 Live from Las Vegas, it's theCUBE. Covering VMworld 2017, brought to you by VMware and it's ecosystem partner. Okay, welcome back everyone. We are here on the ground here at the VM Village live in Las Vegas at VMworld 2017. People buzzing around us here on the ground floor in the hang space. I'm John Furrier, my co-host Dave Vellante. Our next guest is Craig Nunez. Chief VP of Marketing at Daytree AM. Andrey Liboschi. VP Solutions and Alliances at Daytree AM. Welcome to theCUBE. Good to see you. I've been looking forward to this since I arrived in Vegas. You guys are the hottest startup right now that on the track in Silicon Valley. A lot of people talking about you guys. I want to get this out there. Give you a minute to just talk a little bit about Daytree AM. You guys are a new model emerging with some real pros. Data domain, everyone knows the success of that. Thanks, Lutman, that went that way. You guys have a great team of XBMware guys. So we're going to have a really compelling, unique thing, but it's getting traction. So give a minute to explain what Daytree AM is. In simple terms, we are a very different take on convergence. We're converging VMware and Linux virtualization, even bare metal container hosts with your primary storage. We leveraged host flash for that with secondary storage and archived to cloud all in one super simple system. And I mean what a lot of our customers kind of tell us is, wow, you are a simpler, more scalable kind of Nutanix that meets Rubrik. You're like this love child of Nutanix and Rubrik. They just love it, because it's one thing that does it all. Super simple. There's a lot of free love going around this generation. You got AWS and VMware bonding together. Google's playing in here. It's the 60s all over again. Yes, yes, not that I remember. Tech hippie generation. Summer of love. Love child of Rubrik. Summer of love. That, I'm going to use that. I will do that. Okay, so love child between Rubrik and Nutanix. What specifically does that look like? Just clarify one from a product perspective. So first of all, there is absolutely zero, call it HCI cluster administration. And so growing is as simple as adding a system. You add a server, adding capacity. You add those independently as you need it. So it's super economic. Everything runs fast because it runs right out of flash in your server adjacent to your VM. And again, no backup silo. You take care of all of your protection and archiving to the cloud with the same console that you're running your business on. So that's in a nutshell what you get. So contrast that, Andre, with the classical hyper-converged infrastructure in terms of how it scales and how it's managed. Yeah, no, that's a good question. So if you think about hyper-convergence, and by the way, it was great. It really changed the data center in many ways. It simplified, removed the no silos that SAN was creating and the complexity around scalability or configuring rate, LAN zoning, all the things that need to specialize the skill to manage, right? And as you know, as you move along in your journey, in the data center, you end up with multiple different vendors. They have different skill sets to manage. So HCI really changed the game in their ways, but it also created different challenges for the data center. And we are lucky enough that HCI is only starting, right? This whole thing about conversion is only getting started. So the problem, one of the first problems that we address is being able to scale performance independent of capacity. So we've hyper-converged for the most part. You know, if you want more capacity, you need to have a computer. If you need more computing, you need to have capacity. So we enable customers to go in different directions as needed. We also enable customers to bring their own existing environment into the solution. With HCI, generally speaking, you need to buy that specific appliance or that specific HCL and sort of like port everything into that specific solution, which kind of becomes a silo as well. So we enable companies to leverage the existing environments and get the same benefits that you would get from a performance perspective that HCI is bringing data locality and read local read IOs with SSDs and VMEs, but at the same time with your existing hardware and allows you to use whatever you want. There are other benefits on the resiliency side as well, primary and secondary backup. So all the primary data leaves in the nodes in the servers, but we have the copy of the data or the backup in what we call a data cluster. So what that really makes is the solution is stateless on the server side. I don't know if you remember in the same time frame all the servers were stateless. This server went down. You would just restart the VMs or the workload in a different server and it creates. With hyperconvergence, now it's always stateful. All the data is actually living on the server. So when you lose a server, you're actually putting data at risk and to be cost effective with HCI, you need to do what they call FTT1 or replication factor two. It means like two copies of the data across the cluster, but it's not very uncommon to have a disk failure and a read error and then you're down to backup and have to restore. You want to rely on the backups as your insurance, not as your users for a day today. So there are a number of different things that we saw. We believe we solve and we solve well that hyperconvergence was not able to solve in its first instance. But you know what, that said, hyperconvergence is starting, this whole journey into convergence is starting. I think I saw Chad Sackett saying there's 450,000 VNX out there. Those are all coming for, you know, for renewal, for, you know, refresh cycles. And now customers have the ability to see what HCI was doing the past three, four years, what worked and what was not working well and look at the new solutions and see how we are addressing those challenges. Okay, well what about the data protection side? You guys obviously have, with Brian and Hugo, a lot of experience as a target, you know? But you're talking about more, you're talking about a software platform. Yeah, from a data protection perspective, first of all you've got a platform that's, you know, totally unified with your primary storage environment. You then have, you know, this wonderful granularity at, you know, VM and VDIS level, container level. Great scale, I mean, again, the chops that the founders bring to that. But one of the things that, you know, I think is, you know, really powerful, a lot of other platforms will talk about, hey, we can