 Live from Cube headquarters in Palo Alto, California. It's the Silicon Valley Friday Show with John Furrier. Happy New Year everyone. You're listening to the Silicon Valley Friday Show. I'm John Furrier. This week, it's January 6th. Happy New Year 2017. And our guest this week is Alan Cohen, who's the chief commercial officer at Lumio, industry veteran, startup executive, going way back. Former Cisco executive, been around the block, been in the startup community for decades. Alan, welcome to the show this week. It's like a nice way of saying I'm old. Yeah, you're old but experienced. I got my big doctor checkup today going on, 51 years old. But look, so much is going on. It's like, it's great to have you on and get your reaction to a lot of stuff happening. But obviously CES is going on. It's 2017, it's the new year. Stocks are up. Twitter actually had good earnings yesterday. So that's a bright spot. CES is happening. It's turning into an auto show basically. Software is booming. You're seeing the automotive industry actually co-locating most of their main tech here in Silicon Valley. You see a startup community that's certainly changing. You're seeing a media business that is absolutely in turmoil with medium laying off the third of their staff. Journalists can't make money. Washington Post is on its way back though. Washington Post, they've got Bezos and little influence there. So who knows what's being subsidized on the digital side. But a complete digital transformation. The computer industry is in massive turmoil. As Dave Donatelli at Oracle said, it's completely, if you don't have cloud, you're going to be screwed. All the infrastructure guys are really struggling. So much is happening. So let's just stick with the big news. I want to talk about first is the security state of the United States. Julian Assange was on Fox News this week for exclusive interview. I saw that. And he came out and basically said, look at John Podesta's emails were not hacked by the Russian government. We can say that was not the Russians. But then he went in and he illuminated some interesting things like, hey, his password was so weak, 14 year olds could have cracked it. So we are in a state of, I don't want to say head in the sand, but the United States of America, liberties are at risk. People are being hacked. Whether it's spearfishing or fishing or other tactics, it's a total crazy environment. What's your thoughts on this? Well, I'll paraphrase. So yesterday I was driving and it's worth everybody listening to. There was a hearing of the Armed Services Committee, John McCain's committee. And he was a grilling national security director, Clapper and Adderham Wright Rogers, the head of the NSA. And Mike Rogers had a very interesting thought, which I think everybody in our industry should pay attention to, which is, first of all, there is a massive concentration of data in enterprise data centers and in cloud environments. And 10 years ago, people didn't have the computing power to get to it and extract it. And now they do. And things like AI and all the things that have advanced our industry are kind of weaponized in the hands and the ability of the bad actors to get their hands on the same tools and cloud capabilities is very low. But if you build anything that's connected to the internet, you're going to be at risk. And I think we never really thought about that over the last 20 years as we were building the internet. I mean, certainly people paid attention to security. And there's going to be a shift in thinking. So the last 20 years in security, we spent all of our time saying, how do you keep bad things out? It's kind of makes sense. And the next 20 years, they're going to say, now bad things are in it. How do we limit the amount of damage that they can do? John Podesta, I don't know what his password was. Like I'm not kind of Starbucks buddy with it. They said his password was password. Well, aside from that being like the Mel Brooks, one, two, three, four is the lock on your suitcase, you know, kind of environment. Like the entire world is going to need a hygiene lesson on, you know, kind of, you know, how do you operate in the digital world? Like you don't leave your front door of your house unlocked. And some people, some neighborhoods, they do do that. I lived in one of those, but they're, you know, but you know, it was a town of 11 people, right? So when I lived in Connecticut, you never have locked the door. There was no, there was nothing to steal either, but so. I wouldn't call Connecticut, you know, the boondocks. But I mean, I mean, in reality though, I mean, people do lock their doors. But let's talk about hygiene. I mean, Donald Trump was quoted saying that he's going to use courier to send confidential information, basically physically. You think it's going to take away the Blackberry? They're going to take away the Blackberry? I don't know. Well, Blackberry has limitations. I mean, look at, look at Amazon has this snowball, now snowmobile. So you're seeing this physical analog, you're seeing trends where I was just