's Marketing for Veritas. Veritas is introducing today and the press release is on the wire, Veritas Predictive Insights. Eric, thanks for coming in today and sharing thew news. >> Thanks John, absolutely, thanks for having me. >> So you guys have a unique new thing for Veritas. Not new to the industry, but new in capabilities, called Predictive Insights. I know Dave Vellante is actually linked on your press release and covered it in Chicago as an embargo. This is exciting news for Veritas because you guys have so much customer installed base, tons of data. Talk about what this new product is. What's the news? >> Well, thanks John, actually the news it's pretty exciting. Our customers are very excited and receptive about it. What it's actually doing is helping our customers reduce both planned and unplanned down time. And the way we're doing that is with an analytics engine that we've developed that's taking all the data from over 15,000 of our appliances around the world. We've been collecting that data for three years. We have hundreds of millions of data points from that. And we're utilizing our own AI ML engines that we've created to be able to predict things in customer's environments that may cause them down time or outages, and fix those before they happen. That's why our customers are really exciting about it. >> So how much does this cost? >> Well, it doesn't really cost anything. It's a value add. You know if our customers are utilizing our Veritas auto support services today, then as of yesterday, the service is turned on and we're already looking at their systems and creating this intelligence on them. >> So this is immediately valuable. >> And immediately evaluate those. >> So this is a new product from Veritas that takes existing operational data from your customer's environment. >> Correct. >> You guys are matching in your corpus of meta data. >> Exactly. >> A telemetry data, what, hundreds of millions of signals, call center, real log data, real outages and real things. >> Right, right. >> And creating machine learning and AI on top of it to extract value for you guys or for the customer? >> Well it's really for the customer. The benefit for the customer is that we have insights into you know our world wide universe of customers. But we can look at individual systems and say, why is this one operating differently than the others? And then the machine learning will actually determine that the ones that are operating really well have this patch and this patch installed. You know those types of things. And then we can apply that learning and that model to a particular customer's system. >> And they get a dashboard. >> And they get a dashboard that'll highlight what we call the system reliability score. So there's this, you know in big enterprises there's a lot of fatigue associated with events that are occurring all the time. You think of an enterprise, we have customers with many, many just net backup appliances alone. But you think of their entire infrastructure and all the alerts that they're getting. It creates a lot of fatigue. A lot of things go unfixed because they're minor events, like maybe a patch needs to be installed or a firmware update. While they're fixing the more hair on fire problems. But then ultimately those what looked like smaller events build up and build up and then they create outages. So what we're able to do is to identify which systems have potential anomalies. Highlight those very visually. Then they can drill down and we'll have prescriptive maintenance that can be taken to improve that. >> So site reliability score, we'll get to that in a second, I think that's a big deal. I want to read the press release headline. >> Okay. >> Veritas's Predictive Insights uses original intelligence AI, machine learning, ML, to predict and prevent unplanned service. Now the key word there is unplanned service. This is kind of the doomsday scenario for customers. They got a large data center or large infrastructure devices. Unplanned basically means an outage, if something happens, something bad happens. >> Yeah, something bad happens. >> And no one likes that, so what you guys are doing is giving them a valuated dashboard that taps into a product. So if, correct me if I'm wrong, but if a customer that has Veritas, if they have the products, they get the service. If they become a customer, they now have the capability built in out of the gate. >> Absolutely, right. >> And so they see all this, so you're taking all the data from years of experience. >> Yeah, exactly. >> Giving them a dashboard to help them look at unplanned down time type scenarios, and give them specific actions to take, particularly analytics and prescriptive analytics for them. >> Exactly, so what we're trying to really achieve for our customers is to use that intelligence and machine learning to identify things that may cause an outage in the future and prevent that outage from occurring, causing that down time, by taking remedial action in advance of that happening. And that's the beauty of Predictive Insights. That's really what it's providing for our customers. >> So you guys have this always on feature called auto support feature. >> Correct. >> That kicks in and it brings the system reliability score, SRS. I think this is important. I want you to explain this, I think this is a trend we're seeing certainly on the Cloud side of the market. Google has pioneered this concept called site reliability engineer over years of practice and they make their infrastructure work great. So we know that that kind of concept of having reliability, you guys are now giving a score to each appliance. >> Correct. >> It's almost like a health detector or like credit score. >> Definitely, credit score is a good analogy of that. >> So explain SRS, what's it mean for the customer and what's the impact to them? >> Yeah, so I don't know if you ever like, maybe you use one of those credit scoring apps os something like that, where it's monitoring your credit from three different agencies or whatever. That's kind of what we're doing, only the data sets are coming from a much broader set of appliances, right. But we're showing you your system reliability score, credit score if you will. And then we're showing you very prescriptively the processes you can take to improve your credit score, if you will, or your system's health and reliability. So that might be installing a firmware patch. Installing software update, things of that nature. Replacing some drives that may fail in the future. And all of those steps will then increase that liability score. >> And also you see in the hacking world, you know that one of the biggest parts of security breaches is not loading a patch. >> Yeah, exactly. >> The unplanned, unforeseen things are you know some sort of thing goes on, a hurricane, wild fire. You never know what's going to happen, so you got to be prepared for those kinds of infrastructure change or whatever. So I get that, so the operators can have a nice dashboard. I totally buy that. I want to get into the impact to the more on business side. How does this help the business owner that's your customer, does this help them with planning, refresh rates, total cost of ownership? Can you just talk about the impact of how this data relates to their job? Because I'd be like, what's in it for me? >> Yeah, no, exactly. And there's really three key areas that we're addressing for our customers. I mean the first one is around improving their operational efficiency, right. Again, reducing that alert fatigue and making it easier on the infrastructure management to do their job with less headaches, with less dashboards lighting up. So it's very, very prescriptive on highlighting what needs to be done and helping them through that process. The other area's around the prescriptive potential fault detection. And fixing those anomalies before they can actually cause a down time event, right, doing that in advance. So that's reducing the planned and unplanned down time, which can be significant in terms of cost to your business. One of the analysts states that this 20 million a year in cost associated with down time events like that, and that varies by industry. >> And that's a dart at the board, it's a big number. >> It's a big number, yeah. >> You pick your number, right, and see which one. >> And then the third area is really around helping our customers have better predictability into what their utilization requirements are. So the benefit there is really helping them improve their ROI on our appliances. Because now they don't have to over buy and over provisions at capacity because we can show them the trend data, the amount of efficiency they're getting from data. And they can right size their appliances in terms of performance capacity, and then we can warn them in advance. >> That's a real big thing is what's happening there. That's proactive. >> It's very proactive. >> It's not reactive. >> Exactly. >> Well you can solve on the reactive side because you just fix it. But then the proactive side is really where things break as you blow over capacity, you might want to add more. >> Yeah, believe it or not, those types of things have caused down time events in our customers, where they're assuming their backups are going to complete, as an example with net backup appliances, and yet they're out of capacity. And at the last moment that's a fire drill for them. So we can show them out 30, 60, 90 days, what they're utilization is, and then a threshold is at this point in time you're going to have potential outage, some kind of problem. And so we recommend that you add this capacity before that ever occurs. >> Alright, talk about the customer reaction to that. You guys, actually it was announced today, you talk to customers all the time. When you showed customers this in pre-launch, what was some of the feedback you guys heard? What were the key areas, what did they hone in on, what was the key things about the Predictive Insights that made them get jazzed up about this? >> Yeah, so it's really I would say it covers the two key areas that I already mentioned. One of 'em is helping prevent unplanned down time. That's a big concern for our customers in any industry. And this is going to be able to help them overcome that you know kind of rear view mirror look as to what's happening in the data center. And fixing a problem after it's occurred. Now they'll be able to be in advance of that and eliminate or at least significantly reduce those types of issues. And then the other one is helping, again, in that event fatigue at the operational model. That's where we've gotten the best feedback. >> So I'm going to ask you a hard question, which is, hey you know, predictive analytics has been around for awhile, pre-descriptive. why now, what's different about this opportunity? Obviously free is good