 Hello and welcome to theCUBE pod episode 30. I'm John Furrier with Dave Vellante. He extracting the save. I'm in Boston area with Dave in his studio. We're doing this pod from here. I've been traveling management of WorldWing. We've been on events, SaaS event in Vegas. That's when the MGM hack, we're gonna get into that later. Mandate event, CrowdStrike, a slew of events, big acquisition, Cisco buying Splunk, which we've been to every.conf since its existence, except for the past year. Obviously they were cutting back. A lot of hot takes on there. Some good rants coming on. David Portnoy with one bite pizza reviews and the Washington Post journalism scandal. That's gonna be my rant. And obviously Intel had a big innovation event or lack thereof, Microsoft Surface co-pilot news going head to head against Google. You're starting to see Dave, Microsoft and Google going at it. And a slew of other news. Obviously Cisco was the top news. CrowdStrike event security week with Mandiant and CrowdStrike. Two of the best threat detection companies in the world had events the same week. We were at both. I was with Mandiant in Washington, DC, David, CrowdStrike. Big-time conversations going mainstream around cyber warfare, Chinese being number one, Apex, Predator, if you will, and hacking, obviously CrowdStrike and Mandiant make some great contact coming out of that. And then obviously just more hacks. The AI train is continuing to roll along. We'll update you on that. There's a lot of new data there. Dave, just a ton of enterprise news. I mean, the enterprise is hot. It's going mainstream, pod 30. Here we go. Last day of summer, too, by the way. You can feel it out there in England. A little chilly. I put my hoodie on today. Looking good with the tie, too. Well, I got to do a couple of things. I'm doing the breaking analysis day, right? This is my vibe. What do you think? We had a pretty killer run with Cube gigs and a lot of events we didn't get to because we were so busy. And then the MGM hack versus Caesar. Caesar's got hacked. MGM decided not to pay. Caesar's paid, so there's a huge cybersecurity. Pay or don't pay. So it was interesting, Johnson. Big conversation. Last week we were out at an MGM property, which was the ARIA, right? And it was a shit show coming in. Remember they had to write down our credit card number? I was like, what are you doing with that piece of paper? Well, we got to manually enter it and then we'll shred it. The manager will shred it. I'm like, well, in the meantime, can you please flip it over so nobody can take a picture of my credit card? They're like, oh yeah, sure. So that was kind of a nightmare. So I was at Caesar's this week staying at Bellagio, which is Caesar's property. And the event, the CrowdStrike event, was at Caesar's, no problem. And there were no signs. And you're saying that Caesar's paid the ransom. Yeah, paid 15 million, boom. Which is interesting, and MGM didn't. So maybe they're still struggling. But the interesting thing is when I drove in two weeks ago for the SAS Explorer Conference, MGM, you probably saw it too. Maybe you were there during the day, but it was pitch black, the big lion, the green, black, which is crazy. You've never seen that before. Yeah, a ton of properties were affected at Bellagio. They were all part of that. See, MGM owns all those casinos. I gotta tell you, it's amazing to me, John, how packed Caesar's and Bellagio were. And I went over to Oracle Cloud World one night to have dinner with Juan Loiza from Oracle. At the Canaletto, we hang out at Canaletto a lot. I've never been here before. This is a no for an I.O. They didn't even know that. But that was pretty packed too, but I could not believe how many people there were in Vegas. So what recession? I mean, the whole hack thing was interesting is that after that hack happened, it was going on for 10 days before they, now they're back to normal as of today, almost 10 days later. What's interesting is you and I, both at Mandiant and CrowdStrike, we were all the experts were there. And so I had a chance, you were at CrowdStrike, I was at Mandiant and the experts all told me the inside baseball on that. Yeah, did you hear the social engineering? All social engineering, help desk, English speaking, reset my password. Abomination, though. Yeah, I mean. I mean, to basically say, hey, I call up the help desk to get a password, the fake, I mean, wow, that guy's obviously got fired. Yeah. Well, social engineering, they worked their target for a long time. But here's the thing, in cybersecurity world where the warfare has been going on. It's well documented that everyone does these pen tests and they do sock reviews. The sock, the security operations center is becoming less important because the hackers are going to zero day exploits and actually social engineering, which has nothing to do with pen testing or anything else. Securities getting almost good enough now where it's social engineering is almost a guarantee to be hit. And so social engineering basically means they identify, they learn about you on LinkedIn, maybe TikTok or whatever. They understand who you are, get inside your head, go through your trash, your digital trash, or whatever. And then they pretend they're you and they get credentialed in. So there's no malware, nothing. They're living off the land. Yeah, no files. As the expression goes. No files, it's a fileless hack. You look like an actual person. So that's huge. So social engineering is the new art, state of the art, cybersecurity. By the way, to defend against social engineering, you don't need to be a technical person. It's changed so much. Okay, that was one big. But there was a failure in process. The fact that you could just call up and get your password. But the SOC analyst experience is like, it's like air traffic controllers. You know, they're sitting all day, they burn out fast, they're very short life cycle. So that SOC analyst experience has to improve. And that was one of the big things that CrowdStrike was, they had this thing called Charlotte AI, which was basically a natural language interface to dramatically improve the SOC analyst experience. Something not a lot of people talk about this. We have you scale on from Forrester, Mellie Mellon, who covers that. She was actually really good. You can maybe talk about that. But that's interesting. You're saying like the SOC's not going away. Is that what you're saying? I'm saying that the SOC is less relevant than it was before for two reasons. One is more zero day exploits are being leveraged. Okay, so that's up into the right in terms of action. Kind of implies that the SOC's kind of working because they have to go to zero days in social engineering. So that's happening. So social engineering as well. So that puts that in. The second reason why SOCs are under pressure is that some of the technology is like the old, older, antiquated, a little bit outdated. So you've got refresh issues operationally and then things are changing in terms of the data model and whatnot. So that's kind of a big factor. The tech being used, we had one guy, former Gartner analyst, Antoine, now at Mandium, he called it technology from the 90s. A little bit over the top, but not really that far off. But here's the thing about the zero day. So it used to be, the joke used to be, the really sad joke used to be because Microsoft has patch Tuesday. So patch Tuesday would mean hack Wednesday. But now patch Tuesday, because everything's compressed, speed means patch Tuesday means zero day Tuesday. So the stat that was really most telling from CrowdStrike was breakout time. So breakout time used to be an hour and 58 minutes. Last