 Live from Washington, D.C., it's theCUBE, covering AWS Public Sector Summit 2017. Brought to you by Amazon Web Services and its partner ecosystem. Oh, welcome back here on theCUBE, the flagship broadcast of Silicon Angle TV, along with John Furrier. I'm John Walls, we are here at AWS Public Sector Summit 2017, the sixth one. History has grown leaps and bounds and still a great vibe on the show for us. Impact all day, John. It's a new reinvent for the public sector. It's just size-wise, it's going to become a behemoth very shortly, our first conference, multi-year run covering Amazon. Thanks to Theresa Carlson for letting us come in. Really, on the front lines here, it's awesome. Edge computing, right here, Edge broadcasting. We're just sending the data out there. We are, we're extracting the signal from the noise, as John always likes to say. Government education, it's all being talked about here this week, and with us to talk about that is Max Peterson, he's a general manager at AWS and Max, thank you for joining us. We appreciate that. Thank you for the invitation. And I knew we were in trouble with our next guest, because I said, this is John, I'm John. He said, this is Max, and I'm Max. I said, no you're not. I know better than that. Andre Pinar, who's a founder and chairman of C5 Consulting. Andre, thank you for being here on theCUBE. It's a great pleasure being here. All right, let's just start off first off with poor responsibilities. A little bit about C5 too for our audience. First off, if you would, Max, tell us a little bit about your portfolio. Sure. At AWS and then, Andre will switch over to C5. I think I might have the best job in the world because I get to work with government customers, educational institutions, non-profits who are all working to try and improve the lives of citizens, improve the lives of students, improve the lives of teachers, and basically improve the lives of people overall. And I do that all around the world. That is a good job. Yeah, Andre. Max will have to arm wrestle for who's got the best job in the world, because in C5 we have the privilege of investing into fast growing companies that are built on Amazon Cloud and that specializes in cybersecurity, big data, and cloud computing, and helps to make the world a safer place. I'm willing to say we both have the best job. Yeah, wait, wait. We can talk to the two of you. Are you kidding? We're talking to all the smartest people, like you guys, we can't get better than that. You're just a sliver of our great day. That's awesome. We've established we all have great jobs. Andre, let's hit cyber. Obviously, there is not a hotter topic. Certainly in this city, that is talked about quite a bit as you're well aware. So let's just talk about that space in general and the kinds of things that you look for and why you have this, I guess, interest of this association with AWS. So the AWS Cloud Platform is a game changer for cybersecurity. When we started investing in cybersecurity and people considered cloud, one of the main concerns was, do I move my data into the cloud and will it be secure? Today it's the other way around because of the innovation that AWS have been driving in the cybersecurity space. People are saying, we feel we are much more secure having the benefit of all innovation on the cloud platform in terms of our cybersecurity. And the investment thesis that you guys go after just for the record, you're more on the growth side with what stage of investments do you guys do? We're a later stage investor, so the companies we invest in are typically post revenue, but fast growing and visibility on profitability. It's the hot areas, okay, cybersecurity, security, surveillance, smart cities, autonomous vehicles. I mean, there's a data problem going on. So you see data and supercomputing coming back into, it's a foe. I mean, back when I was a youngling in college, they called it data processing, the departments, mainframes, data processing. Now you have more compute power, edge computer. Now you got tons of data. How is all that coming in and changing the business models of companies? This is a completely different shift with the cloud. But you still need high performance computing. You still need huge amounts of data science operations. How do companies and governments and public sectors pull it off? I think just the sheer volume of data that's being generated also by the emerging internet of things necessitates new models for storing and processing and accessing data and also for securing it. And when big enterprises and governments think about cybersecurity, they really think about how do we secure the most valuable data that's in our custody and our stewardship, and how do we meet that obligation to the people who've provided that data to us? How would you summarize the intrinsic difference between old way, new way? Old way being non-cloud and new way being cloud as we look forward? I think that was a pretty good summary right there. New way is cloud. Old way is the legacy that people have locked up in their data centers. And it's not just the hardware that is the legacy problem, that data is the legacy problem. Because when you have all that information built in silos around government, it makes it impossible to actually implement a digital citizen experience. You as a citizen would like to be able to just ask your question of government and let them sort out what your postal code was, what your benefits information was, right? You can't do that when you've got the data, much less the systems locked up in a whole bunch of individual departments. Well, merging of data, sharing data as an ethos in the cybersecurity world, where there's an ethos of, hey, you know, we're going to help each other out because the more data, the more they can get patterns into the analytics, which is a sharing culture. That's not really kind of the way it is. I got governance, I got policy issues. Well, policing is a good example. In the Washington DC area, there are 19 law enforcement agencies with arresting powers, and that data has been kept in completely separate silos. Whereas if you were able to integrate and share that data, you would be able to draw some very useful predictive policing conclusions from that, which can prevent and detect crime. That's a confidence issue and that's what your security point weighs in. I want to get back to what you said about the old way, new way thing. Another bottleneck or barrier or just hurdle, if you will, in cloud growth, has been cultural mindset of management and also operational practices. I mean, you have a waterfall development cycles or project management versus agile, which is different. And that's a different cultural thing. So you got all the best intentions in the world. People could raise their hand, put stuff in the cloud, but if you can't scale out, you're going to be on this cadence where projects aren't going to get that ROI picture generated. So the agility. How are you guys seeing that development? I would tell you the first thing that it takes is leaders. And that's what this conference is about. It's about telling the stories of customers who have seen the potential and who are now leaders. It takes