because your customers get turned on pretty quickly. They get the benefits immediately, and new customers get it. I get that piece. >> Yeah. >> But what's different about you guys with this versus what might be out in the market? >> Yeah, I would say the key differentiation is that we have this very, very large universe of installed base systems that we've been gathering data on for over three years now. So the more data you have, the more data points you have. The better results you'll get from a machine learning type of environment. And we're still collecting data, both from the machines that are coming in from the telemetry data, as well as from our service personnel. So that right off the bat makes our solution unique than others that may have been like out sooner, in that we've developed a rich data set that is being applied to the machine learning. And hence, our results out the gate are very, very good. >> And you're using that, you're not actually charging for it. So that's another big one. >> Yeah, that's true too. >> So let's get into the specifics on the rollout. So this is a digital transformation table stake. You guys are checking a big box here. >> Sure. >> This is good. It gives your product some capability that levels that meta data, and that is what this data driven world is about. And certainly IoT is even going to make this even more of a table stake. >> Absolutely. >> On the rollout side, it's all appliances, Veritas. >> Uh huh. >> And then software only and then you're going to go beyond Veritas, is that right? >> Yeah. >> Explain that, what does that mean? So I get the appliances. What does software only mean and what does beyond Veritas mean? >> Yeah, so just to reiterate, today it's our appliances only. But many of our customers consume our solutions of software. And they're putting it on their bring our own server model. Probably about 40% of our customers, right. So we believe we can add this type of capability to be able to provide insights into our software that's installed on independent third party hardware as well. Maybe some of the capabilities won't be as rich, but we're going to start building those capabilities over time and try to bring in that data and help those customers that are software only customers. >> And that's on the road map? >> That's on the road map. >> Okay, so it's not available today? Okay, beyond Veritas? >> Yeah, so obviously many of our customers today are protecting data on prime, protecting data in the Cloud or some kind of hybrid model. And we support, we don't really care where the customers want to store their data. We're capable of protecting it and helping them achieve whatever those Cloud type of initiatives are in that environment. So an obvious next step would be to, hey how can we bring this to help you know where your data is located and how it's working in those environments? Is that back up going to be able to be restored, as an example? So we're looking at future capabilities to add on to this. There's going to be huge value to our customers. >> This is great news. Thanks for coming in and sharing. I really appreciate it. I want to get your thoughts on some observations that we've been making. Certainly theCUBE coverage of Veritas has been increased. Dave Vellante's been out on the road with the team, looked at some of the new back up recovery versions, looking at new UI, kind of new Veritas going on here. >> It kind of is. >> What's the vibe going on in Veritas? What's new about Veritas for the folks watching now and saying this is really cool. Veritas is cool and relevant right now. You guys are a product market fit. You guys got kind of a new Veritas vibe going on. What's it all about? Share your thoughts. >> Yeah, so I think there's, you know, some people call us legacy, right? But I don't think that's necessarily a bad term, right. I meant like when I'm gone, I hope I've left a legacy, right, that's worthwhile. And so we have that legacy, which is great. Because we've been adding, there's value for our customers for many, many years. But what's new and exciting I think for us is that we're able to provide solutions that are very, very simple to utilize, very easy to accommodate whatever their requirements are, whether it's on print or hybrid or in the Cloud, we don't really care. So we've kind of progressed I would say into a very, very modern architecture for what we're doing. And meeting the requirements today of what our customer's are doing as well as looking forward. And this Predictive Insights piece I think is just another manifestation on how we're progressing as a company, what we can bring to today on the current problems in the data center, and also looking out in terms of where the future requirements are as well. And we're ready for those. >> Well legacy is a great word. I love you brought that up because it's a double edge sword. If you're a legacy and you don't do anything and you rest on your legacy, then you kind of, you're just milking that until the legacy is dry. >> Fair. >> But if you look at what Microsoft's done, they're classified as a legacy vendor. Office was shrink wrapped software. >> Yeah. >> Satya Nadella comes over and now they're the darling of Cloud. They've shifted their products and execution to be what customers want, which is Cloud. Now they've got Office365, Azures, you know have been repurposed. There's some stuff they could still work on, but clearly cleared the runway. >> Yeah. >> And Oracle, not so much, Microsoft has. So this is a Veritas kind of vibe that's going on similarly to Microsoft. You guys are looking, hey we've got to install a base. We're going to use that and leverage the assets of that installed base, that legacy. Harness it and make it part of the digital transformation. Is that kind of the vibe? >> No, exactly, and I think Microsoft is a great example. I mean we're in tight partnership with Azure as a matter of fact. I just came from one of our vision solution's stages where a gentleman from Azure shared the stage with us and talking about our partnerships and all that. So I mean great example, but we're bringing those capabilities into the Cloud era, if you will. We have solutions that run natively in Cloud, help that environment, so. >> Making the transition to digital transformation. Veritas, the new Veritas, they got the solutions that are Cloud enabled. Using data for the benefit of the customers, not just trying to bolt it on and make more money. They're actually bringing value to the install base and changing the game up. Eric Seidman here inside theCUBE. Director of Solutions Marketing at Veritas. Part of theCUBE conversation, part of their news coverage of their Predictive Insights. I'm John Furrier, here in the Palo Alto studios, thanks for watching. (upbeat music)

>> Live from Bellevue, Washington, it's theCUBE covering Smartsheet ENGAGE'18. Brought to you by Smartsheet. >> Welcome back to theCUBE, I am Lisa Martin with Jeff Rick and Jeff and I have been live at Smartsheet Engage all day Jeff, we're in not Vegas. >> Not Vegas. >> Bellevue, Washington, this has been a really electric event. They keynote kicked off this morning standing room only, they have doubled in only their second year they have about 2,000 attendees, 1,100 customer companies represented here, they had customers from 20 countries, they more than 50% female attendees for the second year in a row, but we've heard such great groundswell stories all day. >> Yeah, it's been a good day, Lisa. You know, there's a little bit of confusion in this space, I think there's a lot of tools around workplace productivity, we got to hear from a couple analysts and how they're reshaping the way that they define those tools and that's okay, and I get it, but there was no question about the three customers we had on and the passion that those three customers had, kind of old school shadow IT implementations, they brought the tool in from their prior work, plugged it in and are having tremendous success, even the last one, to the chagrin of the parent company that builds software to do the same thing, so there's really no substitute for that type of passion and you know, we've seen these kind of communities grow before, I remember early days at the ServiceNow, it kind of reminds me of that you know, a lot of passion, applause, applause at the new features which is is always an interesting one, so a really, really good day. >> And well, you talked about those three customers that we had on today, we had GE Renewable Energy which was our last guest, a woman from Sodexo, Sodexo is a massive, massive company and then we had a gentleman from the office of the CIO at PayPal. These are three massive companies and the interesting theme from each of them is that these were groundswell opportunities for Smartsheet to really go viral within these organizations and make massive business impact and it's interesting that it really, even from a sales perspective, when we talked to the V.P. of Strategic Accounts, this is not a top down sale, this is bottoms up. Even PayPal found it on their own and learned how to use Smartsheet from YouTube videos. >> I love that. >> That was fantastic. >> So I love, you know, everyone talks about the new way to work but what about the new workers, right? And both of those examples are really good. The PayPal one as great, office of the CIO and yet to figure it out they just watched YouTube videos which is how people learn things today, and they implemented it from that experience. They didn't call Smartsheet, they just put it in and it worked and then we just had GE on and his comment that he wanted something lightweight for his workers. Lightweight. Three click rule, he said he had a three click rule after we turned the cameras off and if he can't get it down to three clicks you got to go back to work and make the process a little bit simpler, so you know, these are real examples of real big companies implementing kind of at the departmental level where this is getting traction, and executing to drive differentiation. And that's pretty exciting regardless if you get confused about the messaging or this or that, those are real life examples. >> And there's nothing that's more validating, right? Than the voice of a customer who has used it and especially the voice of a customer who is not a developer, doesn't know what an API is or need to in their daily jobs. This is technology that was built from the ground up, back 12 years ago on the construct of a spreadsheet which so many people understand and they've really parlayed that you're comfortable here with these tools, there's going to be like, you were talking a lot about today very smart that you brought up, I've got so many apps open and I think Forrester said between 13 and 30 apps people have open every day, so you can't really compete for that mind share so in terms of differentiation