 From our studios in the heart of Silicon Valley, Palo Alto, California, this is a CUBE Conversation. Everyone, welcome to this special CUBE Conversation. I'm John Furrier with my co-host, Abby Currance, executive director of the Cloud Boundary Foundation. My co-host with Blair Henley-Frank, principal analyst at ISG, ISG Insights. Blair, great to see you, former journalist at Venture Beat. Great to see you. Great to have you on theCUBE finally. Yes, likewise, it's good to be here. So I'd love to start to find out what you're working on. You've been covering the tech sector as a journalist now as an analyst. You've always done good work, always admired what you've done. I'm sure you're digging into some really good stuff. What are you researching? What are some of the things you're finding around cloud? What's the data? What's the data tell us? Yeah, awesome. So we have a forthcoming cloud study where we talked to 300 enterprise IT decision makers and we asked them what they're doing today, what they're looking to do in the future and how they're doing it. And we're taking all of that information and we're putting that together with the information that we have from ISG's advisor and practitioner community and building an understanding of where the market is and where it should be. And that's what we have going on today. One of the things that we think is really important is when we look at the data and we look at what's going on in the market, what we find really important is that enterprises today are starting to move to the cloud. They have some workloads in SAS. They have some workloads in a public cloud, IaaS or pass. And then they have a lot of stuff that's still on-premises. And that exists in a wide variety of workloads, whether that's on bare metal, whether that's virtualized, whether that's some sort of cloud native or containerized application that's still running on-prem all the way up until the cloud. And what we see is that those different modes of operation are actually going to continue to exist throughout the enterprise. Even as we see more workloads shift into the public cloud, enterprises aren't realistically going to be able to retire all of their on-premises investments for the foreseeable future. Right. And so what they- I mean, Amazon confirmed that with Outposts. You saw Azure Stack. And that's total, I mean, first a VMware deal, the RDS on-premises. And then you got the Outposts, which still hasn't, we've heard anything about that. That's validation. Amazon essentially saying, I'm going to put cloud on-premise. Yeah, cloud operations. So certainly that's validated. The question I want to ask you, and I think Abby, get your thoughts too, if you want to chime in over the top, but I've always been critical of the cloud market share game, right? Like I've always been vocal in theCUBE because it's always been infrastructure service, platform service, and then SaaS as the application. Now Amazon has some SaaS, but most of their SaaS is their customers. Google's got G Suite, they've got their own SaaS. Microsoft's got Office 365. So when you start bundling SaaS revenues into cloud market share and revenue projections, you start to see sandbagging of the numbers. I mean, you can talk to Salesforce and say, in Workday, they have clouds. So what's a cloud? What is cloud technologies? And Azure, as that develops, also has this massive market share. And it didn't really exist a few years ago. Where'd that come from? Is that just a shift of some sandbagging on the revenue side? Or is that actually real cloud, or is it? I mean, so this is the game that the customers have to squint through. Now we in the industry know that, okay, a little bit of Office 365, okay, is that really cloud? Yeah, I mean, when you think about financials with cloud vendors, everybody is playing a slightly different shell game. And generally speaking, you're not really going to get real numbers from anybody, except possibly Amazon. And the reason why Amazon is able to do that is because the financial results for AWS look great. But everybody else is going to be masking. But they don't have a lot of SaaS though. The thing about their SaaS number is their customer base. So I mean, if you have. I would argue cloud is nothing but infrastructure with a SaaS on top of it. Like, I mean, we talk about cloud as if there's some magic kind of thing happening over here, but it's basically a different kind of data center with a different kind of SaaS on top of it. And I think, you know, if I'm, you know, if it's me reporting my numbers out, I'm going to, well, I'm going to make them look as good as I possibly can. Of course. And. Cube cloud's coming out. Great. I mean, you're going to make it look as great as you can. I mean, infrastructure is infrastructure is infrastructure. But now like, when you talk about SaaS on top of that, well, what's cloud? What's not? And it's super, it's a very fungible definition. All right, so I'm not just agreeing on that point. I see how that makes sense. The question for people who are making, quote, decisions in the buyer side, they tend to think of things like cloud supplier. Is that really a word? Like, what does that mean? If