year it went down to 79 minutes this year. And the fastest breakout time was seven minutes, breakout time meaning the time it takes to grab and break in, grab the cash and go or grab, exfiltrate and go or encrypt. So that imagined seven minutes. And that's the fastest they've seen, but still 79 minutes. So that the point being, it used to be dwell time. Well, it takes 200 days to find people. Well, let's compress that down to 100 days or 10 days, it doesn't matter anymore. Well, I mean, that's one thing I heard as well. And that was called the smash and grabs. Those are smash and grabs where breakout time is critical. The other one that came out was the dwell time of wandering around, finding the jewels. So they come in on a scene and this came up a lot around shared responsibility model that's been talked about in the industry. So everyone shares, everyone takes the responsibility of their platform, but shared responsibility means you're sistering things up against each other. So that seems, those seams can be exploited whether it's zero day or social engineering. So once you're in the network, you can move around and find the jewels. And so what we've been hearing is lateral movement and patterns around lateral movement is they now look at that that layer two defense, they call it. But if you're in and out in 79 minutes, then dwell time becomes the kind of an irrelevant metric. Yeah. So, but I do think the sock analyst, the experience is going to shift toward using AI to do prioritization and identify the right patch and actually create workflows, either templatized workflows or custom workflows to fix the problem, to fix the exposure. Well, one of the problems about dwell time now, in addition to what you just said, is that dwell time is relevant for another use case of how far back you need to look at the breach where the storage is, what much data you got to go through. So again, this is putting just tons of pressure on the CISO. I mean, if you have a dwell time where you can't identify the dwell time, that means you don't know how long they've screwed you over, which changes the compliance and reporting breach issues. So that's another factor that kind of comes into the whole data reporting compliance. So that's huge. But that's another one where Gen AI can help a lot. I was going to say that. I was going to say that. Yeah, yeah. You know, it's like the cop who doesn't want to do the report, right? You just have Gen AI do the report. That was, I was just patiently stole the words right out of my mouth. So that came out big because at Mandy, Frank Mandy, who's the CEO, he basically said he used to spend all his time doing the reports. So the legal work, I mean, Kevin Mandy meant the legal work is so fricking hard. It's a heavy lift time consuming that AI is going to solve that problem. So that's where AI's help. The area that I learned last week from the Mandy and the thing that was to me is I was so pumped up and drunk on AI around how AI can help security. But I didn't give it a lot of thought about how to secure AI. So these guys are looking at it from both sides of the coin. Are you securing the AI itself? Like LLM injections, they're calling it prompt injections. They're calling it to how AI works for the practitioners and helps the defenders. So when I asked everyone on theCUBE that I told them you did a poll on Twitter, does AI help the defenders or attackers and the attackers kind of won, Kevin Mandy said it definitely helps the defenders. And his reasoning was like... In the near term or long term? Near term and long term. And he said, and the reason is, and I asked him, well, that's not what the poll said. All the vendors said the defender. So he actually had a good answer. He didn't just have the vendor position. He said the asymmetry of the attackers who are sitting here, once they fire off the attack, all the action happens on the defense side. So once this impact, all the shit happens on the defense side. So he goes, the asymmetry will be taken down by the AI. So the defenders will get a bump up in productivity here. Now, the attackers will get productive, but they're already productive. The net gain is going to be on the lower the asymmetry between the attacker and the defense. So that to me is the first honest answer I've ever heard from a vendor. Because I think when the instant answer is, oh, it's going to help the attackers. You better pay us. I think that's so self-serving. But here's why I actually agree with Mandia. It is because of what I saw at CrowdStrike. So George Kurtz, CEO of CrowdStrike stood up. They demoed this at Black Hat when they announced it. And it was a live demo, an actual real demo. No, of course it had previously been done, but it was done on live data. This thing called Charlotte AI, here's George Kurtz talking to, now of course this was all text-based, but they translated it into voice. And of course you had the British accent and everything else. But he basically said, okay, sock analyst comes in, give me all the threats that are the most prominent threats today. And Charlotte AI tells you what those threats are. Then he says, okay, scan my environment and tell me where my exposures are. Boom, okay, tell me the scripts or workflows I need to fix those. Boom, all happening in near real time. So that's why I do, and so here I am thinking, wow, if I'm an attacker, I want to get a hold of Charlotte AI. So I asked CrowdStrike about that and they said, look, we spent a lot of time trying to keep our tech out of the hands of hackers, but hackers do get it, but we watch them. And we actually sometimes bait them into their playbook and then we shut it right down. And so there's an example of using AI where the defenders are actually going to get better. And to your point, it's going to make the sock analyst and the defenders more productive so they're not running around, plugging holes in the dam. The total changeover is happening. I think, we'll get to the Cisco acquisition in a second around how observability has changed since the cloud era started scaling. I think the same thing's happening with security. And the final thing that I was most excited about with the Mandine event and CrowdStrike event that you were at was, I've been ranting for almost eight straight years on theCUBE about cyber war for how we're under attack. There's no holding back right now. They're absolutely saying publicly and out loud that China is the number one threat by multiple factors. They would know. And they call them the apex attacker that they are so advanced. Russia dropped down to number two. Korea, North Korea is number three. Iran. And Iran, so North Korea's got better mojo on cybersecurity and social engineering, but Russia was interesting. The Ukraine war has an impact on Russia because, one, people are leaving the country of Russia. And two, Ukraine used to be the test kitchen for Russia. And also they forks the talent. And they want, they're working on the war. So the Russia is kind of distracted right now. So China is clearly number one in the world. And there's general awareness around doctrine in the United States, how to do it. And Kevin Mandia was saying some of the things you were saying, which is they're learning how to counter offense. And they're gonna start holding these people accountable. And so as the companies get smarter on the threat intelligent landscape, the AI and other systems like SOCs and AI, so you get the SOC as dev sec op, that's operational stuff. Threat detection is a whole nother ball game. That's what Mandia was really good at. And they don't have an SMB market. They're the top of the pyramid. Yeah, when something goes wrong, you call