we've heard from Smartsheet themselves that they collaborate with companies that you'd think would be their competition. >> Right. >> But they understand that how this is starting from this groundswell, they have to be able to collaborate, to integrate, to connect with Slack, Microsoft teams, Office365, CRM systems from Microsoft, Salesforce, because that's how the worker needs to see their information, and they're also giving users the ability to configure, I want to see this, my team might want to see something completely different, and we can do that while sharing the same information. >> Right, right. I think the thing that struck me as really the big competitive differentiator in this kind of, work-group management is the going outside your four walls. If you use Salesforce, if you use even G-Suite, every time I send you an email it says, Lisa's not in your G-Suite are you sure? Are you sure? Like, red flag, I'm doing something wrong, the fact that the Smartsheet licensing structure is set up that if I set up a project I can share it to people outside of my organization. They can participate in that project. A, it just makes a lot of sense 'cause more and more projects right? You've got contractors, you've got partners, you've got all these things. It's not just an isolated instance anymore but then, more importantly, for Smartsheet, it just gives exposure to the tool to a new group of people. So, I think that's a really key part of the story here, that again maybe count as under the covers in terms as some of the messaging, but a real key differentiator, we've seen this type of viral growth before. I used to work for an Atlassian Service Provider and Atlassian had a great, kind of, seed strategy. $10 for 10 licenses and the $10 goes for schools in Africa. Brilliant. Who doesn't want to pay 10 bucks to help such a worthy cause, and then to seed it in. And then people that had success with the tool, it goes with them. You know, we heard that here the last gentleman from GE used it at a prior company, brought it over, wanted a lightweight tool not a big ERP tool implemented, and now he's running, he said $100 million in assets more effectively than he could before. >> Exactly, but will you talk about in terms of that big differentiator, their ability to, if I'm a Smartsheet user and you're not, I can share something with you and we can collaborate. They've got, I think I read over the weekend, 650,000 active individual users, but they have about 3,000,000 people that are collaborators. And I think it was Mark Mader, the CEO, this morning, that shared with us. That's 40% of their business. They have a massive pipeline by just enabling this collaboration and the ability for a user who's paying license to share with a colleague that isn't. >> Right. And then this is always the small conferences, 2,000 people, still new, people are super passionate, it's not a big vendor show, it's not a big expo hall show, but people are super engaged and sharing information and you get that in kind of the early days of these conferences, which is a really neat thing to see and there's no substitute for passionate customers, at the end of the day that's all they can really hope for, and that's the validation you need to move forward. >> Absolutely and they had, I think, almost 50 customer speakers today and I know how incredibly difficult it is for a marketing team to find 10 customers. >> Yeah, you know that right? >> Right. To speak. >> To speak. >> Let alone what multiplier you need to have to get 50, four x? Maybe not here. It seems like these people that are users, PayPal, and Cisco, and Sodexo, and GE Renewable Energy, have found this on their own and are really kind of creating this virality that is, it was very infectious, contagious. >> Yeah. >> By the day. >> Which is amazing to me because there's, again, there's so many applications out there, and they don't all do the same thing and they all have pros and cons. But, to be able to find it to be able to deliver success and again another important piece at any rate in with those existing systems that already are in play. Mark was very clear, we're not expecting you to throw out the apps that you have, you may or may not be able to display some with Smartsheet, but we really want to work with them, right. We want to play together, not necessarily play separate. And again, you have to do that to be successful in 2018. >> And they're listening to their customers. They have to do that to be successful, that's driven by the customers, it's clear that, there's a push pull effect and it's going to vary based on the enterprise and their overall objectives, but their collaboration with customers to develop and prioritize all of the enhancements that people have been asking for for the last year since the first Engage was really, you felt that, you heard it. There was a lot of applause during the product announcement session this morning. They are listening, they're taking that feedback in and ultimately, what their VP of customer success talked about is they're driving change management and that is extremely difficult, culturally, to be able to do. >> It's people, right? I mean, they said it right out the top. Empower everyone to improve how they work, connect, innovate, and execute. I've said it time and time again, we do a lot of shows, I think that's a pretty straightforward path to give more people more data, the tools to manipulate the data and get the answers, and then most importantly, the authority and power to execute those decisions, especially when you're close to the customer. That's where good things happen. That's where the organization moves forward and you can't be centralized command and control everything 'cause it's moving way too fast. >> Right, right. >> Way too fast. >> Well, Jeff, I had a blast hosting with you all day today. Learned a lot, my perspective is really opened up about Smartsheet and what it is and how it can really drive a lot of transformation and accelerate digital transformation. >> I can't help but again go back to the line from Google Cloud, right? People want to move to judgment, less drudgery more judgment. That's what they're enabling here at Smartsheet and we're excited to be here and cover it and can't wait until next year. >> Awesome, thanks Jeff. Again, Lisa Martin with Jeff Rick. Thanks for watching our coverage of Smartsheet Engage 2018, from Bellevue Washington, we'll see you next time. (upbeat music)

>> Announcer: Live from Chicago, Illinois. It's theCUBE. Covering VeeamON 2018. Brought to you by, Veeam. >> We're back at VeeamON 2018 in Chicago. You're watching theCUBE, the leader in live tech coverage. My name is Dave Vellante with Stu Miniman. Paul Madison is here he's the vice president of global cloud business at Veeam. Cloud, is where all the action is. Paul, thanks for coming back on theCUBE. >> No, Dave good to see you again, Stu good to see you. >> So you guys have made, you know, a major push obviously into the Cloud. We talked about, with Peter, that you know Veeam used to be product company. Now you're a platform company. Platforms beat products as we know and Cloud is a key part of that. It's a distribution channel, it's a technology, it's a disruptive force. What's your take on what's happening in Cloud? >> So, we're loving what's going on in the Cloud market space. I think, and I've talked with you guys about this before, the pace of innovation that's happening is absolutely remarkable. And it's all about delivering value for the customer. I heard Danny talk about business outcomes in the Cloud. We see this again and again, the Cloud is emerging as the platform or series of platforms that customers can drive innovation, can drive business agility. And we're excited about that because as the customers are moving there now we are evolving our platform to allow them to know that no matter what infrastructure, what platform they use they've got an answer in Veeam. Right? From a data protection, intelligent data management perspective... Veeam's got an answer. So, we see incredible market opportunity, we see accelerate in innovation and we see our platform evolving to take advantage of all that. >> So as the head of Cloud at Veeam, how does it work? Do you have product requirements, obviously you've got channel relationships to get building how do you spend your time architecting, I mean, how did you architect sort of the Cloud plan for Veeam? >> Yeah, it's still a work in process obviously. We are constantly evolving it as the market changes, we have to continue to evolve our strategy. But I have a lot of internal partners, you know, I partner really closely with Danny's organization from a product strategy. I partner very closely with Anton Gostev on product management, I partner really closely with Carey Stanton on our alliance partners. Because as you can imagine all of them are moving towards the Cloud or have a Cloud strategy. I work with people on pricing, licensing, sales, and marketing. And it's just this great, wonderful ecosystem that we have internally. Where we assess where we want to be, we assess where the platform has to go and we try to evolve all those things together. It's not trivial, there's a lot of work. Especially as we transition from a product company, to a platform company, to a solution company. But those are the kinds of problems that we like to solve, that's exciting stuff for us. >> Paul, wonder if you could speak a little bit to that partner ecosystem. So, you know, we went through years of public cloud is the enemy or public cloud said everything is going here to, you know, the Cloud service providers. And even the traditional vars and integrators, many of them worked with Microsoft for years. Lots of them now working with Amazon in some way or another. >> Paul: Right. >> Walk through a little bit that dynamic of what you are seeing, of course you play it across all of them so you've got a great vantage point. >> Yeah, sure. It's a great question, and it has, Stu, it's evolved in the last I'd say 18 to 24 months. It used to be, when I first started at Veeam, I went to a partner conference and I was six weeks into my tenure at Veeam and I came from Microsoft Azure And the looks on the peoples faces was, oh my God, you know, Veeam is going 100% asual. As the Azure guy here public cloud was bad, right? And so it lit people up and I tried to, and continue to rapidly assure them, no, that's not the enemy, that's not where we're going. We see an evolution now where we do see some Cloud service providers saying, we have to understand that customers want to go there, so I need to be a part of that market. That's why we're making the choices that we're making in terms of how we engineer the platform is that it's about customers having choice. And so, it's not the easiest dynamic to manage, as you might be aware of. But there is