you're going to say the clouds, you know, part of a workload, is that actually even relevant? A cloud supplier. I mean, I guess they're supplying cloud to you. But so when you start to get into the vendors versus the buyers and the consuming of the technology, we get in that old school game of trying to put things into like market share revenue. I mean, I see Amazon just kicking ass 10 ways from Sunday. And I think Azure's certainly doing some good things there. Google, we'll see what's going on with Google. They've got great direction, but it's like apples, oranges, and pears, right? Like, are they all the same or different? And then throw Salesforce in there. So this is where it muddies the water. So this- And Alibaba. Alibaba, so I mean, so it's hard to like figure this out. So I'd love to get your thoughts on how you guys see that in the studies. Are customers confused? Do they have some visibility into what they want to do? What's out there in the data on this point? So what I will say is that directionally speaking, SaaS is where the market is going. So when we asked our survey respondents for where are their applications today and where did they wanna go? 90% of those people we surveyed, 90% of the 300 people we surveyed around the world said, in 2019, we are primarily in a hybrid mode where our applications are on-premises and in a public cloud. 5% of them said the majority of our applications are in SaaS. Now when you look at 2021, 37% say that they expect to be in a hybrid mode. 61% expect that they are going to be majority SaaS for their workloads in two years. So they're in build-up mode, they're shifting mode. They're shifting and they're not just, they're planning to shift to SaaS. They're planning to, they want to get out of the business of running applications and put some of that burden onto providers to say, okay, it's your job to run the application, we'll provide the data, we'll build our business processes, but we don't want our job to be running those apps. And what we see is that when you look at total cost of ownership, our respondents found SaaS to be far more predictable in terms of TCO than I as in past. And again, for those people who are really paying attention, if you think about it doesn't like, that's not a surprise. But on the other hand, that's like, I think that's part of where the driver comes from is that when you're consuming a SaaS product, it's very understandable, it's very consumable. When you think about running applications in an I as PaaS environment, maybe not so much. It's going to be, you're more in charge of that application, so. And SaaS has got immediate gratification. Exactly. You can see the benefits. Easy to consume. Is the revenue there, it was doing its objective. Why is the I as fuzzy? Just because it's a classic back office kind of mindset. Is it more of maturity? It seems mature to me. I mean, I don't, I think I as has been more mature than ever before right now. Well, no, you kind of. I think it's been around a while. I mean, I'd love to hear your answer. I think it's, I think there's just, I feel like it's a relic of the past, whereas that's not something we spend much time thinking about, like there was that old joke. Like, you know, great job keeping the servers up. Said no CEO ever, right? That's a good point. But now platform, so you got SageMaker, seeing what Amazon's moving with the stack with SageMaker, machine learning, all this kind of classification, kind of platform creeping up to the top of the stack. It seems to be where everyone talks about. I'm sure Google next will hear all about AI and how IoT edge or, you know, some focus around that piece. So again, I agree. It's the commoditization, just another distraction layer on top of it. We've seen that movie before. We're moving up the stack. We're just moving up the stack at a faster pace than we have in the last two decades. So bottom line Blair, what's the survey? What's the net net? What's it telling us? What's coming out of it? So the net net here is really that enterprises need to have a strategy and an operating model in place for the long haul when they think about their cloud strategy overall. This is something where they're not going to be able to snap their fingers and get to cloud native nirvana overnight because that requires technical change. It requires culture change. It requires process change. There's a lot of very heavy lifting that takes place and not all of the applications that exist in an enterprise today really need that heavy lift. Yeah, yeah. And so when you think about what the future holds for enterprises, they really need to build a model for how they are going to make that transition as smooth as possible. Take advantage of the new capabilities that are entering the market as quickly as possible to help advance their business. While at the same time having the opportunity to work across all of those different modes of operation and do so with high reliability, high customer satisfaction, high performance, all of the things that you need to succeed as a business in 2019. So I totally agree, it's a heavy lift to go kill the old to bring in the new. And one of the things I've seen as