 live from the Moscone Center in San Francisco, California. It's theCUBE at AWS Summit 2015. Okay, welcome back everyone. You're watching theCUBE live in San Francisco. This is our flagship program. We go out to the events and extract the signal from the noise, breaking down all the action here in Moscone North with Amazon Web Services, their technical summit, Andy Jassy, the leader, did the keynote, all the top dogs were out here, customers use cases, studies, huge news. Again, in the cadence of Amazon Web Services, a slew of new announcements. Here to break it down is the team from SiliconANGLE Media and Wikibon theCUBE, our guest, David Floyer, our top analyst in the area, and Mark Farley, our distinguished guest on theCUBE. Guys, let's break it down. David, good to see you. Mark and I have been peppering away at the questions of the guests. You've been in the analyst sessions talking to some of their top dogs, executives, and also the customers. So what's your take? What's your walk away? What's your, what's the smell in the air? World domination, are they slowing down? Are they misfiring? Are they winning? What's going on? So my observation is that for the first time ever, they are starting to talk about hybrid clouds as opposed to just one cloud, which is the AWS cloud. And recognizing, perhaps a little grudgingly, but recognizing that they are going to have to work with the enterprises, that not everything is going to go to the cloud. There's going to be some, a lot of it going to the public clouds like AWS. And in that area, they're really streaming ahead. But there are other options, such as platform as a service, such as software as a service. And they are going to have to deal with a hybrid environment. And they're putting out how are they going to manage that? How are they going to design systems so that the customer has some degree of flexibility? So they're admitting basically hybrid cloud is the architecture. Yes. They basically are saying yes. That not everything will be AWS. Yes, so they have to, that's their initial foray into the enterprise. Yeah, absolutely. Aligning with hybrid. Yes. That's what everyone's talking about. So what do you think is tilting that? Is it just more conversations with customers? Is it competition from Microsoft? Or what do you think is going on? Well, one of it is the competition from Microsoft. Yes, I think Azure has placed itself extremely smartly as a good integration between the data center and the cloud. They really offer a very good service in that area. So Azure has certainly been one of the factors of that. But I think also their own success is another factor. So they've been able to take off the easy pieces onto AWS. Obviously, they've taken off so much of development. They've got such great products in that area. It's almost crazy of anybody to try and replicate on site what they do there. But if they want to go further and take and get a real part of the action of the large enterprise and medium-sized enterprise gold jewels, they're going to have to find a way of migrating stuff slowly and not converting the whole lot to the cloud. Because there's a lot of interaction in workflows within a large organization. You can't just pull a piece out very easily. You've got to take it step by step. And that means managing it as a hybrid cloud for at least a long time and probably in the real world forever. So just moving to the cloud is not the answer. That's their old strategy. Hey, we're better in the cloud. Just go over here. Lower, smaller, faster, cheaper scale. Some management. Yeah. Well, have it every day. I'm for a small startup. I'm for a small company. Great. So management is what I hear you saying. Management is a hard game. That's a managed service between two platforms is extremely difficult. What you're saying is, they knocked down the low-hanging fruit early and now that's a little bit more challenging. It's more challenging than they've got to put. And they will. They will put in good products and good architectures to do that. And they're going to have to. And they'll also realize that Azure is a power out there. That also there are going to be a lot of software as a service organizations. People like Oracle, people like SAP are not going to allow AWS to go and mop up all of their software revenue. And the revenue is in the software. So long-term, their strategy has to be to get into that software layer. And then they're going to bump very strongly with the ISP. So, Dave, I got to ask you, do you think Amazon is putting the kind of pressure on the other guys? Is the heat in the kitchen really, really hot for? Oracle, IBM, HP, EMC, VMware? I mean, how hot are they turning up the competition? And what are those guys, do those guys have to go off their plan? Meaning, does VMware have to do something medieval? Like partner with Google on the network level? Or EMC to transform? I mean, you know what I'm talking about. I'm trying to see your take on what the moves of the other guys are. Absolutely. And two years ago, EMC, Oracle did not have anything to say at all. And they looked at this train coming at them and they were just like a deer in the headlights. Deer in the train headlights, totally, yeah, absolutely. So, but now they're much more comfortable with this, much more comfortable with adding value on top of it, much more comfortable with putting up their own services, which are cloud services, to provide the sort of variety of services and variety of consumption models that the end users want. So, Amazon