 Hi, welcome to CUBE Conversations. I'm Stu Miniman, coming to you from the Wikibon Home Office in Marlboro, Massachusetts. And joining me for the cloud conversation is our lead cloud analyst, Steve Chambers, coming over to us from the UK. Steve, thanks for joining us again. Hi, Stu, and a good day from the UK. Beautiful day, yeah. Yeah, it's great. I was with you last week in London. We were at this phenomenal MIT Institute for the Digital Economy talking about the second machine and last week I said I had to escape the dreary, cold, disgusting weather in Boston over to London, where it was lovely. I'm happy to say that when I came back over here to Boston, weather's come out nice. Spring has finally arrived. Those huge mountains of snow are starting to go away. So we're all in a little bit of a happier mood and it is full season for us. We've got lots of events going on. Want to dig in with you, let's talk a little bit about the wrap up, the MIT piece, some of the applicability to what we see from that into the enterprise world. And you were just at the AWS Summit in London. We also broadcast the Q from the AWS Summit in San Francisco the week before John Furrier and Mark Farley did a great job getting some of the technologies, some of the partners, customers using. So yeah, let me set up as to, where was your head out the last week? Well, I think the MIT event was mind blowing, right? The four key presenters were all very, very good. You expect when you go to the academic sessions, you think, it might be a bit dry, not that interesting, but they did a great job, they were funny, some wonderful content in it. But I think if the second machine age content from last Friday, MIT, if that was the theory, I think yesterday at the Amazon Summit, that was the practice. So we heard some brilliant presentations from customers who were building platforms on platforms. And that was one of the main sessions from Marshall in the MIT event. And that's what I left when I thought, wow, it's like I read the theory last week, and now I'm seeing it in practice this week. And that was the big aha moment for me at Amazon yesterday. Yeah, I tell you, it was definitely one of the highlights of the MIT event for me is they were talking about really, it's not about products anymore, it's about building that platform. I was sitting in the audience and one of the people were like, hey, you were talking about consumer things like Apple and the Apple Store, and other companies in the consumer space that were building platforms. He said, what about the enterprise space? And I was happy to say that he quickly came back and was like, oh, well, Salesforce is one of the earliest examples, building a solution set. It might be SAS, but it's really a platform that everybody can contribute to. There's partners, ecosystems that plug into that. I mean, at Wikibon, we've been talking for the last couple of years. There are the open source platforms that people are using components and building off of. And absolutely, Amazon is a force to be reckoned with and definitely we would agree they are a platform today that companies are using, partners are building into. Maybe Steve, could we even say that it's coming close to being an enterprise app store from Amazon? Yesterday, it was all about enterprise. We just saw some really interesting points from Werner in his keynote. The acknowledgement that on-premise, it's okay to have on-premise stuff. It's okay, hybrid cloud. That was touched on not only in the keynote, but also in the enterprise track in the afternoon. And, you know, customers were talking about it. I met several yesterday that explained how they didn't have a cloud-first policy, but they had a why not cloud policy. So when it came to new applications and they're also doing some, how did they describe it? They're trying to reduce the footprint of their colo. So, you know, bit by bit, they're moving apps to the cloud. It's not as easy as they would like it because sometimes applications have got stickiness to other applications in the data center. One example I heard yesterday and there was quite a bit of laughter in the room was how, and I don't know why Cobra gets such a bad rap, but they were saying how, you know, the applications that you're using technology like Cobra, very sensitive to latency, they're not going to go in the cloud, right? So there are things out there that are not going to go, but equally, and, you know, I didn't get much of a kind of fanboy in press yesterday. People were very, you know, maybe it's because he was in Britain. I don't know. We're very more measured, you know, than some of the nations I can think of. And they were very pragmatic and saying, you know, if it makes sense, we'll do it. If it doesn't, we won't. We'll pick the right tool for the job. And Amazon has got more and more tools that we're going to use. So, you know, that was the kind of takeaway I had from the customers yesterday. All right, so Steve, maybe you can elucidate unpack for us a little bit. Amazon's moderated a little bit on kind of the on-prem side of things, but for the most part, they still want everything going on in the public cloud. I mean, it's not Amazon's vision is, you can have some stuff on-prem maybe kind of, but they don't even like to call it, you know, they don't never call it hybrid cloud or, you know, private cloud. It's, you know, public