Mandia. Mandia is right there. Crowdstrike and Mandia are the two tops. Well, but Crowdstrike and product company, Mandiant really is sort of the services play. But when you get hacked, I mean, they're the gold standard of who you call. But I'll tell you one thing, we talked about the ransom, you said Caesar paid the ransom, right? One question you never want to have to ask is should we pay the ransom? Because if you're asking that question, you're basically fucked. Well, that's a debate, pay or not pay. But here's the thing. First of all, you might not get your data back anyway, but obviously in the case of Caesar's probably helped and people will say, well, it took us a few tries to get the data back. And the second thing is, it's actually illegal to pay countries like North Korea. You know, if the attacker is in North Korea, you can't pay them. So the FBI is always going to tell you don't pay. So the point is you don't want to have to get to that point. So you're better off. One of the guys at Crowdstrike said to us, you got a guarantee for less than 15 million, which was the ransom the Caesar had to pay. I could have secured the Caesar, MGM or whatever it was. So, you know, do the homework now. It's interesting. All right, well, let's get into some of the cool news around Cisco. This is the big- One of the things I want to just say on Charlotte AI, because I do think they're ahead of it, they announced pricing and their pricing is $20 per endpoint a year. Now, I know that adds up, but basically Microsoft for its open AI stuff, it's copilot is charging $30 per user per month. So it's $20 per endpoint per year. So they're making it pretty inexpensive to do this. And so I think this is going to be a game changer and secured. Yeah, and the edge came up too, by the way, a lot in the edge at layer two, layer two defense. I mean, the big messes were layer two defense. AI is going to give the advantage to the defender and avoid help with burnout issue you mentioned. And third is the private public partnership. The industry believes that the regulation conversations BS and that the private industries have to lead to the defense of our country. And that's going to be very interesting to see. I hope they're right, but the government does have to kind of enable that. So we can maybe say that for our rent section. Oh, I got a rant. So I do too on that one. Can't wait for cyber, more cyber war rants, but Cisco, Dave Cisco bought Splunk for $28 billion. We got a ton of analysis here on theCUBE. We've got questions that we put together as a team. There's gonna be a ton to unpack here, but Splunk, the leader in probably one of the most epic startups, in my opinion, that solved the problem extremely well, a problem that nobody wanted to solve and created a public company, grew the hell out of it. We covered it, log data. Okay, as the internet grew and cloud grew and more hyper-converged infrastructure, software-led infrastructure grew, the need to go through log files was something that they built in and just been just a gift that keeps giving from a revenue standpoint and amazing company. And then, boom, Amazon cloud comes out. So Jeremy Burton had a great analysis on this, but Splunk has been a walking dead company for what, two years, three years now? Maybe two years for sure. Even four years, I said pre-pandemic even, they started to decline. I'd say 2019 is when we first, with the ETR data, Eric Bradley and myself, in fact, I think in 2019, we predicted bad things ahead for Splunk. It's almost a marker, Dave, like when companies don't invite the cube back, they're cutting budgets down so bad, events get smaller, it's like, yep, recession. It's funny, I was going to say, so you remember the three of the hottest companies when we started the cube, it was Splunk, Tableau and ServiceNow and all three of those companies rocketed and then Tableau was client-based and they had to transition to the cloud, so they brought in Adam Salipski to clean that up and then, of course, they got acquired. ServiceNow kept rocking even after Saluteman left and John Donahoe was sort of the interim guy in between and then now, of course, as former SAP CEO Bill Dermot is kicking ass over there. And but Splunk, we've been to how many dot-coms have we been to, John? And you know as well as I do. Since 2012, every single event up until 2020. You know as well as I do. Extremely loyal customer bases, they got the guys with the funny hats and the BFW hats running around, right? And then they have an awesome customer base. There's a lot of criticism about pricing, Splunk kind of being the oracle of log metrics and so forth and data movement also. In your point about, big problem with cloud, cloud came in and they didn't really have a great cloud strategy and the second thing was, they had to transition to ARR and that was painful, it always is painful and they didn't do such a great job of it and they bought Signal FX under when Doug Merritt was there that helped a little bit. But so what happened is we started to see the decline in around 2019, particularly in 2020, even though the bubble helped their stock price but you could see from a spending standpoint, they were, it was icebergs ahead. So they bring in Steel, Gary Steel to help clean it up. That was, he came from proof point. He's a private equity cleaner. He's like that guy in Pulp Fiction. Wolf comes in, cleans up the dead body. Why don't you say that? Splunk was a great company, great culture. I've always respected, I've always respected the culture of Splunk because they, when Doug Merritt was there when they had their growth, they created a culture of innovation, camaraderie, fun, the people were all awesome. And then when knives came out, when it got tight, when the budget started squeezing, I just think the board of directors just went the hell in the handbasket and talked to Doug Merritt about it privately and he won't say anything, but you know, reading between the lines with Doug Merritt, he had this great company and he basically, he didn't say he'd get forced out but he'd left abruptly, which is a sign that there's bad board behavior. And we know that they tried to hire two Amazonians, Teresa Carlson and Sean Bice, who's now, Sean Bice is now working for Charlie Bill and Microsoft. And so there was a huge board dynamic at that time. And that was clearly, in my opinion, a symptom of the fact that Splunk reign was over. The reign of their greatness was over. Cloud was there, they had competition. Clint Sharp, who's founder of Cribble, he used to talk to me about the pricing. I think he built the product, he sold to Splunk. There's been a lot of Splunk killers coming out. People were eating away at their data, but they were just, they liked VMware. They had a product that people loved, Dave. Well, Datadog was one of those Splunk attackers. They still got that great product. Elastic was another one. And so the rumor was that Cisco's been a rumor to buying Splunk for like a year now. But there was also a rumor they were going to buy Datadog. But they would have had to pay more for Datadog. Now Datadog has better growth and certainly better momentum. Let's get into this Jeremy Burton analysis. Jeremy Burton, the founder of Observe, former MC executive and CMO. He's the founder of Observe, which was funded by the Snowflake guys. So he's kind of tied in the whole future. First of all, Cisco's going to do very well with Splunk. Cause when you have a dead company that moves over, that's a cash cow that's going to increase the base. What the logic is there. So you want to go there first? Well, I think it's relevant, right? So why did Cisco buy Splunk, right? So cash cow. So