has absolutely led the way, made the change happen, but when you've got a heavyweight like Microsoft with very deep pockets and you've got heavyweights like IBM and you've got heavyweights like Oracle, they have now- They have muscle. They have muscle. But let me ask you that question. On the muscle piece, now it's a double-edged sword for Amazon. Their agility and greatness, which by the way, I'm a big fan of Amazon, so everyone knows I love what they do. I think they're winning heavily and they're the secretariat wealth head of other horses at this point. But Agile can give the big guys some fast movement too. They have muscle. They might not be moving like on a dime, but can move pretty fast. Look what Microsoft's done recently, look what EMC and VMware are doing. So they could move faster than they were in the past. You know, cheaters are good, but lines are pretty effective as well. Yeah, yeah. And just a good, strong line with a bit of muscle is going to actually go take it. So we expect to see VMware. I mean, who do you expect to see at the table? VMware for short. There's obviously VMware for short. Microsoft is the most interesting. They have, if you look at the Linux versus Microsoft battle, you'd have thought that was over a long time ago and then everything was going to Linux. It's very interesting if you look at the data from Oracle, for example, they have an increasing amount running on Microsoft server. And they are very well positioned for this new data center. They've got good products. They've got databases. They've got the middleware. They've got a complete stack of middleware. They can be incredibly efficient. If they can get the speed game going. Well, yes, that's their challenge. But the new guy on the top of him, I talked to him before he became the, Who's Satya? Who's Joe? Yes. I talked to him beforehand and he was the cloud manager. They know how to move fast. They are moving fast, but I give Microsoft a ton of props. I love what they're doing. Since Bomber's been gone, they've been going all cloud, they've done a lot of open source stuff, donate stuff to open compute. Yeah, we riff on that all the time. However, I have customers telling me directly that Amazon just blows them away performance-wise. Oh, at the moment for doing something... On the cloud. Specifically on the cloud. They have more services. They have more capabilities. Who does, who's they? AWS, AWS, Amazon. Definitely. But if you look for an end-to-end integration of a suite of applications, Microsoft start to look very nice. The system center, they've got the hypervisor, they've got the whole stack. Well, an Office 365. Office, they own Office, yes. All right, so specialism, guys. I want to go around and get your opinion on this. It might be that if you can't win the big game and be in the top three in cloud, you've got to find specialism. So there's plenty of specialty roles on the Information Broker Cloud. That could be a great one for EMC, right? EMC's got a lot of data going on. Their cloud needs big data, but they might not be their storage. So they store data, so that they're going to be in the data game. So it might be a data cloud. I'm speculating. But to delete it on, what do you think? I mean, if you're not... What are the fractures going to be? Yeah, who's the top three at this point in terms of picks, in terms of cloud? The way that I'm thinking about this is that you've got a whole number of things going on all at the same time. You've got Amazon going on. You've got Flash going on. You've got converged infrastructure going on. All of these things are making a big change. So what is the topology, the fundamental topology that you're likely to see? So if you look at the key issues, you're not going to have much faster I.O. Distances are actually more of a problem. So why not have mega data centers by industry as being the way that the systems of the future attack? So by, word, a by industry? By the data that's relevant for that industry. For example, if you look at Supernap out in Las Vegas, they focused on the media industry. So that is a nice model for saying, let's have all the cloud providers in that data center, which they are, and let's have all of the data for that industry there, and all the services there for that industry, and keep that pretty close. So for a number of industries, that will be a good model. All right, so I want to pin you down. Right now, if you had to stack rank the top three cloud players, who are they? There's Amazon, clearly. There's VMware, wannabe. Do you think VMware has a cloud or? No, I mean, they've got enough. It's like pre-NBA, it's like pre-pics. Yeah. All right, so this is not like today, it's like. Yeah, there. The people that, from a, there's people like ServiceNow, there's, which I've got very, very interesting. You put them in the top three. They are very big in terms of potential, but they're coming at it. Well, obviously Google. Microsoft? Microsoft, but the interesting ones, I think of the ServiceNow, the Oracle, the people that are coming in with a very different view of how a cloud should operate. All right, we're getting a lot of music here. You guys okay with the sound? We good? We're good? Okay, we got some music in the background. They're kicking up. Who do you consider the top three cloud players? The top three are Amazon, Microsoft, and Google, right? And it's interesting. Microsoft and Google can print money. Amazon has a harder time printing money. We haven't seen the money yet? We haven't, I'm lounge at the