>> From the Cube studios in Palo Alto in Boston, bringing you data-driven insights from the Cube in ETR. This is breaking analysis with Dave Valante. >> Throughout the pre-vaccine COVID era, IT buyers indicated that budget constraints would constrict 2020 spending by roughly 5 percent relative to 2019 levels. But the forced march to digital, combined with increased cyber threats, created a modernization mandate that powered Q4 spending last year and this momentum has carried through to 2021. However, COVID variants have delayed return to work and business travel plans and as such our current forecast for global IT spending remains strong at 6 to 7 percent but slightly down from previous estimates. Notably, CIOs and IT buyers expect a 7 to 8 percent increase in 2022 spending, reflecting investments in hybrid strategies in a continued belief that technology remains the underpinning of competitive advantage in the coming decade. Hello and welcome to this week's Wikibon Cube Insights, powered by ETR. In this breaking analysis we'll share the latest results of ETR's macro spending survey and update you in industry and sector spending patterns. First, let's summarize the key take-aways from ETR's latest demand-side survey. Based on ETR's latest survey. Currently with 869 responses as shown here at the bottom, we expect a slight pull-back in spending expectations from CIOs and IT buyers to roughly 6 to 7 percent, down from 7 to 8 percent earlier this year. This reflects caution over return to office strategies but buyers continue to expect robust spending as we said into next year as they support hybrid models, modernize their HQ infrastructure and continue to move forward on digital transformation initiatives. Cyber security and cloud remain the top 2 priorities with data initiatives overtaking collaboration and productivity on the priority list. Although all of these remain strong. Organizations now expect around 44 percent of employees to be working in a hybrid model over the long-term with 37 percent currently working in a hybrid fashion. Now here's the data behind the revised projections it compares the spending growth expectations from the March, June, and September 21 surveys. This by no means is a radical change as you can see from the downward trajectory of the yellow bar. It reflects the reality of the continued injection of uncertainty caused by the pandemic. Organizations are dealing with the reality and remaining flexible with regard to strategies and spending outlook, but the 2022 bar on the far-right at 7 and a half percent stands out in its telling as buyers expect spending levels in 22 to outpace historical norms by quite a large margin. Now as shown here, the spending compression is an across the board trend. Only Latin America, industrial materials manufacturing, and retail consumer show an uptick from previous surveys. With non-profits, education, energy, and APAC showing the steepest declines. But the longer term spending outlook remains robust across the boards. This chart shows that generally the outlook for 2022 spending is strong with retail consumer and government leading the charge. Only the historically cautious education sector stands out as softer, but even so its spending outlook is comparable to historical norms. Now be careful putting too much emphasis, by the way, on Latin America as the ends are small as ETR noted here. Now let's take a look at the sector analysis. This picture has been amazingly consistent. ETR asks respondents to rate their spending priorities and the chart shows the ratings from highest to lowest priority for the top technology sectors. Now this data only shows the top 7 sectors, so even though for instance RPA appears down the list, it remains one of the highest in the survey. In fact, although we are not showing this data, we went in and looked at this. Machine learning, containers, cloud, and RPA remain the top 4 areas from a net score or spending momentum standpoint. Well above the 40 percent mark we talk about all the time. Back to the priorities we asked the CIOs. Cyber security is noticeably above the rest with cloud migration remaining very strong. The data sector i.e. analytics and data warehousing have overtaken collaboration and productivity as priorities. However, collaboration remains strong as do networking, AI, and RPA. Now when we dig into some of these sectors to see which vendors are showing spending momentum, let's take a look. In addition to the large cloud players, especially AWS and Microsoft, we saw that snowflake continued to hover at around 80 percent net score level. Some others that we haven't cited as much recently are popping up either with spending momentum, or showing a larger presence in the market or both within these sectors. Toughtsbot has popped up now this AI specialist has shown up every now and then in the survey but they seem to be getting traction in the data set and they have an elevated net score. Datadog also stood out as did Cockroach Labs and Databricks is starting to show some strength even though they have shown strength in past surveys, they're starting to show larger presence in the survey. Now Networking Arista who has always had strong momentum shows continued strong momentum. And Maraki which has a large presence in the data set, is also notable. Not as high, but as a much larger share. Monday.com is also hitting the radar in collaboration and Twilio is popping up as well. Let's take a look at the return to office trends and the actions organizations have taken as a result of COVID and see how that's changed over time. This data shows the time series going back to the June 2020 survey. Let's start with the percent of organizations with employees working from home and you'll note that has ticked up since June and is now back up to 75 percent. And you can see the noticeable drop in the percentage of companies that have employees fully returning to the office. Also, more organizations are canceling business trips. So these are some of the factors that contribute to the slightly more cautious spending outlook that we're reporting here. Now continuing on the chart even though layoffs are trending downward, it's no surprise given the skill shortage you see a slight uptick in hiring freezes and a downtick in new hiring. New IT deployment freezes they remain low but there is a slight down tick in accelerating new IT deployments. So look, these are not radical changes, but they do reflect the on-going day-by-day, month-by-month, quarter-by-quarter adjustments that we've seen companies make throughout the COVID era. And it underscores the need for organizations to be more agile, flexible, resilient, and responsive to change. What does that mean? It means modernizing infrastructure and apps, better leveraging data, applying AI, and taking care of governance, compliance, and security. And CIOs expect these spending priorities to continue for the foreseeable future, at least for the next 15 months. Now as we've declared in previous episodes, every CEO, CXO, corner office, boards of directors, they're trying to get hybrid right. Interestingly, we see some companies mandating a return to work. We've seen this with some of the Wall Street firms, for example, but tech is a leading example of advocating for remote or hybrid work. To it, Michael Dell's public posture that he's wide-open for remote and, or hybrid work and Frank Slootman has moved Snowflakes' executive offices to Bozeman, Montana reflecting his sentiment that the days of big corporate towers are over. And why not? Productivity is through the roof, and the cost savings from working remotely can be enormous. This chart shows data back to the December 2020 survey. And we've seen a steady decline in remote work, but it's still the dominant model of 53 percent of the work force. In other words, people are starting to come back to office but still very, very high remote. Now jump to the third set of bars. And organizations expect a 39 percent of employees to be working remotely in 6 months. Now jump back to the second set of bars, 37 percent of employees are currently working in a hybrid model and that's up from 33 percent in June. Now jump to the fourth set of bars and the expectation is around 44 percent will be working in a hybrid model within the next 6 months. Organizations expect remote workers to settle in and level around 30 percent. Now that's down from previous highs of 35 percent last December but it's up significantly from the historical average of 15 to 16 percent. And the expectation as you can see in the last set of bars is that more than 40 percent of employees will be working in a hybrid model, on a permanent basis. So look, the world is going hybrid. It's the future and that requires technology investments to support new ways to work. And that's one main reason why we see the spending momentum continuing into 2022. So let's drill a little bit into what this means. In order words, how are organizations thinking about their hybrid models. This chart shows the responses from the June and September surveys when ETR began asking organizations to describe their hybrid approaches in more detail. The dominant model, around 50 percent of organizations say time will be split between remote and required on-site days. This is where leaders will ask employees to come to the office at designated times for whiteboard sessions, or planning meetings, et cetera. So hybrid is the dominant model. Then we see a big drop to primarily on-site with exceptions as needed and a low single digit number of organizations with no hybrid option. So the message is clear: Hybrid is the way forward and IT infrastructure will evolve to support these models and this bodes well for tech spending in our view. It speaks to continued cyber investments, leverage the cloud for flexible capacity shoring up on-prem infrastructure as we now see more vendors offering flexible capacity on-prem. Modernizing applications, building layers with micro-services and kubernetes that can actually connect to the cloud or assist in moving workloads, evolving the network architecture, flattening that out we hear a lot of talk about the edge, driving automation, and new ways to work and putting data at the core of digital business strategies. These are the technology approaches that organizations are tapping to deal with the changing dynamics of the pandemic, and adapting to new business models. Across the board, technology has become one of the most important enablers for competitiveness ain the coming decade and we expect that momentum to continue until some exogenous factors derail the spending trend. At the moment, that risk doesn't appear to be a slow-down in an economic recovery, although we continue to watch uncertainties around interest rates, inflation, tax policy, and global economic tensions, especially with China. And as always, we'll be here to update you as the data changes. Okay we're going to leave it there for now, remember these episodes are all available as podcasts you just got to search "breaking analysis podcasts" and we publish each week on wikibon.com and silliconeggle.com. You can connect with me on twitter @Devalante or email me at david.valante@silliconeggle.com. Appreciate the comments on LinkedIn and don't forget to check out ETR.plus for all the survey data. This is Dave Valante for the Cube insights powered by ETR, be well, and we'll see you next time. (music)

(bouncy techno music) >> Thank you, Adam. It's great working with you all week in the studio. We're here, live in Barcelona. TheCUBE's continuous coverage of Cloud City, it's unbelievable. Darragh Grealish is here, he's the chief technology officer and co-founder of 56K.Cloud. I love that name, we're going to talk about that. And Alexander Lerhmann is the director of new business development innovation at Sunrise UPC. Gents, great to see you, welcome to theCUBE. Thanks for coming on. >> Yeah. >> Thanks for having us. >> MWC, you guys made the bet to come here and aren't you glad you did? >> Yeah, we had to go through a lot of processes, but it was totally worth it, you know? >> Yeah, we're going to talk about edge cloud, right, and we're going to talk about developers, and how this whole thing's going to build out. But how do you think about the cloud? You know, we were talking to DR earlier. The cloud, people think it's a place. Increasingly people say, "no, that's actually an experience, it's a development environment." The cloud is expanding to the edge. The data center is just another edge node. How do you guys look at the edge cloud? >> Yeah well, we see the edge cloud as a huge opportunity to monetize on 5G. To bring the understanding, and the features that 5G can deliver into the next generation of developer experience. Because once we address developer experience, we're going to be able to address that next generation of user experience. >> Okay so, let's dig into a little bit about what each of your respective companies does. Tell us about 56K, and I love the name. Maybe a lot of people don't understand it, but y'know. >> Yeah, it's kind of a generation thing. So, I worked for a lot of large companies, all of them super long email addresses. At the same time, I grew up with the 56K modem. The dial-up modem, as you know it. >> Speaker: Right. >> And the transition from dial-up to broadband was massive. I mean, in terms of user experience on the web, you know. The impact on that technology that did, meant that finally you could control the user experience. You had some predictability, and we thought it was a catchy name. People relate to it. I used to work in test automations, so user experience was an important thing. And so, we kind of combine now, cloud and the 56k kind of understanding, so experience. And it's all about addressing that user experience. >> It's a game changer from a consumer experience at that time. >> Exactly. >> And that's obviously the metaphor you're using. Alexander, tell us more about Sunrise UPC, what their relationship is with 56K. >> Yeah, so Sunrise UPC obviously is a telecommunications provider. #2 largest private telecommunication provider in Switzerland. And in terms of partnership with 56K.Cloud, business started the conversation of how we can bring our world together with what 56K.Cloud is doing. We see a lot of things that we can do to kind of improve the offer from our end, to our customers in the wider community as well. >> Yeah so, this is a good example, right? Because we see, we always talk about the global telco industry, but there's a lot of localization, right? >> Alexander: Right. >> There's a lot of public policy that has to be considered. So let's get into the "Cloud" portion of your name. >> Darragh: Yeah. >> You think about things like wavelength. Which is essentially, it's really the outpost for 5G, if you think about it, right. They're not satellites, it's a platform for the development. Tell us about wavelength in 5G, the intersection there, why it's important. >> Yeah so, the edge cloud solution from Amazon, as you've heard of it, it's not just solving existing use cases or problems, it's actually creating new opportunities by combining the technologies of 5G network slicing, network exposed functions, and multiple access edge compute, you know, it's actually the platform. So, what we're trying to do is bring that developer experience at tuning that is dominated in this large ecosystem in the public cloud, stretched into the network because we need to start to see developers to see the network as an asset. Once they realize that speed, bandwidth, and latency, they're not fighting against this to deliver the best user experience. They can orchestrate this. They can be part of the challenge. And once we can get those developers to see the network as a value proposition, and this is the kind of minimum components that would build that next generation, you know, the next opportunities. So you know, you had an interview recently with Jeff Barr from AWS, and he referred to AWS waveband as, "this is not just solving existing issues." He said, "this is an opportunity," you know, combining 5G. 5G is not just 4G plus one, it's a whole stack of capabilities. And once operators realize that, they restack on public cloud, their telco stack. That's modernizing 5G, going to 5G standalone. And then once they're on public cloud, you know, dogfooding, you start to take those technologies, and you bring them to your subscriber base. But the developers that are in that subscriber base, once you address their need, they can have their creativity process, and building those super apps, like DATRON. Once they address that, then you're going to get that ultimate user experience. >> So, as a telco in the local region, you've got an advantage because you've got your presence at the edge, and you're leaning into next-gen, cloud-native, container, sort of developers. We've always said, "developers are going to win the edge." And you don't typically, most telcos anyway, we don't think of them as developer centric. You guys are different. So, can you talk about how you envision leveraging wavelength, and what the role of developers will be in your country? >> Yeah, I think for us first, it's essentially very important to kind of look at new stuff in many ways. You know, my role at the company is to look at innovative things, and to kind of think a little bit ahead, what's coming down the line, and not necessarily being revenue generating today, but maybe something that's coming, >> Dave: Right. >> sometime down the road. And I think that whole area has so much potential, it just plays into so many fields that are relevant for a telco. And it opens a new channel in many ways because, you know, we'll be able to not just sell connectivity, business, connectivity, mobile, all those products to our customers, but we actually take a more sophisticated route by working with a developer community, then I kind of augment the offering, but then we'll hit the customer. >> So we've seen CDNs and over-the-top providers come in, use your network, thank you, >> Darragh: Yes. >> for building out all that great infrastructure. It sounds like this is different. You're actually facilitating the development of new apps. >> Alexander: Yes. What's different, what kind of apps are we talking about here that you can monetize? >> I mean, it's from small to large, literally everything. I think what we've learned with the rollout of 5G is that it actually touches all industries. Maybe there's some others that shine a bit more than others, but fundamentally, it's such a big shift in terms of what we, as a telco, provides. It's not just this smartphone centric world any longer. It's much more like a building customized solution for particular customer segments, and help them in the industry. So, one thing, when I mentioned in particular was we are from Switzerland. Smart farming. Agriculture, right. And we can do a lot of good things there, if you bring all these technologies together and solve problems that this vertical has had in the past, which was literally increase food production, and be sustainable. Now you can do that, you know, in the old days that wasn't possible. >> So you're talking drones, stream data, and 5G enables that. >> Exactly. >> Yeah. I mean, that's a whole new world, and that is a great monetization opportunity. Who owns the data in that example? Is that a discussion that's going on, or? >> Well, who owns the data? The customer owns the data, right. If it's his or hers. >> Dave: Yeah good, right answer. (all laugh) >> How about when you think about 5G features, network slicing, other capabilities. How do you see 56K taking advantage of those, and working with the developer community to really exploit them? >> Yeah so, we've been more than four years already, working in public clouds, primarily on AWS. And what we've done is, you know, a lot of that cloud native migrations we've done, you know, we've seen those technologies. So what we're trying to do is remap that. And how we're doing this is we're going to be launching the 5G developer platform. It's going to be global ecosystem, open ecosystem, you can go and check it out, it's 5g.dev, literally. And in there, what we want to do is expose these new features of 5G, not just in telco language. So we're launching these kind of networks that slice as code, so that you have this infrastructure as code, in the public cloud domain. This is what resonates with developers. You want to stretch that, and like I mentioned earlier, make that network slices code. So search features, and network slicing dynamic narrative slicing is enhanced mobile broadband, geofence ways, speed, bandwidth, ultra reliable low-latency. I've seen it with my own eyes. You can single digit milliseconds. It's ridiculous how accurate it can be. And then there is the massive IOT. So as you see in IOT, but actually bringing narrowband IOT really at scale, and not just you needing technical boundaries, or contractual boundaries to access that, the developer has the same experiences as in public cloud. And so we want to monetize this to a global 5G. >> Single digit latency, right? So I mean, you know what's going to happen. I think that's why I love the name so much, right. And what happened is people being the consumer at first it was like, "oh my gosh!" And then what happened is the developer community said, "look at all the great data apps we can push in." And then now it's just orders of magnitude more that we can do. And we saw video in the early days of video, it was jittery. And so, it's very exciting times. I think about the data center, and how virtualization occurred there. And, it was almost like force fitting an old model into a new model, where the cloud was setting the definition of that new model. And now they're kind of catching up. Telcos are in a similar situation, right? They've got very purpose-built infrastructure. You guys obviously are more forward-thinking in regard, but is there a parallel there with the old sort of virtualization days, and how you're modernizing the network? What's the state of the network today, and where do you see it going? >> Yeah, we've always looked at the network as our prime differentiator, and we had to be on top of new things, and make sure that it is top notch. That's sort of an indisputable- >> Dave: Table stakes. >> Table stakes, exactly. And so I guess from that point alone, you need to continue to look at how can you improve it? How can you make it more efficient? How can we make it more stable? I mean, frictionless is for us, a key word in that context. And I think with those new technologies, there's just more that we can do. And now we can actually, and this is the beauty of it that comes with 5G and all these new cloud technologies. We can actually make the network our offering again, by delivering network enabled services, which is something that comes with 5G that wasn't there with 4G. >> Yeah, those value added services are key. And it's almost like, I think about the virtualization days, but now we're bringing cloud-native containerization, Kubernetes, Docker, to this new world, and you're doing it on a cloud platform. So that's what's different about the data centers. Data centers were trying to do it on general purpose platforms that were kind of being refactored and forced into it. But the cloud has shown us the way, and it's different, isn't it? >> Yeah, exactly. Well, what has shown to us is that we know we no longer have to sell top down or anything. What we're doing is we have to sell developer to developer. There is multiple avenues, not just SIM cards, with subscribers or large enterprises wanting a thousand SIM cards. It's past that. Now it's developers building those augmented kind of user experiences on the apps, on drones. Like you mentioned too, like chargers and stuff, and aqua tech. In the end, these developers need to become aware that the network can be orchestrated by them. And that we can describe it's never against code, in a familiar way, the way they develop those applications. And we need to extend that developer experience with those applications, and not just be talking about, "no, I have slow speed here, I have fast speed.' I mean, we want to enable some really serious, interesting use cases. >> You used the term network as code infrastructure, as code has been a game changer, >> Darragh: Yup. >> in the technology industry. But, much of the infrastructure is not programmable. And so, what what you're envisioning is a world where, whether it's edge, whether it's data center or cloud, it's the same, right? >> Yeah. >> It's the same experience. The developer experience is the same. The program ability spans, that's the layer that spans all those physical locations. That's the game changer. >> Exactly, yeah. That's why we have to break down those technical boundaries inside the telco industry, and make this familiar to developers and expose them. So that's why we're working with all the major ISVs, the vendors, like you've seen here today in Cloud City. What what we're doing is we're making those never exposed functions, if you call it that way, in a way that the developers can relate to. And why that's really important, is because then they have the same experience on the mobile expert app world. But at the same time we've been here at Cloud City, what we realized is actually, the vendors are also interested in that too, because they want to talk across from each other, and build and be more rapid, and actually in the end, build more competitive, be more competitive in terms of the network implementation. Because right now, there isn't yet this value proposition of why do I need a 5G phone. Why do we need a 5G, 4G is just good enough once I have three out of four bars. (Dave laughs) We need to get that 4G to 5G transition. And the developers are going to drive that. >> Well, when customers see the applications, it's going to shine a light. We've got the mobile network operators, we've got the whole 5G networks licensed capability. We've got this edge cloud coming together, real quick. You got to be excited, Alexander. >> That is an absolutely exciting point in our development and in our evolution as an industry, and it's a huge opportunity, because as again, as I said earlier, it is game changing. It's not just an evolution, but it's really a next major step forward to do things differently. >> Guys, great having you. >> Yup. >> We've got to go, We're going to take it back to Adam Burns in the studio. Thanks for watching.

(bouncy techno music) >> Thank you, Adam. It's great working with you all week in the studio. We're here, live in Barcelona. TheCUBE's continuous coverage of Cloud City, it's unbelievable. Darragh Grealish is here, he's the chief technology officer and co-founder of 56K.Cloud. I love that name, we're going to talk about that. And Alexander Lerhmann is the director of new business development innovation at Sunrise UPC. Gents, great to see you, welcome to theCUBE. Thanks for coming on. >> Yeah. >> Thanks for having us. >> MWC, you guys made the bet to come here and aren't you glad you did? >> Yeah, we had to go through a lot of processes, but it was totally worth it, you know? >> Yeah, we're going to talk about edge cloud, right, and we're going to talk about developers, and how this whole thing's going to build out. But how do you think about the cloud? You know, we were talking to DR earlier. The cloud, people think it's a place. Increasingly people say, "no, that's actually an experience, it's a development environment." The cloud is expanding to the edge. The data center is just another edge node. How do you guys look at the edge cloud? >> Yeah well, we see the edge cloud as a huge opportunity to monetize on 5G. To bring the understanding, and the features that 5G can deliver into the next generation of developer experience. Because once we address developer experience, we're going to be able to address that next generation of user experience. >> Okay so, let's dig into a little bit about what each of your respective companies does. Tell us about 56K, and I love the name. Maybe a lot of people don't understand it, but y'know. >> Yeah, it's kind of a generation thing. So, I worked for a lot of large companies, all of them super long email addresses. At the same time, I grew up with the 56K modem. The dial-up modem, as you know it. >> Speaker: Right. >> And the transition from dial-up to broadband was massive. I mean, in terms of user experience on the web, you know. The impact on that technology that did, meant that finally you could control the user experience. You had some predictability, and we thought it was a catchy name. People relate to it. I used to work in test automations, so user experience was an important thing. And so, we kind of combine now, cloud and the 56k kind of understanding, so experience. And it's all about addressing that user experience. >> It's a game changer from a consumer experience at that time. >> Exactly. >> And that's obviously the metaphor you're using. Alexander, tell us more about Sunrise UPC, what their relationship is with 56K. >> Yeah, so Sunrise UPC obviously is a telecommunications provider. #2 largest private telecommunication provider in Switzerland. And in terms of partnership with 56K.Cloud, business started the conversation of how we can bring our world together with what 56K.Cloud is doing. We see a lot of things that we can do to kind of improve the offer from our end, to our customers in the wider community as well. >> Yeah so, this is a good example, right? Because we see, we always talk about the global telco industry, but there's a lot of localization, right? >> Alexander: Right. >> There's a lot of public policy that has to be considered. So let's get into the "Cloud" portion of your name. >> Darragh: Yeah. >> You think about things like wavelength. Which is essentially, it's really the outpost for 5G, if you think about it, right. They're not satellites, it's a platform for the development. Tell us about wavelength in 5G, the intersection there, why it's important. >> Yeah so, the edge cloud solution from Amazon, as you've heard of it, it's not just solving existing use cases or problems, it's actually creating new opportunities by combining the technologies of 5G network slicing, network exposed functions, and multiple access edge compute, you know, it's actually the platform. So, what we're trying to do is bring that developer experience at tuning that is dominated in this large ecosystem in the public cloud, stretched into the network because we need to start to see developers to see the network as an asset. Once they realize that speed, bandwidth, and latency, they're not fighting against this to deliver the best user experience. They can orchestrate this. They can be part of the challenge. And once we can get those developers to see the network as a value proposition, and this is the kind of minimum components that would build that next generation, you know, the next opportunities. So you know, you had an interview recently with Jeff Barr from AWS, and he referred to AWS waveband as, "this is not just solving existing issues." He said, "this is an opportunity," you know, combining 5G. 5G is not just 4G plus one, it's a whole stack of capabilities. And once operators realize that, they restack on public cloud, their telco stack. That's modernizing 5G, going to 5G standalone. And then once they're on public cloud, you know, dogfooding, you start to take those technologies, and you bring them to your subscriber base. But the developers that are in that subscriber base, once you address their need, they can have their creativity process, and building those super apps, like DATRON. Once they address that, then you're going to get that ultimate user experience. >> So, as a telco in the local region, you've got an advantage because you've got your presence at the edge, and you're leaning into next-gen, cloud-native, container, sort of developers. We've always said, "developers are going to win the edge." And you don't typically, most telcos anyway, we don't think of them as developer centric. You guys are different. So, can you talk about how you envision leveraging wavelength, and what the role of developers will be in your country? >> Yeah, I think for us first, it's essentially very important to kind of look at new stuff in many ways. You know, my role at the company is to look at innovative things, and to kind of think a little bit ahead, what's coming down the line, and not necessarily being revenue generating today, but maybe something that's coming, >> Dave: Right. >> sometime down the road. And I think that whole area has so much potential, it just plays into so many fields that are relevant for a telco. And it opens a new channel in many ways because, you know, we'll be able to not just sell connectivity, business, connectivity, mobile, all those products to our customers, but we actually take a more sophisticated route by working with a developer community, then I kind of augment the offering, but then we'll hit the customer. >> So we've seen CDNs and over-the-top providers come in, use your network, thank you, >> Darragh: Yes. >> for building out all that great infrastructure. It sounds like this is different. You're actually facilitating the development of new apps. >> Alexander: Yes. What's different, what kind of apps are we talking about here that you can monetize? >> I mean, it's from small to large, literally everything. I think what we've learned with the rollout of 5G is that it actually touches all industries. Maybe there's some others that shine a bit more than others, but fundamentally, it's such a big shift in terms of what we, as a telco, provides. It's not just this smartphone centric world any longer. It's much more like a building customized solution for particular customer segments, and help them in the industry. So, one thing, when I mentioned in particular was we are from Switzerland. Smart farming. Agriculture, right. And we can do a lot of good things there, if you bring all these technologies together and solve problems that this vertical has had in the past, which was literally increase food production, and be sustainable. Now you can do that, you know, in the old days that wasn't possible. >> So you're talking drones, stream data, and 5G enables that. >> Exactly. >> Yeah. I mean, that's a whole new world, and that is a great monetization opportunity. Who owns the data in that example? Is that a discussion that's going on, or? >> Well, who owns the data? The customer owns the data, right. If it's his or hers. >> Dave: Yeah good, right answer. (all laugh) >> How about when you think about 5G features, network slicing, other capabilities. How do you see 56K taking advantage of those, and working with the developer community to really exploit them? >> Yeah so, we've been more than four years already, working in public clouds, primarily on AWS. And what we've done is, you know, a lot of that cloud native migrations we've done, you know, we've seen those technologies. So what we're trying to do is remap that. And how we're doing this is we're going to be launching the 5G developer platform. It's going to be global ecosystem, open ecosystem, you can go and check it out, it's 5g.dev, literally. And in there, what we want to do is expose these new features of 5G, not just in telco language. So we're launching these kind of networks that slice as code, so that you have this infrastructure as code, in the public cloud domain. This is what resonates with developers. You want to stretch that, and like I mentioned earlier, make that network slices code. So search features, and network slicing dynamic narrative slicing is enhanced mobile broadband, geofence ways, speed, bandwidth, ultra reliable low-latency. I've seen it with my own eyes. You can single digit milliseconds. It's ridiculous how accurate it can be. And then there is the massive IOT. So as you see in IOT, but actually bringing narrowband IOT really at scale, and not just you needing technical boundaries, or contractual boundaries to access that, the developer has the same experiences as in public cloud. And so we want to monetize this to a global 5G. >> Single digit latency, right? So I mean, you know what's going to happen. I think that's why I love the name so much, right. And what happened is people being the consumer at first it was like, "oh my gosh!" And then what happened is the developer community said, "look at all the great data apps we can push in." And then now it's just orders of magnitude more that we can do. And we saw video in the early days of video, it was jittery. And so, it's very exciting times. I think about the data center, and how virtualization occurred there. And, it was almost like force fitting an old model into a new model, where the cloud was setting the definition of that new model. And now they're kind of catching up. Telcos are in a similar situation, right? They've got very purpose-built infrastructure. You guys obviously are more forward-thinking in regard, but is there a parallel there with the old sort of virtualization days, and how you're modernizing the network? What's the state of the network today, and where do you see it going? >> Yeah, we've always looked at the network as our prime differentiator, and we had to be on top of new things, and make sure that it is top notch. That's sort of an indisputable- >> Dave: Table stakes. >> Table stakes, exactly. And so I guess from that point alone, you need to continue to look at how can you improve it? How can you make it more efficient? How can we make it more stable? I mean, frictionless is for us, a key word in that context. And I think with those new technologies, there's just more that we can do. And now we can actually, and this is the beauty of it that comes with 5G and all these new cloud technologies. We can actually make the network our offering again, by delivering network enabled services, which is something that comes with 5G that wasn't there with 4G. >> Yeah, those value added services are key. And it's almost like, I think about the virtualization days, but now we're bringing cloud-native containerization, Kubernetes, Docker, to this new world, and you're doing it on a cloud platform. So that's what's different about the data centers. Data centers were trying to do it on general purpose platforms that were kind of being refactored and forced into it. But the cloud has shown us the way, and it's different, isn't it? >> Yeah, exactly. Well, what has shown to us is that we know we no longer have to sell top down or anything. What we're doing is we have to sell developer to developer. There is multiple avenues, not just SIM cards, with subscribers or large enterprises wanting a thousand SIM cards. It's past that. Now it's developers building those augmented kind of user experiences on the apps, on drones. Like you mentioned too, like chargers and stuff, and aqua tech. In the end, these developers need to become aware that the network can be orchestrated by them. And that we can describe it's never against code, in a familiar way, the way they develop those applications. And we need to extend that developer experience with those applications, and not just be talking about, "no, I have slow speed here, I have fast speed.' I mean, we want to enable some really serious, interesting use cases. >> You used the term network as code infrastructure, as code has been a game changer, >> Darragh: Yup. >> in the technology industry. But, much of the infrastructure is not programmable. And so, what what you're envisioning is a world where, whether it's edge, whether it's data center or cloud, it's the same, right? >> Yeah. >> It's the same experience. The developer experience is the same. The program ability spans, that's the layer that spans all those physical locations. That's the game changer. >> Exactly, yeah. That's why we have to break down those technical boundaries inside the telco industry, and make this familiar to developers and expose them. So that's why we're working with all the major ISVs, the vendors, like you've seen here today in Cloud City. What what we're doing is we're making those never exposed functions, if you call it that way, in a way that the developers can relate to. And why that's really important, is because then they have the same experience on the mobile expert app world. But at the same time we've been here at Cloud City, what we realized is actually, the vendors are also interested in that too, because they want to talk across from each other, and build and be more rapid, and actually in the end, build more competitive, be more competitive in terms of the network implementation. Because right now, there isn't yet this value proposition of why do I need a 5G phone. Why do we need a 5G, 4G is just good enough once I have three out of four bars. (Dave laughs) We need to get that 4G to 5G transition. And the developers are going to drive that. >> Well, when customers see the applications, it's going to shine a light. We've got the mobile network operators, we've got the whole 5G networks licensed capability. We've got this edge cloud coming together, real quick. You got to be excited, Alexander. >> That is an absolutely exciting point in our development and in our evolution as an industry, and it's a huge opportunity, because as again, as I said earlier, it is game changing. It's not just an evolution, but it's really a next major step forward to do things differently. >> Guys, great having you. >> Yup. >> We've got to go, We're going to take it back to Adam Burns in the studio. Thanks for watching.