cloud is the main answer from them. Can you kind of walk through a little bit what Amazon's vision is? And I'd love to get a little back and forth as to what we really see today. Yeah, absolutely. So, you know, last year when I was working at Microsoft in the hybrid cloud team, right, in the UK, I came out with a position that hybrid cloud is not product, it's not a SKU. A lot of vendors talk about hybrid cloud as if it's a thing you can buy, but it's the thing that you make, right? So Amazon had the point yesterday that hybrid cloud is a journey, not a destination, right? So, but the way they described it and they had a nice spectrum slide that we need to get a copy out to the folks to see. They had on-premise on the left-hand side and across the spectrum, they had hybrid identity, hybrid network, hybrid management, you know, and all the different things that they do. And then on the right-hand side, they had the Amazon public cloud. Now, as I'm watching this, you know, with my cynical Brit hat on, I'm thinking, yes, I think hybrid cloud is a journey for Amazon. It's a journey into your data center to assimilate more and more of what you do. So I think, you know, people have been looking at Amazon that it's a weakness, the way that they, you know, kind of dismiss on-premise and they always talk about going all in on the public cloud, which they kept saying yesterday, so I don't think they've changed their core message. But I think they know, you know, if they perceived that people thought it was a weakness because they wouldn't embrace hybrid or they wouldn't embrace on-premise, I think they're now trying to turn it into a strength that with Amazon, you can do hybrid better than anywhere else. And I think that was a bit of an about turn. Yeah, so I was just actually pulling up my notes from re-invent, you know, back in November. And they said, what customers are really looking for is they want to control or have a private version of their network, their compute, their storage, their key management and their governance. And Amazon saying, we can do all this in our cloud. So I agree with some of that, but, you know, it is a journey and it's not overnight, but where we have arguments right now is today, if you look at the overall, you know, what's at $1.3 trillion IT spend and, you know, AWS and Microsoft, you know, the public clouds are growing gangbusters, but there's still a tiny sliver of this overall pie. And the question is, if we go out five years from now, you know, the growth rates are no longer triple digits. They're now double digits. So, you know, is this going to be 10% of the pie? Is it going to be 70% of the pie, which is kind of where Amazon puts it out? You know, how much of it's going to be there? And, you know, customers we talked to today, public cloud is a tool, on-prem is what they know, and they're using SaaS. So it's really about understanding our portfolio and everything else like that. So, you know, I'm bullish on where public cloud's going, but, you know, I don't think, you know, the IT industry is all in on public cloud and general AWS specifically. So please, yeah, what's your take? So, I think I got a sense yesterday talking to customers that there's a little bit of trying to make the public cloud look like the enterprise. I think that's the fundamentally wrong thing to do. Now, they'll probably, I'll probably get rich and shouted at in the street for saying this, but, you know, when you look at what people are trying to do with SDN and security, they say, well, you know, we need to make the cloud network look like ours. Whereas, you know, you see a start up like ghost work, which was started by 14 year old kids, which still blows my mind, you know, the public cloud network is fine for them. And, you know, I want to dig into this with some, you know, I met some good network engineers yesterday, but I want to dig into this like, why are you trying to make the cloud network look like yours? And I'm sure there's good reasons for it. I haven't heard one yet, right? I'm sure security guys out there will say, well, you know, we can't have VPC transit areas and lots of other kind of networking gobbledygook. But, you know, the public cloud network is working for lots of people. And I just have this, I have this sense from what I heard from, not just from customers yesterday, not just from Amazon, but from some partners in the space that I think we're trying with hybrid cloud, for example, you know, I was an early believer in that because I recognized there's always been of the applications on premise. But seeing people trying to bend and twist public cloud to look like the enterprise, you know, be managed by enterprise tools, something's telling me that's the wrong thing to do. One of the examples yesterday was of students, right? And I think we touched on this already. They go through university life and they use things like Amazon cloud. They're not really interested in deployed virtual machines. I think this is another misnomer. I think we're pointing the light at the wrong part because it feels comfortable, but I think we should try and make ourselves uncomfortable and really look at this through a different light. The big thing that Amazon and their customers were talking about yesterday wasn't the use of virtual machines and sizes. They touched on that briefly. It was like a sub-subheading in Werner's