snap VMs, we can replicate, but then they will store them on expensive flash in those nodes. And we have a separate device that is, you know, cost optimized, globally deduped, compressed on very low cost capacity that is ideal for all that capacity you need to keep to protect the business. And so bringing that together with, you know, the great performance of flash, this thing really does it all end to end. And so it's a different way to think about it. And when we go in, we're typically solving problems on the, you know, compute primary storage side. But when we then describe, you know, what we do from a backup or archive to cloud perspective, the lights go on. Oh my gosh, I simply don't need to do all this other stuff. I got a two for one here. But yes, exactly. So in your file system, basically you're saying eliminates the need for any separate backup software. Is that right or? We do, I would say, 80 or 90% of what most people need because the convenience of having your virtualization engineer do it all is so good. Now, what I would say is there are a lot of requirements in the world that we absolutely are going to turn to our pals at Zerto for in a cool replication. Our friends at Veeam, Rubrik or Cohesity, all of those guys will team up with because if you want, you know, a backup off platform, you know, we're daydream to daydream, you know? Yeah, right. We're not going to sugar coat that. But if there are specific requirements that those guys do that you need, we're going to give them a ring and bring them in. But what we're finding is most of our customers are looking for ways to just do it all in one spot with the guy running the business. So it's like- All right, so I want to back up. We had Brian's founder on Monday. And this is interesting. So I want you to take a minute to describe why you're doing this because a lot of people, you come in, okay, primary storage compute and then that's how I use to operate. And then the next guy comes in with his solution. You guys have an interesting perspective. With the data domain backup side, why are you guys taking this approach? Explain the uniqueness of why you guys are engaging in this way and what does it mean for the customer on the other end? Is it all in one? Is it optional? I mean, the approach is unique because of the founders. Just take a minute to explain that. Here's the world. The world is hard and getting harder, right? I mean, it's just a morning, noon, night and weekend job to keep businesses running with the pace of this economy we're in, right? And- The buyers are pulling their hair out, basically. And the- Exactly. And so the winner in the market is the one who can bring the simplest approach that gets the job done. And the problem is the bolt-on piecemeal solutions that folks are tasked to live with, if you sit down and just draw all of the software stacks and consoles that you need to put together to go from your virtualization environment, flash, your backup environment, replication, DR, security, you want to blow your room out. Give me a rope. Give me a rope. I'm hanging it from the ramp. Again, guys are trying to get the job done. They've forced to move fast. They're tight on budget. And so if you can bring them the simplest possible solution that solves the problem today and future proofs that going forward, that's what folks are looking for. And there's a lot of nuanced edges to a lot of different solutions out there, but at the end of the day, show me simple and that wins. All right, so now give me the reactions. That's important to buyers to understand what Daystream is. Thank you very much for that. Now the reaction. So you walk into that buyer and say, hey, don't blow your brains out. Don't hang from the rafters. We got you here. This is beautiful for you. Simple works, cleans those lines up. What are they reacting? Are they skeptical? They say you're full of, you know what? Do they test the hell out of it? What it is? What goes on there? When you walk them through it, and I'm going to let you take this too. You've talked to a ton of people already. When you walk them through it, they totally get it. Where should flash be? Right next to the VM on the host. Makes perfect sense. It's cheaper there, right? How should you scale it? Well, stateless hosts. Servers that aren't storage nodes. You lose two and you're clustered down. That's not a great situation, right? And so, yeah, stateless hosts. Any number of servers can fail. You're still going. People love that. They get that. Bringing all of the backup capability into that one console. You know, if you've got it, people get it. And by the way, a quick demo is kind of icing on the cake. But I mean, share some color. I want to get to it. You know, customers, I've been traveling the last few weeks and talking to customers. I joined Datum more four months ago or so. And the customers understand the proposition and they like. They like that we bring performance. They like that we bring resiliency. They like that it can utilize the existing investments in the data center. And they like that we do primary and secondary backup. The customers that we're talking to, they get it. And they understand and they want to do PLCs and move on. So we're talking about a lot of VNXs out there, 400,000 plus. Obviously, that's been a target for a hyperconverged. Clearly a target for you guys. But you're also talking about stateless. And you think about these emerging cloud native apps, these stateless apps. Certain IoT apps that are being developed. Do you see the emergence within your customer base yet of those type of emerging applications that aren't staple? Absolutely. I mean, well, first of all, if you look at the public cloud world and architecturally, what those guys have had to do to kind of get latency low and scalable, they think EC2 and S3. Think of how Google Cloud is architected with Colossus. They have separated that persistent capacity from what's going on effectively on the nodes, the compute nodes. And they've done that for exactly that reason. To scale low latency workloads as you need, as you grow on demand. And to make that infrastructure invisible to the developer. Absolutely, absolutely. And so the approach we're taking is fundamentally to give customers and kind of this hybrid world a way to bring that kind of infrastructure with the simplicity, scale, performance you need, kind of on-prem. And then it's a wonderful map when you take that in a hybrid way to public cloud because you can very easily map that capacity layer to capacity layer, compute to compute. Instead of this kind of crazy dance you have to do with