>> From the Silicon Angle Media Office, in Boston Massachusetts, it's theCUBE. Now, here's your host Dave Vellante. >> Hi everybody, welcome to this breaking analysis where we try to provide you some insights on theCUBE. My name is Dave Vellante. I'm here with Jim Kobielus who was up today, and Jim we were just off of the VMworld 2019. Big show, lot of energy, lot of announcements. I specifically want to focus on containers and the impact that containers are having on VMware, specifically the broader ecosystem and the industry at large. So, first of all, what was you take on VMworld 2019? >> Well, my take was that VMware is growing fast, and they're investing in the future, which is fairly clearly cloud and native computing on containers with Kubernetes and all that. But really that's the future and so, what VMware is doing is they're making significant bets that containers will rule the roost in cloud computing and application infrastructures going forward. But in fact virtual machines, VMs hypervisors are hotter than ever and that was well established last week by the fact that the core predominate announcement last week was a VMware Tanzu, which is not yet a production solution, but is in a limited preview, which is the new platform for coexistence of containers and vSphere. A container run time embedded in vSphere, so that customers can run containers in a highly-iso workloads, in a highly isolated VM environment. In other words, VMware is saying, we're saying to their customers, "You don't have to migrate away from VMs "until you're good and ready. "You can continue to run whatever containers "you build on vShpere, "but we more than encourage you to continue to run VMs "until you're good and ready "to migrate, if ever." >> All right. So, I want to come back and unpack that a little bit, but does your data, does your analysis, when you're talking to customers and the industry at large, is there any evidence from what you see that containers are hurting VMware's business? >> I don't get any sense that containers are hurting VMware's business. I get the strong sense that containers, they've just of course acquired Pivotal, a very additive to the revenue mix at VMware. And VMware, most of their announcements last week were in fact all around Kubernetes, and containers, and products that are very much for those customers who are going deep down the container road. >> So that was a setup question. >> You've got lots of products for them. >> So that was a setup question. So I have some data on this. >> Go ahead >> Right answer. So, I want to show you this. So, Alex, if you wouldn't mind bringing up that slide. And we shared this with you last week when we were prepping for VMworld. This is data from Enterprise Technology Research ETR, and they have a panel of 4500 end user customers that they go out and do spending surveys with them. So, what this shows is, this is container customers spending on VMware. So, you can see it goes back to early January. Now it's a little deceiving here. You see that big spike, but what it shows it that, A, that big spike is the number of shared customers. So, you really didn't have many customers back then that were doing both containers and VMware that ETR found. But as the N gets bigger, 186, 248, 257, 361, across those 461 customers, those are the shared customers in the green. And you can see that it's kind of a flat line. It's holding very well in the high 30's percent range, which is their sort of proprietary metric. So, there's absolutely no evidence, Jim, that containers, thus far anyway, are hurting VMware's business. Which of course was the narrative, containers are going to kill VMware, no evidence of that. But then why would they acquire Pivotal? Are they concerned about the future, what's your-- >> Well, they're concerned about cross selling their existing customer base who are primarily on V's, fearing the hypervisors, cross selling them on the new world of Kubernetes base products for cloud computing, and so forth and so on. In other words it's all about how do they grow their revenue base? VMware's been around for more than 20 years now. They rule the roost on the hypervisors. Where do they go from here, in terms of their product mix? Well, Kubernetes and beyond that, things like serverless will clearly be in the range of the things that they could add on. Their customers could add on to their existing deploys. I mean, look at Pivotal. Pivotal has a really strong Kubernetes distribution, which of course VMware co-developed with them. Pivotal also has a strong functions as a service backplane, the Pivotal function service for, serverless environments. So, this acquisition of Pivotal very much positions VMware to capitalize on those opportunities to sell those products when that market actually develops. But I see some evidence that virtual machines are going like gang busters in terms of customer deployments. Last week on theCUBE at VMworld, Mark Lohmeyer who's an SVP at a VMware for one of their cloud business unit, said that in the last year, for example, customers who are using a VMware cloud on AWS, VMware grew the customer base by 400% last year, and grew the number of VMs running in VMware, cloud, and AWS by 900%, which would imply that on average each customer more than doubled the number of VMs they're running on that particular cloud service. That means VMs are very much relevant now, and probably will be going forward. And why is that? That's a good question, we can debate that. >> Well, so the naysayers at VMworld in the audience were tweeting that, "Oh, I though we started Pivotal. "We launched Pivotal so that we didn't have to run VMs on, "or run containers on VMs, "so we could run them on bare metal." Are people running containers on virtual machines? >> Well, they are, yes. In fact, there's a broad range of industry initiatives, not just Tanzu at VMware, to do just that. To run containers on VMs. I mean, there is the KubeVirt, open source project over at CNCF, that's been going for a couple years now. But also, Google has Gvisor, Intel has the Kata containers initiative, I believe that there are a few others. Oh yeah, AWS with Firecracker, last year's reinvent. All this would imply, strongly indicate that these large cloud and tech vendors wouldn't be investing heavily into convergence of containers and VMs and hypervisors, if there weren't a strong demand from customers for hybrid environments where they're going to run both stacks as it were in parallel, why? Well, one of the strong advantages of VMs is workload isolation at the hardware level, which is something that typically container run times don't offer. For example, the workload isolation seems to be one of the strong features that VMware's touting for Tanzu going forward. >> So, VMware is--the centerpiece of VMware's strategy is obviously multicloud, Kubernetes as a lynch pin to enable running applications on different platforms. Will, in your opinion, and of course VMware is hard core enterprise, right? Will VMware, two things, will they be able to attract the developers, number one. And number two, will those