a trend, I'd love to get you guys thoughts on this as a reaction because I've seen the Kubernetes trend really let a lot of air out of that tension because it allows people to get in with containers to get around some workloads and bring kind of baby steps into transitioning stuff. And I've seen people saying, you know what? I like the idea of going cloud, but I got this app and I don't want to shut it down and have to rebuild it. But I can put some containers around things, run it on some VMs, use Kubernetes to orchestrate it. So I think this has been, I'm not sure if it's actually been deployed in massive production, but I've heard people say that. Is that hype or is that reality? Is it becoming a crutch? Is it a short term transitional? I got to drag out my soapbox for this because I have a soapbox for this. Okay, good, let's go. I'm not a big believer in lift and shift. I think there are times where it may be opportunistic when you're like in the life in hardware or something like that. But I'm not a big believer that a cloud is a goal because cloud should not be your goal. If I'm a business, my goal should not be cloud. My goal should be how do I write more applications more quickly and maybe how do I use infrastructure and better in a more efficient ways? But cloud is not my goal. If that's my goal, I'm going to be really sad at the end of the day because that hasn't made my business better. So I think, I feel like we've all over-rotated. You're saying it's not the outcome. The outcome is the app, the benefits. The outcome, if you're a bank and you tell me your goal is to be on the cloud, well, I'm like, well then you've got the wrong goal. Your goal should be how am I writing more applications and getting them out into my hands of my customer and changing my business faster? If the cloud gets me to that, great, but that may not be the answer for all of your workloads. And you need to really think about that before you say my goal is cloud. My goal is to write more applications faster, period. And if that's in the cloud or if that's on-prem or if that's on bare metal, what have you? But I need to really think about what my outcome is. And I feel like we've really focused on the cloud as the solution and that's not the solution. And if you're check-boxing, I'm done for the year because I moved a bunch of stuff to the cloud, well, the work's not done. The work is the culture part and the team part and really figuring out the applications I need to create and how do I iterate on those applications? The cloud is just, it's a byproduct of that. It should be enabling the outcome they want. That's a great soapbox. Your thoughts on the overall lift and shift, the soapbox rant by my co-host Abby here? Yeah, I think that the big opportunity is to do what's right for the business. That's ultimately what should be driving any sort of transformation. I had a conversation with a startup once. They were very focused on taking their monolithic application and going to microservices and they were like, we're going to go to microservices. That's what we want to do because that's the future. That's what a modern application looks like. And they started decomposing their application, what I would call radically decomposing their application, getting down to the atomic moment of how small can we make every single piece of this application? What they figured out was that it was a massive headache. And so they actually then took it and sort of recomposed the application into not microservices, but what they called mega-services, where- And they ended up writing a book and being famous and doing a speaking tour, but they didn't achieve the objective. And that's exactly it, is that they all of a sudden created this host of technical problems by pursuing an ideal that wasn't- And this is the danger, and this is the dogma danger having the dogma of a certain trend. I remember that during the big data days when we were covering the Hadoop movement around 2010, 2011, 12, I would hear this all the time at Inside Cloud Era. Man, I just set up an 18 node cluster, I'm so pumped. I'm like, well, what are you doing with it? Well, I'll just collect data. Like, well, I get it, I get it. And then what happened was that was their end game. We see a lot of that with cloud to your point where it's not about, it's what you're using it for. And then they had to make up the term data lake after that. So again, they just kept on adding on more, but they actually missed the entire boat because it was about making data addressable for apps. So this is the danger of the tech world. And making it useful. And I feel like we follow the shiny penny as opposed to saying, actually, is that actually even relevant for me? Like, you know, like when Docker came out in 2014 and every conversation started with, that was the answer to everything, whatever you wanted. Do you want toast for lunch, Docker? And I feel like that was the answer to anything. And they're like, why? One, why do you care about a container? And two, why? And I think containers were pretty cool though. Sure, they're cool, but containers been around since 1969. Like, I mean, this is, it was not, Summer of Love