(upbeat music) >> Hello everyone, welcome to this CUBE Showcase, accelerating business transformation with VMware Cloud on AWS. It's a solution innovation conversation with two great guests, Fred Wurden, VP of Commercial Services at AWS and Narayan Bharadwaj, who's the VP and General Manager of Cloud Solutions at VMware. Gentlemen, thanks for joining me on the showcase. >> Great to be here. >> Great. Thanks for having us on. It's a great topic. >> We've been covering this VMware cloud on AWS since the launch going back and it's been amazing to watch the evolution from people saying, Oh, it's the worst thing I've ever seen. What's this mean? And the press were not really on board with the vision, but as it played out as you guys had announced together, it did work out great for VMware. It did work out great for AWS and it continues two years later and I want to just get an update from you guys on where you guys see this has been going. I'll see multiple years. Where is the evolution of the solution as we are right now coming off VMware explorer just recently and going in to re:Invent, which is only a couple weeks away Feels like tomorrow. But as we prepare, a lot going on. Where are we with the evolution of the solution? >> I mean, first thing I want to say is October 2016 was a seminal moment in the history of IT. When Pat Gelsinger and Andy Jassy came together to announce this. And I think John, you were there at the time I was there. It was a great, great moment. We launched the solution in 2017 year after that at VMworld, back when we called it VMworld. I think we have gone from strength to strength. One of the things that has really mattered to us is we've learned from AWS also in the processes, this notion of working backwards. So we really, really focused on customer feedback as we built a service offering now five years old. Pretty remarkable journey. In the first years we tried to get across all the regions, that was a big focus because there was so much demand for it. In the second year, we started going really on enterprise great features. We invented this pretty awesome feature called Stretched Clusters, where you could stretch a vSphere cluster using vSAN and NSX-T across to AZs in the same region. Pretty phenomenal four nines of availability that applications started to get with that particular feature. And we kept moving forward, all kinds of integration with AWS Direct Connect, Transit Gateways with our own advanced networking capabilities. Along the way, Disaster Recovery, we punched out two new services just focused on that. And then more recently we launched our Outposts partnership. We were up on stage at re:Invent, again, with Pat and Andy announcing AWS Outposts and the VMware flavor of that, VMware Cloud and AWS Outposts. I think it's been significant growth in our federal sector as well with our federal and high certification more recently. So all in all, we are super excited. We're five years old. The customer momentum is really, really strong and we are scaling the service massively across all geos and industries. >> That's great, great update. And I think one of the things that you mentioned was how the advantages you guys got from that relationship. And this has been the theme for AWS, man, since I can remember from day one, Fred. You guys do the heavy lifting as you always say for the customers. Here, VMware comes on board. Takes advantage of the AWS and just doesn't miss a beat. Continues to move their workloads that everyone's using, vSphere, and these are big workloads on AWS. What's the AWS perspective on this? How do you see it? >> Yeah, it's pretty fascinating to watch how fast customers can actually transform and move when you take the skill set that they're familiar with and the advanced capabilities that they've been using on-prem and then overlay it on top of the AWS infrastructure that's evolving quickly and building out new hardware and new instances we'll talk about. But that combined experience between both of us on a jointly engineered solution to bring the best security and the best features that really matter for those workloads drive a lot of efficiency and speed for the customers. So it's been well received and the partnership is stronger than ever from an engineering standpoint, from a business standpoint. And obviously it's been very interesting to look at just how we stay day one in terms of looking at new features and work and responding to what customers want. So pretty excited about just seeing the transformation and the speed that which customers can move to while at VMC. >> That's a great value proposition. We've been talking about that in context to anyone building on top of the cloud. They can have their own supercloud, as we call it, if you take advantage of all the CapEx and investment Amazon's made and AWS has made and continues to make in performance IaaS and PaaS, all great stuff. I have to ask you guys both as you guys see this going to the next level, what are some of the differentiations you see around the service compared to other options in the market? What makes it different? What's the combination? You mentioned jointly engineered. What are some of the key differentiators of the service compared to others? >> Yeah. I think one of the key things Fred talked about is this jointly engineered notion. Right from day one we were the early adopters of the AWS Nitro platform. The reinvention of EC2 back five years ago. And so we have been having a very, very strong engineering partnership at that level. I think from a VMware customer standpoint, you get the full software-defined data center, compute storage networking on EC2, bare metal across all regions. You can scale that elastically up and down. It's pretty phenomenal just having that consistency globally on AWS EC2 global regions. Now the other thing that's a real differentiator for us, what customers tell us about is this whole notion of a managed service. And this was somewhat new to VMware. But we took away the pain of this undifferentiated heavy lifting where customers had to provision rack stack hardware, configure the software on top, and then upgrade the software and the security patches on top. So we took away all of that pain as customers transitioned to VMware cloud in AWS. In fact, my favorite story from last year when we were all going through the Log4j debacle. Industry was just going through that. Favorite proof point from customers was before they could even race this issue to us, we sent them a notification saying, we already patched all of your systems, no action from you. The customers were super thrilled. I mean, these are large banks. Many other customers around the world were super thrilled they had to take no action, but a pretty incredible industry challenge that we were all facing. >> Narayan, that's a great point. The whole managed service piece brings up the security. You kind of teasing at it, but there's always vulnerabilities that emerge when you are doing complex logic. And as you grow your solutions, there's more bits. Fred, we were commenting before we came on camera more bits than ever before and at the physics layer too, as well as the software. So you never know when there's going to be a zero-day vulnerability out there. It happens. We saw one with Fortinet this week. This came out of the woodwork. But moving fast on those patches, it's huge. This brings up the whole support angle. I wanted to ask you about how you guys are doing that as well, because to me, we see the value when we talk to customers on theCUBE about this. It was a real easy understanding of what the cloud means to them with VMware now with the AWS. But the question that comes up that we want to get more clarity on is how do you guys handle support together? >> Well, what's interesting about this is that it's done mutually. We have dedicated support teams on both sides that work together pretty seamlessly to make sure that whether there's a issue at any layer, including all the way up into the app layer, as you think about some of the other workloads like SAP, we'll go end-to-end and make sure that we support the customer regardless of where the particular issue might be for them. And on top of that, we look at where we're improving reliability in as a first order of principle between both companies. So from availability and reliability standpoint, it's top of mind and no matter where the particular item might land, we're going to go help the customer resolve that. It works really well. >> On the VMware side, what's been the feedback there? What are some of the updates? >> Yeah, I think, look, I mean, VMware owns and operates the service, but we work phenomenal backend relationship with AWS. Customers call VMware for the service or any issues. And then we have a awesome relationship with AWS on the backend for support issues or any hardware issues. The key management that we jointly do. All of the hard problems that customers don't have to worry about. I think on the front end, we also have a really good group of solution architects across the companies that help to really explain the solution, do complex things like cloud migration, which is much, much easier with the VMware Cloud in AWS. We're presenting that easy button to the public cloud in many ways. And so we have a whole technical audience across the two companies that are working with customers every single day. >> You had mentioned, I've got list here of some of the innovations. You mentioned the stretch clustering, getting the geos working, advanced network, Disaster Recovery, FedRAMP, public sector certifications, Outposts. All good, you guys are checking the boxes every year. You got a good accomplishments list there on the VMware AWS side here in this relationship. The question that I'm interested in is what's next? What recent innovations are you doing? Are you making investments in? What's on the list this year? What items will be next year? How do you see the new things, the list of accomplishments? People want to know what's next. They don't want to see stagnant growth here. They want to see more action as cloud continues to scale and modern applications cloud native. You're seeing more and more containers, more and more CI/CD pipelining with modern apps, put more pressure on the system. What's new? What's the new innovations? >> Absolutely. And I think as a five year old service offering, innovation is top of mind for us every single day. So just to call out a few recent innovations that we announced in San Francisco at VMware Explore. First of all, our new platform i4i.metal. It's isolate based. It's pretty awesome. It's the latest and greatest, all the speeds and feeds that we would expect from VMware and AWS at this point in our relationship. We announced two different storage options. This notion of working from customer feedback, allowing customers even more price reductions, really take off that storage and park it externally and separate that from compute. So two different storage offerings there. One is with AWS FSx with NetApp ONTAP, which brings in our NetApp partnership as well into the equation and really get that NetApp based really excited about this offering as well. And the second storage offering called VMware Cloud Flex Storage. VMware's own managed storage offering. Beyond that, we have done a lot of other innovations as well. I really wanted to talk about VMware Cloud Flex Compute where previously customers could only scale by hosts and a host is 36 to 48 cores, give or take. But with VMware Cloud Flex Compute, we are now allowing this notion of a resource defined compute model where customers can just get exactly the vCPU memory and storage that maps to the applications, however small they might be. So this notion of granularity is really a big innovation that we are launching in the market this year. And then last but not least, top of ransomware. Of course it's a hot topic in the industry. We are seeing many, many customers ask for this. We are happy to announce a new ransomware recovery with our VMware Cloud DR solution. A lot of innovation there and the way we are able to do machine learning and make sure the workloads that are covered from snapshots and backups are actually safe to use. So there's a lot of differentiation on that front as well. A lot of networking innovations with Project Northstar. Our ability to have layer four through layer seven, new SaaS services in that area as well. Keep in mind that the service already supports managed Kubernetes for containers. It's built in to the same clusters that have virtual machines. And so this notion of a single service with a great TCO for VMs and containers is sort at the heart of our (faintly speaking). >> The networking side certainly is a hot area to keep innovating on. Every year it's the same, same conversation, get better faster, networking more options there. The Flex Compute is interesting. If you don't mind me getting a quick clarification, could you explain the resource-defined versus hardware-defined? Because this is what we had saw at Explore coming out, that notion of resource-defined versus hardware-defined. What does that mean? >> Yeah, I mean I think we have been super successful in this hardware-defined notion. We we're scaling by the hardware unit that we present as software-defined data centers. And so that's been super successful. But customers wanted more, especially customers in different parts of the world wanted to start even smaller and grow even more incrementally. Lower the cost even more. And so this is the part where resource-defined starts to be very, very interesting as a way to think about, here's my bag of resources exactly based on what the customers request before fiber machines, five containers. It's size exactly for that. And then as utilization grows, we elastically behind the scenes, we're able to grow it through policies. So that's a whole different dimension. That's a whole different service offering that adds value and customers are comfortable. They can go from one to the other. They can go back to that host based model if they so choose to. And there's a jump off point across these two different economic models. >> It's cloud flexibility right there. I like the name. Fred, let's get into some of the examples of customers, if you don't mind, let's get into some of the, we have some time. I want to unpack a little bit of what's going on with the customer deployments. One of the things we've heard again on theCUBE is from customers is they like the clarity of the relationship, they love the cloud positioning of it. And then what happens is they lift and shift the workloads and it's like feels great. It's just like we're running VMware on AWS and then they start consuming higher level services. That adoption next level happens and because it's in the cloud. So can you guys take us through some recent examples of customer wins or deployments where they're using VMware cloud on AWS on getting started and then how do they progress once they're there? How does it evolve? Can you just walk us through a couple use cases? >> Sure. Well, there's a couple. One, it's pretty interesting that like you said, as there's more and more bits, you need better and better hardware and networking. And we're super excited about the i4 and the capabilities there in terms of doubling and or tripling what we're doing around lower variability on latency and just improving all the speeds. But what customers are doing with it, like the college in New Jersey, they're accelerating their deployment on onboarding over like 7,400 students over a six to eight month period. And they've really realized a ton of savings. But what's interesting is where and how they can actually grow onto additional native services too. So connectivity to any other services is available as they start to move and migrate into this. The options there obviously are tied to all the innovation that we have across any services, whether it's containerized and with what they're doing with Tanzu or with any other container and or services within AWS. So there's some pretty interesting scenarios where that data and or the processing, which is moved quickly with full compliance, whether it's in like healthcare or regulatory business is allowed to then consume and use things, for example, with Textract or any other really cool service that has monthly and quarterly innovations. So there's things that you just could not do before that are coming out and saving customers money and building innovative applications on top of their current app base in a rapid fashion. So pretty excited about it. There's a lot of examples. I think I probably don't have time to go into too many here. But that's actually the best part is listening to customers and seeing how many net new services and new applications are they actually building on top of this platform. >> Narayan, what's your perspective from the VMware side? 'Cause you guys have now a lot of headroom to offer customers with Amazon's higher level services and or whatever's homegrown where it's being rolled out 'cause you now have a lot of hybrid too. So what's your take on what's happening in with customers? >> I mean, it's been phenomenal. The customer adoption of this and banks and many other highly sensitive verticals are running production-grade applications, tier one applications on the service over the last five years. And so I have a couple of really good examples. S&P Global is one of my favorite examples. Large bank, they merge with IHS Markit, big conglomeration now. Both customers were using VMware Cloud and AWS in different ways. And with the use case, one of their use cases was how do I just respond to these global opportunities without having to invest in physical data centers? And then how do I migrate and consolidate all my data centers across the global, which there were many. And so one specific example for this company was how they migrated 1000 workloads to VMware Cloud and AWS in just six weeks. Pretty phenomenal if you think about everything that goes into a cloud migration process, people process technology. And the beauty of the technology going from VMware point A to VMware point B. The lowest cost, lowest risk approach to adopting VMware Cloud and AWS. So that's one of my favorite examples. There are many other examples across other verticals that we continue to see. The good thing is we are seeing rapid expansion across the globe, but constantly entering new markets with a limited number of regions and progressing our roadmap. >> It's great to see. I mean, the data center migrations go from months, many, many months to weeks. It's interesting to see some of those success stories. Congratulations. >> One of the other interesting fascinating benefits is the sustainability improvement in terms of being green. So the efficiency gains that we have both in current generation and new generation processors and everything that we're doing to make sure that when a customer can be elastic, they're also saving power, which is really critical in a lot of regions worldwide at this point in time. They're seeing those benefits. If you're running really inefficiently in your own data center, that is not a great use of power. So the actual calculators and the benefits to these workloads are pretty phenomenal just in being more green, which I like. We just all need to do our part there and this is a big part of it here. >> It's a huge point about the sustainability. Fred, I'm glad you called that out. The other one I would say is supply chain issue is another one. You see that constraints. I can't buy hardware. And the third one is really obvious, but no one really talks about it. It's security. I mean, I remember interviewing Steven Schmidt with that AWS and many years ago, this is like 2013 and at that time people were saying, the cloud's not secure. And he's like, listen, it's more secure in the cloud on-premise. And if you look at the security breaches, it's all about the on-premise data center vulnerabilities, not so much hardware. So there's a lot, the stay current on the isolation there is hard. So I think the security and supply chain, Fred, is another one. Do you agree? >> I absolutely agree. It's hard to manage supply chain nowadays. We put a lot of effort into that and I think we have a great ability to forecast and make sure that we can lean in and have the resources that are available and run them more efficiently. And then like you said on the security point, security is job one. It