>> Live from Barcelona, Spain. It's theCUBE! Covering KubeCon, CloudNativeCon, Europe 2019. Brought to you by Red Hat, the Cloud Native Computing Foundation, and Ecosystem Partners. >> Hi, and welcome back. This is KubeCon, CloudNativeCon 2019 here in Barcelona. 7700 in attendance according to the CNCF foundation. I'm Stu Miniman and my co-host for this week is Corey Quinn. And happy to welcome back to the program, a cube-i-lom Rob Szumski, who's the Product Manager for Red Hat OpenShift. Rob, thanks so much for joining us >> Happy to be here. >> All right, so a couple of weeks ago, we had theCUBE in Boston. You know, short drive for me, didn't have to take a flight as opposed to... I'm doing okay with the jet lag here, but Red Hat Summit was there. And it was a big crowd there, and the topic we're going to talk about with you is operators. And it was something we talked about a lot, something about the ecosystem. But let's start there. For our audience that doesn't know, What is an operator? How does it fit into this whole cloud-native space in this ecosystem? >> (Corey) And where can you hire one? >> (laughs) So there's software programs first of all. And the idea of an operator is everything it takes to orchestrate one of these complex distributor applications, databases, messaging queues, machine learning services. They all are distinct components that all need to be life-cycled. And so there's operational expertise around that, and this is something that might have been in a bash script before, you have a Wiki page. It's just in your head, and so it's putting that into software so that you can stamp out mini copies of that. So the operational expertise from the experts, so you want to go to the folks that make MongoDB for Mongo, for Reddits, for CouchBase, for TensorFlow, whatever it is. Those organizations can embed that expertise, and then take your user configuration and turn that into Kubernetes. >> Okay, and is there automation in that? When I hear the description, it reminds me a little bit of robotic process automation, or RPA, which you talk about, How can I harem them? RPA is, well there's certain jobs that are rather repetitive and we can allow software to do that, so maybe that's not where it is. But help me to put it into the >> No, I think it is. >> Okay, awesome. >> When you think about it, there's a certain amount of toil involved in operating anything and then there's just mistakes that are made by humans when you're doing this. And so you would rather just automate away that toil so you can spend you human capitol on higher level tasks. So that's what operator's all about. >> (Stu) All right. Great. >> Do you find that operator's are a decent approach to taking things that historically would not have been well-suited for autoscaling, for example, because there's manual work that has to happen whenever a no-joinser leaves a swarm. Is that something operators tend to address more effectively? Or am I thinking about this slightly in the wrong direction? >> Yeah, so you can do kind of any Kubernetes event you can hook into, so if your application cares about nodes coming and leaving, for example, this is helpful for operators that are operating the infrastructure itself, which OpenShift has under the hood. But you might care about when new name spaces are created or this pod goes away or whatever it is. You can kind of hook into everything there. >> So, effectively it becomes a story around running stateful things in what was originally designed for stateless containers. >> Yeah, that can help you because you care about nodes going away because your storage was on it, for example. Or, now I need to re-balance that. Whatever that type of thing is it's really critical for running stateful workloads. >> Okay, maybe give us a little bit of context as to the scope of operators and any customer examples you have that could help us add a little bit of concreteness to it. >> Yeah, they're designed to run almost anything. Every common workload that you can think about on an OpenShift cluster, you've got your messaging queues. We have a product that uses an operator, AMQ Streams. It's Kafka. And we've got folks that heavily use a Prometheus operator. I think there's a quote that's been shared around about one of our customer's Ticketmaster. Everybody needed some container native monitoring and everybody could figure out Prometheus on their own. Or they could use operator. So, they were running, I think 300-some instances of Prometheus and dev and staging and this team, that team, this person just screwing around with something over here. So, instead of being experts in Prometheus, they just use the operator then they can scale out very quickly. >> That's great because one of the challenges in this ecosystem, there's so many pieces of it. We always ask, how many companies need to be expert on not just Kubernetes, but any of these pieces. How does this tie into the CNCF, all the various projects that are available? >> I think you nailed it. You have to integrate all this stuff all together and that's where the value of something like OpenShift comes at the infrastructure layer. You got to pick all your networking and storage and your DNS that you're going to use and wire all that together and upgrade that. Lifecycle it. The same thing happens at a higher level, too. You've got all these components, getting your Fluentd pods down to operating things like Istio on Service Mesh's, serviceless workloads. All this stuff needs to be configured and it's all pretty complex. It's moving so fast, nobody can be an expert. The operator's actually the expert, embedded from those teams which is really awesome. >> You said something before we got started. A little bit about a certification program for operators. What is that about? >> We think of it as the super set of our community operators. We've got the TensorFlow community, for example, curates an operator. But, for companies that want to go to market jointly with Red Hat, we have a certification program that takes any of their community content, or some of their enterprise distributions and makes sure that it's well-tested on OpenShift and can be jointly supported by OpenShift in that partner. If you come to Red Hat with a problem with a MongoDB operator, for example, we can jointly solve that problem with MongoDB and ultimately keep your workload up and keep it running. We've got that times a bunch of databases and all kinds of servers like that. You can access those directly from OpenShift which is really exciting. One-click install of a production-ready Mongo cluster. You don't need to dig through a bunch of documentation for how that works. >> All right, so Rob, are all of these specific only to OpenShift, or will they work with flavors of Kubernetes? >> Most of the operators work just against the generic Kubernetes cluster. Some of them also do hook into OpenShift to use some of our specialized security primitives and things like that. That's where you get a little bit more value on OpenShift, but you're just targeting Kubernetes at the end of the day. >> What do you seeing customers doing with this specifically? I guess, what user stories are you seeing that is validating that this is the right direction to go in? >> It's a number of different buckets. The first one is seeing folks running services internally. You traditionally have a DBA team that maybe runs the shared database tier and folks are bringing that the container native world from their VM's that they're used to. Using operators to help with that and so now it's self-service. You have a dedicated cluster infrastructure team that runs clusters and gives out quota. Then, you're just eating into that quota to run whatever workloads that you want in an operator format. That's kind of one bucket of it. Then, you see folks that are building operators for internal operation. They've got deep expertise on one team, but if you're running any enterprise today especially like a large scale Ecommerce shop, there's a number of different services. You've got caching tier, and load balancing tiers. You've got front-ends, you've got back-ends, you've got queues. You can build operators around each one of those, so that those teams even when they're sharing internally, you know, hey where's the latest version of your stack? Here's the operator, go to town. Run it in staging QA, all that type of stuff. Then, lastly, you see these open source communities building operators which is really cool. Something like TensorFlow, that community curates an operator to get you one consistent install, so everyone's not innovating on 30 different ways to install it and you're actually using it. You're using high level stuff with TensorFlow. >> It's interesting to lay it out. Some of these okay, well, a company is doing that because it's behind something. Others you're saying it's a community. Remind me, just Red Hat's long history of helping to give if you will, adult supervision for all of these changes that are happening in the world out there. >> It's a fast moving landscape and some tools that we have are our operator SDK are helping to tame some of that. So, you can get quickly up and running, building an operator whether you are one of those communities, you are a commercial vendor, you're one of our partners, you're one of our customers. We've got tools for everybody. >> Anything specific in the database world that's something we're seeing, that Cambrian explosion in the database world? >> Yeah, I think that folks are finally wrapping their heads around that Kubernetes is for all workloads. And, to make people feel really good about that, you need something like an operator that's got this extremely well-tested code path for what happens when these databases do fail, how do I fail it over? It wasn't just some person that went in and made this. It's the expert, the folks that are committing to MongoDB, to CouchBase, to MySQL, to Postgres. That's the really exciting thing. You're getting that expertise kind of as extension of your operations team. >> For people here at the show, are there sessions about operators? What's the general discussion here at the show for your team? >> There's a ton. Even too many to mention. There's from a bunch of different partners and communities that are curating operators, talking about best practices for managing upgrades of them. Users, all that kind of stuff. I'm going to be giving a keynote, kind of an update about some of stuff we've been talking about here later on this evening. It's all over the place. >> What do you think right now in the ecosystem is being most misunderstood about operators, if anything? >> I think that nothing is quite misunderstood, it's just wrapping your head around what it means to operate applications in this manner. Just like Kubernetes components, there's this desired state loop that's in there and you need to wrap your head around exactly what needs to be in that. You're declarative state is just the Kubernetes API, so you can look at desired and actual and make that happen, just like all the Kub components. So, just looking at a different way of thinking. We had a panel yesterday at the OpenShift Commons about operators and one of the questions that had some really interesting answers was, What did you understand about your software by building an operator? Cause sometimes you need to tease apart some of these things. Oh, I had hard coded configuration here, one group shared that their leader election was not actually working correctly in every single incidences and their operator forced them to dig into that and figure out why. So, I think it's a give and take that's pretty interesting when you're building one of these things. >> Do you find that customers are starting to rely on operators to effectively run their own? For example, MongoDB inside of their Kubernetes clusters, rather than depending upon a managed service offering provided by their public cloud vendor, for example. Are you starting to see people effectively reducing public cloud to baseline primitives at a place to run containers, rather than the higher level services that are starting to move up the stack? >> A number of different reasons for that too. You see this for services if you find a bug in that service, for example, you're just out of luck. You can't go introspect the versions, you can't see how those components are interacting. With an operator you have an open source stack, it's running on your cluster in your infrastructure. You can go introspect exactly what's going on. The operator has that expertise built in, so it's not like you can screw around with everything. But, you have much more insight into what's going on. Another thing you can't get with a cloud service is you can't run it locally. So, if you've got developers that are doing development on an airplane, or just want to have something local so it's running fast, you can put your whole operator stack right on your laptop. Not something you can do with a hosted service which is really cool. Most of these are opens source too, so you can go see exactly how the operator's built. It's very transparent, especially if you're going to trust this for a core part of the infrastructure. You really want to know what's going on under the hood. >> Just to double check, all this can run on OpenShift? It is agnostic to where it lives, whether public cloud or data center? >> Exactly. These are truly hybrid services, so if you're migrating your database to here, for example, over now you have a truly hybrid just targeting Kubernetes environment. You can move that in any infrastructure that you like. This is one of the things that we see OpenShift customers do. Some of them want to be cloud-to-cloud, cloud-to-on-prem, different environments on prem only, because you've got database workloads that might not be leaving or a mainframe you need to tie into, a lot of our FSI customers. Operators can help you there where you can't move some of those workloads. >> Cloud-on-prem makes a fair bit of sense to me. One thing I'm not seeing as much of in the ecosystem is cloud-to-cloud. What are you seeing that's driving that? >> I think everybody has their own cloud that they prefer for whatever reasons. I think it's typically not even cost. It's tooling and cultural change. And, so you kind of invest in one of those. I think people are investing in technologies that might allow them to leave in the future, and operators and Kubernetes being one of those important things. But, that doesn't meant that they're not perfectly happy running on one cloud versus the other, running Kubernetes on top of that. >> Rob, really appreciate all the updates on operators. Thanks so much for joining us again. >> Absolutely. It's been fun. >> Good luck on the keynote. >> Thank you. >> For Corey Quinn, I'm Stu Miniman, back with more coverage two days live from wall to wall here at KubeCon CloudNativeCon 2019 in Barcelona, Spain. Thanks for watching.

>> theCUBE's live coverage is made possible by funding from Dell Technologies: "Creating technologies that drive human progress." >> Good late afternoon from Barcelona, Spain at the Theater of Barcelona. It's Lisa Martin and Dave Nicholson of "theCUBE" covering MWC23. This is our third day of continuous wall-to-wall coverage on theCUBE. And you know we're going to be here tomorrow as well. We've been having some amazing conversations about the ecosystem. And we're going to continue those conversations next. Honore Labourdette is here, the VP global partner, Ecosystem Success Team, Telco Media and Entertainment at Red Hat. And Tony Jeffries joins us as well, a Senior Director of Product Management, Telecom Systems Business at Dell. Welcome to the theCUBE. >> Thank you. >> Thank you. >> Great to have both of you here. So we're going to be talking about the evolution of the telecom stack. We've been talking a lot about disaggregation the last couple of days. Honore, starting with you, talk about the evolution of the telecom stock. You were saying before we went live this is your 15th at least MWC. So you've seen a lot of evolution, but what are some of the things you're seeing right now? >> Well, I think the interesting thing about disaggregation, which is a key topic, right? 'Cause it's so relative to 5G and the 5G core and the benefits and the features of 5G core around disaggregation. But one thing we have to remember, when you disaggregate, you separate things. You have to bring those things back together again in a different way. And that's predominantly what we're doing in our partnership with Dell, is we're bringing those disaggregated components back together in a cohesive way that takes advantage of the new technology, at the same time taking out the complexity and making it easier for our Telco customers to deploy and to scale and to get much more, accelerate the time to revenue. So the trend now is, what we're seeing is two things I would say. One is how do we solve for the complexity with the disaggregation? And how do we leverage the ecosystem as a partner in order to help solve for some of those challenges? >> Tony, jump on in, talk about what you guys announced last week, Dell and Red Hat, and how it's addressing the complexities that Honore was saying, "Hey, they're there." >> Yeah. You know, our customers, our operators are saying, "Hey, I want disaggregation." "I want competition in the market." But at the same time who's going to support all this disaggregation, right? And so at the end of the day, there's going to be an operator that's going to have to figure this out. They're going to have an SLA that they're going to have to meet. And so they're going to want to go with a best-in-class partner with Red Hat and Dell, in terms of our infrastructure and their software together as one combined engineered system. And that's what we call a Dell Telecom infrastructure block for Red Hat. And so at the end of the day, things may go wrong, and if they do, who are they going to call for that support? And that's also really a key element of an engineered system, is this experience that they get both with Red Hat and with Dell together supporting the customer as one. Which is really important to solve this disaggregated problem that can arise from a disaggregated open network situation, yeah. >> So what is the market, the go to market motion look like? People have loyalties in the IT space to technologies that they've embraced and been successful with for years and years. So you have folks in the marketplace who are diehard, you know, dyed red, Red Hat folks. Is it primarily a pull from them? How does that work? How do you approach that to your, what are your end user joint customers? What does that look like from your perspective? >> Sure, well, interestingly enough both Red Hat and Dell have been in the marketplace for a very long time, right? So we do have the brand with those Telco customers for these solutions. What we're seeing with this solution is, it's an emerging market. It's an emerging market for a new technology. So there's an opportunity for both Red Hat and Dell together to leverage our brands with those customers with no friction in the marketplace as we go to market together. So our field sales teams will be motivated to, you know, take advantage of the solution for their customers, as will the Dell team. And I'll let Tony speak to the Dell, go to market. >> Yeah. You know, so we really co-sell together, right? We're the key partners. Dell will end up fulfilling that order, right? We send these engineered systems through our factories and we send that out either directly to a customer or to a OTEL lab, like an intermediate lab where we can further refine and customize that offer for that particular customer. And so we got a lot of options there, but we're essentially co-selling. And Dell is fulfilling that from an infrastructure perspective, putting Red Hat software on top and the licensing for that support. So it's a really good mix. >> And I think, if I may, one of the key differentiators is the actual capabilities that we're bringing together inside of this pre-integrated solution. So it includes the Red Hat OpenShift which is the container software, but we also add our advanced cluster management as well as our Ansible automation. And then Dell adds their orchestration capability along with the features and functionalities of the platform. And we put that together and we offer capability, remote automation orchestration and management capabilities that again reduces the operating expense, reduces the complexity, allows for easy scale. So it's, you know, certainly it's all about the partnership but it's also the capabilities of the combined technology. >> I was just going to ask about some of the numbers, and you mentioned some of them. Reduction of TCO I imagine is also a big capability that this solution enables besides reducing OpEx. Talk about the TCO reduction. 'Cause I know there's some numbers there that Dell and Red Hat have already delivered to the market. >> Yeah. You know, so these infrastructure blocks are designed specifically for Core, or for RAN, or for the Edge. We're starting out initially in the Core, but we've done some market research with a company called ACG. And ACG has looked at day zero, day one and day two TCO, FTE hours saved. And we're looking at over 40 to 50% TCO savings over you know, five year period, which is quite significant in terms of cost savings at a TCO level. But also we have a lot of numbers around power consumption and savings around power consumption. But also just that experience for our operator that says, hey, I'm going to go to one company to get the best in class from Red Hat and Dell together. That saves a lot of time in procurement and that entire ordering process as well. So you get a lot of savings that aren't exactly seen in the FTE hours around TCO, but just in that overall experience by talking to one company to get the best of both from both Red Hat and Dell together. >> I think the comic book character Charlie Brown once said, "The most discouraging thing in the world is having a lot of potential." (laughing) >> Right. >> And so when we talk about disaggregating and then reaggregating or reintegrating, that means choice. >> Tony: Yeah. >> How does an operator approach making that choice? Because, yeah, it sounds great. We have this integration lab and you have all these choices. Well, how do I decide, how does a person decide? This is a question for Honore from a Red Hat perspective, what's the secret sauce that you believe differentiates the Red Hat-infused stack versus some other assemblage of gear? >> Well, there's a couple of key characteristics, and the one that I think is most prevalent is that we're open, right? So "open" is in Red Hat's DNA because we're an open source technology company, and with that open source technology and that open platform, our customers can now add workloads. They have options to choose the workloads that they want to run on that open source platform. As they choose those workloads, they can be confident that those workloads have been certified and validated on our platform because we have a very robust ecosystem of ISVs that have already completed that process with open source, with Red Hat OpenShift. So then we take the Red Hat OpenShift and we put it on the Dell platform, which is market leader platform, right? Combine those two things, the customers can be confident that they can put those workloads on the combined platform that we're offering and that those workloads would run. So again, it goes back to making it simpler, making it easy to procure, easy to run workloads, easy to deploy, easy to operate. And all of that of course equates to saving time always equates to saving money. >> Yeah. Absolutely. >> Oh, I thought you wanted to continue. >> No, I think Honore sort of, she nailed it. You know, Red Hat is so dominant in 5G, and what they're doing in the market, especially in the Core and where we're going into the RAN, you know, next steps are to validate those workloads, those workload vendors on top of a stack. And the Red Hat leader in the Core is key, right? It's instant credibility in the core market. And so that's one of the reasons why we, Dell, want to partner with with Red Hat for the core market and beyond. We're going to be looking at not only Core but moving into RAN very soon. But then we do, we take that validated workload on top of that to optimize that workload and then be able to instantiate that in the core and the RAN. It's just a really streamlined, good experience for our operators. At the end of the day, we want happy customers in between our mutual customer base. And that's what you get whenever you do that combined stack together. >> Were operators, any operators, and you don't have to mention them by name, involved in the evolution of the infra blocks? I'm just curious how involved they were in helping to co-develop this. I imagine they were to some degree. >> Yeah, I could take that one. So, in doing so, yeah, we can't be myopic and just assume that we nailed it the first time, right? So yeah, we do work with partners all the way up and down the stack. A lot of our engineering work with Red Hat also brings in customer experience that is key to ensure that you're building and designing the right architecture for the Core. I would like to use the names, I don't know if I should, but a lot of those names are big names that are leaders in our industry. But yeah, their footprints, their fingerprints are all over those design best practices, those architectural designs that we build together. And then we further that by doing those validated workloads on top of that. So just to really prove the point that it's optimized for the Core, RAN, Edge kind of workload. >> And it's a huge added value for Red Hat to have a partner like Dell who can take all of those components, take the workload, take the Red Hat software, put it on the platform, and deliver that out to the customers. That's really, you know, a key part of the partnership and the value of the partnership because nobody really does that better than Dell. That center of excellence around delivery and support. >> Can you share any feedback from any of those nameless operators in terms of... I'm even kind of wondering what the catalyst was for the infra block. Was it operators saying, "Ah, we have these challenges here"? Was it the evolution of the Telco stack and Dell said, "We can come in with Red Hat and solve this problem"? And what's been some of their feedback? >> Yeah, it really comes down to what Honore said about, okay, you know, when we are looking at day zero, which is primarily your design, how much time savings can we do by creating that stack for them, right? We have industry experts designing that Core stack that's optimized for different levels of spectrum. When we do that we save a lot of time in terms of FTE hours for our architects, our operators, and then it goes into day one, right? Which is the deployment aspect for saving tons of hours for our operators by being able to deploy this. Speed to market is key. That ultimately ends up in, you know, faster time to revenue for our customers, right? So it's, when they see that we've already done the pre-work that they don't have to, that's what really resonates for them in terms of that, yeah. >> Honore, Lisa and I happen to be veterans of the Cloud native space, and what we heard from a lot of the folks in that ecosystem is that there is a massive hunger for developers to be able to deploy and manage and orchestrate environments that consist of Cloud native application infrastructure, microservices. >> Right. >> What we've heard here is that 5G equals Cloud native application stacks. Is that a fair assessment of the environment? And what are you seeing from a supply and demand for that kind of labor perspective? Is there still a hunger for those folks who develop in that space? >> Well, there is, because the very nature of an open source, Kubernetes-based container platform, which is what OpenShift is, the very nature of it is to open up that code so that developers can have access to the code to develop the workloads to the platform, right? And so, again, the combination of bringing together the Dell infrastructure with the Red Hat software, it doesn't change anything. The developer, the development community still has access to that same container platform to develop to, you know, Cloud native types of application. And you know, OpenShift is Red Hat's hybrid Cloud platform. So it runs on-prem, it runs in the public Cloud, it runs at the edge, it runs at the far edge. So any of the development community that's trying to develop Cloud native applications can develop it on this platform as they would if they were developing on an OpenShift platform in the public Cloud. >> So in "The Graduate", the advice to the graduate was, "Plastics." Plastics. As someone who has more children than I can remember, I forget how many kids I have. >> Four. >> That's right, I have four. That's right. (laughing) Three in college and grad school already at this point. Cloud native, I don't know. Kubernetes definitely a field that's going to, it's got some legs? >> Yes. >> Okay. So I can get 'em off my payroll quickly. >> Honore: Yes, yes. (laughing) >> Okay, good to know. Good to know. Any thoughts on that open Cloud native world? >> You know, there's so many changes that's going to happen in Kubernetes and services that you got to be able to update quickly. CICD, obviously the topic is huge. How quickly can we keep these systems up to date with new releases, changes? That's a great thing about an engineered system is that we do provide that lifecycle management for three to five years through this engagement with our customers. So we're constantly keeping them up with the latest and the greatest. >> David: Well do those customers have that expertise in-house, though? Do they have that now? Or is this a seismic cultural shift in those environments? >> Well, you know, they do have a lot of that experience, but it takes a lot of that time, and we're taking that off of their plate and putting that within us on our system, within our engineered system, and doing that automatically for them. And so they don't have to check in and try to understand what the release certification matrix is. Every quarter we're providing that to them. We're communicating out to the operator, telling them what's coming up latest and greatest, not only in terms of the software but the hardware and how to optimize it all together. That's the beauty of these systems. These are five year relationships with our operators that we're providing that lifecycle management end to end, for years to come. >> Lisa: So last question. You talked about joint GTM availability. When can operators get their hands on this? >> Yes. Yes. It's currently slated for early September release. >> Lisa: Awesome. So sometime this year? >> Yes. >> Well guys, thank you so much for talking with us today about Dell, Red Hat, what you're doing to really help evolve the telecom stack. We appreciate it. Next time come back with a customer, we can dig into it. That'd be fun. >> We sure will, absolutely. That may happen today actually, a little bit later. Not to let the cat out the bag, but good news. >> All right, well, geez, you're going to want to stick around. Thank you so much for your time. For our guests and for Dave Nicholson. This is Lisa Martin of theCUBE at MWC23 from Barcelona, Spain. We'll be back after a short break. (calm music)