>>last decade. The >>major vectors of power in >>tech. We're cloud, mobile >>social and big data. Network computing >>architectures were >>heavily influenced by the mobile leg of that stool with bring your own devices and the SAs >>ification of the enterprise. >>The next 10 years are going to see a focus on instrumented the edge and leveraging architectures that provide a range of capabilities from very small embedded devices, too much larger systems that span hybrid it installations, they move data across clouds and then to the very far edge. >>And is so often the >>case consume arised IOT technology is rapidly driving innovations for enterprise IOT. What are the key trends, challenges and opportunities >>that this >>sea change brings and how should we think about the expanding network >>universe and what will it take to >>thrive in this new environment? Hello everyone. This is Dave Volonte. Welcome back to HPD discovered 2021. You're watching the cubes, virtual coverage of H P. S annual customer event. And with me to discuss the next decade >>of IOT innovation >>and enablement is David Logan, who's the vice president and >>Ceo for the >>Americas for >>HP. Es. Aruba >>networks. David, Welcome to the cube, come on in. >>Thanks so much. It's my pleasure to be here today with you. So >>if the last decade was all about mobile that was legit, it was really driven by the iphone and android adoption and we've been hearing about IOT >>for a long time. >>What's >>the impetus behind the current >>focus on IOT is a >>connected cars, connected homes. What's making it >>real this >>time? From your point of view? >>You know, it's it's really almost everything at once. Uh if you look at how um IOT systems had been developed over the past 10 years, it was super industry specific, A lot of, a lot of mitch implementations, um a lot of product vendors trying to become an IOT platform play. But with all of that innovation that's taken place, it's been additive over the past 10 years. Now. The next 10 years, we're really looking at a phenomenal amount of growth, a phenomenal amount of uh increased innovation to bring IOT solutions to almost any industry for any purpose, whether it's a horizontal need or or a vertical need, that's >>so you guys use terms like solutions, enablement IOT solutions, it's a real big focus of HBs Edge to cloud narrative. I wonder if you could add a little color and some details behind that and explain how Aruba fits in. >>I'll be glad to. So um, H p S Edge to cloud strategy is a really accurate term. Ultimately, the Edge is where IOT solutions are first enabled and it's where data is born, it is where end user experiences live and Aruba's role in Edge to cloud architectures is to provide the connectivity, the performance assurance, the ability to commingle what were once parallel architectures into common infrastructure, common operating platforms and allow this data that's born at the edge to go all the way to the hybrid cloud infrastructure, wherever it needs to go, whether it's an IOT and user application, whether it's an IOT subsystem for industry or or for vertical industry or for vertical enterprise, um the Aruba infrastructure really provides this common operating platform at the edge so that the rest of the enterprise can benefit from what's once transpiring >>when you think about the >>sort of >>candidates for IOT at the enterprise level. I mean, the edge obviously is very fragmented and and of course the big industrial giants, they're on a path there digitizing, they're collecting data, they're driving new monetization initiatives and you know, they got the budgets to do that. Can can smaller companies come to this party. >>Absolutely. And it's really the consumer is ation of IOT that's really driving that. As you mentioned in some of your opening statements, um, the consumer is ation of computing with mobile computing architecture, sas clarification of applications and the extension of the enterprise application environment to the end user with their consumer devices as opposed to their enterprise issue devices. We're seeing the same effects in IOT now, the Consumer Ization of IOT, the release of the amazon echo in 2014, all of the smart tv technology, all of the in home home automation technology that's been developed for individual use cases, for conglomerated use cases. It is this innovation that is now being able to be brought into the enterprise either in the form of pure consumer technology. Just take a look inside your average student dorm room, how much digital technology they brought in, But it's in a it's in an enterprise setting in the university. Uh think about hospitals, health care that have brought in technology to facilitate their particular processes. The consumer is a shin will allow digital experiences to be delivered to the patient in their in their in their treatment suite, for example. So we're gonna see this really drive over the next 10 years quite quite uh quite a significant amount of interesting new use cases. >>Just a quick aside, David, I mean, that Echo example is kind of interesting because when you think about the predominant use cases for AI at the enterprise, it's it's largely modeling that's taking place in the cloud. But when you think about the predominance of AI on whether it's smartphones or you mentioned things like Echo, it's that's kind of a i influencing at the edge, facial recognition is another good example that's bleeding into the enterprise. And it's as you as you know, we've talked about up top it sort of points the way and informs the enterprise, much like the Consumer ization of it. >>Absolutely. Um organizations like Microsoft google amazon, they're really leading the charge from from uh both the Consumer ization perspective but also a developer enablement perspective, bringing the ability for a. I machine learning very specific capabilities. Like you mentioned, video recognition to be able to be brought into enterprise application environments by a developer so that they don't necessarily need to know how to develop that full ai ml stack but can incorporate that capability into their end user applications. And then it's going to lead to brand new productivity innovations that an enterprise can benefit from. Uh It's gonna lead to certainly new business models, it's gonna lead to the ability to integrate um Federated Systems together. Whether it's a business model between two enterprises or whether it's uh the how a particular enterprise operates their own business. It's gonna be, it's gonna be really fascinating. >>I was reading about hand recognition of security. You go beyond fingerprint recognition, it should now be hacked. Let's talk about the market. Everybody talks about the tam, you know, pick your trillion, 1,000,000,001 trillion two trillion. It's a huge total available market, as I said, very fragmented. So how do you think about segmenting the market? How should we think about the different categories of of IOT and solutions and architectures? >>Well, you know, every every organization is easily category categorized by their industry, healthcare, higher education, industrial retail. They all have their particular operating models that generally speaking, have a lot of similarities. And so when we think about market and market segmentation and I think it's first important to think about the particular vertical that enterprise organization belongs to. And then, you know, innovators like like us here in Aruba, we think about how do these particular industries need solutions? And then we look across them for horizontal opportunities, for example, within Aruba's solution set the ability to uh go through rapid iOT device onboarding and security policy process and procedures that's pretty universally applicable across many different industries. But at the same time when you when you look inside a particular vertical, like a heavily industrialized setting, they want to collapse there. OT infrastructure and their I O. T. And I. T. Infrastructure altogether. And they're going to need some very specific solutions to do that. Um, whether it's the ability to guarantee data flow from the edge to the cloud, whether it's security, performance, assurance, whatever their needs, are there going to be very unique to them too. And so looking at it by vertical first is important and then I think sending by size makes sense. And then as we were talking about earlier, the Consumerism nation of IOT systems is really going to bring the ability for medium and smaller organizations to benefit from a lot of these innovations. >>Another another aside maybe it's not a quicker side, but you get the O. T. And the I. T. You know, T. Engineers that are pretty hard core about the way they do things and you got it folks, they have security edicts and compliance and so forth. Kind of how how are they working together? Like who's driving the bus and that >>convergence. You know, every organization has their own operating culture. They have there their prior way of doing things and then they have the future and the real key here for leadership honestly the real key here for organizational leadership, solution, technology leadership in these organizations is to figure out how to bring everybody together the booty uh responsible part of the organization. The folks that are in the line of business, the folks are in biomedical engineering in a health care organization. They know what the end application is, they know what the systems behaviors are going to be from an end user's perspective or from a from a technology perspective as it's applied at the edge, the I. T. Team knows how to build and operate and maintain a bus nature that is all co mingled together is all integrated together. They're going to have to work together so that they understand the end user applications, the experiences that need to be delivered the system's architecture and then how it needs to be operated. But the reason they need to come together is it needs to be using a common enterprise architecture to do so. Common network infrastructure, common computing storage, data platforms at least from a standards perspective, so that the enterprise can get operational efficiency so they can really have the one plus one equals three value proposition moments when multiple systems come together. >>So a couple things we just hit their the organizational challenges, the architectural challenges. You don't want to have more stovepipes? Everybody talks about stovepipes and and data silos. Are there any other challenges that you note that an organization faces in planning and implementing an IOT solutions architecture from your perspective are the organizational, we talked about that. They were talking about some technical and any others that we might have missed, >>you know. Um It's interesting when you look inside at enterprise that has some decent best practices or some good best practices for implementing their their enterprise IOT frameworks. Um as I mentioned, bringing the organization together uh from the end user perspective and the experiences that they need from the operational perspective and the operational technology bleeding into or merging into I. T. Technology. Clearly there's there's that organizational component, but that then needs to map into a newly refined enterprise architecture last decade, you know, the nineties and two thousands, 2010, we talked about enterprise architecture a lot, it was a lot about client server and it was a lot about migrating from legacy application architecture is into next gen and web dato and now it's all about machine to machine and mobile and post mobile. And that means the enterprise architecture that maybe got dusty on the shelf needs to be pulled off and re implemented. And interestingly, as a networking vendor, what we've seen as a best practice is these enterprise organizations recognize that with cloud and mobile and IOT and vendors playing such a such an important role that a lot of control and a lot of visibility has been pulled away from the classic enterprise I. T. Organization and looking at the network as the place where experiences come to uh at the places where uh as to where um instrumentation of the overall end to end architecture can come together. And so they're really now starting to look at the network as as a far more important component than perhaps they did four or five years ago where it might have just been four bars of wifi or connectivity from branch to headquarters. >>When I think about enterprise architectures, I definitely go to workloads like, okay, how is work? How is work that's being done in the enterprise changing and you obviously have a lot of general purpose E R P and financials and Crm and HCM etcetera. You've got this emerging set of workloads that's data intensive, whether it's A I or you know, whatever, whatever you call, some people call matrix workloads, but all the kind of new, interesting, you know, data intensive workloads and then there's a ton of work being done that's just don't even supporting applications directly, it's it's making storage run better or networks run better and so it's kind of wasted cycles if you will. So yeah, I talked a lot of people who are kind of rethinking that architecture to your point based upon the type of work that's being done and obviously things like influencing at the edge that we talked about a little bit earlier, uh are gonna drive that in the enterprise and that's really gonna put new requirements on the architecture, is it not? >>Absolutely. In fact, this is, this is core to the HP edge to cloud strategy and architecture. Ultimately, every organization is going to be different, they have different use cases, different, different business requirements. But um, we are going to find over the next 10 years that a significant amount of the data that is born at the edge and the experiences that are delivered at the Edge need a local presence of computer and communications to enable what needs to, what needs to take place locally from an operations perspective, Let me give you a concrete example. I mentioned health care a couple of times, imagine the healthcare environment of a large healthcare network organization and they need to consume patient telemetry information from all of their patient bedside monitoring systems. At the point at the point of patient care, well, what if the point of patient care is in a hospital tower? What if the point of patient care is in the patient's home? That's a completely different set of circumstances, physically and logically from an enterprise architecture perspective. And so it's particularly important to think through how data will be born at the edge, consumed locally, processed locally. And then forwarded to hybrid cloud computing environments for continued processing after the fact. So you might need to react immediately to some patient telemetry that's collected locally, but then also collect that information processing and the metadata stored somewhere else, maybe maybe haven't diverge into multiple streams? And in all of this, the computing architecture at the edge, the hybrid cloud architecture, the network architecture from edge to cloud all matters because this involves security, involves availability, involves performance, it involves how the data itself is used, the experience of the end users that are responsible for the delivery of the, Of the experience itself. So the ultimate enterprise architecture here is going to evolve yet again. And just as we've seen over 30 years, the centralization, the decentralization, the centralization, the distribution of various functions. We're just we're just seeing that again, because we continue to reinvent how we operate with better and better architectural models, >>right. Pendulums definitely swinging when you, when I think about the compute at the local level, I think it's gonna be super, super high performance and dirt, cheap and low power. Um, and I want to ask you a question about something you said earlier about your strategy is really to look for those horizontal opportunities. So am I right to and for you're not going after the, the deep edge with, you know, specialized capabilities or are you? I think Tesla, right. I mean, you know, designing their own chips for their cars, you're not going there, I presume. But you also reference, hey, there's gonna be some data that's coming back, that's kind of your role. But maybe you can help clarify that for me. >>Yeah, so, so interesting. We are in a way going after the special edge cases, but that's through the creation of an architecture that is malleable enough where you can define an enterprise network architecture and enterprise network experience that will address the horizontal, easy to understand use cases like mobile devices that need wifi connectivity or mobile devices that need bluetooth connectivity or Zig B or what have you. But also we have found that through again through consumer is ation of IOT systems that um, I O T specific technologies for very specific edge use cases are still embedding common access technologies, common networking technologies, common security protocols, um Common orchestration capabilities for compute as some examples. And so what we are building is the ability for uh an enterprise architect or an enterprise network architect to define a single network architecture physically that can commingle lots of different perhaps parallel network architectures into a single common platform and then operate it even though that it might consume multiple, many parallel types of systems ultimately operated as one single entity. Um That honestly, that's the power of the Aruban architecture is even though we have to physically deploy access points and switches and SD WAN gateways to create whatever the enterprise network architecture looks like, It's all driven by software and it's all driven by common interfaces that at some point get down to. Okay, I can actually connect that kind of strange device because it has enough commonality so that I can plug in this USB adapter into this access point. And all of a sudden I've got this connectivity for this very specialized thing transporting specialist protocol across an I. P. Network. So it's um it's really the blend of looking for horizontal opportunities so that we attacked the market effectively but also make sure we don't leave anybody behind in the process just because they've got a specialized need. >>Thank you for that clarification. So room is going to participate in the entire value chain that we've sort of laid out here and visualized. What do you think's going on? Maybe we can talk about the vendor landscape the pretenders from the contenders. What are the keys in your view to the product solutions, the right clarity of vision? Uh maybe some things that haven't been invented yet. How do you how do you think about that? >>Yeah, so um a lot of lessons learned over the past 10 years, I would say um there have been a number of very prominent enterprise technology companies, facilities, tech, um a vertical oriented solutions for healthcare, for industrial settings and they've all at one point or another tried to build a platform strategy, they have decided to self anoint or anoint themselves with, we're going to be the platform for some particular horizontal function inside the enterprise that involves IOT because we want to be the centerpiece where all this data from all these IOT systems concerning this particular environment flows through and we want to help democratize data access. Um Unfortunately most of them still took a very vendor specific point of view about it, even even by layering standards on top of what they've built, um even forming industry consortiums, they haven't necessarily achieved critical mass of what we would all like to see, which is full democratization of IOT solution architectures and IOT data access and I think we're gonna see that over the next 10 years, it's gonna take a while but I think um you know to to your question of what are some interesting uh interesting products or technologies to be developed? Um I think uh industries working together vendors working together like Microsoft like google like amazon like Aruba HP like um in ocean which is an industry consortium, these places where we come together and decide to achieve the greater good to achieve greater benefits for our enterprise customers and build a platform capabilities using standards using open source, using consume arised tech using really critical functions in orchestration, configuration management, aPI architectures, standard standard object models for how how information is communicated. I think that we will be able to democratize IOT data access, I think we'll be able to democratize how IOT systems are deployed and dramatically expand the market opportunity for the benefit of everybody. >>Yeah, we've certainly seen those types of collaborations before, I'm not sure it's ever been this large. Maybe the internet was this large, but that was kind of more government driven than it was a vendor driven, which is your land, give us the bumper sticker for Y H P E in Aruba. >>Well, you know, um HBs in a really um in a really interesting position, we really are enabling the entire edge to cloud architecture, as we've mentioned a few times and the ability to lay out the foundation of the infrastructure for communications for compute for storage regardless of how an enterprise organization wants to consume it, whether it's all at the edge or all in private data centers or in hybrid architecture, whether they want to control the entire architecture top to bottom, whether they want us to help them deploy and manage the architecture on their behalf with industry partners. Ultimately, we are giving them a set of building blocks into end that will coexist with whatever they've already built, help them build a malleable architecture and going forward in the future and really helped them achieve economies of scale, >>David, Very interesting discussion. Thank you so much for your perspectives. Really appreciate you coming on the cube. >>Thank you. Thank you so much. Dave. I really appreciate the time and I'm uh I'm really excited to be part of discover, >>awesome. And thank you for watching this segment of H. P. E. Discovered 2021. You're watching the cube. This is David. Want to keep it right there. Mhm.

(upbeat music) >> Announcer: From theCUBE studios in Palo Alto in Boston connecting with thought leaders all around the world, this is theCUBE Conversation. >> Well, welcome to theCUBE Conversation here in theCUBE studios in Palo Alto, California. I'm John Furrier, your host. Got a great conversation with two great guests, going to explore the edge, what it means in terms of commercial, but also national security. And as the world goes digital, we're going to have that deep dive conversation around how it's all transforming. We've got Ki Lee, Vice President of Booz Allen's Digital Business. Ki, great to have you. John Pisano, Principal at Booz Allen's Digital Cloud Solutions. Gentlemen, thanks for coming on. >> And thanks for having us, John. >> So one of the most hottest topics, obviously besides cloud computing having the most refactoring impact on business and government and public sector has been the next phase of cloud growth and cloud scale, and that's really modern applications and consumer, and then here for national security and for governments here in the U.S. is military impact. And as digital transformation starts to go to the next level, you're starting to see the architectures emerge where the edge, the IoT edge, the industrial IoT edge, or any kind of edge concept, 5G is exploding, making that much more of a dense, more throughput for connectivity with wireless. You got Amazon with Snowball, Snowmobile, all kinds of ways to deploy technology, that's IT like and operational technologies. It's causing quite a cloud operational opportunity and disruption, so I want to get into it. Ki, let's start with you. I mean, we're looking at an architecture that's changing both commercial and public sector with the edge. What are the key considerations that you guys see as people have to really move fast in this new architecture of digital? >> Yeah, John, I think it's a great question. And if I could just share our observation on why we even started investing in edge. You mentioned the cloud, but as we've reflected upon kind of the history of IT, then you take a look from mainframes to desktops to servers to cloud to mobile and now IoT, what we observed was that industry investing in infrastructure led to kind of an evolution of IT, right? So as you mentioned, with industry spending billions on IoT and edge, we just feel that that's going to be the next evolution. If you take a look at, you mentioned 5G, I think 5G will be certainly an accelerator to edge because of the resilience, the lower latency and so forth. But taking a look at what's happening in space, you mentioned space earlier as well, right, and what Starlink is doing by putting satellites to actually provide transport into the space, we're thinking that that actually is going to be the next ubiquitous thing. Once transport becomes ubiquitous, just like cloud allows storage to be ubiquitous. We think that the next generation internet will be space-based. So when you think about it, connected, it won't be connected servers per se, it will be connected devices. >> John: Yeah, yeah. >> That's kind of some of the observations and why we've been really focusing on investing in edge. >> I want to come back to that piece around space and edge and bring it from a commercial and then also tactical architecture in a minute 'cause there's a lot to unpack there, role of open source, modern application development, software and hardware supply chains, all are core issues that are going to emerge. But I want to get with John real quick on cloud impact, because you think about 5G and the future of work or future of play, you've got people, right? So whether you're at a large concert like Coachella or a 49ers or Patriots game or Redskins game if you're in the D.C. area, you got people there, of congestion, and now you got devices now serving those people. And that's their play, people at work, whether it's a military operation, and you've got work, play, tactical edge things. How is cloud connecting? 'Cause this is like the edge has never been kind of an IT thing. It's been more of a bandwidth or either telco or something else operationally. What's the cloud at scale, cloud operations impact? >> Yeah, so if you think about how these systems are architected and you think about those considerations that Ki kind of touched on, a lot of what you have to think about now is what aspects of the application reside in the cloud, where you tend to be less constrained. And then how do you architect that application to move out towards the edge, right? So how do I tier my application? Ultimately, how do I move data and applications around the ecosystem? How do I need to evolve where my application stages things and how that data and those apps are moved to each of those different tiers? So when we build a lot of applications, especially if they're in the cloud, they're built with some of those common considerations of elasticity, scalability, all those things; whereas when you talk about congestion and disconnected operations, you lose a lot of those characteristics, and you have to kind of rethink that. >> Ki, let's get into the aspect you brought up, which is space. And then I was mentioning the tactical edge from a military standpoint. These are use cases of deployments, and in fact, this is how people have to work now. So you've got the future of work or play, and now you've got the situational deployments, whether it's a new tower of next to a stadium. We've all been at a game or somewhere or a concert where we only got five bars and no connectivity. So we know what that means. So now you have people congregating in work or play, and now you have a tactical deployment. What's the key things that you're seeing that it's going to help make that better? Are there any breakthroughs that you see that are possible? What's going on in your view? >> Yeah, I mean, I think what's enabling all of this, again, one is transport, right? So whether it's 5G to increase the speed and decrease the latency, whether it's things like Starlink with making transport and comms ubiquitous, that tied with the fact that ships continue to get smaller and faster, right? And when you're thinking about tactical edge, those devices have limited size, weight, power conditions and constraints. And so the software that goes on them has to be just as lightweight. And that's why we've actually partnered with SUSE and what they've done with K3s to do that. So I think those are some of the enabling technologies out there. John, as you've kind of alluded to it, there are additional challenges as we think about it. We're not, it's not a simple transition and monetization here, but again, we think that this will be the next major disruption. >> What do you guys think, John, if you don't mind weighing in too on this as modern application development happens, we just were covering CloudNativeCon and KubeCon, DockerCon, containers are very popular. Kubernetes is becoming super great. As you look at the telco landscape where we're kind of converging this edge, it has to be commercially enterprise grade. It has to have that transit and transport that's intelligent and all these new things. How does open source fit into all this? Because we're seeing open source becoming very reliable, more people are contributing to open source. How does that impact the edge in your opinion? >> So from my perspective, I think it's helping accelerate things that traditionally maybe may have been stuck in the traditional proprietary software confines. So within our mindset at Booz Allen, we were very focused on open architecture, open based systems, which open source obviously is an aspect of that. So how do you create systems that can easily interface with each other to exchange data, and how do you leverage tools that are available in the open source community to do that? So containerization is a big drive that is really going throughout the open source community. And there's just a number of other tools, whether it's tools that are used to provide basic services like how do I move code through a pipeline all the way through? How do I do just basic hardening and security checking of my capabilities? Historically, those have tend to be closed source type apps, whereas today you've got a very broad community that's able to very quickly provide and develop capabilities and push it out to a community that then continues to adapt and add to it or grow that library of stuff. >> Yeah, and then we've got trends like Open RAN. I saw some Ground Station for the AWS. You're starting to see Starlink, you mentioned. You're bringing connectivity to the masses. What is that going to do for operators? Because remember, security is a huge issue. We talk about security all the time. Where does that kind of come in? Because now you're really OT, which has been very purpose-built kind devices in the old IoT world. As the new IoT and the edge develop, you're going to need to have intelligence. You're going to be data-driven. There is an open source impact key. So, how, if I'm a senior executive, how do I get my arms around this? I really need to think this through because the security risks alone could be more penetration areas, more surface area. >> Right. That's a great question. And let me just address kind of the value to the clients and the end users in the digital battlefield as our warriors to increase survivability and lethality. At the end of the day from a mission perspective, we know we believe that time's a weapon. So reducing any latency in that kind of observe, orient, decide, act OODA loop is value to the war fighter. In terms of your question on how to think about this, John, you're spot on. I mean, as I've mentioned before, there are various different challenges, one, being the cyber aspect of it. We are absolutely going to be increasing our attack surface when you think about putting processing on edge devices. There are other factors too, non-technical that we've been thinking about s we've tried to kind of engender and kind of move to this kind of edge open ecosystem where we can kind of plug and play, reuse, all kind of taking the same concepts of the open-source community and open architectures. But other things that we've considered, one, workforce. As you mentioned before, when you think about these embedded systems and so forth, there aren't that many embedded engineers out there. But there is a workforce that are digital and software engineers that are trained. So how do we actually create an abstraction layer that we can leverage that workforce and not be limited by some of the constraints of the embedded engineers out there? The other thing is what we've, in talking with several colleagues, clients, partners, what people aren't thinking about is actually when you start putting software on these edge devices in the billions, the total cost of ownership. How do you maintain an enterprise that potentially consists of billions of devices? So extending the standard kind of DevSecOps that we move to automate CI/CD to a cloud, how do we move it from cloud to jet? That's kind of what we say. How do we move DevSecOps to automate secure containers all the way to the edge devices to mitigate some of those total cost of ownership challenges. >> It's interesting, as you have software defined, this embedded system discussion is hugely relevant and important because when you have software defined, you've got to be faster in the deployment of these devices. You need security, 'cause remember, supply chain on the hardware side and software in that too. >> Absolutely. >> So if you're going to have a serviceability model where you have to shift left, as they say, you got to be at the point of CI/CD flows, you need to be having security at the time of coding. So all these paradigms are new in Day-2 operations. I call it Day-0 operations 'cause it should be in everyday too. >> Yep. Absolutely. >> But you've got to service these things. So software supply chain becomes a very interesting conversation. It's a new one that we're having on theCUBE and in the industry Software supply chain is a superly relevant important topic because now you've got to interface it, not just with other software, but hardware. How do you service devices in space? You can't send a break/fix person in space. (chuckles) Maybe you will soon, but again, this brings up a whole set of issues. >> No, so I think it's certainly, I don't think anyone has the answers. We sure don't have all the answers but we're very optimistic. If you take a look at what's going on within the U.S. Air Force and what the Chief Software Officer Nic Chaillan and his team, and we're a supporter of this and a plankowner of Platform One. They were ahead of the curve in kind of commoditizing some of these DevSecOps principles in partnership with the DoD CIO and that shift left concept. They've got a certified and accredited platform that provides that DevSecOps. They have an entire repository in the Iron Bank that allows for hardened containers and reciprocity. All those things are value to the mission and around the edge because those are all accelerators. I think there's an opportunity to leverage industry kind of best practices as well and patterns there. You kind of touched upon this, John, but these devices honestly just become firmware. The software is just, if the devices themselves just become firmware , you can just put over the wire updates onto them. So I'm optimistic. I think all the piece parts are taking place across industry and in the government. And I think we're primed to kind of move into this next evolution. >> Yeah. And it's also some collaboration. What I like about, why I'm bringing up the open source angle and I think this is where I think the major focus will shift to, and I want to get your reaction to it is because open source is seeing a lot more collaboration. You mentioned some of the embedded devices. Some people are saying, this is the weakest link in the supply chain, and it can be shored up pretty quickly. But there's other data, other collective intelligence that you can get from sharing data, for instance, which hasn't really been a best practice in the cybersecurity industry. So now open source, it's all been about sharing, right? So you got the confluence of these worlds colliding, all aspects of culture and Dev and Sec and Ops and engineering all coming together. John, what's your reaction to that? Because this is a big topic. >> Yeah, so it's providing a level of transparency that historically we've not seen, right? So in that community, having those pipelines, the results of what's coming out of it, it's allowing anyone in that life cycle or that supply chain to look at it, see the state of it, and make a decision on, is this a risk I'm willing to take or not? Or am I willing to invest and personally contribute back to the community to address that because it's important to me and it's likely going to be important to some of the others that are using it? So I think it's critical, and it's enabling that acceleration and shift that I talked about, that now that everybody can see it, look inside of it, understand the state of it, contribute to it, it's allowing us to break down some of the barriers that Ki talked about. And it reinforces that excitement that we're seeing now. That community is enabling us to move faster and do things that maybe historically we've not been able to do. >> Ki, I'd love to get your thoughts. You mentioned battlefield, and I've been covering a lot of the tactical edge around the DOD's work. You mentioned about the military on the Air Force side, Platform One, I believe, was from the Air Force work that they've done, all cloud native kind of directions. But when you talk about a war field, you talk about connectivity. I mean, who controls the DNS in Taiwan, or who controls the DNS in Korea? I mean, we have to deploy, you've got to stand up infrastructure. How about agility? I mean, tactical command and control operations, this has got to be really well done. So this is not a trivial thing. >> No. >> How