value, you see firms that will, now are starting to say, okay I can differentiate based on maybe a vertical orientation that I have. I'm going to specialize by going after the enterprise or by going after health care, financial services. And they're saying alright, those big players are here to stay. I better, I should figure out how to get along with them and how I can add value on top of them. Because from my perspective, and those big hyper scale or public clouds. Sometimes I call them a canvas, you can paint on them. But cloud and service providers can really help bring another level of intimacy to those platforms for their customer and drive value for their customer. So co-opting those large platforms is a good strategy. >> Yeah, alright, so Microsoft background. One of the things that caught our eye is, I believe, it was 2500 downloads already of the Veeam solution. >> Yes. >> For Azure. >> Yes. >> Broad reduction and betaWS, give some color on what's happening with public now. >> Yeah, sure, so we are super excited about what's happening with our Cloud partners. We've had tremendous growth in our VCSP business. We have over 19,000 of them now, globally, which is a huge ecosystem of partners. We've seen 58% year over year growth there. Fantastic growth in the number of machines that are protected by Veeam and Veeam powered services. The AWS marketplace has been, the AWS market is one that we've now, you know, jumped into with our acquisition of N2WS. We've seen terrific, I don't know if you're talking with Ezra or anybody from the N2W side. But they've seen 153% year over year growth since coming on board with Veeam. We have Office365 now, Danny talked a little bit about the new version of that, that we're in private beta of right now. That market is taking off tremendously. We've seen 29,000 downloads of that, 29,000 different customers that have downloaded that. We're currently protecting around three million mailboxes of Office365, so there's just a lot that's, our work with the IBM Cloud, is terrific. They are here, they're our sponsor. Great things going on there, 1,000% growth in the VM's that are deployed using it, on the IBM Cloud. Now their resiliency services practice is building up around Veeam. So there's just this tremendous momentum across all the dynamics of our Cloud business right now. >> Well, customers have to place bets. We love sports analogies in theCUBE. Kentucky Derby just went down, we have the Preakness coming up. And customers I feel like they're placing bets on what's called the under card, right. You've got the big race is the Kentucky Derby, well there's a bunch of races leading up to that, they call that the under card. People warm up, they make little bets here, little bets there. But then when it comes to the big race that's when they put down their big money. And I feel like the Cloud bets have largely been on the under card to date. When you talk to customers, well first of all do you agree with that, and are they asking you, okay, you know, which Cloud should I use where? What bets should I place? Having, you know, run the Azure group, you've got a perspective on this. What do you see customers doing and how do you advise them? >> Yeah, so, that's a great question, what we... So let me take you back a little bit. We did see early on customers that sort of nibbled around the edges, around the under card, and made small bets on it and then for whatever reason made the decision to dive in big. And I think a number of them that didn't work out quite well because as they were going through the under card and managing through that they didn't learn as much as they needed to or the platforms evolved so that they ended up saying, wait a minute, hold on, we maybe shouldn't have made that bet. Alright? So, customers now are, I think they're taking a little more of a smart approach towards it because they realize that, hey, going 100% in with one provider is going to be a challenge, right? They are worried about the old vendor lock in and portability across clouds. We obviously will talk to customers about multi-cloud world, 81% that we surveyed said, I'm not going to have a single Cloud provider. I'm going to try to figure out which work loads to put where. And we're going to continue to help advise them and help figure out how they do that. How those different cloud infrastructures factor into their data protection and availability strategies. >> Yeah, so when you get to the database, the middleware on up and you take that approach. Then, obviously there's substantial skillsets that you're going to need whether you're using, you know, Amazon's databases or Oracle's or IBM's, et cetera. At the infrastructure level, however, and I think this is part of your strategy, you can potentially standardize, you know, you guys want to be the standard for the data protection platform. But you've got to earn their trust and the right to do that. >> Paul: Absolutely. >> But if we're understanding that right, that is the strategy, right? To sort of take that stress away from them, let them worry about which database, which SaaS application. But from an infrastructure stand point, you can rely on Veeam to be that data protection platform. >> That's exactly right. And I think when you were talking with Danny earlier is any app, any data, any cloud. Regardless of where you want to go, bet on us, we've got the answer for you. >> Okay so then follow-up question. Why you guys? You've got system vendors, you've got storage vendors, you know, to a certain extent you got quasi security players. Big established companies, start-ups. Why Veeam? >> Well, I think because of a couple of reasons. First of all the platform is extensive and continuing to grow. And we, I'm thrilled that we are, you know, we've got the platform elements of it. I think you said earlier, platforms always trump products. I'm a firm believer in that. I love platforms. I think the second reason is we're a partner driven and customer driven organization. I know that sort of, that can sound like sort of mom and apple pie but the reality is we are 100% channel focused. We don't compete with those channel partners, we don't compete with cloud service providers. We can enable all of them. And so you've got a great platform, with a great organization that knows how to partner and wants to partner. Those two things come together and make us a great choice. >> How do you, I haven't asked anybody this, I wonder if you'll give us your perspective. Because you're pure channel, how do you, and at the same time customer driven, how do you get that feedback? Obviously you go in with channel partners but how do you ensure that you're getting the high fidelity feedback from the customers? >> So, get with the customer. (laughing) You know, we're 100% channel driven but we are arm in arm with our channel partners. It's not, you know, in some areas of the business, yes there's a lot that goes on that Veeam folks don't get involved with. But when it matters, when it counts, we're arm in arm with our channel partners. We go and visit together, we spend that time, we invest that time. We do partner advisory councils, we do customer advisory boards. You know, we're not... It's not diffused through the channels, I guess is what I want to say. It's very much a true partnership where we are engaged fully. >> Okay, let's get into it. You're a Philly fan, your boss is a Patriots fan. >> Paul: I've heard that, yes. >> You got, I mean. Listen, as a long time Philly fan it's like one of the best feelings in the world when your team wins the Super Bowl. First of all, having your team in the Super Bowl for two weeks having that hype lead up is just the greatest thing in the world, even though you just can't wait for kick-off. But I got to say congratulations. >> Thank you. >> I know you've got to feel good about that. >> Thank you, we feel great about it. It took us a couple of days to catch our breath after the game and quite frankly even during the game. Hey, listen, Tom Brady, two minutes ago has the ball, we were all getting ready to leave the party because we said, hey, we've seen this movie before, we know what's going to happen. Go down the field, touchdown. We're out. >> You can't watch. >> Can't watch it, can't watch it. I really didn't watch the last 30 seconds of the game 'cause I just had my (laughs). No we were super happy about it, I will be honest and say it's been a source of on-going rivalry inside of Veeam. Because we have quite the Boston contingent. But, we've got the trophy. >> Well, pretty amazing that, well 'cause Philly had the really outstanding defense >> Yeah. >> Which everybody tries to predict before the game, right, and then Brady shreds the Philly defense. Who would have known that Nick Fowles is going to score every single time he had the ball except the one fluke interception. >> Paul: Yeah. >> It was really an unbelievable game. I mean, as a Pats fan, we were heartbroken, but wow what a game. >> We loved it and, honestly, the guys have been great about it and almost, I don't know if Peter falls in this category, but almost everyone has said, yeah well Philly was the better team. We lost a great game to a better team, there's been no, oh well, one of our guys tried to say, hey, that whole Philly special play should have been called an illegal formation. But then I gave him a list of all the violations that the Patriots have had in the past five years and he's like, okay. >> Yeah you don't want to sound like the raving fan, right? You know, calling the ineligible, eligible. >> Paul: Right. >> Look, Brady, they made that great call. Brady couldn't make the catch, he couldn't make the catch. Nick Fowles made the catch. Okay then when it came down to execution they stared, you know, into the abyss and they didn't blink. I mean, ya got to give em' credit. And Villanova, I mean, that was awesome. >> They were just a machine. >> Sixers, what happened? Big favorite. I think young team. >> Young team, look, they're going to be good for a while. >> Dave: Should be a good rivalry. >> I think Ben Simmons, you know, he's going to come up. Joel Embiid is an absolute beast but I got to hand it to your team and your coach, I mean, I think in some ways we got out-coached a little bit. >> Dave: When Larry Bird came up and Dr. J was, you know, didn't want to relinquish that mantle. That was some of the best rivalries in the early 80's. With the Sixers and the Celtics so hopefully that will get better. >> Paul: Hopefully we'll get that going again. That'll be awesome. >> We love talking sports and we love talking sports with guys in tech that love sports. Paul, thanks very much for coming back. >> Hey, my pleasure man, thanks for having me, really appreciate it, thanks, guys. >> Alright, keep it right there, everybody, we'll be right back with our next guest right after this short break.