they get $4 billion in ARR. Cisco's got like 40% of its revenue now is coming from software subscriptions, which is huge. And Splunk, you pointed this out to me. Yesterday we heard on the call only a third of the Splunk's revenue was overseas. And Cisco's got a massive overseas business. They're going to kill it. They're going to kill it. They're going to kill it. It's a great move for Cisco, right? $28 billion, that's one of the, I think their biggest acquisition ever, but you know, whatever, they got $28 billion in cash. I mean, it's a dog with fleas on standalone basis. That's what company Howard described Splunk as the way they were dying. Cisco's brilliant moves to bring that in, clean that up quickly. I'm sure that Gary Steele, because remember they made an offer Overture a year ago was reported. We've reported that. So the Wall Street Journal, that rumor, probably cleaned up the product. Clean it up, we'll buy it. Do the dirty work. Come back with a better proposal. The price is still the same. And Cisco's going to, one, get the cash, have a better data story with app D and 1000Is, right? So they got 1000Is, great synergies. And it gives them more mojo with the data and the AI play in cyber as well. Yeah, and G2's business. And G2. Check, check, check, check all the boxes, culture fit, check. And then the international. Home run, boom, boom. Big company takes it. And this is what Jeremy Burton was basically saying. Oh, wait, wait, before you go there. So the big thing for Cisco, John, is going to be how they integrate it. You, Zias, and I talked about this at Cisco Live, as you know, we talked about complexity, their taming complexity, how they're doing that. But they saw Liz Santoni, right? She runs the observability business. G2 Patel runs the security business. It looks like they're keeping Gary Steele around. I'm sure to do the integration. He's going to be responsible for that. But then what do they do with that asset? Did they break it up? Did they put it into the different divisions? Did they bring it all under one executive? That's where Cisco really has to make some tough decisions and actually integrate this time. That's what they're criticized for a lot, is not doing that integration. I kind of sensed on the call with Chuck Robbins, the way he was talking, that he kind of had, he wanted to say more there, but he wanted to yield to Gary Steele more. And I think the way I'm reading your point there is that two things came on that call that were kind of in between the lines. They talked about tan expansion and growth, but there really is no growth of Splunk. It's a creative synergy from Cisco. The international piece, good. Growth from once they get it into Cisco. So Cisco, as just a machine will grow the number. Whereas Datadog would have been a market growth, per se. It's the combination of what Splunk brings to the table. That's the synergy piece. That's the growth. And this comes back down to the observability market. I think the analysis that's missing, that was missed on the day of the acquisition is, everyone's talking about observability. To me, this is nothing to do with observability, but Cisco, other than the fact that they have observability play that they're going to bring in. And so Cisco made a great call here to take a big piece off the table, gives them the numbers on software leach. And the data, and makes things more predictive, right? Versus reactive. Now that is a home run. Now, good call. I think that analysis will stand the test of time. We'll go back at the podcast. We'll look at it. I'm sure we'll be great on that as well. Let's get into the Jeremy Burton piece. Jeremy Burton, founder, Observe. An observability startup. Remember, when we were commenting on observability day, we said crowded field. It's going to consolidate. It's going to be a startup. But we said, once there's a tailwind, turns to a headwind, it's going to be a shit show. So here's- You got the best name if that name sticks. And also Jeremy is on the board of Snowflake. So he's got some insight into this. Plus he's a senior executive in the industry. And it's the first time doing a startup, by the way. So it's interesting to see Jeremy be on the big executive sweep and now a founder. So fun to always talk to Jeremy. So he sent me a document. He draws a line in the document from 2000 to 2024. And then there's a set of companies that were founded going back to 2000 Splunk. Dynatrace, New Relic, AppDynamics, SumoLogic, Datadog, Elastic, founded in 2012. That's the demarcation line. He calls the Amazon boundary, right? Amazon since 2012 really kind of changed the next gen cloud services. We saw the VMs go to Gubernettis, seeing a whole other set of microservices. On the other side of that line, you got 2013, 14, SignalFX, Rafauna Labs, LightStep, Axiom, HoneycombIO, Observe, his company, Chronosphere, and Cygnus, okay? We've interviewed everyone of those companies except Axiom. So we know all of those companies. Splunk, gone. Dynatrace, great company, still around. We will hang around, New Relic, Private Equity, AppDynamics, Cisco, SumoLogic. I think they went Private Equity, didn't they? And Datadog's still public. Elastic, maybe on the bubble, we'll see. If you don't sell to a private equity company, you have to get a big dog to pick you out. And so I'll quote Jeremy Burton's line here. He says, all the companies on the left, only one or two might make it. The price of failure is an acquisition by a strategic acquirer, a big tech company like Cisco, or a private equity player. In both cases, once they acquire the acquisition, it's used to fuel their customer base and associated cash flow. As a technology proposition, they are for all intended purposes, dead. I think that's the most accurate statement because it's an integration play to your point and then synergies, which Cisco, I think, nailed it. So that leaves the music stop, musical chairs is happening. So Dynatrace, Datadog, Elastic, left there. On the other side, you got the new company. So I think he's got a good read on this. If I'm Jeremy and I've been to crowded space, I love the fact that there's M&A there and I like the fact that it's Cisco because let's face it, Cisco is going to work really well within Cisco. But there's a whole big market there outside of Cisco. So that's goodness for a company like Observe, even though we're very positive from Cisco's standpoint of the Splunk acquisition, but there's still more shoes that have to drop in that space because it is really crowded, but it's growing. So the question to ask after that, if you believe that, which we just laid out a good case for, I think Jeremy nailed it, the next question is, who wins on the right side? So, and he puts out there that the survivors will have to have growth and earn the right to fight for the big prize. So the winners on the left are going to have to get acquired but the ones on the right have to get the growth and that's going to be the question for the observability Dave and are looking at the data models that are out there, the Uber post you did, how real-time data. I think that that right side of observability is going to turn into data platform companies and finding the growth wave will be very interesting. Where did he have Datadog in that little model? He had Datadog on the left side. It was just kind of legacy. Which is founded in 2010 or 2009. Dynatrace is even earlier. They've been around longer. New Relic, FNAS, they're gone. Or New Relic was out. So I don't know, I mean Datadog to me is interesting because they are, you know, they do have some momentum but- But they group bottoms up so I think they crossed the line, even though