>> And I'm here at Dell's Presence at MWC with vice president of marketing for telecom and Edge Computing, Aaron Chaisson. Aaron, how's it going? >> Doing great. How's it going today, Dave? >> It's going pretty well. Pretty excited about what you've got going here and I'm looking forward to getting the tour. You ready to take a closer look? >> Ready to do it. Let's go take a look! For us in the telecom ecosystem, it's really all about how we bring together the different players that are innovating across the industry to drive value for our CSP customers. So, it starts really, for us, at the ecosystem layer, bringing partners, bringing telecommunication providers, bringing (stutters) a bunch of different technologies together to innovate together to drive new value. So Paul, take us a little bit through what we're doing to- to develop and bring in these partnerships and develop our ecosystem. >> Uh, sure. Thank you Aaron. Uh, you know, one of the things that we've been focusing on, you know, Dell is really working with many players in the open telecom ecosystem. Network equipment providers, independent software vendors, and the communication service providers. And, you know, through our lines of business or open telecom ecosystem labs, what we want to do is bring 'em together into a community with the goal of really being able to accelerate open innovation and, uh, open solutions into the market. And that's what this community is really about, is being able to, you know, have those communications, develop those collaborations whether it's through, you know, sharing information online, having webinars dedicated to sharing Dell information, whether it's our next generation hardware portfolio we announced here at the show, our use case directory, our- how we're dealing with new service opportunities, but as well as the community to share, too, which I think is an exciting way for us to be able to, you know- what is the knowledge thing? As well as activities at other events that we have coming up. So really the key thing I think about, the- the open telecom ecosystem community, it's collaboration and accelerating the open industry forward. >> So- So Aaron, if I'm hearing this correctly you're saying that you can't just say, "Hey, we're open", and throw a bunch of parts in a box and have it work? >> No, we've got to work together to integrate these pieces to be able to deliver value, and, you know, we opened up a- (stutters) in our open ecosystem labs, we started a- a self-certification process a couple of months back. We've already had 13 partners go through that, we've got 16 more in the pipeline. Everything you see in this entire booth has been innovated and worked with partnerships from Intel to Microsoft to, uh, to (stutters) Wind River and Red Hat and others. You go all the way around the booth, everything here has partnerships at its core. And why don't we go to the next section here where we're going to be showing how we're pulling that all together in our open ecosystems labs to drive that innovation? >> So Aaron, you talked about the kinds of validation and testing that goes on, so that you can prove out an open stack to deliver the same kinds of reliability and performance and availability that we expect from a wireless network. But in the opens- in the open world, uh, what are we looking at here? >> Yeah absolutely. So one of the- one of the challenges to a very big, broad open ecosystem is the complexity of integrating, deploying, and managing these, especially at telecom scale. You're not talking about thousands of servers in one site, you're talking about one server in thousands of sites. So how do you deploy that predictable stack and then also manage that at scale? I'm going to show you two places where we're talkin' about that. So, this is actually representing an area that we've been innovating in recently around creating an integrated infrastructure and virtualization stack for the telecom industry. We've been doing this for years in IT with VxBlocks and VxRails and others. Here what you see is we got, uh, Dell hardware infrastructure, we've got, uh, an open platform for virtualization providers, in this case we've created an infrastructure block for Red Hat to be able to supply an infrastructure for core operations and Packet Cores for telecoms. On the other side of this, you can actually see what we're doing with Wind River to drive innovation around RAN and being able to simplify RAN- vRAN and O-RAN deployments. >> What does that virtualization look like? Are we talking about, uh, traditional virtual machines with OSs, or is this containerized cloud native? What does it look like? >> Yeah, it's actually both, so it can support, uh, virtual, uh-uh, software as well as containerized software, so we leverage the (indistinct) distributions for these to be able to deploy, you know, cloud native applications, be able to modernize how they're deploying these applications across the telecom network. So in this case with Red Hat, uh, (stutters) leveraging OpenShift in order to support containerized apps in your Packet Core environments. >> So what are- what are some of the kinds of things that you can do once you have infrastructure like this deployed? >> Yeah, I mean by- by partnering broadly across the ecosystem with VMware, with Red Hat, uh, with- with Wind River and with others, it gives them the ability to be able to deploy the right virtualization software in their network for the types of applications they're deploying. They might want to use Red Hat in their core, they may want to use Wind River in their RAM, they may want to use, uh, Microsoft or VMware for their- for their Edge workloads, and we allow them to be able to deploy all those, but centrally manage those with a common user interface and a common set of APIs. >> Okay, well I'm dying to understand the link between this and the Lego city that the viewers can't see, yet, but it's behind me. Let's take a look. >> So let's take a look at the Lego city that shows how we not deploy just one of these, but dozens or hundreds of these at scale across a cityscape. >> So Aaron, I know we're not in Copenhagen. What's all the Lego about? >> Yeah, so the Lego city here is to show- and, uh, really there's multiple points of Presence across an entire Metro area that we want to be able to manage if we're a telecom provider. We just talked about one infrastructure block. What if I wanted to deploy dozens of these across the city to be able to manage my network, to be able to manage, uh, uh- to be able to deploy private mobility potentially out into a customer enterprise environment, and be able to manage all of these, uh, very simply and easily from a common interface? >> So it's interesting. Now I think I understand why you are VP of marketing for both telecom and Edge. Just heard- just heard a lot about Edge and I can imagine a lot of internet of things, things, hooked up at that Edge. >> Yeah, so why don't we actually go over to another area? We're actually going to show you how one small microbrewery (stutters) in one of our cities nearby, uh, (stutters) my hometown in Massachusetts is actually using this technology to go from more of an analyzed- analog world to digitizing their business to be able to brew better beer. >> So Aaron, you bring me to a brewery. What do we have- what do we have going on here? >> Yeah, so, actually (stutters) about- about a year ago or so, I- I was able to get my team to come together finally after COVID to be able to meet each other and have a nice team event. One of those nights, we went out to dinner at a- at a brewery called "Exhibit 'A'" in Massachusetts, and they actually gave us a tour of their facilities and showed us how they actually go through the process of brewing beer. What we saw as we were going through it, interestingly, was that everything was analog. They literally had people with pen and paper walking around checking time and temperature and the process of brewing the beer, and they weren't asking for help, but we actually saw an opportunity where what we're doing to help businesses digitize what they're doing in their manufacturing floor can actually help them optimize how they build whatever product they're building, in this case it was beer. >> Hey Warren, good to meet you! What do we have goin' on? >> Yeah, it's all right. So yeah, basically what we did is we took some of their assets in the, uh, brewery that were completely manually monitored. People were literally walking around the floor with clipboards, writing down values. And we censorized the asset, in this case fermentation tanks and we measured the, uh, pressure and the temperature, which in fermentation are very key to monitor those, because if they get out of range the entire batch of beer can go bad or you don't get the consistency from batch to batch if you don't tightly monitor those. So we censorized the fermentation tank, brought that into an industrial I/O network, and then brought that into a Dell gateway which is connected 5G up to the cloud, which then that data comes to a tablet or a phone, which they, rather than being out on the floor and monitor it, can look at this data remotely at any time. >> So I'm not sure the exact date, the first time we have evidence of beer being brewed by humanity... >> Yep. >> But I know it's thousands of years ago. So it's taken that long to get to the point where someone had to come along, namely Dell, to actually digitally transform the beer business. Is this sort of proof that if you can digitally transform this, you can digitally transform anything? >> Absolutely. You name it, anything that's being manufactured, sold, uh, uh, taken care of, (stutters) any business out there that's looking to be able to be modernize and deliver better service to their customers can benefit from technologies like this. >> So we've taken a look at the ecosystem, the way that you validate architectures, we've seen an example of that kind of open architecture. Now we've seen a real world use case. Do you want to take a look a little deeper under the covers and see what's powering all of this? >> We just this week announced a new line of servers that power Edge and RAN use cases, and I want to introduce Mike to kind of take us through what we've been working on and really what the power of what this providing. >> Hey Mike, welcome to theCube. >> Oh, glad- glad to be here. So, what I'd really like to talk about are the three new XR series servers that we just announced last week and we're showing here at Mobile World Congress. They are all short depth, ruggedized, uh, very environmentally tolerant, and able to withstand, you know, high temperatures, high humidities, and really be deployed to places where traditional data center servers just can't handle, you know, due to one fact or another, whether it's depth or the temperature. And so, the first one I'd like to show you is the XR7620. This is, uh, 450 millimeters deep, it's designed for, uh, high levels of acceleration so it can support up to 2-300 watt, uh, GPUs. But what I really want to show you over here, especially for Mobile World Congress, is our new XR8000. The XR8000 is based on Intel's latest Sapphire Rapids technology, and this is- happens to be one of the first, uh, EE boost processors that is out, and basically what it is (stutters) an embedded accelerator that makes, uh, the- the processing of vRAN loads very, uh, very efficient. And so they're actually projecting a, uh, 3x improvement, uh, of processing per watt over the previous generation of processors. This particular unit is also sledded. It's very much like, uh, today's traditional baseband unit, so it's something that is designed for low TCO and easy maintenance in the field. This is the frew. When anything fails, you'll pull one out, you pop a new one in, it comes back into service, and the- the, uh, you know, your radio is- is, uh, minimally disrupted. >> Yeah, would you describe this as quantitative and qualitative in terms of the kinds of performance gains that these underlying units are delivering to us? I mean, this really kind of changes the game, doesn't it? It's not just about more, is it about different also in terms of what we can do? >> Well we are (stutters) to his point, we are able to bring in new accelerator technologies. Not only are we doing it with the Intel, uh, uh, uh, of the vRAN boost technologies, but also (stutters) we can bring it, too, but there's another booth here where we're actually working with our own accelerator cards and other accelerator cards from our partners across the industry to be able to deliver the price and performance capabilities required by a vRAN or an O-RAN deployment in the network. So it's not- it's not just the chip technology, it's the integration and the innovation we're doing with others, as well as, of course, the unique power cooling capabilities that Dell provides in our servers that really makes these the most efficient way of being able to power a network. >> Any final thoughts recapping the whole picture here? >> Yeah, I mean I would just say if anybody's, uh, i- is still here in Mobile World Congress, wants to come and learn what we're doing, I only showed you a small section of the demos we've got here. We've got 13 demos across on 8th floor here. Uh, for those of you who want to talk to us (stutters) and have meetings with us, we've got 13 meeting rooms back there, over 500 costumer partner meetings this week, we've got some whisper suites for those of you who want to come and talk to us but we're innovating on going forward. So, you know, there's a lot that we're doing, we're really excited, there's a ton of passion at this event, and, uh, we're really excited about where the industry is going and our role in it. >> 'Preciate the tour, Aaron. Thanks Mike. >> Mike: Thank you! >> Well, for theCube... Again, Dave Nicholson here. Thanks for joining us on this tour of Dell's Presence here at MWC 2023.

(upbeat music) >> Hello, everyone; I'm John Furrier with SiliconANGLE NEWS and host of theCUBE, and welcome to our SiliconANGLE NEWS MWC NEWS UPDATE in Barcelona where MWC is the premier event for the cloud telecommunication industry, and in the news here is Red Hat, Red Hat announcing a collaboration with NVIDIA, Samsung and Arm on Efficient Open Networks. Red Hat announced updates across various fields including advanced 5G telecommunications cloud, industrial edge, artificial intelligence, and radio access networks, RAN, and Efficiency. Red Hat's enterprise Kubernetes platform, OpenShift, has added support for NVIDIA's converged accelerators and aerial SDK facilitating RAND deployments on industry standard service across hybrid and multicloud platforms. This composable infrastructure enables telecom firms to support heavier compute demands for edge computing, AI, private 5G, and more, and just also helps network operators adopt open architectures, allowing them to choose non-proprietary components from multiple suppliers. In addition to the NVIDIA collaboration, Red Hat is working with Samsung to offer a new vRAN solution for service providers to better manage their open RAN networks. They're also working with UK chip designer, Arm, to create new networking solutions for energy efficient Red Hat Open Source Kubernetes-based Efficient Power Level Exporter project, or Kepler, has been donated to the open Cloud Native Compute Foundation, allowing enterprise to better understand their cloud native workloads and power consumptions. Kepler can also help in the development of sustainable software by creating less power hungry applications. Again, Red Hat continuing to provide OpenSource, OpenRAN, and contributing an open source project to the CNCF, continuing to create innovation for developers, and, of course, Red Hat knows what, a lot about operating systems and the telco could be the next frontier. That's SiliconANGLE NEWS. I'm John Furrier; thanks for watching. (monotone music)

>> theCUBE's live coverage is made possible by funding from Dell Technologies. Creating technologies that drive human progress. (ambient music) >> Lisa: Hey everyone, welcome back to Barcelona, Spain. It's theCUBE Live at MWC 23. Lisa Martin with Dave Vellante. This is day two of four days of cube coverage but you know that, because you've already been watching yesterday and today. We're going to have a great conversation next with EnterpriseWeb and Red Hat. We've had great conversations the last day and a half about the Telco industry, the challenges, the opportunities. We're going to unpack that from this lens. Please welcome Dave Duggal, founder and CEO of EnterpriseWeb and Azhar Sayeed is here, Senior Director Solution Architecture at Red Hat. >> Guys, it's great to have you on the program. >> Yes. >> Thank you Lisa, >> Great being here with you. >> Dave let's go ahead and start with you. Give the audience an overview of EnterpriseWeb. What kind of business is it? What's the business model? What do you guys do? >> Okay so, EnterpriseWeb is reinventing middleware, right? So the historic middleware was to build vertically integrated stacks, right? And those stacks are now such becoming the rate limiters for interoperability for so the end-to-end solutions that everybody's looking for, right? Red Hat's talking about the unified platform. You guys are talking about Supercloud, EnterpriseWeb addresses that we've built middleware based on serverless architecture, so lightweight, low latency, high performance middleware. And we're working with the world's biggest, we sell through channels and we work through partners like Red Hat Intel, Fortnet, Keysight, Tech Mahindra. So working with some of the biggest players that have recognized the value of our innovation, to deliver transformation to the Telecom industry. >> So what are you guys doing together? Is this, is this an OpenShift play? >> Is it? >> Yeah. >> Yeah, so we've got two projects right her on the floor at MWC throughout the various partners, where EnterpriseWeb is actually providing an application layer, sorry application middleware over Red Hat's, OpenShift and we're essentially generating operators so Red Hat operators, so that all our vendors, and, sorry vendors that we onboard into our catalog can be deployed easily through the OpenShift platform. And we allow those, those vendors to be flexibly composed into network services. So the real challenge for operators historically is that they, they have challenges onboarding the vendors. It takes a long time. Each one of them is a snowflake. They, you know, even though there's standards they don't all observe or follow the same standards. So we make it easier using models, right? For, in a model driven process to on boards or streamline that onboarding process, compose functions into services deploy those services seamlessly through Red Hat's OpenShift, and then manage the, the lifecycle, like the quality of service and the SLAs for those services. >> So Red Hat obviously has pretty prominent Telco business has for a while. Red Hat OpenStack actually is is pretty popular within the Telco business. People thought, "Oh, OpenStack, that's dead." Actually, no, it's actually doing quite well. We see it all over the place where for whatever reason people want to build their own cloud. And, and so, so what's happening in the industry because you have the traditional Telcos we heard in the keynotes that kind of typical narrative about, you know, we can't let the over the top vendors do this again. We're, we're going to be Apifi everything, we're going to monetize this time around, not just with connectivity but the, but the fact is they really don't have a developer community. >> Yes. >> Yet anyway. >> Then you have these disruptors over here that are saying "Yeah, we're going to enable ISVs." How do you see it? What's the landscape look like? Help us understand, you know, what the horses on the track are doing. >> Sure. I think what has happened, Dave, is that the conversation has moved a little bit from where they were just looking at IS infrastructure service with virtual machines and OpenStack, as you mentioned, to how do we move up the value chain and look at different applications. And therein comes the rub, right? You have applications with different requirements, IT network that have various different requirements that are there. So as you start to build those cloud platform, as you start to modernize those set of applications, you then start to look at microservices and how you build them. You need the ability to orchestrate them. So some of those problem statements have moved from not just refactoring those applications, but actually now to how do you reliably deploy, manage in a multicloud multi cluster way. So this conversation around Supercloud or this conversation around multicloud is very >> You could say Supercloud. That's okay >> (Dave Duggal and Azhar laughs) >> It's absolutely very real though. The reason why it's very real is, if you look at transformations around Telco, there are two things that are happening. One, Telco IT, they're looking at partnerships with hybrid cloud, I mean with public cloud players to build a hybrid environment. They're also building their own Telco Cloud environment for their network functions. Now, in both of those spaces, they end up operating two to three different environments themselves. Now how do you create a level of abstraction across those? How do you manage that particular infrastructure? And then how do you orchestrate all of those different workloads? Those are the type of problems that they're actually beginning to solve. So they've moved on from really just putting that virtualizing their application, putting it on OpenStack to now really seriously looking at "How do I build a service?" "How do I leverage the catalog that's available both in my private and public and build an overall service process?" >> And by the way what you just described as hybrid cloud and multicloud is, you know Supercloud is what multicloud should have been. And what, what it originally became is "I run on this cloud and I run on this cloud" and "I run on this cloud and I have a hybrid." And, and Supercloud is meant to create a common experience across those clouds. >> Dave Duggal: Right? >> Thanks to, you know, Supercloud middleware. >> Yeah. >> Right? And, and so that's what you guys do. >> Yeah, exactly. Exactly. Dave, I mean, even the name EnterpriseWeb, you know we started from looking from the application layer down. If you look at it, the last 10 years we've looked from the infrastructure up, right? And now everybody's looking northbound saying "You know what, actually, if I look from the infrastructure up the only thing I'll ever build is silos, right?" And those silos get in the way of the interoperability and the agility the businesses want. So we take the perspective as high level abstractions, common tools, so that if I'm a CXO, I can look down on my environments, right? When I'm really not, I honestly, if I'm an, if I'm a CEO I don't really care or CXO, I don't really care so much about my infrastructure to be honest. I care about my applications and their behavior. I care about my SLAs and my quality of service, right? Those are the things I care about. So I really want an EnterpriseWeb, right? Something that helps me connect all my distributed applications all across all of the environments. So I can have one place a consistency layer that speaks a common language. We know that there's a lot of heterogeneity down all those layers and a lot of complexity down those layers. But the business doesn't care. They don't want to care, right? They want to actually take their applications deploy them where they're the most performant where they're getting the best cost, right? The lowest and maybe sustainability concerns, all those. They want to address those problems, meet their SLAs meet their quality service. And you know what, if it's running on Amazon, great. If it's running on Google Cloud platform, great. If it, you know, we're doing one project right here that we're demonstrating here is with with Amazon Tech Mahindra and OpenShift, where we took a disaggregated 5G core, right? So this is like sort of latest telecom, you know net networking software, right? We're deploying pulling elements of that network across core, across Amazon EKS, OpenShift on Red Hat ROSA, as well as just OpenShift for cloud. And we, through a single pane of deployment and management, we deployed the elements of the 5G core across them and then connected them in an end-to-end process. That's Telco Supercloud. >> Dave Vellante: So that's an O-RAN deployment. >> Yeah that's >> So, the big advantage of that, pardon me, Dave but the big advantage of that is the customer really doesn't care where the components are being served from for them. It's a 5G capability. It happens to sit in different locations. And that's, it's, it's about how do you abstract and how do you manage all those different workloads in a cohesive way? And that's exactly what EnterpriseWeb is bringing to the table. And what we do is we abstract the underlying infrastructure which is the cloud layer. So if, because AWS operating environment is different then private cloud operating environment then Azure environment, you have the networking is set up is different in each one of them. If there is a way you can abstract all of that and present it in a common operating model it becomes a lot easier than for anybody to be able to consume. >> And what a lot of customers tell me is the way they deal with multicloud complexity is they go with mono cloud, right? And so they'll lose out on some of the best services >> Absolutely >> If best of, so that's not >> that's not ideal, but at the end of the day, agree, developers don't want to muck with all the plumbing >> Dave Duggal: Yep. >> They want to write code. >> Azhar: Correct. >> So like I come back to are the traditional Telcos leaning in on a way that they're going to enable ISVs and developers to write on top of those platforms? Or are there sort of new entrance and disruptors? And I know, I know the answer is both >> Dave Duggal: Yep. >> but I feel as though the Telcos still haven't, traditional Telcos haven't tuned in to that developer affinity, but you guys sell to them. >> What, what are you seeing? >> Yeah, so >> What we have seen is there are Telcos fall into several categories there. If you look at the most mature ones, you know they are very eager to move up the value chain. There are some smaller very nimble ones that have actually doing, they're actually doing something really interesting. For example, they've provided sandbox environments to developers to say "Go develop your applications to the sandbox environment." We'll use that to build an net service with you. I can give you some interesting examples across the globe that, where that is happening, right? In AsiaPac, particularly in Australia, ANZ region. There are a couple of providers who have who have done this, but in, in, in a very interesting way. But the challenges to them, why it's not completely open or public yet is primarily because they haven't figured out how to exactly monetize that. And, and that's the reason why. So in the absence of that, what will happen is they they have to rely on the ISV ecosystem to be able to build those capabilities which they can then bring it on as part of the catalog. But in Latin America, I was talking to one of the providers and they said, "Well look we have a public cloud, we have our own public cloud, right?" What we want do is use that to offer localized services not just bring everything in from the top >> But, but we heard from Ericson's CEO they're basically going to monetize it by what I call "gouge", the developers >> (Azhar laughs) >> access to the network telemetry as opposed to saying, "Hey, here's an open platform development on top of it and it will maybe create something like an app store and we'll take a piece of the action." >> So ours, >> to be is a better model. >> Yeah. So that's perfect. Our second project that we're showing here is with Intel, right? So Intel came to us cause they are a reputation for doing advanced automation solutions. They gave us carte blanche in their labs. So this is Intel Network Builders they said pick your partners. And we went with the Red Hat, Fort Net, Keysite this company KX doing AIML. But to address your DevX, here's Intel explicitly wants to get closer to the developers by exposing their APIs, open APIs over their infrastructure. Just like Red Hat has APIs, right? And so they can expose them northbound to developers so developers can leverage and tune their applications, right? But the challenge there is what Intel is doing at the low level network infrastructure, right? Is fundamentally complex, right? What you want is an abstraction layer where develop and this gets to, to your point Dave where you just said like "The developers just want to get their job done." or really they want to focus on the business logic and accelerate that service delivery, right? So the idea here is an EnterpriseWeb they can literally declaratively compose their services, express their intent. "I want this to run optimized for low latency. I want this to run optimized for energy consumption." Right? And that's all they say, right? That's a very high level statement. And then the run time translates it between all the elements that are participating in that service to realize the developer's intent, right? No hands, right? Zero touch, right? So that's now a movement in telecom. So you're right, it's taking a while because these are pretty fundamental shifts, right? But it's intent based networking, right? So it's almost two parts, right? One is you have to have the open APIs, right? So that the infrastructure has to expose its capabilities. Then you need abstractions over the top that make it simple for developers to take, you know, make use of them. >> See, one of the demonstrations we are doing is around AIOps. And I've had literally here on this floor, two conversations around what I call as network as a platform. Although it sounds like a cliche term, that's exactly what Dave was describing in terms of exposing APIs from the infrastructure and utilizing them. So once you get that data, then now you can do analytics and do machine learning to be able to build models and figure out how you can orchestrate better how you can monetize better, how can how you can utilize better, right? So all of those things become important. It's just not about internal optimization but it's also about how do you expose it to third party ecosystem to translate that into better delivery mechanisms or IOT capability and so on. >> But if they're going to charge me for every API call in the network I'm going to go broke (team laughs) >> And I'm going to get really pissed. I mean, I feel like, I'm just running down, Oracle. IBM tried it. Oracle, okay, they got Java, but they don't they don't have developer jobs. VMware, okay? They got Aria. EMC used to have a thing called code. IBM had to buy Red Hat to get to the developer community. (Lisa laughs) >> So I feel like the telcos don't today have those developer shops. So, so they have to partner. [Azhar] Yes. >> With guys like you and then be more open and and let a zillion flowers bloom or else they're going to get disrupted in a big way and they're going to it's going to be a repeat of the over, over the top in, in in a different model that I can't predict. >> Yeah. >> Absolutely true. I mean, look, they cannot be in the connectivity business. Telcos cannot be just in the connectivity business. It's, I think so, you know, >> Dave Vellante: You had a fry a frozen hand (Dave Daggul laughs) >> off that, you know. >> Well, you know, think about they almost have to go become over the top on themselves, right? That's what the cloud guys are doing, right? >> Yeah. >> They're riding over their backbone that by taking a creating a high level abstraction, they in turn abstract away the infrastructure underneath them, right? And that's really the end game >> Right? >> Dave Vellante: Yeah. >> Is because now, >> they're over the top it's their network, it's their infrastructure, right? They don't want to become bid pipes. >> Yep. >> Now you, they can take OpenShift, run that in any cloud. >> Yep. >> Right? >> You can run that in hybrid cloud, enterprise web can do the application layer configuration and management. And together we're running, you know, OSI layers one through seven, east to west, north to south. We're running across the the RAN, the core and the transport. And that is telco super cloud, my friend. >> Yeah. Well, >> (Dave Duggal laughs) >> I'm dominating the conversation cause I love talking super cloud. >> I knew you would. >> So speaking of super superpowers, when you're in customer or prospective customer conversations with providers and they've got, obviously they're they're in this transformative state right now. How, what do you describe as the superpower between Red Hat and EnterpriseWeb in terms of really helping these Telcos transforms. But at the end of the day, the connectivity's there the end user gets what they want, which is I want this to work wherever I am. >> Yeah, yeah. That's a great question, Lisa. So I think the way you could look at it is most software has, has been evolved to be specialized, right? So in Telcos' no different, right? We have this in the enterprise, right? All these specialized stacks, all these components that they wire together in the, in you think of Telco as a sort of a super set of enterprise problems, right? They have all those problems like magnified manyfold, right? And so you have specialized, let's say orchestrators and other tools for every Telco domain for every Telco layer. Now you have a zoo of orchestrators, right? None of them were designed to work together, right? They all speak a specific language, let's say quote unquote for doing a specific purpose. But everything that's interesting in the 21st century is across layers and across domains, right? If a siloed static application, those are dead, right? Nobody's doing those anymore. Even developers don't do those developers are doing composition today. They're not doing, nobody wants to hear about a 6 million lines of code, right? They want to hear, "How did you take these five things and bring 'em together for productive use?" >> Lisa: Right. How did you deliver faster for my enterprise? How did you save me money? How did you create business value? And that's what we're doing together. >> I mean, just to add on to Dave, I was talking to one of the providers, they have more than 30,000 nodes in their infrastructure. When I say no to your servers running, you know, Kubernetes,running open stack, running different components. If try managing that in one single entity, if you will. Not possible. You got to fragment, you got to segment in some way. Now the question is, if you are not exposing that particular infrastructure and the appropriate KPIs and appropriate things, you will not be able to efficiently utilize that across the board. So you need almost a construct that creates like a manager of managers, a hierarchical structure, which would allow you to be more intelligent in terms of how you place those, how you manage that. And so when you ask the question about what's the secret sauce between the two, well this is exactly where EnterpriseWeb brings in that capability to analyze information, be more intelligent about it. And what we do is provide an abstraction of the cloud layer so that they can, you know, then do the right job in terms of making sure that it's appropriate and it's consistent. >> Consistency is key. Guys, thank you so much. It's been a pleasure really digging through EnterpriseWeb. >> Thank you. >> What you're doing >> with Red Hat. How you're helping the organization transform and Supercloud, we can't forget Supercloud. (Dave Vellante laughs) >> Fight Supercloud. Guys, thank you so much for your time. >> Thank you so much Lisa. >> Thank you. >> Thank you guys. >> Very nice. >> Lisa: We really appreciate it. >> For our guests and for Dave Vellante, I'm Lisa Martin. You're watching theCUBE, the leader in live tech coverage coming to you live from MWC 23. We'll be back after a short break.