keynote. The customers were running about not chaining together virtual machines to them for applications on, because that's still a hell of a lot of heavy lifting, right? What Amazon are doing is they're taking the undifferentiated heavy lifting as a phrase that you always hear that they do for virtual machines. So you don't have to worry about all the infrastructure. They're not moving that into the application space as well. So now the question is, well, why do I have to mess about with virtual machines at all? If I can just consume a service like a data warehouse and all that, I don't have to bother with the virtual machines anymore as well. The thing that we've always talked about with PaaS and SaaS, I think that's going to be a huge growth area. You mentioned double digit growth for Amazon. I think that's, you see some of the charts where it's steady growth, steady growth, steady growth, and then it goes exponential. But what I saw yesterday, never mind the infrastructure as a service, is the application services that I think are going to really grow for them. Yeah, so a lot of really good points there, Steve. I mean, first of all, if I've got a new tool, I don't use it the way that I was doing things in the old way. So that's kind of a given. But the early uses, I mean, you think about just kind of the core, Clay Christensen, innovators dilemma, disruption is something that's new, that doesn't fit the old way of doing things. So I've got new use cases, new ways of doing things. There's stuff, I don't get a phone and say, gee, I want to be able to do everything just like I did on a tablet. Because boy, that tiny keyboard and I don't have an external mouse. I mean, I remember when I got my first mouse and it was just like, wow, this thing's cool. What do I use it for? I use it for the paint application because that was the only thing it worked with. And eventually I stopped typing most stuff because I could just click around and it was a gooey. And, you know, so, you know. This is a great point, right? Because then how would you feel if you got used to using a great user interface today and then you had to go back to that five-year-old, 10-year-old technology? You'd hate it, right? And I get the sense that once people have started using, and I think this was revealed in the survey we did, right? Once people start using it, it feels weird to go back to the old way of doing it. It was funny, Steve, I was having a discussion. You remember before Windows was graphical? No, I don't think I'm the oldest. You know, you kind of, you know, Windows 3.1.1. You know, it was before Windows really was, you know, kind of a gooey. And now it's like, oh, well, you know, Linux users all, you know, are used to, you know, typing in things and not doing graphical and everything. It's like, oh, it's just funny. Sometimes they come full circle there. I mean, we talk about some of these areas. It's, you know, you know, is VMware the software mainframe? Is this something we asked for a couple of years? So I'm sorry, you had a point there? Yeah, so as Bernard said, you're putting the control and the power of the consumer's hands, right? Because it was something that annoyed him so much when he was the Amazon.com CIO of giving over big checks to companies and then the account manager would disappear. You know, they're totally reorienting the focus around the consumer, which is what we saw in the MIT research last week, which is why I think I'm certainly like that whole second machine age in practice, the whole platform player. But it struck me, you know, you talk to some big household names. I mean, a funny phrase I heard yesterday, and I have to share this was, you know, public cloud is like public transport. It's only for poor people. That's a perception that I heard. But you look at the household names that were there yesterday, the uni leavers, the Vodafones, the, you know, financial types, St. James. These are companies with some serious money that are embracing it. And I was asking them, you know, are you looking at the cloud through the enterprise prism? Or are you looking at things with the Amazon glasses on? So through the cloud prism, are you looking back at your enterprise and working out how I can do things better? Are those two perspectives, I think they're good to try, right? And I think you would see, I think at the minute everyone's looking from the enterprise side of the cloud, and I think that's wrong. I think you should be the way around. All right, so Steve, you know, let's talk a little bit about, you know, some of the competition out there. You know, there's no doubt Amazon is the kind of undisputed leader today. But you know, your old friends at Microsoft are coming on strong. Some of the big enterprise guys are putting some solutions together. Hey, you know, with what you saw yesterday, what did you walk away from? Does Amazon still has a lead? You know, is there differentiation between the different offerings that are out in the marketplace today? Or is it, you know, cloud just a commodity? Definitely not a commodity. I don't see utility. I know we all used to talk about this a few years ago, you know, and say it's going to be like electricity, but there's no such thing as a cloud three plug. You're on our plug. They're all different shapes and sizes. I mean, if you look at, I mean, and they feel different, right? So if you look