are you seeing this translate into the edge innovation area? (laughs) >> It's certainly not a trivial thing, but I think, again, I'm encouraged by how government and industry are partnering up. There's a vision set around this joint all domain command control, JADC2. And then all the services are getting behind that, are looking into that, and this vision of this military, internet of military things. And I think the key thing there, John, as you mentioned, it's not just the connected of the sensors, which requires the transport again, but also they have to be interoperable. So you can have a bunch of sensors and platforms out there, they may be connected, but if they can't speak to one another in a common language, that kind of defeats the purpose and the mission value of that sensor or shooter kind of paradigm that we've been striving for for ages. So you're right on. I mean, this is not a trivial thing, but I think over history we've learned quite a bit. Technology and innovation is happening at just an amazing rate where things are coming out in months as opposed to decades as before. I agree, not trivial, but again, I think there are all the piece parts in place and being put into place. >> I think you mentioned earlier that the personnel, the people, the engineers that are out there, not enough, more of them coming in. I think now the appetite and the provocative nature of this shift in tech is going to attract a lot of people because the old adage is these are hard problems attracts great people. You got in new engineering, SRE like scale engineering. You have software development, that's changing, becoming much more robust and more science-driven. You don't have to be just a coder as a software engineer. You could be coming at it from any angle. So there's a lot more opportunities from a personnel standpoint now to attract great people, and there's real hard problems to solve, not just security. >> Absolutely. Definitely. I agree with that 100%. I would also contest that it's an opportunity for innovators. We've been thinking about this for some time, and we think there's absolute value from various different use cases that we've identified, digital battlefield, force protection, disaster recovery, and so forth. But there are use cases that we probably haven't even thought about, even from a commercial perspective. So I think there's going to be an opportunity just like the internet back in the mid '90s for us to kind of innovate based on this new kind of edge environment. >> It's a revolution. New leadership, new brands are going to emerge, new paradigms, new workflows, new operations, clearly great stuff. I want to thank you guys for coming on. I also want to thank Rancher Labs for sponsoring this conversation. Without their support, we wouldn't be here. And now they were acquired by SUSE. We've covered their event with theCUBE virtual last year. What's the connection with those guys? Can you guys take a minute to explain the relationship with SUSE and Rancher? >> Yeah. So it's actually it's fortuitous. And I think we just, we got lucky. There's two overall aspects of it. First of all, we are both, we partner on the Platform One basic ordering agreement. So just there we had a common mentality of DevSecOps. And so there was a good partnership there, but then when we thought about we're engaging it from an edge perspective, the K3s, right? I mean, they're a leader from a container perspective obviously, but the fact that they are innovators around K3s to reduce that software footprint, which is required on these edge devices, we kind of got a twofer there in that partnership. >> John, any comment on your end? >> Yeah, I would just amplify, the K3s aspects in leveraging the containers, a lot of what we've seen success in when you look at what's going on, especially on that tactical edge around enabling capabilities, containers, and the portability it provides makes it very easy for us to interface and integrate a lot of different sensors to close the OODA loop to whoever is wearing or operating that a piece of equipment that the software is running on. >> Awesome, I'd love to continue the conversation on space and the edge and super great conversation to have you guys on. Really appreciate it. I do want to ask you guys about the innovation and the opportunities of this new shift that's happening as the next big thing is coming quickly. And it's here on us and that's cloud, I call it cloud 2.0, the cloud scale, modern software development environment, edge with 5G changing the game. Ki, I completely agree with you. And I think this is where people are focusing their attention from startups to companies that are transforming and re-pivoting or refactoring their existing assets to be positioned. And you're starting to see clear winners and losers. There's a pattern emerging. You got to be in the cloud, you got to be leveraging data, you got to be horizontally scalable, but you got to have AI machine learning in there with modern software practices that are secure. That's the playbook. Some people are making it. Some people are not getting there. So I'd ask you guys, as telcos become super important and the ability to be a telco now, we just mentioned standing up a tactical edge, for instance. Launching a satellite, a couple of hundred K, you can launch a CubeSat. That could be good and bad. So the telco business is changing radically. Cloud, telco cloud is emerging as an edge phenomenon with 5G, certainly business commercial benefits more than consumer. How do you guys see the innovation and disruption happening with telco? >> As we think through cloud to edge, one thing that we realize, because our definition of edge, John, was actually at the point of data collection on the sensor themselves. Others' definition of edge is we're a little bit further back, what we call it the edge of the IT enterprise. But as we look at this, we realize that you needed this kind of multi echelon environment from your cloud to your tactical clouds where you can do some processing and then at the edge of themselves. Really at the end of the day, it's all about, I think, data, right? I mean, everything we're talking about, it's still all about the data, right? The AI needs the data, the telco is transporting the data. And so I think if you think about it from a data perspective in relationship to the telcos, one, edge will actually enable a very different paradigm and a distributed paradigm for data processing. So, hey, instead of bringing the data to some central cloud which takes bandwidth off your telcos, push the products to the data. So mitigate what's actually being sent over those telco lines to increase the efficiencies of them. So I think at the end of the day, the telcos are going to have a pretty big component to this, even from space down to ground station, how that works. So the network of these telcos, I think, are just going to expand. >> John, what's your perspective? I mean, startups are coming out. The scalability, speed of innovation is a big factor. The old telco days had, I mean, months and years, new towers go up and now you got a backbone. It's kind of a slow glacier pace. Now it's under siege with rapid innovation. >> Yeah, so I definitely echo the sentiments that Ki would have, but I would also, if we go back and think about the digital battle space and what we've talked about, faster speeds being available in places it's not been before is great. However, when you think about facing an adversary that's a near-peer threat, the first thing they're going to do is make it contested, congested, and you have to be able to survive. While yes, the pace of innovation is absolutely pushing comms to places we've not had it before, we have to be mindful to not get complacent and over-rely on it, assuming it'll always be there. 'Cause I know in my experience wearing the uniform, and even if I'm up against an adversary, that's the first thing I'm going to do is I'm going to do whatever I can to disrupt your ability to communicate. So how do you take it down to that lowest level and still make that squad, the platoon, whatever that structure is, continue survivable and lethal. So that's something I think, as we look at the innovations, we need to be mindful of that. So when I talk about how do you architect it? What services do you use? Those are all those things that you have to think about. What if I lose it at this echelon? How do I continue the mission? >> Yeah, it's interesting. And if you look at how companies have been procuring and consuming technology, Ki, it's been like siloed. "Okay, we've got a workplace workforce project, and we have the tactical edge, and we have the siloed IT solution," when really work and play, whether it's work here in John's example, is the war fighter. And so his concern is safety, his life and protection. >> Yeah. >> The other department has to manage the comms, (laughs) and so they have to have countermeasures and contingencies ready to go. So all this is, they all integrate it now. It's not like one department. It's like it's together. >> Yeah. John, I love what you just said. I mean, we have to get away from this siloed thinking not only within a single organization, but across the enterprise. From a digital battlefield perspective, it's a joint fight, so even across these enterprise of enterprises, So I think you're spot on. We have to look horizontally. We have to integrate, we have to inter-operate, and by doing that, that's where the innovation is also going to be accelerated too, not reinventing the wheel. >> Yeah, and I think the infrastructure edge is so key. It's going to be very interesting to see how the existing incumbents can handle themselves. Obviously the towers are important. 5G obviously, that's more deployments, not as centralized in terms of the spectrum. It's more dense. It's going to create more connectivity options. How do you guys see that impacting? Because certainly more gear, like obviously not the centralized tower, from a backhaul standpoint but now the edge, the radios themselves, the wireless transit is key. That's the real edge here. How do you guys see that evolving? >> We're seeing a lot of innovations actually through small companies who are really focused on very specific niche problems. I think it's a great starting point because what they're doing is showing the art of the possible. Because again, we're in a different environment now. There's different rules. There's different capabilities. But then we're also seeing, you mentioned earlier on, some of the larger companies, the Amazons, the Microsofts, also investing as well. So I think the merge of the, you know, or the unconstrained or the possible by these small companies that are just kind of driving innovations supported by the maturity and the heft of these large companies who are building out these hardened kind of capabilities, they're going to converge at some point. And that's where I think we're going to get further innovation. >> Well, I really appreciate you guys taking the time. Final question for you guys, as people are watching this, a lot of smart executives and teams are coming together to kind of put the battle plans together for their companies as they transition from old to this new way, which is clearly cloud-scale, role of data. We hit out all the key points I think here. As they start to think about architecture and how they deploy their resources, this becomes now the new boardroom conversation that trickles down and includes everyone, including the developers. The developers are now going to be on the front lines. Mid-level managers are going to be integrated in as well. It's a group conversation. What are some of the advice that you would give to folks who are in this mode of planning architecture, trying to be positioned to come out of this pandemic with a massive growth opportunity and to be on the right side of history? What's your advice? >> It's such a great question. So I think you touched upon it. One is take the holistic approach. You mentioned architectures a couple of times, and I think that's critical. Understanding how your edge architectures will let you connect with your cloud architecture so that they're not disjointed, they're not siloed. They're interoperable, they integrate. So you're taking that enterprise approach. I think the second thing is be patient. It took us some time to really kind of, and we've been looking at this for about three years now. And we were very intentional in assessing the landscape, how people were discussing around edge and kind of pulling that all together. But it took us some time to even figure it out, hey, what are the use cases? How can we actually apply this and get some ROI and value out for our clients? So being a little bit patient in thinking through kind of how we can leverage this and potentially be a disruptor. >> John, your thoughts on advice to people watching as they try to put the right plans together to be positioned and not foreclose any future value. >> Yeah, absolutely. So in addition to the points that Ki raised, I would, number one, amplify the fact of recognize that you're going to have a hybrid environment of legacy and modern capabilities. And in addition to thinking open architectures and whatnot, think about your culture, the people, your processes, your techniques and whatnot, and your governance. How do you make decisions when it needs to be closed versus open? Where do you invest in the workforce? What decisions are you going to make in your architecture that drive that hybrid world that you're going to live in? All those recipes, patience, open, all that, that I think we often overlook the cultural people aspect of upskilling. This is a very different way of thinking on modern software delivery. How do you go through this lifecycle? How's security embedded? So making sure that's part of that boardroom conversation I think is key. >> John Pisano, Principal at Booz Allen Digital Cloud Solutions, thanks for sharing that great insight. Ki Lee, Vice President at Booz Allen Digital Business. Gentlemen, great conversation. Thanks for that insight. And I think people watching are going to probably learn a lot on how to evaluate startups to how they put their architecture together. So I really appreciate the insight and commentary. >> Thank you. >> Thank you, John. >> Okay. I'm John Furrier. This is theCUBE Conversation. Thanks for watching. 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from the cube studios in palo alto in boston bringing you data driven insights from the cube and etr this is breaking analysis with dave vellante recent survey data from etr shows that enterprise tech spending is tracking with projected u.s gdp growth at six to seven percent this year many markers continue to point the way to a strong recovery including hiring trends and the loosening of frozen it project budgets however skills shortages are blocking progress at some companies which bodes well for an increased reliance on external i.t services moreover while there's much to talk about well there's much talk about the rotation out of work from home plays and stocks such as video conferencing vdi and other remote worker tech we see organizations still trying to figure out the ideal balance between funding headquarter investments that have been neglected and getting hybrid work right in particular the talent gap combined with a digital mandate means companies face some tough decisions as to how to fund the future while serving existing customers and transforming culturally hello everyone and welcome to this week's wikibon cube insights powered by etr in this breaking analysis we welcome back eric porter bradley of etr who will share fresh data perspectives and insights from the latest survey data eric great to see you welcome thank you very much dave always good to see you and happy to be on the show again okay we're going to share some macro data and then we're going to dig into some highlights from etr's most recent march covid survey and also the latest april data so eric the first chart that we want to show it shows cio and it buyer responses to expected i.t spend for each quarter of 2021 versus 2020. and you can see here a steady quarterly improvement eric what are the key takeaways from your perspective sure well first of all for everyone out there this particular survey had a record-setting number of uh participation we had uh 1 500 i.t decision makers participate and we had over half of the fortune 500 and over a fifth of the global 1000. so it was a really good survey this is the seventh iteration of the covet impact survey specifically and this is going to transition to an over large macro survey going forward so we could continue it and you're 100 right what we've been tracking here since uh march of last year was how is spending being impacted because of covid where is it shifting and what we're seeing now finally is that there is a real re-acceleration in spend i know we've been a little bit more cautious than some of the other peers out there that just early on slapped an eight or a nine percent number but what we're seeing is right now it's at a midpoint of over six uh about six point seven percent and that is accelerating so uh we are still hopeful that that will continue uh really that spending is going to be in the second half of the year as you can see on the left part of this chart that we're looking at uh it was about 1.7 versus 3 for q1 spending year over year so that is starting to accelerate through the back half you know i think it's prudent to be be cautious relative because normally you'd say okay tech is going to grow a couple of points higher than gdp but it's it's really so hard to predict this year okay the next chart is here that we want to show you is we ask respondents to indicate what strategies they're employing in the short term as a result of coronavirus and you can see a few things that i'll call out and then i'll ask eric to chime in first there's been no meaningful change of course no surprise in tactics like remote work and halting travel however we're seeing very positive trends in other areas trending downward like hiring freezes and freezing i.t deployments downward trend in layoffs and we also see an increase in the acceleration of new i.t deployments and in hiring eric what are your key takeaways well first of all i think it's important to point out here that uh we're also capturing that people believe remote work productivity is still increasing now the trajectory might be coming down a little bit but that is really key i think to the backdrop of what's happening here so people have a perception that productivity of remote work is better than hybrid work and that's from the i.t decision makers themselves um but what we're seeing here is that uh most importantly these organizations are citing plans to increase hiring and that's something that i think is really important to point out it's showing a real thawing and to your point in right in the beginning of the intro uh we are seeing deployments stabilize versus prior survey levels which means early on they had no plans to launch new tech deployments then they said nope we're going to start and now that's stalling and i think it's exactly right what you said is there's an i.t skills shortage so people want to continue to do i.t deployments because they have to support work from home and a hybrid back return to the office but they just don't have the skills to do so and i think that's really probably the most important takeaway from this chart um is that stalling and to really ask why it's stalling yeah so we're going to get into that for sure and and i think that's a really key point is that that that accelerating it deployments is some it looks like it's hit a wall in the survey and so but before before we get deep into the skills let's let's take a look at this next chart and we're asking people here how a return to the new normal if you will and back to offices is going to change spending with on-prem architectures and applications and so the first two bars they're cloud-friendly if you add them up at 63 percent of the respondents say that either they'll stay in the cloud for the most part or they're going to lower the on-prem spend when they go back to the office the next three bars are on-prem friendly if you add those up as 29 percent of the respondents say their on-prem spend is going to bounce back to pre-covert levels or actually increase and of course 12 percent of that number by the way say they they've never altered their on-prem spend so eric no surprise but this bodes well for cloud but but it it isn't it also a positive for on-prem this we've had this dual funding premise meaning cloud continues to grow but neglected data center spend also gets a boost what's your thoughts you know really it's interesting it's people are spending on all fronts you and i were talking in a prep it's like you know we're we're in battle and i've got naval i've got you know air i've got land uh i've got to spend on cloud and digital transformation but i also have to spend for on-prem uh the hybrid work is here and it needs to be supported so this spending is going to increase you know when you look at this chart you're going to see though that roughly 36 percent of all respondents say that their spending is going to remain mostly on cloud so this you know that is still the clear direction uh digital transformation is still happening covid accelerated it greatly um you know you and i as journalists and researchers already know this is where the puck is going uh but spend has always lagged a little bit behind because it just takes some time to get there you know inversely 27 said that their on-prem spending will decrease so when you look at those two i still think that the trend is the friend for cloud spending uh even though yes they do have to continue spending on hybrid some of it's been neglected there are refresh cycles coming up so overall it just points to more and more spending right now it really does seem to be a very strong backdrop for it growth so i want to talk a little bit about the etr taxonomy before we bring up the next chart we get a lot of questions about this and of course when you do a massive survey like you're doing you have to have consistency for time series so you have to really think through what that what the buckets look like if you will so this next chart takes a look at the etr taxonomy and it breaks it down into simple to understand terms so the green is the portion of spending on a vendor's tech within a category that is accelerating and the red is the portion that is decelerating so eric what are the key messages in this data well first of all dave thank you so much for pointing that out we used to do uh just what we call a next a net score it's a proprietary formula that we use to determine the overall velocity of spending some people found it confusing um our data scientists decided to break this sector breakdown into what you said which is really more of a mode analysis in that sector how many of the vendors are increasing versus decreasing so again i just appreciate you bringing that up and allowing us to explain the the the reasoning behind our analysis there but what we're seeing here uh goes back to something you and i did last year when we did our predictions and that was that it services and consulting was going to have a true rebound in 2021 and that's what this is showing right here so in this chart you're going to see that consulting and services are really continuing their recovery uh 2020 had a lot of declines and they have the biggest sector over year-over-year acceleration sector-wise the other thing to point out in this which we'll get to again later is that the inverse analysis is true for video conferencing uh we will get to that so i'm going to leave a little bit of ammunition behind for that one but what we're seeing here is it consulting services being the real favorable and video conferencing uh having a little bit more trouble great okay and then let's let's take a look at that services piece and this next chart really is a drill down into that space and emphasizes eric what you were just talking about and we saw this in ibm's earnings where still more than 60 percent of ibm's business comes from services and the company beat earnings you know in part due to services outperforming expectations i think it had a somewhat easier compare and some of this pen-up demand that we've been talking about bodes well for ibm and in other services companies it's not just ibm right eric no it's not but again i'm going to point out that you and i did point out ibm in our in our predictions one we did in late december so it is nice to see one of the reasons we don't have a more favorable rating on ibm at the moment is because they are in the the process of spinning out uh this large unit and so there's a little bit of you know corporate action there that keeps us off on the sideline but i would also want to point out here uh tata infosys and cognizant because they're seeing year-over-year acceleration in both it consulting and outsourced i t services so we break those down separately and those are the three names that are seeing acceleration in both of those so again a tata emphasis and cognizant are all looking pretty well positioned as well so we've been talking a little bit about this skill shortage and this is what's i think so hard for for forecasters um is that you know on the one hand there's a lot of pent up demand you know it's like scott gottlieb said it's like woodstock coming out of the covid uh but on the other hand if you have a talent gap you've got to rely on external services so there's a learning curve there's a ramp up it's an external company and so it takes time to put those together so so this data that we're going to show you next uh is is really important in my view and ties what we're saying we're saying at the top it asks respondents to comment on their staffing plans the light blue is we're increasing staff the gray is no change in the magenta or whatever whatever color that is that sort of purplish color anyway that color is is decreasing and the picture is very positive across the board full-time staff offshoring contract employees outsourced professional services all up trending upwards and this eric is more evidence of the services bounce back yeah it certainly is david and what happened is when we caught this trend we decided to go one level deeper and say all right we're seeing this but we need to know why and that's what we always try to do here data will tell you what's happening it doesn't always tell you why and that's one of the things that etr really tries to dig in with through the insights interviews panels and also going direct with these more custom survey questions uh so in this instance i think the real takeaway is that 30 of the respondents said that their outsourced and managed services are going to increase over the next three months that's really powerful that's a large portion of organizations in a very short time period so we're capturing that this acceleration is happening right now and it will be happening in real time and i don't see it slowing down you and i are speaking about we have to you know increase cloud spend we have to increase hybrid spend there are refresh cycles coming up and there's just a real skill shortage so this is a long-term setup that bodes very well for it services and consulting you know eric when i came out of college i somebody told me read read read read as much as you can and and so i would and they said read the wall street journal every day and i so i did it and i would read the tech magazines and back then it was all paper and what happens is you begin to connect the dots and so the reason i bring that up is because i've now been had taken a bath in the etr data for the better part of two years and i'm beginning to be able to connect the dots you know the data is not always predictive but many many times it is and so this next data gets into the fun stuff where we name names a lot of times people don't like it because the marketing people and organizations say well the data's wrong of course that's the first thing they do is attack the data but you and i know we've made some really great calls work from home for sure you're talking about the services bounce back uh we certainly saw the rise of crowdstrike octa zscaler well before people were talking about that same thing with video conferencing and so so anyway this is the fun stuff and it looks at positive versus negative sentiment on on companies so first how does etr derive this data and how should we interpret it and what are some of your takeaways [Music] sure first of all how we derive the data or systematic um survey responses that we do on a quarterly basis and we standardize those responses to allow for time series analysis so we can do trend analysis as well we do find that our data because it's talking about forward-looking spending intentions is really more predictive because we're talking about things that might be happening six months three months in the future not things that a lot of other competitors and research peers are looking at things that already happened uh they're looking in the past etr really likes to look into the future and our surveys are set up to do so so thank you for that question it's an enjoyable lead-in but to get to the fun stuff like you said uh what we do here is we put ratings on the data sets i do want to put the caveat out there that our spending intentions really only captures top-line revenue it is not indicative of profit margin or any other line items so this is only going to be viewed as what we are rating the data set itself not the company um you know that's not what we're in the game of doing so i think that's very important for the marketing and the vendors out there themselves when they when they take a look at this we're just talking about what we can control which is our data we're going to talk about a few of the names here on this highlighted vendors list one we're going to go back to that you and i spoke about i guess about six months ago or maybe even earlier which was the observability space um you and i were noticing that it was getting very crowded a lot of new entrants um there was a lot of acquisition from more of the legacy or standard entrance players in the space and that is continuing so i think in a minute we're going to move into that observability space but what we're seeing there is that it's becoming incredibly crowded and we're possibly seeing signs of them cannibalizing each other uh we're also going to move on a little bit into video conferencing where we're capturing some spend deceleration and then ultimately we're going to get into a little bit of a storage refresh cycle and talk about that but yeah these are the highlighted vendors for april um we usually do this once a quarter and they do change based on the data but they're not usually whipsawed around the data doesn't move that quickly yeah so you can see the some of the big names on the left-hand side some of the sas companies that have momentum obviously servicenow has been doing very very well we've talked a lot about snowflake octa crowdstrike z scalar in all very positive as well as you know several others i i guess i'd add some some things i mean i think if thinking about the next decade it's it's cloud which is not going to be like the same cloud as last decade a lot of machine learning and deep learning and ai and the cloud is extending to the edge in the data center data obviously very important data is decentralized and distributed so data architectures are changing a lot of opportunities to connect across clouds and actually create abstraction layers and then something that we've been covering a lot is processor performance is actually accelerating relative to moore's law it's probably instead of doubling every two years it's quadrupling every two years and so that is a huge factor especially as it relates to powering ai and ai inferencing at the edge this is a whole new territory custom silicon is is really becoming in vogue uh and so we're something that we're watching very very closely yeah i completely completely agree on that and i do think that the the next version of cloud will be very different another thing to point out on that too is you can't do anything that you're talking about without collecting the data and and organizations are extremely serious about that now it seems it doesn't matter what industry they're in every company is a data company and that also bodes well for the storage call we do believe that there is going to just be a huge increase in the need for storage um and yes hopefully that'll become portable across multi-cloud and hybrid as well now as eric said the the etr data's it's it's really focused on that top line spend so if you look at the uh on on the right side of that chart you saw you know netapp was kind of negative was very negative right but there's a company that's in in transformation now they've lowered expectations and they've recently beat expectations that's why the stock has been doing better but but at the macro from a spending standpoint it's still challenged so you have big footprint companies like netapp and oracle is another one oracle's stock is at an all-time high but the spending relative to sort of previous cycles or relative to you know like for instance snowflake much much smaller not as high growth but they're managing expectations they're managing their transition they're managing profitability zoom is another one zoom looking looking negative but you know zoom's got to use its market cap now to to transform and increase its tam uh and then splunk is another one we're going to talk about splunk is in transition it acquired signal fx it just brought on this week teresa carlson who was the head of aws public sector she's the president and head of sales so they've got a go to market challenge and they brought in teresa carlson to really solve that but but splunk has been trending downward we called that you know several quarters ago eric and so i want to bring up the data on splunk and this is splunk eric in analytics and it's not trending in the right direction the green is accelerating span the red is and the bars is decelerating spend the top blue line is spending velocity or net score and the yellow line is market share or pervasiveness in the data set your thoughts yeah first i want to go back is a great point dave about our data versus a disconnect from an equity analysis perspective i used to be an equity analyst that is not what we do here and you you may the main word you said is expectations right stocks will trade on how they do compared to the expectations that are set uh whether that's buy side expectations sell side expectations or management's guidance themselves we have no business in tracking any of that what we are talking about is top line acceleration or deceleration so uh that was a great point to make and i do think it's an important one for all of our listeners out there now uh to move to splunk yes i've been capturing a lot of negative commentary on splunk even before the data turned so this has been about a year-long uh you know our analysis and review on this name and i'm dating myself here but i know you and i are both rock and roll fans so i'm gonna point out a led zeppelin song and movie and say that the song remains the same for splunk we are just seeing uh you know recent spending intentions are taking yet another step down both from prior survey levels from year ago levels uh this we're looking at in the analytics sector and spending intentions are decelerating across every single customer group if we went to one of our other slide analysis um on the etr plus platform and you do by customer sub sample in analytics it's dropping in every single vertical it doesn't matter which one uh it's really not looking good unfortunately and you had mentioned this as an analytics and i do believe the next slide is an information security yeah let's bring that up and it's unfortunately it's not doing much better so this is specifically fortune 500 accounts and information security uh you know there's deep pockets in the fortune 500 but from what we're hearing in all the insights and interviews and panels that i personally moderate for etr people are upset they didn't like the the strong tactics that splunk has used on them in the past they didn't like the ingestion model pricing the inflexibility and when alternatives came along people are willing to look at the alternatives and that's what we're seeing in both analytics and big data and also for their sim in security yeah so i think again i i point to teresa carlson she's got a big job but she's very capable she's gonna she's gonna meet with a lot of customers she's a go to market pro she's gonna have to listen hard and i think you're gonna you're gonna see some changes there um okay so there's more sorry there's more bad news on splunk so bring this up is is is net score for splunk in elastic accounts uh this is for analytics so there's 106 elastic accounts that uh in the data set that also have splunk and it's trending downward for splunk that's why it's green for elastic and eric the important call out from etr here is how splunk's performance in elastic accounts compares with its performance overall the elk stack which obviously elastic is a big part of that is causing pain for splunk as is data dog and you mentioned the pricing issue uh is it is it just well is it pricing in your assessment or is it more fundamental you know it's multi-level based on the commentary we get from our itdms that take the survey so yes you did a great job with this analysis what we're looking at is uh the spending within shared accounts so if i have splunk already how am i spending i'm sorry if i have elastic already how is my spending on splunk and what you're seeing here is it's down to about a 12 net score whereas splunk overall has a 32 net score among all of its customers so what you're seeing there is there is definitely a drain that's happening where elastic is draining spend from splunk and usage from them uh the reason we used elastic here is because all observabilities the whole sector seems to be decelerating splunk is decelerating the most but elastic is the only one