traditional infrastructure. That was actually part of it. She looked at VMware and there's the keynotes and embracing DevOps and containers. It's all over the place. Now we're counting the days for how many store engineers or infrastructure engineers we actually need in the data center moving forward. But the way the system that we sell was architected while I was in mind to support bare metal containers and provide all the performance benefits and really providing a way to run containers and cloud native apps across data centers, across clouds. And we're moving in that direction more and more to support Kubernetes integrated and a few other... So I want to follow up on that. I mean, everybody talks about cloud. We're at the show, it's cloud, cloud, cloud and it's obviously the big wave. But the Parlin, you know this well, John, being at all the time you spent with AWS and Reinvent and Jassy and so forth. The parlance of cloud is not VMs, right? And so is the conversation beginning to change in your customer base around more of a developer mindset and what is that conversation like? For the customers that I've been talking there's still a very VM centric. There are obviously some discussions about containers and developers embracing containers off-prem, on the cloud and on-premise. But an OVM is still pervasive in the enterprise. So that's where the money is. That's where the money is, at least for the large material. It's still a bit of an upside right now on-premise. So cloud is just a different vernacular, true. Well the reality is though folks have, they've got a VM environment. A lot of people we talk to are, they have nascent container development work going on and the challenge is though that those kinds of customers wind up having to silo out the infrastructure that supports those because they just don't have the bridge. And the point is, yeah, you can have your ESX VMs, your Linux VMs, your containers running in those VMs or you can have those containers running bare metal. And it's all one shared pool of resources like it ought to be. And to some extent when I talk to customers, what I figured out is that they always starting with containers running in VMs, but as soon as they figure out their framework, their management, their orchestration, they want to move to bare metal because they want to harvest that additional 10, 15% performance that they get running bare metal. And that I see constantly in talking to Docker and a few other companies out there, that's what they see on their customer base as well. So, where all that is going, I don't believe everything is going to be running in the cloud. I don't believe everything is going to be running in the data center. They'll be mixed of everything. You talk to customers, they have different hypervisors, they have red head virtualization, they have VMware, they have Hyper-V and large customers are embracing everything to some extent. Yeah, and you want to set it up in a way that, you know, you set your policies and you don't care where it is, right? You set it up in an economical way that is lined with your service levels. And who cares if it's a different on-prem site, the cloud, which cloud, it doesn't matter, it's all your cloud, one cloud, right? Guys, thanks for coming on, Andre Liebovici. Yeah. Got it, right? You got it. Big newness, good friend. Congratulations on the startup. Quick, I want to give you this last word here. Talk about the company status, what you guys are hiring for, where you guys are on the startup journey. Obviously, great validation with multiple rounds of funding. How many employees? Yeah. How much revenue are you doing? How much is the product cost? Yeah, gross margin by product. Yeah, we are growing rapidly, 130%, quarter over quarter. We are hiring literally across the board. We can't hire fast enough to keep up with the demand. And for us, the number one goal is just getting in front of, you know, customers who are looking for, you know, way out from- Some sales people, you get some field organization. Channel? Yeah. Channel, we have a wonderful channel network and absolutely hiring, you know, guys to partner up with our channel, both sales and marketing. And yeah, we just- All right, I'll put you both the guys on the spot because we love big fan of startups, certainly ones that have great pedigree and products. That's unique. Again, like NewtonX in the early days, no one understood it. Founders that stayed on the course, you guys are on a similar track where it doesn't look like everything else, but it's game changing. So each of you take a minute to explain to the buyer, potential customer out there, why they should work at Datrium and what you can bring to the table to start with you. So first of all, if you are on array-based infrastructure now and you're dealing with your, you know, the performance constraints and managing loans, you've looked at a modern approach to convergence and it just doesn't scale. It's not right for your infrastructure. An enterprise or service provider has to take a look at this new approach to convergence we've got. It will change your world, literally. Your business and your personal world. And if you don't take a look, you're missing out. It is different from hyperconvergence, but fundamentally brings you that wonderful X86-based infrastructure that the whole planet is moving to. Got to take a look. You can't say the same thing he said, but in your own words, what would you say to the potential buyers that are out there, potential customers that should look, why should they look at you guys? Sure. I'll latch on on the HCI and the simplification of the data center. The HCI was great, simplifying data center, removing a lot of the complexity. We do the same things. We do in a different way. You know, we remove all the knobs and buttons that you have in the data center. As an example, our infrastructure doesn't require any tuning on performance, on enable this, the duplication, enable compression, disable a ratio coding, all those features that people know when you're managing hundreds or thousands of EMS, there's no way you know what needs to be enabled and disabled for each one of your workloads. So we latch on simplicity and that's where HCI beg, it's simplicity. And we do the same thing, but we now solve different challenges that HCI also brought into the market. And the data center. Okay, day three, start up, hot start up, it's looking valley and all around the world, congratulations. It's theCUBE coverage here at VMworld 2017. I'm John Furrier, Dave Vellante. We'll be back with more coverage after this short break.