developers build on top of VMware's platform or are they going to look to their cloud? >> That's a very important question. Last week at VMworld, I didn't get a sense that VMware has a strong developer story. I think that's a really open issue going forward for them. Why would a developer turn to VMware as their core solution provider when they don't offer a strong workbench for building these hybridized VM, /container/serverless applications that seem to be springing up all over? AWS and Microsoft and Google are much stronger in that area with their respective portfolios. >> So, I guess the obvious answer there is Pivotal is their answer to the developer quandary. >> Yes. >> And so, let's talk about that. So, Pivotal was struggling. I talked last week in my analysis, you saw the IPO price and then it dipped down, it never made it back up. Essentially the price that VMware paid the public shareholders for Pivotal was about half of it's initial IPO price, so, okay. So, the stock was struggling, the company didn't have the kind of momentum that, I think, that it wanted, so VMware picks it up. Can VMware fold in Pivotal, and use its go-to-market, and its largess to really prop up Pivotal and make it a leader? >> Well, possibly because Cloud Foundry, Pivotal Cloud Foundry could be the lynch pin of VMware's emerging developer story, if they position in that and really invest in the product in that regard. So yeah, in other words this could very much make VMware a go-to-vendor for the developers who are building the new generation of applications that present serverless functional interfaces, but will have containers under the cover, but also have VMs under the cover providing strong workload isolation in a multi-tenant environment. That would be the promise. >> Now, a couple things. You mentioned Microsoft, of course as you're in the clouding, and Google. The ETR data that I dug into when I wanted to understand, better understand multicloud. Who's got the multicloud momentum? Well, guess who has the most multicloud momentum? It's the cloud guys. Now, AWS doesn't specifically say they participate in multicloud. Certainly their marketing suggest that multicloud is for somebody else, that really they want to have uni-cloud. Whereas Google, and as you're kind of embracing multicloud and Kubernetes specifically, now of course AWS has a Kubernetes offering, but I suspect it's not something that they want to promote hard in the market place because it makes it easier for people to get off of AWS. Your thoughts on multicloud generally, but specifically Kubernetes, and containers as it relates to the big cloud providers. >> Yeah, well my thoughts on multicloud generally is that multicloud is the strategy of the second tier cloud vendors, obviously. If they can't dominate the entire space, at least they can maintain a strong, provide a strong connective tissue for the clouds that actually are deployed in their customer's environments. So, in other words, the Ciscos of the world, the VMwares of the world, IBM. In other words, these are not among the top tier of the public cloud players, hence where do they go to remain relevant? Well, they provide the connective tissue, and they provide the virtualized networking backbones, and they provide the AI ops that enables end-to-end automated monitoring management of the entire mesh. The whole notion of a mesh architecture is something that grew up with IBM and Google for lots of reasons, especially due to the fact that they themselves, as vendors, didn't dominate the public cloud. >> Well, so I agree with you. The only issue I would take is I think Microsoft is a leader in public cloud, but because it has a big On-Prem presence, it's in its best interest to push containers and Kubernetes, and so forth. But you're right about the others. Cisco doesn't have a public cloud, VMware doesn't have a public cloud, IBM has a public cloud but it's really small market share, and so it's in those companies, and Google is behind, but it's in those companies best interest really to promote multicloud, try to use it as a bull work against AWS, who's got an obviously awesome market momentum. The other thing that's interesting in the ETR data when I poke in there, it seems like there are more people looking at Google. Now maybe that's 'cause they have such strong strength in data and analytics, maybe it's 'cause they're looking for a hedge on AWS, but the spending data suggests that more and more people are kicking the tires, and more than kicking the tires on Google. Who of course is obviously behind Kubernetes and that container movement, and open source, your thoughts? >> Yeah, well, many ways, you have to think, that Google has developed the key pieces of the new stack for application development in the multicloud. Clearly they developed Kubernetes, its open source, and also they developed TensorFlow open sources, it's the predominant AI workbench essentially for the new generation of AI driven applications, which is everything. But also, if you look at Google developed Node JS for web applications and so forth. So really, Google now is the go-to-vendor for the new generation of open source application development, and increasingly DevOps in a multicloud environment, running over Istio meshes and so forth. So, I think that's, so, look at one of the announcements last weekend at VMworld. VMware and NVIDIA, their announcement of their collaboration, their joint offering to enable AI workloads, training workloads to run in GPUs in an optimal high performance fashion within a distributive of VMware cloud end-to-end. So really, I think VMware recognizes that the new workloads in the multicloud are predominately, increasingly AI workloads. And in order to, as the market goes towards those kinds of workloads, VMware very much recognizes they need to have a strong developer play, and they do with NVIDIA in a sense. Very much so because NVIDIA with the rapid framework and so forth, and NVIDIA being the predominant GPU vendor, very much is a very strategic partner for VMware as they're going forward, as they hope to line up the AI developers. But Google still is the vendor to beat as regards to AI developers of the world, in that regard, so-- >> So we're entering a world we sometimes call the post-virtual machine world. John Furrier is kind of tongue and cheek on a play on web tudauto. He calls it cloud tudauto, which is a world of multiple clouds. As I've said many times, I'm not sure multicloud is necessarily a coherent strategy yet as opposed to sort of a multi-vendor situation, Shadow IT, >> Yes. >> Lines on business, et cetera. But Jim, thanks very much-- >> Sure. >> For coming on and breaking down the container market, and VMworld 2019. It was great to see you. >> Likewise. >> All right, thank you for watching everybody. This is Dave Vellante with Jim Kobielus. We'll see you next time on theCUBE. (upbeat music)