>> From theCUBE Studios in Palo Alto in Boston, bringing you data-driven insights from theCUBE and ETR, this is Breaking Analysis with Dave Vellante. >> While never really meant to be a consumer tech event, the rapid ascendancy of smartphones sucked much of the air out of Mobile World Congress over the years, now MWC. And while the device manufacturers continue to have a major presence at the show, the maturity of intelligent devices, longer life cycles, and the disaggregation of the network stack, have put enterprise technologies front and center in the telco business. Semiconductor manufacturers, network equipment players, infrastructure companies, cloud vendors, software providers, and a spate of startups are eyeing the trillion dollar plus communications industry as one of the next big things to watch this decade. Hello, and welcome to this week's Wikibon CUBE Insights, powered by ETR. In this Breaking Analysis, we bring you part two of our ongoing coverage of MWC '23, with some new data on enterprise players specifically in large telco environments, a brief glimpse at some of the pre-announcement news and corresponding themes ahead of MWC, and some of the key announcement areas we'll be watching at the show on theCUBE. Now, last week we shared some ETR data that showed how traditional enterprise tech players were performing, specifically within the telecoms vertical. Here's a new look at that data from ETR, which isolates the same companies, but cuts the data for what ETR calls large telco. The N in this cut is 196, down from 288 last week when we included all company sizes in the dataset. Now remember the two dimensions here, on the y-axis is net score, or spending momentum, and on the x-axis is pervasiveness in the data set. The table insert in the upper left informs how the dots and companies are plotted, and that red dotted line, the horizontal line at 40%, that indicates a highly elevated net score. Now while the data are not dramatically different in terms of relative positioning, there are a couple of changes at the margin. So just going down the list and focusing on net score. Azure is comparable, but slightly lower in this sector in the large telco than it was overall. Google Cloud comes in at number two, and basically swapped places with AWS, which drops slightly in the large telco relative to overall telco. Snowflake is also slightly down by one percentage point, but maintains its position. Remember Snowflake, overall, its net score is much, much higher when measuring across all verticals. Snowflake comes down in telco, and relative to overall, a little bit down in large telco, but it's making some moves to attack this market that we'll talk about in a moment. Next are Red Hat OpenStack and Databricks. About the same in large tech telco as they were an overall telco. Then there's Dell next that has a big presence at MWC and is getting serious about driving 16G adoption, and new servers, and edge servers, and other partnerships. Cisco and Red Hat OpenShift basically swapped spots when moving from all telco to large telco, as Cisco drops and Red Hat bumps up a bit. And VMware dropped about four percentage points in large telco. Accenture moved up dramatically, about nine percentage points in big telco, large telco relative to all telco. HPE dropped a couple of percentage points. Oracle stayed about the same. And IBM surprisingly dropped by about five points. So look, I understand not a ton of change in terms of spending momentum in the large sector versus telco overall, but some deltas. The bottom line for enterprise players is one, they're just getting started in this new disruption journey that they're on as the stack disaggregates. Two, all these players have experience in delivering horizontal solutions, but now working with partners and identifying big problems to be solved, and three, many of these companies are generally not the fastest moving firms relative to smaller disruptive disruptors. Now, cloud has been an exception in fairness. But the good news for the legacy infrastructure and IT companies is that the telco transformation and the 5G buildout is going to take years. So it's moving at a pace that is very favorable to many of these companies. Okay, so looking at just some of the pre-announcement highlights that have hit the wire this week, I want to give you a glimpse of the diversity of innovation that is occurring in the telecommunication space. You got semiconductor manufacturers, device makers, network equipment players, carriers, cloud vendors, enterprise tech companies, software companies, startups. Now we've included, you'll see in this list, we've included OpeRAN, that logo, because there's so much buzz around the topic and we're going to come back to that. But suffice it to say, there's no way we can cover all the announcements from the 2000 plus exhibitors at the show. So we're going to cherry pick here and make a few call outs. Hewlett Packard Enterprise announced an acquisition of an Italian private cellular network company called AthoNet. Zeus Kerravala wrote about it on SiliconANGLE if you want more details. Now interestingly, HPE has a partnership with Solana, which also does private 5G. But according to Zeus, Solona is more of an out-of-the-box solution, whereas AthoNet is designed for the core and requires more integration. And as you'll see in a moment, there's going to be a lot of talk at the show about private network. There's going to be a lot of news there from other competitors, and we're going to be watching that closely. And while many are concerned about the P5G, private 5G, encroaching on wifi, Kerravala doesn't see it that way. Rather, he feels that these private networks are really designed for more industrial, and you know mission critical environments, like factories, and warehouses that are run by robots, et cetera. 'Cause these can justify the increased expense of private networks. Whereas wifi remains a very low cost and flexible option for, you know, whatever offices and homes. Now, over to Dell. Dell announced its intent to go hard after opening up the telco network with the announcement that in the second half of this year it's going to begin shipping its infrastructure blocks for Red Hat. Remember it's like kind of the converged infrastructure for telco with a more open ecosystem and sort of more flexible, you know, more mature engineered system. Dell has also announced a range of PowerEdge servers for a variety of use cases. A big wide line bringing forth its 16G portfolio and aiming squarely at the telco space. Dell also announced, here we go, a private wireless offering with airspan, and Expedo, and a solution with AthoNet, the company HPE announced it was purchasing. So I guess Dell and HPE are now partnering up in the private wireless space, and yes, hell is freezing over folks. We'll see where that relationship goes in the mid- to long-term. Dell also announced new lab and certification capabilities, which we said last week was going to be critical for the further adoption of open ecosystem technology. So props to Dell for, you know, putting real emphasis and investment in that. AWS also made a number of announcements in this space including private wireless solutions and associated managed services. AWS named Deutsche Telekom, Orange, T-Mobile, Telefonica, and some others as partners. And AWS announced the stepped up partnership, specifically with T-Mobile, to bring AWS services to T-Mobile's network portfolio. Snowflake, back to Snowflake, announced its telecom data cloud. Remember we showed the data earlier, it's Snowflake not as strong in the telco sector, but they're continuing to move toward this go-to market alignment within key industries, realigning their go-to market by vertical. It also announced that AT&T, and a number of other partners, are collaborating to break down data silos specifically in telco. Look, essentially, this is Snowflake taking its core value prop to the telco vertical and forming key partnerships that resonate in the space. So think simplification, breaking down silos, data sharing, eventually data monetization. Samsung previewed its future capability to allow smartphones to access satellite services, something Apple has previously done. AMD, Intel, Marvell, Qualcomm, are all in the act, all the semiconductor players. Qualcomm for example, announced along with Telefonica, and Erickson, a 5G millimeter network that will be showcased in Spain at the event this coming week using Qualcomm Snapdragon chipset platform, based on none other than Arm technology. Of course, Arm we said is going to dominate the edge, and is is clearly doing so. It's got the volume advantage over, you know, traditional Intel, you know, X86 architectures. And it's no surprise that Microsoft is touting its open AI relationship. You're going to hear a lot of AI talk at this conference as is AI is now, you know, is the now topic. All right, we could go on and on and on. There's just so much going on at Mobile World Congress or MWC, that we just wanted to give you a glimpse of some of the highlights that we've been watching. Which brings us to the key topics and issues that we'll be exploring at MWC next week. We touched on some of this last week. A big topic of conversation will of course be, you know, 5G. Is it ever going to become real? Is it, is anybody ever going to make money at 5G? There's so much excitement around and anticipation around 5G. It has not lived up to the hype, but that's because the rollout, as we've previous reported, is going to take years. And part of that rollout is going to rely on the disaggregation of the hardened telco stack, as we reported last week and in previous Breaking Analysis episodes. OpenRAN is a big component of that evolution. You know, as our RAN intelligent controllers, RICs, which essentially the brain of OpenRAN, if you will. Now as we build out 5G networks at massive scale and accommodate unprecedented volumes of data and apply compute-hungry AI to all this data, the issue of energy efficiency is going to be front and center. It has to be. Not only is it a, you know, hot political issue, the reality is that improving power efficiency is compulsory or the whole vision of telco's future is going to come crashing down. So chip manufacturers, equipment makers, cloud providers, everybody is going to be doubling down and clicking on this topic. Let's talk about AI. AI as we said, it is the hot topic right now, but it is happening not only in consumer, with things like ChatGPT. And think about the theme of this Breaking Analysis in the enterprise, AI in the enterprise cannot be ChatGPT. It cannot be error prone the way ChatGPT is. It has to be clean, reliable, governed, accurate. It's got to be ethical. It's got to be trusted. Okay, we're going to have Zeus Kerravala on the show next week and definitely want to get his take on private networks and how they're going to impact wifi. You know, will private networks cannibalize wifi? If not, why not? He wrote about this again on SiliconANGLE if you want more details, and we're going to unpack that on theCUBE this week. And finally, as always we'll be following the data flows to understand where and how telcos, cloud players, startups, software companies, disruptors, legacy companies, end customers, how are they going to make money from new data opportunities? 'Cause we often say in theCUBE, don't ever bet against data. All right, that's a wrap for today. Remember theCUBE is going to be on location at MWC 2023 next week. We got a great set. We're in the walkway in between halls four and five, right in Congress Square, stand CS-60. Look for us, we got a full schedule. If you got a great story or you have news, stop by. We're going to try to get you on the program. I'll be there with Lisa Martin, co-hosting, David Nicholson as well, and the entire CUBE crew, so don't forget to come by and see us. I want to thank Alex Myerson, who's on production and manages the podcast, and Ken Schiffman, as well, in our Boston studio. Kristen Martin and Cheryl Knight help get the word out on social media and in our newsletters. And Rob Hof is our editor-in-chief over at SiliconANGLE.com. He does some great editing. Thank you. All right, remember all these episodes they are available as podcasts wherever you listen. All you got to do is search Breaking Analysis podcasts. I publish each week on Wikibon.com and SiliconANGLE.com. All the video content is available on demand at theCUBE.net, or you can email me directly if you want to get in touch David.Vellante@SiliconANGLE.com or DM me @DVellante, or comment on our LinkedIn posts. And please do check out ETR.ai for the best survey data in the enterprise tech business. This is Dave Vellante for theCUBE Insights, powered by ETR. Thanks for watching. We'll see you next week at Mobile World Congress '23, MWC '23, or next time on Breaking Analysis. (bright music)

>> From the Cube Studios in Palo Alto in Boston, bringing you data-driven insights from The Cube and ETR. This is "Breaking Analysis" with Dave Vellante. >> The world's leading telcos are trying to shed the stigma of being monopolies lacking innovation. Telcos have been great at operational efficiency and connectivity and living off of transmission, and the costs and expenses or revenue associated with that transmission. But in a world beyond telephone poles and basic wireless and mobile services, how will telcos modernize and become more agile and monetize new opportunities brought about by 5G and private wireless and a spate of new innovations and infrastructure, cloud data and apps? Hello, and welcome to this week's Wikibon CUBE Insights powered by ETR. In this breaking analysis and ahead of Mobile World Congress or now, MWC23, we explore the evolution of the telco business and how the industry is in many ways, mimicking transformations that took place decades ago in enterprise IT. We'll model some of the traditional enterprise vendors using ETR data and investigate how they're faring in the telecommunications sector, and we'll pose some of the key issues facing the industry this decade. First, let's take a look at what the GSMA has in store for MWC23. GSMA is the host of what used to be called Mobile World Congress. They've set the theme for this year's event as "Velocity" and they've rebranded MWC to reflect the fact that mobile technology is only one part of the story. MWC has become one of the world's premier events highlighting innovations not only in Telco, mobile and 5G, but the collision between cloud, infrastructure, apps, private networks, smart industries, machine intelligence, and AI, and more. MWC comprises an enormous ecosystem of service providers, technology companies, and firms from virtually every industry including sports and entertainment. And as well, GSMA, along with its venue partner at the Fira Barcelona, have placed a major emphasis on sustainability and public and private partnerships. Virtually every industry will be represented at the event because every industry is impacted by the trends and opportunities in this space. GSMA has said it expects 80,000 attendees at MWC this year, not quite back to 2019 levels, but trending in that direction. Of course, attendance from Chinese participants has historically been very high at the show, and obviously the continued travel issues from that region are affecting the overall attendance, but still very strong. And despite these concerns, Huawei, the giant Chinese technology company. has the largest physical presence of any exhibitor at the show. And finally, GSMA estimates that more than $300 million in economic benefit will result from the event which takes place at the end of February and early March. And The Cube will be back at MWC this year with a major presence thanks to our anchor sponsor, Dell Technologies and other supporters of our content program, including Enterprise Web, ArcaOS, VMware, Snowflake, Cisco, AWS, and others. And one of the areas we're interested in exploring is the evolution of the telco stack. It's a topic that's often talked about and one that we've observed taking place in the 1990s when the vertically integrated IBM mainframe monopoly gave way to a disintegrated and horizontal industry structure. And in many ways, the same thing is happening today in telecommunications, which is shown on the left-hand side of this diagram. Historically, telcos have relied on a hardened, integrated, and incredibly reliable, and secure set of hardware and software services that have been fully vetted and tested, and certified, and relied upon for decades. And at the top of that stack on the left are the crown jewels of the telco stack, the operational support systems and the business support systems. For the OSS, we're talking about things like network management, network operations, service delivery, quality of service, fulfillment assurance, and things like that. For the BSS systems, these refer to customer-facing elements of the stack, like revenue, order management, what products they sell, billing, and customer service. And what we're seeing is telcos have been really good at operational efficiency and making money off of transport and connectivity, but they've lacked the innovation in services and applications. They own the pipes and that works well, but others, be the over-the-top content companies, or private network providers and increasingly, cloud providers have been able to bypass the telcos, reach around them, if you will, and drive innovation. And so, the right-most diagram speaks to the need to disaggregate pieces of the stack. And while the similarities to the 1990s in enterprise IT are greater than the differences, there are things that are different. For example, the granularity of hardware infrastructure will not likely be as high where competition occurred back in the 90s at every layer of the value chain with very little infrastructure integration. That of course changed in the 2010s with converged infrastructure and hyper-converged and also software defined. So, that's one difference. And the advent of cloud, containers, microservices, and AI, none of that was really a major factor in the disintegration of legacy IT. And that probably means that disruptors can move even faster than did the likes of Intel and Microsoft, Oracle, Cisco, and the Seagates of the 1990s. As well, while many of the products and services will come from traditional enterprise IT names like Dell, HPE, Cisco, Red Hat, VMware, AWS, Microsoft, Google, et cetera, many of the names are going to be different and come from traditional network equipment providers. These are names like Ericsson and Huawei, and Nokia, and other names, like Wind River, and Rakuten, and Dish Networks. And there are enormous opportunities in data to help telecom companies and their competitors go beyond telemetry data into more advanced analytics and data monetization. There's also going to be an entirely new set of apps based on the workloads and use cases ranging from hospitals, sports arenas, race tracks, shipping ports, you name it. Virtually every vertical will participate in this transformation as the industry evolves its focus toward innovation, agility, and open ecosystems. Now remember, this is not a binary state. There are going to be greenfield companies disrupting the apple cart, but the incumbent telcos are going to have to continue to ensure newer systems work with their legacy infrastructure, in their OSS and BSS existing systems. And as we know, this is not going to be an overnight task. Integration is a difficult thing, transformations, migrations. So that's what makes this all so interesting because others can come in with Greenfield and potentially disrupt. There'll be interesting partnerships and ecosystems will form and coalitions will also form. Now, we mentioned that several traditional enterprise companies are or will be playing in this space. Now, ETR doesn't have a ton of data on specific telecom equipment and software providers, but it does have some interesting data that we cut for this breaking analysis. What we're showing here in this graphic is some of the names that we've followed over the years and how they're faring. Specifically, we did the cut within the telco sector. So the Y-axis here shows net score or spending velocity. And the horizontal axis, that shows the presence or pervasiveness in the data set. And that table insert in the upper left, that informs as to how the dots are plotted. You know, the two columns there, net score and the ends. And that red-dotted line, that horizontal line at 40%, that is an indicator of a highly elevated level. Anything above that, we consider quite outstanding. And what we'll do now is we'll comment on some of the cohorts and share with you how they're doing in telecommunications, and that sector, that vertical relative to their position overall in the data set. Let's start with the public cloud players. They're prominent in every industry. Telcos, telecommunications is no exception and it's quite an interesting cohort here. On the one hand, they can help telecommunication firms modernize and become more agile by eliminating the heavy lifting and you know, all the cloud, you know, value prop, data center costs, and the cloud benefits. At the same time, public cloud players are bringing their services to the edge, building out their own global networks and are a disruptive force to traditional telcos. All right, let's talk about Azure first. Their net score is basically identical to telco relative to its overall average. AWS's net score is higher in telco by just a few percentage points. Google Cloud platform is eight percentage points higher in telco with a 53% net score. So all three hyperscalers have an equal or stronger presence in telco than their average overall. Okay, let's look at the traditional enterprise hardware and software infrastructure cohort. Dell, Cisco, HPE, Red Hat, VMware, and Oracle. We've highlighted in this chart just as sort of indicators or proxies. Dell's net score's 10 percentage points higher in telco than its overall average. Interesting. Cisco's is a bit higher. HPE's is actually lower by about nine percentage points in the ETR survey, and VMware's is lower by about four percentage points. Now, Red Hat is really interesting. OpenStack, as we've previously reported is popular with telcos who want to build out their own private cloud. And the data shows that Red Hat OpenStack's net score is 15 percentage points higher in the telco sector than its overall average. OpenShift, on the other hand, has a net score that's four percentage points lower in telco than its overall average. So this to us talks to the pace of adoption of microservices and containers. You know, it's going to happen, but it's going to happen more slowly. Finally, Oracle's spending momentum is somewhat lower in the sector than its average, despite the firm having a decent telco business. IBM and Accenture, heavy services companies are both lower in this sector than their average. And real quickly, snowflake's net score is much lower by about 12 percentage points relative to its very high average net score of 62%. But we look for them to be a player in this space as telcos need to modernize their analytics stack and share data in a governed manner. Databricks' net score is also much lower than its average by about 13 points. And same, I would expect them to be a player as open architectures and cloud gains steam in telco. All right, let's close out now on what we're going to be talking about at MWC23 and some of the key issues that we'll be unpacking. We've talked about stack disaggregation in this breaking analysis, but the key here will be the pace at which it will reach the operational efficiency and reliability of closed stacks. Telcos, you know, in a large part, they're engineering heavy firms and much of their work takes place, kind of in the basement, in the dark. It's not really a big public hype machine, and they tend to move slowly and cautiously. While they understand the importance of agility, they're going to be careful because, you know, it's in their DNA. And so at the same time, if they don't move fast enough, they're going to get hurt and disrupted by competitors. So that's going to be a topic of conversation, and we'll be looking for proof points. And the other comment I'll make is around integration. Telcos because of their conservatism will benefit from better testing and those firms that can innovate on the testing front and have labs and certifications and innovate at that level, with an ecosystem are going to be in a better position. Because open sometimes means wild west. So the more players like Dell, HPE, Cisco, Red Hat, et cetera, that do that and align with their ecosystems and provide those resources, the faster adoption is going to go. So we'll be looking for, you know, who's actually doing that, Open RAN or Radio Access Networks. That fits in this discussion because O-RAN is an emerging network architecture. It essentially enables the use of open technologies from an ecosystem and over time, look at O-RAN is going to be open, but the questions, you know, a lot of questions remain as to when it will be able to deliver the operational efficiency of traditional RAN. Got some interesting dynamics going on. Rakuten is a company that's working hard on this problem, really focusing on operational efficiency. Then you got Dish Networks. They're also embracing O-RAN. They're coming at it more from service innovation. So that's something that we'll be monitoring and unpacking. We're going to look at cloud as a disruptor. On the one hand, cloud can help drive agility, as we said earlier and optionality, and innovation for incumbent telcos. But the flip side is going to also do the same for startups trying to disrupt and cloud attracts startups. While some of the telcos are actually embracing the cloud, many are being cautious. So that's going to be an interesting topic of discussion. And there's private wireless networks and 5G, and hyperlocal private networks, they're being deployed, you know, at the edge. This idea of open edge is also a really hot topic and this trend is going to accelerate. You know, the importance here is that the use cases are going to be widely varied. The needs of a hospital are going to be different than those of a sports venue are different from a remote drilling location, and energy or a concert venue. Things like real-time AI inference and data flows are going to bring new services and monetization opportunities. And many firms are going to be bypassing traditional telecommunications networks to build these out. Satellites as well, we're going to see, you know, in this decade, you're going to have, you're going to look down at Google Earth and you're going to see real-time. You know, today you see snapshots and so, lots of innovations going in that space. So how is this going to disrupt industries and traditional industry structures? Now, as always, we'll be looking at data angles, right? 'Cause it's in The Cube's DNA to follow the data and what opportunities and risks data brings. The Cube is going to be on location at MWC23 at the end of the month. We got a great set. We're in the walkway between halls four and five, right in Congress Square, it's booths CS60. So we'll have a full, they're called Stan CS60. We have a full schedule. I'm going to be there with Lisa Martin, Dave Nicholson and the entire Cube crew, so don't forget to stop by. All right, that's a wrap. I want to thank Alex Myerson, who's on production and manages the podcast, Ken Schiffman as well. Kristin Martin and Cheryl Knight help get the word out on social media and in our newsletters. And Rob Hof is our editor-in-chief over at Silicon Angle, does some great stuff for us. Thank you all. Remember, all these episodes are available as podcasts. Wherever you listen, just search "Breaking Analysis" podcasts I publish each week on wikibon.com and silicon angle.com. And all the video content is available on demand at thecube.net. You can email me directly at david.vellante@silicon angle.com. You can DM me at dvellante or comment on my LinkedIn post. Please do check out etr.ai for the best survey data in the enterprise tech business. This is Dave Vellante for The Cube Insights powered by ETR. Thanks for watching and we'll see you at Mobile World Congress, and/or at next time on "Breaking Analysis." (bright music) (bright music fades)

(light music) >> Hi everybody. Welcome to this Cube Conversation. I'm really pleased to announce a collaboration with Rob Strechay. He's a guest cube analyst, and we'll be working together to extract the signal from the noise. Rob is a long-time product pro, working at a number of firms including AWS, HP, HPE, NetApp, Snowplow. I did a stint as an analyst at Enterprise Strategy Group. Rob, good to see you. Thanks for coming into our Marlboro Studios. >> Well, thank you for having me. It's always great to be here. >> I'm really excited about working with you. We've known each other for a long time. You've been in the Cube a bunch. You know, you're in between gigs, and I think we can have a lot of fun together. Covering events, covering trends. So. let's get into it. What's happening out there? We're sort of exited the isolation economy. Things were booming. Now, everybody's tapping the brakes. From your standpoint, what are you seeing out there? >> Yeah. I'm seeing that people are really looking how to get more out of their data. How they're bringing things together, how they're looking at the costs of Cloud, and understanding how are they building out their SaaS applications. And understanding that when they go in and actually start to use Cloud, it's not only just using the base services anymore. They're looking at, how do I use these platforms as a service? Some are easier than others, and they're trying to understand, how do I get more value out of that relationship with the Cloud? They're also consolidating the number of Clouds that they have, I would say to try to better optimize their spend, and getting better pricing for that matter. >> Are you seeing people unhook Clouds, or just reduce maybe certain Cloud activities and going maybe instead of 60/40 going 90/10? >> Correct. It's more like the 90/10 type of rule where they're starting to say, Hey I'm not going to get rid of Azure or AWS or Google. I'm going to move a portion of this over that I was using on this one service. Maybe I got a great two-year contract to start with on this platform as a service or a database as a service. I'm going to unhook from that and maybe go with an independent. Maybe with something like a Snowflake or a Databricks on top of another Cloud, so that I can consolidate down. But it also gives them more flexibility as well. >> In our last breaking analysis, Rob, we identified six factors that were reducing Cloud consumption. There were factors and customer tactics. And I want to get your take on this. So, some of the factors really, you got fewer mortgage originations. FinTech, obviously big Cloud user. Crypto, not as much activity there. Lower ad spending means less Cloud. And then one of 'em, which you kind of disagreed with was less, less analytics, you know, fewer... Less frequency of calculations. I'll come back to that. But then optimizing compute using Graviton or AMD instances moving to cheaper storage tiers. That of course makes sense. And then optimize pricing plans. Maybe going from On Demand, you know, to, you know, instead of pay by the drink, buy in volume. Okay. So, first of all, do those make sense to you with the exception? We'll come back and talk about the analytics piece. Is that what you're seeing from customers? >> Yeah, I think so. I think that was pretty much dead on with what I'm seeing from customers and the ones that I go out and talk to. A lot of times they're trying to really monetize their, you know, understand how their business utilizes these Clouds. And, where their spend is going in those Clouds. Can they use, you know, lower tiers of storage? Do they really need the best processors? Do they need to be using Intel or can they get away with AMD or Graviton 2 or 3? Or do they need to move in? And, I think when you look at all of these Clouds, they always have pricing curves that are arcs from the newest to the oldest stuff. And you can play games with that. And understanding how you can actually lower your costs by looking at maybe some of the older generation. Maybe your application was written 10 years ago. You don't necessarily have to be on the best, newest processor for that application per se. >> So last, I want to come back to this whole analytics piece. Last June, I think it was June, Dev Ittycheria, who's the-- I call him Dev. Spelled Dev, pronounced Dave. (chuckles softly) Same pronunciation, different spelling. Dev Ittycheria, CEO of Mongo, on the earnings call. He was getting, you know, hit. Things were starting to get a little less visible in terms of, you know, the outlook. And people were pushing him like... Because you're in the Cloud, is it easier to dial down? And he said, because we're the document database, we support transaction applications. We're less discretionary than say, analytics. Well on the Snowflake earnings call, that same month or the month after, they were all over Slootman and Scarpelli. Oh, the Mongo CEO said that they're less discretionary than analytics. And Snowflake was an interesting comment. They basically said, look, we're the Cloud. You can dial it up, you can dial it down, but the area under the curve over a period of time is going to be the same, because they get their customers to commit. What do you say? You disagreed with the notion that people are running their calculations less frequently. Is that because they're trying to do a better job of targeting customers in near real time? What are you seeing out there? >> Yeah, I think they're moving away from using people and more expensive marketing. Or, they're trying to figure out what's my Google ad spend, what's my Meta ad spend? And what they're trying to do is optimize that spend. So, what is the return on advertising, or the ROAS as they would say. And what they're looking to do is understand, okay, I have to collect these analytics that better understand where are these people coming from? How do they get to my site, to my store, to my whatever? And when they're using it, how do they they better move through that? What you're also seeing is that analytics is not only just for kind of the retail or financial services or things like that, but then they're also, you know, using that to make offers in those categories. When you move back to more, you know, take other companies that are building products and SaaS delivered products. They may actually go and use this analytics for making the product better. And one of the big reasons for that is maybe they're dialing back how many product managers they have. And they're looking to be more data driven about how they actually go and build the product out or enhance the product. So maybe they're, you know, an online video service and they want to understand why people are either using or not using the whiteboard inside the product. And they're collecting a lot of that product analytics in a big way so that they can go through that. And they're doing it in a constant manner. This first party type tracking within applications is growing rapidly by customers. >> So, let's talk about who wins in that. So, obviously the Cloud guys, AWS, Google and Azure. I want to come back and unpack that a little bit. Databricks and Snowflake, we reported on our last breaking analysis, it kind of on a collision course. You know, a couple years ago we were thinking, okay, AWS, Snowflake and Databricks, like perfect sandwich. And then of course they started to become more competitive. My sense is they still, you know, compliment each other in the field, right? But, you know, publicly, they've got bigger aspirations, they get big TAMs that they're going after. But it's interesting, the data shows that-- So, Snowflake was off the charts in terms of spending momentum and our EPR surveys. Our partner down in New York, they kind of came into line. They're both growing in terms of market presence. Databricks couldn't get to IPO. So, we don't have as much, you know, visibility on their financials. You know, Snowflake obviously highly transparent cause they're a public company. And then you got AWS, Google and Azure. And it seems like AWS appears to be more partner friendly. Microsoft, you know, depends on what market you're in. And Google wants to sell BigQuery. >> Yeah. >> So, what are you seeing in the public Cloud from a data platform perspective? >> Yeah. I think that was pretty astute in what you were talking about there, because I think of the three, Google is definitely I think a little bit behind in how they go to market with their partners. Azure's done a fantastic job of partnering with these companies to understand and even though they may have Synapse as their go-to and where they want people to go to do AI and ML. What they're looking at is, Hey, we're going to also be friendly with Snowflake. We're also going to be friendly with a Databricks. And I think that, Amazon has always been there because that's where the market has been for these developers. So, many, like Databricks' and the Snowflake's have gone there first because, you know, Databricks' case, they built out on top of S3 first. And going and using somebody's object layer other than AWS, was not as simple as you would think it would be. Moving between those. >> So, one of the financial meetups I said meetup, but the... It was either the CEO or the CFO. It was either Slootman or Scarpelli talking at, I don't know, Merrill Lynch or one of the other financial conferences said, I think it was probably their Q3 call. Snowflake said 80% of our business goes through Amazon. And he said to this audience, the next day we got a call from Microsoft. Hey, we got to do more. And, we know just from reading the financial statements that Snowflake is getting concessions from Amazon, they're buying in volume, they're renegotiating their contracts. Amazon gets it. You know, lower the price, people buy more. Long term, we're all going to make more money. Microsoft obviously wants to get into that game with Snowflake. They understand the momentum. They said Google, not so much. And I've had customers tell me that they wanted to use Google's AI with Snowflake, but they can't, they got to go to to BigQuery. So, honestly, I haven't like vetted that so. But, I think it's true. But nonetheless, it seems like Google's a little less friendly with the data platform providers. What do you think? >> Yeah, I would say so. I think this is a place that Google looks and wants to own. Is that now, are they doing the right things long term? I mean again, you know, you look at Google Analytics being you know, basically outlawed in five countries in the EU because of GDPR concerns, and compliance and governance of data. And I think people are looking at Google and BigQuery in general and saying, is it the best place for me to go? Is it going to be in the right places where I need it? Still, it's still one of the largest used databases out there just because it underpins a number of the Google services. So you almost get, like you were saying, forced into BigQuery sometimes, if you want to use the tech on top. >> You do strategy. >> Yeah. >> Right? You do strategy, you do messaging. Is it the right call by Google? I mean, it's not a-- I criticize Google sometimes. But, I'm not sure it's the wrong call to say, Hey, this is our ace in the hole. >> Yeah. >> We got to get people into BigQuery. Cause, first of all, BigQuery is a solid product. I mean it's Cloud native and it's, you know, by all, it gets high marks. So, why give the competition an advantage? Let's try to force people essentially into what is we think a great product and it is a great product. The flip side of that is, they're giving up some potential partner TAM and not treating the ecosystem as well as one of their major competitors. What do you do if you're in that position? >> Yeah, I think that that's a fantastic question. And the question I pose back to the companies I've worked with and worked for is, are you really looking to have vendor lock-in as your key differentiator to your service? And I think when you start to look at these companies that are moving away from BigQuery, moving to even, Databricks on top of GCS in Google, they're looking to say, okay, I can go there if I have to evacuate from GCP and go to another Cloud, I can stay on Databricks as a platform, for instance. So I think it's, people are looking at what platform as a service, database as a service they go and use. Because from a strategic perspective, they don't want that vendor locking. >> That's where Supercloud becomes interesting, right? Because, if I can run on Snowflake or Databricks, you know, across Clouds. Even Oracle, you know, they're getting into business with Microsoft. Let's talk about some of the Cloud players. So, the big three have reported. >> Right. >> We saw AWSs Cloud growth decelerated down to 20%, which is I think the lowest growth rate since they started to disclose public numbers. And they said they exited, sorry, they said January they grew at 15%. >> Yeah. >> Year on year. Now, they had some pretty tough compares. But nonetheless, 15%, wow. Azure, kind of mid thirties, and then Google, we had kind of low thirties. But, well behind in terms of size. And Google's losing probably almost $3 billion annually. But, that's not necessarily a bad thing by advocating and investing. What's happening with the Cloud? Is AWS just running into the law, large numbers? Do you think we can actually see a re-acceleration like we have in the past with AWS Cloud? Azure, we predicted is going to be 75% of AWS IAS revenues. You know, we try to estimate IAS. >> Yeah. >> Even though they don't share that with us. That's a huge milestone. You'd think-- There's some people who have, I think, Bob Evans predicted a while ago that Microsoft would surpass AWS in terms of size. You know, what do you think? >> Yeah, I think that Azure's going to keep to-- Keep growing at a pretty good clip. I think that for Azure, they still have really great account control, even though people like to hate Microsoft. The Microsoft sellers that are out there making those companies successful day after day have really done a good job of being in those accounts and helping people. I was recently over in the UK. And the UK market between AWS and Azure is pretty amazing, how much Azure there is. And it's growing within Europe in general. In the states, it's, you know, I think it's growing well. I think it's still growing, probably not as fast as it is outside the U.S. But, you go down to someplace like Australia, it's also Azure. You hear about Azure all the time. >> Why? Is that just because of the Microsoft's software state? It's just so convenient. >> I think it has to do with, you know, and you can go with the reasoning they don't break out, you know, Office 365 and all of that out of their numbers is because they have-- They're in all of these accounts because the office suite is so pervasive in there. So, they always have reasons to go back in and, oh by the way, you're on these old SQL licenses. Let us move you up here and we'll be able to-- We'll support you on the old version, you know, with security and all of these things. And be able to move you forward. So, they have a lot of, I guess you could say, levers to stay in those accounts and be interesting. At least as part of the Cloud estate. I think Amazon, you know, is hitting, you know, the large number. Laws of large numbers. But I think that they're also going through, and I think this was seen in the layoffs that they were making, that they're looking to understand and have profitability in more of those services that they have. You know, over 350 odd services that they have. And you know, as somebody who went there and helped to start yet a new one, while I was there. And finally, it went to beta back in September, you start to look at the fact that, that number of services, people, their own sellers don't even know all of their services. It's impossible to comprehend and sell that many things. So, I think what they're going through is really looking to rationalize a lot of what they're doing from a services perspective going forward. They're looking to focus on more profitable services and bringing those in. Because right now it's built like a layer cake where you have, you know, S3 EBS and EC2 on the bottom of the layer cake. And then maybe you have, you're using IAM, the authorization and authentication in there and you have all these different services. And then they call it EMR on top. And so, EMR has to pay for that entire layer cake just to go and compete against somebody like Mongo or something like that. So, you start to unwind the costs of that. Whereas Azure, went and they build basically ground up services for the most part. And Google kind of falls somewhere in between in how they build their-- They're a sort of layer cake type effect, but not as many layers I guess you could say. >> I feel like, you know, Amazon's trying to be a platform for the ecosystem. Yes, they have their own products and they're going to sell. And that's going to drive their profitability cause they don't have to split the pie. But, they're taking a piece of-- They're spinning the meter, as Ziyas Caravalo likes to say on every time Snowflake or Databricks or Mongo or Atlas is, you know, running on their system. They take a piece of the action. Now, Microsoft does that as well. But, you look at Microsoft and security, head-to-head competitors, for example, with a CrowdStrike or an Okta in identity. Whereas, it seems like at least for now, AWS is a more friendly place for the ecosystem. At the same time, you do a lot of business in Microsoft. >> Yeah. And I think that a lot of companies have always feared that Amazon would just throw, you know, bodies at it. And I think that people have come to the realization that a two pizza team, as Amazon would call it, is eight people. I think that's, you know, two slices per person. I'm a little bit fat, so I don't know if that's enough. But, you start to look at it and go, okay, if they're going to start out with eight engineers, if I'm a startup and they're part of my ecosystem, do I really fear them or should I really embrace them and try to partner closer with them? And I think the smart people and the smart companies are partnering with them because they're realizing, Amazon, unless they can see it to, you know, a hundred million, $500 million market, they're not going to throw eight to 16 people at a problem. I think when, you know, you could say, you could look at the elastic with OpenSearch and what they did there. And the licensing terms and the battle they went through. But they knew that Elastic had a huge market. Also, you had a number of ecosystem companies building on top of now OpenSearch, that are now domain on top of Amazon as well. So, I think Amazon's being pretty strategic in how they're doing it. I think some of the-- It'll be interesting. I think this year is a payout year for the cuts that they're making to some of the services internally to kind of, you know, how do we take the fat off some of those services that-- You know, you look at Alexa. I don't know how much revenue Alexa really generates for them. But it's a means to an end for a number of different other services and partners. >> What do you make of this ChatGPT? I mean, Microsoft obviously is playing that card. You want to, you want ChatGPT in the Cloud, come to Azure. Seems like AWS has to respond. And we know Google is, you know, sharpening its knives to come up with its response. >> Yeah, I mean Google just went and talked about Bard for the first time this week and they're in private preview or I guess they call it beta, but. Right at the moment to select, select AI users, which I have no idea what that means. But that's a very interesting way that they're marketing it out there. But, I think that Amazon will have to respond. I think they'll be more measured than say, what Google's doing with Bard and just throwing it out there to, hey, we're going into beta now. I think they'll look at it and see where do we go and how do we actually integrate this in? Because they do have a lot of components of AI and ML underneath the hood that other services use. And I think that, you know, they've learned from that. And I think that they've already done a good job. Especially for media and entertainment when you start to look at some of the ways that they use it for helping do graphics and helping to do drones. I think part of their buy of iRobot was the fact that iRobot was a big user of RoboMaker, which is using different models to train those robots to go around objects and things like that, so. >> Quick touch on Kubernetes, the whole DevOps World we just covered. The Cloud Native Foundation Security, CNCF. The security conference up in Seattle last week. First time they spun that out kind of like reinforced, you know, AWS spins out, reinforced from reinvent. Amsterdam's coming up soon, the CubeCon. What should we expect? What's hot in Cubeland? >> Yeah, I think, you know, Kubes, you're going to be looking at how OpenShift keeps growing and I think to that respect you get to see the momentum with people like Red Hat. You see others coming up and realizing how OpenShift has gone to market as being, like you were saying, partnering with those Clouds and really making it simple. I think the simplicity and the manageability of Kubernetes is going to be at the forefront. I think a lot of the investment is still going into, how do I bring observability and DevOps and AIOps and MLOps all together. And I think that's going to be a big place where people are going to be looking to see what comes out of CubeCon in Amsterdam. I think it's that manageability ease of use. >> Well Rob, I look forward to working with you on behalf of the whole Cube team. We're going to do more of these and go out to some shows extract the signal from the noise. Really appreciate you coming into our studio. >> Well, thank you for having me on. Really appreciate it. >> You're really welcome. All right, keep it right there, or thanks for watching. This is Dave Vellante for the Cube. And we'll see you next time. (light music)