is the only P1. And if you think of how we build our infrastructure from Nitro all the way up and how we respond and work with our partners and our customers, there's nothing more important. >> And Narayan, your point earlier about the managed service patching and being on top of things is really going to get better. All right, final question. I really want to thank you for your time on this showcase. It's really been a great conversation. Fred, you had made a comment earlier. I want to end with a curve ball and put you eyes on the spot. We're talking about a new modern shift. We're seeing another inflection point. We've been documenting it. It's almost like cloud hitting another inflection point with application and open source growth significantly at the app layer. Continue to put a lot of pressure and innovation in the infrastructure side. So the question is for you guys each to answer is, what's the same and what's different in today's market? So it's like we want more of the same here, but also things have changed radically and better here. What's changed for the better and what's still the same thing hanging around that people are focused on? Can you share your perspective? >> I'll tackle it. Businesses are complex and they're often unique, that's the same. What's changed is how fast you can innovate. The ability to combine managed services and new innovative services and build new applications is so much faster today. Leveraging world class hardware that you don't have to worry about, that's elastic. You could not do that even five, 10 years ago to the degree you can today, especially with innovation. So innovation is accelerating at a rate that most people can't even comprehend and understand the set of services that are available to them. It's really fascinating to see what a one pizza team of engineers can go actually develop in a week. It is phenomenal. So super excited about this space and it's only going to continue to accelerate that. That's my take, Narayan. >> You got a lot of platform to compete on. With Amazon, you got a lot to build on. Narayan, your side. What's your answer to that question? >> I think we are seeing a lot of innovation with new applications that customers are constantly (faintly speaking). I think what we see is this whole notion of how do you go from desktop to production to the secure supply chain and how can we truly build on the agility that developers desire and build all the security and the pipelines to energize that production quickly and efficiently. I think we are seeing, we are at the very start of that sort of journey. Of course, we have invested in Kubernetes, the means to an end, but we're so much more beyond that's happening in industry and I think we're at the very, very beginning of this transformations, enterprise transformation that many of our customers are going through and we are inherently part of it. >> Well, gentlemen, I really appreciate that we're seeing the same thing. It's more the same here on solving these complexities with distractions, whether it's higher level services with large scale infrastructure. At your fingertips, infrastructure as code, infrastructure to be provisioned, serverless, all the good stuff happen and Fred with AWS on your side. And we're seeing customers resonate with this idea of being an operator again, being a cloud operator and developer. So the developer ops is kind of, DevOps is changing too. So all for the better. Thank you for spending the time and we're seeing again that traction with the VMware customer base and AWS getting along great together. So thanks for sharing your perspectives. >> We appreciate it. Thank you so much. >> Thank you John. >> This is theCUBE and AWS VMware showcase accelerating business transformation, VMware Cloud on AWS. Jointly engineered solution bringing innovation to the VMware customer base, going to the cloud and beyond. I'm John Furrier, your host. Thanks for watching. (gentle music)

>> Welcome back to the Seaport in Boston and this is theCUBE's coverage of Red Hat Summit 2022. I'm Dave Vellante with my co-host Paul Gillin. Rob Belson is here as the Developer Relations Lead at Verizon. Robbie great to see you. Thanks for coming on theCUBE. >> Thanks for having me. >> So Verizon and developer relations. Talk about your role there. Really interesting. >> Absolutely. If you think about our mobile edge computing portfolio in Verizon 5G Edge, suddenly the developer is a more important persona than ever for actually adopting the cloud itself and adopting the mobile edge. So the question then quickly became how do we go after developers and how do we tell stories that ultimately resonate with them? And so my role has been spearheading our developer relations and experience efforts, which is all about meeting developers in the channels where they actually are, building content that resonates with them. Building out architectures that showcase how do you actually use the technology in the wild? And then ultimately creating automation assets that make their lives easier in deploying to the mobile edge. >> So, you know, telcos get a bad rap, when you're thinking it's amazing what you guys do. You put out all this capital infrastructure, big outlays. You know, we use our phones to drop a call. People like, "Ah, freaking Verizon." But it's amazing what we can actually do too. You think about the pandemic, the shift that the telcos had to go through to landlines to support home, never missed a beat. And yet at the same time you're providing all this infrastructure for people to come over the top, the cost forbid is going down, right? Your cost are going up and yet now we're doing this big 5G buildup. So I feel like there's a renaissance about to occur in edge computing that the telcos are going to lead new forms of monetization new value that you're going to be able to add, new services, new applications. The future's got to be exciting for you guys and it's going to be developer-led, isn't it? >> Absolutely. I mean it's been such an exciting time to be a part of our mobile edge computing portfolio. If you think back to late 2019 we were really asking the question with the advent of high speed 5G mobile networks, how can you drive more immersive experiences from the cloud in a cloud native way without compromising on the tools you know and love? And that's ultimately what caused us to really work with the likes of AWS and others to think about what does a mobile edge computing portfolio look like? So we started with 5G Edge with AWS Wavelength. So taking the compute and storage services you know and love in AWS and bringing it to the edge of our 4G and 5G networks. But then we start to think, well, wait a minute. Why stop at public networks? Let's think about private networks. How can we bring the cloud and private networks together? So you turn back to late 2021 we announced Verizon 5G Edge with AWS Outposts but we didn't even stop there. We said, "Well, interest's cool, but what about network APIs? We've been talking about the ability and the programmability of the 5G network but what does that actually look like to the developers? And one great example is our Edge Discovery Service. So you think about the proliferation of the edge 17 Wavelength Zones today in the US. Well, what edge is the right edge? You think about maybe the airline industry if the closest exit might be behind you absolutely applies to service discovery. So we've built an API that helps answer that seemingly basic question but is the fundamental building block for everything to workload orchestration, workload distribution. A basic network building block has become so important to some of these new sources of revenue streams, as we mentioned, but also the ability to disintermediate that purpose built hardware. You think about the future of autonomous mobile robots either ground and aerial robotics. Well, you want to make those devices as cheap as possible but you don't want to compromise on performance. And that mobile edge layer is going to become so critical for that connectivity, but also the compute itself. >> So I just kind of gave my little narrative up front about telco, but that purpose built hardware that you're talking about is exceedingly reliable. I mean, it's hardened, it's fossilized and so now as you just disaggregate that and go to a more programmable infrastructure, how are you able to and what gives you confidence that you're going to be able to maintain that reliability that I joke about? Oh, but it's so reliable. The network has amazing reliability. How are you able to maintain that? Is that just the pace of technology is now caught up, I wonder if you can explain that? >> I think it's really cool as I see reliability and sort of geo distribution as inextricably linked. So in a world where to get that best in class latency you needed to go to one place and one place only. Well, now you're creating some form of single source of failure whether it's the power, whether it's the compute itself, whether it's the networking, but with a more geo distributed footprint, particularly in the mobile edge more choices for where to deliver that immersive experience you're naturally driving an increase in reliability. But again, infra alone it's not going to do the job. You need the network APIs. So it's the convergence of the cloud and network and infra and the automation behind it that's been incredibly powerful. And as a great example, the work we've been doing in hybrid MEC the ability to converge within one single architecture, the private network, the public network, the AWS Outposts, the AWS Wavelength all in one has been such a fantastic journey and Red Hat has been a really important part in that journey. >> From the perspective of the developer when they're building a full cloud to edge application, where does Verizon pick up? Where do they start working primarily with you versus with their cloud provider? >> Absolutely. And I think you touched on a really important point. I think when you often think about the edge it's thought of as an either, or. Is it the edge? Is it the cloud? Is it both? It's an and I can't emphasize that enough. What we've seen from the customers greenfield or otherwise it's about extending an application or services that were never intended to live at the edge, to the edge itself, to deliver a more performant experience. And for certain control plane operations, metadata, backend operations analytics that can absolutely stay in the cloud itself. And so our role is to be a trusted partner in some of our enterprise customers' journeys. Of course, they can lean on the cloud provider in select cases, but we're an absolutely critical mode of support as you think about what are those architectures? How do you integrate the network APIs? And through our developer relations efforts, we've put a major role in helping to shape what those patterns really look like in the wild. >> When they're developing for 5G I mean, the availability of 5G of particularly you know, the high bandwidth 5G is pretty spotty right now. Mostly urban areas. How should they be thinking in the future developing an application roll out two years from now about where 5G will be at that point? >> Absolutely. I think one of the most important things in this case is the interoperability of our edge computing portfolio with both 4G and 5G. Whenever somebody asks me about the performance of 5G they ask how fast? Or for edge computing. It's always about benchmark. It's not an absolute value. It's always about benchmarking the performance to that next best alternative. What were you going to get if you didn't have edge computing in your back pocket? And so along that line of thought having the option to go either through 4G or 5G, having a mobile edge computing portfolio that works for both modes of connectivity even CAN-AM IoT is incredibly powerful. >> So it sounds like 4G is going to be with us for quite a while still? >> And I think it's an important part of the architecture. >> Yeah. >> Robert, tell us about the developer that's building these applications. Where does that individual come from? What's their persona? >> Oh, boy I think there's a number of different personas and flavors. I've seen everything from the startup in the back of a garage working hard to try to figure out what could I do for a next generation media and entertainment experience but also large enterprises. And I think a great area where we saw this was our 5G Edge Computing Challenge that we hosted last year. Believe it or not 100 submissions from over 22 countries, all building on Verizon 5G Edge. It was so exciting to see because so many different use cases across public safety, healthcare, media and entertainment. And what we found was that education is so important. A lot of developers have great ideas but if you don't understand the fundamentals of the infrastructure you get bogged down in networking and setting up your environment. And that's why we think that developer education is so important. We want to make it easy and in fact, the 5G Edge portfolio was designed in such a way that we'll abstract the complexities of the network away so you can focus on building your application and that's such a central theme and focus for how we approach the development. >> So what kind of services are you exposing via APIs? >> Absolutely, so first and foremost, as you think about 5G Edge with say AWS Wavelength, the infra there are APIs that are exposed by AWS to launch your infra, to patch your infrastructure, to automate your infrastructure. Specifically that Verizon has developed that's our network APIs. And a great example is our Edge Discovery Service. So think of this as like a service registry you've launched an application in all 17 edge zones. You would take that information, you would send it via API to the Edge Discovery Service so that for any mobile client say, you wake up one morning in Boston, you can ask the API or query, "Hey, what's the closest edge zone?" DNS isn't going to be able to figure it out. You need knowledge of the actual topology of the mobile network itself. So the API will answer. Let's say you take a little road trip 1,000 miles south to say Miami, Florida you ask that question again. It could change. So that's the workflow and how you would use the network API today. >> How'd you get into this? You're an engineer it's obvious how'd you stumble into this role? >> Well, yeah, I have a background in networks and distributed systems so I always knew I wanted to stay in the cloud somewhere. And there was a really unique opportunity at Verizon as the portfolio was being developed to really think about what this developer community looked like. And we built this all from scratch. If you look at say our Verizon 5G Edge Blog we launched it just along the timing of the actual GA of Wavelength. You look at our developer newsletter also around the time of the launch of Wavelength. So we've done a lot in such a short period and it's all been sort of organic, interacting with developers, working backwards from the customer. And so it's been a fairly new, but incredibly exciting journey. >> How will your data, architecture, data flow what will that look like in the future? How will that be different than it is sort of historically? >> When I think about customer workloads real time data architecture is an incredibly difficult thing to do. When you overlay the edge, admittedly, it gets more complicated. More places that produce the data, more places that consume data. How do you reconcile all of these environments? Maintain consistency? This is absolutely something we've been working on with the ecosystem at large. We're not going to solve this alone. We've looked at architecture patterns that we think are successful. And some of the things that we found that we believe are pretty cool this idea of taking that embedded mobile database, virtualizing it to the edge, even making it multi-tenant. And then you're producing data to one single source and simplifying how you organize and share data because all of the data being produced to that one location will be relevant to that topology. So Boston, as an example, Boston data being produced to that edge zone will only service Boston clients. So having a geo distributed footprint really does help data architectures, but at the core of all of this database, architectures, you need a compute environment that actually makes sense. That's performant, that's reliable. That's easy to use that you understand how to manage and that the edge doesn't make it any more difficult to manage. >> So are you building that? >> That's exactly what we're doing. So here at Red Hat Summit we've had the unique opportunity to continue to collaborate with our partners at Red Hat to think about how you actually use OpenShift in the context of hybrid MEC. So what have done is we've used OpenShift as is to extend what already exists to some of these new edge zones without adding in an additional layer of complexity that was unmanageable. >> So you use OpenShift so you don't have to cobble this together on your own as a full development environment and that's the role really that OpenShift plays here? >> That's exactly right. And we presented pieces of this at our re:Invent this past year and what we basically did is we said the edge needs to be inextricably linked with the cloud. And you want to be able to manage it from some seamless central pane of glass and using that OpenShift console is a great way. So what we did is we wanted to show a really geo-distributed footprint in action. We started with a Wavelength zone in Boston, the region in Northern Virginia, an outpost in the Texas area. We cobbled it all together in one cluster. So you had a whole compute mesh separated by thousands of miles all within a single cluster, single pane of glass. We take that and are starting to expand on the complexity of these architectures to overlay the network APIs we mentioned, to overlay multi-region support. So when we say you can use all 17 zones at once you actually can. >> So you've been talking about Wavelength and Outposts which are AWS products, but Microsoft and Google both have their distributed architectures as well. Where do you stand with those? Will you support those? Are you working with them? >> That's a great question. We have made announcements with Microsoft and Google but today I focus a lot on the work we do with AWS Wavelength and Outposts and continuing to work backwards from the customer and ultimately meet their needs. >> Yeah I mean, you got to start with an environment that the developers know that obviously a great developer community, you know, you see it at re:Invent. What was the reaction at re:Invent when you showed this from a developer community? >> Absolutely. Developers are excited and I think the best part is we're not the only ones talking about Wavelength not even AWS are the only ones talking about Wavelength. And to me from a developer ecosystem perspective that's when you know it's working. When you're not the one telling the best stories when others are evangelizing the power of your technology on your behalf that's when the ecosystem's starting to pick up. >> Speaking of making a bet on Outposts you know, it's somewhat limited today. I'll say it it's limited today in terms of we think it supports RDS and there's a few storage players. Is it your expectation that Outposts is going to be this essentially the cloud environment on your premises is that? >> That's a great question. I see it more as we want to expand customer choice more than ever and ultimately let the developers and architects decide. That's why I'm so bullish on this idea of hybrid MEC. Let's provide all of the options the most complicated geo distributed hybrid deployment you can imagine and automate it, make it easy. That way if you want to take away components of this architecture all you're doing is simplifying something that's already automated and fairly simple to begin with. So start with the largest problem to solve and then provide customers choice for what exactly meets their requirements their SLAs, their footprint, their network and work backwards from the customer. >> Exciting times ahead. Rob, thanks so much for coming on theCUBE. It's great to have you. >> Appreciate it, thanks for your time. >> Good luck. All right, thank you for watching. Keep it right there. This is Dave Vellante for Paul Gillin. We're live at Red Hat Summit 2022 from the Seaport in Boston. We'll be right back.