>> Announcer: Live from Berlin, Germany. It's theCube, covering NetApp Insight 2017. Brought to you by, NetApp. >> Welcome back to theCube's live coverage of NetApp Insight 2017, I'm your host Rebecca Knight along with my co-host Peter Burris. We are joined by Jean English. She is the Senior Vice President and Chief Marketing Officer of NetApp, thanks so much for comin' on the show. >> Thank you for having me, we're glad you're here with us to join us at Insight Berlin. >> We're always excited to do anything with NetApp. So, talk a little bit about NetApp's digital transformation. You're now at a year's long transformation from storage, your legacy, to data. Talk a little bit about your positioning in the market. >> Sure, so I think people have previously thought of NetApp as storage, and what we're so focused on now is data. And why data? Because that's what we hear from our customers, our partners, the analysts, is what is really topping their needs right now. If we think about how companies are transforming, they're having to think about digital transformation is topping the list. It's topping the most strategic agendas of most CEOs. But what happens is they have to think about the data. It has become a life blood of their business, and as it seamlessly flows through that business, and what does it mean to either optimize their operations, if they've gotta increase their customer touch points, do they have to create new product services, and even businesses. So we feel like right now that is where our focus is on data, and it's so much a part of our heritage that we look to the future as well. >> One of the things that you're working on now is helping customers use data in new, exciting, innovative, creative ways, can you talk broadly about your approach to that, and how you're drawing inspiration on customers and then empowering them? >> Absolutely, so we really try to think about, what is our purpose? And our purpose could be true to our heritage from 25 years ago, we just celebrated our 25 year anniversary this past spring, and it is to empower our customers to change the world with data. Just a few of those, we've seen now, especially in hybrid cloud environments, customers have to think about how are they gonna simplify to integrate data across on-prem, cloud environments, to accelerate digital transformation. One example of that is EidosMedia. We love their story, because their talking about how to get news stories, real time, through a cloud platform, into the hands of journalists that can publish real time live insights. Real time journalism, and so when you think about the speed that has to happen with creating stories, getting 'em published, getting 'em out to news networks, that's data. And it's a good data story. >> When you think about the data story though, a lot of people talk about how data is a fuel, or data is. And we tend to think, at least at SiliconANGLE Wikibon, that that's probably not the best analogy, because data's different from other resources. Most resources share the economics of scarcity, you can do this, or you can do that, but data's different because data could be copied, data can be shared. But data also can be appropriated inappropriately. Could you talk a little bit about the relationship or the direction that NetApp's taking to on the one hand, facilitate the sharing of data strategically while at the same time, ensuring that proper security and IP controls are placed on it. >> So I think people are looking to make sure that they can share freely data, and seamlessly integrate data across multiple sources. Right now what we find is that whether it's because you've had data that's been on-prem, and maybe that's more structured. Now we're startin' to see more unstructured data. So data's becoming a lot more diverse. People are constantly looking for the latest source of truth of data, so dynamic, and because it's so distributed across environments, people are trying to figure out, how do you integrate data, how do you share data, but it's all about simplicity, 'cause they need it to be efficient. They need to make sure that it's protected, so security is top of minds, so data protection is the upmost of importance. They're looking for ways to embrace future technologies. And whether that's thinking about different cloud environments, SAS applications, and then how do they create the most open opportunities. A lot of people aren't just putting their data in one cloud, what we're finding is, is it's a multi-cloud world, and they're looking for a holistic solution to more easily and seamlessly manage their data through those environments. >> But the infrastructure has to move from as you said, a storage orientation towards something that's going to facilitate the appropriate sharing and integration of data. Like a fabric. >> Yes. >> Can you talk a little bit about that. >> So we started the conversation around data fabric, it was one of the first people to really talk about data fabric in the market back in 2013. And this vision was about how do you seamlessly be able to share and integrate data across cloud and on-prem environments. That has become so true in how we've been building out that data fabric today. We just launched a few weeks ago that we are the first industry leading storage data service in the Microsoft Azure console, so that people can easily be able to, can do complete storage capabilities in cloud storage, in Microsoft, we've also been developing solutions to make sure that, maybe if you're not wanting to do everything in Office365 and Azure, you wanna back it up to AWS, so how do you have better backup capabilities? Sharing of data across clouds. We're also seeing that you may wanna sync data, so maybe once you put data into the cloud, and you run analytics or even machine learning, how do you then get data back? Because you wanna make sure that you're constantly being able to look holistically at your customers. This notion of one cloud, to back to on-prem, multi-cloud environments, has been critical as we think about customers and where they're going. >> One of the things we're also hearing about at this conference is, this is the day of the data visionary, and this is where people who are thinking about how to store data, use data, extract data, find value in the data. The demands on them, the pressures on them, are so intense. How is NetApp helping those people, sort of understanding where they are, not only in their businesses, but also in their trajectories of their careers, and then helping them move forward. >> We've been really thinking about who is really using data to disrupt, and are this disruptive use of data to really drive business results. It's not just about having the data, it's about how are you gonna have an impact on the business. So we start to think about this notion of who is a data thriver? Who's thriving with data versus who's just surviving and in fact, some are even resisting. So we actually partner with IDC to launch a study on data thrivers to look at who is truly looking at driving new revenue streams, attracting new customers, how are they able to use data as correlistic part of their business. Not some one off or side project to help do the digital transformation, but what was gonna drive really good business results. Data as an asset. Data across business and IT. And we see new roles are emerging from this. We're seeing that, Chief Data Officers, there's Chief Digital Officers, Chief Data Scientists, Chief Transformation Officers. All new roles that have been emerging in the last couple of years, but these data thrivers are seeing tremendous business impact. >> So, what is it that separates those people, I mean I think that, those really, those companies and those business models, and what are sort of the worst case scenarios for those companies that are just surviving and not necessarily thriving, in this new environment. >> Yeah, I think it's interesting, we're seeing that companies that actually put data at the center of what they do. So we think of it as a data-centric organization, are seeing 6x in what they're seeing in terms of being able to drive real customer acquisition. When we think about what it means to drive operational efficiency, when we think about 2x times in terms of profitability, real bottom line results, compared to people that are simply just surviving with data. What's interesting is that when we start to think about what are the attributes of these people, so business and IT working together in unison. These roles in fact that are emerging are starting to become those catalysts and change agents that are bringing IT and the business more together. We're also seeing that when you think of data as an asset, even to the bottom line, how does data become more critical in terms of what they see in terms of being a differentiated advantage for the company. Also, thinking through quality, quality, quality. You've gotta make sure that the data is of highest quality and it's constantly being cleansed. Then in terms of how do we think of it being used across the business, it's not just about holding data and locking it away behind a firewall. Data more today is so dynamic, distributed and diverse, that you have to let it be utilized and activated across the business. And then to think through, it's starts not just in terms of what customers are using and seeing from data, what they can actually see in terms of customer touch points and having a better customer experience, but then how do you make sure it even comes back to the development to create new products, create new services, maybe even eliminate waste. Stop doing product lines based on what they're seeing from actual usage. So it's a pretty fascinating space right now, but the data thriver is the new thought we're thinking in terms of getting that out in the market and really sharing more so with our clients, so that they can benchmark themselves as well. >> So, you're a CMO. >> Yes. >> You're telling a story, but you also have operational responsibilities. How would you tell your peers to use data differently? >> Well, I think there's a couple things. I mean, for me data's the life blood of how we think about how we actually create a better customer experience. We're using data constantly to better understand what are our customer's needs, and those customers are evolving. Before, in the loyalist that we love was storage architects and admins, we're starting to see that people are thinking about how to use more hybrid cloud data services with CIOs. How are they gonna look at a cloud strategy? With DevOps, how are they gonna create, deploy, and, applications at speed? How are they gonna be able to help to really think through, what are they gonna do to drive more analytics and better workload usage, and efficiencies? Our clients are evolving, and when we think about how do you reach those clients differently, we have to know who they are. We have to use data to understand them. We have to be more personalized. We just relaunched our entire digital experience, so that when we try to look at how do you bring people into something that's more customized, more personalized, what does it mean to be a cloud architect that's thinking about a data backup and protection plan. What does it mean for someone in DevOps who's thinking about how do I actually create and deploy an application at speed? How do you think about someone that's gonna look at the needs from a CIO, so much differently than before. But, using data, using customization, thinking about an engaging experience, bringing 'em through that experience so that we solve their business challenges. We use data and analytics every day. I think of us as being the new data scientists. People say, is it art or is it science and marketing? I'm like, it's a little bit of the storytelling, absolutely, we have to lead with stories, but the data and the analytics is where we really understand our customers best. So using analytic models, using predictive models, using more ways in which we can actually reach customers in new ways we never have before through social. But bring them into a new conversation. Analytics, analytics, storytelling, and understanding, getting closer to new clients like we never have before, and then thinking through how do we use that full-circle loop of learning to get better and better in how we engage our customers in ways they want to engage with us. >> I wanna switch gears just a second, and I know that you've just been nominated as an International Board Member. You were a Board Member before, of Athena of the Triangle, which is about supporting and inspiring women in the technology industry. As we know that this is the dearth of women, technologists, is a big problem in the US and globally. Can you tell us a little more about the organization and what you're doing? >> So, Athena International is really about, how do you promote women's leadership? It's across the world, in fact we just launched some very exciting initiatives in China where I lived for a year, and the President of Athena International is a friend of mine, and she was really looking at how do you foster growth, especially in emerging markets and countries where women's leadership can be so profound in terms of how do you impact the business, government, and market, and really overall global success. Athena is focused on, is technology, but it's also with women in many industries. But really, how do you gain the powerful mentorships, how do you gain powerful access to programs, to having more access to expertise that can help them to think through business models, business cases. How do they grow their business, it might be from financial to career counseling, to mentoring on marketing, but it's really thinking through women's leadership as a whole. >> And is NetApp also working on behalf of those, of that cause too? >> We're really focused on, today in fact we're gonna be hosting the, the annual Women in Technology Summit. So we're so focused on how do we think about developing women in technology, how to think about that across not only our employees, but our partners and our customers, and it's not just about women, this is men and women working together to determine how do we stop the fact that we've got to get more access to women in mentorships and sponsorships, and really really driving how we have leadership as we grow, really grow into our careers, and can drive more business impact. >> Great. Well Jean, thanks so much for coming on theCUBE, >> Thank you. >> It was really fun talking to you. >> Absolutely, thank you both. >> I'm Rebecca Knight for Peter Burris, we will have more from NetApp Insight, here in Berlin, Germany in just a little bit.