>> From the Cube Studios in Palo Alto in Boston bringing you data-driven insights from the Cube and ETR. This is Breaking Analysis with Dave Vellante. >> The unraveling of market enthusiasm continued in Q4 of 2022 with the earnings reports from the US hyperscalers, the big three now all in. As we said earlier this year, even the cloud is an immune from the macro headwinds and the cracks in the armor that we saw from the data that we shared last summer, they're playing out into 2023. For the most part actuals are disappointing beyond expectations including our own. It turns out that our estimates for the big three hyperscaler's revenue missed by 1.2 billion or 2.7% lower than we had forecast from even our most recent November estimates. And we expect continued decelerating growth rates for the hyperscalers through the summer of 2023 and we don't think that's going to abate until comparisons get easier. Hello and welcome to this week's Wikibon Cube Insights powered by ETR. In this Breaking Analysis, we share our view of what's happening in cloud markets not just for the hyperscalers but other firms that have hitched a ride on the cloud. And we'll share new ETR data that shows why these trends are playing out tactics that customers are employing to deal with their cost challenges and how long the pain is likely to last. You know, riding the cloud wave, it's a two-edged sword. Let's look at the players that have gone all in on or are exposed to both the positive and negative trends of cloud. Look the cloud has been a huge tailwind for so many companies like Snowflake and Databricks, Workday, Salesforce, Mongo's move with Atlas, Red Hats Cloud strategy with OpenShift and so forth. And you know, the flip side is because cloud is elastic what comes up can also go down very easily. Here's an XY graphic from ETR that shows spending momentum or net score on the vertical axis and market presence in the dataset on the horizontal axis provision or called overlap. This is data from the January 2023 survey and that the red dotted lines show the positions of several companies that we've highlighted going back to January 2021. So let's unpack this for a bit starting with the big three hyperscalers. The first point is AWS and Azure continue to solidify their moat relative to Google Cloud platform. And we're going to get into this in a moment, but Azure and AWS revenues are five to six times that of GCP for IaaS. And at those deltas, Google should be gaining ground much faster than the big two. The second point on Google is notice the red line on GCP relative to its starting point. While it appears to be gaining ground on the horizontal axis, its net score is now below that of AWS and Azure in the survey. So despite its significantly smaller size it's just not keeping pace with the leaders in terms of market momentum. Now looking at AWS and Microsoft, what we see is basically AWS is holding serve. As we know both Google and Microsoft benefit from including SaaS in their cloud numbers. So the fact that AWS hasn't seen a huge downward momentum relative to a January 2021 position is one positive in the data. And both companies are well above that magic 40% line on the Y-axis, anything above 40% we consider to be highly elevated. But the fact remains that they're down as are most of the names on this chart. So let's take a closer look. I want to start with Snowflake and Databricks. Snowflake, as we reported from several quarters back came down to Earth, it was up in the 80% range in the Y-axis here. And it's still highly elevated in the 60% range and it continues to move to the right, which is positive but as we'll address in a moment it's customers can dial down consumption just as in any cloud. Now, Databricks is really interesting. It's not a public company, it never made it to IPO during the sort of tech bubble. So we don't have the same level of transparency that we do with other companies that did make it through. But look at how much more prominent it is on the X-axis relative to January 2021. And it's net score is basically held up over that period of time. So that's a real positive for Databricks. Next, look at Workday and Salesforce. They've held up relatively well, both inching to the right and generally holding their net scores. Same from Mongo, which is the brown dot above its name that says Elastic, it says a little gets a little crowded which Elastic's actually the blue dot above it. But generally, SaaS is harder to dial down, Workday, Salesforce, Oracles, SaaS and others. So it's harder to dial down because commitments have been made in advance, they're kind of locked in. Now, one of the discussions from last summer was as Mongo, less discretionary than analytics i.e. Snowflake. And it's an interesting debate but maybe Snowflake customers, you know, they're also generally committed to a dollar amount. So over time the spending is going to be there. But in the short term, yeah maybe Snowflake customers can dial down. Now that highlighted dotted red line, that bolded one is Datadog and you can see it's made major strides on the X-axis but its net score has decelerated quite dramatically. Openshift's momentum in the survey has dropped although IBM just announced that OpenShift has a a billion dollar ARR and I suspect what's happening there is IBM consulting is bundling OpenShift into its modernization projects. It's got a, that sort of captive base if you will. And as such it's probably not as top of mind to the respondents but I'll bet you the developers are certainly aware of it. Now the other really notable call out here is CloudFlare, We've reported on them earlier. Cloudflare's net score has held up really well since January of 2021. It really hasn't seen the downdraft of some of these others, but it's making major major moves to the right gaining market presence. We really like how CloudFlare is performing. And the last comment is on Oracle which as you can see, despite its much, much lower net score continues to gain ground in the market and thrive from a profitability standpoint. But the data pretty clearly shows that there's a downdraft in the market. Okay, so what's happening here? Let's dig deeper into this data. Here's a graphic from the most recent ETR drill down asking customers that said they were going to cut spending what technique they're using to do so. Now, as we've previously reported, consolidating redundant vendors is by far the most cited approach but there's two key points we want to make here. One is reducing excess cloud resources. As you can see in the bars is the second most cited technique and it's up from the previous polling period. The second we're not showing, you know directly but we've got some red call outs there. Reducing cloud costs jumps to 29% and 28% respectively in financial services and tech telco. And it's much closer to second. It's basically neck and neck with consolidating redundant vendors in those two industries. So they're being really aggressive about optimizing cloud cost. Okay, so as we said, cloud is great 'cause you can dial it up but it's just as easy to dial down. We've identified six factors that customers tell us are affecting their cloud consumption and there are probably more, if you got more we'd love to hear them but these are the ones that are fairly prominent that have hit our radar. First, rising mortgage rates mean banks are processing fewer loans means less cloud. The crypto crash means less trading activity and that means less cloud resources. Third lower ad spend has led companies to reduce not only you know, their ad buying but also their frequency of running their analytics and their calculations. And they're also often using less data, maybe compressing the timeframe of the corpus down to a shorter time period. Also very prominent is down to the bottom left, using lower cost compute instances. For example, Graviton from AWS or AMD chips and tiering storage to cheaper S3 or deep archived tiers. And finally, optimizing based on better pricing plans. So customers are moving from, you know, smaller companies in particular moving maybe from on demand or other larger companies that are experimenting using on demand or they're moving to spot pricing or reserved instances or optimized savings plans. That all lowers cost and that means less cloud resource consumption and less cloud revenue. Now in the days when everything was on prem CFOs, what would they do? They would freeze CapEx and IT Pros would have to try to do more with less and often that meant a lot of manual tasks. With the cloud it's much easier to move things around. It still takes some thinking and some effort but it's dramatically simpler to do so. So you can get those savings a lot faster. Now of course the other huge factor is you can cut or you can freeze. And this graphic shows data from a recent ETR survey with 159 respondents and you can see the meaningful uptick in hiring freezes, freezing new IT deployments and layoffs. And as we've been reporting, this has been trending up since earlier last year. And note the call out, this is especially prominent in retail sectors, all three of these techniques jump up in retail and that's a bit of a concern because oftentimes consumer spending helps the economy make a softer landing out of a pullback. But this is a potential canary in the coal mine. If retail firms are pulling back it's because consumers aren't spending as much. And so we're keeping a close eye on that. So let's boil this down to the market data and what this all means. So in this graphic we show our estimates for Q4 IaaS revenues compared to the "actual" IaaS revenues. And we say quote because AWS is the only one that reports, you know clean revenue and IaaS, Azure and GCP don't report actuals. Why would they? Because it would make them look even, you know smaller relative to AWS. Rather, they bury the figures in overall cloud which includes their, you know G-Suite for Google and all the Microsoft SaaS. And then they give us little tidbits about in Microsoft's case, Azure, they give growth rates. Google gives kind of relative growth of GCP. So, and we use survey data and you know, other data to try to really pinpoint and we've been covering this for, I don't know, five or six years ever since the cloud really became a thing. But looking at the data, we had AWS growing at 25% this quarter and it came in at 20%. So a significant decline relative to our expectations. AWS announced that it exited December, actually, sorry it's January data showed about a 15% mid-teens growth rate. So that's, you know, something we're watching. Azure was two points off our forecast coming in at 38% growth. It said it exited December in the 35% growth range and it said that it's expecting five points of deceleration off of that. So think 30% for Azure. GCP came in three points off our expectation coming in 35% and Alibaba has yet to report but we've shaved a bid off that forecast based on some survey data and you know what maybe 9% is even still not enough. Now for the year, the big four hyperscalers generated almost 160 billion of revenue, but that was 7 billion lower than what what we expected coming into 2022. For 2023, we're expecting 21% growth for a total of 193.3 billion. And while it's, you know, lower, you know, significantly lower than historical expectations it's still four to five times the overall spending forecast that we just shared with you in our predictions post of between 4 and 5% for the overall market. We think AWS is going to come in in around 93 billion this year with Azure closing in at over 71 billion. This is, again, we're talking IaaS here. Now, despite Amazon focusing investors on the fact that AWS's absolute dollar growth is still larger than its competitors. By our estimates Azure will come in at more than 75% of AWS's forecasted revenue. That's a significant milestone. AWS is operating margins by the way declined significantly this past quarter, dropping from 30% of revenue to 24%, 30% the year earlier to 24%. Now that's still extremely healthy and we've seen wild fluctuations like this before so I don't get too freaked out about that. But I'll say this, Microsoft has a marginal cost advantage relative to AWS because one, it has a captive cloud on which to run its massive software estate. So it can just throw software at its own cloud and two software marginal costs. Marginal economics despite AWS's awesomeness in high degrees of automation, software is just a better business. Now the upshot for AWS is the ecosystem. AWS is essentially in our view positioning very smartly as a platform for data partners like Snowflake and Databricks, security partners like CrowdStrike and Okta and Palo Alto and many others and SaaS companies. You know, Microsoft is more competitive even though AWS does have competitive products. Now of course Amazon's competitive to retail companies so that's another factor but generally speaking for tech players, Amazon is a really thriving ecosystem that is a secret weapon in our view. AWS happy to spin the meter with its partners even though it sells competitive products, you know, more so in our view than other cloud players. Microsoft, of course is, don't forget is hyping now, we're hearing a lot OpenAI and ChatGPT we reported last week in our predictions post. How OpenAI is shot up in terms of market sentiment in ETR's emerging technology company surveys and people are moving to Azure to get OpenAI and get ChatGPT that is a an interesting lever. Amazon in our view has to have a response. They have lots of AI and they're going to have to make some moves there. Meanwhile, Google is emphasizing itself as an AI first company. In fact, Google spent at least five minutes of continuous dialogue, nonstop on its AI chops during its latest earnings call. So that's an area that we're watching very closely as the buzz around large language models continues. All right, let's wrap up with some assumptions for 2023. We think SaaS players are going to continue to be sticky. They're going to be somewhat insulated from all these downdrafts because they're so tied in and customers, you know they make the commitment up front, you've got the lock in. Now having said that, we do expect some backlash over time on the onerous and generally customer unfriendly pricing models of most large SaaS companies. But that's going to play out over a longer period of time. Now for cloud generally and the hyperscalers specifically we do expect accelerating growth rates into Q3 but the amplitude of the demand swings from this rubber band economy, we expect to continue to compress and become more predictable throughout the year. Estimates are coming down, CEOs we think are going to be more cautious when the market snaps back more cautious about hiring and spending and as such a perhaps we expect a more orderly return to growth which we think will slightly accelerate in Q4 as comps get easier. Now of course the big risk to these scenarios is of course the economy, the FED, consumer spending, inflation, supply chain, energy prices, wars, geopolitics, China relations, you know, all the usual stuff. But as always with our partners at ETR and the Cube community, we're here for you. We have the data and we'll be the first to report when we see a change at the margin. Okay, that's a wrap for today. I want to thank Alex Morrison who's on production and manages the podcast, Ken Schiffman as well out of our Boston studio getting this up on LinkedIn Live. Thank you for that. Kristen Martin also and Cheryl Knight help get the word out on social media and in our newsletters. And Rob Hof is our Editor-in-Chief over at siliconangle.com. He does some great editing for us. Thank you all. Remember all these episodes are available as podcast. Wherever you listen, just search Breaking Analysis podcast. I publish each week on wikibon.com, at siliconangle.com where you can see all the data and you want to get in touch. Just all you can do is email me david.vellante@siliconangle.com or DM me @dvellante if you if you got something interesting, I'll respond. If you don't, it's either 'cause I'm swamped or it's just not tickling me. You can comment on our LinkedIn post as well. And please check out ETR.ai for the best survey data in the enterprise tech business. This is Dave Vellante for the Cube Insights powered by ETR. Thanks for watching and we'll see you next time on Breaking Analysis. (gentle upbeat music)

(lively music) >> Welcome back to our coverage of Cloud Native Security Con. I'm Dave Vellante, here in our Boston studio. We're connecting today, throughout the day, with Palo Alto on the ground in Seattle. And right now I'm here with Michael Foster with Red Hat. He's on the ground in Seattle. We're going to discuss the trends and containers and security and everything that's going on at the show in Seattle. Michael, good to see you, thanks for coming on. >> Good to see you, thanks for having me on. >> Lot of market momentum for Red Hat. The IBM earnings call the other day, announced OpenShift is a billion-dollar ARR. So it's quite a milestone, and it's not often, you know. It's hard enough to become a billion-dollar software company and then to have actually a billion-dollar product alongside. So congratulations on that. And let's start with the event. What's the buzz at the event? People talking about shift left, obviously supply chain security is a big topic. We've heard a little bit about or quite a bit about AI. What are you hearing on the ground? >> Yeah, so the last event I was at that I got to see you at was three months ago, with CubeCon and the talk was supply chain security. Nothing has really changed on that front, although I do think that the conversation, let's say with the tech companies versus what customers are actually looking at, is slightly different just based on the market. And, like you said, thank you for the shout-out to a billion-dollar OpenShift, and ACS is certainly excited to be part of that. We are seeing more of a consolidation, I think, especially in security. The money's still flowing into security, but people want to know what they're running. We've allowed, had some tremendous growth in the last couple years and now it's okay. Let's get a hold of the containers, the clusters that we're running, let's make sure everything's configured. They want to start implementing policies effectively and really get a feel for what's going on across all their workloads, especially with the bigger companies. I think bigger companies allow some flexibility in the security applications that they can deploy. They can have different groups that manage different ones, but in the mid to low market, you're seeing a lot of consolidation, a lot of companies that want basically one security tool to manage them all, so to speak. And I think that the features need to somewhat accommodate that. We talk supply chain, I think most people continue to care about network security, vulnerability management, shifting left and enabling developers. That's the general trend I see. Still really need to get some hands on demos and see some people that I haven't seen in a while. >> So a couple things on, 'cause, I mean, we talk about the macroeconomic climate all the time. We do a lot of survey data with our partners at ETR, and their recent data shows that in terms of cost savings, for those who are actually cutting their budgets, they're looking to consolidate redundant vendors. So, that's one form of consolidation. The other theme, of course, is there's so many tools out in the security market that consolidating tools is something that can help simplify, but then at the same time, you see opportunities open up, like IOT security. And so, you have companies that are starting up to just do that. So, there's like these countervailing trends. I often wonder, Michael, will this ever end? It's like the universe growing and tooling, what are your thoughts? >> I mean, I completely agree. It's hard to balance trying to grow the company in a time like this, at the same time while trying to secure it all, right? So you're seeing the consolidation but some of these applications and platforms need to make some promises to say, "Hey, we're going to move into this space." Right, so when you have like Red Hat who wants to come out with edge devices and help manage the IOT devices, well then, you have a security platform that can help you do that, that's built in. Then the messaging's easy. When you're trying to do that across different cloud providers and move into IOT, it becomes a little bit more challenging. And so I think that, and don't take my word for this, some of those IOT startups, you might see some purchasing in the next couple years in order to facilitate those cloud platforms to be able to expand into that area. To me it makes sense, but I don't want to hypothesize too much from the start. >> But I do, we just did our predictions post and as a security we put up the chart of candidates, and there's like dozens, and dozens, and dozens. Some that are very well funded, but I mean, you've seen some down, I mean, down rounds everywhere, but these many companies have raised over a billion dollars and it's like uh-oh, okay, so they're probably okay, maybe. But a lot of smaller firms, I mean there's just, there's too many tools in the marketplace, but it seems like there is misalignment there, you know, kind of a mismatch between, you know, what customers would like to have happen and what actually happens in the marketplace. And that just underscores, I think, the complexities in security. So I guess my question is, you know, how do you look at Cloud Native Security, and what's different from traditional security approaches? >> Okay, I mean, that's a great question, and it's something that we've been talking to customers for the last five years about. And, really, it's just a change in mindset. Containers are supposed to unleash developer speed, and if you don't have a security tool to help do that, then you're basically going to inhibit developers in some form or another. I think managing that, while also giving your security teams the ability to tell the message of we are being more secure. You know, we're limiting vulnerabilities in our cluster. We are seeing progress because containers, you know, have a shorter life cycle and there is security and speed. Having that conversation with the C-suites is a little different, especially when how they might be used to virtual machines and managing it through that. I mean, if it works, it works from a developer's standpoint. You're not taking advantage of those containers and the developer's speed, so that's the difference. Now doing that and then first challenge is making that pitch. The second challenge is making that pitch to then scale it, so you can get onboard your developers and get your containers up and running, but then as you bring in new groups, as you move over to Kubernetes or you get into more container workloads, how do you onboard your teams? How do you scale? And I tend to see a general trend of a big investment needed for about two years to make that container shift. And then the security tools come in and really blossom because once that core separation of responsibilities happens in the organization, then the security tools are able to accelerate the developer workflow and not inhibit it. >> You know, I'm glad you mentioned, you know, separation of responsibilities. We go to a lot of shows, as you know, with theCUBE, and many of them are cloud shows. And in the one hand, Cloud has, you know, obviously made the world, you know, more interesting and better in so many different ways and even security, but it's like new layers are forming. You got the cloud, you got the shared responsibility model, so the cloud is like the first line of defense. And then you got the CISO who is relying heavily on devs to, you know, the whole shift left thing. So we're asking developers to do a lot and then you're kind of behind them. I guess you have audit is like the last line of defense, but my question to you is how can software developers really ensure that cloud native tools that they're using are secure? What steps can they take to improve security and specifically what's Red Hat doing in that area? >> Yeah, well I think there's, I would actually move away from that being the developer responsibility. I think the job is the operators' and the security people. The tools to give them the ability to see. The vulnerabilities they're introducing. Let's say signing their images, actually verifying that the images that's thrown in the cloud, are the ones that they built, that can all be done and it can be done open source. So we have a DevSecOps validated pattern that Red Hat's pushed out, and it's all open source tools in the cloud native space. And you can sign your builds and verify them at runtime and make sure that you're doing that all for free as one option. But in general, I would say that the hope is that you give the developer the information to make responsible choices and that there's a dialogue between your security and operations and developer teams but security, we should not be pushing that on developer. And so I think with ACS and our tool, the goal is to get in and say, "Let's set some reasonable policies, have a conversation, let's get a security liaison." Let's say in the developer team so that we can make some changes over time. And the more we can automate that and the more we can build and have that conversation, the better that you'll, I don't say the more security clusters but I think that the more you're on your path of securing your environment. >> How much talk is there at the event about kind of recent high profile incidents? We heard, you know, Log4j, of course, was mentioned in the Keynote. Somebody, you know, I think yelled out from the audience, "We're still dealing with that." But when you think about these, you know, incidents when looking back, what lessons do you think we've learned from these events? >> Oh, I mean, I think that I would say, if you have an approach where you're managing your containers, managing the age and using containers to accelerate, so let's say no images that are older than 90 days, for example, you're going to avoid a lot of these issues. And so I think people that are still dealing with that aspect haven't set up the proper, let's say, disclosure between teams and update strategy and so on. So I don't want to, I think the Log4j, if it's still around, you know, something's missing there but in general you want to be able to respond quickly and to do that and need the tools and policies to be able to tell people how to fix that issue. I mean, the Log4j fix was seven days after, so your developers should have been well aware of that. Your security team should have been sending the messages out. And I remember even fielding all the calls, all the fires that we had to put out when that happened. But yeah. >> I thought Brian Behlendorf's, you know, talk this morning was interesting 'cause he was making an attempt to say, "Hey, here's some things that you might not be thinking about that are likely to occur." And I wonder if you could, you know, comment on them and give us your thoughts as to how the industry generally, maybe Red Hat specifically, are thinking about dealing with them. He mentioned ChatGPT or other GPT to automate Spear phishing. He said the identity problem is still not fixed. Then he talked about free riders sniffing repos essentially for known vulnerabilities that are slow to fix. He talked about regulations that might restrict shipping code. So these are things that, you know, essentially, we can, they're on the radar, but you know, we're kind of putting out, you know, yesterday's fire. What are your thoughts on those sort of potential issues that we're facing and how are you guys thinking about it? >> Yeah, that's a great question, and I think it's twofold. One, it's brought up in front of a lot of security leaders in the space for them to be aware of it because security, it's a constant battle, constant war that's being fought. ChatGPT lowers the barrier of entry for a lot of them, say, would-be hackers or people like that to understand systems and create, let's say, simple manifests to leverage Kubernetes or leverage a misconfiguration. So as the barrier drops, we as a security team in security, let's say group organization, need to be able to respond and have our own tools to be able to combat that, and we do. So a lot of it is just making sure that we shore up our barriers and that people are aware of these threats. The harder part I think is educating the public and that's why you tend to see maybe the supply chain trend be a little bit ahead of the implementation. I think they're still, for example, like S-bombs and signing an attestation. I think that's still, you know, a year, two years, away from becoming, let's say commonplace, especially in something like a production environment. Again, so, you know, stay bleeding edge, and then make sure that you're aware of these issues and we'll be constantly coming to these calls and filling you in on what we're doing and make sure that we're up to speed. >> Yeah, so I'm hearing from folks like yourself that the, you know, you think of the future of Cloud Native Security. We're going to see continued emphasis on, you know, better integration of security into the DevSecOps. You're pointing out it's really, you know, the ops piece, that runtime that we really need to shore up. You can't just put it on the shoulders of the devs. And, you know, using security focused tools and best practices. Of course you hear a lot about that and the continued drive toward automation. My question is, you know, automation, machine learning, how, where are we in that maturity cycle? How much of that is being adopted? Sometimes folks are, you know, they embrace automation but it brings, you know, unknown, unintended consequences. Are folks embracing that heavily? Are there risks associated around that, or are we kind of through that knothole in your view? >> Yeah, that's a great question. I would compare it to something like a smart home. You know, we sort of hit a wall. You can automate so much, but it has to actually be useful to your teams. So when we're going and deploying ACS and using a cloud service, like one, you know, you want something that's a service that you can easily set up. And then the other thing is you want to start in inform mode. So you can't just automate everything, even if you're doing runtime enforcement, you need to make sure that's very, very targeted to exactly what you want and then you have to be checking it because people start new workloads and people get onboarded every week or month. So it's finding that balance between policies where you can inform the developer and the operations teams and that they give them the information to act. And that worst case you can step in as a security team to stop it, you know, during the onboarding of our ACS cloud service. We have an early access program and I get on-calls, and it's not even security team, it's the operations team. It starts with the security product, you know, and sometimes it's just, "Hey, how do I, you know, set this policy so my developers will find this vulnerability like a Log4Shell and I just want to send 'em an email, right?" And these are, you know, they have the tools and they can do that. And so it's nice to see the operations take on some security. They can automate it because maybe you have a NetSec security team that doesn't know Kubernetes or containers as well. So that shared responsibility is really useful. And then just again, making that automation targeted, even though runtime enforcement is a constant thing that we talk about, the amount that we see it in the wild where people are properly setting up admission controllers and it's acting. It's, again, very targeted. Databases, cubits x, things that are basically we all know is a no-go in production. >> Thank you for that. My last question, I want to go to the, you know, the hardest part and 'cause you're talking to customers all the time and you guys are working on the hardest problems in the world. What is the hardest aspect of securing, I'm going to come back to the software supply chain, hardest aspect of securing the software supply chain from the perspective of a security pro, software engineer, developer, DevSecOps Pro, and then this part b of that is, is how are you attacking that specifically as Red Hat? >> Sure, so as a developer, it's managing vulnerabilities with updates. As an operations team, it's keeping all the cluster, because you have a bunch of different teams working in the same environment, let's say, from a security team. It's getting people to listen to you because there are a lot of things that need to be secured. And just communicating that and getting it actionable data to the people to make the decisions as hard from a C-suite. It's getting the buy-in because it's really hard to justify the dollars and cents of security when security is constantly having to have these conversations with developers. So for ACS, you know, we want to be able to give the developer those tools. We also want to build the dashboards and reporting so that people can see their vulnerabilities drop down over time. And also that they're able to respond to it quickly because really that's where the dollars and cents are made in the product. It's that a Log4Shell comes out. You get immediately notified when the feeds are updated and you have a policy in action that you can respond to it. So I can go to my CISOs and say, "Hey look, we're limiting vulnerabilities." And when this came out, the developers stopped it in production and we were able to update it with the next release. Right, like that's your bread and butter. That's the story that you want to tell. Again, it's a harder story to tell, but it's easy when you have the information to be able to justify the money that you're spending on your security tools. Hopefully that answered your question. >> It does. That was awesome. I mean, you got data, you got communication, you got the people, obviously there's skillsets, you have of course, tooling and technology is a big part of that. Michael, really appreciate you coming on the program, sharing what's happening on the ground in Seattle and can't wait to have you back. >> Yeah. Awesome. Thanks again for having me. >> Yeah, our pleasure. All right. Thanks for watching our coverage of the Cloud Native Security Con. I'm Dave Vellante. I'm in our Boston studio. We're connecting to Palo Alto. We're connecting on the ground in Seattle. Keep it right there for more coverage. Be right back. (lively music)