that's actually showing resiliency so that's why we decided to choose these two but you pointed out yes it's also datadog datadog is cloud native uh they're more devops oriented they tend to be viewed as having technological lead as compared to splunk so that's a really good point a dynatrace also is expanding their abilities and splunk has been making a lot of acquisitions to push their cloud services they are also changing their pricing model right they're they're trying to make things a little bit more flexible moving off ingestion um and moving towards uh you know consumption so they are trying and the new hires you know i'm not gonna bet against them because the one thing that splunk has going for them is their market share in our survey they're still very well entrenched so they do have a lot of accounts they have their foothold so if they can find a way to make these changes then they you know will be able to change themselves but the one thing i got to say across the whole sector is competition is increasing and it does appear based on commentary and data that they're starting to cannibalize themselves it really seems pretty hard to get away from that and you know there are startups in the observability space too that are going to be you know even more disruptive i think i think i want to key on the pricing for a moment and i've been pretty vocal about this i think the the old sas pricing model where essentially you essentially lock in for a year or two years or three years pay up front or maybe pay quarterly if you're lucky that's a one-way street and i think it's it's a flawed model i like what snowflake's doing i like what datadog's doing look at what stripe is doing look what twilio is doing these are cons you mentioned it because it's consumption based pricing and if you've got a great product put it out there and you know damn the torpedoes and i think that is a game changer i i look at for instance hpe with green lake i look at dell with apex they're trying to mimic that model you know they're there and apply it to to infrastructure it's much harder with infrastructure because you got to deploy physical infrastructure but but that is a model that i think is going to change and i think all of the traditional sas pricing is going to is going to come under disruption over the next you know better part of the decades but anyway uh let's move on we've we've been covering the the apm space uh pretty extensively application performance management and this chart lines up some of the big players here comparing net score or spending momentum from the april 20th survey the gray is is um is sorry the the the gray is the april 20th survey the blue is jan 21 and the yellow is april 21. and not only are elastic and data dog doing well relative to splunk eric but everything is down from last year so this space as you point out is undergoing a transformation yeah the pressures are real and it's you know it's sort of that perfect storm where it's not only the data that's telling us that but also the direct feedback we get from the community uh pretty much all the interviews i do i've done a few panels specifically on this topic for anyone who wants to you know dive a little bit deeper we've had some experts talk about this space and there really is no denying that there is a deceleration in spend and it's happening because that spend is getting spread out among different vendors people are using you know a data dog for certain aspects they're using elastic where they can because it's cheaper they're using splunk because they have to but because it's so expensive they're cutting some of the things that they're putting into splunk which is dangerous particularly on the security side if i have to decide what to put in and whatnot that's not really the right way to have security hygiene um so you know this space is just getting crowded there's disruptive vendors coming from the emerging space as well and what you're seeing here is the only bit of positivity is elastic on a survey over survey basis with a slight slight uptick everywhere else year over year and survey over survey it's showing declines it's just hard to ignore and then you've got dynatrace who based on the the interviews you do in the venn you're you know one on one or one on five you know the private interviews that i've been invited to dynatrace gets very high scores uh for their road map you've got new relic which has been struggling you know financially but they've got a purpose built they've got a really good product and a purpose-built database just for this apm space and then of course you've got cisco with appd which is a strong business for them and then as you mentioned you've got startups coming in you've got chaos search which ed walsh is now running you know leave the data in place in aws and really interesting model honeycomb it's going to be really disruptive jeremy burton's company observed so this space is it's becoming jump ball yeah there's a great line that came out of one of them and that was that the lines are blurring it used to be that you knew exactly that app dynamics what they were doing it was apm only or it was logging and monitoring only and a lot of what i'm hearing from the itdm experts is that the lines are blurring amongst all of these names they all have functionality that kind of crosses over each other and the other interesting thing is it used to be application versus infrastructure monitoring but as you know infrastructure is becoming code more and more and more and as infrastructure becomes code there's really no difference between application and infrastructure monitoring so we're seeing a convergence and a blurring of the lines in this space which really doesn't bode well and a great point about new relic their tech gets good remarks uh i just don't know if their enterprise level service and sales is up to snuff right now um as one of my experts said a cto of a very large public online hospitality company essentially said that he would be shocked that within 18 months if all of these players are still uh standalone that there needs to be some m a or convergence in this space okay now we're going to call out some of the data that that really has jumped out to etr in the latest survey and some of the names that are getting the most queries from etr clients which are many of which are investor clients so let's start by having a look at one of the most important and prominent work from home names zoom uh let's let's look at this eric is the ride over for zoom oh i've been saying it for a little bit of a time now actually i do believe it is um i will get into it but again pointing out great dave uh the reason we're presenting today splunk elastic and zoom are they are the most viewed on the etr plus platform uh trailing behind that only slightly is f5 i decided not to bring f5 to the table today because we don't have a rating on the data set um so then i went one deep one below that and it's pure so the reason we're presenting these to you today is that these are the ones that our clients and our community are most interested in which is hopefully going to gain interest to your viewers as well so to get to zoom um yeah i call zoom the pandec pandemic bull market baby uh this was really just one that had a meteoric ride you look back january in 2020 the stock was at 60 and 10 months later it was like like 580. that's in 10 months um that's cooled down a little bit uh into the mid 300s and i believe that cooling down should continue and the reason why is because we are seeing a huge deceleration in our spending intentions uh they're hitting all-time lows it's really just a very ugly data set um more importantly than the spending intentions for the first time we're seeing customer growth in our survey flattened in the past we could we knew that the the deceleration and spend was happening but meanwhile their new customer growth was accelerating so it was kind of hard to really make any call based on that this is the first time we're seeing flattening customer growth trajectory and that uh in tandem with just dominance from microsoft in every sector they're involved in i don't care if it's ip telephony productivity apps or the core video conferencing microsoft is just dominating so there's really just no way to ignore this anymore the data and the commentary state that zoom is facing some headwinds well plus you've pointed out to me that a lot of your private conversations with buyers says that hey we're we're using the freebie version of zoom you know we're not paying them and so in that combined with teams i mean it's it's uh it's i think you know look zoom has to figure it out they they've got to they've got to figure out how to use their elevated market cap to transform and expand their tan um but let's let's move on here's the data on pure storage and we've highlighted a number of times this company is showing elevated spending intentions um pure announces earnings in in may ibm uh just announced storage what uh it was way down actually so sort of still pure more positive but i'll comment on a moment but what does this data tell you eric yeah you know right now we started seeing this data last survey in january and that was the first time we really went positive on the data set itself and it's just really uh continuing so we're seeing the strongest year-over-year acceleration in the entire survey um which is a really good spot to be pure is also a leading position in among its sector peers and the other thing that was pretty interesting from the data set is among all storage players pure has the highest positive public cloud correlation so what we can do is we can see which respondents are accelerating their public cloud spend and then cross-reference that with their storage spend and pure is best positioned so as you and i both know uh you know digital transformation cloud spending is increasing you need to be aligned with that and among all storage uh sector peers uh pure is best positioned in all of those in spending intentions and uh adoptions and also public cloud correlation so yet again just another really strong data set and i have an anecdote about why this might be happening because when i saw the date i started asking in my interviews what's going on here and there was one particular person he was a director of cloud operations for a very large public tech company now they have hybrid um but their data center is in colo so they don't own and build their own physical building he pointed out that doran kovid his company wanted to increase storage but he couldn't get into his colo center due to covert restrictions they weren't allowed you had so 250 000 square feet right but you're only allowed to have six people in there so it's pretty hard to get to your rack and get work done he said he would buy storage but then the cola would say hey you got to get it out of here it's not even allowed to sit here we don't want it in our facility so he has all this pent up demand in tandem with pent up demand we have a refresh cycle the ssd you know depreciation uh you know cycle is ending uh you know ssds are moving on and we're starting to see uh new technology in that space nvme sorry for technology increasing in that space so we have pent up demand and we have new technology and that's really leading to a refresh cycle and this particular itdm that i spoke to and many of his peers think this has a long tailwind that uh storage could be a good sector for some time to come that's really interesting thank you for that that extra metadata and i want to do a little deeper dive on on storage so here's a look at storage in the the industry in context and some of the competitive i mean it's been a tough market for the reasons that we've highlighted cloud has been eating away that flash headroom it used to be you'd buy storage to get you know more spindles and more performance and you were sort of forced to buy more flash gave more headroom but it's interesting what you're saying about the depreciation cycle so that's good news so etr combines just for people's benefit here combines primary and secondary storage into a single category so you have companies like pure and netapp which are really pure play you know primary storage companies largely in the sector along with veeam cohesity and rubric which are kind of secondary data or data protection so my my quick thoughts here are that pure is elevated and remains what i call the one-eyed man in the land of the blind but that's positive tailwinds there so that's good news rubric is very elevated but down it's a big it's big competitor cohesity is way off its highs and i have to say to me veeam is like the steady eddy consistent player here they just really continue to do well in the data protection business and and the highs are steady the lows are steady dell is also notable they've been struggling in storage their isg business which comprises service and storage it's been soft during covid and and during even you know this new product rollout so it's notable with this new mid-range they have in particular the uptick in dell this survey because dell so large a small uptick can be very good for dell hpe has a big announcement next month in storage so that might improve based on a product cycle of course the nimble brand continues to do well ibm as i said just announced a very soft quarter you know down double digits again uh and there in a product cycle shift and netapp is that looks bad in the etr data from a spending momentum standpoint but their management team is transforming the company into a cloud play which eric is why it was interesting that pure has the greatest momentum in in cloud accounts so that is sort of striking to me i would have thought it would be netapp so that's something that we want to pay attention to but i do like a lot of what netapp is doing uh and other than pure they're the only big kind of pure play in primary storage so long winded uh uh intro there eric but anything you'd add no actually i appreciate it was long winded i i'm going to be honest with you storage is not my uh my best sector as far as a researcher and analyst goes uh but i actually think a lot of what you said is spot on um you know we do capture a lot of large organizations spend uh we don't capture much mid and small so i think when you're talking about these large large players like netapp and um you know not looking so good all i would state is that we are capturing really big organizations spending attention so these are names that should be doing better to be quite honest uh in those accounts and you know at least according to our data we're not seeing it and it's long-term depression as you can see uh you know netapp now has a negative spending velocity in this analysis so you know i can go dig around a little bit more but right now the names that i'm hearing are pure cohesity uh um i'm hearing a little bit about hitachi trying to reinvent themselves in the space but you know i'll take a wait-and-see approach on that one but uh pure and cohesity are the ones i'm hearing a lot from our community so storage is transforming to cloud as a service you're seeing things like apex and in green lake from dell and hpe and container storage little so not really a lot of people paying attention to it but pure about a company called portworx which really specializes in container storage and there's many startups there they're trying to really change the way david flynn has a startup in that space he's the guy who started fusion i o so a lot a lot of transformations happening here okay i know it's been a long segment we have to summarize and then let me go through a summary and then i'll give you the last word eric so tech spending appears to be tracking us gdp at six to seven percent this talent shortage could be a blocker to accelerating i.t deployments and that's kind of good news actually for for services companies digital transformation you know it's it remains a priority and that bodes well not only for services but automation uipath went public this week we we profiled that you know extensively that went public last wednesday um organizations they've i said at the top face some tough decisions on how to allocate resources you know running the business growing the business transforming the business and we're seeing a bifurcation of spending and some residual effects on vendors and that remains a theme that we're watching eric your final thoughts yeah i'm going to go back quickly to just the overall macro spending because there's one thing i think is interesting to point out and we're seeing a real acceleration among mid and small so it seems like early on in the covid recovery or kovitz spending it was the deep pockets that moved first right fortune 500 knew they had to support remote work they started spending first round that in the fortune 500 we're only seeing about five percent spent but when you get into mid and small organizations that's creeping up to eight nine so i just think it's important to point out that they're playing catch-up right now uh also would point out that this is heavily skewed to north america spending we're seeing laggards in emea they just don't seem to be spending as much they're in a very different place in their recovery and uh you know i do think that it's important to point that out um lastly i also want to mention i know you do such a great job on following a lot of the disruptive vendors that you just pointed out pure doing container storage we also have another bi-annual survey that we do called emerging technology and that's for the private names that's going to be launching in may for everyone out there who's interested in not only the disruptive vendors but also private equity players uh keep an eye out for that we do that twice a year and that's growing in its respondents as well and then lastly one comment because you mentioned the uipath ipo it was really hard for us to sit on the sidelines and not put some sort of rating on their data set but ultimately um the data was muted unfortunately and when you're seeing this kind of hype into an ipo like we saw with snowflake the data was resoundingly strong we had no choice but to listen to what the data said for snowflake despite the hype um we didn't see that for uipath and we wanted to and i'm not making a large call there but i do think it's interesting to juxtapose the two that when snowflake was heading to its ipo the data was resoundingly positive and for uipath we just didn't see that thank you for that and eric thanks for coming on today it's really a pleasure to have you and uh so really appreciate the the uh collaboration and look forward to doing more of these we enjoy the partnership greatly dave we're very very happy to have you in the etr family and looking forward to doing a lot lot more with you in the future ditto okay that's it for today remember these episodes are all available as podcasts wherever you listen all you got to do is search breaking analysis podcast and please subscribe to the series check out etr's website it's etr dot plus we also publish a full report every week on wikibon.com at siliconangle.com you can email me david.velante at siliconangle.com you can dm me on twitter at dvalante or comment on our linkedin post i could see you in clubhouse this is dave vellante for eric porter bradley for the cube insights powered by etr have a great week stay safe be well and we'll see you next time

>> From theCUBE studios in Palo Alto and Boston, Bringing you data-driven insights from theCUBE and ETR. This is "Breaking Analysis" with Dave Vellante. >> Recent survey data from ETR shows that enterprise tech spending is tracking with projected US GDP growth at six to 7% this year. Many markers continue to point the way to a strong recovery, including hiring trends and the loosening of frozen IT Project budgets. However skills shortages are blocking progress at some companies which bodes well for an increased reliance on external IT services. Moreover, while there's much talk about the rotation out of work from home plays and stocks such as video conferencing, VDI, and other remote worker tech, we see organizations still trying to figure out the ideal balance between funding headquarter investments that have been neglected and getting hybrid work right. In particular, the talent gap combined with a digital mandate, means companies face some tough decisions as to how to fund the future while serving existing customers and transforming culturally. Hello everyone, and welcome to this week's Wikibon CUBE's Insights powered by ETR. In this "Breaking Analysis", we welcome back Erik Porter Bradley of ETR who will share fresh data, perspectives and insights from the latest survey data. Erik, great to see you. Welcome. >> Thank you very much, Dave. Always good to see you and happy to be on the show again. >> Okay, we're going to share some macro data and then we're going to dig into some highlights from ETR's most recent March COVID survey and also the latest April data. So Erik, the first chart that we want to show, it shows CIO and IT buyer responses to expected IT spend for each quarter of 2021 versus 2020, and you can see here a steady quarterly improvement. Erik, what are the key takeaways, from your perspective? >> Sure, well, first of all, for everyone out there, this particular survey had a record-setting number of participation. We had a 1,500 IT decision makers participate and we had over half of the Fortune 500 and over a fifth of the Global 1000. So it was a really good survey. This is seventh iteration of the COVID Impact Survey specifically, and this is going to transition to an overlarge macro survey going forward so we can continue it. And you're 100% right, what we've been tracking here since March of last year was, how is spending being impacted because of COVID? Where is it shifting? And what we're seeing now finally is that there is a real re-acceleration in spend. I know we've been a little bit more cautious than some of the other peers out there that just early on slapped an eight or a 9% number, but what we're seeing is right now, it's at a midpoint of over six, about 6.7% and that is accelerating. So, we are still hopeful that that will continue, and really, that spending is going to be in the second half of the year. As you can see on the left part of this chart that we're looking at, it was about 1.7% versus 3% for Q1 spending year-over-year. So that is starting to accelerate through the back half. >> I think it's prudent to be cautious (indistinct) 'cause normally you'd say, okay, tech is going to grow a couple of points higher than GDP, but it's really so hard to predict this year. Okay, the next chart here that we want to show you is we asked respondents to indicate what strategies they're employing in the short term as a result of coronavirus and you can see a few things that I'll call out and then I'll ask Erik to chime in. First, there's been no meaningful change of course, no surprise in tactics like remote work and holding travel, however, we're seeing very positive trends in other areas trending downward, like hiring freezes and freezing IT deployments, a downward trend in layoffs, and we also see an increase in the acceleration of new IT deployments and in hiring. Erik, what are your key takeaways? >> Well, first of all, I think it's important to point out here that we're also capturing that people believe remote work productivity is still increasing. Now, the trajectory might be coming down a little bit, but that is really key, I think, to the backdrop of what's happening here. So people have a perception that productivity of remote work is better than hybrid work and that's from the IT decision makers themselves, but what we're seeing here is that, most importantly, these organizations are citing plans to increase hiring, and that's something that I think is really important to point out. It's showing a real following, and to your point right in the beginning of the intro, we are seeing deployments stabilize versus prior survey levels, which means early on, they had no plans to launch new tech deployments, then they said, "Nope, we're going to start." and now that stalling, and I think it's exactly right, what you said, is there's an IT skills shortage. So people want to continue to do IT deployments 'cause they have to support work from home and a hybrid back return to the office, but they just don't have the skills to do so, and I think that's really probably the most important takeaway from this chart, is that stalling and to really ask why it's stalling. >> Yeah, so we're going to get into that for sure, and I think that's a really key point, is that accelerating IT deployments, it looks like it's hit a wall in the survey, but before we get deep into the skills, let's take a look at this next chart, and we're asking people here how our return to the new normal, if you will, and back to offices is going to change spending with on-prem architectures and applications. And so the first two bars, they're Cloud-friendly, if you add them up, it's 63% of the respondents, say that either they'll stay in the Cloud for the most part, or they're going to lower their on-prem spend when they go back to the office. The next three bars are on-prem friendly. If you add those up it's 29% of the respondents say their on-prem spend is going to bounce back to pre-COVID levels or actually increase, and of course, 12% of that number, by the way, say they've never altered their on-prem spend. So Erik, no surprise, but this bodes well for Cloud, but isn't it also a positive for on-prem? We've had this dual funding premise, meaning Cloud continues to grow, but neglected data center spend also gets a boost. What's your thoughts? >> Really, it's interesting. It's people are spending on all fronts. You and I were talking in the prep, it's like we're in battle and I've got naval, I've got air, I've got land, I've got to spend on Cloud and digital transformation, but I also have to spend for on-prem. The hybrid work is here and it needs to be supported. So this is spending is going to increase. When you look at this chart, you're going to see though, that roughly 36% of all respondents say that their spending is going to remain mostly on Cloud. So that is still the clear direction, digital transformation is still happening, COVID accelerated it greatly, you and I, as journalists and researchers already know this is where the puck is going, but spend has always lagged a little bit behind 'cause it just takes some time to get there. Inversely, 27% said that their on-prem spending will decrease. So when you look at those two, I still think that the trend is the friend for Cloud spending, even though, yes, they do have to continue spending on hybrid, some of it's been neglected, there are refresh cycles coming up, so, overall it just points to more and more spending right now. It really does seem to be a very strong backdrop for IT growth. >> So I want to talk a little bit about the ETR taxonomy before we bring up the next chart. We get a lot of questions about this, and of course, when you do a massive survey like you're doing, you have to have consistency for time series, so you have to really think through what the buckets look like, if you will. So this next chart takes a look at the ETR taxonomy and it breaks it down into simple-to-understand terms. So the green is the portion of spending on a vendor's tech within a category that is accelerating, and the red is the portion that is decelerating. So Erik, what are the key messages in this data? >> Well, first of all, Dave, thank you so much for pointing that out. We used to do, just what we call a Net score. It's a proprietary formula that we use to determine the overall velocity of spending. Some people found it confusing. Our data scientists decided to break this sector, break down into what you said, which is really more of a mode analysis. In that sector, how many of the vendors are increasing versus decreasing? So again, I just appreciate you bringing that up and allowing us to explain the reasoning behind our analysis there. But what we're seeing here goes back to something you and I did last year when we did our predictions, and that was that IT services and consulting was going to have a true rebound in 2021, and that's what this is showing right here. So in this chart, you're going to see that consulting and services are really continuing their recovery, 2020 had a lot of the clients and they have the biggest sector year-over-year acceleration sector wise. The other thing to point out on this, which we'll get to again later, is that the inverse analysis is true for video conferencing. We will get to that, so I'm going to leave a little bit of ammunition behind for that one, but what we're seeing here is IT consulting services being the real favorable and video conferencing having a little bit more trouble. >> Great, okay, and then let's take a look at that services piece, and this next chart really is a drill down into that space and emphasizes, Erik, what you were just talking about. And we saw this in IBM's earnings, where still more than 60% of IBM's business comes from services and the company beat earnings, in part, due to services outperforming expectations, I think it had a somewhat easier compare and some of this pent-up demand that we've been talking about bodes well for IBM and other services companies, it's not just IBM, right, Erik? >> No, it's not, but again, I'm going to point out that you and I did point out IBM in our predictions when we did in late December, so, it is nice to see. One of the reasons we don't have a more favorable rating on IBM at the moment is because they are in the process of spinning out this large unit, and so there's a little bit of a corporate action there that keeps us off on the sideline. But I would also want to point out here, Tata, Infosys and Cognizant 'cause they're seeing year-over-year acceleration in both IT consulting and outsourced IT services. So we break those down separately and those are the three names that are seeing acceleration in both of those. So again, at the Tata, Infosys and Cognizant are all looking pretty well positioned as well. >> So we've been talking a little bit about this skills shortage, and this is what's, I think, so hard for forecasters, is that in the one hand, There's a lot of pent up demand, Scott Gottlieb said it's like Woodstock coming out of the COVID, but on the other hand, if you have a talent gap, you've got to rely on external services. So there's a learning curve, there's a ramp up, it's an external company, and so it takes time to put those together. So this data that we're going to show you next, is really important in my view and ties what we were saying at the top. It asks respondents to comment on their staffing plans. The light blue is "We're increasing staff", the gray is "No change" and the magenta or whatever, whatever color that is that sort of purplish color, anyway, that color is decreasing, and the picture is very positive across the board. Full-time staff, offshoring, contract employees, outsourced professional services, all up trending upwards, and this Erik is more evidence of the services bounce back. >> Yeah, it's certainly, yes, David, and what happened is when we caught this trend, we decided to go one level deeper and say, all right, we're seeing this, but we need to know why, and that's what we always try to do here. Data will tell you what's happening, it doesn't always tell you why, and that's one of the things that ETR really tries to dig in with through the insights, interviews panels, and also going direct with these more custom survey questions. So in this instance, I think the real takeaway is that 30% of the respondents said that their outsourced and managed services are going to increase over the next three months. That's really powerful, that's a large portion of organizations in a very short time period. So we're capturing that this acceleration is happening right now and it will be happening in real time, and I don't see it slowing down. You and I are speaking about we have to increase Cloud spend, we have to increase hybrid spend, there are refresh cycles coming up, and there's just a real skills shortage. So this is a long-term setup that bodes very well for IT services and consulting. >> You know, Erik, when I came out of college, somebody told me, "Read, read, read, read as much as you can." And then they said, "Read the Wall Street Journal every day." and so I did it, and I would read the tech magazines and back then it was all paper, and what happens is you begin to connect the dots. And so the reason I bring that up is because I've now taken a bath in the ETR data for the better part of two years and I'm beginning to be able to connect the dots. The data is not always predictive, but many, many times it is. And so this next data gets into the fun stuff where we name names. A lot of times people don't like it because they're either marketing people at organizations, say, "Well, data's wrong." because that's the first thing they do, is attack the data. But you and I know, we've made some really great calls, work from home, for sure, you're talking about the services bounce back. We certainly saw the rise of CrowdStrike, Okta, Zscaler, well before people were talking about that, same thing with video conferencing. And so, anyway, this is the fun stuff and it looks at positive versus negative sentiment on companies. So first, how does ETR derive this data and how should we interpret it, and what are some of your takeaways? >> Sure, first of all, how we derive the data, are systematic survey responses that we do on a quarterly basis, and we standardize those responses to allow for time series analysis so we can do trend analysis as well. We do find that our data, because it's talking about forward-looking spending intentions, is really more predictive because we're talking about things that might be happening six months, three months in the future, not things that a lot of other competitors and research peers are looking at things that already happened, they're looking in the past, ETR really likes to look into the future and our surveys are set up to do so. So thank you for that question, It's a enjoyable lead in, but to get to the fun stuff, like you said, what we do here is we put ratings on the datasets. I do want to put the caveat out there that our spending intentions really only captures top-line revenue. It is not indicative of profit margin or any other line items, so this is only to be viewed as what we are rating the data set itself, not the company, that's not what we're in the game of doing. So I think that's very important for the marketing and the vendors out there themselves when they take a look at this. We're just talking about what we can control, which is our data. We're going to talk about a few of the names here on this highlighted vendors list. One, we're going to go back to that you and I spoke about, I guess, about six months ago, or maybe even earlier, which was the observability space. You and I were noticing that it was getting very crowded, a lot of new entrants, there was a lot of acquisition from more of the legacy or standard players in the space, and that is continuing. So I think in a minute, we're going to move into that observability space, but what we're seeing there is that it's becoming incredibly crowded and we're possibly seeing signs of them cannibalizing each other. We're also going to move on a little bit into video conferencing, where we're capturing some spend deceleration, and then ultimately, we're going to get into a little bit of a storage refresh cycle and talk about that. But yeah, these are the highlighted vendors for April, we usually do this once a quarter and they do change based on the data, but they're not usually whipsawed around, the data doesn't move that quickly. >> Yeah, so you can see some of the big names in the left-hand side, some of the SAS companies that have momentum. Obviously, ServiceNow has been doing very, very well. We've talked a lot about Snowflake, Okta, CrowdStrike, Zscaler, all very positive, as well as several others. I guess I'd add some things. I mean, I think if thinking about the next decade, it's Cloud, which is not going to be like the same Cloud as the last decade, a lot of machine learning and deep learning and AI and the Cloud is extending to the edge and the data center. Data, obviously, very important, data is decentralized and distributed, so data architectures are changing. A lot of opportunities to connect across Clouds and actually create abstraction layers, and then something that we've been covering a lot is processor performance is actually accelerating relative to Moore's law. It's probably instead of doubling every two years, it's quadrupling every two years, and so that is a huge factor, especially as it relates to powering AI and AI inferencing at the edge. This is a whole new territory, custom Silicon is really becoming in vogue and so something that we're watching very, very closely. >> Yeah, I completely, agree on that and I do think that the next version of Cloud will be very different. Another thing to point out on that too, is you can't do anything that you're talking about without collecting the data and organizations are extremely serious about that now. It seems it doesn't matter what industry they're in, every company is a data company, and that also bodes well for the storage goal. We do believe that there is going to just be a huge increase in the need for storage, and yes, hopefully that'll become portable across multi-Cloud and hybrid as well. >> Now, as Erik said, the ETR data, it's really focused on that top-line spend. So if you look on the right side of that chart, you saw NetApp was kind of negative, was very negative, right? But it is a company that's in transformation now, they've lowered expectations and they've recently beat expectations, that's why the stock has been doing better, but at the macro, from a spending standpoint, it's still stout challenged. So you have big footprint companies like NetApp and Oracle is another one. Oracle's stock is at an all time high, but the spending relative to sort of previous cycles are relative to, like for instance, Snowflake, much, much smaller, not as high growth, but they're managing expectations, they're managing their