>> Announcer: Live from Las Vegas it's theCube. Covering VMworld 2017. Brought to you by VMware and its ecosystem partners. (upbeat techno music) >> Hi, I'm Stu Miniman here with Justin Warren. This is theCUBE's coverage of VMworld2017. Believe it or not it's our eighth year covering this show. About 23,000 here in attendance and pulls from around the world even though there is a European show. But happen to welcome to the program, a first time guest, to theCUBE, someone I've known for a number of years. So, great to pull you in front of the camera. Dan Frith who is a consultant with Penguin Punk. We had one of my guests this morning said, you know this is the punk rock set so it only makes sense that, you know, you've got the shoes and the hair, and even hit a punk show >> Dan: Yep. >> here in Vegas >> Dan: I did, I did. >> when you first got here. >> Dan: Yep. >> So, thanks for joining us. >> Thank you. Thanks for having me. >> So, Dan, just for our audience, give us a little bit about your background. You're heavily involved in the VMware community. You're a VIMA leader. >> Dan: Yeah. >> Tell us your background and what you're doing these days. >> Dan: Yeah, sure. Thanks, Stu. I've been working with Virtualization for about 15 year now. Started with Workstation, went to ESX 2. And sort of it all went from there. I thought that was pretty cool stuff. Kept me really busy for a long time. Branched out into further data center technologies. I'm really interested in things that go in racks, and how they can help people do stuff better, faster and smarter. >> Dan: Yeah. >> I tell you, I've been working with VMware for about the same time, 15 years. Had a little bit more hair and less gray, you know, when that started, I loved some of the IBM to TV commericals where it was like, "Where did all the servers go?" Racked it all up and things like that. To watch the evolution and the ebbs and flows in this community >> Dan: Yep. >> has been pretty cool. So, how important is VMware today in your ecosystem? >> Yeah, it's critical to what we do every day. A lot of our customers are very VMware focused. Not just for the high proviso. It's all management automation that we wrap around that stuff. NSX is becoming more and more critical to what we're doing. Got a lot of complicated cloud plays happening locally. NSX is really helping us to get where we need to be where traditionally maybe it was bit of a slower, harder process. We've certainly found stuff like that is really helping us get some good winds on the board. >> Could you unpack that a little bit for us? Definitely coming into the show, I hear a lot about NSX. Lots of customers doing what I taught. Some of the ecosystem at large is like when you really get in there's some complicated pieces. Networking, security, >> Dan: That's right. >> never going to be simple? >> Dan: Right. >> So what are some of the challenges? How do we get over some of them? And what does this really deliver? >> Yeah, I think some of the biggest challenges with networking and security in the enterprise isn't the actual tech anymore it's the way that we apply the processes to that tech, the policies, the frameworks and governments, the risk, compliance assessments, all that sort of stuff. People don't necessarily understand that world inside their business. Having something like NSX come in it gives them the opportunity to reassess what they're actually trying to achieve, what's critical from an application perspective down rather than just thinking about the infrastructure and the tools they're using. It's not just about switches, routers, firewalls anymore. It's about what I'm actually trying to achieve, what really needs to talk to what, and now I can make this happen with this tool that's actually really flexible and agile, and very easy to get up and running. >> But the thing around the security aspect of it in particular, is that it's not the same sort of audience that you would normally be talking to if you're a VMware sort of person. >> Dan: That's right. It's usually handled by someone completely different. Similarly, the networking can be a little bit funny as well because the networking people are all about the hardware, and the switches, and things that plug into it. And this virtual switching idea, when I first heard NSX you're going to teach BGP to virtualization? >> I know, >> and I think that's been very interesting as well. I think we saw the last 10 years the storage and virtualization guys seem to come together reasonably well and start to cooperate on stuff. And we're finally understanding what storage is to VMware guys and vice versa. Whereas the networking stuff is still that dark art where you have to have >> Yeah. >> a certain number of letters after your name to make it work. And the security guys, again, they're a whole different beast, right? They're kind of like the DBA's of the infrastructure world. >> So, how far along in using storage as sort of an analogy. How far down that journey of getting people together and to understand each other on both sides. >> Yeah, so I think its still pretty early days. I know VMware's been very bullish about what NSX can do to transform your infrastructure. But I think there's a lot of conversations that still need to be had at a reasonably high level in organizations to get people understanding exactly what they can do with this stuff, and I think realize the potential of what they can do. Sometimes it's not actually what they need to do now, it's what they need to do three years from now. And I think a lot of businesses just aren't planning ahead that far, right? >> Dan, I'm curious your take on the keynote this morning. Pat got on stage. I thought good energy. I thought it was one of his best keynotes that he's given. >> Dan: Absolutely. >> But for your audience, kind of in your geo, digital transformation, kind of the journey to cloud. How much of that kind of hit home for you? Any critiques that you'd give. >> So, cloud's obviously a hot topic where I'm based. The VMware AWS story is getting more and more interesting. But, again, for Australia still not so much. You've got it in one geo right now. Australia is not going to be enabled for awhile. It took AWS a long time to get a presence down there. >> I think if I heard right, they said within a year by the time we come back to VMWorld next year, which I think is going to be in Vegas unfortunately again, but they said we should be across all the Amazon availability zones. >> Yeah, in which case that could be tremendously interesting. But I've got to crunch a few numbers to make sure this really works because I like the idea. It's a neat idea. It's very good for those legacy enterprises that don't really want to get away from vSphere to Shared who've got the kind of crusty applications that don't really run very well on public cloud. But they're in the middle of their transformation piece, perhaps. They're trying to get cloud-native. This is a nice stepping stone. If VMware can execute on it, makes sense financially. >> So, what are some of the financial price points that you're seeing out there? You know, we've heard over the years, VMware sometimes is everybody's yelling about it, sometimes not as much, cloud is going to be the savior Or wow, it's really expensive- >> Dan: That's right, it sort of varies. I think one of the points this morning they said, "You can have a variable cost model." And a lot of the businesses I deal with they hate that stuff. They need to know every month how much they're going to spend. >> Stu: Yeah, CFO doesn't like uncertainty, right? >> Absolutely not. Yeah, and this kind of stuff can get out of control really quickly. I'm not yet convinced unless you put the right controls, governance, framework, all that stuff on top of it. That's going to be the key thing, I think, for the success of this. >> There's a lot of talk about innovation which involves change and risk. And so, if we're trying to keep things into constrained boxes where we may not understand exactly what it's going to be, then by definition we're reducing as much risk as we can which is kind of- >> What's been fascinating with the customers I work with who are all traditional enterprises, services, those types. They've got CIOs coming in and saying, "Let's go to cloud. Everyone's in the cloud." They've sent it all up there and they go, "Oh my three-tier application actually doesn't work in this cloud. I need to bring it back. We've got those people going through those cycles already locally. Yeah, there's a lot of innovation going on at a high level. But I think some of the homework hasn't been done, to make that successful. And I think that's what people need to focus more on is an application centric, or even a business outcome centric... You know we use 2,000 applications in the enterprise but what do they all do. >> Justin: What are they for? >> What are they for? Are they just there because they've always been there? Or can we carve some of this stuff out? >> Yeah, how do softwares and service and public cloud fit into that discussion. >> Yeah. So, I think they're going to be more and more critical. I think the maturity around some of the softwares and service offerings has been really good. People are loving the offloader risk and the offload our responsibility for SAS. I think some of the problem is around, again, it's compliance, risk, people aren't necessarily backing up their Office365 stuff. They're sort of relying on Microsoft to have things in place. They're potentially not realizing some of the risk they're exposing themselves to. Not that this stuff is dodgy but it's tricky to navigate how you actually protect- >> I was talking to a security person yesterday, and they were like, "Oh, yeah, no if I just use SAS I don't need to worry about the security, right?" And I was like, "No, you need to worry about it even more." >> Dan: Yeah, yeah. >> We've seen plenty of examples of people who have put data into AWS for example, and then their S3 bucket is just open for the world to see. >> Dan: That's right. The simplicity adds a bit more mystery where it probably shouldn't. >> Yeah, doing your homework and understanding the tools that you're about to go and use is