they were founded in 2010 on that side of the line. Yeah, I do think they did cross the line. They've been blowing it out since 2014. They do have a bit of a go-to-market shit show based on my sources but that can be corrected. Yeah, Datadog might be a little bit long on the tooth. We'll see. We don't really engage with that much so we should reach out to them. Yeah, I mean, I know some sales people who work there and who have worked there. It was kind of a cluster of- What do you think the bottom line with Splunk and Cisco? What's going to be, what do you think we'll have to, what are the questions that we would ask? What, as we get into Cisco, who runs the team? Is it J2 or Liz Sloney? First of all, the thing's complicated. You know, it's a pretty big acquisition. So it's going to take nine to 12 months to actually close the deal. And then how do they organize? So once they close the deal, then it's going to take them another year to do the integration. How will they do that integration? Where do the different assets go? Where are their synergies? Where are their product overlaps? One of the analysts on the call, financial analyst, was like, yeah, I got some product overlap. I'm like, no, no, there's no product overlap. There is some product overlap. We know that. Okay, so the Cisco's pattern has been to just let the assets stand alone and prove itself. I don't think that's the right play here for customers. I think they want to actually come to customers with an integration plan. That's going to take them a year to figure that out. And then where does it go in Cisco's organization? I thought our internal analyst meeting we had yesterday that you put together was really solid. Rob Stretchy and you put together some good comments. But the questions that came out of my notes there were my concerns were one, customer concerns, possible customer concerns with the Cisco deal is, will it be higher prices? Yep. Delusion on innovation. Yeah, dead company has that synergy happen. Splunk's brain drain. Interesting piece there. Like do the great people. Will it be a brain drain? And then focus, right? Where's the focus? How much do they trim? What do they tweak? This is the same, some of the same questions that's going on at VMware Broadcom. Product overlap, you mentioned that. Lock in. Lock in and choice. If I'm a Splunk customer, like Broadcom's thinking about VMware, if you got a vSphere, you can't go anywhere else. So the art of the deal in my opinion here is for Splunk and Cisco to be like, let's keep that core base and get them turning on more Splunk things or more Cisco things. Is ThousandEyes better with this? I'd imagine it is. Is AppD better with this? I'm sure it would be. So I think if I'm an architect or I'm an executive at Cisco, I'm probably going, okay, how do I bring in, keep the cash flow going, grow the international, check, check, check, how can I get more revenue on the synergies? That's going to be my number one question when we run the analyst calls with these guys. And then keep raising my hand on that one point. How about the analyst who asked, why'd you buy a legacy company? Why didn't you buy a hot phone? I love that guy. Right? And so, but the answer was. Well, that's what Jeremy Bird's basically saying. But the answer was, hey, Splunk's got a really good hybrid multi-cloud strategy. That's where our customers want. We meeting them where they are. I do think that's valid, by the way. I mean, if I'm Cisco and I don't have a cloud, that's one of the other questions that came up, John, in our internal meeting, right? Was what do you think about, what do you think about Splunk's cloud strategy? Which we're going to go out to the field and ask. We think Splunk missed the boat on cloud or we see Splunk's hybrid multi-cloud strategy is really attractive and meeting our needs, et cetera, et cetera. Those are the kinds of things that we're going to pick at with customers, with our partners at ETR and our own survey work. And we'll come back and report on that. Well, what's interesting is that with all the AI stuff, a lot of on-premises swinging back. So the data piece is going to be a lot of on-prem protecting AI. And that's going to be interesting. That's what cybersecurity, I think it's a big angle on that. I think the security angles on the Cisco deal, to me is a big upshot for this thing. J2, G2 Patel takes this on. This instantly changes his world, right? Because he can then go and increase his numbers and you pointed out at the last Cisco Live, that's an opportunity for Cisco from a revenue standpoint. And I think- They have a $4 billion security business that's not growing. Now they take this Splunk asset and they start really integrating that product and on the security side and driving those international sales and other Cisco synergies, bringing it together with network because network and security go hand in hand, they could get that business growing. Well, we're going to keep on doing that. So Dave, one thing I want to bring up, I'm going to get a lot going on at the rant, we'll get to that rant section soon, but I wanted to bring up something that I saw that got my attention. I've been following CARTA, CARTA is a company that makes the service, we're on VCs and all their stock certificates. We use them as well. They got good data. They have a technology that sees everyone's cap table. Right. It's almost like a hidden little secret there. It's like a secret sauce. It's like crunch based, but you can take a look inside the cap tables. But they aggregate their data and here's an interesting report they just put out. Startup compensation. First half of 2023. A major chill on compensation, equity and cash. Okay. First half, about 28 billion was raised. Less than half was raised in the first quarter. You know, with this economy, they're employing compensations down, Dave. Wait, wait, you're talking about money raised or? No, people's comp because of the lack of funding environments. What are you saying? The total comp, the 28 billion. So 28 billion was raised. You look at the cap tables and what's the grants look like? So what, so the report looks at equity grants and cash compensation. So during the first half. Are there other averages or what's the data show? What's the indication that it's down? Okay, so the first half, start-ups on CARDA collected, collectively hired 314,000 employees. That figure fell, okay? And the first half of 2022, 314,000. And this year, 129,000. Wow, okay. That's new hires. The year to date. First half of 2022, first half of 2023, which is this year. So salaries flatline to start the year. So total compensation benchmarks for employees salaries fell 0.3% from November 22 to May 2023. Equity packages saw substantial reductions over November 2022 to May 2023. Average equity grants benchmarks declined 26%. Is that a value number or the shares number? Equity grants, averages. Do you know, is that in terms of value or it's a no, it's gotta be grants. It's a number of, yeah, I mean, percent of the grants, stock grants, I guess. And then layoffs are no longer rising but have yet to subsidize or subside. So, remember I said in the podcast, startup's gonna falling out of the sky. Not so much but still paying, right? So the question is, you know, the headcount has fallen. You know, I think too, it would be a lot worse without AI. It would be a disaster without AI, don't you think? Yeah, this is interesting. Net headcount across credit companies has fallen for five straight months. Six of the last seven, the exception was January 2023. So startups are hiring and that's not new information. I'm an LP on some of these vertical SaaS companies and every one of them