transition, they're managing profitability. Zoom is another one, Zoom looking negative, but Zoom's got to use its market cap now to transform and increase its TAM. And then Splunk is another one we're going to talk about. Splunk is in transition, it acquired SignalFX, It just brought on this week, Teresa Carlson, who was the head of AWS Public Sector. She's the president and head of sales, so they've got a go-to-market challenge and they brought in Teresa Carlson to really solve that, but Splunk has been trending downward, we called that several quarters ago, Erik, and so I want to bring up the data on Splunk, and this is Splunk, Erik, in analytics, and it's not trending in the right direction. The green is accelerating spend, the red is in the bars is decelerating spend, the top blue line is spending velocity or Net score, and the yellow line is market share or pervasiveness in the dataset. Your thoughts. >> Yeah, first I want to go back. There's a great point, Dave, about our data versus a disconnect from an equity analysis perspective. I used to be an equity analyst, that is not what we do here. And the main word you said is expectations, right? Stocks will trade on how they do compare to the expectations that are set, whether that's buy-side expectations, sell-side expectations or management's guidance themselves. We have no business in tracking any of that, what we are talking about is the top-line acceleration or deceleration. So, that was a great point to make, and I do think it's an important one for all of our listeners out there. Now, to move to Splunk, yes, I've been capturing a lot of negative commentary on Splunk even before the data turns. So this has been a about a year-long, our analysis and review on this name and I'm dating myself here, but I know you and I are both rock and roll fans, so I'm going to point out a Led Zeppelin song and movie, and say that the song remains the same for Splunk. We are just seeing recent spending attentions are taking yet another step down, both from prior survey levels, from year ago levels. This, we're looking at in the analytics sector and spending intentions are decelerating across every single group, and we went to one of our other slide analysis on the ETR+ platform, and you do by customer sub-sample, in analytics, it's dropping in every single vertical. It doesn't matter which one. it's really not looking good, unfortunately, and you had mentioned this is an analytics and I do believe the next slide is an information security. >> Yeah, let's bring that up. >> And unfortunately it's not doing much better. So this is specifically Fortune 500 accounts and information security. There's deep pockets in the Fortune 500, but from what we're hearing in all the insights and interviews and panels that I personally moderate for ETR, people are upset, that they didn't like the strong tactics that Splunk has used on them in the past, they didn't like the ingestion model pricing, the inflexibility, and when alternatives came along, people are willing to look at the alternatives, and that's what we're seeing in both analytics and big data and also for their SIM and security. >> Yeah, so I think again, I pointed Teresa Carlson. She's got a big job, but she's very capable. She's going to meet with a lot of customers, she's a go-to-market pro, she's going to to have to listen hard, and I think you're going to see some changes there. Okay, so sorry, there's more bad news on Splunk. So (indistinct) bring this up is Net score for Splunk and Elastic accounts. This is for analytics, so there's 106 Elastic accounts in the dataset that also have Splunk and it's trending downward for Splunk, that's why it's green for Elastic. And Erik, the important call out from ETR here is how Splunk's performance in Elastic accounts compares with its performance overall. The ELK stack, which obviously Elastic is a big part of that, is causing pain for Splunk, as is Datadog, and you mentioned the pricing issue, well, is it pricing in your assessment or is it more fundamental? >> It's multi-level based on the commentary we get from our ITDMs teams that take the survey. So yes, you did a great job with this analysis. What we're looking at is the spending within shared accounts. So if I have Splunk already, how am I spending? I'm sorry if I have Elastic already, how am I spending on Splunk? And what you're seeing here is it's down to about a 12% Net score, whereas Splunk overall, has a 32% Net score among all of its customers. So what you're seeing there is there is definitely a drain that's happening where Elastic is draining spend from Splunk and usage from them. The reason we used Elastic here is because all observabilities, the whole sector seems to be decelerating. Splunk is decelerating the most, but Elastic is the only one that's actually showing resiliency, so that's why we decided to choose these two, but you pointed out, yes, it's also Datadog. Datadog is Cloud native. They're more dev ops-oriented. They tend to be viewed as having technological lead as compared to Splunk. So a really good point. Dynatrace also is expanding their abilities and Splunk has been making a lot of acquisitions to push their Cloud services, they are also changing their pricing model, right? They're trying to make things a little bit more flexible, moving off ingestion and moving towards consumption. So they are trying, and the new hires, I'm not going to bet against them because the one thing that Splunk has going for them is their market share in our survey, they're still very well entrenched. So they do have a lot of accounts, they have their foothold. So if they can find a way to make these changes, then they will be able to change themselves, but the one thing I got to say across the whole sector is competition is increasing, and it does appear based on commentary and data that they're starting to cannibalize themselves. It really seems pretty hard to get away from that, and you know there are startups in the observability space too that are going to be even more disruptive. >> I think I want to key on the pricing for a moment, and I've been pretty vocal about this. I think the old SAS pricing model where you essentially lock in for a year or two years or three years, pay up front, or maybe pay quarterly if you're lucky, that's a one-way street and I think it's a flawed model. I like what Snowflake's doing, I like what Datadog's doing, look at what Stripe is doing, look at what Twilio is doing, you mentioned it, it's consumption-based pricing, and if you've got a great product, put it out there and damn, the torpedoes, and I think that is a game changer. I look at, for instance, HPE with GreenLake, I look at Dell with Apex, they're trying to mimic that model and apply it to infrastructure, it's much harder with infrastructure 'cause you've got to deploy physical infrastructure, but that is a model that I think is going to change, and I think all of the traditional SAS pricing is going to come under disruption over the next better part of the decades, but anyway, let's move on. We've been covering the APM space pretty extensively, application performance management, and this chart lines up some of the big players here. Comparing Net score or spending momentum from the April 20th survey, the gray is, sorry, the gray is the April 20th survey, the blue is Jan 21 and the yellow is April 21, and not only are Elastic and Datadog doing well relative to Splunk, Erik, but everything is down from last year. So this space, as you point out, is undergoing a transformation. >> Yeah, the pressures are real and it's sort of that perfect storm where it's not only the data that's telling us that, but also the direct feedback we get from the community. Pretty much all the interviews I do, I've done a few panels specifically on this topic, for anyone who wants to dive a little bit deeper. We've had some experts talk about this space and there really is no denying that there is a deceleration in spend and it's happening because that spend is getting spread out among different vendors. People are using a Datadog for certain aspects, they are using Elastic where they can 'cause it's cheaper. They're using Splunk because they have to, but because it's so expensive, they're cutting some of the things that they're putting into Splunk, which is dangerous, particularly on the security side. If I have to decide what to put in and whatnot, that's not really the right way to have security hygiene. So this space is just getting crowded, there's disruptive vendors coming from the emerging space as well, and what you're seeing here is the only bit of positivity is Elastic on a survey-over-survey basis with a slight, slight uptick. Everywhere else, year-over-year and survey-over-survey, it's showing declines, it's just hard to ignore. >> And then you've got Dynatrace who, based on the interviews you do in the (indistinct), one-on-one, or one-on-five, the private interviews that I've been invited to, Dynatrace gets very high scores for their roadmap. You've got New Relic, which has been struggling financially, but they've got a really good product and a purpose-built database just for this APM space, and then of course, you've got Cisco with AppD, which is a strong business for them, and then as you mentioned, you've got startups coming in, you got ChaosSearch, which Ed Walsh is now running, leave the data in place in AWS and really interesting model, Honeycomb is getting really disruptive, Jeremy Burton's company, Observed. So this space is it's becoming jumped ball. >> Yeah, there's a great line that came out of one of them, and that was that the lines are blurring. It used to be that you knew exactly that AppDynamics, what they were doing, it was APM only, or it was logging and monitoring only, and a lot of what I'm hearing from the ITDM experts is that the lines are blurring amongst all of these names. They all have functionality that kind of crosses over each other. And the other interesting thing is it used to be application versus infrastructure monitoring, but as you know, infrastructure is becoming code more and more and more, and as infrastructure becomes code, there's really no difference between application and infrastructure monitoring. So we're seeing a convergence and a blurring of the lines in this space, which really doesn't bode well, and a great point about New Relic, their tech gets good remarks. I just don't know if their enterprise level service and sales is up to snuff right now. As one of my experts said, a CTO of a very large public online hospitality company essentially said that he would be shocked that within 18 months if all of these players are still standalone, that there needs to be some M and A or convergence in this space. >> Okay, now we're going to call out some of the data that really has jumped out to ETR in the latest survey, and some of the names that are getting the most queries from ETR clients, many of which are investor clients. So let's start by having a look at one of the most important and prominent work from home names, Zoom. Let's look at this. Erik is the ride over for Zoom? >> Ah, I've been saying it for a little bit of a time now actually. I do believe it is, and we'll get into it, but again, pointing out, great, Dave, the reason we're presenting today Splunk, Elastic and Zoom, they are the most viewed on the ETR+ platform. Trailing behind that only slightly is F5, I decided not to bring F5 to the table today 'cause we don't have a rating on the data set. So then I went one deep, one below that and it's pure. So the reason we're presenting these to you today is that these are the ones that our clients and our community are most interested in, which is hopefully going to gain interest to your viewers as well. So to get to Zoom, yeah, I call Zoom the pandemic bull market baby. This was really just one that had a meteoric ride. You look back, January in 2020, the stock was at $60 and 10 months later, it was like 580, that's in 10 months. That's cooled down a little bit into the mid-300s, and I believe that cooling down should continue, and the reason why is because we are seeing huge deceleration in our spending intentions. They're hitting all-time lows, it's really just a very ugly dataset. More importantly than the spending intentions, for the first time, we're seeing customer growth in our survey flatten. In the past, we knew that the deceleration of spend was happening, but meanwhile, their new customer growth was accelerating, so it was kind of hard to really make any call based on that. This is the first time we're seeing flattening customer growth trajectory, and that in tandem with just dominance from Microsoft in every sector they're involved in, I don't care if it's IP telephony, productivity apps or the core video conferencing, Microsoft is just dominating. So there's really just no way to ignore this anymore. The data and the commentary state that Zoom is facing some headwinds. >> Well, plus you've pointed out to me that a lot of your private conversations with buyers says that, "Hey, we're, we're using the freebie version of Zoom, and we're not paying them." And that combined with Teams, I mean, it's... I think, look, Zoom, they've got to figure out how to use their elevated market cap to transform and expand their TAM, but let's move on. Here's the data on Pure Storage and we've highlighted a number of times this company is showing elevated spending intentions. Pure announced it's earnings in May, IBM just announced storage, it was way down actually. So still, Pure, more positive, but I'll on that comment in a moment, but what does this data tell you, Erik? >> Yeah, right now we started seeing this data last survey in January, and that was the first time we really went positive on the data set itself, and it's just really continuing. So we're seeing the strongest year-over-year acceleration in the entire survey, which is a really good spot to be. Pure is also a leading position among its sector peers, and the other thing that was pretty interesting from the data set is among all storage players, Pure has the highest positive public Cloud correlation. So what we can do is we can see which respondents are accelerating their public Cloud spend and then cross-reference that with their storage spend and Pure is best positioned. So as you and I both know, digital transformation Cloud spending is increasing, you need to be aligned with that. And among all storage sector peers, Pure is best positioned in all of those, in spending intentions and adoptions and also public Cloud correlation. So yet again, to start another really strong dataset, and I have an anecdote about why this might be happening, because when I saw the data, I started asking in my interviews, what's going on here? And there was one particular person, he was a director of Cloud operations for a very large public tech company. Now, they have hybrid, but their data center is in colo, So they don't own and build their own physical building. He pointed out that during COVID, his company wanted to increase storage, but he couldn't get into his colo center due to COVID restrictions. They weren't allowed. You had 250,000 square feet, right, but you're only allowed to have six people in there. So it's pretty hard to get to your rack and get work done. He said he would buy storage, but then the colo would say, "Hey, you got to get it out of here. It's not even allowed to sit here. We don't want it in our facility." So he has all this pent up demand. In tandem with pent up demand, we have a refresh cycle. The SSD depreciation cycle is ending. SSDs are moving on and we're starting to see a new technology in that space, NVMe sorry, technology increasing in that space. So we have pent up demand and we have new technology and that's really leading to a refresh cycle, and this particular ITDM that I spoke to and many of his peers think this has a long tailwind that storage could be a good sector for some time to come. >> That's really interesting, thank you for that extra metadata. And I want to do a little deeper dive on storage. So here's a look at storage in the industry in context and some of the competitive. I mean, it's been a tough market for the reasons that we've highlighted, Cloud has been eating away that flash headroom. It used to be you'd buy storage to get more spindles and more performance and we're sort of forced to buy more, flash, gave more headroom, but it's interesting what you're saying about the depreciation cycle. So that's good news. So ETR combines, just for people's benefit here, combines primary and secondary storage into a single category. So you have companies like Pure and NetApp, which are really pure play primary storage companies, largely in the sector, along with Veeam, Cohesity and Rubrik, which are kind of secondary data or data protection. So my quick thoughts here that Pure is elevated and remains what I call the one-eyed man in the land of the blind, but that's positive tailwinds there, so that's good news. Rubrik is very elevated but down, it's big competitor, Cohesity is way off its highs, and I have to say to me, Veeam is like the Steady Eddy consistent player here. They just really continue to do well in the data protection business, and the highs are steady, the lows are steady. Dell is also notable, they've been struggling in storage. Their ISG business, which comprises servers and storage, it's been softer in COVID, and during even this new product rollout, so it's notable with this new mid range they have in particular, the uptick in Dell, this survey, because Dell is so large, a small uptick can be very good for Dell. HPE has a big announcement next month in storage, so that might improve based on a product cycle. Of course, the Nimble brand continues to do well, IBM, as I said, just announced a very soft quarter, down double digits again, and they're in a product cycle shift. And NetApp, it looks bad in the ETR data from a spending momentum standpoint, but their management team is transforming the company into a Cloud play, which Erik is why it was interesting that Pure has the greatest momentum in Cloud accounts, so that is sort of striking to me. I would have thought it would be NetApp, so that's something that we want to pay attention to, but I do like a lot of what NetApp is doing, and other than Pure, they're the only big kind of pure play in primary storage. So long-winded, intro there, Erik, but anything you'd add? >> No, actually I appreciate it as long-winded. I'm going to be honest with you, storage is not my best sector as far as a researcher and analyst goes, but I actually think that a lot of what you said is spot on. We do capture a lot of large organizations spend, we don't capture much mid and small, so I think when you're talking about these large, large players like NetApp not looking so good, all I would state is that we are capturing really big organization spending attention, so these are names that should be doing better to be quite honest, in those accounts, and at least according to our data, we're not seeing it in. It's longterm depression, as you can see, NetApp now has a negative spending velocity in this analysis. So, I can go dig around a little bit more, but right now the names that I'm hearing are Pure, Cohesity. I'm hearing a little bit about Hitachi trying to reinvent themselves in the space, but I'll take a wait-and-see approach on that one, but pure Cohesity are the ones I'm hearing a lot from our community. >> So storage is transforming to Cloud as a service. You've seen things like Apex in GreenLake from Dell and HPE and container storage. A little, so not really a lot of people paying attention to it, but Pure bought a company called Portworx which really specializes in container storage, and there's many startups there, they're trying to really change the way. David Flynn, has a startup in that space, he's the guy who started Fusion-io. So a lot of transformations happening here. Okay, I know it's been a long segment, we have to summarize, and let me go through a summary and then I'll give you the last word, Erik. So tech spending appears to be tracking US GDP at 6 to 7%. This talent shortage could be a blocker to accelerating IT deployments, so that's kind of good news actually for services companies. Digital transformation, it remains a priority, and that bodes, well, not only for services, but automation. UiPath went public this week, we profiled that extensively, that went public last Wednesday. Organizations that sit at the top face some tough decisions on how to allocate resources. They're running the business, growing the business, transforming the business, and we're seeing a bifurcation of spending and some residual effects on vendors, and that remains a theme that we're watching. Erik, your final thoughts. >> Yeah, I'm going to go back quickly to just the overall macro spending, 'cause there's one thing I think is interesting to point out and we're seeing a real acceleration among mid and small. So it seems like early on in the COVID recovery or COVID spending, it was the deep pockets that moved first, right? Fortune 500 knew they had to support remote work, they started spending first. Around that in the Fortune 500, we're only seeing about 5% spend, but when you get into mid and small organizations, that's creeping up to eight, nine. So I just think it's important to point out that they're playing catch up right now. I also would point out that this is heavily skewed to North America spending. We're seeing laggards in EMEA, they just don't seem to be spending as much. They're in a very different place in their recovery, and I do think that it's important to point that out. Lastly, I also want to mention, I know you do such a great job on following a lot of the disruptive vendors that you just pointed out, with Pure doing container storage, we also have another bi-annual survey that we do called Emerging Technology, and that's for the private names. That's going to be launching in May, for everyone out there who's interested in not only the disruptive vendors, but also private equity players. Keep an eye out for that. We do that twice a year and that's growing in its respondents as well. And then lastly, one comment, because you mentioned the UiPath IPO, it was really hard for us to sit on the sidelines and not put some sort of rating on their dataset, but ultimately, the data was muted, unfortunately, and when you're seeing this kind of hype into an IPO like we saw with Snowflake, the data was resoundingly strong. We had no choice, but to listen to what the data said for Snowflake, despite the hype. We didn't see that for UiPath and we wanted to, and I'm not making a large call there, but I do think it's interesting to juxtapose the two, that when snowflake was heading to its IPO, the data was resoundingly positive, and for UiPath, we just didn't see that. >> Thank you for that, and Erik, thanks for coming on today. It's really a pleasure to have you, and so really appreciate the collaboration and look forward to doing more of these. >> Yeah, we enjoy the partnership greatly, Dave. We're very happy to have you on the ETR family and looking forward to doing a lot, lot more with you in the future. >> Ditto. Okay, that's it for today. Remember, these episodes are all available as podcasts wherever you listen. All you have to do is search "Breaking Analysis" podcast, and please subscribe to the series. Check out ETR website it's etr.plus. We also publish a full report every week on wikibon.com and siliconangle.com. You can email me, david.vellante@siliconangle.com, you can DM me on Twitter @dvellante or comment on our LinkedIn posts. I could see you in Clubhouse. This is Dave Vellante for Erik Porter Bradley for the CUBE Insights powered by ETR. Have a great week, stay safe, be well and we'll see you next time. (bright music)

>> From theCUBE Studios in Palo Alto in Boston, bringing you data driven insights from theCUBE and ETR, this is Breaking Analysis with Dave Vellante. >> Last year in 2020 it was good to be in tech and even better to be in the cloud, as organizations had to rely on remote cloud services to keep things running. We believe that tech spending will increase seven to 8% in 2021. But we don't expect investments in cloud computing to sharply attenuate, when workers head back to the office. It's not a zero sum game, and we believe that pent up demand in on-prem data centers will complement those areas of high growth that we saw last year, namely cloud, AI, security, data and automation. Hello everyone, and welcome to this week's Wikibon CUBE Insights powered by ETR. In this breaking analysis we'll provide our take on the latest ETR COVID survey, and share why we think the tech boom will continue, well into the future. So let's take a look at the state of tech spending. Fitch Ratings has upped its outlook for global GDP to 6.1% for January's 5.3% projection. We've always expected tech spending to outperform GDP by at least 100 to 200 basis points, so we think 2021 could see 8% growth for the tech sector. That's a massive swing from last year's,5% contraction, and it's being powered by spending in North America, a return of small businesses, and, the massive fiscal stimulus injection from the U.S led central bank actions. As we'll show you, the ETR survey data suggests that cloud spending is here to stay, and a dollar spent back in the data center doesn't necessarily mean less spending on digital initiatives, generally and cloud specifically. Moreover, we see pent up demand for core on-prem data center infrastructure, especially networking. Now one caveat, is we continue to have concerns for the macro on-prem data storage sector. There are pockets of positivity, for example, pure storage seems to have accelerating momentum. But generally the data suggests the cloud and flash headroom, continue, to pressure spending on storage. Now we don't expect the stock market's current rotation out of tech. We don't expect that that changes the fundamental spending dynamic. We see cloud, AI and ML, RPA, cybersecurity and collaboration investments still hovering above, that 40% net score. Actually cybersecurity is not quite there, but it is a priority area for CIOs. We'll talk about that more later. And we expect that those high growth sectors will stay steady in ETRs April survey along with continued spending on application modernization in the form of containers. Now let me take a moment to comment on the recent action in tech stocks. If you've been following the market, you know that the rate on the 10-year Treasury note has been rising. This is important, because the 10 years of benchmark, and it affects other interest rates. As interest rates rise, high growth tech stocks, they become less attractive. And that's why there's been a rotation, out of the big tech high flyer names of 2020. So why do high growth stocks become less attractive to investors when interest rates rise? Well, it's because investors are betting on the future value of cash flows for these companies, and when interest rates go up, the future values of those cash flows shrink, making the valuations less attractive. Let's take an example. Snowflake is a company with a higher revenue multiple than pretty much any other stock, out there in the tech industry. Revenues at the company are growing more than 100%, last quarter, and they're projected to have a revenue of a billion dollars next year. Now on March 8th, Snowflake was valued at around $80 billion and was trading at roughly 75x forward revenue. Today, toward the middle the end of March. Snowflake is valued at about 50 billion or roughly 45x forward revenue. So lower growth companies that throw off more cash today, become more attractive in a rising rate climate because, the cash they throw off today is more valuable than it was in a low rate environment. The cash is there today versus, a high flying tech company where the cash is coming down the road and doesn't have to be discounted on a net present value basis. So the point is, this is really about math, not about fundamental changes in spending. Now the ETR spending data has shown, consistent upward momentum, and that cycle is continuing, leading to our sanguine outlook for the sector. This chart here shows the progression of CIO expectations on spending over time, relative to previous years. And you can see the steady growth in expectations each quarter, hitting 6% growth in 2021 versus 2020 for the full year. ETR estimates show and they do this with a 95% confidence level, that spending is going to be up between 5.1 to 6.8% this year. We are even more up optimistic accounting for recent upward revisions in GDP. And spending outside the purview of traditional IT, which we think will be a tailwind, due to digital initiatives and shadow tech spending. ETR covers some of that, but it is really a CIO heavy survey. So there's some parts that we think can grow even faster, than ETR survey suggests. Now the positive spending outlook, it's broad based across virtually all industries that ETR tracks. Government spending leads the pack by a wide margin, which probably gives you a little bit of heartburn. I know it does for me, yikes. Healthcare is interesting. Perhaps due to pent up demand, healthcare has been so busy saving lives, that it has some holes to fill. But look at the sectors at 5% or above. Only education really lags notably. Even energy which got crushed last year, showing a nice rebound. Now let's take a look at some of the strategies that organizations have employed during COVID, and see how they've changed. Look, the picture is actually quite positive in our view. This data shows the responses over five survey snapshots, starting in March of 2020. Most people are still working from home that really hasn't changed much. But we're finally seeing some loosening of the travel restrictions imposed last year, is a notable drop in canceled business trips. It's still high, but it's very promising trend. Quick aside, looks like Mobile World Congress is happening in late June in Barcelona. The host of the conference just held a show in Shanghai and 20,000 attendees showed up. theCube is planning to be there in Barcelona along with TelcoDr, Who took over Ericsson's 65,000 square foot space, when Ericsson tapped out of the conference. We are good together we're going to lay out the future of the digital telco, in a hybrid: physical slash virtual event. With the ecosystem of telcos, cloud, 5G and software communities. We're very excited to be at the heart of reinventing the event experience for the coming decade. Okay, back to the data. Hiring freezes, way down. Look at new IT deployments near flat from last quarter, with big uptick from a year ago. Layoffs, trending downward, that's really a positive. Hiring momentum is there. So really positive signs for tech in this data. Now let's take a look at the work from home, survey data. We've been sharing this for several quarters now, remember, the data showed that pre pandemic around 15 to 16% of employees worked remotely. And we had been sharing the CIO is expected that figure to slowly decline from the 70% pandemic levels and come into the spring in the summer, hovering in the 50% range. But then eventually landing in the mid 30s. Now the current survey shows 31%. So, essentially, it's exactly double from the pre COVID levels. It's going to be really interesting to see because across the board organizations are reporting, big increases in productivity as a result of how they've responded to COVID in the remote work practices and the infrastructure that's been put in place. And look, a lot of workers are expecting to stay remote. So we'll see where this actually lands. My personal feelings, the number is going to be higher than the low 30s. Perhaps well into the mid to upper 30s. Now let's take a look at the cloud and on-prem MCS. So were a little bit out on a limb here with a can't have a cake and eat it too scenario. Meaning pent up demand for data center infrastructure on-prem is going to combine with the productivity benefits of cloud in the digital imperative. So that means that technology budgets are going to get a bigger piece of the overall spending pie, relative to other initiatives. At least for the near term. ETR asked respondents about how the return to physical, is going to impact on-prem architectures and applications. You can see 63% of the respondents, had a cloud friendly answer, as shown in the first two bars. Whereas 30% had an on-prem friendly answer, as shown in the next three bars. Now, what stands out, is that only 5% of respondents plan to increase their on-prem spend to above pre COVID levels. Sarbjeet Johal pinged me last night and asked me to jump into a clubhouse session with Martin Casado and the other guys from Andreessen Horowitz. They were having this conversation about the coming cloud backlash. And how cloud native companies are spending so much, too much, in their opinion, on AWS and other clouds. And at some point, as they scale, they're going to have to claw back technology infrastructure on-prem, due to their AWS vague. I don't know. This data, it certainly does not suggest that that is happening today. So the cloud vendors, they keep getting more volume, you would think they're going to have better prices and better economies of scales than we'll see on-prem. And as we pointed out, the repatriation narrative that you hear from many on-prem vendors is kind of dubious. Look, if AWS Azure, and Google can't provide IT infrastructure and better security than I can on-prem, then something is amiss. Now however, they are creating an oligopoly. And if they get too greedy and get hooked on the margin crack, of cloud, they'd better be careful, or they're going to become the next regulated utility? So, it's going to be interesting to see if the Andreessen scenario has (laughs) legs, maybe they have another agenda, maybe a lot of their portfolio companies, have ideas are around doing things to help on-prem? Why are we so optimistic that we'll see a stronger 2021 on-prem spend if the cloud continues to command so much attention? Well, first, because nearly 20% of customers say there will be an uptick in on-prem spending. Second, we saw in 2020, that the big on-prem players, Dell, VMware, Oracle, and SAP in particular, and even IBM made it through, okay. And they've managed to figure out how to work through the crisis. And finally, we think that the lines between on-prem and cloud, and hybrid and cross cloud and edge will blur over the next five years. We've talked about this a lot, that abstraction layer that we see coming, and there's some real value opportunities there. It'll take some time. But we do see there, that the traditional vendors, are going to attack those new opportunities and create value across clouds and hybrid systems and out to the edge. Now, as those demarcation lines become more gray, a hybrid world is emerging that is going to require hardware and software investments that reduce latency and are proximate to users buildings and distributed infrastructure. So we see spending in certain key areas, continuing to be strong across the board, will require connecting on-prem to cloud in edge workloads. Here's where it CIOs see the action, asked to cite the technologies that will get the most attention in the next 12 months. These seven stood out among the rest. No surprise that cyber comes out as top priority, with cloud pretty high as well. But interesting to see the uptick in collaboration in networking. Execs are seeing the importance of collaboration technologies for remote workers. No doubt, there's lots of Microsoft Teams in that bar. But there's some pent up demand it seems for networking, we find that very interesting. Now, just to put this in context, in a spending context. We'll share a graphic from a previous breaking analysis episode. This chart shows the net score or spending momentum on the vertical axis. And the market share or pervasiveness in the ETR data set on the horizontal axis. The big four areas of spend momentum are cloud, ML and AI, containers in RPA. This is from the January survey, we don't expect a big change in the upcoming April data, we'll see. But these four stand out above the 40% line that we've highlighted, which to us is an indicator of elevated momentum. Now, note on the horizontal axis only cloud, cloud is the only sector that enjoys both greater than 60% market share on the x axis, and is above the 40% net score line and the y axis. So even though security is a top priority as we were talking about earlier. It competes with other budget items, still right there certainly on the horizontal axis, but it competes with other initiatives for that spend momentum. Okay, so key takeaways. Seven to 8% tech spending growth expected for 2021. Cloud is leading the charge, it's big and it has spending momentum, so we don't expect a big rotation out of cloud back to on-prem. Now, having said that, we think on-prem will benefit from a return to a post isolation economy. Because of that pent up demand. But we caution we think there are some headwinds, particularly in the storage sector. Rotation away from tech in the stock market is not based on a fundamental change in spending in our view, or demand, rather it's stock market valuation math. So there should be some good buying opportunities for you in the coming months. As money moves out of tech into those value stocks. But the market is very hard to predict. Oh 2020 was easy to make money. All you had to do is buy high growth and momentum tech stocks on dips. 2021 It's not that simple. So you got to do your homework. And as we always like to stress, formulate a thesis and give it time to work for you. Iterate and improve when you feel like it's not working for you. But stay current, and be true to your strategy. Okay, that's it for today. Remember, these episodes are all available as podcasts wherever you listen. So please subscribe. I publish weekly in siliconangle.com and wikibond.com and always appreciate the comments on LinkedIn. You can DM me @dvellante or email me at david.vellante@siliconangle.com. Don't forget to check out etr.plus where all the survey data science actually resides. Some really interesting things that they're about to launch. So do follow that. This is Dave vellante. Thanks for watching theCube Insights powered by ETR. Good health to you, be safe and we'll see you next time.