important. >> Dan: Yeah, understanding the risks and understanding some of the consequences of your actions. It's not just about reducing the floor tiles on your own premises stuff. It's about understanding what the data is actually doing, where it's going, and what it's going to mean to someone if they get ahold of that data. >> Yeah, but it's not a new situation really. Cloud's been around for over ten years now. A lot of these ideas of IT working with the business because that's what IT is about. It's not exactly a radical concept. >> It's not a massive change in what we're doing. I think some of the problem is we haven't done that very well to begin with. Now, we've just put another infrastructure construct in place and gone, "Oh, well now well work with the business on this." Unfortunately, we still aren't working with the business. You still got pockets of the business doing their own thing. It's poorly understood. IT is a cost center, a pain, a drain on the business, if you will. And it's hard for them to, I think, bridge that gap. We need to focus a bit more on making the gap between what the business is trying to achieve and what IT can do to help them. I don't think the cloud necessarily takes that conversation away. >> Yeah, unfortunately the technologies never going to be a silver bullet but I heard you say that IT still is looked at as a cost center for a lot of your environments. And I hear people maybe they're too optimistic. Not only is IT a cost center, they're working with the business. Maybe IT is driving the business. Sounds like maybe you're not there quite yet. >> So, I don't think that's happening in the big enterprises just yet. The more conservative ones are still struggling, I think, with bridging that gap between IT and business. The ones who can't see the value of what they're doing from an IT perspective, they're always going to struggle with that kind of stuff. >> How about just a general concept of digital transformation. In your area is that something, are people embracing it? I've read a great article actually by one of the networking vendors, and he said, "Look, people might not agree with digital transformation but digital disruption is definitely real." >> Absolutely. >> Stu: What are you seeing? >> If there's a way we can shoehorn a way of doing things differently into traditional business, into traditional IT companies as well, and making them understand that they're not just there to take all their money and not necessarily deliver on all of their promises. And if the business can start understanding that their is some value in IT, then I'm all for digital disruption if that's a mechanism to make that happen. Realistically though, I'm still faced with the same challenges of legacy software being out of support, and hardware that's sweating the asset, taking it a little too far. Those kind of problems are realistically what I'm still seeing every day. >> Kind of like the concept that Pat talked about in the keynote today of cyber hygiene. Just doing the basics >> Dan: That's right. >> Dan: Doing the basics. And I think some people are struggling with those basics because they've never done it or they've sort of forgotten how to do it, or they expect, magically, that their new shiny cloud will do that for them. Or their service provider and that's definitely not the case. >> Justin: Yeah. >> We're still pretty early in the show. But any of the announcements so far, anything jump out at you? Or anything that you've seen yet that you want to highlight? >> I'm excited about the VM in AWS thing. I think it's good to finally see that. The annoucement last year at VMworld US, now it's generally available. Limited but generally available. >> Yeah, it was actually announced like a month after the show last year. One of the things we were a little frustrated that there was a three letter name big company that they made an announcement with which was up on stage talking about security today but not so much their cloud offerings. >> Not so much about that stuff. Yeah, so it's been a weird, I'm not going to say it's a pivot but it's certainly a bit of a twist. >> So, you're also a VMUG leader. What are the pain points that you're hearing from people in the community? What do they look for out of the ecosystem that would make their jobs a whole lot easier? >> I think people are sometimes struggling with the complexity of the ecosystem. It's still fairly broad and diverse. And sometimes people struggle to actually navigate their way through what they need to get done. I think that's what a lot of our VMUG members are struggling with day to day. >> I guess I don't see the vendors in the ecosystem solving that problem. It tends to be the distribution, consultants and the like that will help explain that. Because the problem we have, even if I just take storage or networking, these are really complicated things. And there's not going to be one solution that fits 90% of it. So, that's why I need to understand, you said a customer with 2,000 applications, how do I manage that stack of applications? How do I deal with that? You're a consultant. How do you help people through some of these challenges? >> So, I generally try to start with what's important to people. Like what's really making the business tick? What hurt them the most when it goes down? What costs them money? And some people have a really hard time understanding how much money their burning every time an application falls over. And then we just try to make some links between the infrastructure, the application that keeps that outcome running for them. >> Yeah, one of the things I've been poking at is there's too many things that IT is doing that they suck at. And I'm not trying to poke at them. It's what we call the undifferentiated heavy lifting. Come on, I think we talk to anybody, you're no good at building a data center. Please don't do another one. >> Dan: That's right. >> Somebody else can do it. Now, I'm not saying it all goes to public cloud. Lots of options how you do that. But from the ground up and as we work our way, what drives the business? What creates value for the business? And finding those areas. Roles of the CIO is changing greatly, role of IT. >> Yeah. >> Things are going to look very different in five years than it does today. >> Oh, absolutely. Yeah, yeah. And I think people don't necessarily appreciate the value of consultants who can help them on their journey. Because it's hard. IT is hard. Enterprise is hard. And putting IT and Enterprise in the same sentence that really makes it very hard. >> Justin: Yeah, very hard. >> You got to be careful. I saw there was one of those sarcastic memes years ago. It was like, "Consultants, if you can't solve the problem at least there's lots of money to be made moving it along." >> Yeah, yeah. And redefining the problem is another fun one. >> Justin: That's always fun. >> Yeah. >> So, Dan people want to learn more about what you're doing. How do they find you? >> So, they can find me at penguinpunk.net. I've got a blog there. It's been running there for about 10 years now. You can find me on the Twitters @penguinpunk. And various other things. Come to a VMUG meeting in Brisbane if you're ever in the area. We'll buy you a beer and treat you nice. >> Stu: Excellent. Love to do that. We have yet to do theCUBE in Australia but it's definitely what we want to do. So, Dan, thank you so much for joining us. >> Thanks, Stu. For Justin and Stu, we'll be back with lots more coverage here from VMworld 2017. You're watching theCUBE. (upbeat techno music)

(upbeat music) >> Narrator: Live from New Orleans. It's The Cube, covering VeeamON, 2017 brought to you by Veeam. >> Welcome back to New Orleans everybody. This is The Cube, the leader in live tech coverage. I'm Dave Vellante with Stu Miniman. It's our first day of coverage at VeeamON 2017. The first time The Cube has covered VeeamON and it's quite an event. About 3,000 people here and as I say, we're being going two days of coverage talking to executives and partners and of course, the customers, we love the customer segments. Markus Marksteiner is here. He's the CTO of Baloise Group, insurance company out of Switzerland. Markus, welcome to The Cube. Thanks for coming on. >> You're welcome. >> So tell us a little bit about your company, your role and what are some of the things driving IT decisions. >> Okay, so are a life insurance and long life insurance company within Switzerland. We also have a bank in Switzerland which is included. We operate in Europe, in the country of Belgium and Germany and Luxembourg and Lichtenstein. So we are a company with about seven and a half thousand employees. And my role in there, is actually I'm a head of infrastructure and supports so I'm responsible for the data center, the user service center and the workplace environment. I also act as a group CTO because we have centralized all the data centers from the different locations to expose it to our headquarter. >> So financial services tends to be in the cutting edge of technology typically, very competitive industry and fast moving, very IT-oriented. What are some of the drivers in your business today? >> I think in the, especially in the insurance companies, we are, within Switzerland but also in Germany and Europe itself, it's a highly regulated market so. The possibility to, let's go for the public cloud is very limited because of regulation part. So therefore we have to deal with insurance companies within Europe but also within US and China, especially, which are very agile out on the market so. Therefore our business is now changing completely because from the traditional insurance which we have selled years ago, we will have to translate this into the industrialization world so meaning, we have to be more flexible on the market, to have shorter periods of production. And for me, as an IT reseller within the company, means my organization have to be agile as well. So, this is actually the most part we are changing to deal with security, that's the one part. But the other part is the agility. >> Paint a picture of your environment. What's it look like? Applications that you're supporting. What does your infrastructure look like. Your