bank. We haven't seen it. We haven't seen it. Seven million billion? We're gonna see it. We're gonna see it soon and it'll be interesting. It's interesting announcement there, isn't it? Yeah. Yeah. Yeah, it's... So, but it doesn't seem to be hurting Amazon at all. You know, that even though Google and Microsoft can invest seemingly as much as they want, they're still pretty far behind. So the argument that says that, you know, Amazon might have a harder time investing, doesn't seem to be holding true. That's a very interesting point. I like your analysis. I think it's right on. I think, I agree with your three picks right there. I would just say that. I agree with the three picks, but then I would say, okay, let's go look at the emerging players. So the game hasn't started yet. It's like sandlot ball at this point. IBM, HP, E-M-C, no, just public. Then it goes specializing. Well, E-M-C was in a public cloud. They had some other stuff, but we'll throw E-M-C in there for data cloud. IBM, VMware, you call VMware and E-M-C the same? Would you put that as one or two? Will E-M-C have a cloud? E-M-C is VMware, isn't it, in terms of stadiums. Okay, good. We'll just call it VMware, VMware. So let's take E-M-C out, VMware, HP, IBM. We already have Microsoft on the top three, Oracle. So if you look at then, the people with muscle, SAP, Oracle, ServiceNow, those types of players. Yeah, those types of players. If you throw a service now and they throw a century link in there. So those are the sort of players that are going to make money in that area from a different direction. Are the telcos screwed in your mind, carriers? I mean, with peering going on, SDN and peering is happening? Well, you know, the telcos have been in the position where they should have made money from this all the way back for 20, 20, 30 years. They seem to be unable to do it, so. They're good accounting seats. The towers are being put up. AT&T makes a lot of money. Absolutely, they're making so much money there. My bill went up, I just started using Periscope on Twitter. But in fact, we should Periscope this right now, you know, analyst moment. I mean, seriously though, I mean, but the service providers are the pipes too. With SDN, we were talking earlier about Google's peering startups are coming out on Interconnect. A lot of innovation going on at the software layer, the really core transit. Really interesting if you say, hey, I can control the transit in and out of private to public clouds, and having a public cloud that has private transit, then isn't that a data center? Well, another way of looking at where the data center is going is to say, what applications are going to come in the future, which are going to be changing, real changing? So what are the new ones coming in? If you look at Oracle, for example, the database market is thinning down. So if you look at what is the potential there, then you're looking at analytics, cognitive computing, areas like that as being what is going to produce money. So what do they need to get going? Let's do a final review. We've got a break, we're getting stuck on time here. Couple key announcements, just run down the news and just get your commentary. EC2 Container Service, a little bit Docker action in there on top of it, full runtime. Elastic File System, want to get your thoughts on threats to things like Oracle, VMware, Lambda, Core, Zero, Admin, Compute Platform, Workspaces, and Aurora, obviously, with the called commercial databases, third of the cost, and obviously machine learning. So first, that's the announcements. Cherry Pick, where's your favorite? I'll start with mine, obviously machine learning, but I'll ask you on the Elastic Storage. An EMC killer? Going off the block, yes, absolutely. So very important, going away from just the old EC2 so model. Does it kill EMC? Absolutely not. EMC is the Teflon Don of storage. I mean, nothing's going to kill these guys. But Elastic File is a big play for their hybrid strategy. They have to have it. They have to have that. They have to have it if they're going to move enterprise apps, migrate enterprise apps, or have them span this boundary. They have to have that file system, and now they do. And what do you think they need to add on to it? Do you think they're, how complete are you? Because you bring to the good point, that's a table stakes requirement for storage, is the management software to be there? What's the other things that you guys say that? They need 10 years. They need 10 years. If data is what you're protecting for your organization and it's your goal. Amazon needs 10 years. You need to develop the confidence of the marketplace that you can look after the data 100% all the time. EMC have earned that. Would you agree that 10 years? Obviously in the data being the key asset, that cloud will be a tough sell. I agree to a point. I think that people give the cloud a little bit more slack. Some of the features that you kind of get for free will, I think, make it easier for people to place their bets. The service has to perform well. It has to have very few outages. But if it does, if it runs for, say, three years, four years, and it's rock solid, it's not going to take 10. It's going to take something less than that. We can debate. We can debate whether it's five or 10. But it's not a couple of years. Another has been tagged on theCUBE. No, no, no. But I think, what's your number? No, I'm saying six. I'm saying six and the reason why, there's a tipping point there. It's 10 for everybody. But it's six to