>> Narrator: Live from New Orleans, it's theCube, covering VeeamON 2017. Brought to you by Veeam. >> We're back at VeeamON 2017 in New Orleans. Andrew Christensen is here. He's a senior systems engineer with the Global Data Centres Study Group, higher ed organization. Andrew, welcome to theCube, thanks for coming on. >> Thank you very much for having me. >> You're welcome. So interesting name, tell us about the organization. >> Study Group, Study Group began life as a small education college in the UK, about 15 years ago. Over the time, we've grown to a global organization. We take on about 85,000 students a year, from close on 160 countries. We have 85 sites around the world, very much a global footprint, very thin corporate terms and in IT terms. >> Okay, is this your first VeeamOn? >> No, it's not. I came to the previous one in Las Vegas, and that experience meant that I had to come back to this one in New Orleans. >> Really, why? Tell us about that. >> It's a great experience. They know how to do their events very well. The information is first class, and as a Veeam product user the information and the experience, in the room available to you is wonderful. >> How long have you been a Veeam customer? How did you... Tell us about your journey. >> Well, our journey, we were very much in the legacy ballpark of backups. We had some unnamed products that we were using, which were very old school in their thinking and how they did things. We realized quickly that the amount of data that we took on was growing and it was going to outpace our capacity for backup, and the simplicity and complexity was growing too fast for us, couldn't manage it. It wasn't going to be feasible, went to market to start looking for a better solution, and Veeam was top of the list. >> So, you mentioned data growth as one of the catalysts for, which created more problems, obviously for your backup, made it harder meet, maybe it was backup windows at the time, or RPO and RTO. Did your decision to change your backup also coincide with an increase in virtualization? And did that have a ripple effect? Can you explain, we've been talking about that all week, but I'd like to validate it with a practitioner. >> No, spot on there. We virtualized quite early on in the grand scheme of things. We went to VMware very quickly, we're now running Hypervisor with a vShpere 5.5 environment. Now that was a well good, I don't think the practices that we took in and a lot of the infrastructure alongside that kept up with that, backups is one of those things. And when we started looking at what we needed, to really work with our environment, get the most out of our virtualization project, we needed to do something very quickly and backups is a key feature. >> Andrew, as a global organization, how does Cloud fit into your architecture, what you're doing, maybe you can kind of sketch out a little bit for... So we know where Cloud fits. >> Our solution, although quite simple in principle, it's never simple, let's face it, anything IT, especially in the engineering scope guide, never simple. >> Dave: This keeps getting more complicated. >> Exactly right, and you know for better or worse, that's how we do these things, especially when it comes to a Cloud scenario. You add a little bit of complexity, but often it pans out to be worthwhile, especially in dollar value. Our solution takes local backups in a hub and spoke concept, our data center as being the hub, and our branch starts being the spoke, consolidate the data from all the sites, hold a decent amount of data as backup onsite, and then everything else will actually ship out to the Cloud, and that being AWS in Glacier storage. Now that came about mostly because our core data center is in Las Vegas, that we have no hands on site. So we didn't really have the option of a manual tape service, a paid for service, very expensive. So we needed to shift away from your old school, typical tape service environment. Having good bandwidth in Las Vegas, and availability to get to the AWS readings, made it a good solution for us. Our tool to do that, already in place with Veeam, made it very simple. >> So what are you... So your target is Glacier? >> Correct, yes. So long term retention, and legal retention especially, we push everything out to Glacier to fill that need for us. >> And okay, so that's the last thing, maybe I missed it, there's something in between obviously, if you need to do a recovery right? >> Correct, so we keep some local storage as well, depending on the environment and the data itself, we'll keep it locally on site in our racks for a certain amount of time, maybe a year, maybe two years depending on some of the data. Everything else has a duplicate and a long term, goes out to AWS. >> Alright, there were a couple of announcements this week about AWS and also about Glacier. What did you hear? What interests you? >> Well, I mean the V10 announcement and its interaction with AWS, hooking in your AWS accounts to s3 Glacier and what not, very promising, very promising, very excited. I'm going to hit up my account manager for a trial on that very soon, cuz that could simplify our process, and I imagine a lot of other people with hybrid cloud scenarios will leverage it as well. For those people that have work loads in AWS, the agentless backup function, very promising. It's a logical step I think, in the partnership that's built that is very logical as well, it's going to help a lot of people. >> What is driving, in your industry, the availability needs and how has that evolved over the last couple of years? >> Well, it's a catch 22, for us data security is paramount, a student come to us, they sign up for a course, in a lot of cases it'll be an international student. Now that's a well and good, but when we look at the data that we take from that student to get them into a course, it's essentially a how to kit for data theft and identity theft. So we need to protect our data very well, you know, we've got a lot of personal information, we've got passport photos, we've got visa replications, the whole shabang. So being able to make sure that A, it's available to the people that need it, so that they can get them into their courses, get them learning stuff, which is what our ideal is, and making sure it's secure, no matter where we put it, backups, availability, all that sort of stuff, needs to be secure. So a solution then at all has to incorporate that as easily as possible. >> Bill Philbin was asking the audience this morning, have you ever had to do a recovery? He said about a third of the audience's hands went up, presuming your hand was up. >> Yes we have. We've both tested, and we actually had incidents where we've had malware come to the business in certain aspects and having a good recovery point on site, and a quick easy interface, the single pane of glass, to coin a pro word of the moment, was very useful. You know, stops the heart a little bit when it does happen, but after you go through the hoops, and you understand what you're doing with the product, it really does give you a sense of security. >> You know, large organizations, big banks and the money business for example, they have very explicit disaster recovery plans, they might have three site data centers, they get gobs of money they can throw at this stuff. Higher