Hello and welcome back to Supercloud 2 where we examine the intersection of cloud and data in the 2020s. My name is Dave Vellante. Our Supercloud panel, our power panel is back. Maribel Lopez is the founder and principal analyst at Lopez Research. Sanjeev Mohan is former Gartner analyst and principal at Sanjeev Mohan. And Keith Townsend is the CTO advisor. Folks, welcome back and thanks for your participation today. Good to see you. >> Okay, great. >> Great to see you. >> Thanks. Let me start, Maribel, with you. Bob Muglia, we had a conversation as part of Supercloud the other day. And he said, "Dave, I like the work, you got to simplify this a little bit." So he said, quote, "A Supercloud is a platform." He said, "Think of it as a platform that provides programmatically consistent services hosted on heterogeneous cloud providers." And then Nelu Mihai said, "Well, wait a minute. This is just going to create more stove pipes. We need more standards in an architecture," which is kind of what Berkeley Sky Computing initiative is all about. So there's a sort of a debate going on. Is supercloud an architecture, a platform? Or maybe it's just another buzzword. Maribel, do you have a thought on this? >> Well, the easy answer would be to say it's just a buzzword. And then we could just kill the conversation and be done with it. But I think the term, it's more than that, right? The term actually isn't new. You can go back to at least 2016 and find references to supercloud in Cornell University or assist in other documents. So, having said this, I think we've been talking about Supercloud for a while, so I assume it's more than just a fancy buzzword. But I think it really speaks to that undeniable trend of moving towards an abstraction layer to deal with the chaos of what we consider managing multiple public and private clouds today, right? So one definition of the technology platform speaks to a set of services that allows companies to build and run that technology smoothly without worrying about the underlying infrastructure, which really gets back to something that Bob said. And some of the question is where that lives. And you could call that an abstraction layer. You could call it cross-cloud services, hybrid cloud management. So I see momentum there, like legitimate momentum with enterprise IT buyers that are trying to deal with the fact that they have multiple clouds now. So where I think we're moving is trying to define what are the specific attributes and frameworks of that that would make it so that it could be consistent across clouds. What is that layer? And maybe that's what the supercloud is. But one of the things I struggle with with supercloud is. What are we really trying to do here? Are we trying to create differentiated services in the supercloud layer? Is a supercloud just another variant of what AWS, GCP, or others do? You spoken to Walmart about its cloud native platform, and that's an example of somebody deciding to do it themselves because they need to deal with this today and not wait for some big standards thing to happen. So whatever it is, I do think it's something. I think we're trying to maybe create an architecture out of it would be a better way of saying it so that it does get to those set of principles, but it also needs to be edge aware. I think whenever we talk about supercloud, we're always talking about like the big centralized cloud. And I think we need to think about all the distributed clouds that we're looking at in edge as well. So that might be one of the ways that supercloud evolves. >> So thank you, Maribel. Keith, Brian Gracely, Gracely's law, things kind of repeat themselves. We've seen it all before. And so what Muglia brought to the forefront is this idea of a platform where the platform provider is really responsible for the architecture. Of course, the drawback is then you get a a bunch of stove pipes architectures. But practically speaking, that's kind of the way the industry has always evolved, right? >> So if we look at this from the practitioner's perspective and we talk about platforms, traditionally vendors have provided the platforms for us, whether it's distribution of lineage managed by or provided by Red Hat, Windows, servers, .NET, databases, Oracle. We think of those as platforms, things that are fundamental we can build on top. Supercloud isn't today that. It is a framework or idea, kind of a visionary goal to get to a point that we can have a platform or a framework. But what we're seeing repeated throughout the industry in customers, whether it's the Walmarts that's kind of supersized the idea of supercloud, or if it's regular end user organizations that are coming out with platform groups, groups who normalize cloud native infrastructure, AWS multi-cloud, VMware resources to look like one thing internally to their developers. We're seeing this trend that there's a desire for a platform that provides the capabilities of a supercloud. >> Thank you for that. Sanjeev, we often use Snowflake as a supercloud example, and now would presumably would be a platform with an architecture that's determined by the vendor. Maybe Databricks is pushing for a more open architecture, maybe more of that nirvana that we were talking about before to solve for supercloud. But regardless, the practitioner discussions show. At least currently, there's not a lot of cross-cloud data sharing. I think it could be a killer use case, egress charges or a barrier. But how do you see it? Will that change? Will we hide that underlying complexity and start sharing data across cloud? Is that something that you think Snowflake or others will be able to achieve? >> So I think we are already starting to see some of that happen. Snowflake is definitely one example that gets cited a lot. But even we don't talk about MongoDB in this like, but you could have a MongoDB cluster, for instance, with nodes sitting in different cloud providers. So there are companies that are starting to do it. The advantage that these companies have, let's take Snowflake as an example, it's a centralized proprietary platform. And they are building the capabilities that are needed for supercloud. So they're building things like you can push down your data transformations. They have the entire security and privacy suite. Data ops, they're adding those capabilities. And if I'm not mistaken, it'll be very soon, we will see them offer data observability. So it's all works great as long as you are in one platform. And if you want resilience, then Snowflake, Supercloud, great example. But if your primary goal is to choose the most cost-effective service irrespective of which cloud it sits in, then things start falling sideways. For example, I may be a very big Snowflake user. And I like Snowflake's resilience. I can move from one cloud to another cloud. Snowflake does it for me. But what if I want to train a very large model? Maybe Databricks is a better platform for that. So how do I do move my workload from one platform to another platform? That tooling does not exist. So we need server hybrid, cross-cloud, data ops platform. Walmart has done a great job, but they built it by themselves. Not every company is Walmart. Like Maribel and Keith said, we need standards, we need reference architectures, we need some sort of a cost control. I was just reading recently, Accenture has been public about their AWS bill. Every time they get the bill is tens of millions of lines, tens of millions 'cause there are over thousand teams using AWS. If we have not been able to corral a usage of a single cloud, now we're talking about supercloud, we've got multiple clouds, and hybrid, on-prem, and edge. So till we've got some cross-platform tooling in place, I think this will still take quite some time for it to take shape. >> It's interesting. Maribel, Walmart would tell you that their on-prem infrastructure is cheaper to run than the stuff in the cloud. but at the same time, they want the flexibility and the resiliency of their three-legged stool model. So the point as Sanjeev was making about hybrid. It's an interesting balance, isn't it, between getting your lowest cost and at the same time having best of breed and scale? >> It's basically what you're trying to optimize for, as you said, right? And by the way, to the earlier point, not everybody is at Walmart's scale, so it's not actually cheaper for everybody to have the purchasing power to make the cloud cheaper to have it on-prem. But I think what you see almost every company, large or small, moving towards is this concept of like, where do I find the agility? And is the agility in building the infrastructure for me? And typically, the thing that gives you outside advantage as an organization is not how you constructed your cloud computing infrastructure. It might be how you structured your data analytics as an example, which cloud is related to that. But how do you marry those two things? And getting back to sort of Sanjeev's point. We're in a real struggle now where one hand we want to have best of breed services and on the other hand we want it to be really easy to manage, secure, do data governance. And those two things are really at odds with each other right now. So if you want all the knobs and switches of a service like geospatial analytics and big query, you're going to have to use Google tools, right? Whereas if you want visibility across all the clouds for your application of state and understand the security and governance of that, you're kind of looking for something that's more cross-cloud tooling at that point. But whenever you talk to somebody about cross-cloud tooling, they look at you like that's not really possible. So it's a very interesting time in the market. Now, we're kind of layering this concept of supercloud on it. And some people think supercloud's about basically multi-cloud tooling, and some people think it's about a whole new architectural stack. So we're just not there yet. But it's not all about cost. I mean, cloud has not been about cost for a very, very long time. Cloud has been about how do you really make the most of your data. And this gets back to cross-cloud services like Snowflake. Why did they even exist? They existed because we had data everywhere, but we need to treat data as a unified object so that we can analyze it and get insight from it. And so that's where some of the benefit of these cross-cloud services are moving today. Still a long way to go, though, Dave. >> Keith, I reached out to my friends at ETR given the macro headwinds, And you're right, Maribel, cloud hasn't really been about just about cost savings. But I reached out to the ETR, guys, what's your data show in terms of how customers are dealing with the economic headwinds? And they said, by far, their number one strategy to cut cost is consolidating redundant vendors. And a distant second, but still notable was optimizing cloud costs. Maybe using reserve instances, or using more volume buying. Nowhere in there. And I asked them to, "Could you go look and see if you can find it?" Do we see repatriation? And you hear this a lot. You hear people whispering as analysts, "You better look into that repatriation trend." It's pretty big. You can't find it. But some of the Walmarts in the world, maybe even not repatriating, but they maybe have better cost structure on-prem. Keith, what are you seeing from the practitioners that you talk to in terms of how they're dealing with these headwinds? >> Yeah, I just got into a conversation about this just this morning with (indistinct) who is an analyst over at GigaHome. He's reading the same headlines. Repatriation is happening at large scale. I think this is kind of, we have these quiet terms now. We have quiet quitting, we have quiet hiring. I think we have quiet repatriation. Most people haven't done away with their data centers. They're still there. Whether they're completely on-premises data centers, and they own assets, or they're partnerships with QTX, Equinix, et cetera, they have these private cloud resources. What I'm seeing practically is a rebalancing of workloads. Do I really need to pay AWS for this instance of SAP that's on 24 hours a day versus just having it on-prem, moving it back to my data center? I've talked to quite a few customers who were early on to moving their static SAP workloads onto the public cloud, and they simply moved them back. Surprising, I was at VMware Explore. And we can talk about this a little bit later on. But our customers, net new, not a lot that were born in the cloud. And they get to this point where their workloads are static. And they look at something like a Kubernetes, or a OpenShift, or VMware Tanzu. And they ask the question, "Do I need the scalability of cloud?" I might consider being a net new VMware customer to deliver this base capability. So are we seeing repatriation as the number one reason? No, I think internal IT operations are just naturally come to this realization. Hey, I have these resources on premises. The private cloud technologies have moved far along enough that I can just simply move this workload back. I'm not calling it repatriation, I'm calling it rightsizing for the operating model that I have. >> Makes sense. Yeah. >> Go ahead. >> If I missed something, Dave, why we are on this topic of repatriation. I'm actually surprised that we are talking about repatriation as a very big thing. I think repatriation is happening, no doubt, but it's such a small percentage of cloud migration that to me it's a rounding error in my opinion. I think there's a bigger problem. The problem is that people don't know where the cost is. If they knew where the cost was being wasted in the cloud, they could do something about it. But if you don't know, then the easy answer is cloud costs a lot and moving it back to on-premises. I mean, take like Capital One as an example. They got rid of all the data centers. Where are they going to repatriate to? They're all in the cloud at this point. So I think my point is that data observability is one of the places that has seen a lot of traction is because of cost. Data observability, when it first came into existence, it was all about data quality. Then it was all about data pipeline reliability. And now, the number one killer use case is FinOps. >> Maribel, you had a comment? >> Yeah, I'm kind of in violent agreement with both Sanjeev and Keith. So what are we seeing here? So the first thing that we see is that many people wildly overspent in the big public cloud. They had stranded cloud credits, so to speak. The second thing is, some of them still had infrastructure that was useful. So why not use it if you find the right workloads to what Keith was talking about, if they were more static workloads, if it was already there? So there is a balancing that's going on. And then I think fundamentally, from a trend standpoint, these things aren't binary. Everybody, for a while, everything was going to go to the public cloud and then people are like, "Oh, it's kind of expensive." Then they're like, "Oh no, they're going to bring it all on-prem 'cause it's really expensive." And it's like, "Well, that doesn't necessarily get me some of the new features and functionalities I might want for some of my new workloads." So I'm going to put the workloads that have a certain set of characteristics that require cloud in the cloud. And if I have enough capability on-prem and enough IT resources to manage certain things on site, then I'm going to do that there 'cause that's a more cost-effective thing for me to do. It's not binary. That's why we went to hybrid. And then we went to multi just to describe the fact that people added multiple public clouds. And now we're talking about super, right? So I don't look at it as a one-size-fits-all for any of this. >> A a number of practitioners leading up to Supercloud2 have told us that they're solving their cloud complexity by going in monocloud. So they're putting on the blinders. Even though across the organization, there's other groups using other clouds. You're like, "In my group, we use AWS, or my group, we use Azure. And those guys over there, they use Google. We just kind of keep it separate." Are you guys hearing this in your view? Is that risky? Are they missing out on some potential to tap best of breed? What do you guys think about that? >> Everybody thinks they're monocloud. Is anybody really monocloud? It's like a group is monocloud, right? >> Right. >> This genie is out of the bottle. We're not putting the genie back in the bottle. You might think your monocloud and you go like three doors down and figure out the guy or gal is on a fundamentally different cloud, running some analytics workload that you didn't know about. So, to Sanjeev's earlier point, they don't even know where their cloud spend is. So I think the concept of monocloud, how that's actually really realized by practitioners is primary and then secondary sources. So they have a primary cloud that they run most of their stuff on, and that they try to optimize. And we still have forked workloads. Somebody decides, "Okay, this SAP runs really well on this, or these analytics workloads run really well on that cloud." And maybe that's how they parse it. But if you really looked at it, there's very few companies, if you really peaked under the hood and did an analysis that you could find an actual monocloud structure. They just want to pull it back in and make it more manageable. And I respect that. You want to do what you can to try to streamline the complexity of that. >> Yeah, we're- >> Sorry, go ahead, Keith. >> Yeah, we're doing this thing where we review AWS service every day. Just in your inbox, learn about a new AWS service cursory. There's 238 AWS products just on the AWS cloud itself. Some of them are redundant, but you get the idea. So the concept of monocloud, I'm in filing agreement with Maribel on this that, yes, a group might say I want a primary cloud. And that primary cloud may be the AWS. But have you tried the licensed Oracle database on AWS? It is really tempting to license Oracle on Oracle Cloud, Microsoft on Microsoft. And I can't get RDS anywhere but Amazon. So while I'm driven to desire the simplicity, the reality is whether be it M&A, licensing, data sovereignty. I am forced into a multi-cloud management style. But I do agree most people kind of do this one, this primary cloud, secondary cloud. And I guarantee you're going to have a third cloud or a fourth cloud whether you want to or not via shadow IT, latency, technical reasons, et cetera. >> Thank you. Sanjeev, you had a comment? >> Yeah, so I just wanted to mention, as an organization, I'm complete agreement, no organization is monocloud, at least if it's a large organization. Large organizations use all kinds of combinations of cloud providers. But when you talk about a single workload, that's where the program arises. As Keith said, the 238 services in AWS. How in the world am I going to be an expert in AWS, but then say let me bring GCP or Azure into a single workload? And that's where I think we probably will still see monocloud as being predominant because the team has developed its expertise on a particular cloud provider, and they just don't have the time of the day to go learn yet another stack. However, there are some interesting things that are happening. For example, if you look at a multi-cloud example where Oracle and Microsoft Azure have that interconnect, so that's a beautiful thing that they've done because now in the newest iteration, it's literally a few clicks. And then behind the scene, your .NET application and your Oracle database in OCI will be configured, the identities in active directory are federated. And you can just start using a database in one cloud, which is OCI, and an application, your .NET in Azure. So till we see this kind of a solution coming out of the providers, I think it's is unrealistic to expect the end users to be able to figure out multiple clouds. >> Well, I have to share with you. I can't remember if he said this on camera or if it was off camera so I'll hold off. I won't tell you who it is, but this individual was sort of complaining a little bit saying, "With AWS, I can take their best AI tools like SageMaker and I can run them on my Snowflake." He said, "I can't do that in Google. Google forces me to go to BigQuery if I want their excellent AI tools." So he was sort of pushing, kind of tweaking a little bit. Some of the vendor talked that, "Oh yeah, we're so customer-focused." Not to pick on Google, but I mean everybody will say that. And then you say, "If you're so customer-focused, why wouldn't you do a ABC?" So it's going to be interesting to see who leads that integration and how broadly it's applied. But I digress. Keith, at our first supercloud event, that was on August 9th. And it was only a few months after Broadcom announced the VMware acquisition. A lot of people, myself included said, "All right, cuts are coming." Generally, Tanzu is probably going to be under the radar, but it's Supercloud 22 and presumably VMware Explore, the company really... Well, certainly the US touted its Tanzu capabilities. I wasn't at VMware Explore Europe, but I bet you heard similar things. Hawk Tan has been blogging and very vocal about cross-cloud services and multi-cloud, which doesn't happen without Tanzu. So what did you hear, Keith, in Europe? What's your latest thinking on VMware's prospects in cross-cloud services/supercloud? >> So I think our friend and Cube, along host still be even more offended at this statement than he was when I sat in the Cube. This was maybe five years ago. There's no company better suited to help industries or companies, cross-cloud chasm than VMware. That's not a compliment. That's a reality of the industry. This is a very difficult, almost intractable problem. What I heard that VMware Europe were customers serious about this problem, even more so than the US data sovereignty is a real problem in the EU. Try being a company in Switzerland and having the Swiss data solvency issues. And there's no local cloud presence there large enough to accommodate your data needs. They had very serious questions about this. I talked to open source project leaders. Open source project leaders were asking me, why should I use the public cloud to host Kubernetes-based workloads, my projects that are building around Kubernetes, and the CNCF infrastructure? Why should I use AWS, Google, or even Azure to host these projects when that's undifferentiated? I know how to run Kubernetes, so why not run it on-premises? I don't want to deal with the hardware problems. So again, really great questions. And then there was always the specter of the problem, I think, we all had with the acquisition of VMware by Broadcom potentially. 4.5 billion in increased profitability in three years is a unbelievable amount of money when you look at the size of the problem. So a lot of the conversation in Europe was about industry at large. How do we do what regulators are asking us to do in a practical way from a true technology sense? Is VMware cross-cloud great? >> Yeah. So, VMware, obviously, to your point. OpenStack is another way of it. Actually, OpenStack, uptake is still alive and well, especially in those regions where there may not be a public cloud, or there's public policy dictating that. Walmart's using OpenStack. As you know in IT, some things never die. Question for Sanjeev. And it relates to this new breed of data apps. And Bob Muglia and Tristan Handy from DBT Labs who are participating in this program really got us thinking about this. You got data that resides in different clouds, it maybe even on-prem. And the machine polls data from different systems. No humans involved, e-commerce, ERP, et cetera. It creates a plan, outcomes. No human involvement. Today, you're on a CRM system, you're inputting, you're doing forms, you're, you're automating processes. We're talking about a new breed of apps. What are your thoughts on this? Is it real? Is it just way off in the distance? How does machine intelligence fit in? And how does supercloud fit? >> So great point. In fact, the data apps that you're talking about, I call them data products. Data products first came into limelight in the last couple of years when Jamal Duggan started talking about data mesh. I am taking data products out of the data mesh concept because data mesh, whether data mesh happens or not is analogous to data products. Data products, basically, are taking a product management view of bringing data from different sources based on what the consumer needs. We were talking earlier today about maybe it's my vacation rentals, or it may be a retail data product, it may be an investment data product. So it's a pre-packaged extraction of data from different sources. But now I have a product that has a whole lifecycle. I can version it. I have new features that get added. And it's a very business data consumer centric. It uses machine learning. For instance, I may be able to tell whether this data product has stale data. Who is using that data? Based on the usage of the data, I may have a new data products that get allocated. I may even have the ability to take existing data products, mash them up into something that I need. So if I'm going to have that kind of power to create a data product, then having a common substrate underneath, it can be very useful. And that could be supercloud where I am making API calls. I don't care where the ERP, the CRM, the survey data, the pricing engine where they sit. For me, there's a logical abstraction. And then I'm building my data product on top of that. So I see a new breed of data products coming out. To answer your question, how early we are or is this even possible? My prediction is that in 2023, we will start seeing more of data products. And then it'll take maybe two to three years for data products to become mainstream. But it's starting this year. >> A subprime mortgages were a data product, definitely were humans involved. All right, let's talk about some of the supercloud, multi-cloud players and what their future looks like. You can kind of pick your favorites. VMware, Snowflake, Databricks, Red Hat, Cisco, Dell, HP, Hashi, IBM, CloudFlare. There's many others. cohesive rubric. Keith, I wanted to start with CloudFlare because they actually use the term supercloud. and just simplifying what they said. They look at it as taking serverless to the max. You write your code and then you can deploy it in seconds worldwide, of course, across the CloudFlare infrastructure. You don't have to spin up containers, you don't go to provision instances. CloudFlare worries about all that infrastructure. What are your thoughts on CloudFlare this approach and their chances to disrupt the current cloud landscape? >> As Larry Ellison said famously once before, the network is the computer, right? I thought that was Scott McNeley. >> It wasn't Scott McNeley. I knew it was on Oracle Align. >> Oracle owns that now, owns that line. >> By purpose or acquisition. >> They should have just called it cloud. >> Yeah, they should have just called it cloud. >> Easier. >> Get ahead. >> But if you think about the CloudFlare capability, CloudFlare in its own right is becoming a decent sized cloud provider. If you have compute out at the edge, when we talk about edge in the sense of CloudFlare and points of presence, literally across the globe, you have all of this excess computer, what do you do with it? First offering, let's disrupt data in the cloud. We can't start the conversation talking about data. When they say we're going to give you object-oriented or object storage in the cloud without egress charges, that's disruptive. That we can start to think about supercloud capability of having compute EC2 run in AWS, pushing and pulling data from CloudFlare. And now, I've disrupted this roach motel data structure, and that I'm freely giving away bandwidth, basically. Well, the next layer is not that much more difficult. And I think part of CloudFlare's serverless approach or supercloud approaches so that they don't have to commit to a certain type of compute. It is advantageous. It is a feature for me to be able to go to EC2 and pick a memory heavy model, or a compute heavy model, or a network heavy model, CloudFlare is taken away those knobs. and I'm just giving code and allowing that to run. CloudFlare has a massive network. If I can put the code closest using the CloudFlare workers, if I can put that code closest to where the data is at or residing, super compelling observation. The question is, does it scale? I don't get the 238 services. While Server List is great, I have to know what I'm going to build. I don't have a Cognito, or RDS, or all these other services that make AWS, GCP, and Azure appealing from a builder's perspective. So it is a very interesting nascent start. It's great because now they can hide compute. If they don't have the capacity, they can outsource that maybe at a cost to one of the other cloud providers, but kind of hiding the compute behind the surplus architecture is a really unique approach. >> Yeah. And they're dipping their toe in the water. And they've announced an object store and a database platform and more to come. We got to wrap. So I wonder, Sanjeev and Maribel, if you could maybe pick some of your favorites from a competitive standpoint. Sanjeev, I felt like just watching Snowflake, I said, okay, in my opinion, they had the right strategy, which was to run on all the clouds, and then try to create that abstraction layer and data sharing across clouds. Even though, let's face it, most of it might be happening across regions if it's happening, but certainly outside of an individual account. But I felt like just observing them that anybody who's traditional on-prem player moving into the clouds or anybody who's a cloud native, it just makes total sense to write to the various clouds. And to the extent that you can simplify that for users, it seems to be a logical strategy. Maybe as I said before, what multi-cloud should have been. But are there companies that you're watching that you think are ahead in the game , or ones that you think are a good model for the future? >> Yes, Snowflake, definitely. In fact, one of the things we have not touched upon very much, and Keith mentioned a little bit, was data sovereignty. Data residency rules can require that certain data should be written into certain region of a certain cloud. And if my cloud provider can abstract that or my database provider, then that's perfect for me. So right now, I see Snowflake is way ahead of this pack. I would not put MongoDB too far behind. They don't really talk about this thing. They are in a different space, but now they have a lakehouse, and they've got all of these other SQL access and new capabilities that they're announcing. So I think they would be quite good with that. Oracle is always a dark forest. Oracle seems to have revived its Cloud Mojo to some extent. And it's doing some interesting stuff. Databricks is the other one. I have not seen Databricks. They've been very focused on lakehouse, unity, data catalog, and some of those pieces. But they would be the obvious challenger. And if they come into this space of supercloud, then they may bring some open source technologies that others can rely on like Delta Lake as a table format. >> Yeah. One of these infrastructure players, Dell, HPE, Cisco, even IBM. I mean, I would be making my infrastructure as programmable and cloud friendly as possible. That seems like table stakes. But Maribel, any companies that stand out to you that we should be paying attention to? >> Well, we already mentioned a bunch of them, so maybe I'll go a slightly different route. I'm watching two companies pretty closely to see what kind of traction they get in their established companies. One we already talked about, which is VMware. And the thing that's interesting about VMware is they're everywhere. And they also have the benefit of having a foot in both camps. If you want to do it the old way, the way you've always done it with VMware, they got all that going on. If you want to try to do a more cross-cloud, multi-cloud native style thing, they're really trying to build tools for that. So I think they have really good access to buyers. And that's one of the reasons why I'm interested in them to see how they progress. The other thing, I think, could be a sleeping horse oddly enough is Google Cloud. They've spent a lot of work and time on Anthos. They really need to create a certain set of differentiators. Well, it's not necessarily in their best interest to be the best multi-cloud player. If they decide that they want to differentiate on a different layer of the stack, let's say they want to be like the person that is really transformative, they talk about transformation cloud with analytics workloads, then maybe they do spend a good deal of time trying to help people abstract all of the other underlying infrastructure and make sure that they get the sexiest, most meaningful workloads into their cloud. So those are two people that you might not have expected me to go with, but I think it's interesting to see not just on the things that might be considered, either startups or more established independent companies, but how some of the traditional providers are trying to reinvent themselves as well. >> I'm glad you brought that up because if you think about what Google's done with Kubernetes. I mean, would Google even be relevant in the cloud without Kubernetes? I could argue both sides of that. But it was quite a gift to the industry. And there's a motivation there to do something unique and different from maybe the other cloud providers. And I'd throw in Red Hat as well. They're obviously a key player and Kubernetes. And Hashi Corp seems to be becoming the standard for application deployment, and terraform, or cross-clouds, and there are many, many others. I know we're leaving lots out, but we're out of time. Folks, I got to thank you so much for your insights and your participation in Supercloud2. Really appreciate it. >> Thank you. >> Thank you. >> Thank you. >> This is Dave Vellante for John Furrier and the entire Cube community. Keep it right there for more content from Supercloud2.