(innovative music) >> Welcome back to theCUBE's continuous coverage of AWS re:Invent 2021. My name is Dave Vellante, and we are running one of the industry's most important and largest hybrid tech events of the year. Hybrid as in physical, not a lot of that going on this year. But we're here with the AWS ecosystem, AWS, and special thanks to AMD for supporting this year's editorial coverage of the event. We've got two live sets, two remote studios, more than a hundred guests on the program. We're going really deep, as we enter the next decade of Cloud innovation. We're super excited to be joined by Danny Allan, who's the Chief Technology Officer at Veeam, and James Kirschner who's the Engineering Director for Amazon S3. Guys, great to see you. >> Great to see you as well, Dave. >> Thanks for having me. >> So let's kick things off. Veeam and AWS, you guys have been partnering for a long time. Danny, where's the focus at this point in time? What are customers telling you they want you to solve for? And then maybe James, you can weigh in on the problems that customers are facing, and the opportunities that they see ahead. But Danny, why don't you start us off? >> Sure. So we hear from our customers a lot that they certainly want the solutions that Veeam is bringing to market, in terms of data protection. But one of the things that we're hearing is they want to move to Cloud. And so there's a number of capabilities that they're asking us for help with. Things like S3, things like EC2, and RDS. And so over the last, I'll say four or five years, we've been doing more and more together with AWS in, I'll say, two big categories. One is, how do we help them send their data to the Cloud? And we've done that in a very significant way. We support obviously tiering data into S3, but not just S3. We support S3, and S3 Glacier, and S3 Glacier Deep Archive. And more importantly than ever, we do it with immutability because customers are asking for security. So a big category of what we're working on is making sure that we can store data and we can do it securely. Second big category that we get asked about is "Help us to protect the Cloud-Native Workloads." So they have workloads running in EC2 and RDS, and EFS, and EKS, and all these different services knowing Cloud-Native Data Protection. So we're very focused on solving those problems for our customers. >> You know, James, it's interesting. I was out at the 15th anniversary of S3 in Seattle, in September. I was talking to Mai-Lan. Remember we used to talk about gigabytes and terabytes, but things have changed quite dramatically, haven't they? What's your take on this topic? >> Well, they sure have. We've seen the exponential growth data worldwide and that's made managing backups more difficult than ever before. We're seeing traditional methods like tape libraries and secondary sites fall behind, and many organizations are moving more and more of their workloads to the Cloud. They're extending backup targets to the Cloud as well. AWS offers the most storage services, data transfer methods and networking options with unmatched durability, security and affordability. And customers who are moving their Veeam Backups to AWS, they get all those benefits with a cost-effective offsite storage platform. Providing physical separation from on-premises primary data with pay-as-you-go economics, no upfront fees or capital investments, and near zero overhead to manage. AWS and APM partners like Veeam are helping to build secure, efficient, cost-effective backup, and restore solutions using the products you know and trust with the scale and reliability of the AWS Cloud. >> So thank you for that. Danny, I remember I was way back in the old days, it was a VeeamON physical event. And I remember kicking around and seeing this company called Kasten. And I was really interested in like, "You protect the containers, aren't they ephemeral?" And we started to sort of chit-chat about how that's going to change and what their vision was. Well, back in 2020, you purchased Kasten, you formed the Veeam KBU- the Kubernetes Business Unit. What was the rationale behind that acquisition? And then James, I'm going to get you to talk a little bit about modern apps. But Danny, start with the rationale behind the Kasten acquisition. >> Well, one of the things that we certainly believe is that the next generation of infrastructure is going to be based on containers, and there's a whole number of reasons for that. Things like scalability and portability. And there's a number of significant value-adds. So back in October of last year in 2020, as you mentioned, we acquired Kasten. And since that time we've been working through Kasten and from Veeam to add more capabilities and services around AWS. For example, we supported the Bottlerocket launch they just did and actually EKS anywhere. And so we're very focused on making sure that our customers can protect their data no matter whether it's a Kubernetes cluster, or whether it's on-premises in a data center, or if it's running up in the Cloud in EC2. We give this consistent data management experience and including, of course, the next generation of infrastructure that we believe will be based on containers. >> Yeah. You know, James, I've always noted to our audience that, "Hey AWS, they provide rich set of primitives and API's that ISV's like Veeam can take advantage of it." But I wonder if you could talk about your perspective, maybe what you're seeing in the ecosystem, maybe comment on what Veeam's doing. Specifically containers, app modernization in the Cloud, the evolution of S3 to support all these trends. >> Yeah. Well, it's been great to see Veeam expands for more and more AWS services to help joint customers protect their data. Especially since Veeam stores their data in Amazon S3 storage classes. And over the last 15 years, S3 has helped companies around the world optimize their work, so I'd be happy to share some insights into that with you today. When you think about S3 well, you can find virtually every use case across all industries running on S3. That ranges from backup, to (indistinct) data, to machine learning models, the list goes on and on. And one of the reasons is because S3 provides industry leading scalability, availability, durability, security, and performance. Those are characteristics customers want. To give you some examples, S3 stores exabytes the data across millions of hard drives, trillions of objects around the world and regularly peaks at millions of requests per second. S3 can process in a single region over 60 terabytes a second. So in summary, it's a very powerful storage offering. >> Yeah, indeed. So you guys always talking about, you know, working backwards, the customer centricity. I think frankly that AWS sort of change the culture of the entire industry. So, let's talk about customers. Danny do you have an example of a joint customer? Maybe how you're partnering with AWS to try to address some of the challenges in data protection. What are customers is seeing today? >> Well, we're certainly seeing that migration towards the Cloud as James alluded today. And actually, if we're talking about Kubernetes, actually there's a customer that I know of right now, Leidos. They're a fortune 500 Information Technology Company. They deal in the engineering and technology services space, and focus on highly regulated industry. Things like defense and intelligence in the civil space. And healthcare in these very regulated industries. Anyway, they decided to make a big investment in continuous integration, continuous development. There's a segment of the industry called portable DevSecOps, and they wanted to build infrastructure as code that they could deploy services, not in days or weeks or months, but they literally wanted to deploy their services in hours. And so they came to us, and with Kasten K10 actually around Kubernetes, they created a service that could enable them to do that. So they could be fully compliant, and they could deliver the services in, like I say, hours, not days or months. And they did that all while delivering the same security that they need in a cost-effective way. So it's been a great partnership, and that's just one example. We see these all the time, customers who want to combine the power of Kubernetes with the scale of the Cloud from AWS, with the data protection that comes from Veeam. >> Yes, so James, you know at AWS you don't get dinner if you don't have a customer example. So maybe you could share one with us. >> Yeah. We do love working backwards from customers and Danny, I loved hearing that story. One customer leveraging Veeam and AWS is Maritz. Maritz provides business performance solutions that connect people to results, ensuring brands deliver on their customer promises and drive growth. Recently Maritz moved over a thousand VM's and petabytes of data into AWS, using Veeam. Veeam Backup for AWS enables Maritz to protect their Amazon EC2 instances with the backup of the data in the Amazon S3 for highly available, cost-effective, long-term storage. >> You know, one of the hallmarks of Cloud is strong ecosystem. I see a lot of companies doing sort of their own version of Cloud. I always ask "What's the partner ecosystem look like?" Because that is a fundamental requirement, in my view anyway, and attribute. And so, a big part of that, Danny, is channel partners. And you have a 100 percent channel model. And I wonder if we could talk about your strategy in that regard. Why is it important to be all channel? How to consulting partners fit into the strategy? And then James, I'm going to ask you what's the fit with the AWS ecosystem. But Danny, let's start with you. >> Sure, so one of the things that we've learned, we're 15 years old as well, actually. I think we're about two months older, or younger I should say than AWS. I think their birthday was in August, ours was in October. But over that 15 years, we've learned that our customers enjoy the services, and support, and expertise that comes from the channel. And so we've always been a 100 percent channel company. And so one of the things that we've done with AWS is to make sure that our customers can purchase both how and when they want through the AWS marketplace. They have a program called Consulting Partners Private Agreements, or CPPO, I think is what it's known as. And that allows our customers to consume through the channel, but with the terms and bill that they associate with AWS. And so it's a new route-to-market for us, but we continue to partner with AWS in the channel programs as well. >> Yeah. The marketplace is really impressive. James, I wonder if you could maybe add in a little bit. >> Yeah. I think Danny said it well, AWS marketplace is a sales channel for ISV's and consulting partners. It lets them sell their solutions to AWS customers. And we focus on making it really easy for customers to find, buy, deploy, and manage software solutions, including software as a service in just a matter of minutes. >> Danny, you mentioned you're 15 years old. The first time I mean, the name Veeam. The brilliance of tying it to virtualization and VMware. I was at a VMUG when I first met you guys and saw your ascendancy tied to virtualization. And now you're obviously leaning heavily into the Cloud. You and I have talked a lot about the difference between just wrapping your stack in a container and hosting it in the Cloud versus actually taking advantage of Cloud-Native Services to drive further innovation. So my question to you is, where does Veeam fit on that spectrum, and specifically what Cloud-Native Services are you leveraging on AWS? And maybe what have been some outcomes of those efforts, if in fact that's what you're doing? And then James, I have a follow-up for you. >> Sure. So the, the outcomes clearly are just more success, more scale, more security. All the things that James is alluding to, that's true for Veeam it's true for our customers. And so if you look at the Cloud-Native capabilities that we protect today, certainly it began with EC2. So we run things in the Cloud in EC2, and we wanted to protect that. But we've gone well beyond that today, we protect RDS, we protect EFS- Elastic File Services. We talked about EKS- Elastic Kubernetes Services, ECS. So there's a number of these different services that we protect, and we're going to continue to expand on that. But the interesting thing is in all of these, Dave, when we do data protection, we're sending it to S3, and we're doing all of that management, and tiering, and security that our customers know and love and expect from Veeam. And so you'll continue to see these types of capabilities coming from Veeam as we go forward. >> Thank you for that. So James, as we know S3- very first service offered in 2006 on the AWS' Cloud. As I said, theCUBE was out in Seattle, September. It was a great, you know, a little semi-hybrid event. But so over the decade and a half, you really expanded the offerings quite dramatically. Including a number of, you got on-premise services things, like Outposts. You got other services with "Wintery" names. How have you seen partners take advantage of those services? Is there anything you can highlight maybe that Veeam is doing that's notable? What can you share? >> Yeah, I think you're right to call out that growth. We have a very broad and rich set of features and services, and we keep growing that. Almost every day there's a new release coming out, so it can be hard to keep up with. And Veeam has really been listening and innovating to support our joint customers. Like Danny called out a number of the ways in which they've expanded their support. Within Amazon S3, I want to call out their support for our infrequent access, infrequent access One-Zone, Glacier, and Glacier Deep Archive Storage Classes. And they also support other AWS storage services like AWS Outposts, AWS Storage Gateway, AWS Snowball Edge, and the Cold-themed storage offerings. So absolutely a broad set of support there. >> Yeah. There's those, winter is coming. Okay, great guys, we're going to leave it there. Danny, James, thanks so much for coming to theCUBE. Really good to see you guys. >> Good to see you as well, thank you. >> All right >> Thanks for having us. >> You're very welcome. You're watching theCUBE's coverage of 2021 AWS re:Invent, keep it right there for more action on theCUBE, your leader in hybrid tech event coverage, right back. (uplifting music)