education tends to be, a little tighter with the budget, fair to say, but also a lot of smaller and mid size organizations, I think it's fair to put you in that category, oftentimes had very little, if any, sometimes data... Disaster recovery, and what they've done is when they re-architected the backup, they said, you know we can kill two birds with one stone. And so to bring those two worlds together. Is that what you did? And how would you describe it? >> I'd call our solution a bit of a hybrid, in line with the backup scenario that we do have, both offsite and hybrid cloud scenario, we also do a DR solution internally. So we have a data center in Las Vegas, we also have one in Sydney. So we do take some DR concepts down to Sydney to hold on to that, very limited. Your bang for buck with DR, it's very hard to justify when you go to manage it and say, well you know, the cost of failure needs to be calculated here. It's very difficult to make that argument successfully. So having a tool, that we already used, that could also do that, very helpful in the first place. You're right in that we are an SMB in the traditional sense and the feature set that does come with Veeam, is quite good for that I think. We're quite OPIC shy, as a tradition, so being able to put a little bit of infrastructure in place, and sort of pre-purchase these things, get the cost out of the way, with CapEx, helped us a lot. So, no more licensing involved, Veeam took care of it in house already, and a little bit of expenditure took that solution very well for us. >> Enter one of the interesting discussions we've seen in the last few years when we talk in the education realm is the importance of data and how can you leverage that data? Of course, we talked about some of the security aspects. How has the role of data changed in your world? >> It's a bit of a catch 22. It's recognized that we do take on a lot of data. How we use that, it's an ongoing question. I mean people have put a lot of BA type roles in place to try and leverage that a bit further, get some use out of it. We have this data, it should be an asset to us. It's very difficult to do successfully I think. People don't really know the questions to ask, of their data. You know, maybe there's a bit of thought leadership or some extra disruptive technology that should come along and help that out a little bit. I think in the near future, it will be a very big question there to be answered and a lot of demands can be met by that. >> How about your students? You know, there's got to be, from all the devices, what kind of pressures does that put on the IT role? >> Well, it's substantial, I mean in our particular role, especially in the UK and Europe, we actually house our students. So, everything from living aspects to education whatnot, everything is handled by us. So their safekeeping, or their lifestyle, their quality of life and such. Now, in today's modern age, you now have two iPads, you have a Chromebook, you have an iPhone and whatnot, all that needs to be handled by us in a secure fashion. The data that comes from that, the content that gets delivered to the students, both privately and during their education, it needs to be both readily available and useful. Making it available to the students, as well as protecting them I suppose, in a secure fashion, making sure that the data that they hand out over these networks and use is safe. That's a big concern to us. >> So a lot of talk this week about ransomware of course. A guy in your position, talk about make the heart stop a little bit. How do you look at that problem? What solutions do you have? And what would you like to see the industry do? >> It's a difficult question. There's no easy answer to that at all. Recently we've heard a lot about machine learning and predictive analytics and whatnot. We use some products that do real time assessment of file stores, file usage, and whatnot, and predict excess usage I suppose. All of a sudden you can start seeing if there are extra files being encrypted very quickly. You can take action based on that, so these are a clear sign of ransomware. That said, we educate a lot of young people, we educate a lot of young people in IT as well. We have identified that a key threat is often going to be from internal. How we protect against that has really shifted our mindset a fair bit. A lot more legislation is coming in, in the UK especially, starting to come in in the US and Austral-Asia, and the requirement for that is only going to grow. It's a challenge that I can't really say in the future how we're going to predict it and act on it, but it is always going to be in front of mind. >> Do you think you could use your backup data, because essentially you're pushing change data over the network, you know, constantly, or at least multiple times per day I presume, right. Do you have the tooling to monitor that activity and identify anomalous behavior, where maybe you're pushing more data, or you're seeing more encrypted data going at a particular time. Do the tools exist to do that today? >> To an extent yes, getting them all together, to be viewable and visible data for your technician, your engineers and whatnot is a bit of a challenge I think. Anti-virus and security software is out there that can do this for you. Also, the data analytics tools, they're out there at the moment. VeeamONE is actually a useful tool on that front, can help us out a lot there. Making sure that the person responsible or looking for that trend knows where to go and has a good single pane of glass per say to actually identify issues. I think that's the key. >> Could you... Another, I've been thinking about sort of how to solve this problem. Could you put like phantom files out there in the network? Phantom high value files like, student credit card list. >> Andrew: You mean the honey pot scenario? >> Yeah use it as a honeypot, yeah. >> Absolutely, I mean a lot of the more enterprise size corporations are doing this, and you can actually leverage that, take them on as a service if you need to. There are companies out there that will offer this service to you. It is quite expensive for what it is, and yet when we calculate the cost of failure, I think the expense might be justified. >> Well like you said, it's hard. Your CapEx, CapEx phobic, I forget what you said, but I'll say CapEx phobic, challenged. Okay, we're out of time so the last question. Takeaways from VeeamON 2017, things that you're excited about? >> Once again, the AWS announcements in v10 and the partnerships coming from that, very exciting, very exciting. Looking forward to that, to being able to test it a little bit. The feature set that keeps growing. When we started out in 8.5, then 8.5 went on to 9.5, and the growth from 8.5 to 995 and now 10 on the horizon, it's massive. If they continue this growth it's going to be one of the best products out there. I'm very happy about that. >> Alright Andrew, thanks very much. Appreciate it. >> Thanks very much for having me. >> You're welcome. Alright keep it right there everybody, Stu and I will be back with our next guest, right after this short break. This is theCUBE, we're live from VeeamON in New Orleans.