at Amazon, you know, I look at all their application services less than the technical bits they do. I think Microsoft's quite a technical, it looks like a cloud by a software company. Amazon is like a cloud from a retail company. And Google, you know, they all look different. I can never imagine a hybrid cloud scenario that will be worth doing from what I've seen today, it's yesterday, where you would move a workload from Amazon to Google. I mean, they're just different the way they work. You'd have to handle it. I guess just to that point, Steve, what we did find at least in most of our surveys are users, the users are using multiple environments. So, I mean, Microsoft is real sticky with a lot of their applications. I mean, Office 365's ubiquitous. You know, heck, we're using Skype right now. So they've got lots of application. Google has lots of different things they're doing. I mean, Amazon is the platform and they've been, I think you've alluded to it some, they've been building up the stack a lot. So it's not just about putting a VM there or cobbling something together for your service, but look at what they've done with Redshift, look at what they're doing with the Lambda project. There's, you know, lots of higher level services that Amazon's putting together that, you know, I think they still, you know, they've got that lead and they're not sitting on it. They keep adding to it, listening to their customers where there's opportunities to go after areas like the database. Oracle's made huge margins for years and years. You know, they launched their database last year. You know, they keep growing and adding on and they listen to the user and they keep making it easier for them to consume and build on top of them. Yeah, I totally agree. And I, the big point I saw yesterday from the customer stories, and I must just, I've done certainly double digits the customers I saw yesterday, they're in their business processes to the Amazon applications. And I think that is the kind of glue that was a break, right? So instead of it being the interface between the enterprise and the cloud being a techie deploying a VM, what Amazon are doing very, very cleverly in their time, you know, like the GoSquad guys were a great example inside their developer for Amazon services. So the developers are all in on the Amazon. But also their business processes, the Lambda thing is great for mobile applications. You know, when events happen, it triggers some code. You know, you're tying your business to a much higher layer than the infrastructure. And I think that is a killer thing that Amazon are doing really, really well. All right. So Steve, you know, we got to wrap up soon. You've been looking at, you know, what's the kind of cloud adoption framework? How should customers be thinking about that? How, you know, I think you talk about layers in the hybrid cloud taxonomy. We'll walk us through a little bit of that. Yeah, absolutely. So I think, you know, it's that knowledge that startups love Amazon, right? I mean, I've been to Glucon and those places before. And you know, the fact that a bunch of 14 year olds can start a business because they didn't have to go to Silicon Valley to get $5 million of investment. You know, that's a good story. We all know those. But yesterday was really about the enterprise. And you can tell, you know, never mind going all in on Amazon. I think Amazon are going all in on the enterprise. They are really going after it. And they're doing some classic plays. So if I think back 10 years ago, when I was at VMware and we were trying to break into the enterprise because, you know, it may be hard for people to remember but, you know, VMware started on the desktop and we went into the enterprise. You know, people thought it was a waste of time. Of course history has proven different. One of the things we did at VMware was this whole kind of virtualization adoption. We had maturity models. We talked in the language that the network engineers and the business people and the operations people understood because, you know, if the enterprise can't grok your technology, they're not going to adopt it enough. You know, it's just going to be another point solution. So how do you really embed what you do into that enterprise? And the cloud adoption framework I saw yesterday and Steven Orban who did a great presentation on it. That is their conversation with the enterprise that they're going to have. They're going to say, look, we've put this in enterprises before. The enterprises that have adopted cloud went through these situations. They had these problems. Here's how they solved them. We want to help you, Mr. Customer. And that's what the cloud adoption framework's going to be. It's going to be open. You've got consultants to come and help you if you need them. I think that's going to be a really big chapter in the coming years for Amazon. All right, Steve. So we're going to have to leave it there for this edition of Cube Conversations, focusing on cloud. Thanks so much, everybody. Please check out premium.wikibon.com slash cloud. Find the latest on this topic. You can find Stevie and myself up on Twitter. Hit us up with any questions you have. Check siliconangle.tv for all the shows that we're going to be at. Stop on by, check out the Cube. See us online. And thanks so much for joining us for this episode. We will see you next time.