>> Paige: Hello everybody and thank you for joining us today for the virtual Vertica BDC 2020. Today's breakout session is entitled Vertica in Eon Mode past, present and future. I'm Paige Roberts, open source relations manager at Vertica and I'll be your host for this session. Joining me is Vertica engineer, Yuanzhe Bei and Vertica Product Manager, David Sprogis. Before we begin, I encourage you to submit questions or comments during the virtual session. You don't have to wait till the end. Just type your question or comment as you think of it in the question box, below the slides and click Submit. Q&A session at the end of the presentation. We'll answer as many of your questions as we're able to during that time, and any questions that we don't address, we'll do our best to answer offline. If you wish after the presentation, you can visit the Vertica forums to post your questions there and our engineering team is planning to join the forums to keep the conversation going, just like a Dev Lounge at a normal in person, BDC. So, as a reminder, you can maximize your screen by clicking the double arrow button in the lower right corner of the slides, if you want to see them bigger. And yes, before you ask, this virtual session is being recorded and will be available to view on demand this week. We are supposed to send you a notification as soon as it's ready. All right, let's get started. Over to you, Dave. >> David: Thanks, Paige. Hey, everybody. Let's start with a timeline of the life of Eon Mode. About two years ago, a little bit less than two years ago, we introduced Eon Mode on AWS. Pretty specifically for the purpose of rapid scaling to meet the cloud economics promise. It wasn't long after that we realized that workload isolation, a byproduct of the architecture was very important to our users and going to the third tick, you can see that the importance of that workload isolation was manifest in Eon Mode being made available on-premise using Pure Storage FlashBlade. Moving to the fourth tick mark, we took steps to improve workload isolation, with a new type of subcluster which Yuanzhe will go through and to the fifth tick mark, the introduction of secondary subclusters for faster scaling and other improvements which we will cover in the slides to come. Getting started with, why we created Eon Mode in the first place. Let's imagine that your database is this pie, the pecan pie and we're loading pecan data in through the ETL cutting board in the upper left hand corner. We have a couple of free floating pecans, which we might imagine to be data supporting external tables. As you know, the Vertica has a query engine capability as well which we call external tables. And so if we imagine this pie, we want to serve it with a number of servers. Well, let's say we wanted to serve it with three servers, three nodes, we would need to slice that pie into three segments and we would serve each one of those segments from one of our nodes. Now because the data is important to us and we don't want to lose it, we're going to be saving that data on some kind of raid storage or redundant storage. In case one of the drives goes bad, the data remains available because of the durability of raid. Imagine also, that we care about the availability of the overall database. Imagine that a node goes down, perhaps the second node goes down, we still want to be able to query our data and through nodes one and three, we still have all three shards covered and we can do this because of buddy projections. Each neighbor, each nodes neighbor contains a copy of the data from the node next to it. And so in this case, node one is sharing its segment with node two. So node two can cover node one, node three can cover node two and node one back to node three. Adding a little bit more complexity, we might store the data in different copies, each copy sorted for a different kind of query. We call this projections in Vertica and for each projection, we have another copy of the data sorted differently. Now it gets complex. What happens when we want to add a node? Well, if we wanted to add a fourth node here, what we would have to do, is figure out how to re-slice all of the data in all of the copies that we have. In effect, what we want to do is take our three slices and slice it into four, which means taking a portion of each of our existing thirds and re-segmenting into quarters. Now that looks simple in the graphic here, but when it comes to moving data around, it becomes quite complex because for each copy of each segment we need to replace it and move that data on to the new node. What's more, the fourth node can't have a copy of itself that would be problematic in case it went down. Instead, what we need is we need that buddy to be sitting on another node, a neighboring node. So we need to re-orient the buddies as well. All of this takes a lot of time, it can take 12, 24 or even 36 hours in a period when you do not want your database under high demand. In fact, you may want to stop loading data altogether in order to speed it up. This is a planned event and your applications should probably be down during this period, which makes it difficult. With the advent of cloud computing, we saw that services were coming up and down faster and we determined to re-architect Vertica in a way to accommodate that rapid scaling. Let's see how we did it. So let's start with four nodes now and we've got our four nodes database. Let's add communal storage and move each of the segments of data into communal storage. Now that's the separation that we're talking about. What happens if we run queries against it? Well, it turns out that the communal storage is not necessarily performing and so the IO would be slow, which would make the overall queries slow. In order to compensate for the low performance of communal storage, we need to add back local storage, now it doesn't have to be raid because this is just an ephemeral copy but with the data files, local to the node, the queries will run much faster. In AWS, communal storage really does mean an S3 bucket and here's a simplified version of the diagram. Now, do we need to store all of the data from the segment in the depot? The answer is no and the graphics inside the bucket has changed to reflect that. It looks more like a bullseye, showing just a segment of the data being copied to the cache or to the depot, as we call it on each one of the nodes. How much data do you store on the node? Well, it would be the active data set, the last 30 days, the last 30 minutes or the last. Whatever period of time you're working with. The active working set is the hot data and that's how large you want to size your depot. By architecting this way, when you scale up, you're not re-segmenting the database. What you're doing, is you're adding more compute and more subscriptions to the existing shards of the existing database. So in this case, we've added a complete set of four nodes. So we've doubled our capacity and we've doubled our subscriptions, which means that now, the two nodes can serve the yellow shard, two nodes can serve the red shard and so on. In this way, we're able to run twice as many queries in the same amount of time. So you're doubling the concurrency. How high can you scale? Well, can you scale to 3X, 5X? We tested this in the graphics on the right, which shows concurrent users in the X axis by the number of queries executed in a minute along the Y axis. We've grouped execution in runs of 10 users, 30 users, 50, 70 up to 150 users. Now focusing on any one of these groups, particularly up around 150. You can see through the three bars, starting with the bright purple bar, three nodes and three segments. That as you add nodes to the middle purple bar, six nodes and three segments, you've almost doubled your throughput up to the dark purple bar which is nine nodes and three segments and our tests show that you can go to 5X with pretty linear performance increase. Beyond that, you do continue to get an increase in performance but your incremental performance begins to fall off. Eon architecture does something else for us and that is it provides high availability because each of the nodes can be thought of as ephemeral and in fact, each node has a buddy subscription in a way similar to the prior architecture. So if we lose node four, we're losing the node responsible for the red shard and now node one has to pick up responsibility for the red shard while that node is down. When a query comes in, and let's say it comes into one and one is the initiator then one will look for participants, it'll find a blue shard and a green shard but when it's looking for the red, it finds itself and so the node number one will be doing double duty. This means that your performance will be cut in half approximately, for the query. This is acceptable until you are able to restore the node. Once you restore it and once the depot becomes rehydrated, then your performance goes back to normal. So this is a much simpler way to recover nodes in the event of node failure. By comparison, Enterprise Mode the older architecture. When we lose the fourth node, node one takes over responsibility for the first shard and the yellow shard and the red shard. But it also is responsible for rehydrating the entire data segment of the red shard to node four, this can be very time consuming and imposes even more stress on the first node. So performance will go down even further. Eon Mode has another feature and that is you can scale down completely to zero. We call this hibernation, you shut down your database and your database will maintain full consistency in a rest state in your S3 bucket and then when you need access to your database again, you simply recreate your cluster and revive your database and you can access your database once again. That concludes the rapid scaling portion of, why we created Eon Mode. To take us through workload isolation is Yuanzhe Bei, Yuanzhe. >> Yuanzhe: Thanks Dave, for presenting how Eon works in general. In the next section, I will show you another important capability of Vertica Eon Mode, the workload isolation. Dave used a pecan pie as an example of database. Now let's say it's time for the main course. Does anyone still have a problem with food touching on their plates. Parents know that it's a common problem for kids. Well, we have a similar problem in database as well. So there could be multiple different workloads accessing your database at the same time. Say you have ETL jobs running regularly. While at the same time, there are dashboards running short queries against your data. You may also have the end of month report running and their can be ad hoc data scientists, connect to the database and do whatever the data analysis they want to do and so on. How to make these mixed workload requests not interfere with each other is a real challenge for many DBAs. Vertica Eon Mode provides you the solution. I'm very excited here to introduce to you to the important concept in Eon Mode called subclusters. In Eon Mode, nodes they belong to the predefined subclusters rather than the whole cluster. DBAs can define different subcluster for different kinds of workloads and it redirects those workloads to the specific subclusters. For example, you can have an ETL subcluster, dashboard subcluster, report subcluster and the analytic machine learning subcluster. Vertica Eon subcluster is designed to achieve the three main goals. First of all, strong workload isolation. That means any operation in one subcluster should not affect or be affected by other subclusters. For example, say the subcluster running the report is quite overloaded and already there can be, the data scienctists running crazy analytic jobs, machine learning jobs on the analytics subcluster and making it very slow, even stuck or crash or whatever. In such scenario, your ETL and dashboards subcluster should not be or at least very minimum be impacted by this crisis and which means your ETL job which should not lag behind and dashboard should respond timely. We have done a lot of improvements as of 10.0 release and will continue to deliver improvements in this category. Secondly, fully customized subcluster settings. That means any subcluster can be set up and tuned for very different workloads without affecting other subclusters. Users should be able to tune up, tune down, certain parameters based on the actual needs of the individual subcluster workload requirements. As of today, Vertica already supports few settings that can be done at the subcluster level for example, the depot pinning policy and then we will continue extending more that is like resource pools (mumbles) in the near future. Lastly, Vertica subclusters should be easy to operate and cost efficient. What it means is that the subcluster should be able to turn on, turn off, add or remove or should be available for use according to rapid changing workloads. Let's say in this case, you want to spin up more dashboard subclusters because we need higher scores report, we can do that. You might need to run several report subclusters because you might want to run multiple reports at the same time. While on the other hand, you can shut down your analytic machine learning subcluster because no data scientists need to use it at this moment. So we made automate a lot of change, the improvements in this category, which I'll explain in detail later and one of the ultimate goal is to support auto scaling To sum up, what we really want to deliver for subcluster is very simple. You just need to remember that accessing subclusters should be just like accessing individual clusters. Well, these subclusters do share the same catalog. So you don't have to work out the stale data and don't need to worry about data synchronization. That'd be a nice goal, Vertica upcoming 10.0 release is certainly a milestone towards that goal, which will deliver a large part of the capability in this direction and then we will continue to improve it after 10.0 release. In the next couple of slides, I will highlight some issues about workload isolation in the initial Eon release and show you how we resolve these issues. First issue when we initially released our first or so called subcluster mode, it was implemented using fault groups. Well, fault groups and the subcluster have something in common. Yes, they are both defined as a set of nodes. However, they are very different in all the other ways. So, that was very confusing in the first place, when we implement this. As of 9.3.0 version, we decided to detach subcluster definition from the fault groups, which enabled us to further extend the capability of subclusters. Fault groups in the pre 9.3.0 versions will be converted into subclusters during the upgrade and this was a very important step that enabled us to provide all the amazing, following improvements on subclusters. The second issue in the past was that it's hard to control the execution groups for different types of workloads. There are two types of problems here and I will use some example to explain. The first issue is about control group size. There you allocate six nodes for your dashboard subcluster and what you really want is on the left, the three pairs of nodes as three execution groups, and each pair of nodes will need to subscribe to all the four shards. However, that's not really what you get. What you really get is there on the right side that the first four nodes subscribed to one shard each and the rest two nodes subscribed to two dangling shards. So you won't really get three execusion groups but instead only get one and two extra nodes have no value at all. The solution is to use subclusters. So instead of having a subcluster with six nodes, you can split it up into three smaller ones. Each subcluster will guarantee to subscribe to all the shards and you can further handle this three subcluster using load balancer across them. In this way you achieve the three real exclusion groups. The second issue is that the session participation is non-deterministic. Any session will just pick four random nodes from the subcluster as long as this covers one shard each. In other words, you don't really know which set of nodes will make up your execution group. What's the problem? So in this case, the fourth node will be doubled booked by two concurrent sessions. And you can imagine that the resource usage will be imbalanced and both queries performance will suffer. What is even worse is that these queries of the two concurrent sessions target different table They will cause the issue, that depot efficiency will be reduced, because both session will try to fetch the files on to two tables into the same depot and if your depot is not large enough, they will evict each other, which will be very bad. To solve this the same way, you can solve this by declaring subclusters, in this case, two subclusters and a load balancer group across them. The reason it solved the problem is because the session participation would not go across the boundary. So there won't be a case that any node is double booked and in terms of the depot and if you use the subcluster and avoid using a load balancer group, and carefully send the first workload to the first subcluster and the second to the second subcluster and then the result is that depot isolation is achieved. The first subcluster will maintain the data files for the first query and you don't need to worry about the file being evicted by the second kind of session. Here comes the next issue, it's the scaling down. In the old way of defining subclusters, you may have several execution groups in the subcluster. You want to shut it down, one or two execution groups to save cost. Well, here comes the pain, because you don't know which nodes may be used by which session at any point, it is hard to find the right timing to hit the shutdown button of any of the instances. And if you do and get unlucky, say in this case, you pull the first four nodes, one of the session will fail because it's participating in the node two and node four at that point. User of that session will notice because their query fails and we know that for many business this is critical problem and not acceptable. Again, with subclusters this problem is resolved. Same reason, session cannot go across the subcluster boundary. So all you need to do is just first prevent query sent to the first subcluster and then you can shut down the instances in that subcluster. You are guaranteed to not break any running sessions. Now, you're happy and you want to shut down more subclusters then you hit the issue four, the whole cluster will go down, why? Because the cluster loses quorum. As a distributed system, you need to have at least more than half of a node to be up in order to commit and keep the cluster up. This is to prevent the catalog diversion from happening, which is important. But do you still want to shut down those nodes? Because what's the point of keeping those nodes up and if you are not using them and let them cost you money right. So Vertica has a solution, you can define a subcluster as secondary to allow them to shut down without worrying about quorum. In this case, you can define the first three subclusters as secondary and the fourth one as primary. By doing so, this secondary subclusters will not be counted towards the quorum because we changed the rule. Now instead of requiring more than half of node to be up, it only require more than half of the primary node to be up. Now you can shut down your second subcluster and even shut down your third subcluster as well and keep the remaining primary subcluster to be still running healthily. There are actually more benefits by defining secondary subcluster in addition to the quorum concern, because the secondary subclusters no longer have the voting power, they don't need to persist catalog anymore. This means those nodes are faster to deploy, and can be dropped and re-added. Without the worry about the catalog persistency. For the most the subcluster that only need to read only query, it's the best practice to define them as secondary. The commit will be faster on this secondary subcluster as well, so running this query on the secondary subcluster will have less spikes. Primary subcluster as usual handle everything is responsible for consistency, the background tasks will be running. So DBAs should make sure that the primary subcluster is stable and assume is running all the time. Of course, you need to at least one primary subcluster in your database. Now with the secondary subcluster, user can start and stop as they need, which is very convenient and this further brings up another issue is that if there's an ETL transaction running and in the middle, a subcluster starting and it become up. In older versions, there is no catalog resync mechanism to keep the new subcluster up to date. So Vertica rolls back to ETL session to keep the data consistency. This is actually quite disruptive because real world ETL workloads can sometimes take hours and rolling back at the end means, a large waste of resources. We resolved this issue in 9.3.1 version by introducing a catalog resync mechanism when such situation happens. ETL transactions will not roll back anymore, but instead will take some time to resync the catalog and commit and the problem is resolved. And last issue I would like to talk about is the subscription. Especially for large subcluster when you start it, the startup time is quite long, because the subscription commit used to be serialized. In one of the in our internal testing with large catalogs committing a subscription, you can imagine it takes five minutes. Secondary subcluster is better, because it doesn't need to persist the catalog during the commit but still take about two seconds to commit. So what's the problem here? Let's do the math and look at this chart. The X axis is the time in the minutes and the Y axis is the number of nodes to be subscribed. The dark blues represents your primary subcluster and light blue represents the secondary subcluster. Let's say the subcluster have 16 nodes in total and if you start a secondary subcluster, it will spend about 30 seconds in total, because the 2 seconds times 16 is 32. It's not actually that long time. but if you imagine that starting secondary subcluster, you expect it to be super fast to react to the fast changing workload and 30 seconds is no longer trivial anymore and what is even worse is on the primary subcluster side. Because the commit is much longer than five minutes let's assume, then at the point, you are committing to six nodes subscription all other nodes already waited for 30 minutes for GCLX or we know the global catalog lock, and the Vertica will crash the nodes, if any node cannot get the GCLX for 30 minutes. So the end result is that your whole database crashed. That's a serious problem and we know that and that's why we are already planning for the fix, for the 10.0, so that all the subscription will be batched up and all the nodes will commit at the same time concurrently. And by doing that, you can imagine the primary subcluster can finish commiting in five minutes instead of crashing and the secondary subcluster can be finished even in seconds. That summarizes the highlights for the improvements we have done as of 10.0, and I hope you already get excited about Emerging Eon Deployment Pattern that's shown here. A primary subcluster that handles data loading, ETL jobs and tuple mover jobs is the backbone of the database and you keep it running all the time. At the same time defining different secondary subcluster for different workloads and provision them when the workload requirement arrives and then de-provision them when the workload is done to save the operational cost. So can't wait to play with the subcluster. Here as are some Admin Tools command you can start using. And for more details, check out our Eon subcluster documentation for more details. And thanks everyone for listening and I'll head back to Dave to talk about the Eon on-prem. >> David: Thanks Yuanzhe. At the same time that Yuanzhe and the rest of the dev team were working on the improvements that Yuanzhe described in and other improvements. This guy, John Yovanovich, stood on stage and told us about his deployment at at&t where he was running Eon Mode on-prem. Now this was only six months after we had launched Eon Mode on AWS. So when he told us that he was putting it into production on-prem, we nearly fell out of our chairs. How is this possible? We took a look back at Eon and determined that the workload isolation and the improvement to the operations for restoring nodes and other things had sufficient value that John wanted to run it on-prem. And he was running it on the Pure Storage FlashBlade. Taking a second look at the FlashBlade we thought alright well, does it have the performance? Yes, it does. The FlashBlade is a collection of individual blades, each one of them with NVMe storage on it, which is not only performance but it's scalable and so, we then asked is it durable? The answer is yes. The data safety is implemented with the N+2 redundancy which means that up to two blades can fail and the data remains available. And so with this we realized DBAs can sleep well at night, knowing that their data is safe, after all Eon Mode outsources the durability to the communal storage data store. Does FlashBlade have the capacity for growth? Well, yes it does. You can start as low as 120 terabytes and grow as high as about eight petabytes. So it certainly covers the range for most enterprise usages. And operationally, it couldn't be easier to use. When you want to grow your database. You can simply pop new blades into the FlashBlade unit, and you can do that hot. If one goes bad, you can pull it out and replace it hot. So you don't have to take your data store down and therefore you don't have to take Vertica down. Knowing all of these things we got behind Pure Storage and partnered with them to implement the first version of Eon on-premise. That changed our roadmap a little bit. We were imagining it would start with Amazon and then go to Google and then to Azure and at some point to Alibaba cloud, but as you can see from the left column, we started with Amazon and went to Pure Storage. And then from Pure Storage, we went to Minio and we launched Eon Mode on Minio at the end of last year. Minio is a little bit different than Pure Storage. It's software only, so you can run it on pretty much any x86 servers and you can cluster them with storage to serve up an S3 bucket. It's a great solution for up to about 120 terabytes Beyond that, we're not sure about performance implications cause we haven't tested it but for your dev environments or small production environments, we think it's great. With Vertica 10, we're introducing Eon Mode on Google Cloud. This means not only running Eon Mode in the cloud, but also being able to launch it from the marketplace. We're also offering Eon Mode on HDFS with version 10. If you have a Hadoop environment, and you want to breathe new fresh life into it with the high performance of Vertica, you can do that starting with version 10. Looking forward we'll be moving Eon mode to Microsoft Azure. We expect to have something breathing in the fall and offering it to select customers for beta testing and then we expect to release it sometime in 2021 Following that, further on horizon is Alibaba cloud. Now, to be clear we will be putting, Vertica in Enterprise Mode on Alibaba cloud in 2020 but Eon Mode is going to trail behind whether it lands in 2021 or not, we're not quite sure at this point. Our goal is to deliver Eon Mode anywhere you want to run it, on-prem or in the cloud, or both because that is one of the great value propositions of Vertica is the hybrid capability, the ability to run in both your on prem environment and in the cloud. What's next, I've got three priority and roadmap slides. This is the first of the three. We're going to start with improvements to the core of Vertica. Starting with query crunching, which allows you to run long running queries faster by getting nodes to collaborate, you'll see that coming very soon. We'll be making improvements to large clusters and specifically large cluster mode. The management of large clusters over 60 nodes can be tedious. We intend to improve that. In part, by creating a third network channel to offload some of the communication that we're now loading onto our spread or agreement protocol. We'll be improving depot efficiency. We'll be pushing down more controls to the subcluster level, allowing you to control your resource pools at the subcluster level and we'll be pairing tuple moving with data loading. From an operational flexibility perspective, we want to make it very easy to shut down and revive primaries and secondaries on-prem and in the cloud. Right now, it's a little bit tedious, very doable. We want to make it as easy as a walk in the park. We also want to allow you to be able to revive into a different size subcluster and last but not least, in fact, probably the most important, the ability to change shard count. This has been a sticking point for a lot of people and it puts a lot of pressure on the early decision of how many shards should my database be? Whether it's in 2020 or 2021. We know it's important to you so it's important to us. Ease of use is also important to us and we're making big investments in the management console, to improve managing subclusters, as well as to help you manage your load balancer groups. We also intend to grow and extend Eon Mode to new environments. Now we'll take questions and answers

>> From the SiliconAngle media office, in Boston, Massachusetts, it's theCUBE. Now, here's your host, Dave Vellante. >> Hello everyone, and welcome to this Cube Conversation. You know, the auto industry was a, if not the dominant force in the 20th century economy, and clearly, you see it in the headlines today. I mean all you got to do is look at Tesla. The stock is absolutely on fire, Tesla's market value is actually greater than that of Ford and GM combined. Even though its revenues are about one 12th of those two combined. The macro discussion today is really heating up around ESG, which stands for environmental social governance. So, electric vehicles are really picking up momentum, and maybe that's the tailwind for Tesla, but consumers are pragmatic, the electric is still more expensive than internal combustion-powered vehicles, so we'll see how that plays out. One of the things we talk about a lot on theCUBE is the software content in automobiles. In many ways, these vehicles are code on wheels, so that's part of the hype factor, too. But you know, I've always argued that the incumbent auto makers are actually in a pretty reasonable position to compete. While autonomous vehicles, they may disrupt the incumbents, and even though right now Silicon Valley is ahead of Detroit and Japan and Germany and Korea, there's an ecosystem that is evolving to support traditional auto makers. Now, one of those players is Tactile Mobility. The vast majority of data created around autonomous vehicles today is visual-based with LIDAR as a key enabler. But a human driver, you think about it, they don't just rely on sight, they're able to feel the road, the bumps, the curves, and the impacts of things like weather. In fact, it's estimated that more than 20% of vehicle crashes in the US each year are weather-related. And intelligent cars, they really still can't predict road conditions ahead. Tactile offers software that uses sensors that already live in the vehicles to predict and feel road conditions like black ice and potholes to improve safety. And with me to talk about these trends and his company is Amit Nisenbaum, who's the CEO of Tactile Mobility, Amit, thanks so much for coming on theCUBE. >> Thank you Dave very much for having me. >> Yeah, so really, it was a great opportunity, when I heard you were in town, invited you out, and really appreciate you coming out to our Marlborough studios, but let me start with, why your founders launched Tactile Mobility. >> Well, Dave, it's a very interesting story, I think, for our company, as well for other entrepreneurs to learn from it, because actually, the company's been around for about eight years, and it all started from a conundrum from a question that was posed to our founder, Boaz Mizrachi, which was about how do you take a vehicle from point A to point B at a set speed, with minimum gas consumption, using only the software and data coming off the vehicle sensors that are run of the mill sensors? And that question started this whole company, he believed that it's only an optimization question, meaning all of the data is out there, meaning data about the conditions of the road, the grates, the curvatures, the conditions and the health of the vehicle, meaning engine efficiency, tire health, et cetera et cetera. And what he found out was that actually neither this nor that has existed. So it was way more complicated than a mere optimization question, it's about how do you generate that data about the vehicle and the road? And he launched the company in order to go after those two data sets. He was able to solve that, or to address that question, and to take a vehicle and to show that you can take a vehicle from point A to point B at a set speed while minimizing fuel consumption, up to 10%. By the time that he has done that, gas prices dropped, and the question was what's next, and fortunately enough, the industry and the hype around autonomous vehicles has come around, and that has been the next frontier for our company, and that's what we been focusing on since then, but not only on that but on also other aspects, which I'll be happy to speak about. >> That is an awesome story of a pivot, you see this all the time with startups, it's kind of survive until you can thrive, and then something happens that's a tailwind, great technology that the visionary can see how to reapply it, and a little bit of luck involved, maybe, okay, so you-- >> Stamina. >> Stamina, right, you got to have a strong heart and stomach to be a startup. Okay, and you joined just a couple years ago, what attracted you to Tactile? >> Well I've been in this industry, actually in the cross section of the two industries of automotive and energy for about 12 years now, starting from a company called Better Place that you might have heard of, I was one of the first 10 employees there, and those two industries have been near and dear to my heart ever since. I like big questions, I like big challenges, I like big plays that have the potential to make a real difference, so the fact that the Tactile Mobility, at the time it was called MobiWize, it was in this industry was a big plus, but also the fact that the offering is not really the vanilla flavor offering, everybody's doing LIDAR and radar and cameras, all of a sudden there is someone else that is saying "Wait a minute, there is that "neglected segment, that additional set "of sensors, the sense of tactility that all of us "are using when we're driving, "and computers will need that as well. "How about that, this is something "that nobody pays attention to." And that really caught my attention. >> So I kind of hinted at this in my little narrative up front, the hype was all around autonomous, but let's face it, level five autonomous, it's, we're talking at least 2030, maybe further, but everybody drives some form of autonomous vehicle today, if you purchase a new vehicle, and that's really the space that you play in, so what are the big trends that you see, and what's the problem that you're solving? >> Yeah, so first of all, you're absolutely right, when people speak about autonomous vehicles, they imagine themself a car, a vehicle with big red button and that's it, that's what is called level five. However, there are four levels below that that lead to that, and today most of the vehicles leaving the assembly line are either level two or level three. That's why we're also saying that we're in the business of smart and autonomous vehicles, and the challenges there, if you're looking at the vehicles themself, are challenges of how do we make those vehicles both safer, as well as more enjoyable to ride? And the ability to address both of those together is actually not as simple as one might think, so that's what we're focusing on, and that's the trend, the trend of no compromises, that you go both for safety, as well as a user experience, that's on the vehicle side. Having said that, being a data company that has a proprietary software stack, that allows it to generate that data, the tactile data, the data about the dynamic between the vehicle and the road, allows us also to take that data to the cloud, and in the cloud to split that dynamic into two separate models. One we model independently the vehicle, the vehicle health, and the other one is we're turning each one of the vehicles to become like a probe that feels the road conditions and maps the location of bumps, cracks, oil spills, black ice, et cetera et cetera, and by that we are able to crowd source the data and create new layer of the map, road conditions there. Going back to the question that was posed about how do you take that vehicle from point A to point B, in minimum fuel, here you go, we have those two types of data, and now we can use it in other verticals as well. >> Well that's very interesting, so a lot of people say "Oh, autonomous vehicles, it's all about real time, "you can't do anything in the cloud," and you actually, you're refuting that, because you're building essentially a map of what's happening on the roads, whether it's a pothole or a bump or a curve, et cetera. And so essentially you're doing that in the cloud, modeling that in the cloud and then what, bringing it down in real time, right? >> Yeah, so first of all, the first use case is indeed to bring it back to the vehicles and so the vehicle, and the vehicles around it, will know what's ahead of them. Use cases, there are about preconditioning vehicle systems, for instance, you're approaching a pothole, probably you want, you meaning the vehicle, would like to tune the suspension to become harder or softer. You're approaching black ice, probably you want, you, the vehicle, would like to slow down, so that's one use case, but there are other use cases. Other use cases around, for instance, road authorities and municipalities, we do have customers around the globe, road authorities and municipalities, that are subscribed to our data services, the road condition data services, that allow them to better plan maintenance, as well as dispatch crews to locations of hazards in real time. >> Yeah, so I remember when I was a kid, we had a CB, that's how you communicated what was ahead. "Hey, watch out, there's a pothole up ahead." >> Great technology. >> Now we're doing that, and now does that essentially require some kind of peer to peer network, or? >> So we're agnostic of the technology, we're the data layer behind all of that. These days, everything, or most of the use cases, are still running on vehicle to cloud to vehicle, or