>> Narrator: Congratulations, Reggie Jackson. >> Certainly in the moment, is about what are youth is and who we are today as a country, as a universe. You are CUBE alumni. Live from San Francisco, it's theCUBE covering Oracle OpenWorld 2016. Brought to you by Oracle now here's your host John Furrier and Peter Burris. >> Hey welcome back everyone we're live here in San Francisco at Oracle OpenWorld. This is SiliconANGLE Media's flagship program, theCUBE, where we go out to the events and extract the signal from noise. I'm John Furrier, co-CEO of SiliconANGLE Media, with Peter Burris, general manager at Wikibon research, and Head of Research at SiliconANGLE Media. Our next guest is CUBE alumni, Chuck Hollis, Senior Vice-President of Infrastructure at cloud and storage. Welcome back to theCUBE. >> It's always a pleasure. I always have a good time when I'm here. >> So the best part of having you on is you've seen the movie before, you've lived it on other teams, you're now at Oracle, what, two and a half years? >> Chuck: One year at Oracle. >> Almost two years, so -- >> Chuck: I'm not dead yet. >> I don't think you -- >> What's that mean? Let's explore that. When will you be dead? >> You're looking good right now. You actually look like you been working out. >> A little tan, like you, like you, you know? >> So is it the country club here at Oracle? >> No, no, no. >> Chairs spinning at five o' clock? >> I'm up early and to bed late and weekends included, right? >> Well, certainly, Dave Donatelli's here, and a team of people really ramping up, essentially engineered systems, AKA hardware engineered in with the software. >> Both, in the cloud, and on premises, right? >> In the cloud and on premises. Clear, end-to-end oracle solution, which will, one, be optimized to run on Oracle, or -- >> Among other things, yes. >> So give us the update; what's the new announcements today? >> So Larry from onstage was very proud to talk about our new gen-two infrastructures of service, and our belief is there's a gap in the market. We have people doing public cloud, right, which, basically, is Startover, Azure, AWS. No chance of an on-prem solution. We have the private cloud guys, basically a Vmware shop, infrastructure only, no pass no nothing, and certainly not a lot of choices if you want to go to public cloud. We think that Oracle's doing a good job of creating that third option. Here's a combined, integrated strategy, on-premises and in the cloud, same technology, same set of capabilities aimed at enterprise applications that basically works the way enterprise IT needs it to work. So this next-gen two infrastructures of service is kind of the first peak of this massive investment we'd be making making entirely new infrastructure cloud that meets the needs of enterprise IT. >> So is this a reboot, or is this an extension of where you guys were? Some were, analysts were saying, not us, but -- >> Chuck: Ah, you'd never say that. >> Well, they said, I was using their words. Holger at Constellation said it's a reboot of their other infrastructure service, so he didn't want to say it failed, implied a transition -- >> Well, I wouldn't say it failed, it's more like a leapfrog. >> John: Explain. >> Oracle got into this business software as service, rather than standalone Sass packages, they worked on integrating everything tightly together, unifying the company. That was followed by platform as a service, aimed at 9,000,000 Java developers around the planet and everything they do. Infrastructure as a service was just made separately about a year ago. We got into the market, we learned a lot of things, but we also realized that we could actually start over again. We look at the engineering team, it's up to about 400 people who are building this next-gen IS, are all ex-Amazon, all ex-Azure. This is not their first infrastructure cloud, and because they were handed a blank piece of paper and said, "you can start over again," it actually is pretty exciting what they've done architecturally. >> So there's got to be something Oracle's doing that's distinct, so just for any number of reasons. Oracle has a lot of existing customers that're running heavy-duty enterprise applications. >> Chuck: Yeah, the tough stuff. >> The tough stuff, so talk to us about how the tough stuff is going to end up in the cloud. >> I think you bring up a good point. One way of looking at it now is that the easy stuff is gone. Desktop has gone to Office 365, and those kids from college are playing with AWS, and maybe I've got some generic workload consolidation sitting in the back room with a private cloud. What about those hairy applications, the demanding databases, in-memory analytics, the big to-do workloads? Where are they going to go? Well, what you see with out infrastructure-to-service is that we're actually providing two capabilities. We can run all of those through our cloud using those exact same technologies that we're running on-premises. You're probably familiar with products like Exadata. Well, you can buy an Exadata. You can use the Exadata in the Oracle public cloud, or you can consume it as a cloud machine, something we call "cloud-to-customer" on premises. And I think that's an important differentiation. A lot of this market is focused on consolidating generic workloads. That's more moderately interesting to us. To your point, what we're really interested are the big, hairy ones. As I joke, these are the ones that have vice-presidents attached to them, right? Yeah, the ones that people really care about. >> Peter: And typically eight figures. >> Depends on the size of the company. Like, Mark was interviewing a lot of people, a lot of customers this morning, and some of them were not large shops. >> But even those partners that're serving those customers often have eight figures associated with their investment in Oracle as well, so it cascades out through the entire industry. But it's also, I want to ask you this, Chuck. It's also not always the applications that have to be brought forward, but we were talking about ageism and it's always better if it's new, but there's a lot of skills in the industry. It's not a question of we want to bring them along. That's still where a lot of the value's being created, so talk about how this third way is going to make not only existing customers and existing apps, but also existing skill sets more rapidly develop inside and experience the expertise with these new technologies. >> I think that's a very good important because any IT organization's only as good as their skill set portfolio. I think anybody who's worked with IT understands that. By the same token, look at the portfolio. Walk into an average IT shop. Here's the stuff that was built decades ago. Here's the stuff that's kind of modern client-server three-tier. Here's the new stuffs that were using containers and microservices. If you're going to be an enterprise cloud provider to that IT shop, you got to support the old stuff, you got to support the kind of current stuff, and you