sort of free downturn had, you know, 12 months plus of runway. They had 100% plus growth rates. The percent of customers or companies that are in those categories now is a tiny slice of what it used to be. It's all down to under six months, three months. I'll send this to you so you can noodle, I know you love dates. Austerity measures are definitely in place. I know you love data so I'll just send that to you. But again, this is a headwind market and even with the AI trend, the other thing I saw is that of all the unicorns, San Francisco Bay Area is dominating the unicorns. There's even a clever post saying that Barry's Gym is the new thing involved in, that's the hot gym everyone goes to and if there's a Barry's Gym nearby there's more unicorns. It's a little tongue-in-cheek on one of those posts I read about some of the unicorns. AI is booming in San Francisco. I think it's gonna be written and we'll go down, I think it'll be written and we'll go down that the summer of 2023 was the summer of AI love. It was definitely a love fest in San Francisco Bay Area. And it reminded me of the Web 2.0 days, where there was so much collaboration and enthusiasm around the wave. This one obviously being 10 times better than bigger than better than the Web 2.0, but there was that generational rise and I started my podcasting company on that wave early on and the bloggers were emerging, the tech crunches of the world, the pod techs were emerging and this is like a 100X step up in enthusiasm. The meetups are packed, the AI startups are awesome, the people are younger and the older people like us are feeling younger, it's like a fountain of youth. AI is a fountain of youth and I can't get enough of it. I can drink the AI Kool-Aid all day long, I love it. This is great data you just sent me by the way. I'm going to tangent here. On other news, Wall Street Journal had a huge piece on AWS. They talked about Amazon Search for its next big hit. I thought that was a very interesting story. They went over and the same story of trying to find their fourth pillar, a lot of Andy Jassy conversations. I heard Scuttlebutt that they're working on another big story on Andy Jassy. Well that's my rant today by the way, it's AWS FTC. You can save that. Yeah, I mean, let's get into it, let's... My rant's the Portnoy thing, David Portnoy and the Washington Post. You want to go first? Well I have two rants, the cybersecurity thing and Portnoy, the Portnoy thing was on Fox News yesterday, saw that highlight, Fox News took the opportunity to jump on that bandwagon and drive their agenda but ultimately they were doing a hit piece on them and he called out the reporter and the reporter lied to him. And this is causing a riff in the journalism community because the journalism all want to support their brethren, in this case a woman, who was saying, hey, she did the right thing, that's how journalism works. And the other half's saying, not really, he really kind of lied to them straight up and even if she was doing a critical piece, you want to get both sides of the story. So you have the journalism community forking between staying with your teammate, if you will, and others saying that's bad behavior. So the general consensus is that the Washington Post, independent of their feelings for David Portnoy, he does the best pizza reviews everyone loves, they went after him and they treated him very badly. So I thought, I saw it first from Jason Calcanis and then it just went super vital from there. And so it's just gotten so bad. This activist journalism is so poor. I think I'd like to see more balance in when you do an article on someone, you should call them up and get an interview. Like not just research it and then publish it without talking to the person. Well, that was unbelievable when he, how he baited her into basically her spilling the beans on, well, I basically put that in there just to get a response, that negative, that you're misogynistic, which is a word he couldn't pronounce, but anyway. I'm sure he did that on purpose. Synistic or whatever. I think that was by design. You think so? Yes, I think he did that on purpose. Because they don't want anyone quoting him having that voice over be, you know. Oh yeah, yeah, right. That's a meme waiting to happen. Oh, that's clever. Oh, feel the same here. Maybe that's just me, but that's what I would do. Hell, I got so many bad things I've said on theCUBE. My meme's gonna be all over the place. Oh, the other thing I want to tell you about that I did, I did a podcast with Eric Nielsen, who runs Community at VMware. And he's doing this thing called a, I call it a victory kind of lap. Now that VMware is closing this chapter down of their historic run in Broadcom. Gonna buy it by the end of this month. Been in October is that he's bringing all the OGs on. John Troyer, he brought us on and he's doing kind of a throwback podcast. So I just like- He's like a hidden legend inside of VMware. He's been there. I think he's been there. One of those guys has been there long. He's got like secret passages. He knows all the people. He's one of their OGs. And it's interesting that their community might be the crown jewel, Dave, of VMware. And Hock Tan was rumored to have said to the V-Mug owner that community is very, very important to them and that it's going to keep their base active and enthusiastic for vSphere and upgrading what we've been reporting on theCUBE as a shelfware. Because Broadcom, as we pointed out on our stories and on our reporting that Broadcom has to get the customers installing more stuff. If they don't, they can't charge more. So I think that's going to probably be the focus going forward with VMware Explorer in Barcelona, which will be the first event, by the way, post acquisition. So in November, you'll see VMware Explorer. So I thought that was interesting. Do we know that deal's going to close next month? That's the rumor. I think people are up and flux is going to be a mass layoff coming. So I think people are scared. So I thought I'd throw that out there. All right, that's my rant. All right. Want me to go do my rant? Yeah. It's back to FTC. Yeah. Okay, so Amazon is basically provided, or FTC provided more information this week on its suit against Amazon. They named three new individuals that they're going after. Russell Grandianetti, who was the senior, or is the senior vice president of international consumer. Jamil Ghani, who's the former prime boss, or he is the prime boss. And then Neil Lindsey, who's the senior vice president who used to oversee prime's tech and operations. They were specifically named. So Grandianetti and Lindsey are part of Jassy's S team, okay? And they're going after Amazon, as you know, for a deceptive prime or practices on getting people to sign up for prime and then making it harder for them to cancel, which we've talked about. It's really not that hard to cancel, but they probably played some games there, I understand. And I would say this that, okay, tell Amazon to stop, Amazon will stop. They'll make it easier to cancel, which is really easy to cancel prime, and then move on. Here's my rant. The average credit card interest rate, John, in the United States is 22.75%. But if you're a new customer, you can get in for 20.68%, okay? This is criminal. The average credit card debt for an American is just under $8,000. You're talking about, at that rate, 20 plus percent, you're talking about $1,700 a year in interest payments. The cost of prime is $180 a year. Okay, you can't cancel your credit card debt. You can figure out how to cancel your prime, push a button and be done with it, $180 per year. Okay, this is bullshit that the government