to anybody else, but there are companies that are working on vehicle to vehicle. >> So you mentioned a stack, what does your stack look like, can you describe that a little bit? >> Two parts, one is embedded software, that sits on one of the vehicle computers, one of the ECUs, and the other one is the cloud component, the component, the embedded software that sits on one of the vehicle ECUs usually either the gateway, or one of the vehicle dynamics ECUs, or maybe ADAS ECU, et cetera, it takes in real time, mounds of data for multiple existing nonvisual sensors, such as wheel speed from all four wheels, wheel angle, position of the gas pedal, torque of the brake pedal and much much more, ingest all of that, create a unified signal that describes in real time the dynamic between the vehicle and the road, that signal is very very noisy, so we apply signal processing methodologies to clean it, and then we apply on top of it algorithms and AI and all of that in real time, in order to derive insights about the vehicle road dynamics. You probably ask yourself, "Give me a concrete example" or something like that, 'cause it's kind of amorphous. The killer app these days with OEMs, vehicle manufacturers, is what is called available grip level. It's basically a signal to the vehicle computer about how drastically can the vehicle accelerate, decelerate, or change direction, all different types of acceleration, before it will start to skid. Think about it as the performance envelope of the vehicle. Nobody but us can model this using software only in any condition, and this type of data has multiple use cases in the vehicle, happy to tell you more about those, question is if we have time. >> We do, but I want to make a point. The software only, the thing, if I understand it correctly, the OEM doesn't have to change any hardware that, you're using the existing sensors of the vehicle, of which there are certainly dozens if not hundreds, to actually take advantage of this, right, you don't have to do any kind of hardware changes, is that correct? >> We're a data and data analytics and AI company. >> Yeah, so if you wanted to add some color and double click on some examples, that would be great. >> Sure, so going back to the available grip level type of data, of insight, I call it, think about adaptive cruise control, the function that allows a vehicle to drive at a set speed, however, to avoid colliding into the front vehicle. So today, it seems like all of the data is there for ACC, adaptive cruise control, to be effective, you know the distance from the vehicle, probably using a radar, you know the relative velocity between the two vehicles, so you have all of the information, however you don't know, you, again, the vehicle computer, how hard the vehicle can brake given how slippery the road is, given how healthy or worn out the tires are, et cetera et cetera. That means that the vehicle computer needs to err on the safe side and keep the large distance in order to allow safe braking. What's wrong with that? Going back to the question about the trend before, first of all it's not natural to the driver. We keep a certain distance for a certain reason, and when the distance is too large, it just doesn't feel natural to us. That's one thing. However, on the other side, it's also not safe, how is that? You keep too large of a distance, someone at the end will cut you in. And ironically, you kept a large distance to stay safe, all of a sudden you're worse off. So being able to allow the vehicle to know really, what is the tight distance, safe distance to stay from the vehicle, allows that vehicle to be more enjoyable to ride, as well as safe. >> So take that example, because today, I can sort of personalize that adaptive cruise control and say "Okay, I want one bar, two bar, three bar," but that's it, and I sometimes say "Whoa, is three bar right, is two bar right?" And you're right, sometimes I go "Eh, it's too far, "I think I'll cut it down to two bar or one bar." You're saying with your software, the system is intelligent enough to optimize that, to keep me safe, but also keep me having comfortable driving. >> Absolutely true, actually those three bars is kind of a psychological exercise, right? Because the shortest bar is that large distance. When they tell you two bars or three bars, it's kind of like "Do you want to keep a large, "very large, or extra large distance," right? Because they will never allow you to keep shorter distance shorter than what is really really the bare minimum in order to brake at the worst case scenario. >> Even if it's safe. And that's really where your software comes in, okay. Now Porsche is an investor in the company, presumably it's a customer, right? >> No, they actually said publicly that they're a customer as well. >> Okay, great, so talk about how customers are using this, and what the adoption cycle looks like, and maybe give us some examples of how it's being applied. >> So customers, you mean OEMs, car manufacturers. So the way that they use it, I just described it now, the adoption cycle, we in this industry unfortunately cycles are long. We work years to create relationships with the car manufacturers to allow them to learn about our capabilities, to validate the integrity of our software. They also most commonly run RFPs or RFQs in order to choose the right technology, and I'm glad to say that we're winning again and again and again, and then there is the integration cycle, which by itself is a few years in length. So the cycle altogether is long, however, we found that our approach is quite effective, and the approach, not necessarily the technology, yes, but also the way that we approach those OEMs. We are quite, if I may say, humble. We know that we're not the car engineers, the typical car engineers. We actually know very little about cars, what we know, we know data very well and we know AI very well. And when we come to them, we say "We're not trying to replace your engineers, "we're not trying to do what you do, "we're trying to tackle the same problems "that you weren't able to tackle before "from a very different angle," and that works very well. >> So, you talked about the integration cycle of a couple, or maybe even longer, how long is the design cycle for these things, is it also years, or? >> So, the design cycle from our perspective is much much more agile, actually we are working in the Agile framework in terms of the development of the software itself, but you're asking about the design, much faster, but when I said a few years, a couple of years, I meant per OEM to design together, to allow them to feel that we're designing, meaning customizing the software to their needs, as well as implementing it, that's the length. >> But what they get is a competitive advantage, so Porsche as a leader, obviously, and an early adopter, is going to be able to now commercialize this technology, and of course it'll be embedded, but now it'll be a feature that the car salesperson will highlight, and maybe they market it, maybe they don't, but that gives them a competitive differentiation, right? So are you seeing that other OEMs are starting to really get this, and sort of leaning in, or what's your experience? >> Yes, it's the typical technology adoption curve, there are the early adopters, and there are the mainstream and the late adopters, I'm glad to say that these days we're not only working with the early adopters, but also more with the mainstream. I encourage you to stay tuned, I believe that in the coming month or two, we'll have a big announcement about another major OEM that has chosen us commercially for mass production, and we are in quite advanced stages with OEMs both in Europe and North America, starting also to spin out to Asia. >> And is the business model, is it a subscription model, is it a one time payment from the OEM, how's it work? >> That's another thing that made me excited about the company, going back to your question from before, it's quite diverse, I would say. For the OEMs, that's software that we embed in their vehicle, it's software licensing. However, the data that we generate and then upload to the cloud and repurpose it with the OEMs themself, but also as I said before, road authorities, municipalities, fleet managers, insurance companies, I didn't have a chance to touch on all of the verticals. That's a subscription model, so the two models working together, it's actually quite an attractive, valuable position for us and for our investors. >> So there's software license, and then there's data as a service. And so there's also adjacent industries that you can go after, you just mentioned a couple, so when you think about the total available market, which obviously, any CEO is going to do, TAM expansion is part of your job, but so what's that vision, what does that look like? >> So in terms of the size itself, it's measured in the trillions, it's very very big. In terms of the different verticals, the ones that I tapped on are the first ones, but even within those, these days we're really trying to stay razor focused on the OEMs and road authorities and municipalities. We have fleets and fleet managers that are coming to us with requests for the data that we call vehicle DNA, that's the data about the vehicle health, et cetera, and that's the third vertical that we're starting to address these days, but we're only 25 people, growing to 40, we're trying to be very very agile, that's from one end, and from the other end, now that we showed our value to the car manufacturers, we're going for the force multipliers, meaning partnerships with the channels, with the T1s, the suppliers to the OEMs themself. >> And let's see, you've been around eight years, you've been there two years, right, and then I think you did a raise of roughly, what, nine million to date? >> In October 2019, we announced the latest round of nine million dollars from Porsche, as well as some other investors, yes. >> Great, okay, so I mean not a ton of money, but you guys are small, and so, little bit more on the companies, 20, going to 40, you're well capitalized, but today, you see people raising 250 million, what do you sense as your capital needs, I mean you're obviously actively raising money, and doing what a CEO does, but can you share with us your milestones for the next 12, 18 months? >> First of all, we were fortunate, and fortune has something to do with it, I think that being disciplined is another thing, to have revenue already. So our capital needs, we're still not profitable, and we're growing fast, so we need to raise in order to support that growth, but we're quite diligent about that. Also, true, companies have raised tens and hundreds of millions of dollars. First of all, not all companies in this industry are created equal, we're not a hardware company, we're a software and data. We're also not trying to do a fully integrated offering like, let's say Zuks or something like that, which requires way way more money. And actually, I'm quite glad that we're raising as we need, but not more than that, because what you raise, you need to return tenfold, so we have enough in order to support the growth of the company in years to come. >> Well the OEM model is very sales efficient as well, so it's not like in software companies today, are hiring people to do inside sales, outside sales, enterprise sales, and so it's a different business. Well Amit, first of all, congratulations, a really interesting story, really appreciate you coming out to our studios here in Marlborough and sharing your story, and best of luck to you. >> Thank you very much, Dave, it's been a pleasure coming here, and I'm glad that you invited me. >> Great, and thank you everybody for watching, this is Dave Vellante with theCUBE, we'll see you next time. (techno music)

>> Hey, welcome back everybody, Jeff Frick here with theCUBE. We're in downtown San Francisco at the Professional BusinessWomen of California Conference. It's the 28th year, Jackie Speier started it a long time ago and now it's grown to 6,000 people. It's a pretty amazing conference, it crosses all indrustries and actually a lot more than California as well. And we're excited to actually have somebody to come talk to us about the conference itself. It's Deepti Srivastava, she's a Project Manager of Google Cloud from Google. Great to see you again, last we saw you, I looked it up was 2014 >> I know. >> at Topcoder Open. >> Indeed. >> And you were doing great work then, you were on a panel with a bunch of high school girls. I remember they'd bust in a couple of busloads of high school girls and you and a couple other mainly young professional women talkin' to 'em about the life of an engineer. So you're still doin' good things. >> I hope so. (laughs) >> Absolutely. >> I hope so, yeah, it's a passion of mine and I'm really happy to bring it to something like PBWC where I'm on the board. And we do a bunch of work across industries and across all levels. PBWC's mission is to work for gender equity and equal pay for women across all industries and in all professional settings. >> Right. >> That includes young professionals, as well as the pipeline of professionals coming in. >> That's terrific. So we could talk about your day job all day long. (Deepti laughs) Google Cloud's kickin' tail, you guys had your big conference a couple weeks back-- >> Here in fact. (chuckles) >> Here in Moscone West, right? >> Yeah. >> But in terms of what you're doing here with PBWC, give us a little bit of the history. So we know it was started by Jackie Speier, I think you said 1988. >> Yeah. >> That's just amazing. >> I know. >> Obviously it's much more than California. >> Yeah. >> But what is the top-level mission and how has the conference evolved over the last several years? >> So Professional BusinessWomen of California, as you said was started by Congresswoman Jackie Speier and Judy Bloom, who's a co-founder. And we still exist and we've been doing this for so long and we really care about our mission, which is to work for basically gender equity and equal pay as I said, for all professional settings for women. And in this particular case, this conference we are talking about inclusion. And we chose this theme because we really think it's pertinent to what's going on right now in the world and in our country. And we, PBWC, believe that the things that unite us, the potentials and aspirations that unite us are greater than our differences and things like that. So we want to make a statement and really address the inclusion work that we do, and the inclusion work that's required for all of us to really move forward as a country and as a people. And if you look at our lineup of speakers today, we really do walk the talk that we're talking about. We have amazing speakers today with Rosario Dawson to Taraji P. Henson and all the way to Secretary Clinton who's closing out our day today, we are so excited to have her. And there's nobody better to represent breaking the glass ceiling than she has so we're very excited to hear. >> And what a get, I think I heard that it's her first public speaking engagement post the election. >> Yeah, I know. And it's very exciting because again, I think we're all about coming together and rallying and being a force for good. The conferences, that's our aim ultimately as an organization. And having her here to give her speech, first public appearance after the election last year, very exciting I think. >> Right, right. >> And we're very excited to hear from her. I'm already inspired by the thought that she's going to be here. >> And really a big part of the theme was kind of the strategy work is done, everybody knows it's good. Now it's really time for the rubber to hit the road. It's about execution and about taking steps and measuring. And a lot of the real concrete, nuts-and-bolts activities that need to happen to really move this thing down the road. >> You mean like gender equity and-- >> Yeah, yeah. >> Yeah, absolutely. I think it's been a topic for awhile and I think, exactly, we need to have the rubber hit the road, we have to get together, we have to have actionable plans and that's what a bunch of our seminars today talk about. How to address those things in your, we really want to empower women and actually people of all backgrounds and ages and all sorts of people to take charge of their own lives. And especially, we are a professional women conference so that's kind of where we focus our messaging. But really we want women to take control of their own lives and we want to give them the tools, the networking opportunities, the inspirations to meet their aspirations in those fields. And so we want them to take charge and move forward by themselves, take away from here and go back to your job, to your work, to your home, to really bring your messaging forward. Take inspiration from here and bring it back to your life. >> Right, and I think Bev Crair, in the keynotes said, "Fill your well today." >> Yeah. >> 'Cause as soon as you leave here it's back to the grind and you're going to need that energy. So while you're here surrounded by this energy and your peers, take it all in and load up. >> Absolutely. And I also want to say that we started out as a conference, an annual conference, and that's definitely our marquee thing that we do every year. But we actually have a lot more offerings that people can continue to engage over the year. So we have webinars and seminars that people can attend, there's community events that happen here. And you can go to the PBWC website and see what all offerings we have. But we want people to engage and we want to be able to provide them with the means to engage throughout the year, not just here but take this, everything you get today and then take it along the rest of the year and recharge yourself. >> It's kind of this whole 365 concept which we talk about on theCUBE a lot too, 'cause we go to so many shows. And there's a huge investment of time and energy and money on those two or three days, but how do you extend that out beyond the show? How do you build the excitement leading into the show so it's not just a one time kind of a shot, then everything goes back to normal? >> Yeah exactly, I think that's exactly the point, that this is not just a one day, you go there, you get inspired and then what next, right? >> Right. >> There's something you can go back to with our various offerings and continue your learning journey if that's what you want, or networking journey if that's what you want to do. Wherever you are in your career, we actually have a Young Women's Professional Summit that I have the honor of chairing, that we have every year and it's meant to help young professional women navigate their way from being in college and high school and those entering a professional life so as I said, we want to cater to all levels and all ages and all sorts of challenges that people face as they're going through their professional careers. >> So that's a separate event? >> It is, it is an annual conference. >> And when is that? Give a plug. Or do you have a date? (Deepti chuckles) >> Yeah, we don't have a date yet but it's going to be in the summer. >> In the summer, okay great. Well I think when we met last, I thought that was such an important piece of that Topcoder Open because it wasn't the Sheryl Sandbergs or the Hillary Clintons or these super mega top-of-the-pyramid people. It was a bunch of young professionals, one of the gals was still in school, hadn't finished graduating, to make it so much real for those high schoolers. They didn't have to look so far to say, "I could see myself, I kind of look like that person, "I kind of see things touch." >> And I think that's very important, Jeff. Exactly. It's very important and that's what we try to do here at PBWC as well. We want to go from catering to the Millennials and how we interact with them and all the way up to C-suite, we had a Senior Leadership Summit yesterday leading up to the conference today where we have a bunch of C-suites and CDOs, Chief Diversity Officers, come together and talk about trending topics and how to solve them. So we really are trying to move the needle forward on many fronts here, but our aim is all of that to culminate into moving women and people of all backgrounds forward. >> Right. And then there's this whole entrepreneurial bit which you can't see behind the camera, but there's booths all over for Intel and LinkedIn and Microsoft and the names that you would expect, Google of course, but there's also all the little boutiques, clothing stores and jewelry stores and crafty things. There's even of course women-focused snacks with the Luna Bars and I forget the other one. (chuckles) So it's kind of a cool entrepreneurial spirit kind of on top of everything else. >> Absolutely. And you know Jackie Speier, Congresswoman, started this conference to help women who were in the SMB, sort of SME market, basically women who ran small businesses. And we want to continue to do that as well but now of course the world is changing and we have a much more of a corporate presence and we want to help there too. But yeah, we pay homage to that by having women who are women entrepreneurs running women-focused businesses, and we have them here in the expo area if you can get a shot of that later. >> Right. >> The energy is palpable, the excitement is there and it's so great to be here and harness that, and take it back, I mean the first time I was here many years ago when I was not even on the board, I was just like, oh my gosh, there's so many women here who are like me or who are, they're people I could look up to all the way up to the C-suite who are making their presence felt here. And also all the people around me and like-minded, like me. So it's a really inspiring event. And I've been here for many years but I'm still inspired by it. So I'm so excited that we do this and continue to do this. >> So, little harder to question. So, and you've been doing this for awhile, what surprises you on the negative that still you know, you're still fighting that battle that you wouldn't have expected to still be doing? And then conversely what has surprised you on the positive, in terms of what's moved maybe further than you might've thought or faster than you might've thought? >> That's a good question. I think you already nailed it, right. The fact that we are still here talking about this is interesting to me, and as I got more involved in this kind of work I realized that people have been doing this for a long time. Congresswoman herself has been doing this for so long and a fearless advocate for women's rights and equal pay and diversity and inclusion. And the fact that we are still here, it is indicative of the fact that we need to have a groundswell movement in order to change policy. We can talk about it all we want but unless there's actionable things you can take away and really have that grassroots-level work to push the envelope forward, it's not going to happen. I think the positive is, as I've seen this conference over the years, it's grown. And it's gotten a lot more young people involved and it's not just the senior leadership that is trying to pull people forward, it's the people starting out early in their careers or mid-level in their careers that are looking at taking charge of their own destiny and pushing their agenda forward in this sense. They want, they're asking for equal pay. They're really engaged and aware. And conferences like PBWC actually help with that, getting those minds together and making things move forward. So I think from a positive side I'm really excited to see so many more people engaged in this fight. And the more people we have, the more we can actually make real progress and real inroads. >> And if you look back, as someone who's never been here and then they see this interview and they say, "This looks awesome, I'm going to sign up," what do you think the biggest surprise when they come for the first-timer? >> I'll tell you what I was surprised by, is seeing so many women together across industries, across ages, across backgrounds. Everybody together, really wanting to move forward. They're really wanting to engage, to connect with each other and to actually make a difference. People are here to make a difference, right? >> Right, right. >> And that's, to say that 6,000 people come together and really all of them have that same sort of mentality of like yes, I'm empowered to make a difference, is electrifying. >> Deepti, I love the energy. >> (laughs) Thank you. >> I love the energy, absolutely. >> It's all these people. >> It is. >> Trust me, I'm sleep deprived (Jeff laughs) with my very young son. So yeah, this is all the energy that I need to feed off of. >> No, it's good. And there is something special here. >> Mm-hmm. >> And you can feel it. 'Cause we go to a lot of shows, you go to a lot of shows. And again, it's not an exclusive tech show which is kind of nice 'cause we cross a lot of industries. But there's definitely, there's an energy, there's a vibe that comes from the little entrepreneurial outlets, it just comes from the, that room was packed. The keynote room was... >> I know. >> Was not fire marshal friendly. (Deepti laughs) Hopefully the fire marshal was not close by-- >> Yes, we had some discussion on that too. But to your point, this is one of the conferences that I've seen where we really, perhaps the only conference I've seen where we really cut across all industries. Because there's tech-focused, there's business-focused, there's all sorts of focused conferences trying to do either their professional work on technology or whatnot, or they're trying to solve the problem on the gender and diversity and inclusion piece in their own silos. And we try to cut across so that we can actually have a coming together of all of these various industries and their leaders, thought leaders, sharing ideas and sharing best practices so that we can actually all move forward together, I think that's again our Senior Leadership Summit which happened last night and the VIP reception which happened last night is all about getting those thought leaders together and getting them to share their best practices and ideas so that again, they can take it back to their companies and really move forward with DNI initiatives. >> It's action right, it's all about the action. >> Absolutely. >> So I promise next time that we talk, we'll talk about Google Cloud. >> Oh, sure. >> 'Cause that's hoppin'. (Deepti laughs) But it was great to see you and congratulations on all your work with the board and with your event >> Thank you. >> in the summer. People should go to the website, keep an eye out. >> Absolutely. >> It'll be comin' out. >> Yeah. >> So thank you. >> Thank you so much, it was great to see you too, Jeff. >> Absolutely. Alright she's Deepti, I'm Jeff, you're watching theCUBE. We're at the Professional BusinessWomen of California Conference. The 28th year, pretty amazing, 6,000 people. Here at Moscone West, thanks for watchin'. (upbeat techno music)

>> Announcer: Live, from Silicon Valley, it's theCUBE. Covering Google Cloud Next '17. (electronic music) >> Welcome back to theCUBE's live coverage of Google Next, here from our Palo Alto studio. Happy to welcome to the program a first time guest, Udi Nachmany, who is the Head of Public Cloud at Ubuntu, thank you so much for joining us. >> Thanks for having me, pleasure to be here. >> All right, so I think it goes without saying, anybody that understands the landscape. Oh wait, there's Cloud, there's Linux, and especially Ubuntu, you know that's going to be there. Before we get into some of these, just tell us a little bit about your role there, and inside the company. >> Sure, I've been with Canonical for about three years, and I head up our partnership with the public clouds and the public IS providers as a whole. >> Yeah. >> That includes Google, AWS, Azure, and many, many others. >> So can you just clarify one thing for us, though? >> Yes. >> You just said Canonical, I introduced you as Ubuntu. >> Yes. >> Which is it? How should we be referring to these two? Well, we are very well known for our products. >> Yeah. >> We're best well known our corporate brand and we're very happy with both names. I usually introduce myself as Udi from Ubuntu, >> Yeah. >> Slash Canonical, so we're used to that. >> Totally understand. So public cloud, give us your view on the landscape today. We want to talk specifically about some of the Google stuff, but what's happening, and what are customers to you for public cloud, where does your suite play into that environment? >> Sure, Ubuntu is a very popular OS, and I think probably the most popular, the area where we're most dominant is public cloud, So a large majority of workload's on Google Cloud, Azure, the Linux part of Azure, AWS, and many, many other providers is running on Ubuntu. A lot of high-visibility services actual develop on Ubuntu. And we have responsibility in that. We need to make the Ubuntu experience predictable and optimized for that cloud platform and have people trust that experience, and believe in it. So that's our job on a technical level, and then on the second level, our job is to help users access support and tooling on top of that, to help them with the operational reality. Because what we see, unless you've probably heard it before from Canonical, what we see is it's great that the licensing cost, the cost of software has gone down, that's great news for everyone, however what a lot of people don't realize is that the cost of operations has gone up, it's skyrocketed, right? It's great Kubernetes is open source, but how do you actually spin up a cluster, how do you deal with this architecture, what does it mean for your business? So that's where we critically focus on private and public cloud. >> Yeah, it's funny. I did an interview with Brad Anderson a few years ago, and I'm like, "Customers are complaining "about licensing costs," and he starts ranting, he's like, "Licensing costs? Do you know that licensing is 6% of the overall cost of what you have?" So, look, we understand operations are difficult, so why is that such a strong fit? What do you bring, what customers do you serve that they're choosing you in such a large preponderance? >> I think the two things we do well, one is we're very well-embedded in the industry and in the community, and pretty much where people are developing something exciting, they're developing it on Ubuntu and they're talking to us through the process. We get a really good view of their problems and challenges, as well as our own. And the second thing is we have come up with tools and frameworks to allow a lot of that knowledge to be crowdsourced, right? So a good example is our modeling platform Juju, where you can very easily get from not knowing anything about, for example Kubernetes, into a position where you have a Kubernetes architecture running on a public cloud, like Google, or in another public cloud, or in bare metal, right? So because we tackled that, we assume that somebody's done this before you, somebody's figured this out. Take all that knowledge, encapsulate it in what we call a Charm, and take that Charm and build an architecture on Juju, on the canvas, or through the CLI. >> Okay, maybe could you compare, contrast, Google, of course, has some pretty good chops when it come to Kubernetes, they're really trying to make some of these offerings really as a service, so ya know, what does Google do, what do you do? How do they work together? Are you actually partnering there or are you just in the community just working on things? >> Google is in this in two different ways. One is they have their own managed service GKE, and that's great and I think people who are all in on Google, then that's a probably a good way to go. You get the expertise, and you get the things that you need. Our approach, as always, is cloud-neutral and we do believe in a hybrid world. We are members of the CNCF, we're silver sponsors of the CNCF, we're very well-embedded in the Kubernetes community, and we do ship a pure upstream Kubernetes distribution that we also sell support for. So we work very closely with Google, in general, Google Cloud, on making sure Ubuntu runs well on GCE, and on the other side, we work very closely with the Kubernetes community in that ecosystem, to again, make sure that it becomes very easy to work with that solution. >> Every player that you talk to in the ecosystem gives you a different story when it comes to multi-cloud environments. Google's message tends to be pretty open. I mean, obviously, with what they're doing with Kubernetes and being their position of where they are with customer adoption, they understand that a lot of people that are doing cloud aren't doing it on Google's Cloud, so they want to make it, you can live in both worlds, and we can support it. I listened to Amazon today, they're like, well, the future's going to be, we're all going to be there, we're going to hire another 100,000 people throughout all of Amazon in the US in the next 18 months. And Microsoft is trying to wrap their arms around a lot of their applications, IBM and Google are there, doing their thing. You've got visibility into customers in all of these environments due to your place in the stack. What are you seeing today? How is Google's adoption going? Is one question I have for you. And two, most customers, I would think, are running kind of multi-cloud, if you will, is the term, is that what you see? How many clouds are they doing? What are you seeing, kind of shifts in there, and I know I asked you three different questions there, but maybe you can dig into that and unpack it for us. >> Sure. I think, in terms of what they, at least top three clouds are saying, I think it's more important to look at what they're doing. If you think about the AWS and VMWare announcement, if you think about Azure Stack for Microsoft, I think those are clearly admissions that there is an OnPrem story and there's a hybrid story that they feel they need to address. They might believe in a world where everybody's happy on a public cloud, but they also live in reality. >> We're on a public cloud show, we're not allowed to mitt about OnPrem, right? Next you're going to, like, mention OpenStack. >> Absolutely. And then, in terms of Google, I think the interesting thing Google's doing, Google are clearly in that, even in terms of size and growth, I think they're in that top three league. They are, my impression is they are focused on building the services and the applications that will attract the users, right? So they don't have this blanket approach of you must use this, because this is the best cloud ever. They actually work on making very good, specific solutions, like for big data and for other things, and Kubernetes is a good example, that will attract people and get them into that specific part of Google Cloud platform, and hopefully in the future, using more and more. So I think they have a very interesting more product than approach, in that sense. >> Okay, so. >> I think I answered one question. >> Yeah, you touched on, yes customers have public and OnPrem. >> Yeah. >> Kind of hybrid, if you will. What about public cloud, you know? Most customers have multiple public clouds in your data or are they tending to get most of it on a single cloud, and might having a second one for some other piece? >> Yeah, I think right now, we're seeing, is a lot of a lot of people using perhaps a couple of platforms. Especially if they have certain size, I'm putting things like serenity and data prophesy aside, but just in terms of public cloud users, they might, again, use a specific platform for a specific service, they might use bare metal servers on software, for example, and VMs on the cloud. People are, by and large, the savvy users do understand that a mix is needed, which also plays to our strength, of course, with tools like Juju and Landscape, we allow you to really solve that operational problem, while being really substrate-agnostic, right? And you don't have to necessarily worry about getting logged in to one or the other. The main thing is, you can manage that, and you can focus on your app. >> All right. Udi, what's the top couple of things that customers are coming to you at these shows for? Where do they find themselves engaging with you as opposed to just, ya know, they're the developers, they're loving what you're doing? >> Sure. So the one thing I mentioned before is operations, right? I've heard about big data, I've heard about Kubernetes. What are my options? Do I hire a team? Do I get a consultant? Do I spend six months reading about this? And they're looking for that help, and I think Juju as an open-source tool and conjure-up as a developer tool that's also open-source. Really expand their options in that sense, and make it much more efficient for them to do that. And the second thing I'd say is Ubuntu is obviously very popular on public cloud, it's popular in production, so production workloads, business-critical workloads. And more and more organizations are realizing that they need to think long and hard about what that means in terms of getting the right support for it, in terms of things like security. An example, this week there was a kernel vulnerability in Linus Distros, I don't think it has a name yet, and we have something called the Canonical Livepatch service which patches kernel vulnerabilities, you can guess by the name. Now, people who have that through our support package have not felt a thing through this vulnerability. So I think we'll start to see more and more of these, where people have a lot of machines running on different substrates, and they're really worried about their up time and what a professional support organization can help them do to maintain that up time. >> It's real interesting times, being a company involved in open sourced, involved in open cloud. I want you to react, there was a quote that Vint Cerf gave at the Google event, I was listening, they had a great session Marc Andreessen and Vint Cerf. >> Yeah it was overcrowed. >> Go there. There was actually room if you got in, but I was glad I got up there, and Vint Cerf said, "We have to be careful about fast leading to instability." What's your take on that? I hear, when I go to a lot of these shows it's like, wow, I used to go from 18 months to six months to six weeks for my deployments. And public cloud will just update everything automatically, but that speed, ya know? As you were just talking, security is one of the issues, but there's instability, what's your take on that? And how are customers dealing with this increasing pace of change, which is the only constant that we have in our industry? >> Yeah, that's very true. I think, so from conversations with customers I've had recently. I've had a few where they've been sitting around and really deliberating what they need to do with this public cloud thing that they've heard about. Trying to buy time, eventually might lead to panicking. So a big financial institution that I met, maybe a month ago are trying to move all in to AWS, right? Whether that's a good thing or a bad thing for them, whether it's the right thing for them, I don't think that discussion necessarily took place, it may well be the best thing for them. But it's the kind of, they're rushing in to that decision, because they took so much time to try and understand. On the other hand, you see people who are much more savvy, and understand that in terms of the rate of change, like you said, it's a constant, so you need to take ownership of your architecture. You can't be locked in to one box that solves all your problems. You need to make sure you have the operation agility and you're using the right tooling, to help you stay nimble when the next big thing comes along. Or the next little thing, which is sometimes just as scary. And I think, again, that's where we're very well placed and that's where we can have very interesting conversations. >> Really interesting stuff. Actually, I just published a case study with City, talking about, they use AWS, I would say tactically would be the way to put it. They build, they have a number of locations where they have infrastructure. Speed and agility absolutely something they need as an outcome. Public cloud is a tool that they use at certain times, but not... There are things they were concerned about in how they build their architectures. Want to give you the last word. We see Canonical, Ubuntu at a lot of shows, you're involved in a lot of partnerships. What do we expect to see from your cloud group, kind of over the next six months, what shall we be keeping an eye on? >> I think on the private cloud side we've been doing some great work into the toggle vertical, and I think you'll see us expanding into more verticals, like financial services, where we've had some good early successes. >> Can I ask, is that NFV-related? It was the top discussion point that I had at OpenStacks on it last year was around NFV. Is it that specific or? >> Yeah, that's an element of it, yeah, but it's about, how do I make my privat cloud economically viable as AWS or Google or Azure would be? How do I free myself from that and enable myself to move between the substrates without making that trade off. So I think that's on the private cloud side. And I think you're going to see more and more crossover between the world of platforms and switches and servers and the world of devices, web-connected devices. We just finished MWC in Barcelona last week. I think we're in the top 13 or 14 bars in terms of visibility, way ahead of most other OS platforms. And I think that's because our message resonates, right? It's great to have five million devices out there, but how do you actually ship a security fix? How do you ship an update? How do you ship an app, and how do you commercialize that? When you have that size of fleet. So that's a whole different kind of challenge, which, again, with the approach we have to operations, I think we are already there, in terms of offering the solution. So I think you're going to see a lot of more activity on that front. And in the public cloud, I'd say it's really about continuing to work ever closer with the bigger public clouds so that you have optimized experiences on Ubuntu, on that public cloud, on your public cloud of choice. And you're going to see a lot more focus on support offerings, sold through those clouds, which makes a lot of sense, not everyone wants to buy from another supplier. It's much easier to get all your needs met through one centralized bill. So you're going to see that as well. >> Udi Nachmany, really appreciate you coming to our studio here to help us with our coverage of Google Next 2017. We'll be wrapping up day one of two days of live coverage here from the SiliconANGLE Media Studio in Palo Alto. You're watching theCUBE (electronic music)