definitely got to give a little pathway to the new stuff, and give me the ability to evolve that portfolio, and peoples' skills forward at the same time. This is what my big arguments that most public cloud providers is public cloud is easy. Just blow everything up and start over in our cloud. Well, as attractive as that might sound, that may not just be a financial reality for the majority of IT organizations. >> Yeah, operationally, too, they can't run their business. So so much for the container stuff. Ravello was the new container cloud server. >> Two things. So we have Ravello and we have a new container cloud service. So we'll put that on Ravello. So we all know hypervisors virtualize hardware. Ravello virtualizes hypervisors. What it does is it comes in to a VC or KVM environment, lifts it up, strips off the hypervisor, encapsulates the network to storage and the compute, then you can actually choose your cloud. You want to run it on AWS, you want to run it on Google, or do you want to run on the Oracle cloud? And it'll show you the prices for each, and you can shop there, so the reason we think that's interesting is nobody really wants to get locked into anybody's cloud, and if we can give people workload portability through VMs, that's great. Well, that's for stuff that we wrapped with virtualization. What about the new containerization? Well, trick with containers is container management, and today, if you want to do container management, you got to graft some open-source stuff and basically build your own. What Oracle has done is created and end-to-end container management service that says, alright, if you really would like to build your own, have at it, but in the meantime, here's something that kind of works. We can do that on-premises, on our cloud machines. We can do this in public Oracle clouds. We have this fast-burning desire to do this on other people's clouds just as soon as we get our own stuff sorted out. But it's the same thing. If I'm developing an application, Oracle has to go compete for that infrastructure business. It can't just say, well, you're an Oracle customer, you have go on all our stuff. And it would be the rare IT leader that would accept lock-in at the cloud level. >> There's no reason to do it today. There's absolutely no reason to do that. >> They may choose to go with us. >> But even if they choose to go with you, they want to do so in a way that doesn't force the lock-in. >> We all flew here, did you pay attention to the flight attendant when she showed where the exit rows are and everything? You may not plan on using that, but it's nice to know they're there. >> And it's nice for you to know where they are, too. Because you guys have learned that to stay at the vanguard of the industry, you have to be always aware of who's about to eat your lunch. >> And I think the Oracle database did a good job back in the day, and still to this day of being affordable. You can invest in the database, it can go wherever you want. And we're trying to do the same thing for that application ecosystem. And we're trying to involve three categories. The old, legacy stuff, the somewhat contemporary stuff, and the emerging containers, microservices-based stuff. >> So talk about your partners, because I know that something that we've been talking about on theCUBE a fair amount is -- >> Partners, we got lots of them. Infrastructure partners in particular? >> John: Well, Centure has an announcement. >> There's a disco party going on behind us here. >> There sure is, unfortunately theCUBE sign's in the way. Otherwise I could participate in it. >> I can see. >> But come back to this notion of a lot of the value that has always been created in the Oracle ecosystems has been created in partners. I have this theory, we have this theory at Wikibon that ultimately there will be more examples of college suppliers being created by your customers and your partners than by individual like AWS and Oracle and Microsoft. >> So Oracle's always had a very rich partner ecosystem. Applications, development, to infrastructure. And the exciting thing that I'm seeing with out partners is like they're seeing opportunity. So let's say that you have this cool vertical application. Five years ago your were selling on-prem hardware with all that entailed. Now you can run the in the Oracle cloud and simply sell a subscription service to your customers. You've evolved your business model forward. Folks that we partner with do application development. They have a platform now for application integration where they have vastly more capablites as opposed to the old school, got to go build it, got to go assemble it, etc, etc. The people who're feeling a little threatened by all of this not surprisingly, are the box-shifters, right? They're guys who just move hardware from A to B. And we're working with them, it's like there's still opportunity there. You just have to look up the stack a little bit. Their skills are still valid, they're just not assembling hardware. >> And you got a Centure announced that the business groups taking the infrastructure-to-service products out, that press release went out today. We covered that. >> I didn't know if that went out yet, but thanks for confirming. >> Oh, maybe that was embargoed, oops. >> Roll back, roll back, roll back. >> Put that back in the model, live TV. >> Centure, all these guys, they want to provide more value to their clients, and 10 years ago, that was stitching together hardware. Now it's about teaching them how to intelligently consume cloud. And I think what these partners like about the Oracle offering is designed to work the way enterprise IT works. It's not this, hey, here's our model, take it or leave it. >> One more thought on this, that there's a difference between the traditional, as you said, three-tier infrastructure, client-server innovation center, and some of the new analytic stuff that's on the horizon. Talk about how you guys are specifically focusing on some of the new analytics applications that are on the horizon coming into the cloud and how you intend to make the two worlds work better together. >> So I think that's great. Old-school analytics we used to call data warehousing, and business intelligence. That hasn't gone away. If you look back five years, it was all about big data, and mining values. Now we're moving to a phase of real-time decision making. Welcome to in-memory analytics things as fast as they can be. And once you figure out how to monetize data, it's addictive, you just want to do it faster and faster and faster and faster. Also, we're talking about relatively exotic infrastructure, right? Multi-terabyte memory spaces, shared Numa architectures. Pretty hard to go down to Best Buy and find the hardware for that and go build that, so as people start pushing the envelope, they're looking more for on-prem engineered solutions or more often, what can you do for me in the cloud. Interestingly enough, we talked about this gen-2 infrastructure service. One of the things it's very good at is having enormous memory spaces and very fast to compute, this kind of