coming down so hard on big tech when these banks are just ripping off the American consumer, allowing them to raise all this debt or take on all this debt, take on all this water, particularly when the interest rates were zero, and back then they were charging 18%. Why not go after, if you really want to protect the consumer? I mean, this is so disingenuous in my opinion, and it's because the government's in bed with the bank because it's regulated. Some Bill Gurley's talk, which was brilliant at the All In Summit, and he talked about the downside of regulation. Now, regulation, by the way, is not all bad. I'm glad that there's regulation in certain industries, for sure, but I mean, this to me is unbelievable that they allow these companies to set up, what is it in South Dakota that has no, just basically makes it easy to do whatever you want and charge whatever you want, and rip off the consumer. I mean, it's 180 bucks a year for Amazon Prime. Tell them to stop, they'll stop, make it easy to unsubscribe, which you can do at any time. So that's my rant. I think that's a great rant because, I mean, that's just, I mean, talk about regulating banks. I thought they were supposed to be regulated, especially after the 2008 crisis, just horrible. I mean, back to my regulation rant on cybersecurity is, and it came up a lot, is that the whole AI thing went on for a week and a half, all the AI guys went down to the DC, you know, put on a show. The government doesn't know what to regulate, I think this whole jumping at Amazon, this other fish to fry, and I think that's just a political theater and axe to ride on Amazon. What has Amazon done to harm consumers? I mean, what's the question? I mean, it's unbelievable to me. How am I hurt? How is it hurting competition? I mean, okay, I guess it's affected retail and retail business. Some rogue product manager could go, some rogue product manager could go forward and beat someone else with a big toilet paper. Okay, small business may be there. Okay, I get that. But Amazon is not intentionally, in my opinion, knowing the culture going out there. They are focused on making profits. They're aggressive. There's nothing wrong with that. But I mean, the prices are moderated and down thanks to Amazon. The service is incredible, you know, they're trustworthy, so much more trustworthy than a lot of other online retailers. They got competition through the roof with Walmart. And okay, if they're playing some games, tell them to stop, make them stop, they should stop. And they did, by the way, I can cancel my way. When this first came out, I said, wow, how hard is it to cancel my Prime subscription? It took like three clicks. No, it was so intuitive and so obvious how to cancel. So I presume Amazon, after they came after them, after the FTC came after them, made that change. Okay, they made the change. All right, I mean, give them a slap in the wrist and move on. My rant on the regulation is, let AI go, let it happen, let it be open, put some guardrails around it like they did the domain name system when the internet started with their computers. Let the web develop, let the internet develop. They did a great job. Department of Commerce handled that perfectly. And then when it got too big, they brought everyone in. I can, when global, the rest is all history. A little history lesson there, how they handled it. Do not get in and regulate it. Let the private sector do it. So that's my rant. All right, well, like we said last week, by the way, it's getting a bunch of government folks and billionaires who run AI companies in the room to figure this out. Yeah, they're probably not the answer. Well, the only reason why they're in that room, Dave, and this is the truth, Finn is going to listen to this podcast. If you've got in the background, listen carefully right now. The only reason why they're in Washington, D.C. is they don't want startups to emerge. Okay, they're afraid of the startups and open source. So all those big companies, it's disingenuous to be there and say there needs to be regulated. It's completely BS. Sam Altman, those guys, completely disingenuous to the whole purpose. They're afraid of startups. So for them to say regulate us, that is BS and it's false. Well, that's not true and they know it. And so they just want to keep their lead, especially Microsoft and the big guys. Well, when industries get regulated, Bill Gurley pointed this out and it was brilliant talk. You haven't seen it, Google, Bill Gurley, all in Summit 2023. He basically said, look what happens when you regulate. The intent of the regulation is to open up competition and make sure that it's all fair and what happens is it kills competition. And then the incumbents make all the money and then it basically is dead. And he told a story. It was a really interesting story in his early days. He was investing in communications equipment and he was trying to create a standard. And the big cable companies were like, no, no, we're the standard. Well, speaking of all in podcast, just some breaking news here. I see that the alternate bread Gershna, who runs Alt Capital, it's Altimeter Capital. He's their alternate kind of stand in just tweeted. Chamath is hosting a fundraiser for Vek Ramaswamy next week featuring a ton of Silicon Valley heavy hitters. The expected event is supposed to bring in a million dollars and for him for a super pack, the tickets are 50 K Dave. You can be the 50 plus, you can be in there. Let's just say that when I'm a billionaire, maybe I'll put up 50 K, but like, I'll pass on that one. Well, so Chamath is all, he's all in on pun intended on Vivek. I don't know, he likes his style. He's got the Indian thing going on with him, which is cool. I don't know, I'm not sold on Vivek. You know, I don't know, I'm just, I don't, I don't want to see a Biden-Trump rematch. That's what I know right now and I haven't made any decisions on anything. Well, we definitely don't want to see those two going at it. We had amazing, I think the theme this week is Cisco, Dave, right? Cisco, cyber warfare, cyber security, and so a couple of the bad journalism going on this week. You had the Instacart IPO, which was kind of a flop. It basically is back to where it was on day zero. Same with ARM, you know, the ARM pullback. So, you know, we were hopeful that these things would create some momentum for the market, but you know, everybody's still watching the Fed. And so it's not like IPOs are going to come roaring back. We said that. I think you asked the question last week in the Q pod or somebody did. And our answer was no, no. This is still, you know, really some challenges ahead. Acquisition is room and acquisition of talent for 600 million by interesting Palo Alto networks. By the way, crowdstrike and George Kurtz invested in talent. They do a secure browser. So that was kind of weird. I was at the crowdstrike Falcon conference and there was talent presenting, you know, had a big presence, George Kurtz was an investor. It looks like Palo Alto's picking him up. So that was kind of interesting. And then Oracle Cloud World was this week, right? We weren't there. We used to do all of the Oracle open. Did you do a fly by at all? I did. I did a fly by, had dinner with one, the boys and a bunch of other analysts and which was good to catch up with those guys. But the best thing I saw coming out of Oracle Cloud World was the rent. So it was Q&A. I think analysts Q&A with Larry and somebody asked him, what about about snowflake? I was like, oh, beautiful. Remember the time somebody asked him, what about work day? Work day is kissing. You're kicking your ass that journalist. I saw it. I saw a snowflake. I mean, you got balls to ask Larry that question because, but it was great. His answer was, he went on for 10 minutes. 