>> From the theCUBE Studios in Palo Alto in Boston, bringing you data-driven insights from theCUBE and ETR, this is Breaking Analysis with Dave Vellante. >> Well, it looks like hybrid cloud is finally here. We've seen a decade of posturing, marchitecture, slideware and narrow examples of hybrid cloud, but there's little question that the definition of cloud is expanding to include on-premises workloads in hybrid models. Now depending on which numbers you choose to represent IT spending, public cloud only accounts for actually less than 5% of the total pie. So the big question is, how will this now evolve? Customers want control, they want governance, they want security, flexibility and a feature-rich set of services to build their digital businesses. It's unlikely that they can buy all that, so they're going to have to build it with partners, specifically vendors, SI's, consultancies and their own developers. The tug of war to win the new cloud day has finally started in earnest between the hyperscalers and the largest enterprise tech companies in the world. Hello and welcome to this week's Wikibon CUBE insights, powered by ETR. In this Breaking Analysis, we'll walk you through how we see the battle for hybrid cloud, how we got here, where we are and where it's headed. First, I want to go back to 2009, in a blog post by a man named Chuck Hollis. Chuck Hollis, at the time, was a CTO and marketing guru inside of EMC who, remember, owned VMware. Chuck was kind of this hybrid, multi-tool player, pun intended. EMC at the time had a big stake, a lot at stake, as the ascendancy of AWS was threatening the historical models, which had defined enterprise IT. Now around that time, NIST published its first draft of a cloud computing definition which, as I recall, included language, something to the effect of accessing remote services over the public network, i.e., public IP networks. Now, NIST has essentially or since evolved that definition, but the original draft was very favorable to the public cloud. And the vendor community, the traditional vendor community, said hang on, we're in this game too. So that was 2009 when Chuck Hollis published this slide. He termed it Private Cloud, a term which he saw buried inside of a Gartner research post or research note that was not really fleshed out and defined. The idea was pretty compelling. The definition of cloud centered on control, where you, as the customer, had on-prem workloads that could span public and on-prem clouds, if you will, with federated security and a data plan that spanned the states. Essentially, you had an internal and an external cloud with a single point of control. This is basically what the hybrid cloud vision has become. An abstraction layer that spans on-prem and public clouds and we can extend that across clouds and out to the edge, where a customer has a single point of control and federated governance and security. Now we know this is still aspirational, but we're now seeing vendor offerings that put forth this promise and a roadmap to get there from different points of view, that we're going to talk about today. The NIST definition now reads cloud computing is a model for enabling ubiquitous, convenient on-demand network access to a shared pool of configurable computing resources, e.g., network server storage, applications and services, that can be rapidly provisioned and released with minimal management effort or service provider interaction. So there you have it, that is inclusive of on-prem, but it took the industry a decade plus to actually get where we are today. And they did so by essentially going to school with the public cloud offerings. Now in 2018, AWS announced Outposts and that was another wake up call to the on-prem community. Externally, they pointed to the validation that hybrid cloud was real. Hey, AWS is doing it so clearly they've capitulated, but most on-prem vendors at the time didn't have a coherent offering for hybrid, but the point is the on-prem vendors responded as they saw AWS moving past the demilitarized zone into enemy lines. And here's what the competitive landscape of hybrid offerings looks like today. All three US-based hyperscalers have an offering or multiple offerings in various forms, Outposts from Amazon and other services that they offer, Google Anthos and Azure Arc, they're all so prominent, but the real action today is coming from the on-prem vendors. Every major company has an offering. Now most of these stemmed from services-led and finance-led initiatives, but they're evolving to true Azure Service models. HPE GreenLake is prominent and the company's CEO, Antonio Neri, is putting the whole company behind Azure Service. HPE claims to be the first, it uses that in its marketing, with such an Azure Service offering, but actually Oracle was their first with Cloud@Customer. You know, possibly Microsoft could make a claim to being early as well, but it really doesn't matter. Let's see, Dell has responded with Apex and is going hard after this opportunity. Cisco has Cisco Plus and Lenovo has TruScale. IBM also has a long services and finance-led history and has announced pockets of Azure Service in areas like storage. And Pure Storage is an example that we chose of a segment player, of course within storage, that has a strong Azure Service offering, and there are others like that. So the landscape is getting very busy. And so, let's break this down a bit. AWS is bringing its programmable infrastructure model and its own hardware to what it calls the edge. And it looks at on-prem data centers as just another edge node. So that's how they're de-positioning the on-prem crowd, but the fact is, when you really look at what Outposts can do today, it's limited, but AWS will move quickly so expect a continued rapid evolution of their model and the services that are supported on Outposts. Azure gets its hardware from partners and has relationships with virtually everyone that matters. Anthos is, as well, a software layer and Google created Kubernetes as the great equalizer in cloud. And it was a nice open source gift to the industry and has obviously taken off. So the cloud guys have the advantage of owning a cloud. The pure on-prem players, they don't, but the on-prem crowd has rich stacks, much richer and more mature in a lot of areas, as it relates to supporting on-premises workloads and much more so than the cloud players, but they don't have mature cloud stacks. They're kind of just getting started with things like subscription billing and API-based microservices offerings. They got to figure out Salesforce compensation and just the overall Azure service mentality versus the historical product box mentality, and that takes time. And they're each coming at this from their respective different points of view and points of strength. HPE is doing a very good job of marketing and go-to market. It probably has the cleanest model, enabled by the company's split from HP, but it has some gaps that it's needed to fill and it's doing so through acquisitions. Ezmeral, for example, is it's new data play. It just bought Zerto to facilitate backup as a service. And it's expanded partnerships to fill gaps in the portfolio. Some partnerships, which they couldn't do before because it created conflicts inside of HPE or HP. Dell is all about the portfolio, the breadth of the portfolio, the go-to-market prowess and its supply chain advantage. It's very serious about Azure Service with Apex and it's driving hard to win that day. Cisco comes at this from a huge portfolio and of course, a point of strength and networking, which maybe is a bit tougher to offer as a service, but Cisco has a large and fast growing subscription business in collaborations, security and other areas, so it's cloud-like in that regard. And Oracle, of course, has the huge advantage of an extremely rich functional stack and it owns a cloud, which has dramatically improved in the past few years, but Oracle is narrow to the red stack, at least today. Oracle, if it wanted to, we think, could dominate the database cloud, it could be the database cloud, especially if it decided to open its cloud to competitive database offerings and run them in the Oracle cloud. Hmm. Wonder if Oracle will ever move in that direction. Now a big part of this shift is the appeal of OPEX versus CAPEX. Let's take a look at some ETR data that digs a bit deeper into this topic. This data is from an August ETR drill down, asking CIOs and IT buyers how their budgets are split between OPEX and CAPEX. The mid point of the yellow line shows where we are today, 57% OPEX, expecting to grow to 63% one year from now. That's not a huge difference, there's not a huge difference when you drill into global 2000, which kind of surprised me. I thought global 2000 would be heavier CAPEX, but they seem to be accelerating the shift to OPEX slightly faster than the overall base, but not really in a meaningful way. So I didn't really discern big differences there. Now, when you dig further into industries and look at subscription versus consumption models for OPEX, you see about 60/40 favoring subscription models, with most industry slowly moving toward consumption or usage based models over time. There are a couple of outliers, but generally speaking, that's the trend. What's perhaps more interesting is when you drill into subscription versus usage based models by product area, and that's what this chart shows. It shows by tech segment, the percent subscription, that's the blue, versus consumption or usage based, that's the gray bars, yellow being indifferent or maybe it's I don't know. What stands out are two areas that are more usage heavy, consumption heavy. That's database, data warehousing, and IS. So database is surely weighted by companies like Snowflake and offerings like Redshift and other cloud databases from Azure and Google and other managed services, but the IS piece, while not surprising, is, we think, relevant because most of the legacy vendor Azure Service offerings are borrowing from a SaaS-oriented subscription model with a hardware twist. In other words, as a customer, you're committing to a term and a minimum spend over the life of that term. You're locked in for a year or three years, whatever it is, to account for the hardware and headroom the vendor has to install because they want to allow you to increase your usage. So that's the usage based model. See, you're then paying by the drink for that consumption above that minimum threshold. So it's a hybrid subscription consumption model, which is actually quite interesting. And we've been saying, what would really be cool is if one of the on-prem penguins on the iceberg would actually jump in and offer a true consumption model right out of the box, as a disruptive move to the industry and to the cloud players, and take that risk. And I think that might happen once they feel comfortable with the financial model and they have nailed the product market fit, but right now, the model is what it is. And even AWS without post requires a threshold and a minimum commitment. So we'd love to see someone take that chance and offer true cloud consumption pricing to facilitate more experimentation and lower risk for the customer entry points. Now let's take a look at some of these players and see what kind of spending momentum they have. This is our popular XY chart-view that plots net score or spending velocity on the x-axis and market share or pervasiveness in the data set on the... Oh, sorry, net score or spending momentum on the y-axis and pervasiveness or market share on the x-axis. Now this is cut by cloud computing vendors, as defined by the customers responding. There were nearly 1500 respondents in the ETR survey, so a couple of points here. Note the red line is the elevated line. In other words, anything above that is considered really robust momentum. And no surprise, Azure, AWS and Google are above that line. Azure and AWS always battle it out for top share of voice in the x-axis in this survey. Now this, remember, is the July survey, but ETR, they gave me a sneak peek at the October results that they're going to be releasing in the coming week and Dell cloud and VMware cloud, which is VCF and maybe some other components, not VMware cloud and AWS, that's a separate beast, but those two are moving up in the y-axis. So they're demonstrating spending momentum. IBM is moving down and Oracle is at a respectable 20% on the y-axis. Now, interestingly, HPE and Lenovo don't show up in the cloud taxonomy, in that cloud cut, and neither does Cisco. I believe I'm correct in that this is an open-ended question, i.e., who are your cloud suppliers? So the customers are not resonating with that messaging yet, but I'm going to double check on that. Now to widen the aperture a bit, we said let's do a cut of the on-prem and cloud players within cloud accounts, so we can include HPE and Cisco and see how they're doing inside of cloud accounts. So that's what this chart does. It's a filter on 975 customers who identify themselves as cloud accounts. So here we were able to add in Cisco and HPE. Now, Lenovo still doesn't show up on the data. It shows up in laptops and desktops, but not as prominent in the enterprise, not prominent at all, but HPE Ezmeral did show up and it's moving forward in the October survey, again, part of the sneak peek. Ezmeral is HPE's data platform that they've introduced, combining the assets of MapR, BlueData and some other organic development. Now, as you can see, HPE and Cisco, they show up on the chart, as I said, and you can see the rope in the tug of war is starting to get a little bit more taut. The cloud guys have momentum and big account presence, but the on-prem folks also have big footprints, rich stacks and many have strong services arms, and a lot of customer affinity. So let's wrap with some comments about how this will shake out and what's some of the markers we can watch. Now, the first thing I'll say is we're starting to hear the right language come out of the vendor community. The idea that they're investing in a layer to abstract the underlying complexity of the clouds and on-prem infrastructure and turning the world into, essentially, a programmable interface to resources. The question is, what about giving access through that layer to underlying primitives in the public cloud? VMware has been very clear on this. They will facilitate that access. I believe Red Hat as well. So watch to the degree in which the large on-prem players are enabling that access for developers. We believe this is the right direction overall, but it's also very hard and it's going to require lots of resources and R & D. I would say at this point that each company has its respective strengths and weaknesses. I see HPE mostly focused today on making its on-prem offerings work like a cloud, whereas some of the others, VMware, Dell and Cisco, are stressing to a greater degree, in my view, enabling multi-cloud and edge connections, cross connections. Not that HPE isn't open to that when you ask them about it, but its marketing is more on-prem leaning, in my opinion. Now all of the traditional vendors, in my view, are still defensive about the cloud, although I would say much less so each day. Increasingly, they look at the public cloud as an opportunity to build value on top of that abstraction layer, if you will. As I said earlier, these on-prem guys, they all have ways to go. They're in the early stages of figuring out what a cloud operating model looks like, how it works, what services to offer, how to pay sellers and partners, but the public cloud vendors, they're miles ahead in that regard, but at the same time, they're navigating into on-prem territory. And they're very immature, in most cases. So how do they service all this stuff? How do they establish partnerships and so forth? And how do they build stacks on prem that are as rich as they are in the cloud? And what's their motivation to do that? Are they getting pulled, digging their heels in? Or are they really serious about it? Now, in some respects, Oracle is in the best position here in terms of hybrid maturity, but again, it's narrowly focused on the Red Stack. I would say the same for Pure Storage, more mature as a service, but narrowly focused, of course, on storage. Let's talk marketplace and ecosystems. One of the hallmarks of public clouds is optionality of tooling. Just all you do is go to the AWS Marketplace and you'll see what I mean. It's got this endless bevy of choices. It's got one of everything in there and you can buy directly from your AWS Console. So watch how the hybrid cloud plays out in terms of partner inclusion and ease of doing business, that's another sign of maturity. Let's talk developers and edge. This is by far the most important and biggest hole in the hybrid portfolios, outside the public cloud players. If you're going to build infrastructure as code, who do you expect to code it? How are the on-prem players cultivating developer communities? IBM paid 34 billion to buy its way in. Actually, in today's valuation terms, you might say that's looking like a good play, but still, that cash outlay is equal to one third of IBM's revenue. So big, big bet on OpenShift, but IBM's infrastructure strategy is fragmented and its cloud business, as IBM reports in its financial statements, is a services-heavy, kitchen sink set of offerings. It's very confusing. So they got to still do some clean up there, but they're serious about the architectural battle for hybrid cloud, as Arvind Krishna calls it. Now VMware, by cobbling together the misfit developer toys of the remnants from the EMC Federation, including Pivotal, is trying to get there. You know, but when you talk to customers, they're still not all in on VMware's developer affinity. Now Cisco has DevNet, but that's basically CCIE's and other trained networking engineers learning to code in languages like Python. It's not necessarily true devs, although they're upskilling. It's a start and they're investing, Cisco, that is, investing in the community, leveraging their champions, and I would say Dell could do the same with, for example, the numerous EMC storage admins that are out there. Now Oracle bought Sun to get Java, and that's a large community of developers, but even