bare-metal compute we're seeing in real-time analytics. I think the other factor on this is internet of things, forgive me for playing buzzword bingo, the easy part is gathering the data. The real-time decisioning and actioning on it, that's heavy computing. >> Peter: And delivery with control. >> Yeah, delivering with control. You've got 10 million gas meters. Okay, how do I reason over that in real time, right? That kind of thing. >> So I had to ask you, we've been hearing about this spark-based exadata, what it's all about. What's that all about, is it a new product? >> Another member in the family. So you guys probably know the headlines on the spark chip has a couple of unique talents. It's got 32 encryption processors, so it can encrypt in real time, no delay. Has this ability to take queries and run them in silicon. It also has the ability to compress and decompress memory for in-memory analytics. So the exadata is basically a purpose-built, engineered system for database, so by taking our processor technology and putting it in this purpose-built machine, it gets a whole bunch of new talents for no more money because again, that's part of our differentiation. Things I've learned since I've been a year at Oracle is it's nice to have your own chips. Sometimes they come in very very handy as you build differentiated solutions, so I think exadata customers will have a new option, and I'm sure in the fullness of time it'll be available in our public cloud, it'll be available as a cloud -- >> But this brings up a good point, though. Intel was on stage yesterday, gave the same old corporate pitch, didn't really learn anything new there. >> Chuck: They had nice slides, though. >> That Ian Bryant's awesome. But the thing is, and Larry said that I find compelling is now that I can get your thoughts on it because it kind of comes back to the hyperconversion trend, which is he said, "we are going to provide it faster and cheaper." So he's clearly looking at infrastructures, bring this thing down, cost down to zero if possible, while performance he wants to bring up to a whole other level. How are you guys going to do that, what's the strategy? >> I think Larry and Oracle have the ability to invest like crazy. Don't forget, we build our own hardware. We build our own servers. We build our own data center fabrics. We don't have to buy this stuff from anybody. We build it, so Larry and the team, a couple years ago set this team up with a mission to go compete. Now if you've looked at Amazon, AWS margins, you know there's a lot of fat there. They're also running on really old stuff, the basic architecture was designed 10, 11 years ago. I don't want to throw aspersions around, but you could call it legacy cloud, right? >> John: What do you call it? >> Legacy cloud, anything 10 years or older, it's got to be legacy. So there's a clear opportunity to go build something new. That being said, this is a big boy's game. This is not let's round up a couple million dollars of VC and build a new cloud. So to look at the aggregate spend Oracle's putting behind this infrastructure -- >> Well, you just said the big boys are public, like Rackspace, they couldn't make it, right? So you're starting to see, they were a little, kind of a big boy, I mean... >> They're reasonable out there. But look at it this way, Oracle's got a national software franchise. Much like Microsoft does bring people on. We build our own hardware. We build our own data centers. We actually can become a vertical supplier in this and the argument is efficiency is result. >> So we're going to see Dave Donatelli on Wednesday after his keynote. I know he's prepping up for that. How's it going with Dave, what's going on with Dave? >> Dave's having a good time. I mean, we all came to Oracle on the same premise, is that the industry was rotating, and I think we've seen that in some of the analyst numbers, less and less on-premise spend, more and more spent in the cloud. >> A lot of new hires coming in from an industry that we know on Oracle, pre-existing players. >> And if you asked 'em five years ago if they ever would end up working for Oracle, they might have not said so. >> John: You're being polite. They'd say, "no friggin' way." >> Go through your mind and think what are the traditional on-prem IT vendors that transition their customers to the cloud? It would be a very short list. >> So you buy the whole cloud-broker Dell technologies? >> They don't have a cloud. I think customers want to consume cloud. >> Bing cloud air network now has 4,000 cloud providers. >> All slightly different, all slightly different. >> All working together with hypervisor. >> It's like a big portfolio management company. >> Is that a chess game, or is that just hail Mary? >> Vshpere was designed for the data centers. EMC bombed 10 years ago. Our tech's designed for the data center, and it wasn't designed for a world where people don't want data centers anymore. So I think VM ware's very challenged because their technology and business model is standing up viable public cloud options. The last big one was, oh no, we can't do it. We'll go to IBM. What's your cloud strategy, VM ware? Call IBM? That's kind of a rough deal on a sales call. >> Well, if you put it in the context of a V-cloud air network, you could argue that they're giving up the cloud. Basically, VM world, they said, "we're done with the cloud." they yielded -- >> Peter: I don't think they said that, John. >> They yielded that they weren't going to have their own cloud. >> Absolutely they yielded. >> They yielded on not having their own cloud. >> Okay, they yielded on their own cloud, that's what I meant. >> Nothing more than kind of a boutique offering, and certainly there's a market for small regional service providers around the world. No argument there. And there's a natural tendency, but as I look at people going to cloud, the sticking point isn't the hypervisor, the sticking point is the database and the applications, the middleware. This is something Microsoft has done brilliantly with Azure. >> Larry pointed out that's Ernie's call. Microsoft's well ahead of Oracle on migrating their install base half into their cloud. >> And that's what you guys have to try to figure out how to do as well. >> We're well along the way. But the point is that without that franchise, that's a tough road to hoe, right? The infrastructure guys maybe, the applications guys are the ones you want to talk to. >> Peter said, I'd like to get your thoughts on a comment Peter made on our intro with Matt Eastwood from IDC, everything's on the table. Ecosystems, channel partners, >> Chuck: And we're shaking the table apart. >> So if you have the gravity, an Oracle face of the world that's a suite, which I think is a little bit orthogonal to where the cloud is, but I get the language of Oracle the suite. Is it gravity around the suite, not a winner-take-all? >> You got to be able to pick off pieces and they have to stand on their own. >> You could build a ecosystem around that, and open ecosystem, so that means a new lock-in spec is stickyness, or pure performance, or