say, you know what? Game's over. The game's already over. I think it's less than six. It's long tail. My number out there can't go over because that's, you know, got $1. My number is going to be four and a half. I'll tell you why. Under five, because Cloud Foundry and OpenStack will fumble along for a little bit longer. People are tooling up. I don't mean that in a negative way. Just inertia, inch by inch, and Cloud Foundry's putting a lot of pressure. Cloud Foundry with IBM, Cloud's trying to HP. If the muscle can get with the brain tissue and move, then you might see pressure for Amazon to make that go faster. So to me, the only thing that's going to make it go less than 10, and around the 4.5 would be pressure on Amazon to specifically build better stuff faster on that one point. It takes time. It will take time. They will sell this service. 20, 19 and a half. They will sell this service at a price that will just blow away all enterprise storage. That's the problem. They're going to be hugely disruptive. Final comments. Wrapping up here, awesome day here in the queue. We had awesome guests from Splunk, the data scientist guy at Amazon, the Wood, guys, Amazon, winning, outlook, feelings, I'll start. I think Amazon's awesome, I think to the gold standard in Cloud, and I think they are the tsunami of innovation that is disrupting and disrupting business models at the same time, innovating and lowering costs. That is an amazing formula for innovation, and the only thing that's going to stop that is the seawall of the incumbents in the market to protect their own lives. How far Amazon will take in the enterprise will be a function of the other players. I've been saying that for two years, I say I keep on that, but Amazon is a force in the enterprise. They're professionalizing their stack. They're adding the table stakes, the low hanging fruit, and adding in the white space. There's still a lot more work to go, but clearly winning, and I see HP really have to step up their game. IBM has got the messaging all tight, I think. They just got to run faster, pedal faster. So, and then Oracle, Oracle I think is going to have a formula, they've got Sun, they've got some integrated systems. I think Oracle might be the wild card here, and I think VMware is the granddaddy of them all, the chess player and Pat Gelsinger. I would look to see some savvy moves by VMware because they have leverage. They've got the virtualization infrastructure, technology, and the incumbent position. Little bit more innovation opportunity than, say, Oracle which just has market power. So, that's my take, guys. What's your take on the outlook on that? My take is it's going to be very interesting to see what Google does. I think Google is at risk for missing the boat on enterprise completely, right? They sort of play around in it. They're not serious. They have this partnership with VMware. VMware is driving that. Google's not. I think Google is going to at some point in the next few years wake up and say we lost the enterprise business, we can't get back into it. So, my take is that Amazon has done fantastically well. It's gone after the low-hanging fruit. It's chopped it all off. It's now going to take a little bit of extra effort and extra investment to get the ladders to go up into the trees and get the bigger fruit, the ones that the animals can't get easily. That's going to take some rocking and tackling and they're going to see an increase in costs and an increase in resistance from the enterprise. So, I think we're starting to see a little bit of the curve. The mature curve for Amazon? I don't, I think it's just, which curve you look at, I think it's going to be a kick up. So, that's my view and I think Microsoft is in the best place alongside them to put real pressure on them. So, your point, competition has been watching Amazon. It's not a free ride. I mean, they're out there just having their way with the market. They have been, but as they go deeper into the enterprise, so it becomes more of a battle. I like it. I have a very good insight. Competition's not standing by with their hands tied behind their back, blindfolded. VMware in particular, IBM not. Also, VMware could make a move with Google. I mean, I joking earlier, but that's an interesting play. Google has to wake up. Google has no enterprise presence, but VMware does. And Google got developers with Android and they got transit. And they want to do cars and they want to do more ads. Google just doesn't have a focus in this area. The other wild card from Floyd, from Plainly Report, just notified on Twitter, just saw the tweet, IBM's advantage is also enterprise credibility relationships and services. So, he brings up a good point, services. That's muscle too. IBM has got services. I mean, that's a great way to keep a client locked in for a body's added. So, Amazon doesn't have a lot of service. All right guys, that's a wrap. Thank you so much. I want to also thank Mark Farley for an amazing time. First time on theCUBE as a co-host. Good job. Well done. You were great. Hey, now we're going to rock and roll. Oops, there goes my microphone. David Floyd, obviously cameo. Doing a flyby at the end for the wrap up. Great job guys. Thanks to the crew here. Good job at home. And hey, thanks for everyone watching. Stay tuned. We'll be back at, where are we next? We're at London tomorrow. Tomorrow we're going to be live in London. We've got service now. We've got OpenStack, IBM Vision. Oh, Tuesday Mark Logic. It's cube time, baby. We'll see you next time.