17x faster. Yeah, eviscerating snowflake, which of course, you know, it was so much easier than snowflake. Well, okay, not really. But he was talking about MySQL Heatwave, which is actually a pretty cool product, bringing transactions and analytics together. Have you seen the benchmarks? He loves his benchmarks. It was classic Larry, but it's another, again, it's another indication that the snowflake is doing well. And you know, hey, Larry's, I mean, they're the king of database. So you got to respect them, despite in insect rays, snarky comments to me at SuperCloud. Yeah. No, no, when he calls out someone, it's definitely on his radar because getting on his radar is actually a compliment. So the other thing that came out of that, people were actually talking about how he still got the balls to be that aggressive and compete. The other thing that came out of that, Dave, was the fact that if you look at the compute and GPU markets, that the shift to compute and connectivity is happening. So with the edge emerging, the core cloud edge distributed computing, it's going to be the security paradigm and it's going to be data driven. And the question is, is that this still going to be more and more databases out? Everyone, their mother's got a vector database. We're expecting more and more announcements coming around vector databases. So that thing is going to consolidate too, because we're going to see things, companies are going to just, Oracle announced a vector database, others are going to announce a vector database. One other thing is Intel at a big event this week. Again, we weren't there, but we watched. And I saw on Twitter, Crawford Dell Pred actually put on a tweet, hey, the road map's looking pretty good. Some counted Intel down and out or something to that effect. And I think he was talking about me. I wish he had called me out specifically because I've been sort of vocal about some of the challenges that Intel. So I said, let's define what down and out actually means. What's the probability that within the next five to seven years, Intel will regain number one in foundry and number one in design and be number one overall. And then John Ford chimed in CNBC saying, is that really the criterion? Is it really number one or nothing? And the answer that I gave was no, it's not number one or nothing. But what's the probability that Intel is going to be better than number three in foundry within that timeframe? And I think the probability is very, very low. And what does it mean? What's the future of Intel look like? They're doubling down in the portfolio. They get a big portfolio. Pat made a bunch of announcements, a bunch of AI announcements, but the fundamentals remain the same that Intel is no longer the volume leader. The ARM ecosystem is the volume leader. Now that doesn't mean go out and invest in ARM because ARM has got its own challenges because so much of the value goes to the ecosystem but that ecosystem is a whole. That business model has created massive volumes which have conferred huge value outside of Intel. So the alternatives. And Intel's fighting an in-front war. They're fighting AMD. They're fighting Nvidia. They're fighting TSM and Samsung. They're, you know, China is coming after them. And so, you know, Pat, as we've said, we love Pat, he's doing everything possible. But the challenges remain. So why are some of those other analysts such cheerleaders? Because they could pay a lot of money by Intel. But what's their angle? What's their audience? Okay, their angle is, and it's a good one, they're right. Despite the fact that they pay a lot of money, that was kind of a snarky comment by me. But their angle is, look, Intel is a leader. They still, you know, control the x86 roadmap. They've got a massive install base. They've got a great ecosystem. They've got, you know, standards throughout. They've got relationships with the enterprise players, with the PC players. They've got products in every single segment of the market. But I think they're really spread too thin. And I think it's going to be very challenging for them to fund both Foundry and all the work they have to do in the design. And so I think people see it and they say, okay, great. Hey, they're announcing all this stuff. Pat has his shit together, obviously. They're announcing all these AI products. I also think there's, people want an alternative to Nvidia, but it's, hey, when you talk to people privately, they're like, uh, Intel, we're really, they're still stinging their products. They're not what they used to be. Scottlebut and Colo Alto is Silicon Valley. Is it that plane might hit that mountain? So like, I mean, it is what it is. I think they're best. And that's the other thing is I put out on Twitter. What's the scenario for Intel regaining that lead? And I think the best scenario, which is awful, is that China takes over TSM, which is pretty high probability. And then what happens? Then people are going to be forced. Apple is going to be forced to start looking for alternatives, but I think they're going to look to Samsung before they look to Intel because, you know, Samsung's ahead in foundry. But there's still a chance that the US government could get Apple in a headlock and, you know, get Intel and Apple in a room and say, you know, Tim Cook, give that business to Pat and save the frigging foundry business. But Intel's still got to deliver. And right now they're not delivering on that front. Well, that's good analysis. We'll pick that up another time. I will just say, I just wanted to get this out there. We were at this SAS event at the RU mentioned. So let's explore. Let's explore when it was the, when it got hacked. So I was talking to those guys. They run a golf tournament called SAS Championship, Dave. I was invited to play in the Pro-N. It's awesome. I'll be playing in the Pro-N as a 15 handicap for the SAS Championship. I'm going to go down early and do a little videotaping, maybe sideline, kind of inside the ropes, social media, video blogging. Awesome. You have a 15 handicap? Yeah. Then you never frigging golf. That's pretty good. I'm at the top of the curve though. I'm not exactly average. Yeah, but that's average. How many times a year do you golf? Once a month, maybe. That's it. 12 times a year, you golf. Probably less than that. I know guys, golf 12 times in a week. I mean, you shouldn't 70, if that's the case. But I'm looking forward to it. It's in North Carolina. That's great. It's a senior tour. Fred Couples, Bernard Langer. So bucket list item check. I got invited too, you know. But I'm away that week doing a show on my path. I wish you were there. And I'm a really sucky golfer. I wish you were there. I would never. I would choke. Well, wish me luck. And thank God it's not on TV. Anyway, great, great POP 30. That's us, friend. Go to SiliconANGLE.com. That's where all the news is hitting. Rob Hoef and team are driving a lot of great stories. TheCube.net, that's the catalog of content for all the events. We've got a lot more events coming up. We've got Reinvent at the end of the year. We've got Supercomputing in Denver. That should be a good one. Find out what's going on at the chip level. And of course, KubeCon, CNCF, it's CloudNativeCon, Kubernetes, DockerCon, we're not going to be up. I'll do a briefing with the CEO. I believe the first time we're not covering DockerCon. It's in the company's history. We Y-path in two weeks. We've got a Teradata event down in Florida. OK, keep in tune to theCUBE. We'll be doing our normal thing. Thanks for listening. So 30 is in the books.