(cheerful music) >> Welcome to theCUBE's continuing coverage of AMD's 4th Generation EPYC launch. I'm Dave Nicholson, and I'm here in our Palo Alto studios talking to Greg Gibby, senior product manager, data center products from AMD, and Mohan Rokkam, technical marketing engineer at Dell. Welcome, gentlemen. >> Mohan: Hello, hello. >> Greg: Thank you. Glad to be here. >> Good to see each of you. Just really quickly, I want to start out. Let us know a little bit about yourselves. Mohan, let's start with you. What do you do at Dell exactly? >> So I'm a technical marketing engineer at Dell. I've been with Dell for around 15 years now and my goal is to really look at the Dell powered servers and see how do customers take advantage of some of the features we have, especially with the AMD EPYC processors that have just come out. >> Greg, and what do you do at AMD? >> Yeah, so I manage our software-defined infrastructure solutions team, and really it's a cradle to grave where we work with the ISVs in the market, so VMware, Nutanix, Microsoft, et cetera, to integrate the features that we're putting into our processors and make sure they're ready to go and enabled. And then we work with our valued partners like Dell on putting those into actual solutions that customers can buy and then we work with them to sell those solutions into the market. >> Before we get into the details on the 4th Generation EPYC launch and what that means and why people should care. Mohan, maybe you can tell us a little about the relationship between Dell and AMD, how that works, and then Greg, if you've got commentary on that afterwards, that'd be great. Yeah, Mohan. >> Absolutely. Dell and AMD have a long standing partnership, right? Especially now with EPYC series. We have had products since EPYC first generation. We have been doing solutions across the whole range of Dell ecosystem. We have integrated AMD quite thoroughly and effectively and we really love how performant these systems are. So, yeah. >> Dave: Greg, what are your thoughts? >> Yeah, I would say the other thing too is, is that we need to point out is that we both have really strong relationships across the entire ecosystem. So memory vendors, the software providers, et cetera, we have technical relationships. We're working with them to optimize solutions so that ultimately when the customer buys that, they get a great user experience right out of the box. >> So, Mohan, I know that you and your team do a lot of performance validation testing as time goes by. I suspect that you had early releases of the 4th Gen EPYC processor technology. What have you been seeing so far? What can you tell us? >> AMD has definitely knocked it out of the park. Time and again, in the past four generations, in the past five years alone, we have done some database work where in five years, we have seen five exit performance. And across the board, AMD is the leader in benchmarks. We have done virtualization where we would consolidate from five into one system. We have world records in AI, we have world records in databases, we have world records in virtualization. The AMD EPYC solutions has been absolutely performant. I'll leave you with one number here. When we went from top of Stack Milan to top of Stack Genoa, we saw a performance bump of 120%. And that number just blew my mind. >> So that prompts a question for Greg. Often we, in industry insiders, think in terms of performance gains over the last generation or the current generation. A lot of customers in the real world, however, are N - 2. They're a ways back, so I guess two points on that. First of all, the kinds of increases the average person is going to see when they move to this architecture, correct me if I'm wrong, but it's even more significant than a lot of the headline numbers because they're moving two generations, number one. Correct me if I'm wrong on that, but then the other thing is the question to you, Greg. I like very long complicated questions, as you can tell. The question is, is it okay for people to skip generations or make the case for upgrades, I guess is the problem? >> Well, yeah, so a couple thoughts on that first too. Mohan talked about that five X over the generation improvements that we've seen. The other key point with that too is that we've made significant process improvements along the way moving to seven nanocomputer to now five nanocomputer and that's really reducing the total amount of power or the performance per watt the customers can realize as well. And when we look at why would a customer want to upgrade, right? And I want to rephrase that as to why aren't you? And there is a real cost of not upgrading. And so when you look at infrastructure, the average age of a server in the data center is over five years old. And if you look at the most popular processors that were sold in that timeframe, it's 8, 10, 12 cores. So now you've got a bunch of servers that you need in order to deliver the applications and meet your SLAs to your end users, and all those servers pull power. They require maintenance. They have the opportunity to go down, et cetera. You got to pay licensing and service and support costs and all those. And when you look at all the costs that roll up, even though the hardware is paid for just to keep the lights on, and not even talking about the soft costs of unplanned downtime, and, "I'm not meeting your SLAs," et cetera, it's very expensive to keep those servers running. Now, if you refresh, and now you have processors that have 32, 64, 96 cores, now you can consolidate that infrastructure and reduce your total power bill. You can reduce your CapEx, you reduce your ongoing OpEx, you improve your performance, and you improve your security profile. So it really is more cost effective to refresh than not to refresh. >> So, Mohan, what has your experience been double clicking on this topic of consolidation? I know that we're going to talk about virtualization in some of the results that you've seen. What have you seen in that regard? Does this favor better consolidation and virtualized environments? And are you both assuring us that the ROI and TCO pencil out on these new big, bad machines? >> Greg definitely hit the nail on the head, right? We are seeing tremendous savings really, if you're consolidating from two generations old. We went from, as I said, five is to one. You're going from five full servers, probably paid off down to one single server. That itself is, if you look at licensing costs, which again, with things like VMware does get pretty expensive. If you move to a single system, yes, we are at 32, 64, 96 cores, but if you compare to the licensing costs of 10 cores, two sockets, that's still pretty significant, right? That's one huge thing. Another thing which actually really drives the thing is we are looking at security, and in today's environment, security becomes a major driving factor for upgrades. Dell has its own setups, cyber-resilient architecture, as we call it, and that really is integrated from processor all the way up into the OS. And those are some of the features which customers really can take advantage of and help protect their ecosystems. >> So what kinds of virtualized environments did you test? >> We have done virtualization across primary codes with VMware, but the Azure Stack, we have looked at Nutanix. PowerFlex is another one within Dell. We have vSAN Ready Nodes. All of these, OpenShift, we have a broad variety of solutions from Dell and AMD really fits into almost every one of them very well. >> So where does hyper-converged infrastructure fit into this puzzle? We can think of a server as something that contains not only AMD's latest architecture but also latest PCIe bus technology and all of the faster memory, faster storage cards, faster nicks, all of that comes together. But how does that play out in Dell's hyper-converged infrastructure or HCI strategy? >> Dell is a leader in hyper-converged infrastructure. We have the very popular VxRail line, we have the PowerFlex, which is now going into the AWS ecosystem as well, Nutanix, and of course, Azure Stack. With all these, when you look at AMD, we have up to 96 cores coming in. We have PCIe Gen 5 which means you can now connect dual port, 100 and 200 gig nicks and get line rate on those so you can connect to your ecosystem. And I don't know if you've seen the news, 200, 400 gig routers and switchers are selling out. That's not slowing down. The network infrastructure is booming. If you want to look at the AI/ML side of things, the VDI side of things, accelerator cards are becoming more and more powerful, more and more popular. And of course they need that higher end data path that PCIe Gen 5 brings to the table. GDDR5 is another huge improvement in terms of performance and latencies. So when we take all this together, you talk about hyper-converged, all of them add into making sure that A, with hyper-converged, you get ease of management, but B, just 'cause you have ease of management doesn't mean you need to compromise on anything. And the AMD servers effectively are a no compromise offering that we at Dell are able to offer to our customers. >> So Greg, I've got a question a little bit from left field for you. We covered Supercompute Conference 2022. We were in Dallas a couple of weeks ago, and there was a lot of discussion of the current processor manufacturer battles, and a lot of buzz around 4th Gen EPYC being launched and what's coming over the next year. Do you have any thoughts on what this architecture can deliver for us in terms of things like AI? We talk about virtualization, but if you look out over the next year, do you see this kind of architecture driving significant change in the world? >> Yeah, yeah, yeah, yeah. It has the real potential to do that from just the building blocks. So we have our chiplet architecture we call it. So you have an IO die and then you have your core complexes that go around that. And we integrate it all with our infinity fabric. That architecture allows you, if we wanted to, replace some of those CCDs with specific accelerators. And so when we look two, three, four years down the road, that architecture and that capability already built into what we're delivering and can easily be moved in. We just need to make sure that when you look at doing that, that the power that's required to do that and the software, et cetera, and those accelerators actually deliver better performance as a dedicated engine versus just using standard CPUs. The other things that I would say too is if you look at emerging workloads. So data center modernization is one of the buzzwords in cloud native, right? And these container environments, well, AMD'S architecture really just screams support for those type of environments, right? Where when you get into these larger core accounts and the consolidation that Mohan talked about. Now when I'm in a container environment, that blast radius so a lot of customers have concerns around, "Hey, having a single point of failure and having more than X number of cores concerns me." If I'm in containers, that becomes less of a concern. And so when you look at cloud native, containerized applications, data center modernization, AMD's extremely well positioned to take advantage of those use cases as well. >> Yeah, Mohan, and when we talk about virtualization, I think sometimes we have to remind everyone that yeah, we're talking about not only virtualization that has a full-blown operating system in the bucket, but also virtualization where the containers have microservices and things like that. I think you had something to add, Mohan. >> I did, and I think going back to the accelerator side of business, right? When we are looking at the current technology and looking at accelerators, AMD has done a fantastic job of adding in features like AVX-512, we have the bfloat16 and eight features. And some of what these do is they're effectively built-in accelerators for certain workloads especially in the AI and media spaces. And in some of these use cases we look at, for example, are inference. Traditionally we have used external accelerator cards, but for some of the entry level and mid-level use cases, CPU is going to work just fine especially with the newer CPUs that we are seeing this fantastic performance from. The accelerators just help get us to the point where if I'm at the edge, if I'm in certain use cases, I don't need to have an accelerator in there. I can run most of my inference workloads right on the CPU. >> Yeah, yeah. You know the game. It's an endless chase to find the bottleneck. And once we've solved the puzzle, we've created a bottleneck somewhere else. Back to the supercompute conversations we had, specifically about some of the AMD EPYC processor technology and the way that Dell is packaging it up and leveraging things like connectivity. That was one of the things that was also highlighted. This idea that increasingly connectivity is critically important, not just for supercomputing, but for high-performance computing that's finding its way out of the realms of Los Alamos and down to the enterprise level. Gentlemen, any more thoughts about the partnership or maybe a hint at what's coming in the future? I know that the original AMD announcement was announcing and previewing some things that are rolling out over the next several months. So let me just toss it to Greg. What are we going to see in 2023 in terms of rollouts that you can share with us? >> That I can share with you? Yeah, so I think look forward to see more advancements in the technology at the core level. I think we've already announced our product code name Bergamo, where we'll have up to 128 cores per socket. And then as we look in, how do we continually address this demand for data, this demand for, I need actionable insights immediately, look for us to continue to drive performance leadership in our products that are coming out and address specific workloads and accelerators where appropriate and where we see a growing market. >> Mohan, final thoughts. >> On the Dell side, of course, we have four very rich and configurable options with AMD EPYC servers. But beyond that, you'll see a lot more solutions. Some of what Greg has been talking about around the next generation of processors or the next updated processors, you'll start seeing some of those. and you'll definitely see more use cases from us and how customers can implement them and take advantage of the features that. It's just exciting stuff. >> Exciting stuff indeed. Gentlemen, we have a great year ahead of us. As we approach possibly the holiday seasons, I wish both of you well. Thank you for joining us. From here in the Palo Alto studios, again, Dave Nicholson here. Stay tuned for our continuing coverage of AMD's 4th Generation EPYC launch. Thanks for joining us. (cheerful music)

(bright music) >> Hello everyone. Welcome to theCUBE's coverage of AWS re:Invent 22. I'm John Furrier, host of theCUBE. Got some great coverage here talking about software supply chain and sustainability in the cloud. We've got a great conversation. Gunnar Hellekson, vice president and general manager at Red Hat Enterprise Linux and Business Unit of Red Hat. Thanks for coming on. And Adnan Ijaz, director of product management of commercial software services, AWS. Gentlemen, thanks for joining me today. >> It's a pleasure. (Adnan speaks indistinctly) >> You know, the hottest topic coming out of Cloud Native developer communities is slide chain software sustainability. This is a huge issue. As open source continues to power away and fund and grow this next generation modern development environment, you know, supply chain, you know, sustainability is a huge discussion because you got to check things out, what's in the code. Okay, open source is great, but now we got to commercialize it. This is the topic, Gunnar, let's get in with you. What are you seeing here and what's some of the things that you're seeing around the sustainability piece of it? Because, you know, containers, Kubernetes, we're seeing that that run time really dominate this new abstraction layer, cloud scale. What's your thoughts? >> Yeah, so I, it's interesting that the, you know, so Red Hat's been doing this for 20 years, right? Making open source safe to consume in the enterprise. And there was a time when in order to do that you needed to have a long term life cycle and you needed to be very good at remediating security vulnerabilities. And that was kind of, that was the bar that you had to climb over. Nowadays with the number of vulnerabilities coming through, what people are most worried about is, kind of, the providence of the software and making sure that it has been vetted and it's been safe, and that things that you get from your vendor should be more secure than things that you've just downloaded off of GitHub, for example. Right? And that's a place where Red Hat's very comfortable living, right? Because we've been doing it for 20 years. I think there's another aspect to this supply chain question as well, especially with the pandemic. You know, we've got these supply chains have been jammed up. The actual physical supply chains have been jammed up. And the two of these issues actually come together, right? Because as we go through the pandemic, we've got these digital transformation efforts, which are in large part, people creating software in order to manage better their physical supply chain problems. And so as part of that digital transformation, you have another supply chain problem, which is the software supply chain problem, right? And so these two things kind of merge on these as people are trying to improve the performance of transportation systems, logistics, et cetera. Ultimately, it all boils down to, both supply chain problems actually boil down to a software problem. It's very interesting. >> Well, that is interesting. I want to just follow up on that real quick if you don't mind. Because if you think about the convergence of the software and physical world, you know, that's, you know, IOT and also hybridcloud kind of plays into that at scale, this opens up more surface area for attacks, especially when you're under a lot of pressure. This is where, you know, you have a service area on the physical side and you have constraints there. And obviously the pandemic causes problems. But now you've got the software side. How are you guys handling that? Can you just share a little bit more of how you guys looking at that with Red Hat? What's the customer challenge? Obviously, you know, skills gaps is one, but, like, that's a convergence at the same time more security problems. >> Yeah, yeah, that's right. And certainly the volume of, if we just look at security vulnerabilities themselves, just the volume of security vulnerabilities has gone up considerably as more people begin using the software. And as the software becomes more important to, kind of, critical infrastructure. More eyeballs around it and so we're uncovering more problems, which is kind of, that's okay, that's how the world works. And so certainly the number of remediations required every year has gone up. But also the customer expectations, as I mentioned before, the customer expectations have changed, right? People want to be able to show to their auditors and to their regulators that no, in fact, I can show the providence of the software that I'm using. I didn't just download something random off the internet. I actually have like, you know, adults paying attention to how the software gets put together. And it's still, honestly, it's still very early days. I think as an industry, I think we're very good at managing, identifying remediating vulnerabilities in the aggregate. We're pretty good at that. I think things are less clear when we talk about, kind of, the management of that supply chain, proving the providence, and creating a resilient supply chain for software. We have lots of tools, but we don't really have lots of shared expectations. And so it's going to be interesting over the next few years, I think we're going to have more rules are going to come out. I see NIST has already published some of them. And as these new rules come out, the whole industry is going to have to kind of pull together and really rally around some of this shared understanding so we can all have shared expectations and we can all speak the same language when we're talking about this problem. >> That's awesome. Adnan, Amazon web service is obviously the largest cloud platform out there. You know, the pandemic, even post pandemic, some of these supply chain issues, whether it's physical or software, you're also an outlet for that. So if someone can't buy hardware or something physical, they can always get to the cloud. You guys have great network compute and whatnot and you got thousands of ISVs across the globe. How are you helping customers with this supply chain problem? Because whether it's, you know, I need to get in my networking gears and delay, I'm going to go to the cloud and get help there. Or whether it's knowing the workloads and what's going on inside them with respect to open source. 'Cause you've got open source, which is kind of an external forcing function. You've got AWS and you got, you know, physical compute stores, networking, et cetera. How are you guys helping customers with the supply chain challenge, which could be an opportunity? >> Yeah, thanks John. I think there are multiple layers to that. At the most basic level, we are helping customers by abstracting away all these data center constructs that they would have to worry about if they were running their own data centers. They would have to figure out how the networking gear, you talk about, you know, having the right compute, right physical hardware. So by moving to the cloud, at least they're delegating that problem to AWS and letting us manage and making sure that we have an instance available for them whenever they want it. And if they want to scale it, the capacity is there for them to use. Now then, so we kind of give them space to work on the second part of the problem, which is building their own supply chain solutions. And we work with all kinds of customers here at AWS from all different industry segments, automotive, retail, manufacturing. And you know, you see the complexity of the supply chain with all those moving pieces, like hundreds and thousands of moving pieces, it's very daunting. And then on the other hand, customers need more better services. So you need to move fast. So you need to build your agility in the supply chain itself. And that is where, you know, Red Hat and AWS come together. Where we can enable customers to build their supply chain solutions on platforms like Red Hat Enterprise Linux RHEL or Red Hat OpenShift on AWS, we call it ROSA. And the benefit there is that you can actually use the services that are relevant for the supply chain solutions like Amazon managed blockchain, you know, SageMaker. So you can actually build predictive analytics, you can improve forecasting, you can make sure that you have solutions that help you identify where you can cut costs. And so those are some of the ways we're helping customers, you know, figure out how they actually want to deal with the supply chain challenges that we're running into in today's world. >> Yeah, and you know, you mentioned sustainability outside of software sustainability, you know, as people move to the cloud, we've reported on SiliconANGLE here in theCUBE, that it's better to have the sustainability with the cloud because then the data centers aren't using all that energy too. So there's also all kinds of sustainability advantages. Gunnar, because this is kind of how your relationship with Amazon's expanded. You mentioned ROSA, which is Red Hat, you know, on OpenShift, on AWS. This is interesting because one of the biggest discussions is skills gap, but we were also talking about the fact that the humans are a huge part of the talent value. In other words, the humans still need to be involved. And having that relationship with managed services and Red Hat, this piece becomes one of those things that's not talked about much, which is the talent is increasing in value, the humans, and now you got managed services on the cloud. So we'll look at scale and human interaction. Can you share, you know, how you guys are working together on this piece? 'Cause this is interesting, 'cause this kind of brings up the relationship of that operator or developer. >> Yeah, yeah. So I think there's, so I think about this in a few dimensions. First is that it's difficult to find a customer who is not talking about automation at some level right now. And obviously you can automate the processes and the physical infrastructure that you already have, that's using tools like Ansible, right? But I think that combining it with the elasticity of a solution like AWS, so you combine the automation with kind of elastic and converting a lot of the capital expenses into operating expenses, that's a great way actually to save labor, right? So instead of like racking hard drives, you can have somebody do something a little more like, you know, more valuable work, right? And so, okay, but that gives you a platform. And then what do you do with that platform? You know, if you've got your systems automated and you've got this kind of elastic infrastructure underneath you, what you do on top of it is really interesting. So a great example of this is the collaboration that we had with running the RHEL workstation on AWS. So you might think, like, well why would anybody want to run a workstation on a cloud? That doesn't make a whole lot of sense. Unless you consider how complex it is to set up, if you have, the use case here is like industrial workstations, right? So it's animators, people doing computational fluid dynamics, things like this. So these are industries that are extremely data heavy. Workstations have very large hardware requirements, often with accelerated GPUs and things like this. That is an extremely expensive thing to install on-premise anywhere. And if the pandemic taught us anything, it's if you have a bunch of very expensive talent and they all have to work from home, it is very difficult to go provide them with, you know, several tens of thousands of dollars worth of workstation equipment. And so combine the RHEL workstation with the AWS infrastructure and now all that workstation computational infrastructure is available on demand and available right next to the considerable amount of data that they're analyzing or animating or working on. So it's a really interesting, it was actually, this is an idea that was actually born with the pandemic. >> Yeah. >> And it's kind of a combination of everything that we're talking about, right? It's the supply chain challenges of the customer, it's the lack of talent, making sure that people are being put to their best and highest use. And it's also having this kind of elastic, I think, OpEx heavy infrastructure as opposed to a CapEx heavy infrastructure. >> That's a great example. I think that illustrates to me what I love about cloud right now is that you can put stuff in the cloud and then flex what you need, when you need it, in the cloud rather than either ingress or egress of data. You just get more versatility around the workload needs, whether it's more compute or more storage or other high level services. This is kind of where this next gen cloud is going. This is where customers want to go once their workloads are up and running. How do you simplify all this and how do you guys look at this from a joint customer perspective? Because that example I think will be something that all companies will be working on, which is put it in the cloud and flex to whatever the workload needs and put it closer to the compute. I want to put it there. If I want to leverage more storage and networking, well, I'll do that too. It's not one thing, it's got to flex around. How are you guys simplifying this? >> Yeah, I think, so, I'll give my point of view and then I'm very curious to hear what Adnan has to say about it. But I think about it in a few dimensions, right? So there is a technically, like, any solution that Adnan's team and my team want to put together needs to be kind of technically coherent, right? Things need to work well together. But that's not even most of the job. Most of the job is actually ensuring an operational consistency and operational simplicity, so that everything is, the day-to-day operations of these things kind of work well together. And then also, all the way to things like support and even acquisition, right? Making sure that all the contracts work together, right? It's a really... So when Adnan and I think about places of working together, it's very rare that we're just looking at a technical collaboration. It's actually a holistic collaboration across support, acquisition, as well as all the engineering that we have to do. >> Adnan, your view on how you're simplifying it with Red Hat for your joint customers making collaborations? >> Yeah, Gunnar covered it well. I think the benefit here is that Red Hat has been the leading Linux distribution provider. So they have a lot of experience. AWS has been the leading cloud provider. So we have both our own points of view, our own learning from our respective set of customers. So the way we try to simplify and bring these things together is working closely. In fact, I sometimes joke internally that if you see Gunnar and my team talking to each other on a call, you cannot really tell who belongs to which team. Because we're always figuring out, okay, how do we simplify discount experience? How do we simplify programs? How do we simplify go to market? How do we simplify the product pieces? So it's really bringing our learning and share our perspective to the table and then really figure out how do we actually help customers make progress. ROSA that we talked about is a great example of that, you know, together we figured out, hey, there is a need for customers to have this capability in AWS and we went out and built it. So those are just some of the examples in how both teams are working together to simplify the experience, make it complete, make it more coherent. >> Great, that's awesome. Next question is really around how you help organizations with the sustainability piece, how to support them simplifying it. But first, before we get into that, what is the core problem around this sustainability discussion we're talking about here, supply chain sustainability, what is the core challenge? Can you both share your thoughts on what that problem is and what the solution looks like and then we can get into advice? >> Yeah. Well from my point of view, it's, I think, you know, one of the lessons of the last three years is every organization is kind of taking a careful look at how resilient it is, or I should say, every organization learned exactly how resilient it was, right? And that comes from both the physical challenges and the logistics challenges that everyone had, the talent challenges you mentioned earlier. And of course the software challenges, you know, as everyone kind of embarks on this digital transformation journey that we've all been talking about. And I think, so I really frame it as resilience, right? And resilience at bottom is really about ensuring that you have options and that you have choices. The more choices you have, the more options you have, the more resilient you and your organization is going to be. And so I know that's how I approach the market. I'm pretty sure that's how Adnan is approaching the market, is ensuring that we are providing as many options as possible to customers so that they can assemble the right pieces to create a solution that works for their particular set of challenges or their unique set of challenges and unique context. Adnan, does that sound about right to you? >> Yeah, I think you covered it well. I can speak to another aspect of sustainability, which is becoming increasingly top of mind for our customers. Like, how do they build products and services and solutions and whether it's supply chain or anything else which is sustainable, which is for the long term good of the planet. And I think that is where we have also been very intentional and focused in how we design our data center, how we actually build our cooling system so that those are energy efficient. You know, we are on track to power all our operations with renewable energy by 2025, which is five years ahead of our initial commitment. And perhaps the most obvious example of all of this is our work with ARM processors, Graviton3, where, you know, we are building our own chip to make sure that we are designing energy efficiency into the process. And you know, the ARM Graviton3 processor chips, they are about 60% more energy efficient compared to some of the CD6 comparable. So all those things that also we are working on in making sure that whatever our customers build on our platform is long term sustainable. So that's another dimension of how we are working that into our platform. >> That's awesome. This is a great conversation. You know, the supply chain is on both sides, physical and software. You're starting to see them come together in great conversations. And certainly moving workloads to the cloud and running them more efficiently will help on the sustainability side, in my opinion. Of course, you guys talked about that and we've covered it. But now you start getting into how to refactor, and this is a big conversation we've been having lately is as you not just lift and shift, but replatform it and refactor, customers are seeing great advantages on this. So I have to ask you guys, how are you helping customers and organizations support sustainability and simplify the complex environment that has a lot of potential integrations? Obviously API's help of course, but that's the kind of baseline. What's the advice that you give customers? 'Cause you know, it can look complex and it becomes complex, but there's an answer here. What's your thoughts? >> Yeah, I think, so whenever I get questions like this from customers, the first thing I guide them to is, we talked earlier about this notion of consistency and how important that is. One way to solve the problem is to create an entirely new operational model, an entirely new acquisition model, and an entirely new stack of technologies in order to be more sustainable. That is probably not in the cards for most folks. What they want to do is have their existing estate and they're trying to introduce sustainability into the work that they are already doing. They don't need to build another silo in order to create sustainability, right? And so there has to be some common threads, there has to be some common platforms across the existing estate and your more sustainable estate, right? And so things like Red Hat Enterprise Linux, which can provide this kind of common, not just a technical substrate, but a common operational substrate on which you can build these solutions. If you have a common platform on which you are building solutions, whether it's RHEL or whether it's OpenShift or any of our other platforms, that creates options for you underneath. So that in some cases maybe you need to run things on-premises, some things you need to run in the cloud, but you don't have to profoundly change how you work when you're moving from one place to another. >> Adnan, what's your thoughts on the simplification? >> Yeah, I mean, when you talk about replatforming and refactoring, it is a daunting undertaking, you know, especially in today's fast paced world. But the good news is you don't have to do it by yourself. Customers don't have to do it on their own. You know, together AWS and Red Hat, we have our rich partner ecosystem, you know, AWS has over 100,000 partners that can help you take that journey, the transformation journey. And within AWS and working with our partners like Red Hat, we make sure that we have- In my mind, there are really three big pillars that you have to have to make sure that customers can successfully re-platform, refactor their applications to the modern cloud architecture. You need to have the rich set of services and tools that meet their different scenarios, different use cases. Because no one size fits all. You have to have the right programs because sometimes customers need those incentives, they need those, you know, that help in the first step. And last but not least, they need training. So all of that, we try to cover that as we work with our customers, work with our partners. And that is where, you know, together we try to help customers take that step, which is a challenging step to take. >> Yeah, you know, it's great to talk to you guys, both leaders in your field. Obviously Red Hats, I remember the days back when I was provisioning and loading OSs on hardware with CDs, if you remember those days, Gunnar. But now with the high level services, if you look at this year's reinvent, and this is kind of my final question for the segment is, that we'll get your reaction to, last year we talked about higher level service. I sat down with Adam Saleski, we talked about that. If you look at what's happened this year, you're starting to see people talk about their environment as their cloud. So Amazon has the gift of the CapEx, all that investment and people can operate on top of it. They're calling that environment their cloud. Okay? For the first time we're seeing this new dynamic where it's like they have a cloud, but Amazon's the CapEx, they're operating. So, you're starting to see the operational visibility, Gunnar, around how to operate this environment. And it's not hybrid, this, that, it's just, it's cloud. This is kind of an inflection point. Do you guys agree with that or have a reaction to that statement? Because I think this is, kind of, the next gen supercloud-like capability. We're going, we're building the cloud. It's now an environment. It's not talking about private cloud, this cloud, it's all cloud. What's your reaction? >> Yeah, I think, well, I think it's very natural. I mean, we use words like hybridcloud, multicloud, I guess supercloud is what the kids are saying now, right? It's all describing the same phenomena, right? Which is being able to take advantage of lots of different infrastructure options, but still having something that creates some commonality among them so that you can manage them effectively, right? So that you can have, kind of, uniform compliance across your estate. So that you can have, kind of, you can make the best use of your talent across the estate. I mean this is, it's a very natural thing. >> John: They're calling it cloud, the estate is the cloud. >> Yeah. So yeah, so fine, if it means that we no longer have to argue about what's multicloud and what's hybridcloud, I think that's great. Let's just call it cloud. >> Adnan, what's your reaction, 'cause this is kind of the next gen benefits of higher level services combined with amazing, you know, compute and resource at the infrastructure level. What's your view on that? >> Yeah, I think the construct of a unified environment makes sense for customers who have all these use cases which require, like for instance, if you are doing some edge computing and you're running WS outpost or you know, wavelength and these things. So, and it is fair for customer to think that, hey, this is one environment, same set of tooling that they want to build that works across all their different environments. That is why we work with partners like Red Hat so that customers who are running Red Hat Enterprise Linux on-premises and who are running in AWS get the same level of support, get the same level of security features, all of that. So from that sense, it actually makes sense for us to build these capabilities in a way that customers don't have to worry about, okay, now I'm actually in the AWS data center versus I'm running outpost on-premises. It is all one. They just use the same set of CLI, command line APIs and all of that. So in that sense it actually helps customers have that unification so that consistency of experience helps their workforce and be more productive versus figuring out, okay, what do I do, which tool I use where? >> Adnan, you just nailed it. This is about supply chain sustainability, moving the workloads into a cloud environment. You mentioned wavelength, this conversation's going to continue. We haven't even talked about the edge yet. This is something that's going to be all about operating these workloads at scale and all with the cloud services. So thanks for sharing that and we'll pick up that edge piece later. But for re:Invent right now, this is really the key conversation. How to make the sustained supply chain work in a complex environment, making it simpler. And so thanks you for sharing your insights here on theCUBE. >> Thanks, thanks for having us. >> Okay, this is theCUBE's coverage of AWS re:Invent 22. I'm John Furrier, your host. Thanks for watching. (bright music)