so, when you compare AWS and Microsoft ecosystems to the others, it's not even close in terms of developer affinity. So lots of work to be done there. One other point is Pure's acquisition of Portworx, again, while narrowly focused, is a good move and instructive of the changes going on in infrastructure. Now how does this all relate to the edge? Well, I'm not going to talk much about that today, but suffice to say, developers, in our view, will win the edge. And right now, they're coding in the cloud. Now they're often coding in the cloud and moving work on prem, wrapping them in containers, but watch how sticky that model is for the respective players. The other thing to watch is cadence of offerings. Another hallmark of cloud is a rapid expansion of features. The public cloud players don't appear to be slowing down and the on-prem folks seem to be accelerating. I've been watching HPE and GreenLake and their cadence of offerings, and watch how quickly the newbies of Azure Service can add functionality, I have no doubt Dell is going to be right there as well, as is Cisco and others. Also pay attention to financial metrics, watch how Azure Service impacts the income statements and how the companies deal with that because as you shift to deferred revenue models, it's going to hurt profitability. And I'm not worried about that at all because it won't hurt cashflow, or at least it shouldn't. As long as the companies communicate to Wall Street and they're transparent, i.e., they don't shift reporting definitions every year and a half or two years, but watch for metrics around retention and churn, RPO or Remaining Performance Obligations, billing versus bookings, increased average contract values, cohort selling, the impact on both gross margin and operating margin. These are the things you watch with SaaS companies and essentially, these big hardware players are becoming Azure Service slash SaaS companies. These are going to be the key indicators of success and the proof in the pudding of the transition to Azure Service. It should be positive for these companies, assuming they get the product market fit right, and can create a flywheel effect with their respective ecosystems and partner channels. Now I'm sure you can think of other important factors to watch, but I'm going to leave it here for now. Remember these episodes, they're all available as podcasts, wherever you listen. All you got to do is search Breaking Analysis podcast and please subscribe, check out ETR's website at etr.plus. We also publish a full report every week on wikibon.com and siliconangle.com. You can get in touch with me, email david.vellante@siliconangle.com or you can DM me @dvellante. You can comment on our LinkedIn posts. This is Dave Vellante for theCUBE Insights powered by ETR. Have a great week, everybody, stay safe, be well. And we'll see you next time. (soft music)

(upbeat music) >> Hi, I'm Joe Rodriguez, Managing Director of Financial Services at Cloudera. Welcome to the Fight Fraud with Data session. At Cloudera we believe that fighting fraud begins with data. So financial services is Cloudera's largest industry vertical. We have approximately 425 global financial services customers, which consists of 82 out of a hundred of the largest global banks of which we have 27 that are globally systemic banks. Four out of the five top stock exchanges, eight out of the top 10 wealth management firms and all four of the top credit card networks. So as you can see, most financial services institutions utilize Cloudera for data analytics and machine learning. We also have over 20 central banks and a dozen or so financial regulators. So it's an incredible footprint which gives Cloudera lots of insight into the many innovations that our customers are coming up with. Criminals can steal thousands of dollars before a fraudulent transaction is detected. So the cost to purchase your account data is well worth the price to fraudsters. According to Experian, credit and a debit card account information sells on the dark web for a mere $5 with the CVV number and up to $110 if it comes with all the bank information, including your name, social security number, date of birth, complete account numbers, and other personal data. Our customers have several key data and analytics challenges when it comes to fighting financial crime. The volume of data that they need to deal with is huge and growing exponentially. All this data needs to be evaluated in real time. There are new sources of streaming data that need to be integrated with existing legacy data sources. This includes biometrics data and enhanced authentication video surveillance, call center data, and of course all that needs to be integrated with existing legacy data sources. There is an analytics Arms Race between the banks and the criminals, and the criminal networks never stop innovating. They also have to deal with disjointed security and governance. Security and governance policies are often set per data source or application requiring redundant work across workloads. And they have to deal with siloed environments. The specialized nature of platforms and people results in disparate data sources and data management processes. This duplicates efforts and divides the business risk and crime teams, limiting collaboration opportunities between them. CDP enhances financial crime solutions to be holistic by eliminating data gaps between siloed solutions, with an enterprise data approach, advanced data analytics and machine learning. By deploying an enterprise wide data platform, you reduce siloed divisions between business risk and crime teams and enable better collaboration through industrialized machine learning, you tighten up the loop between detection and new fraud patterns. Cloudera provides the data platform on which a best of breed applications can run and leverage integrated machine learning. Cloudera stands rather than replaces your existing fraud modeling applications. So Oracle, SAS, Actimize, to name a few, integrate with an enterprise data hub to scale the data, increase speed and flexibility and improve efficacy of your entire fraud system. It also centralizes the fraud workload on data that can be used for other use cases in applications like Enhanced KYC and Customer 360 for example. I just wanted to highlight a couple of our partners in financial crime prevention, Simudyne and Quantexa. So Simudyne provides fraud simulation using agent-based modeling machine learning techniques to generate synthetic transaction data. This data simulates potential fraud scenarios in a cost-effective GDPR-compliant virtual environment to significantly improve financial crime detection systems. Simudyne identifies future fraud topologies for millions of simulations that can be used to dynamically train new machine learning algorithms for enhanced identification. And Quantexa connects the dots within your data using dynamic entity resolution, and advanced network analytics to create context around your customers. This enables you to see the bigger picture and automatically assesses potential criminal behavior. Now let's go over some of our customers and how they're using Cloudera. First, we'll talk about United Overseas Bank or UOB. UOB is a leading full service bank in Asia with a network of more than 500 offices in 19 countries and territories, in Asia Pacific, Western Europe and North America. UOB built a modern data platform on Cloudera that gives it the flexibility and speed to develop new AI and machine learning solutions and to create a data-driven enterprise. UOB set up it's big data analytics center in 2017. It was Singapore's first centralized big data unit within a bank to deepen the bank's data analytic capabilities and to use data insights to enhance the bank's performance. Essential to this work was implementing a platform that could cost efficiently bring together data from dozens of separate systems and incorporate a range of unstructured data, including voice and text. Using Cloudera CDP and machine learning, UOB gained a richer understanding of its customer preferences to help make their banking experience simpler, safer, and more reliable. Working with Cloudera, UOB has a big data platform that gives business staff and data scientists, faster access to relevant and quality data for self-service analytics, machine learning and emerging artificial intelligence solutions. With new self-service analytics and machine learning driven insights, UOB has realized improvements in digital banking, asset management, compliance, AML, and more. Advanced AML detection capabilities, help analysts detect suspicious transactions either based on hidden relationships of shell companies and high risk individuals with Cloudera and machine learning technologies, UOB was able to enhance AML detection and reduce the time to identify new links from months to three weeks. Next, let's speak about MasterCard. So MasterCard's principle business is to process payments between banks and merchants and the credit issuing banks and credit unions of the purchasers who use the MasterCard brand debit and credit cards to make purchases. MasterCard chose Cloudera Enterprise for fraud detection and to optimize their DW infrastructure, delivering deep insights and best practices and big data security and compliance. Next, let's speak about Bank Rakyat in Indonesia or BRI. BRI is one of the largest and oldest banks in Indonesia and engages in the provision of general banking services. It's headquartered in Jakarta, Indonesia. BRI is well-known for its focus on microfinancing initiatives and serves over 75 million customers through its more than 11,000 offices and rural service outposts. BRI required better insight to understand customer activity and identify fraudulent transactions. The bank needed a solid foundation that allowed it to leverage the power of advanced analytics, artificial intelligence, and machine learning to gain better understanding of customers and the market. BRI used Cloudera Enterprise data platform to build an agile and reliable, predictive augmented intelligence solution to enhance its credit scoring system. And to address the rising concern around data security from regulators and customers, BRI developed a real-time fraud detection service powered by Cloudera and Kafka, BRI's data scientists developed a machine learning model for fraud detection by creating a behavioral scoring model based on customer savings, loan transactions, deposits, payroll and other financial real-time data. This led to improvements in its fraud detection and credit scoring capabilities, as well as the development of a new digital microfinancing product. With the enablement of real-time fraud detection, BRI was able to reduce the rate of fraud by 40%. It improved relationship manager productivity by two and a half fold. It improved the credit scoring system to cut down on micro-financing loan processing times from two weeks to two days to now two minutes. So fraud prevention is a good area to start with data focus if you haven't already. It offers a quick return on investment and it's a focused area that's not too entrenched across the company. To learn more about fraud prevention, go to www.cloudera.com, and you should schedule a meeting with Cloudera to learn even more. And with that, thank you for listening and thank you for your time. (upbeat music)

>> Announcer: Live from Las Vegas, it's theCUBE! Covering AWS re:Invent 2019. Brought to you by Amazon Web Services, and Intel, along with its ecosystem partners. >> Well welcome back to the Sands, day two, AWS re:Invent 2019, lot of buzz still going on here Dave Vellante. >> It's all buzz. >> Yeah, a jam-packed show floor, second day in a row, day two of our coverage here on theCUBE, along with Dave Vellante, I'm John Walls, and we're joined by Paul Cheesbrough, who's the CTO and president of digital at the Fox Corporation. Paul, good to see you, sir. >> Thanks for having me on. >> Thanks for being with us, we appreciate that. >> Paul: I'm a big fan of theCUBE. >> So what brings you here, about your partnership with AWS, and let's just start with that, characterize a little bit about what that relationship's all about. >> Yeah, well I think re:Invent's become the go-to show for cloud computing generally. I think it's its eighth season, and certainly for my team and myself, it's the place to discover the latest product evolutions and talk to other people in my position and peers in the industry and see what's going on, so it's a great opportunity to do a bit of fact-digging and see what's going on in the industry. >> So what fact-digging are you doing right now that applies to your world, what have you seen here, maybe in the past day or two, that you said "Yep, I can see where that's playing "into the entertainment world." >> Yeah, I'd say the first thing is the ecosystem, you can see from around here the buzz and the vibe. I mean this is at a different level to what I've seen before, and that's always really good to see, so it's not just an AWS story, it's kind of the companies that they're enabling, and a lot of the innovation comes out of these smaller startups that are building on top of the platform, so spending a ton of time on that front. I'd also say Andy Jassy's keynote yesterday, really very impressive on how they've kept the foot down on new releases on the data front. So SageMaker and Redshift are two technologies we use heavily and they've continued to innovate on that front, and just getting time with the top table of AWS and the deep technical engineers who can kind of give you a view of where the company's going and where the services will be in a year or two's time is, you don't get that any other kind of place. >> You know when we first started doing theCUBE at re:Invent seven years ago, lot of tire kickers, certainly from the enterprise, lot of developers, no question, but you're way beyond kicking tires, so what are some of the things that you're doing in the cloud, you mentioned Redshift and SageMaker, what are you doing with those tools? >> Yeah, so, I mean you're a media company, so you'll understand how technology's kind of carved up, and on the enterprise side, which is all of our internal IT and networks, we've pretty much migrated all of that over the recent years into the cloud, and largely running on AWS, so storage, compute, we've retired all of our data centers bar one. All of our applications that our employees use are software as a service based, so we don't really run our own infrastructure, and on top of that we've really put a very deep data infrastructure in place where the consumer trend, the way our content's consumed these days, we've got a very direct relationship with the consumer. We stream more and more content to them, and that throws off a data trail that you've got to capture and manage, and we use Redshift and SageMaker to analyze the data on top of Redshift on that front, so the enterprise piece, we've done pretty holistically. On the digital side of our business, our products and services and our apps, they're almost entirely built natively on AWS services. Our engineers, the innovation that they're driving there, they couldn't do it without partners like AWS. And then the third and final piece to a media company's the media and the broadcast piece, how you move video around the production organization, the creative organization. And that's the bit that we're announcing here today, that partnership with AWS to kind of solve that issue. >> Yeah, so I wanted to ask you about, a big part of your transformation was data. And so you got rid of, they always talk about the heavy lifting, you got rid of that for the most part, all except one data center. What did you do with the people that were doing all of that stuff, did they just sort of go through retraining, or attrition, did they get excited about learning new tooling, how did that all go? >> Well I've been on the journey around cloud computing since 2006 in my career, so-- >> Dave: Day one, I guess it's still day one. >> In fact I purchased S3 from Werner Vogels back then. >> That was the first product, wasn't it, the first service. >> And then I met Andy soon after, and in those days, and I think some organizations experience this, the technology team were the most risk-averse, and they put every blocker in the way from moving to the cloud, 