containers, you know? It was, but I feel like, you know, everyone's like, that's my answer. And you're like, what's the question you're asking? And I feel like we continue, we went from Docker to the next thing and the next thing and the next thing. And I feel like we're not pausing to say, actually, what are we hoping to gain? To your point. So Kubernetes, what you think about, is Kubernetes a shiny penny or shiny new toy? Does that have any relevance in your mind, in your soapbox? Where does Kubernetes fit into your view? I mean, I think Kubernetes is a, is an amazing technology that has done a lot for the way we think about scheduling and container orchestration. But it has also, you know, become victim of the shiny penny and that everyone's like, Kubernetes, and you know, and two years ago, everyone's like, Kubernetes, how many people were using it two years ago? Not that many. And so I think about it, and it's like, and I often ask, why do you care so much about a container orchestration? FTO sold us $650 million or whatever they're known for. $515, I know, to VMware. Is that $515 was enough? $515. That's half a billion dollars. That's Kubernetes to change. I lived my two years, last two years wrong. That's what I did. But that's a different story about all my research. You could have been the Kubernetes Foundation. But I think, CSE is doing pretty well. I mean, that community's rallying, it feels like an Amazon alternative. They feel it's very cloud-native. So I think Kubernetes has been a good rallying cry, for sure. It is, but I think you're also, what you see even in CNCF, which has so many amazing technologies. I do not want to take away from that, but you also see the shiny penny effect happening within that community. You know, when I went to KubeCon in December, you know, what was the hot topic? It wasn't Kubernetes, it was Istio. You heard Istio everywhere. And I've never seen this many people so excited about service mesh in my life. I'm like, great, this is awesome. We love it on the Kube, it's great content. Well, service mesh is great. Wouldn't want policy, stateful applications. Well, ultimately, like, my jackals. Have some of that stateful, fantasy land. I'm excited about it. No, state's hard. Well, and this is what I end up telling clients is you want to adopt the parts of the stack that are necessary for you to solve the problems that you have. Right, if you are in a position where you need a service mesh, you know, because you are having problems that only a service mesh can solve. And if you aren't in that position, then you get to be like the 60% of respondents in our survey who said that they are currently experimenting with a service mesh, or the 33% who say that they plan to use it in the future. 60% are experimenting with it? Yeah, well, probably. The number is way high. Well, it's probably somebody has it running on some VMs somewhere, you know. It's really high. Well, if you look at the success of KubeCo, one of the things that Envoy is a great example, and you talk about some of the challenges that enterprises have. If you look at the success of all the open source projects that once have been super successful, it's the folks that had to build it for themselves. Envoy got to lift. And I think this is a challenge that I see. I haven't really figured out in the enterprise yet how that's going to play out, but it generally seems to be that the enterprises don't necessarily want to be like that, but they want the same kind of control. I want to roll out my own cloud, but they don't want to have an open stack problem, meaning I don't want to have stuff that's not supported. So you have this kind of new changeover vibe going. I really haven't put my finger on it, but it has that same vibe. Well, enterprises are more in control. And what we've seen in our research is that enterprises actually feel comfortable now. They no longer feel like they're in the fog of war. Like, I don't know what's going on. They're more like, oh, we actually understand and we're on it. And they're being more thoughtful about the technologies that they use. And they are experimenting more. And they're feeling really confident. But my caution is always use the technology when it makes sense, as it makes sense. But at the end of the day, as a business owner, your fundamental question is, does this serve my outcomes? Does this serve my business outcomes? And if the answer is, I don't know, then really think about what you're investing in in terms of technology. I mean, I love all of these technologies, but I'm never going to recommend all of them if that's not actually going to be in your best interest. That's great stuff. Well, thanks for coming on, Blair. Appreciate it. You're going to be at Google Next, Cloud Foundry, and Philly on April. First we get Apple. Unfortunately, I won't make it to the Cloud Foundry Summit, but. Google Next next month? Sure will. All right, we'll see you there. Abby, thanks for co-hosting this segment with me. Blair Hedley, Frank, sharing the data, here with my co-host, Abby and John here, hosting the first ever Cube, what do we call it, Cloud? Cloud Cube. Cloud Cube. Rebrand. The Cube, and thanks for watching.