>>Hey everyone, it's Vegas. Welcome back. We know you've been watching all day. We appreciate that. We always love being able to bring you some great content on the Cube Live from AWS Reinvented 22. Lisa Martin here with Paul Gill. And Paul, we've had such a great event. We've, I think we've done nearly 70 interviews since we started on the Cube on >>Monday night. I believe we just hit 70. Yeah, we just hit 70. You must feel like you've done half of >>Them. I really do. But we've been having great conversations. There's so much innovation going on at aws. Nothing slowed them down during the pandemic. We love also talking about the innovation, the flywheel that is their partner ecosystem. We're gonna have a great conversation about that >>Next. And as we've said, going back to day one, the energy of the show is remarkable. And here we are, we're getting late in the afternoon on day two, and there's just as much activity, just as much energy out there as, as the beginning of the first day. I have no doubt day three will be the >>Same. I agree. There's been no slowdown. We've got two guests here. We're gonna have a great conversation. Chuck Kubota joins us, senior Director of Cloud Services, GTM at Red Hat. Great to have you on the program. And Ted Stanton, global head of Sales, red Hat at IBM at aws. Welcome. >>Thanks for having us. >>How's the show going so far for you guys? >>It's a blur. Is it? Oh my gosh. >>Don't they all >>Blur? Well, yes, yes. I actually like last year a bit better. It was half the size. Yeah. And a lot easier to get around, but this is back to normal, so >>It is back to normal. Yeah. And and Ted, we're hearing north of 50,000 in-person attendees. I heard a, something I think was published. I heard the second hand over like 300,000 online attendees. This is maybe the biggest one we ever had. >>Yeah, yeah, I would agree. And frankly, it's my first time here, so I am massively impressed with the overall show, the meeting with partners, the meeting with customers, the announcements that were made, just fantastic. And >>If you remember back to two years ago, there were a lot of questions about whether in-person conferences would ever return and the volume that we used to see them. And that appears to be >>The case. I think we, I think we've answered, I think AWS has answered that for us, which I'm very pleased to see. Talk about some of those announcements. Ted. There's been so much that that's always one of the things we know and love about re men is there's slew of announcements. You were saying this morning, Paul, and then keynote, you lost, you stopped counting after I >>Lost 15, I lost count for 15. I think it was over 30 announcements this morning alone >>Where IBM and Red Hat are concern. What are some of the things that you are excited about in terms of some of the news, the innovation, and where the partnership is going? >>Well, definitely where the partnership is going, and I think even as we're speaking right now, is a keynote going on with Aruba, talking about some of the partners and the way in which we support partners and the new technologies and the new abilities for partners to take advantage of these technologies to frankly delight our customers is really what most excites me. >>Chuck, what about you? What's going on with Red Hat? You've been there a long time. Sales, everything, picking up customers, massively transforming. What are some of the things that you're seeing and that you're excited >>About? Yeah, I mean, first of all, you know, as customers have, you know, years ago discovered it's not competitively advantageous to manage their own data centers in most cases. So they would like to, you know, give that responsibility to Amazon. We're seeing them move further up the stack, right? So that would be more beyond the operating system, the application platforms like OpenShift. And now we have a managed application platform built on OpenShift called Red Out OpenShift service on AWS or Rosa. And then we're even further going up the stack with that with, we just announced this week that red out OpenShift data science is available in the AWS marketplace, runs on Rosa, helps break the land speed record to getting those data models out there that are so important to make, you know, help organizations become more, much more data driven to remain competitive themselves. >>So talk about Rosa and how it differs from previous iterations of, of OpenShift. I mean, you had, you had an online version of OpenShift several years ago. What's different about Rosa? >>Yeah, so the old OpenShift online that was several years old, right? For one thing, wasn't a joint partnership between Amazon and Red Hat. So we work together, right? Very closely on this, which is great. Also, the awesome thing about Rosa, you know, if you think about like OpenShift for, for, as a matter of fact, Amazon is the number one cloud that OpenShift runs on, right? So a lot of those customers want to take advantage of their committed spins, their EDPs, they want one bill. And so Rosa comes through the one bill comes through the marketplace, right? Which is, which is totally awesome. Not only that or financially backing OpenShift with a 99.95% financially backed sla, right? We didn't have that before either, right? >>When you say financially backed sla, >>What do you mean? That means that if we drop below 99.95% of availability, we're gonna give you some money back, right? So we're really, you know, for lack of better words, putting our money where our mouth is. Absolutely right. >>And, and some of the key reasons that we even work together to build Rosa was frankly we've had a mirror of customers and virtually every single region, every single industry been using OpenShift on AWS for years, right? And we listened to them, they wanted a more managed version of it and we worked very closely together. And what's really great about Rosa too is we built some really fantastic integrations with some of the AWS native services like API gateway, Amazon rds, private link, right? To make it very simple and easy for customers to get started. We talked a little bit about the marketplace, but it's also available just on the AWS console, right? So customers can get started in a pay as you go fashion start to use it. And if they wanna move into a more commitment, more of a set schedule of payments, they can move into a marketplace private offer. >>Chuck, talk about, how about Rosen? How is unlocking the power of technology like containers Kubernetes for customers while dialing down some of the complexity that's >>There? Yeah, I mean if you think about, you know, kind of what we did, you know, earlier on, right? If you think about like virtualization, how it dialed down the complexity of having to get something rack, get a blade rack, stack cable and cooled every time you wanted to deploy new application, right? So what we do is we, our message is this, we want developers to focus on what matters most. And that's build, deploy, and running applications. Most of our customers are not in the business of building app platforms. They're not in the business of building platforms like banks, I, you know, financials, right? Government, et cetera. Right? So what we do is we allow those developers that are, enable those developers that know Java and Node and springing and what have you, just to keep writing what they know. And then, you know, I don't wanna get too technical here, but get pushed through way and, and OpenShift takes care of the rest, builds it for them, runs it through a pipeline, a CICD pipeline, goes through all the testing and quality gates and things like that, deploys it, auto wires it up, you know, to monitoring which is what you need. >>And we have all kinds of other, you know, higher order services and an ecosystem around that. And oh, by the way, also plugging into and taking advantage of the services like rds, right? If you're gonna write an application, a tradition, a cloud native application on Amazon, you're probably going to wanna run it in Rosa and consuming one of those databases, right? Like RDS or Aurora, what have you. >>And I, and I would say it's not even just the customers. We have a variety of ecosystem partners, both of our partners leveraging it as well. We have solos built their executive management system that they go ahead and turn and sell to their customers, streamlines data and collects data from a variety of different sources. They decided, you know, it's better to run that on top of Rosa than manage OpenShift themselves. We've seen IBM restack a lot of their software, you know, to run on top of Rose, take advantage of that capabilities. So lots of partners as well as customers are taking advantage of fully managed stack of that OpenShift that that turnkey capabilities that it provides >>For, for OpenShift customers who wanna move to Rose, is that gonna be a one button migration? Is that gonna be, can they run both environments simultaneously and migrate over time? What kind of tools are you giving them? >>We have quite, we have quite a few migration tools such as conveyor, right? That's one of our projects, part of our migration application toolkit, right? And you know, with those, there's also partners like Trilio, right? Who can help move, you know, applications back 'em up. In fact, we're working on a pretty cool joint go to market with that right now. But generally speaking, the OpenShift experience that the customers that we have know and love and those who have never used OpenShift either are coming to it as well via Rosa, right? The experience is primarily the same. You don't have to really retrain your people, right? If anything, there's a reduction in operational cost. We increase developer productivity cuz we manage so much of the stack for you. We have SRE site reliability engineers that are backing the platform that proactively get ahead of anything that may go wrong. So maybe you don't even notice if something went wrong, wrong. And then also reactively fixing it if it comes to that, right? So, you know, all those kind of things that your customers are having to do on their own or hire a contractor, a consultant, what have to do Now we benefit from a managed offering in the cloud, right? In Amazon, right? And your developers still have that great experience too, like to say, you know, again, break the land speed record to prod. >>I >>Like that. And, and I would actually say migrations from OpenShift are on premise. OpenShift to Rosa maybe only represents about a third of the customers we have. About another third of the customers is frankly existing AWS customers. Maybe they're doing Kubernetes, do it, the, you know, do it themselves. We're struggling with some of the management of that. And so actually started to lean on top of using Rosa as a better platform to actually build upon their applications. And another third, we have quite a few customers that were frankly new OpenShift customers, new Red Hat customers and new AWS customers that were looking to build that next cloud native application. Lots of in the startup space that I've actually chosen to go with Rosa. >>It's funny you mention that because the largest Rosa consumer is new to OpenShift. Oh wow. Right. That's pretty, that's pretty powerful, right? It's not just for existing OpenShift customers, existing OpenShift. If you're running OpenShift, you know, on EC two, right. Self-managed, there's really no better way to run it than Rosa. You know, I think about whether this is the 10th year, 10 year anniversary of re right? Right. Yep. This is also the 10 year anniversary of OpenShift. Yeah, right. I think it one oh came out about sometime around a week, 10 years ago, right? When I came over to Red Hat in 2015. You know, if you, if you know your Kubernetes history was at July 25th, I think was when Kubernetes ga, July 25th, 2015 is when it g you have >>A good >>Memory. Well I remember those days back then, right? Those were fun, right? The, we had a, a large customer roll out on OpenShift three, which is our OpenShift RE based on Kubernetes. And where do you think they ran Amazon, right? Naturally. So, you know, as you move forward and, and, and OpenShift V four came out, the, reduces the operational complexity and becomes even more powerful through our operator framework and things like that. Now they revolved up to Rosa, right? And again, to help those customers focus on what matters most. And that's the applications, not the containers, not those underlying implementation and technical details while critically important, are not necessarily core to the business to most of our customers. >>Tremendous amount of innovation in OpenShift in a decade, >>Pardon me? >>Tremendous amount of innovation in OpenShift in the >>Last decade. Oh absolutely. And, and and tons more to come like every day. Right. I think what you're gonna see more of is, you know, as Kubernetes becomes more, more and more of the plumbing, you know, I call 'em productive abstractions on top of it, as you mentioned earlier, unlocking the power of these technologies while minimizing, even hiding the complexity of them so that you can just move fast Yeah. And safely move fast. >>I wanna be sure we get to, to marketplaces because you have been, red Hat has made, has really stepped up as commitment to the AWS marketplace. Why are you doing that now and how are, how are the marketplaces evolving as a channel for you? >>Well, cuz our customers want us to be there, right? I mean we, we, we are customer centric, customer first approach. Our customers want to buy through the marketplace. If you're an Amazon, if you're an Amazon customer, it's really easy for you to go procure software through the marketplace and have, instead of having to call up Red Hat and get on paper and write a second check, right? One stop shop one bill. Right? That is very, very attractive to our customers. Not only that, it opens up other ways to buy, you know, Ted mentioned earlier, you know, pay as you go buy the drink pricing using exactly what you need right now. Right? You know, AWS pioneered that, right? That provides that elasticity, you know, one of the core tenants at aws, AWS cloud, right? And we weren't able to get that with the traditional self-managed on Red Hat paper subscriptions. >>Talk a little bit about the go to market, what's, you talked about Ted, the kind of the three tenants of, of customer types. But talk a little bit about the gtm, the joint go to market, the joint engineering, so we get an understanding of how customers engage multiple options. >>Yeah, I mean, so if you think about go to market, you know, and the way I think of it is it's the intersection of a few areas, right? So the product and the product experience that we work together has to be so good that a customer or user, actually many start talk, talking about users now cuz it's self-service has a more than likely chance of getting their application to prod without ever talking to a person. Which is historically not what a lot of enterprise software companies are able to do, right? So that's one of those biggest things we do. We want customers to just be successful, turn it on, get going, be productive, right? At the same time we wanna to position the product in such a way that's differentiating that you can't get that experience anywhere else. And then part of that is ensuring that the education and enablement of our customers and our partners as such that they use the platform the right way to get as much value out of as possible. >>All backed by, you know, a very smart field that ensures that the customer get is making the right decision. A customer success org, this is attached to my org now that we can go on site and team with our customers to make sure that they get their first workloads up as quickly as possible, by the way, on our date, our, our dime. And then SRE and CEA backing that up with support and operational integrity to ensure that the service is always up and available so you can sleep, sleep, sleep well at night. Right? Right. One of our PMs of, of of Rosa, he says, what does he say? He says, Rosa allows organizations, enables organizations to go from 24 7 operations to nine to five innovation. Right? And that's powerful. That's how our customers remain more competitive running on Rosa with aws, >>When you're in customer conversations and you have 30 seconds, what are the key differentiators of the solution that you go boom, boom, boom, and they just go, I get it. >>Well, I mean, my 32nd elevator pitch, I think I've already said, I'll say it again. And that is OpenShift allows you to focus on your applications, build, deploy, and run applications while unlocking the power of the technologies like containers and Kubernetes and hiding or minimizing those complexities. So you can do as fast as possible. >>Mic drop Ted, question for you? Sure. Here we are at the, this is the, I leave the 11th reinvent, 10th anniversary, 11th event. You've been in the industry a long time. What is your biggest takeaway from what's been announced and discussed so far at Reinvent 22, where the AWS and and its partner ecosystem is concerned? If you had 30 seconds or if you had a bumper sticker to put on your DeLorean, what would you say? >>I would say we're continuing to innovate on behalf of our customers, but making sure we bring all of our partners and ecosystems along in that innovation. >>Yeah. I love the customer obsession on both sides there. Great work guides. Congrats on the 10th anniversary of OpenShift and so much evolution, the customer obsession is really clear for both of you guys. We appreciate your time. You're gonna have to come back now. Absolutely. Absolutely. Thank you. All right. Thank you so much for joining us. For our guests and for Paul Gillin. I'm Lisa Martin. You're watching The Cube, the leader in live enterprise and emerging tech coverage.