'cause they saw it as a threat, and frankly didn't understand it, so, it took a lot of pushing to get things going in those days, I think it's slightly different now, but once you're through that barrier, and people get momentum and, anyone in my position as a CTO will tell you there's no shortage of work to throw people at, so the resource that we've got within the team, I'd much rather they were building software than managing servers and pipes and doing upgrades, so we've released a ton of talent to do what I would call the value add piece, that consumers touch and feel, and moved it really kind of front of store, and that's made a big difference, some people didn't make the journey and we brought new talent in, I think that's inevitable. But yeah. >> So it's almost like you get to practice a little less and play a little more, is about what it comes down to. >> And sort of rearchitected your business around data and software, it sounds like, as opposed to, like you said, pipes. >> Yeah, but everything starts with the consumer in our business, so if you work backwards from that, they've changed their behaviors and they expect content in different forms on different devices. They expect the traditional channels of cable, they expect the new channels of mobile and streaming, and that places a lot of stress internally on how you create and produce and distribute that content, so to some degree in our industry, we had no choice, we had to change, and that's been, as a technologist driving transformation, it's been a fun ride. >> You're almost on this parallel track a little bit, you talk about the transformation you're going through with live streaming right now, that's a must, must do, must have, that's how consumers bring in their media, and yet you have to transform technologically speaking to provide this consumer transformation as well, so you have these two tracks going down that you've got to answer to, I mean what kind of complexity does that create for you, because your business is fundamentally changing, and the technology is fundamentally changing. >> And you know, I think historically, the solution to that problem was to put parallel infrastructure in place and your digital team would have their own infrastructure, your enterprise team would have their own infrastructure, and then your media and broadcast team would be on a completely different network doing their own thing, and they would all coexist, and I think the convergence at the consumer end has rippled back into a convergence within the organization as well, where, our technology teams play across those three different fields, and someone like AWS, and other partners like that are now capable of being partners across those three different fields together, so the convergence at the consumer end really does apply within the organization as well. >> So you mentioned some things you're doing with AWS, maybe you could talk about that initiative and talk about the tech, and we could talk about the outcome for the consumer. >> So I think the last bastions within any media organization in terms of transforming, you think about the media and broadcast operation, everything from the trucks and the cameras through to the edit suites, through to master control, through to the way that you play out and distribute, not only do we have a national network, but we've got local stations as well, and you overlay the digital products on top of that. It's a very complicated set of partners and direct access points at the end, and the technology that's been operating in that space hasn't changed since the 90s, genuinely hasn't, it maybe got a minor upgrade when HD came along in 2001, but it really hasn't changed, so, what we have decided to do is really re-engineer that, it's the only piece of our business that doesn't run natively on the cloud, and we're pleased to announce this week the deal with AWS as the strategic partner to really lift our video workflows in terms of how we produce, create, and really importantly distribute our video to all of those partners, in a way that really transforms the way our creatives can work as well, so, it was a pretty long process going through how you do that safely, because if you get it wrong, you go off the air, and that's really, you cannot do that, you're TV guys, you know that, and so we've been very careful. So AWS have stepped up with some great technologies, but really important they have great vision as well for it. >> So what specifically have you done, you created a new platform in the cloud? >> Yeah, so we were very very fortunate, we've just completed this deal with Disney to sell some of our assets there. It meant that actually we had a greenfield approach to this part of our business, so, for the first time ever we were unencumbered with a legacy, so a blank sheet of paper, and we came at it with the attitude of, if you were a large broadcaster starting your business today, how would you do it? And with that mindset, it takes you into a very different space, so we're working with AWS, and their media services team, and the elemental team within that, to encode our video within our sports news entertainment and local stations, we're using them to move the video from studio locations and football stadiums, and news gathering locations, remote locations, straight into the cloud, to be both managed and produced, and then it stays natively within the cloud, to be published out to distribution partners, whether it's Comcast for cable, whether it's Hulu for live TV, whether it's Apple for the VOD stuff that they do, or whether it's our own services, but that natively stays in the cloud, that workflow, and that just really enables a very different way of thinking. >> And the move is obviously a big challenge, right? I mean it's video, and it's big data. How are you solving that problem, what are the components of that that enable you to do that? >> So I think it would've been very difficult to achieve this vision if some of the products like Outposts and the local zones that AWS have announced at the show, we had early visibility and testing of those. If you're in an edit suite, editing 4K content, you can't necessarily, in a truck, you can't necessarily go back and forth to the cloud all the time, so we had the ability to kind of put a piece of the cloud on-prem or into a truck or into a studio to reduce the, eliminate the latency, and to manage that, so that's one thing. We also have architected it in a way where resilience is core and key, so if for whatever reason one part of the architecture goes down, then other bits of it can pick up the slack, and again, the way that we work with AWS on that front, they've really helped us architect something robust there. >> Yeah, how much does live come into this, I mean you can't afford a slip-up, right, I mean it's one thing to have down time, your point is, you can't go black, but just in terms of what you deliver, whether it's live news, live sports, live entertainment, it's real time. >> So we're predominantly a live company now, and it's the heart of our business, it's what we're great at doing, it's what our creative teams have done all of their lives, and if you take an NFL game on a Sunday, number of cameras, feeds, data, stats, the number of teams you've got both on location and back in the production facility, the number of games you're actually producing at the same time, on a complicated day it can be multiple games, and then the complexity around who you get the signal out to, in effect. Live is difficult, and I think that's why you haven't seen too many broadcasters go in this direction, quite yet, so we know we're an early adopter. We're being very careful and cautious around how we're kind of ramping this up, for example, we're still alongside the fiber connectivity into the cloud, we're also using satellite, so some of those decisions we've put in place as near term. >> You got some redundancies in place just as a risk management. >> Exactly, so we can slowly dial it up, and we're building new facilities around this to help make it happen as well, but the number one thing is giving the consumer a great experience. I'll give you some examples, actually, of how this'll transform the consumer experience, so, we'll be able to do both 4K and 8K natively through this infrastructure with AWS, we can't do that today. Latency will be reduced heavily, so we effectively encode the video once, and the device at the end decodes it, so that really compresses that level of latency that you'll see in a football game. And when you think about things like 5G, I don't know whether you saw Hans and the Verizon team in their announcement yesterday. Things like betting services and other things that we're getting into, you have to have close to zero latency to make those things work, so in the current broadcast chain, we encode and decode and re-encode, and all of these compression chains, and at the end of it, you've got a fairly decent quality signal, but by no means 4K or 8K, and that's one aspect, so the consumer will see a difference. The other thing is, we never want to be in a position again where we use infrastructure from 30 years ago, I mean we, no company in 2019 can afford to be in that position, so, by plugging into AWS, we kind of get that constant drip feed of innovation as it comes, and a very software-focused sort of architecture, as opposed to hardware and cables, which is, you see a lot of in broadcast. So we're pivoting not just the business, but the way we do business as well. >> So the consumer experience is much improved. As well, you mentioned live, of course the mainspring is live, that's where the content is created, but there's also an on-demand experience as well, is that, I presume compressed, so I can get to the best highlights if I miss the game, get the little mini game that I can watch and get a good flavor for it, that is compressed as well? >> Absolutely, so I mean going back to your data question earlier, so this infrastructure natively, as we're putting video through it, Amazon and AWS have the technologies to index the video in real time, to do scene detection, face recognition, a lot of those very forward-leaning technologies that I think for the last 10 years have been more science than fact, but now they're really coming to their own, so all of the video that goes through the pipes in a live form gets really in real time indexed. All of the consumption information about how the video's being consumed on the device comes back in in real time, and we can combine that into an experience, so if you're joining the live feed or coming at the video on demand asset later, you've got a much much richer experience, whether that's searching and finding the bit that you want or whether that's us curating a package of content automatically, using that metadata, so, we're excited about that. >> Talk a bit more about the search, how does that all work? >> Well I think search on a TV experience is still pretty clumsy. >> John: Amen. >> Yeah, it's definitely, and part of that's the user interface, I mean hats off to Comcast and their Xfinity product, a lot of the search now is done by voice through the remote and they're seeing a transformational difference there, but even in some of the OTT streaming services, the search and discovery, I'd use discovery in the same context, it's still clumsy, and that's entirely driven by the data, there's a reason Google are the best in the marketplace at search, because of the level of indexing that they do to create the, and I think AWS and their approach to video will be game-changing for us on this front, and they've obviously got the search technologies on the front end to enable that as well as the indexing technologies on the back end. >> How do you keep up with all the innovation, you mentioned up top that, citing Andy Jassy announce all this stuff, how do you keep up with it all, does it sometimes feel like it's going too fast to be able to absorb it all? >> No, this is a great time to be a CTO, because there's no way, we could complain about it, but the consumer's not going to stop changing the way that they demand content from us, so for me it's a combination of picking the right partner, speaking to them frequently and coming to events like this to meet my peers. I also spend a lot of time with venture capital companies, and very early stage startups to really get an idea around what's coming next over the next three to five years, and getting in early with those customers. I kind of have a mantra with my team internally, where I don't reward them necessarily for just doing business with the old incumbent legacy technology providers. I'd much rather we experiment with the next generation of companies, that's actually how we began our very early relationship with AWS and Amazon, and it's served us well. >> Well, the next time you see Joe or Troy, please give 'em our best. All right, if you will, they're always welcome on theCUBE, as are you, Paul. Paul Cheesbrough from Fox, joining us here on theCUBE, we'll be back with more coverage here live, AWS re:Invent 2019, you're watching theCUBE from the Sands. (techno music)

>> Announcer: From Austin, Texas, it's theCUBE, covering Pure Storage Accelerate 2019, brought to you by Pure Storage. (air whooshes) >> Welcome to theCUBE's day two coverage of Pure Accelerate 2019 from Austin, Texas. I am Lisa Martin, Dave Vellante is my co-host, and we're pleased to welcome back to theCUBE, here is VP of Strategy Matt Kixmoeller. Kix, welcome back! >> Thank you very much, happy to be here. >> This has been a, being shot out of a cannon. Yesterday and today, lots of news. First of all, happy 10th anniversary to you and Pure. >> Thank you very much, yeah. >> Tremendous amount of innovation, as Tara Lee said yesterday, overnight in 10 years. (laughs) >> It's a really fun time at Pure. Just something about the nostalgia of 10 years gets people, naturally, to start thinking about what the next 10 years are about. And so, there's just a lot of that spirit right now at the company, so it's almost like people are really charging into the second chapter with a lot of energy, so that's cool. >> A lot of energy, I think, all fueled by this massive sea of orange that has descended on Austin. >> Absolutely. >> So, four announcements yesterday. Let's start with Cloud Block Store, what you guys are doing with AWS, and kind of this vision of Pure's cloud strategy. >> Yeah, look, the cloud discussions I've had with customers here at the show have been awesome. And I think more than anything, people have realized that we've really built something very unique with Cloud Block Store, something that doesn't exist anywhere else in the industry right now. And, you know, if you look at kind of other storage vendors over the time, people have certainly taken their storage OSes and put them in the cloud kind of as a test-dev experiment, a way to try things out, but never really thinking, "I want to build something "that runs tier-one applications." And that was our goal from day one. We looked at the Amazon platform and said, they really built EBS, their block offering, as kind of a way to beat boot VMs, but it was really never meant for a way to run mission-critical applications. So they've been very open in partnering with us to say, look, let's bring this capability onto the platform. And we really rearchitected our Purity Operating Environment, and so, the whole lower half of that is really optimized for the AWS services to help customers move tier-one apps to the cloud. >> Was that joint engineering, or was it really mostly Pure doing that work? >> You know, it was Pure engineering in the sense that we wrote the code, but there was a lot of co-architecture work with AWS so we could fundamentally understand the basics of all of their services and how to optimize for it. And one of the big realizations and choices that came out of that was not to base the storage layer of this on EBS, but instead to base it on S3. And if you look at your average cloud customer, they really use S3 as the storage basis for the apps they build on Amazon, and so, S3 is the 11-nines durable storage platform there. And so our whole goal here was, how do you use S3, but still deliver the level of performance you'd expect out of a tier-one block environment? >> Well, when you read the