not, am I getting that right? >> I think Oracle's going to try to play on both sides. If you appreciate the value of the suite, the IAS working with a pass, working with a Sass, great, we have all those pieces; pick and choose. Larry made it pretty clear. He wanted to go head-to-head on iops, memory and core, and dollars per whatever. Oracle intends to feed on that as well, so it'll be interesting to see how this plays out. Nothing like a low price to get an IT buyer -- >> Well he said, and the word he called this is interesting, he was overselling in my opinion, I've heard Larry. >> Chuck: Larry? I can't imagine he'd do that. >> Larry was overselling on their earnings call, but I don't think the analysts understand, they don't see the long game. You look down the 20-mile stare, it just hasn't even started for Oracle. >> Larry is a master at the long game in ways that I'm just now starting to appreciate. >> Well, let's be honest. What is the most sticky thing in the industry? Your applications, that's the stickiest thing in the industry. After that, the developer ecosystem and then you get down to the hypervisor, and you get down to the first -- >> Chuck: And then you get to the wires that connect it together and all that kind of stuff. >> But the most sticky thing is the businesses are still run around some of these floor applications. >> Well, that's why I brought up the suite angle, because I think that the developer angle is sticky because agility has proven that not everyone can build a killer app, so for instance, with an HCM there's probably some feature of HCM that is sub-par relative to some genius entrepreneur that eats, breathes that one feature, has an app, that could be integrated into that feature. >> I think that's your point, and with the platform-as-a-service offering, oh, you want to add it, do something different, great. Yes, exactly. >> It's all a continuous development, continuous integration, but that continuity still is close to the application. >> Yeah, ecosystem to me is, I've heard talks about what the developers' market, go-to-market strategy is. If that's in place, Oracle could have a very robust -- >> We're seeing the both the same thing on the hardware and the software. So hardware, build-your-own, is starting to get out of bow, ya know? Less and less popular buying servers and storage and knitting them together. A lot of guys still buy into that, but that market's going down. I think you're going to see the same thing with software and applications. Rather than starting with a blank piece of paper, where are the big chunks of enterprise functionality that I can grab out of the box and build the thing -- >> Reused, preexisting applications. >> Yes, yes! >> Everybody's talking about business capabilities, right? And the idea is that this capability is the things that I have to do to perform the activities to fit my business needs. And those activities are people, and increasingly, software. And being able to grab those capabilites and pick parts of them from the industry and weave them together quickly, continuously sustained, the match with the marketplace, to your point -- >> Well, we're going to have Juan Luzon next, and we're going to go deep on this, but I think -- >> That was a great guy. >> The API economy, if anything, showed us one, security is FUBARed and needs to be fixed fast, and the encryption on a chip thing has been downplayed. I don't know why Fowler's not getting more airtime on that. That's a really huge thing, but the API economy has proven that this ability to pull stuff that someone else has already done, not assembling like a junkyard kind of situation, why build it if someone's got to get it though an API? >> You talk about giving capital management, right? And you know, there's 175 functions, I don't know, some large number of function there, they're fine. I need this one little thing, so I'm just going to extend it, and still do it in such a way that I'm not developing -- >> And a developer who does that becomes a feature in a bigger pie. I mean, he'll make more money, doesn't go out of business, doesn't try to go public. >> So I wanted to share, before we wrapped up, one interesting thought. We all talked about cloud is coming, cloud is coming. I actually got tangible evidence at the beginning of the year that it's here. So a new word was given to me, cloud quotas. Cloud quotas, and it was kind of funny. This is happening mostly in the larger banks. Senior management, executive management, you're a little slow on this cloud thing. Let me help you out. We'll set a strategic objective. Five years from now, how much did we cloud-spend? This year, your cloud quota is 15% between cloud and non-cloud spent. Next year, etc, and I think what we're seeing is that kind of like the gears are starting to rub, between the businesses says, guys, this can't be so hard. Let's get on with it. >> I'm sure your sales guys have cloud quotas, too. >> Different kind of cloud quota. Different kind of cloud quota. >> On that point, 20 years ago, when it became very popular to pay executives on the basis of RONA, return on net assets, it was right about that time that outsourcing got popular. >> Shocking, isn't that, your mess for less, right? >> Sounds like cloud. >> Okay, bottom line, for the folks at home, Oracle's infrastructure stuff that you're involved in is not new, but it's growing now because it didn't have a lot of nurturing. It was always kind of like that back office secret sauce. What's the update, give a quick update. >> We want to give people a strategy for their enterprise applications for cloud. If they want to consume on-prem, great. Engineered system's cloud equivalence. You want to consume off-prem, same set of capabilites and more in our public cloud. You want to consume the public cloud in your data center, that's a cloud machine, and it oughtta be the technology stack and the set of capabilities. Geographical location, the consumption model really doesn't matter, and when we put this in front of large IT shops, and even smaller ones, they're like, this is great. I can build my architecture, I can build my strategy. I don't have to make a cloud decision now, and if I do make one, then I can undo it later. That agility has become very very attractive to people. >> I could invest in options but have a future. >> Chuck Hollis, Senior Vice-President of infrastructure, congratulations, and then Larry Ellison got to the end of his keynote, didn't have a lot of time, but there's a lot of meat on the bone in the keynote, that he kind of, he couldn't hit. Welcome to the cloud, too many product announcements. Welcome to Amazon's world. >> Peter: Seems excited. >> There's a lot of stuff coming down. It was great talking to you guys, thanks for your time. >> Thanks for sharing your insight and the data and the bits here. Here at theCUBE, we're always sending out the packets of content out to the network, live, original content. I'm John for Peter Burris with SiliconANGLE theCUBE. We'll be right back with more live coverage after this short break. >> Hi, I'm John Furrier, the co-founder of