>>Hello, brilliant humans and welcome back to Las Vegas, Nevada, where we are live from the AWS Reinvent Show floor here with the cube. My name is Savannah Peterson, joined with Dave Valante, and we have a very exciting conversation with you. Two, two companies you may have heard of. We've got AWS and Red Hat in the house. Manu and Joel, thank you so much for being here. Love this little fist bump. Started off, that's right. Before we even got rolling, Manu, you said that you wanted this to be the best segment of, of the cubes airing. We we're doing over a hundred segments, so you're gonna have to bring the heat. >>We're ready. We're did go. Are we ready? Yeah, go. We're ready. Let's bring it on. >>We're ready. All right. I'm, I'm ready. Dave's ready. Let's do it. How's the show going for you guys real quick before we dig in? >>Yeah, I think after Covid, it's really nice to see that we're back into the 2019 level and, you know, people just want to get out, meet people, have that human touch with each other, and I think a lot of trust gets built as a functional that, so it's super amazing to see our partners and customers here at Reedman. Yeah, >>And you've got a few in the house. That's true. Just a few maybe, maybe a couple >>Very few shows can say that, by the way. Yeah, it's maybe a handful. >>I think one of the things we were saying, it's almost like the entire Silicon Valley descended in the expo hall area, so >>Yeah, it's >>For a few different reasons. There's a few different silicon defined. Yeah, yeah, yeah. Don't have strong on for you. So far >>It's, it's, it is amazing. It's the 10th year, right? It's decade, I think I've been to five and it's, it grows every single year. It's the, you have to be here. It's as simple as that. And customers from every single industry are here too. You don't get, a lot of shows have every single industry and almost every single location around the globe. So it's, it's a must, must be >>Here. Well, and the personas evolved, right? I was at reinvent number two. That was my first, and it was all developers, not all, but a lot of developers. And today it's a business mix, really is >>Totally, is a business mix. And I just, I've talked about it a little bit down the show, but the diversity on the show floor, it's the first time I've had to wait in line for the ladies' room at a tech conference. Almost a two decade career. It is, yeah. And it was really refreshing. I'm so impressed. So clearly there's a commitment to community, but also a commitment to diversity. Yeah. And, and it's brilliant to see on the show floor. This is a partnership that is robust and has been around for a little while. Money. Why don't you tell us a little bit about the partnership here? >>Yes. So Red Hand and AWS are best friends, you know, forever together. >>Aw, no wonder we got the fist bumps and all the good vibes coming out. I know, it's great. I love that >>We have a decade of working together. I think the relationship in the first phase was around running rail bundled with E two. Sure. We have about 70,000 customers that are running rail, which are running mission critical workloads such as sap, Oracle databases, bespoke applications across the state of verticals. Now, as more and more enterprise customers are finally, you know, endorsing and adopting public cloud, I think that business is just gonna continue to grow. So a, a lot of progress there. The second titration has been around, you know, developers tearing Red Hat and aws, Hey, listen, we wanna, it's getting competitive. We wanna deliver new features faster, quicker, we want scale and we want resilience. So just entire push towards devs containers. So that's the second chapter with, you know, red Hat OpenShift on aws, which launched as a, a joint manage service in 2021 last year. And I think the third phase, which you're super excited about, is just bringing the ease of consumption, one click deployment, and then having our customers, you know, benefit from the joint committed spend programs together. So, you know, making sure that re and Ansible and JBoss, the entire portfolio of Red Hat products are available on AWS marketplace. So that's the 1, 2, 3, it of our relationship. It's a decade of working together and, you know, best friends are super committed to making sure our customers and partners continue successful. >>Yeah, that he said it, he said it perfectly. 2008, I know you don't like that, but we started with Rel on demand just in 2008 before E two even had a console. So the partnership has been there, like Manu says, for a long time, we got the partnership, we got the products up there now, and we just gotta finalize that, go to market and get that gas on the fire. >>Yeah. So Graviton Outpost, local zones, you lead it into all the new stuff. So that portends, I mean, 2008, we're talking two years after the launch of s3. >>That's right. >>Right. So, and now look, so is this a harbinger of things to come with these new innovations? >>Yeah, I, I would say, you know, the innovation is a key tenant of our partnership, our relationship. So if you look at from a product standpoint, red Hat or Rel was one of the first platforms that made a support for graviton, which is basically 40% better price performance than any other distribution. Then that translated into making sure that Rel is available on all of our regions globally. So this year we launched Switzerland, Spain, India, and Red Hat was available on launch there, support for Nitro support for Outpost Rosa support on Outpost as well. So I think that relationship, that innovation on the product side, that's pretty visible. I think that innovation again then translates into what we are doing on marketplace with one click deployments we spoke about. I think the third aspect of the know innovation is around making sure that we are making our partners and our customers successful. So one of the things that we've done so far is Joe leads a, you know, a black belt team that really goes into each customer opportunity, making sure how can we help you be successful. We launched and you know, we should be able to share that on a link. After this, we launched like a big playlist, which talks about every single use case on how do you get successful and running OpenShift on aws. So that innovation on behalf of our customers partners to make them successful, that's been a key tenant for us together as >>Well. That's right. And that team that Manu is talking about, we're gonna, gonna 10 x that team this year going into January. Our fiscal yield starts in January. Love that. So yeah, we're gonna have a lot of no hiring freeze over here. Nope. No ma'am. No. Yeah, that's right. Yeah. And you know what I love about working with aws and, and, and Manu just said it very, all of that's customer driven. Every single event that we, that he just talked about in that timeline, it's customer driven, right? Customers wanted rail on demand, customers want JBoss up in the cloud, Ansible this week, you know, everything's up there now. So it's just getting that go to market tight and we're gonna, we're gonna get that done. >>So what's the algorithm for customer driven in terms of taking the input? Because if every customers saying, Hey, I this a >>Really similar >>Question right up, right? I, that's what I want. And if you know, 95% of the customers say it, Jay, maybe that's a good idea. >>Yeah, that's right. Trends. But >>Yeah. You know, 30% you might be like, mm, you know, 20%, you know, how do you guys decide when to put gas on the fire? >>No, that, I think, as I mentioned, there are about 70,000 large customers that are running rail on Easy Two, many of these customers are informing our product strategy. So we have, you know, close to about couple of thousand power users. We have customer advisory booths, and these are the, you know, customers are informing us, Hey, let's get all of the Red Hat portfolio and marketplace support for graviton, support for Outpost. Why don't we, why are we not able to dip into the consumption committed spend programs for both Red Hat and aws? That's right. So it's these power users both at the developer level as well as the guys who are actually doing large commercial consumption. They are the ones who are informing the roadmap for both Red Hat and aws. >>But do, do you codify the the feedback? >>Yeah, I'm like, I wanna see the database, >>The, I think it was, I don't know, it was maybe Chasy, maybe it was Besos, that that data beats intuition. So do you take that information and somehow, I mean, it's global, 70,000 customers, right? And they have different weights, different spending patterns, different levels of maturity. Yeah. Do you, how do you codify that and then ultimately make the decision? Yeah, I >>If, I mean, well you, you've got the strategic advisory boards, which are made up of customers and partners and you know, you get, you get a good, you gotta get a good slice of your customer base to get, and you gotta take their feedback and you gotta do something with it, right? That's the, that's the way we do it and codify it at the product level, I'm sure open source. That's, that's basically how we work at the product level, right? The most elegant solution in open source wins. And that's, that's pretty much how we do that at the, >>I would just add, I think it's also just the implicit trust that the two companies had built with each other, working in the trenches, making our customers and partners successful over the last decade. And Alex, give an example. So that manifests itself in context of like, you know, Amazon and Red Hat just published the entire roadmap for OpenShift. What are the new features that are becoming over the next six to nine to 12 months? It's open source available on GitHub. Customers can see, and then they can basically come back and give feedback like, Hey, you know, we want hip compliance. We just launched. That was a big request that was coming from our >>Customers. That is not any process >>Also for Graviton or Nvidia instances. So I I I think it's a, >>Here's the thing, the reason I'm pounding on this is because you guys have a pretty high hit rate, and I think as a >>Customer, mildly successful company >>As, as a customer advocate, the better, you know, if, if you guys make bets that pay off, it's gonna pay off for customers. Right. And because there's a lot of failures in it. Yeah. I mean, let's face it. That's >>Right. And I think, I think you said the key word bets. You place a lot of small bets. Do you have the, the innovation engine to do that? AWS is the perfect place to place those small bets. And then you, you know, pour gas on the fire when, when they take off. >>Yeah, it's a good point. I mean, it's not expensive to experiment. Yeah. >>Especially in the managed service world. Right? >>And I know you love taking things to market and you're a go to market guy. Let's talk gtm, what's got your snow pumped about GTM for 2023? >>We, we are gonna, you know, 10 x the teams that's gonna be focused on these products, right? So we're gonna also come out with a hybrid committed spend program for our customers that meet them where they want to go. So they're coming outta the data center going into a cloud. We're gonna have a nice financial model for them to do that. And that's gonna take a lot of the friction out. >>Yeah. I mean, you've nailed it. I, I think the, the fact that now entire Red Hat portfolio is available on marketplace, you can do it on one click deployment. It's deeply integrated with Amazon services and the most important part that Joel was making now customers can double dip. They can drive benefit from the consumption committed spend programs, both from Red Hat and from aws, which is amazing. Which is a game changer That's right. For many of our large >>Customers. That's right. And that, so we're gonna, we're gonna really go to town on that next year. That's, and all the, all the resources that I have, which are the technology sellers and the sas, you know, the engineers we're growing this team the most out that team. So it's, >>When you say 10 x, how many are you at now? I'm >>Curious to see where you're headed. Tell you, okay. There's not right? Oh no, there's not one. It's triple digit. Yeah, yeah. >>Today. Oh, sweet. Awesome. >>So, and it's a very sizable team. They're actually making sure that each of our customers are successful and then really making sure that, you know, no customer left behind policy. >>And it's a great point that customers love when Amazonians and Red Hats show up, they love it and it's, they want to get more of it, and we're gonna, we're gonna give it to 'em. >>Must feel great to be loved like that. >>Yeah, that's right. Yeah. Yeah. I would say yes. >>Seems like it's safe to say that there's another decade of partnership between your two companies. >>Hope so. That's right. That's the plan. >>Yeah. And I would say also, you know, just the IBM coming into the mix here. Yeah. I, you know, red Hat has informed the way we have turned around our partnership with ibm, essentially we, we signed the strategic collaboration agreement with the company. All of IBM software now runs on Rosa. So that is now also providing a lot of tailwinds both to our rail customers and as well as Rosa customers. And I think it's a very net creative, very positive for our partnership. >>That's right. It's been very positive. Yep. Yeah. >>You see the >>Billboards positive. Yeah, right. Also that, that's great. Great point, Dave. Yep. We have a, we have a new challenge, a new tradition on the cube here at Reinvent where we're, well, it's actually kind of a glamor moment for you, depending on how you leverage it. We're looking for your 32nd hot take your Instagram reel, your sizzle thought leadership, biggest takeaway, most important theme from this year's show. I know you want, right, Joel? I mean, you TM boy, I feel like you can spit the time. >>Yeah. It is all about Rosa for us. It is all in on that, that's the native OpenShift offering on aws and that's, that's the soundbite we're going go to town with. Now, I don't wanna forget all the other products that are in there, but Rosa is a, is a very key push for us this year. >>Fantastic. All right. Manu. >>I think our customers, it's getting super competitive. Our customers want to innovate just a >>Little bit. >>The enterprise customers see the cloud native companies. I wanna do what these guys are doing. I wanna develop features at a fast clip. I wanna scale, I wanna be resilient. And I think that's really the spirit that's coming out. So to Joel's point, you know, move to worlds containers, serverless, DevOps, which was like, you know, aha, something that's happening on the side of an enterprise is not becoming mainstream. The business is demanding it. The, it is becoming the centerpiece in the business strategy. So that's been really like the aha. Big thing that's happening here. >>Yeah. And those architectures are coming together, aren't they? That's correct. Right. You know, VMs and containers, it used to be one architecture and then at the other end of the spectrum is serverless. People thought of those as different things and now it's a single architecture and, and it's kind of right approach for the right job. >>And, and a compliments say to Red Hat, they do an incredible job of hiding that complexity. Yeah. Yes. And making sure that, you know, for example, just like, make it easier for the developers to create value and then, and you know, >>Yeah, that's right. Those, they were previously siloed architectures and >>That's right. OpenShift wanna be place where you wanna run containers or virtual machines. We want that to be this Yeah. Single place. Not, not go bolt on another piece of architecture to just do one or the other. Yeah. >>And hey, the hybrid cloud vision is working for ibm. No question. You know, and it's achievable. Yeah. I mean, I just, I've said unlike, you know, some of the previous, you know, visions on fixing the world with ai, hybrid cloud is actually a real problem that you're attacking and it's showing the results. Agreed. Oh yeah. >>Great. Alright. Last question for you guys. Cause it might be kind of fun, 10 years from now, oh, we're at another, we're sitting here, we all look the same. Time has passed, but we are not aging, which is a part of the new technology that's come out in skincare. That's my, I'm just throwing that out there. Why not? What do you guys hope that you can say about the partnership and, and your continued commitment to community? >>Oh, that's a good question. You go first this time. Yeah. >>I think, you know, the, you know, for looking into the future, you need to look into the past. And Amazon has always been driven by working back from our customers. That's like our key tenant, principle number 1 0 1. >>Couple people have said that on this stage this week. Yeah. >>Yeah. And I think our partnership, I hope over the next decade continues to keep that tenant as a centerpiece. And then whatever comes out of that, I think we, we are gonna be, you know, working through that. >>Yeah. I, I would say this, I think you said that, well, the customer innovation is gonna lead us to wherever that is. And it's, it's, it's gonna be in the cloud for sure. I think we can say that in 10 years. But yeah, anything from, from AI to the quant quantum computing that IBM's really pushing behind that, you know, those are, those are gonna be things that hopefully we show up on a, on a partnership with Manu in 10 years, maybe sooner. >>Well, whatever happens next, we'll certainly be covering it here on the cube. That's right. Thank you both for being here. Joel Manu, fantastic interview. Thanks to see you guys. Yeah, good to see you brought the energy. I think you're definitely ranking high on the top interviews. We >>Love that for >>The day. >>Thank >>My pleasure >>Job, guys. Now that you're competitive at all, and thank you all for tuning in to our live coverage here from AWS Reinvent in Las Vegas, Nevada, with Dave Valante. I'm Savannah Peterson. You're watching The Cube, the leading source for high tech coverage.

>>Hello everyone. Welcome to the Cube's coverage of AWS Reinvent 22. I'm John Ferer, host of the Cube. Got some great coverage here talking about software supply chain and sustainability in the cloud. We've got a great conversation. Gunner Helickson, Vice President and general manager at Red Hat Enterprise Linux and Business Unit of Red Hat. Thanks for coming on. And Edon Eja Director, Product Management of commercial software services aws. Gentlemen, thanks for joining me today. >>Oh, it's a pleasure. >>You know, the hottest topic coming out of Cloudnative developer communities is slide chain software sustainability. This is a huge issue. As open source continues to power away and fund and grow this next generation modern development environment, you know, supply chain, you know, sustainability is a huge discussion because you gotta check things out where, what's in the code. Okay, open source is great, but now we gotta commercialize it. This is the topic, Gunner, let's get in, get with you. What, what are you seeing here and what's some of the things that you're seeing around the sustainability piece of it? Because, you know, containers, Kubernetes, we're seeing that that run time really dominate this new abstraction layer, cloud scale. What's your thoughts? >>Yeah, so I, it's interesting that the, you know, so Red Hat's been doing this for 20 years, right? Making open source safe to consume in the enterprise. And there was a time when in order to do that you needed to have a, a long term life cycle and you needed to be very good at remediating security vulnerabilities. And that was kind of, that was the bar that you had that you had to climb over. Nowadays with the number of vulnerabilities coming through, what people are most worried about is, is kind of the providence of the software and making sure that it has been vetted and it's been safe, and that that things that you get from your vendor should be more secure than things that you've just downloaded off of GitHub, for example. Right? And that's, that's a, that's a place where Red Hat's very comfortable living, right? >>Because we've been doing it for, for 20 years. I think there, there's another, there's another aspect to this, to this supply chain question as well, especially with the pandemic. You know, we've got these, these supply chains have been jammed up. The actual physical supply chains have been jammed up. And, and the two of these issues actually come together, right? Because as we've been go, as we go through the pandemic, we've had these digital transformation efforts, which are in large part people creating software in order to manage better their physical supply chain problems. And so as part of that digital transformation, you have another supply chain problem, which is the software supply chain problem, right? And so these two things kind of merge on these as people are trying to improve the performance of transportation systems, logistics, et cetera. Ultimately it all boils down to it all. Both supply chain problems actually boil down to a software problem. It's very >>Interesting that, Well, that is interesting. I wanna just follow up on that real quick if you don't mind. Because if you think about the convergence of the software and physical world, you know, that's, you know, IOT and also hybrid cloud kind of plays into that at scale, this opens up more surface area for attacks, especially when you're under a lot of pressure. This is where, you know, you can, you have a service area in the physical side and you have constraints there. And obviously the pandemic causes problems, but now you've got the software side. Can you, how are you guys handling that? Can you just share a little bit more of how you guys are looking at that with Red Hat? What's, what's the customer challenge? Obviously, you know, skills gaps is one, but like that's a convergence at the same time. More security problems. >>Yeah, yeah, that's right. And certainly the volume of, if we just look at security vulnerabilities themselves, just the volume of security vulnerabilities has gone up considerably as more people begin using the software. And as the software becomes more important to kind of critical infrastructure, more eyeballs are on it. And so we're uncovering more problems, which is kind of, that's, that's okay. That's how the world works. And so certainly the, the number of remediations required every year has gone up. But also the customer expectations, as I've mentioned before, the customer expectations have changed, right? People want to be able to show to their auditors and to their regulators that no, we, we, in fact, I can show the providence of the software that I'm using. I didn't just download something random off the internet. I actually have, like you, you know, adults paying attention to the, how the software gets put together. >>And it's still, honestly, it's still very early days. We can, I think the, in as an industry, I think we're very good at managing, identifying remediating vulnerabilities in the aggregate. We're pretty good at that. I think things are less clear when we talk about kind of the management of that supply chain, proving the provenance, proving the, and creating a resilient supply chain for software. We have lots of tools, but we don't really have lots of shared expectations. Yeah. And so it's gonna be interesting over the next few years, I think we're gonna have more rules are gonna come out. I see NIST has already, has already published some of them. And as these new rules come out, the whole industry is gonna have to kind of pull together and, and really and really rally around some of this shared understanding so we can all have shared expectations and we can all speak the same language when we're talking about this >>Problem. That's awesome. A and Amazon web service is obviously the largest cloud platform out there, you know, the pandemic, even post pandemic, some of these supply chain issues, whether it's physical or software, you're also an outlet for that. So if someone can't buy hardware or, or something physical, they can always get the cloud. You guys have great network compute and whatnot and you got thousands of ISVs across the globe. How are you helping customers with this supply chain problem? Because whether it's, you know, I need to get in my networking gears delayed, I'm gonna go to the cloud and get help there. Or whether it's knowing the workloads and, and what's going on inside them with respect open source. Cause you've got open source, which is kind of an external forcing function. You got AWS and you got, you know, physical compute stores, networking, et cetera. How are you guys helping customers with the supply chain challenge, which could be an opportunity? >>Yeah, thanks John. I think there, there are multiple layers to that. At, at the most basic level we are helping customers buy abstracting away all these data central constructs that they would have to worry about if they were running their own data centers. They would have to figure out how the networking gear, you talk about, you know, having the right compute, right physical hardware. So by moving to the cloud, at least they're delegating that problem to AWS and letting us manage and making sure that we have an instance available for them whenever they want it. And if they wanna scale it, the, the, the capacity is there for them to use now then that, so we kind of give them space to work on the second part of the problem, which is building their own supply chain solutions. And we work with all kinds of customers here at AWS from all different industry segments, automotive, retail, manufacturing. >>And you know, you see that the complexity of the supply chain with all those moving pieces, like hundreds and thousands of moving pieces, it's very daunting. So cus and then on the other hand, customers need more better services. So you need to move fast. So you need to build, build your agility in the supply chain itself. And that is where, you know, Red Hat and AWS come together where we can build, we can enable customers to build their supply chain solutions on platform like Red Hat Enterprise, Linux Rail or Red Hat OpenShift on, on aws. We call it Rosa. And the benefit there is that you can actually use the services that we, that are relevant for the supply chain solutions like Amazon managed blockchain, you know, SageMaker. So you can actually build predictive and s you can improve forecasting, you can make sure that you have solutions that help you identify where you can cut costs. And so those are some of the ways we are helping customers, you know, figure out how they actually wanna deal with the supply chain challenges that we're running into in today's world. >>Yeah, and you know, you mentioned sustainability outside of software su sustainability, you know, as people move to the cloud, we've reported on silicon angle here in the cube that it's better to have the sustainability with the cloud because then the data centers aren't using all that energy too. So there's also all kinds of sustainability advantages, Gunner, because this is, this is kind of how your relationship with Amazon's expanded. You mentioned Rosa, which is Red Hat on, you know, on OpenShift, on aws. This is interesting because one of the biggest discussions is skills gap, but we were also talking about the fact that the humans are huge part of the talent value. In other words, the, the humans still need to be involved and having that relationship with managed services and Red Hat, this piece becomes one of those things that's not talked about much, which is the talent is increasing in value the humans, and now you got managed services on the cloud, has got scale and human interactions. Can you share, you know, how you guys are working together on this piece? Cuz this is interesting cuz this kind of brings up the relationship of that operator or developer. >>Yeah, Yeah. So I think there's, so I think about this in a few dimensions. First is that the kind of the, I it's difficult to find a customer who is not talking about automation at some level right now. And obviously you can automate the processes and, and the physical infrastructure that you already have that's using tools like Ansible, right? But I think that the, combining it with the, the elasticity of a solution like aws, so you combine the automation with kind of elastic and, and converting a lot of the capital expenses into operating expenses, that's a great way actually to save labor, right? So instead of like racking hard drives, you can have somebody who's somebody do something a little more like, you know, more valuable work, right? And so, so okay, but that gives you a platform and then what do you do with that platform? >>And if you've got your systems automated and you've got this kind of elastic infrastructure underneath you, what you do on top of it is really interesting. So a great example of this is the collaboration that, that we had with running the rel workstation on aws. So you might think like, well why would anybody wanna run a workstation on, on a cloud? That doesn't make a whole lot of sense unless you consider how complex it is to set up, if you have the, the use case here is like industrial workstations, right? So it's animators, people doing computational fluid dynamics, things like this. So these are industries that are extremely data heavy. They have workstations have very large hardware requirements, often with accelerated GPUs and things like this. That is an extremely expensive thing to install on premise anywhere. And if the pandemic taught us anything, it's, if you have a bunch of very expensive talent and they all have to work from a home, it is very difficult to go provide them with, you know, several tens of thousands of dollars worth of worth of worth of workstation equipment. >>And so combine the rail workstation with the AWS infrastructure and now all that workstation computational infrastructure is available on demand and on and available right next to the considerable amount of data that they're analyzing or animating or, or, or working on. So it's a really interesting, it's, it was actually, this is an idea that I was actually born with the pandemic. Yeah. And, and it's kind of a combination of everything that we're talking about, right? It's the supply chain challenges of the customer, It's the lack of lack of talent, making sure that people are being put their best and highest use. And it's also having this kind of elastic, I think, opex heavy infrastructure as opposed to a CapEx heavy infrastructure. >>That's a great example. I think that's illustrates to me what I love about cloud right now is that you can put stuff in, in the cloud and then flex what you need when you need it at in the cloud rather than either ingress or egress data. You, you just more, you get more versatility around the workload needs, whether it's more compute or more storage or other high level services. This is kind of where this NextGen cloud is going. This is where, where, where customers want to go once their workloads are up and running. How do you simplify all this and how do you guys look at this from a joint customer perspective? Because that example I think will be something that all companies will be working on, which is put it in the cloud and flex to the, whatever the workload needs and put it closer to the work compute. I wanna put it there. If I wanna leverage more storage and networking, Well, I'll do that too. It's not one thing. It's gotta flex around what's, how are you guys simplifying this? >>Yeah, I think so for, I'll, I'll just give my point of view and then I'm, I'm very curious to hear what a not has to say about it, but the, I think and think about it in a few dimensions, right? So there's, there is a, technically like any solution that aan a nun's team and my team wanna put together needs to be kind of technically coherent, right? The things need to work well together, but that's not the, that's not even most of the job. Most of the job is actually the ensuring and operational consistency and operational simplicity so that everything is the day-to-day operations of these things kind of work well together. And then also all the way to things like support and even acquisition, right? Making sure that all the contracts work together, right? It's a really in what, So when Aon and I think about places of working together, it's very rare that we're just looking at a technical collaboration. It's actually a holistic collaboration across support acquisition as well as all the engineering that we have to do. >>And on your, your view on how you're simplifying it with Red Hat for your joint customers making Collabo >>Yeah. Gun, Yeah. Gunner covered it. Well I think the, the benefit here is that Red Hat has been the leading Linux distribution provider. So they have a lot of experience. AWS has been the leading cloud provider. So we have both our own point of views, our own learning from our respective set of customers. So the way we try to simplify and bring these things together is working closely. In fact, I sometimes joke internally that if you see Ghana and my team talking to each other on a call, you cannot really tell who who belongs to which team. Because we're always figuring out, okay, how do we simplify discount experience? How do we simplify programs? How do we simplify go to market? How do we simplify the product pieces? So it's really bringing our, our learning and share our perspective to the table and then really figure out how do we actually help customers make progress. Rosa that we talked about is a great example of that, you know, you know, we, together we figured out, hey, there is a need for customers to have this capability in AWS and we went out and built it. So those are just some of the examples in how both teams are working together to simplify the experience, make it complete, make it more coherent. >>Great. That's awesome. That next question is really around how you help organizations with the sustainability piece, how to support them, simplifying it. But first, before we get into that, what is the core problem around this sustainability discussion we're talking about here, supply chain sustainability, What is the core challenge? Can you both share your thoughts on what that problem is and what the solution looks like and then we can get into advice? >>Yeah. Well from my point of view, it's, I think, you know, one of the lessons of the last three years is every organization is kind of taking a careful look at how resilient it is. Or ever I should say, every organization learned exactly how resilient it was, right? And that comes from both the, the physical challenges and the logistics challenges that everyone had. The talent challenges you mentioned earlier. And of course the, the software challenges, you know, as everyone kind of embarks on this, this digital transformation journey that, that we've all been talking about. And I think, so I really frame it as, as resilience, right? And and resilience is at bottom is really about ensuring that you have options and that you have choices. The more choices you have, the more options you have, the more resilient you, you and your organization is going to be. And so I know that that's how, that's how I approach the market. I'm pretty sure that's exact, that's how AON is, has approaching the market, is ensuring that we are providing as many options as possible to customers so that they can assemble the right, assemble the right pieces to create a, a solution that works for their particular set of challenges or their unique set of challenges and and unique context. Aon, is that, does that sound about right to you? Yeah, >>I think you covered it well. I, I can speak to another aspect of sustainability, which is becoming increasingly top of mind for our customer is like how do they build products and services and solutions and whether it's supply chain or anything else which is sustainable, which is for the long term good of the, the planet. And I think that is where we have been also being very intentional and focused in how we design our data center. How we actually build our cooling system so that we, those are energy efficient. You know, we, we are on track to power all our operations with renewable energy by 2025, which is five years ahead of our initial commitment. And perhaps the most obvious example of all of this is our work with arm processors Graviton three, where, you know, we are building our own chip to make sure that we are designing energy efficiency into the process. And you know, we, there's the arm graviton, three arm processor chips, there are about 60% more energy efficient compared to some of the CD six comparable. So all those things that are also we are working on in making sure that whatever our customers build on our platform is long term sustainable. So that's another dimension of how we are working that into our >>Platform. That's awesome. This is a great conversation. You know, the supply chain is on both sides, physical and software. You're starting to see them come together in great conversations and certainly moving workloads to the cloud running in more efficiently will help on the sustainability side, in my opinion. Of course, you guys talked about that and we've covered it, but now you start getting into how to refactor, and this is a big conversation we've been having lately, is as you not just lift and ship but re-platform and refactor, customers are seeing great advantages on this. So I have to ask you guys, how are you helping customers and organizations support sustainability and, and simplify the complex environment that has a lot of potential integrations? Obviously API's help of course, but that's the kind of baseline, what's the, what's the advice that you give customers? Cause you know, it can look complex and it becomes complex, but there's an answer here. What's your thoughts? >>Yeah, I think so. Whenever, when, when I get questions like this from from customers, the, the first thing I guide them to is, we talked earlier about this notion of consistency and how important that is. It's one thing, it it, it is one way to solve the problem is to create an entirely new operational model, an entirely new acquisition model and an entirely new stack of technologies in order to be more sustainable. That is probably not in the cards for most folks. What they want to do is have their existing estate and they're trying to introduce sustainability into the work that they are already doing. They don't need to build another silo in order to create sustainability, right? And so there have to be, there has to be some common threads, there has to be some common platforms across the existing estate and your more sustainable estate, right? >>And, and so things like Red Hat enterprise Linux, which can provide this kind of common, not just a technical substrate, but a common operational substrate on which you can build these solutions if you have a common platform on which you are building solutions, whether it's RHEL or whether it's OpenShift or any of our other platforms that creates options for you underneath. So that in some cases maybe you need to run things on premise, some things you need to run in the cloud, but you don't have to profoundly change how you work when you're moving from one place to another. >>And that, what's your thoughts on, on the simplification? >>Yeah, I mean think that when you talk about replatforming and refactoring, it is a daunting undertaking, you know, in today's, in the, especially in today's fast paced work. So, but the good news is you don't have to do it by yourself. Customers don't have to do it on their own. You know, together AWS and Red Hat, we have our rich partner ecosystem, you know AWS over AWS has over a hundred thousand partners that can help you take that journey, the transformation journey. And within AWS and working with our partners like Red Hat, we make sure that we have all in, in my mind there are really three big pillars that you have to have to make sure that customers can successfully re-platform refactor their applications to the modern cloud architecture. You need to have the rich set of services and tools that meet their different scenarios, different use cases. Because no one size fits all. You have to have the right programs because sometimes customers need those incentives, they need those, you know, that help in the first step and last but no needs, they need training. So all of that, we try to cover that as we work with our customers, work with our partners and that is where, you know, together we try to help customers take that step, which is, which is a challenging step to take. >>Yeah. You know, it's great to talk to you guys, both leaders in your field. Obviously Red hats, well story history. I remember the days back when I was provisioning, loading OSS on hardware with, with CDs, if you remember, that was days gunner. But now with high level services, if you look at this year's reinvent, and this is like kind of my final question for the segment is then we'll get your reaction to is last year we talked about higher level services. I sat down with Adam Celski, we talked about that. If you look at what's happened this year, you're starting to see people talk about their environment as their cloud. So Amazon has the gift of the CapEx, the all that, all that investment and people can operate on top of it. They're calling that environment their cloud. Okay, For the first time we're seeing this new dynamic where it's like they have a cloud, but they're Amazon's the CapEx, they're operating. So you're starting to see the operational visibility gun around how to operate this environment. And it's not hybrid this, that it's just, it's cloud. This is kind of an inflection point. Do you guys agree with that or, or having a reaction to that statement? Because I, I think this is kind of the next gen super cloud-like capability. It's, it's, we're going, we're building the cloud. It's now an environment. It's not talking about private cloud, this cloud, it's, it's all cloud. What's your reaction? >>Yeah, I think, well I think it's a very natural, I mean we used words like hybrid cloud, multi-cloud, if, I guess super cloud is what the kids are saying now, right? It's, it's all, it's all describing the same phenomena, right? Which is, which is being able to take advantage of lots of different infrastructure options, but still having something that creates some commonality among them so that you can, so that you can manage them effectively, right? So that you can have kind of uniform compliance across your estate so that you can have kind of, you can make the best use of your talent across the estate. I mean this is a, this is, it's a very natural thing. >>They're calling it cloud, the estate is the cloud. >>Yeah. So yeah, so, so fine if it, if it means that we no longer have to argue about what's multi-cloud and what's hybrid cloud, I think that's great. Let's just call it cloud. >>And what's your reaction, cuz this is kind of the next gen benefits of, of higher level services combined with amazing, you know, compute and, and resource at the infrastructure level. What's your, what's your view on that? >>Yeah, I think the construct of a unified environment makes sense for customers who have all these use cases which require, like for instance, if you are doing some edge computing and you're running it WS outpost or you know, wave lent and these things. So, and, and it is, it is fear for customer to say, think that hey, this is one environment, same set of tooling that they wanna build that works across all their different environments. That is why we work with partners like Red Hat so that customers who are running Red Hat Enterprise Linux on premises and who are running in AWS get the same level of support, get the same level of security features, all of that. So from that sense, it actually makes sense for us to build these capabilities in a way that customers don't have to worry about, Okay, now I'm actually in the AWS data center versus I'm running outpost on premises. It is all one. They, they just use the same set of cli command line APIs and all of that. So in that sense, it's actually helps customers have that unification so that that consistency of experience helps their workforce and be more productive versus figuring out, okay, what do I do, which tool I use? Where >>And on you just nailed it. This is about supply chain sustainability, moving the workloads into a cloud environment. You mentioned wavelength, this conversation's gonna continue. We haven't even talked about the edge yet. This is something that's gonna be all about operating these workloads at scale and all the, with the cloud services. So thanks for sharing that and we'll pick up that edge piece later. But for reinvent right now, this is really the key conversation. How to bake the sustained supply chain work in a complex environment, making it simpler. And so thanks for sharing your insights here on the cube. >>Thanks. Thanks for having >>Us. Okay, this is the cube's coverage of ados Reinvent 22. I'm John Fur, your host. Thanks for watching.