sort of cloud storage press release du jour, you can't really get into the nuance, but if I understand it correctly, you guys essentially have architected, using AWS services, a new class of block storage that runs on AWS, but looks like Pure. >> That's exactly it. >> So you're essentially front-ending cheap S3 storage with high-priority EC2s, you've got some mirroring for rights to give it high availability, and again, it looks like Pure. >> Kix: Yep. >> So you win, 'cause you're making money on the software, (laughs) AWS is selling services, and the customer has a Pure experience. Did we get that right? >> Yeah, and I think the combination, the one-two punch, that's been very interesting for customers is not only what we're doing with Cloud Block Store, but the new Pure as-a-Service offering. And so, Pure as-a-Service is our as-a-service consumption mechanism that allows you to essentially subscribe to or rent Pure arrays from Pure in your data center, but it's a license that can go between on-prem and cloud. And so, imagine you're a customer that is mostly on-prem today, but you have that mandate, "I've got to get to the cloud." You might need more storage, but the last thing you want to do is commit to another three- or five-year purchase of a storage array that just puts off that cloud journey that much longer. So a customer can subscribe to Pure as-a-Service, they'll maybe subscribe to 100 terabytes, and we put an array in their data center right now, but a year from now, they decide they're going to move 50 terabytes to Cloud Block Store in Amazon, that's just a transparent movement, they're already licensed for it. And so that-- >> And there's already, oh, sorry, sorry. >> Kix: No, go ahead. >> There's already customers that are in beta with Cloud Block Store, is that correct? >> Correct, yeah. >> Lisa: Any interesting insights that you can share without giving away secret sauce? >> Oh, absolutely. You know, I think the thing that pleased us the most about the beta was really the divergence of use cases. You know, we created this, but there's always, you create something, and you don't know what people are going to do with it, right? And so, we have this goal of going after tier-one apps. Obviously, there's a lot of people that are just focused on migration, "How do I get the tier-one app from on-prem to cloud?" And so that was what I would say would be the dominant use case. But there were a lot of interested in test-dev type use cases. And really interesting, I think we saw it in both directions. So we saw some customers who wanted to develop their app in the cloud, but then deploy on-prem. We saw the opposite, we saw people that wanted to develop on-prem but then deploy in the scalable infrastructure in the cloud. And so I thought that was quite interesting. >> How much of the impetus to do that offering was hardcore customer demand, "We need this," versus, "Hey, we need to embrace the cloud "and make it a tailwind and not be defensive about it"? >> You know, I think when we looked at what was going to be the buy-in criteria for the storage array of tomorrow, fundamentally, this is it, right? People want on-prem infrastructure that's connected to the cloud and provides them a roadmap or a bridge to the cloud. And I think we've seen a big change in mindset over even the last couple years. I'd say two or three years ago, the mindset from customers was, "I'm all in on cloud." I think we've seen that soften, where they've realized that the cloud is not a panacea, it's usually actually not cheaper or faster, but it is more agile, it is more flexible, and so, a combination of on-prem and cloud is the right answer. And so, what does that mean from a storage platform? Storage is the hard part. And so, I then need a storage architecture that can support both on-prem and cloud and drive commonality, as opposed to having it be totally different architecture. >> Was Outposts at all a catalyst in your thinking on this, or was this happening way before you even saw that? >> No, we started this effort before that, but I think Outposts is a good example, I believe, of how Amazon is just getting serious about saying, look, we can't ask everybody to rearchitect every application for web scale. There are certain apps that it won't make sense to rearchitect. How do we bring those to the cloud in an efficient way? And those are really the types of applications and the first-generation Cloud Block Store is perfect for. You connect your existing on-prem app, move it to the cloud without changing it, and then maybe slowly you rearchitect parts of the application, you evolve it over time, but that's not a gate to going to the cloud anymore. >> I like the way you said it, you thought about what storage is going to look like in the next 10 years. And we've said this a lot, it's the cloud experience, bringing that cloud experience to your data is what storage is going to look like, you know, wherever it lives, is going to look like in the next 10 years. >> Absolutely, and I think the other real mindset shift I think we've seen is how people are thinking about truly running their on-prem environment more like a service. You know, if you look at, the key message that we had at the show here was really the Modern Data Experience, and defining for customers what that meant. And in a lot of ways, I've been in the storage industry for a little while, I think back, 20 years ago, the buzzword was utility storage. I think one of our competitors had that as their slogan sometime in the '90s. >> Yeah, right. >> And the reality, though, is when you talk to most storage teams, they just never did that. They still ran a bunch of arrays on a project-by-project basis, and it didn't look at all like the cloud. And so, now people have learned the lessons from the public cloud and said, "We really need to apply those on-prem "to truly bring our infrastructure together "into much more of a virtual pool, "truly deliver it on demand, abstract consumption "from the back-end infrastructure to give flexibility." And so, that's really what we're trying to deliver with the Modern Storage Experience, is to say, look, let's get out of the world of array-by-array management. If a customer buys 50 or 100 of our arrays, how do they take that pool of arrays and turn it into a block service, turn it into a file service, turn it into an object service for their customers, with real abstractions and real APIs for those services that have nothing to do with the back-end infrastructure? >> Dave: Mm-hm. >> When Charlie talked yesterday, Kix, about the Modern Data Experience, the three S's pop up. >> Kix: Yeah. (clears throat) >> Simple, seamless, sustainable. But as IT is getting more and more complex, and customers are in a multi-cloud environment, not necessarily from a strategic perspective, right, acquisition, et cetera, how does Pure actually take that word, simple, from a marketing concept into reality for your customers? >> Yeah, you know, I think simple is the most underappreciated but biggest differentiator (coughs) that Pure has. I was recalling for someone, you talked to Coz earlier today. I had a conversation about three weeks into the existence of Pure, (coughs) excuse me, with Coz, and we were just debating, I mean, this is before we wrote any code at all, about, what would be Pure's long-term differentiator? And I was kind of like, "Ah, we'll be the flash people, or high-performance, or whatever," and he's like, "No, no, no, we're going to be simple. "We are going to deliver a culture that drives "simplicity into our products, "and that'll be game-changing." And I thought he was a little crazy at the time, but he's absolutely turned out to be right. And if you look over the years, that started with just an appliance experience, a 10-card install, just a really easy environment. But that's manifested itself into every product we create. And it's really hard to reverse-engineer that. It's an engineering discipline thing that you have to build into the DNA of the company. >> Yeah, he kind of shared that with us, Lisa. He was basically, my words, saying, you don't ever want to suboptimize simple to get a little knob turn on performance, because you'll be turning knobs your entire career. There's a lot of storage arrays out there that, it's all about turning the knobs. >> Kix: Yeah, well-- >> If you can't fix it, you feature it. >> Oh, and if you think about really trying to automate something, it's really hard to automate complex stuff. If something's simple, if it's consistent, it plugs into an automation framework. >> You talked about "get your 10X"-- >> Kix: Yeah. >> I think, is that what you said? And an entrepreneur who was very successful once told me, "I look for two things, a large market and a 10X impact." >> Yep. >> So, what is your 10X? >> You know, we have two 10Xs at the show this year. So first was really kind of a 10-year jump in performance. When we first entered, people were used to 10-millisecond latency from disk, and we introduced them to one-millisecond latency. Now, with the shipping in direct memory and bringing SCM into the architecture, we can do 100 microseconds. That's another 10X. And so, it's hard to ignore that. >> Lisa: That's game-changing, as you said yesterday. >> (coughs) Exactly. The other is really around our next product, FlashArray C, which brings flash to tier-two data. And there, it's all about consolidation. Most people have not used flash to fix tier one, but their biggest problem now is tier two. They have less-important applications, but because they haven't optimized that, it's taking up way too much of IT time. And so, FlashArray C is, "How do I go "and basically consolidate 10X consolidation "at that tier-two level to really bring "sanity to tier-two storage?" >> And you've got NAM pricing, we talked to Charlie about this, that it ultimately should be a tailwind for you guys as NAM pricing comes down, as NOR fab capacity's coming online in China to go after the thumb drives, right, so that's going to leave the enterprise for all the traditional flash guys that we know and love. So that should open up new markets for you. Today, if you look at pricing for flash C class storage, if I got it right, I'm guessing $1, $1.50 a gigabyte. You see hybrid still at probably half that, 65, 70 cents. Do you see that compressing over the next, let's call it 18, 24 months? >> Absolutely, I mean, what we can do with this product is really bring out flash at disk prices. And so, if you think about the difference, I mean, what we now have in the product line is two platforms, FlashArray X, optimized for performance, at hundreds of microseconds of latency, but C, at a little bit slower performance, still in the millisecond range, can really get down now to those disk prices you just mentioned. And so, it fundamentally gives customers the chance to ask, "Can I really now eliminate disk from the data center?" You know, as I said in my keynote, that the slogan from Pure from day one has been "the all-flash data center." And 10 years ago, people didn't believe it. We were maybe leaning over our skis a little bit in doing that. It now really feels possible to go and have the all-flash data center. >> Well, I'll tell you, we believed it. David Floyer picked up on it early on, and he was-- >> Kix: Yeah. >> He was actually probably too aggressive with (laughs) his forecast. We missed the NAND supply constraints. >> Kix: Yeah. >> But now that seems to be loosening up. >> Well, and, look, one of the things that really helps us build the perfect product around QLC is the work we've done to integrate with raw flash. We cannot just use QLC, but we can use it really efficiently, and the challenge there is to make it reliable. It's inherently a less-reliable flash. And so, that's what we're good at, taking things that are less reliable and making them enterprise-grade. >> And your custom flash modules allow that? >> Yeah. >> Can you add some color to that? >> Basically, what we do is we source raw NANDs, put it in our system, but then do all the work in software to manage the flash. And so, when you have a less-reliable flash medium like QLC, generally, what you have to do is add more flash to overprovision and be careful writing to it. And so, when do it globally, we don't do it inside every SSD, we can do it across the whole system, which makes the whole thing more efficient, thus allowing us to drive costs down even more. >> Hm. >> One of the things that we have heard over the last day and a half from customers, even those that were onstage yesterday, those that were on theCUBE yesterday and those that will come on today, is, they talk about the customer experience. They don't talk about FlashBlade, FlashArray, they're not talking about product names. They're talking about maybe workloads that they're running on there. But the interesting thing is, when we go to some other shows, you hear a lot of names of boxes. >> Kix: Yep. >> We haven't heard that. Talk to me a little bit about how Pure has evolved and really maybe even created this customer experience that's focused on simplicity, on outcomes, that is, in your perspective, why people aren't talking about the specific technologies-- >> Kix: Yeah. >> But rather, this single pane of glass that they have. >> Look, when we started the company, I obviously talked to a lot of customers, and I found, in general, there was frustration with products, but they also just generally didn't like their storage company. And so, from day one, we said, how do we reinvent the experience? Of course, we have to build a better product, and we can use flash as kind of an excuse to do that, but we also want to work on the business model of storage, and we also want to work on the customer experience, the support experience, the just 360 view of how you deal with a vendor. And so, from day one, we've been very disciplined about all of that. Going all-flash was a key part of the product. Evergreen has probably been our quintessential investment in just, how do you change that buying cycle? And so, you can buy into an experience and nondisrupt the way they evolve, versus replace your storage array every three to five years. And then, I think the overall customer experience just comes from the culture of the company, right? Everybody at Pure is centered on making customers happy, doing the right thing, being a vendor that you actually want to work with. And that's not something you can really legislate, that's not something you can put rules around, it's just the culture at Pure. >> When we talked about Evergreen yesterday with a number of customers, including Formula 1. I said, "You know, as a marketer, "how much of that nondisruptive operations, "take me from marketing to reality," and all of them articulated the exact value prop that you guys talk about. It was really remarkable. And another customer that we talked to, I think from a legal firm here in the U.S., didn't even do a POC, talked to a peer of his at another company that was a Pure fan-- >> Kix: Yep. >> And (snaps fingers) bought it right on the spot. So the validation that you're getting from the voice of the customer is pretty remarkable. >> Yeah, this is our number one asset, right? And I mean, so when we think about, how do we spread the religion of Pure, it's just all about giving voice to our customers, so they can share their stories. 