storage. Obviously, your backup, we'll talk about that. >> So we have, within Basel we have two data centers nearby. And we have now set up a third data center outside of Basel for disaster recovery because Basel is located on a earthquake area with a high risk impact so therefore our internal audit is set, it's not that good to have for the complete group data centers located on a earthquake plate so please set up a data center which is at least 100 kilometers away from our location now, so. Within the data centers, typically we have mainframes, we have servers, we have storage, all kinds of flavors. We have some centralization there. We have one with strategy in the infrastructure which a huge partnership with HP. In this area we have from storage part, we're using NetApp and DocuStorage. And as a backup software of course now, since nearly a year now, we are using Veeam for doing the backup of all the virtual machines. In the future, also the physical machines. And also we elevated Veeam because of the data implication into data center three. So this guarantees me to bring up the data at a certain time to get us into three to make the restore and the restart there. >> So you've got, two data centers within a synchronous distance and one is an asynchronous distance. Is that correct? So you have a three data center set up which is essentially is as close to zero data loss as you can get. >> Yeah, exactly. The data center three we are using not only as a cold backup standby data center, we are putting all the non-productive environment to this data center so we have all three data centers up and running and they have on a certain perspective productive level meaning for the developer, of course data center three is absolutely highly critical because they develop in data center three, all the data is there. For the productive part, we have data center one and two which is in Basel which has the availability there, so. We're using both sides and they're all connected together. >> How often do you test recovery in that set up? >> We're trying now to test it twice a year. But we cannot switch the complete data center because we have productive and-- >> Dave: It's too risky. >> It's too risky so we built up a reference model, a reference service where we have included all the environments we need to make it for the auditors visible that our infrastructure in data center three is working in case of an emergency. >> Okay. Let's talk a little bit more about the data protection strategy. So we have a high-level, we understand the data center approach but what about protecting the apps? How do you use Veeam? How did you start with Veeam and where are you now? >> I mean we came from an absolutely traditional data standards so we had a legacy backup system running based on file locks and then we started a certain time with NetApp and using snapshot technologies there. Because we had huge databases which are not able to fulfill the SLA anymore in the recovery mode so we have to switch them to them to NetApp. And then we started with data center three and then we had another problem. How can we replicate these data into data center three in a certain time to get the SLA fulfilled in case of an emergency. And there we made a revelation and Veeam was actually the one who was fulfilling all the requirements and it was easy to deal with them. So we decided, okay, let's try it Veeam. And at a certain time, we thought well, it's not only about data application with Veeam it's also about the complete backup stack, we can replace by this software. So we grow slowly with the possibilities we saw during the implementation phase. We said, okay, we can use this model and this model and then VeeamON came on so we could use the report part also for the sizing of the virtual machines and now on we just backing up almost everything with Veeam, so. >> Can you speak to organizationally, you know, how many people you have managing kind of backup and DR and what that experience has been like? >> In the past we had about three people which were responsible for the complete backup process. But they're very focused on their tooling, they could not tell me if the backup was correct. If the data was backuped correctly. They only say, yeah, my system is running and it's backuping but is it really also consistent. I don't know so we had to ask the engineers. With Veeam now, we switched completely. We do not have any responsible anymore for backup purposes itself. We took this because of the ease of use, the tool, we gave them directly to the engineers of Linux, of Citrix, or of Windows and they are now responsible for their own data. So they can now do the backups itself and they can also assure to me that this, what they do with the backup is correct and it's restartable. Because they have to check each time. >> Yeah, so you're not only operationally more efficient but you actually know that what you have works. >> Markus: Exactly. (laughing) Yeah, yeah. >> Great. I believe it's your first time at the conference. What's the experience been so far? What value have you been getting? What brought you here? >> Actually I came here with the goal to learn more about the Veeam company itself and this was actually during the networking areas and the networking part was very helpful for me to meet directly the management of Veeam to see what is their strategy and it was also in the general session, they have a story to tell and that's what, I was coming in here to get this information and in the sessions, and today also with the talks with Baronov directly and McKay, that's really, there's a spirit in this company. That's what we are looking for. Because we have so many big companies, vendors in our thing, where you do not have the connection to the management directly and for me it's very important because we try really to grow with our business and therefore I need a partner behind where I can rely on them. With Veeam, absolutely the case. >> So you mentioned supporting physical endpoints is something that interest you. Anything else from the announcements that you heard that excites you? Anything not there, that you're looking for in the future, too? >> Yeah, for the future for me it's actually the cloud connection is very important. Because we are still in the high-regulated market but I think also the insurance and the financial sector in Switzerland, there are slightly opening for the cloud services and also for us, it's the Office365 and Amazon web services, they're coming slightly into our organization and to know that there is also a possibility with the same backup software using this in a cloud, this gives me the feeling and also the assurance that I can go to my management and tell them, hey guys, we're choosing the right vendor because we can also use them for the cloud. I do not have to evaluate another product there for fulfilling this requirement. That's good to hear. >> So you sell insurance, your company does. Backup is largely insurance. How do you make the business case, what business benefits have you seen? Can you share with any metrics, maybe they're largely cost cutting. Maybe it's enabling DR. What can you share with us? >> The one thing I can share with you is actually we had a, that's not only based on Veeam by the product, by the backup itself, but it's also based on the Veeam reporter. We had in a branch office in Belgium. We have an issue where we had several active directory controllers running there. And with VeeamON, they reported that there's two controllers broken during the weekend and there's only one active directory controller available. Meaning, if this will also fail, we have to replicate the complete staff to Basel meaning 1500 users have to wait. And they are very aware about these profiles because they are using Citrix in the background. So meaning, we will probably have an issue there for about four to five almost a whole working day where a complete branch could not work. Meaning, there we just rolled up these two active controls with Veeam in a certain time period and then nothing happened. And I mean, counted in money, this would cost us at least a half a million Euro, this outage, if it occurred. >> Markus, in the key note, you know, one of the terms that gets thrown out is digital transformation. We've talked to a lot of financial service companies that, that terms resonate. What does it mean to your organization? How has it impacted your job? >> Yeah, it has a huge impact because our business lines they are now looking for other type of insurance. Meaning, in the past, we just insured the car for one year. So, the experience of the users then, also my kids is actually, I don't want to have a car insurance for a whole year because I'm only driving twice a month, a car. So they would like to have an insurance like insure what you use. >> Stu: As a service? >> As a service. And therefore we have to adapt this into completely other models because with our legacy systems, it's impossible. So what is our business doing? They're going out, looking for startup companies. Bringing them in and the startup companies, they start, typically in a cloud environment. They're very agile. And then when they bring out the product, the first thing is they ask for a connection to the legacy systems, for customer relationship management systems and stuff like this. So I have to really change my organization completely. And so I have to go away from these silos organization parts, into DevOps. And I also have to change my data center because I have to provide these services also as a cloud service, as it is possible in the public cloud, so. Meaning, the digitalization in the business has absolutely direct impact to my organization. >> I'd buy that service. I've got four kids, three driving, two at college. They really only need it a couple of months out of the year. I'll switch insurance companies. Give me a call. (laughing) All right, excellent. Thanks very much for coming on The Cube. Markus, we really appreciate it. >> Thank you. >> You're welcome, all right, keep it right there everybody. Stu and I will be back. Continuous coverage of continuous data protection, continuous content flow. VeeamON 2017. We'll be right back. (upbeat music)