something, it takes a spark to start it and the most powerful spark that we've seen are customer testimonials who come forward and they explain, hey, I was doing this the old way. A lot of times for a cost reason or a new mandate, they have to come up with a new way to invent and they made that selection of the cloud. And that's what so often change the opportunity that they can address. Here's just using that data as an example. Transport for London in the UK has a massive amount of data that comes from all of the journey information. They started their journey to the cloud four years ago and it started with the simple premise of I needed to save costs. They saved money and they were able to take that money and reprogram it now to figuring out how do we unlock the data to generate more information for commuters. And then finally, they're able to take that learning and start spinning it into, how do I actually improve the journey by using machine learning, artificial intelligence and big data techniques. Classic progression along the cloud. Save some money, reinvest the savings and then start delivering new innovation. I was going to use the use cases, jump right in. Andre, can you just chime in and share your opinion on this or anecdotal or story or data around use cases that you see out there that you can point to saying that's game changing, that's transformative, that's disruptive. Well, one of the customer stories that Max referred to that was a real game changer in cybersecurity was when the CIA said that they are going to adopt the AWS cloud platform. But people said if the US intelligence community has the confidence to feel secure on AWS cloud, why can't we? And so AWS have evolved cybersecurity from being an offering which is on top of the cloud and the responsibility of the client to something which is inside the cloud which involves a whole range of services. And I think that's been a complete game changer. The CIA deal, Dave Vellante is not here, my partner in crime as well. I called the shot her all around the cloud. That was a seminal moment for AWS in chronicling your guys journey over the years. I've been following you guys since the early birthdays and how you're growing up. But that was a really critical moment for AWS in public sector. So I want to ask you guys both a question. Right now, 2017 here at Public Sector Conference, what's the perception of AWS outside of the ecosystem? Clearly cloud is the new normal. We heard Berners I agree with that. But what's the perception of the viability that the production level, what's the progress bar in the minds of the folks? How far are we in that journey? Because this is a breakout year, this year. So that was the shot around the cloud. Now this seems to be a breakout year, almost a hockey stick pickup. It's another example of how it takes leadership. And it was the shot heard around the cloud. What we're seeing though is now many, many people are picking up that lead and using it to their advantage. The National Cybersecurity Center in the UK told a story today that's pretty much a direct follow on, right? They're now describing to their agencies what they should do to be safe on the cloud. They're not giving them a list of rules that they need to try and go check off. It's very much about enabling and it's very much about providing the right sort of guidance and policy. It's unlocking it instead of using security as a blocker in that example. And much more than just that one example all over the world. But people generally think, okay, this is now viable. So in terms of the mind of the people out in the trench is not in the front lines like here. Thoughts on your view on the perception of the progress bar on AWS public sector? John, one of the best measures of how the AWS cloud is perceived is what's happening in the startup scene. 90% of all startups today get born on the Amazon cloud in the US. 70% of all startups in France, in France gets born on the AWS cloud. And this is the future voting for cloud. And saying, this is where we want to be. This is where we can scale. This is where we can grow. If you believe in APIs will be the normal operational interface to subsystems and data, then you essentially have a holistic distributed cloud a.k.a. computer. And that's a vision. All right, so what's the challenge? What do you guys see as the challenge? Is it just education, growth? I mean, you only have 10,000 people here. It's not like it's 30 yet. Sure. Well, you heard one of the, or you hit on one of the things that's key and that's policy. You really do have to break through the old government bureaucracy and the old government mentality and help set the new policies, whether it's economic policies that help enable small businesses to launch and use the cloud, whether it's procurement policies that allow people to actually buy tech and use tech fast, or whether it's the basic policy of the country. The UK now has a policy of being a digital native, cloud native. The ecosystem is interesting, Andre, you mentioned startups because I think for me, challenge opportunity is to have the Amazon scale up to handle the tsunami of ecosystem partners that could be, we just talked to a fugue here, amazing startup funded by New Enterprise Associates, NEA. They're kicking ass. I mean, they're just awesome. If you go back 10 years ago, they wouldn't even be considered. Yeah. Absolutely. So you've got an opportunity to get everyone in the marketplace and let it be a free for all. It's kind of like a fun time. It's a great time. And in the venture capital world, being architect on the Amazon cloud has become a badge of quality. So increasingly venture capital firms are looking for startups that run on the AWS cloud and use it in the innovative way. Well, on efficiency on the product side but also leverage on the capital side. Exactly. You need less capital. Yeah. You've been in provision of data center? Yeah. You need less capital. And secondly, also you can fail much faster and then still have space and time to pivot and restart. And I think failing faster is something from an investment point of view that's really attractive. All right, final question. Failing faster. Failing faster, because what you don't want are long, long drawn out deaths of businesses because that's a sure way to destroy value in money. I think the other part though is fix faster. Fix faster. And that's part exactly what the cloud does. So instead of spending an immense amount of time and energy trying to figure out precisely what I need to build, I can come up with a basic idea. I can work quick. I can fail fast, but I can fix it fast. All right. Well, you mentioned the golden time, the golden era. And I think you both have captured. So I think both of your jobs would be up there at the top of the shelf. Thank you, John. You mentioned 19 agencies, by the way, here in DC that can arrest. I have parking tickets from every one of them. That's it. I'm glad to have an arrest at you, John. That's the price you pay for living in this city. Thanks, John. Max Andre. Thank you very much. I appreciate the time. Back with more here from AWS Public Sector Summit 2017. Live, Washington DC. You're watching The Cube.