'Cause that's so much more credible than anything we say, obviously, as a vendor. >> You're one of only two billion-dollar independent storage companies, which, we love independent storage companies, 'cause, you know, the competition's great. How far out do you look and do you think about being an independent storage company? You've seen, as a "somewhat" historian of the industry, you've seen TAM expansion, you guys are working hard on TAM expansion now, new workloads. You got backup stuff goin' on. You got the cloud as an opportunity, multi-cloud as an opportunity. So you got some runway there. >> Yeah. >> Beyond that, you've seen companies try to vertically integrate, buy backup software companies, you know, a converged infrastructure, whatever it is. How far out do you think about it from a business model standpoint? Or do you not worry about that? >> You know, look, to put it in context a little bit, you look at the latest IDC numbers, we're maybe one-third in to the transition to flash, right? The world still buys two-thirds disk, one-third flash. That's a huge opportunity. We're now five or six globally in storage. That's a few spots that we have to go, right? And so, we're not at all market-share limited, or opportunity limited, even within the storage industry, so we could make a much, much larger company. And so, that's mission number one at Pure. But when we think beyond that, that's just a launching point. And so, you've seen us do some stuff here at the show where we're getting into different types of storage. The first obvious expansion is, let's make sure anything that is a storage product comes from Pure, and there's obvious categories we don't play in today. You saw us introduce a new product around VM Analytics Pro, where we're reaching up the stack and adding real value at the VM tier, taking our Meta AI technology and using to give VM-level optimization recommendations. And so, yeah, I think we increasingly understand that IT's a full-stack game, and so storage is maybe the hardest part of the stack, and that gives us a great base to work from, but we don't constrain our engineers to say, you can only solve storage problems. >> Geography's another upside for you. I mean, most of your business, the vast majority of your business, is in the U.S., whereas you take a company like some of these other ones around here, more than half their business is outside the U.S, so. >> Yeah, no, our international businesses, we've been international five or six years now, and it felt like the first couple years are investment years, and it took time. But we're really starting to see them grow and take hold, and so, it's great to see the international business grow. And I think Pure as a company is also learning to really think internationally, not just because we want the opportunity, but the largest customers in the world that we now deal with have international operations, and they want to deal with one Pure globally. >> So when you're talking, and maybe this has even happened the last day and a half, with a prospective customer who is still investing a lot on-prem, still not yet gone the route of flash, as you were saying, those numbers speak for themselves. What do you say to them? >> If they're not on flash yet? >> Lisa: Yeah, yeah, to show them the benefits. I mean, what's that conversation like? >> It's rare, to be honest, now to find customers who haven't started with flash. But I think the biggest thing I try to encourage folks is that flash is not just about performance. And when I look at the history of people who have embraced Pure, they usually start with some performance need, but very quickly, they realize it's all about simplicity, it's all about efficiency. And if they can make storage fundamentally simpler and more efficient, they free up dollars to put towards innovation. And we unlock the ability to drive dollars towards innovation, and then we drive storage to the new innovation projects, like analytics, like AI, et cetera. And so, we just try to talk about that broader opportunity. And I think that's the hardest thing for people to grasp, because the IT history has always been lots of ROI pitches that say, "Hey, this thing costs a lot, but trust me, "you'll make it up in all these other benefits," that no one believes. And so, you just have to get them to taste it to begin with, and when they see it for themselves, that's when it clicks and they start to really understand the ROI around that. >> Well, congratulations on 10 years of Pure unlocking innovation, not just internally, but externally across the globe. We appreciate your time, Kix. >> Thank you, we're looking forward to the next 10 years. >> All right, to the next 10! For Dave Vellante, I'm Lisa Martin. You're watching theCUBE from Pure Accelerate 2019. (upbeat music)

>> Live from Las Vegas, it's theCUBE, covering AWS re:Invent 2018, brought to you buy Amazon Web Services, Intel and their ecosystem partners. And welcome back here at AWS re:Invent. We are live in Las Vegas, day three of our coverage right here on the Cube, and we continue our discussion now with Justin Warren and John Walls, with Matt Yanchyshyn, who is the director of solutions architecture at AWS. >> That's right. >> Good morning. Good to see you, sir. >> Thanks for having me. >> And Nick Cayou, vice president of the global ecosystem at Pivotal. And, good to see you this morning, Nick. >> Good morning, thanks for having me. >> All right, first off let's just get your take on what's happening here. We were talking a little but before we got started about here we are, day three, well day four if you count the partner conferences, but last day of the show, and there's still a lot of excitement in the air. >> All the energy out here. >> The show floor's still packed. What have you guys seen this week that's kind of stood out in your mind, Matt? >> Well, I mean people stick around for the third day because Werner Vogels is like a hero for so many people here and so, you know, a lot of buzz is to see his keynote this morning. You know, one thing I've been really excited about is all the announcements around machine learning this week. There's just been an incredible amount of innovation, and people are really excited about the DeepRacer and the DeepRacer league announced this morning, so that, you know, the momentum we're seeing and the excitement around machine learning is really cool to see. >> And from your perspective, Nick? >> I'm joining the marathon towards the middle. I came in last night. Matt and I had dinner. But I think the most impactful announcement I saw coming out of AWS was probably the Outposts announcement, sort of the commitment to hybrid, which, and I know Matt played a big role in kind of pioneering that and so that's super exciting, and I just can't believe how many people have stuck around. I mean, we're on the last day of this thing, and it's like, you know, people are staying after the party. They won't leave the house. >> Yeah, exactly right. Well, at four O'clock they're going to have important things that we're going to think about. DeepRacer, by the way, we've had a couple of guests on. That was a really cool idea about taking literally a small, toy truck, if you will, but programming it and doing some, not reflective learning, but reinforced learning with it, and then actually taking it into practice and putting these cars on tracks and having a yearlong competition. So we'll kind of see next year, how that works out. >> Yeah. >> AWS and Pivotal, all right. So what are the two of aligned with now? What brings the two of you here, and the two companies together? >> Yeah, well, I mean, I think first of all, as companies we have a lot in common, certainly how we think about customers. We're both really sort of customer-obsessed companies. But, you know what I see a lot, I work with partners all day long, and we want to make it easy for both our customers and our partners to embrace modern DevOps, like all these enterprises are going through DevOps transformation, and any tools and partnerships we can create to make that journey easier is really a priority for me and my team. >> Okay, and then from the Pivotal side of the fence? >> Yeah, I would say largely it's our customers. You know, a large portion of our clients have chosen to run Pivotal Cloud Foundry, which is sort of our flagship platform, as a service on AWS. Going back to, you know, tune of 2014 was the first public IaaS we supported after Vsphere, so, you know, I think our customers are pushing us to work together, and I think we've met that challenge. You know, one of the things we're here to talk about from a Pivotal perspective is all the work we've done with Amazon to expose Amazon services to our platform through this technology called a service broker, that you know, over the past six months, Amazon engineers and Pivotal engineers have worked kind of assiduously to deliver to market, and now it's getting in the hands of customers. You know, after this session we're going to go speak with about 50 customers in a private room about how they're deploying Cloud Foundry on AWS and utilizing the service broker to be more productive and drive more innovation of services into their developer community. >> So what are some of the services customers are attracted to? What are they pushing you to put into this service broker? What do they want to do with that? Maybe you could give us a bit of a flavor of that? >> So we came out initially a couple months ago with 18 services that we support, so things like S3, RDS, some of the Hadoop offerings. You know, I think we're going to see the basics, the S3s, probably consumed first, but we're working. We're actually putting some ideas together to see how we can build kind of reference architectures and paradigms to let our customers know how to take advantage of these services like machine learning or some of the Hadoop offerings, etc. >> Yeah, I mean, we started out with some of the IoT integrations already for the service brokers, but I agree. We're starting with the core services, the databases, DynamoDB, RDS, S3, etc. And we're starting to layer in more services over time. >> Well you've got to start with the basics so that you can then build upon that. >> Exactly. >> Which is what Amazon has a long history of doing. You know, you started with EC2 and then you grew beyond S3 and now we have services like SageMaker and things that drive the car with DeepRacer, so it would be nice if we could actually do training models using Pivotal Cloud Foundry. >> Well actually, nothing's stopping us from using PCF. One of the things I love about it is with Cloud Foundry you can use the Service Brokers. It makes it easier for you to adopt AWS services, but nothing's stopping you from using any AWS service, and it's one of actually the great parts of the partnership, so you're not limited to what we have service brokers for. >> Yeah. So, enterprises have been going on this cloud journey for some time, and Amazon's been around for a long time. AWS has had these services for a while, Pivotal as well. Where are we seeing customers? Where's the momentum for customers, where they're transforming their businesses, and we're hearing a lot about hybrid cloud here at the show. Where are enterprises putting their workloads? What are they looking at putting workloads into hybrid as compared to putting things over into public cloud or using Pivotal Cloud Foundry for? >> I guess I'll take it from my angle first. So, you know, approximately 70% of our customers are still running their workloads on prem, right? That doesn't mean to say that they're not expanding those applications out to Amazon, for example, and I think the key trend we're seen is, you know, cloud is becoming more of an operating model, and what we focus on is teaching our clients how to build and rebuilt software. The big sort of surface area below the iceberg for us right now is all of the enterprise applications, legacy monoliths that need to be kind of decomposed and moved into a cloud operating model, modernized through things like data services that we can expose through our platform to something like AWS. And, you know, it's starting to shift. We were talking earlier about the Outpost and how I think the goal is to kind of meet customers where they are together, if that's the best way to put it. >> Yeah. >> Both Amazon and Pivotal. >> Yeah, I mean with the size of customers we're working with, like Comcast and Liberty Mutual and US Air Force, it's not like a single jump into the cloud. It's a migration, a lot of different workloads, a lot of different divisions of these companies. So it's sort of a continuum, and so different companies are at different stages of their migration and adoption of the cloud all over different parts of the business, so I think the hybrid story is really meeting that need. You have some divisions that are going to jump right into server lists and IoT, and then you have other parts of the company that maybe, you know, have a mainframe that they're still tied to, so there's always going to be some of these dependencies, and so I think hybrid story allows us to sort of address all different parts of the companies we work with. >> So what are the factors then? If I'm looking at, you know, a hybrid cloud solution, how do you help people decide what to put where? Because, you know, you got it on prem, it becomes, you know, a heave, right? To move some things over, and so, could be easier to I guess, take the lightest lift and go from there, but that's not necessarily the best route to go, so how do you help people with that kind of decision? >> Yeah, I mean, we believe in the fullness of time that customers will eventually move everything to the cloud but, you know, in the meantime, like I said, it's going to be a multiyear journey for a lot of these big customers. So like if you take, you know, a Liberty Mutual or a Comcast, these are very large companies, and we work with them to find teams and workloads within, and that comes down to people a lot of the time. You know, different teams may be at a different point of sort of agility in terms of DevOps, and if they're able to adapt their software. If their software runs on x86 infrastructure and if they're already using CICD for example and if they're used to containers, then they're going to be good candidates. So I always look to the people and then the products and then decide what they're going to migrate in that order. >> Yeah, and I would say that, you know, there's a lot of big enterprises that are looking to shut down data centers and they've already made a decision to fundamentally move infrastructure to AWS for example, right? And a lot of times we'll be brought in after the fact if you will, to deliver that developer experience on top of an already made, fundamentally an outsourcing decision, so all the reasons, you know, cost, complexity, flexible finances, consumption-based pricing, a lot of that kind of substrate decision has already been made, and we're generally coming in and saying, okay, now let's look at the application architecture. Are there things like latency and/or regulatory requirements that would require you to keep this on prem versus moving completely to the public cloud? Are there services? So, you know, could you move off of legacy middleware for example, on prem, and take advantage of, you know, refactoring and moving applications into the public cloud to improve your cost structure there? There's a myriad of issues. I think we would generally agree. A lot of times we get guidance from our customers in their respective market segment as to what's most important to them. >> So looking ahead trying to sketch out the vision of what we're going to see in the future, what do you think that customers are going to be asking for you, next year, two years out? >> Well, I think we've had a great reception for a lot of the templates and the automation that we've co-engineered. You know, Nick was talking about a lot of the co-engineering. So we have something called the AWS Quick Starts that allow you to deploy Pivotal Cloud Foundry really quickly, and so we've had really good reception from customers. >> Yep. >> Like, things that we can make it easier for them to deploy Pivotal and just sort of explore using AWS. We're going to double down on those efforts. More service brokers, more Quick Starts, more Automation more self-service for customers to they can get started with pivotal, you know, quickly. >> Yeah, and I'd add we're also, we support a product we launched about three quarters ago, Pivotal Container Service, on AWS, and so I think we'll see by virtue of the partnership with VMware, a lot more customer demand to run PKS, you know, on AWS, on Outposts, on VM cloud for AWS, and all the variants of the VMware and Amazon partnership as well. >> Yeah, like you said, meeting customers where they are. >> That's right, yeah. >> Well you're about to meet Cisco >> (laughs) that's right. >> So, good luck with that, and I'm sure you're going to get a very positive earful, which is always a good thing and continue that great work with them. Gentlemen, thanks for being with us. >> Thanks for having us. >> Appreciate the time. >> Thank you. >> Back with more AWS re:Invent. We're live here in Las Vegas at the Sands expo, and you're watching theCUBE.