>>Live from Las Vegas, Nevada. It's a queue at HP. Discover 2014 brought to you by HP. >>Welcome back, everyone live here in Las Vegas for HP. Discover 2014. This is the cube we're out. We go where the action is. We're on the ground here at HP. Discover getting all the signals, sharing them with you, extracting the signal from the noise. I'm John furrier, founder of SiliconANGLE. I joined Steve Woolwich VP of product marketing at map art technologies. Great to see you welcome to the cube. Thank you. I know you got a plane to catch up, but I really wanted to squeeze you in because you guys are a leader in the big data space. You guys are in the top three, the three big whales map are Hortonworks, Cloudera. Um, you know, part of the original big data industry, which, you know, when we did the cube, when we first started the industry, you had like 30, 34 employees, total combined with three, one company Cloudera, and then Matt are announced and then Hortonworks, you guys have been part of that. Holy Trinity of, of early pioneers. Give us the update you guys are doing very, very well. Uh, we talked to you guys at the dupe summit last week. So Jack Norris for the party, give us the update what's going on with the momentum and the traction. And then I want to talk about some of the things with the product. >>Yeah. So we've seen a tremendous uptick in sales at map. Are we tripled revenue? We announced that publicly about a month ago. So we went up 300% in sales, over Q3, I'm sorry, Q1 of 2013. And I think it's really, you know, the maturity of the market. As people move more towards production, they appreciate the enterprise features. We built into the map, our distribution for Hadoop. So, um, you know, the stats I would share is that 80% of our customers triple the size of their cluster within the first 12 months and 50% of them doubled the size of the cluster because there's the, you know, they had that first production success use case and they find other applications and start rolling out more and more. So it's been great for us. >>You know, I always joke with Jack Norris, who's the VP of marketing over there. And John Frodo is the CEO about Matt bars, humbleness. You don't have the fanfare of all the height, depressed love cloud era. Now see they had done some pretty amazing things. They've had a liquidity event, so essentially kind of an IPO, if you will, that huge ex uh, financing from Intel and they're doing great big Salesforce. Hortonworks has got their open source play. You guys got, you got your heads down as well. So talk about that. How many employees you guys have and what's going on with the product? How many, how many new, what, how many products do you guys actually, >>We have, well, we have one product. So we have the map, our distribution for Hadoop, and it's got all the open source packages directly within it, but where we really innovate is in the course. So that's where we, we spent our time early on was really innovating that data platform to give everything within the Hadoop ecosystem, more reliability, better availability, performance, security scale, >>It's open source contributions to the court. And you guys put stuff on top of that, uh, >>And how it works. Yeah. And even some projects we lead the projects like with Apache Mahal and Apache drill, which is coming into beta shortly other projects, we commit and contribute back. But, um, so we take in the distribution, we're distributing all those projects, but where we really innovate is at that data platform level. So >>HP is a big data leader officer. They bought, uh, autonomy. They have HP Vertica. You guys are here. Hey, what are you doing here? Obviously we covered the cube, uh, the announcement with, uh, with, with HP Vertica, you here for that reason, is there other biz dev other activity going on other integration opportunities? >>Yeah, a few things. So, um, obviously the HP Vertica news was big. We went into general availability that solution the first week of may. So, um, what we have is the HP Vertica database integrated directly on top of our data platform. So it's this hybrid solution where you have full SQL database directly within your Hadoop distribution. Um, so it had a couple sessions on that. We had, uh, a nice panel discussion with our friends from Cloudera and Hortonworks. So really good discussion with HP about just the ecosystem and how it's evolving. The other things we're doing with HP now is, you know, we've got reference architectures on their hardware lines. So, um, you know, people can deploy Mapbox on the hardware of HP, but then also we're talking with the, um, the autonomy group about enterprise search and looking at a similar type of integration where you could have the search integrated directly into your Hadoop distro. And we've got some joint accounts we're piloting that she goes, now, >>You guys are integrating with HP pretty significantly that deals is working well. Absolutely. What's the coolest thing that you've seen with an HP that you can share. How so I asked you in the big data landscape, everyone's Bucher, you know, hunkering down, working on their feature, but outside in the real world, big data, it's not on the top of mind of the CIO, 24 7. It's probably an item that they're dressing. What have you seen and what have you been most impressed with at HP here? >>Yeah. Say, you know, this is my first HP event like this. I think the strategy they have is really good. I think in certain areas like the cloud in particular with the helium, I think they made a lot of early investments there and place some bets. And I think that's going to pay off well for them. And that marries pretty nicely with our strategy as well in terms of, you know, we have on-premise deployments, but we're also an OEM if you will, within Amazon web services. So we have a lot of agility in the cloud if you will. And I think as those products and the partnerships with HP, evolvable, we'll be playing a lot more with them in the cloud as well. >>I see that asks you a question. I want you to share with the folks out there in your own words, what is it about map bar that they may or may not understand or might not know about? Um, a little humble brag out there and share some, share some, uh, insight of, into, into map bar for folks that don't know you guys as a company and for the folks that may have a misperception of what you guys do shit share with them, with what, what map map is all about. >>Yeah. I mean, for me, I was in this space with Aster data and kind of the whole Hadoop and MapReduce area since 2008 and pretty familiar with everybody in the space. I really looked at Matt bars, the best technology hands down, you look at the Forrester wave and they rank us as having the best technology today, as well as product roadmap. I think the misperception is people think, oh, it's proprietary and close. It's actually the opposite of that. We have an unbiased open-source approach where we'll ship in support in our distribution, in the entire Apache spark stack. We're not selective over which projects within Apache spark. We support. Um, I feel like SQL on Hadoop. We support Impala as well as hive and other SQL on to do technologies, including the ability to integrate HP Vertica directly in the system. And it's because of the openness of our platform. I'd say it's actually more open because of the standards we've integrated into the data platform to support a lot of third-party tools directly within it. So there is no locked in the storage formats are all the same. The code that runs on top of the distribution from the projects is exactly the same. So you can build a project in hive or some other system, and you can port it between any of the distributions. So there isn't a, lock-in >>The end of the day, what the customers want is they want ease of integration. They want reliability. That's right. And so what are you guys working on next? What's the big, uh, product marketing roadmap that you can share with us? >>Yeah, I think for us, because of the innovations we did in the data platform allows us to support not only more applications, but more types of operational systems. So integrating things like fraud detection and recommendation engines directly with the analytical systems to really speed up that, um, accuracy and, and, uh, in targeting and detecting risk and things like that. So I think now over time, you know, Hadoop has sort of been this batch analytic type of platform, but the ability to converge operations and analytics in one system is really going to be enabled by technology like Matt BARR. >>How many employees do you guys have now? Uh, >>I'm not sure what our CFO would. Let me say that before. You can say we're over 200 at this point >>As well. And over five, the customers which got the data, you guys do summit graduations, we covered your relationship with HP during our big data SV. That was exciting. Good to see John Schroeder, big, very impressive team. I'm impressed with map. I will always have been. You guys have Stephanie kept your knitting saved. Are you going to do, and again, leading the big data space, um, and again, not proprietary is a very key word and that's really cool. So thanks for coming on. Like you really appreciate Steve. We'll be right back. This is the cube live in Las Vegas, extracting the city from the noise with map bar here at the HP discover 2014. We'll be right back here for the short break.

and we're here with sicky junta and psyche is with CSC she's uh she's an entrepreneur she's a cloud expert she's a technologist a businessperson her official title is global vice president of cloud computing and cloud services at CSC welcome thank you it's good to see good to see you here and we're very excited to be at sapphire this is day 3 of course we're gonna talk cloud with the woods with sicky so so why don't we start off sick you tell us you know what is what is cloud all about is that is it living up to the hype I personally believe that cloud it is the way of the future we don't have enough trees and data centers for the generation that we are breathing you know the generation that we are breathing produce a tremendous amount of these data by the minute us digital data texting data voice data and all this data has to be Monte so the cloud it is the future to go and it's actually changed in the last three years I've been working loud for quite a while the dynamics of the last 12 months people have gone from being educational I want to know and we have to spell MC sounds like cloud and and then you say to them now their projects they have money they have value added in Rio the termination in that cloud project how was it changing good business Missy SC is a very well-known you know broad-based service provider outsourcing and so far how is the cloud changing your business it is very interesting because it's kind of transforming the business of cici's it transformed the way that we interact with our customers and prospects we use a lot of digital new yahoo the way we approach to our custom is very different we do pilots in our cloud the business model is changing we run we don't take hasit and people like it outsourcing deal we just run it for my fabric or we deliver cloud fabric at the customer data centers and we managers or we can say to them will give you the cloud fabric and you are like an Amazon you can manage it yourselves and we just keep the fabric well we'll provide the provisioning we provide your constructions and you are your own service provider is it very different than what she does to the top reason folks talk to you about you get a lot of clouds going on building clouds and you've been in technology preneur in the past sold your companies but you're at CC big brands are coming to you what is the number one thing you're seeing the pattern of the customer requests and or the new customers I think the customers they're really serious about cloud want agility version Assad Julia um I T delivery time to deliver a off even six weeks three months that is traditional it is not possible today customers wants to build application and modern weeks instead of months the new platforms like force calm and a zoo or do you have spring source vm having google apps they actually have this very beautiful object-oriented way for you to write application we're very very fast and so that requires a delivery mechanisms that can sustain that more I think that they want to build brand new applications so they can stay with them for the next 20 years and and we're waiting to us come on this morning we're talking on prior you said the cloud is a user experience I think that's really profound can you expand on that that was pretty compelling I think people look at the cloud as is odd this tech I and big iron in there but you talk about what you mean by the cloud is a user experience so I there are two type of Christ there is the consumer clouds that's the cloud that we do every your typing on the cloud and we have facebook and twitter and all this i play Angry Birds that's a gaming it's a big cloud that's any user experience of the cloud so if you leave in your cloud and use your spirits and then you go away you just say why do I have to win six weeks when I can play you know I can play final fantasy in real time with people in Hong Kong that's really the experience of the castle and enterprise is not there yet and there has two issues first of all the technology really was not they are still provide that the applications like sa peas and and the evolution of the systems second the processes are going internal IT are really very rigid sometimes you have to go fill up in requesting gotta get all this approval and has to be seen by 25 people on business model and all that so we have the challenge of accelerating a business classes and providing the same end user experience there and that's why it's CSC we have pilots in our plans we say to customer currents bosses and you know use our portal our provisioning environments upload workloads start to understand what does it mean interacting with about you know try it out there like in a mixed thing you know they got us growing you know puppy and then there they're stuck with the animal the cloud that's yeah I do never compare Jonna come up with a lot of those in the next half hour secure your company is technology agnostic of anyways right you know the real you get wed to a particular technology or services company so you have to be a trusted advisor to use clients on we're here at sapphire we're hearing a lot about in-memory computing and hannah we were talking a little bit about that off-camera what's your take on on this notion that sa p is putting forth they call them the ram cloud in-memory computing the Hana cloud what's your angle on that so first of all let's all understand the ROM and memory is the juice of clouds and I'll give you an analogy the cloud is like an apartment building where if the guy at the top takes a hot shower and uses all the shot that hot water the guy the bottom has no it has a cold shower and that's really the real analogy in a cloud vector if I have a very intense memory usage workload some could be SI p JD edwards and some others the other everybody in that community in that multi-tenant that's what it is multi-tenant ones we are all together feels the same problems and so memory it is deduce a cloud but that doesn't mean that because i have a lot of memory I don't have to optimize systems systems should be optimized and agile by themselves that's why a lot of refactoring a lot of building you know legacy java to a spring environment where you have encapsulation to take home see where you have object orientations and that makes you a John workers that really are optimized to use the maximum of the memory we actually going through this period right now he talks about private clouds and public laws in a hybrid clouds we've sort of in this period where we've got one foot in the legacy camp because you can't we don't a rip rip and replace and we've got another foot in this you know agile new world are you seeing a lot of sort of native new application development that's going to take advantage of these new cloud architectures new potential business processes you've seen that today and how long do you think it will take to actually see that bring true innovation to business I think that today the biggest usage of cloud are Gavin test so if the Devon test is the biggest user God that means that all the new projects are being developed to be delivered on the cloud vector and that's really very very very important today gets virtualized uses a platform but there is a big movement to refactor my applications because waiting for everything new there is only twenty percent of innovation in every large shop of IT today so there is a lot of companies that do create a roadmap for their workload and and when I talk to them I say divide you your workload part in three categories the legacy one that will never move that's the one that I in agreed environments and virtualized their heart the databases to bake the construct is not a job and the one that you want to do straight away Devon test email unified communications serum and the other things evaluate do I have to do I is it core that I have to own it and build it on or could I sauce it so to provide I system that it was already out there that it's like for sales culture of this world the NetSuite of this world workday is success factor 0 or any type of HR systems and say why do I have to own it why can't i have a SAS cloud environment where i can buy the serious doing this exercise helps them understand what its core what is not and why should I spend the money to take legacy applications to to the cloud can see it's a major changes in all layers who invited the you've got your your your device here your iPad we've hearing a lot of changes at the application layer and of course the infrastructure as well how is infrastructure changing and there's a lot of talk about convergence and there's logical blocks of infrastructure what are your thoughts there well I think that and the infrastructure layer we are actually seeing two major chain changes that are coming very fast first of all the multi-core environment 20 course is gonna beat ah here soon you're just sooner than we think and so all this memory conversation will already evaluated again because how's that memory gonna work with all this capacity our computer we have and that's that's a real conversations in and the IKE advisor that has the interaction with the fabric will need to be optimized to be able to take advantage of that storage is going through a lot of chambers multi-tier being the ability to say I don't want to maintain this for a long time understanding the retention here is it's even more critical than before because the access to the data now it's very fast and understanding the tiering and how you're going to do or not network storage what they're gonna cash what are you gonna close it creates a lot of questions when you build an application or when we refactor the applications a lot of it I think we have to realize that the systems have speed as a requirement and optimize from the end user to the art to the bear models what's the most efficient path just mentioned some real hot tech areas that we were all over I'll see the multicores and you the course the in-memory got solid state changing her essay p guys here saying summaries the new disc disc is the new tape tape is dead pretty pretty simple message there but multi core memory the hypervisor role of virtualization and the change will storage all those forces are colliding yeah when twins win some argue that that's an opportunity for redefinition of a new operating environment so to your point about optimization how do you see that revolving is that fantasy it gotta like a wish list you see new architectures developing definitely new architecture love being developed tonight's a new architecture for instance it's an optimized act architecture for mobility and to create a very pleasant user experience with all the data that sa p has because as if he has all this come on up data lock deals and so it's a new architecture you just say instead of changing the structure of the data or the app i am actually moving the interaction at the mobility level to a new device so that the experience is better in some cases used we will have to go back all the way and brought in right brand new systems that can suppose support that but I i believe the new architecture I've built all the time I think that um we haven't probably have a scene um what's the preferred what's the preferred visually for the future for this type of texture that that you're seeing and that you're driving towards mostly memory stuff immediate benefits to caching what do you see is the preferred methods that are driving right now I think that sounds looking at mobility so that that you can divide the user from the system's is very protesting because if you don't do that we actually slow down the end user experience and the end user is the productivity that we get every day second it's we have to look at business logics and can isolate the business logic so that I can can I really change it in a dynamic way in the last 10 years of 20 years we built system where we encoded everything he has to talk to this database over this IP address with that all this um hardcore stana configurations yes it's very hard in the cloud environment dynamic environment new media environment so we have to look at the system say how can I use so object orientations platforms separations logic how can i isolate the data if I have to how can I put it you know virtual data Mart's on top of it so that I can I'll cute the data because if I kind of a what Hana is was I'm sorry structure data then I cubix and then the cube gets talked to everybody and normally i know that in dededo there is eighty percent again used 20 bars are all right reverse so it's really an interaction and reactant acting from the end user best experience i want to do that facebook experience i want to give it that um gaming experience so how do i get to the data and adina you know it's probably 20 years old and it's really mainframe in monster well you're not gonna go ahead sir so when we talk to some of the vendors like for instance an emc they talk about the block at ciscos pushing UCS and it and they call it cloud ready or cloud enabled or cloud optimized i guess the term they use is that just good marketing or is it really the right model for the cloud to have that sort of single logical block of infrastructure which you're taking away well CC is a V block user we use Vblock for all our fabric cloth fabric deployment and a full hour in this cloud that is the first we have private cloud delivered on premises on the red card it's a unique value proposition no nobody has meaning you don't have to buy millions we delivered to you it's ready just provision the workload we teach you how to do it and we can do it in 10 weeks now we can only do it with a optimized block well the hard work and they're hard when storage and network and compute off very integrated and then we used EDM where I'd advisors are um has their communication macaluso we believe and I personally believe that that's today the best technology available UCS was built for cloud means project California that server was built thinking virtualization the optimization to the upper visor to the chip so that's why I think it is for CCM for our customer the best solutions it has a future-proof solution all the other architecture in the hardware have to change like HP just did a brand new set of equipment so and so I use that word future proof yeah it's like a punch like it Flashman does that expand know it's a good term it means basically you buy something and yes headroom you could it takes you into the future so just drill down on that more detail cuz that's a really important point that folks they don't want the cloud washing mentality they want to see specific so just expand on that you could so first of all um clouds there's no magic there and there is a project you say I want to take my Devon test to the cloud you have to plan it rough too tested you have to make it happen so there's no magic in cloud no pixie dust is like any other the ability to what I call future proof is what I call cloud plus far something that I can sustain in the next five years and not having to do it an architecture change or a major change I will do refreshes because the hardware is moving faster point releases add some stuff to it yeah but my architectural substantial architectural layers and everything is kind of stable for that but cloud pushes innovation to the US as a provider to our suppliers and to our end users all the time because it as a brand new paradigms so future is the roadmap that you built for yourself their customers i'm gonna say i have my roadmap I know what my clouds are gonna look in five years I know they thinks that I'm you know evaluating html5 for everything that is an end you see this vblock for the fabric I'm looking at how do i integrate cloud providers the api structures we are building a very interesting platform for cloud service programs where we will be the broker on all the cloud providers and look at the Echelon and maintain transparency so I know exactly what my cloud I'm gonna look in five years so that's when I seed with my CIS I say you don't have to do cloud the doctor doesn't say that you have to do cloud but if you do understand the business value and what's the roadmap and what's the current state to end state and the value that you want to be able to the post so CSE obviously cloud service provider and the Chinese proverb may you live in interesting times and we're in the technology business so we always live in interesting times i guess but so you have your cloud business your provisioning your own cloud you have your own data centers we see SI p announced today the Hana cloud and so but you of course a big SI p partner now you're sort of quasi competitor are you gonna build your own Hana cloud of me how does that all work you live in this age of cooperation can you talk about that a little bit but that's the beauty of cloud cloud doesn't bring competition brings integration so I'll give you another example we work very strongly with Microsoft Azure in their environment but our customer comes to CSC because they they want the full service experience and they want security and they want somebody that really looks at the architecture of what they do it expertise not just a class so we have created a federation model where no customer comes in our cloud is called cloud belt and say I want to build myself a force applications the integration to the force platform is similis to the end users we actually integrated us force platform and we'd actually run the code in the first platform but the customer said I want to now put it as my data in the public knowledge I want to get having them physical I wanted on your data center so we take care of all that in the Federation loss so we talked a lot about SCP with SI p in the last a day about hannah and they have their business on demand a platform that it is a way to write applications in situ and we asked him you know we want to run the application they plot from ourselves because I value added and then already so that's okay we will do a fixed platform like force or Google oh I absorb but we have portable platforms like spring or chorus or alarm stock and but remember well the customer fields a lock-in because they know they can only run it down beauty and and when you wrote it a nap in a strict platform you kind of just say okay I take it and I run in there he runs only there it's off two months like if you ride a force up you can write it in a matter of days I runs only there you can't just say I don't like yourself horse I'm gonna walk with my data we're going yeah you walk with you did about the Alpha stays there Thank so there is a lot of lock-in in this new their plan yet but Federation is the value on it the CSC brings we understand the de world is dynamic in nature and we will push hard on all our suppliers to say when can we have the ability for them to have portable bar codes instead of fix work that the CSC leading executive forum did some work a couple years ago that I read and it was they were talking to some CIOs those guys and they said as part of CSC very good work that they do and they said anecdotally that the discussions with CIOs this is probably 2001 9 time frame during the downturn suggested that CIOs are accelerating IT organizations are accelerating their adoption of cloud by as much as 12 to 18 months and then he went out into the Wikibon community and confirm that same thing I was really compressing that cycle and and I think it you would describe it as everybody needed the cloud it was sort of this cloud frenzy and now it's a little bit more selective one of the areas that seems to be having good uptake in flowers the federal government they seem to you know the new federal CIO is really hitting hard on cloud um is a supporter yeah and so um so what are you seeing there why is that is and how much money can you actually save with clouds that's a very good question so in the federal case since 1999 they had 400 data centers and when they lead the last census of all the data center i think was 2008 they had over a thousand data centers and so that's a huge growth everybody I want my own data centers until the garlic laptops iPads yeah that's a data center so I am so I think the government has come to the conclusion to say we all belong to the same family yes we all have our differences and security and privacy but let's trot learn how to share and I think there's a strong mandate for federal to use cloud vectors in fact CeCe's part of the data center consolidation committee where Jim Schaffer our president of public sector is a contributing member they are interesting things that we see is that actually federal for the first time turns to commercial and says good what is he working on the commercial side let's take commercial structures and architectures and apply so that we can move much much faster and reduce the cost so now comes to the cops um i dissect the cost of cloud in various sections first of all you have to virtualize and so virtualization brings in fifteen percent you're going from 700 servers to let's say 200 servers and that's a saving say he said in energy is saving now agility you you save them space and he'd never thing and that's a real hardcore cost rather cost that you have to buy new our hardware they will around and virtualized environment poverty if you take all your refresh cycle everything that's coming to be done you buy new hardware that can support that you can synchronize that as you can see what a nice day Saudi there is in the big girls then if you do infrastructure-as-a-service you got another you know 15 I mean maybe ten percent like I go to Amazon but then you hit a brick wall and that r equal is your applications and don't run on the cloud and you know you don't have any more things to cry so that's why I say to my CL we have to look at the IT Park and your eyes we have to go to the hardcore runner Montaigne IT budget today is sixty percent and evaluate how are we going to write new applications that get modernized or how can we refactor the application so that we can reduce this run and montane down to no more than fifty percent so we can use all the other 50 for your innovation and that's why it's seriously we believe we've somebody takes this portfolio approach we can commit up to forty to forty-five percent cartridge on a traditional on a traditional company which now if you are a brand new company and you really do the analysis core versus non core and you go this route you actually can reduce your cost a lot when I was a CIO I add a data set I see the data center and I said I don't want to run datacenters I just builds after I don't have to have a data center the last person that was holding up was my CFO and he says oh I like my sister now I ever say well six months you are not sweet otherwise you are met and and now is the number one that sweets speaker for public company of using cell system so it is a culture that's a great I mean it's great movement right now cloud there's a SiliconANGLE TV the worldwide leader and online tech coverage this is the cube this is where we talk about all the great stories and content with Suki Kunta great conversation here at SiliconANGLE dot TV question on the service is angle Dave and I have been talking for weeks now about how the services business changing both the services of delivery consulting integration which you mentioned that's where cloud is not about competition bout integration and also the services that can be offered on the cloud so how was the the services business changing the value chain of the architecture to the wind services that are being delivered we call that services angle mean what's your angle on the services business is changing into in two ways one it becomes more strategic so all this road mapping and understanding of the asset portfolio and why do you want to be on three years and what's the type of IT leader you want to be for your organization so it's moving upwards and then actually is becoming very very technical people the really most virtualization optimization infrastructure and can really what i call the youngsters the guys that can really write apps very fast the young Dae young coders know what we are crap that really don't want to spend the times on you know I'll ride this big proposal he's there and I'll show you and that's when i interviewed it for CSC the kid in five minutes his own is the ipod alive stop on top here I know that he lives the cloud everyday leavin this is really the new people that I say we have to look for but there is a big difference the culture change the consultant with the tie and phil italia proceeds one in two and three so the kids say give me two hours and i give it back to you yeah it's a huge there's conflict back in the 90s remember that that's the consultant suit they're making a lot of money project management huge schedules kind of slow now it's like you got these gunslinger coders who can whip up apps deploy it on the cloud in a couple days in a day and set change very used to start with a word document to powerpoint and now they're starting with you know code well know if they're the most used tool is a mind map for a project instead of a bullet and and I think that's when you start come in a conversation with a customer you follow the threads of where he wants to be and then the end you end up with a map or what it needs to be done but it is a different culture and the beauty of having the traditional thing though is is that you can have you can actually provide structure to discredit creativity so the end result is a quality because you know cowboy is intact it's cowboying intact and I you don't want to have that especially with our customers where we get them and can't we have small and large I mean I have olympic system a small bite active coupons so that that's my spectrum but quality is the most important thing nothing so we have to put quality within relationships we're here with the