watching on CES. Analog's coming back. You're seeing Kodak film making a comeback, vinyl records. So we're making a shift back to this new analog world. There's always, there's always going to be an overreaction. Don't forget, like when Sony got hacked, they went back to fax machines, right? For a while. I'm sure the computer systems are back on at Sony. I just think you used to, things that you used to take for granted, you don't take for granted. And I think the good news, and I don't want to be Polly Annabash, because this is pretty serious. I've built whole business around this in the last four years with some folks, is when we had terrorism incidents, everybody had to take their shoes off and fly a different way. And knock on wood, we haven't had any flights that have been taken over. So we're going to go through very similar measures. They're going to be painful. They're going to actually slow some things up, right? Which I think is what the president-elect was probably hinting at, because it takes a little while for a courier to get a note from me to you from Sunnyvale to Palo Alto. It only takes a second to send it to Pat. Alan, what's your take on that? I mean, first of all, you're a chief criminal. Lemio is a security company for the folks that are watching. We'll get it out in a second. In the third segment, we'll get more about your business on security. But really what we're talking about here is that the risk for citizens and society, and certainly Silicon Valley over the past decade, has taken a more prominent visible role in the government. Net neutrality, some say is at risk with Trump. That's obviously a topic. But security is one of those things where we don't have a West Point for cyber. And you mentioned and connected the internet. I mean, it's equivalent of Russia just dropping armed forces into New York and breaking into the banks and taking the cash. If they did that, there'd be war. But yet they're coming in digital forces and attacking our liberties. And some say even the Chinese are getting all the R&D from the US and just manufacturing. I mean, this is crazy. Why don't we have a digital army? Well, actually we do, right? And if you heard Admiral Rogers yesterday, he said like, well, you know, they made a differentiation between espionage and interfering with nation-state. Because the US actually conducts espionage. And by the way, very few people as good as our cyber army. Russians are pretty good, Chinese are pretty good. But there's the playing fields more level. I think you have to kind of break this into two issues. And it's not very, I mean, it's not completely Silicon Valley. One, you know, we don't ask civilians to shoot back when their businesses get robbed. So if somebody came to theCUBE and stole all your microphones and cameras, we wouldn't say, hey, let's arm Jeff Frick and send them out with an Uzi and take out the offending party. We maybe got raided by CNET or something. But so it's a multilateral game, right? Because so the influence, cyber is now right up there with economics, warfare and political influence as a factor on how nation-states, how the international system works together. It's doubly difficult for corporations because we expect the police and the military to protect us in the physical and meat space. But in cyberspace, it's a little bit vaguer. So I think one of the biggest, so I'd say the two challenges for the incoming administration and for government and for Silicon Valley, and I'll come to that point in a second, is that we're going to have to have like a new social contract on how that works. We don't have a contract for that one. It's the first of its kind. We're with Alan Cohen who's the chief commercial officer at Lumio here in studio in Palo Alto for the Silicon Valley Friday show. The impact of Silicon Valley is interesting because you have people way in the far left. You have people collect me kind of in the middle who are libertarian, conservative financially, but also risk taker entrepreneur. We want net neutrality. We want the freedoms. We want the liberties of creation. But now you mentioned these new contracts that are going to impact things. You mentioned before we came on air that used company sells kind of security, not audit, but like a checklist you've got deals with, Salesforce and all these big companies. I mean, there's now new dynamics going on that are now the new table stakes to have a vendor buy a startup. So if you're a CEO of any company, it doesn't have to be a Silicon Valley company. I mean, if you're General Motors or Ford or pick any company you want, your security agenda is a risk factor like for your board of directors, just like your finances, currency risk, personnel turnover and product failure. So those things actually matters and it's gonna take a while for that to get into the system, because there are differences of technology sophistication in management teams. And I worked at IBM years ago when Lou Gerstner was running it. Lou didn't use a PC, right? He was right, but he would be, you know, so. He's a 30, 70 terminal. And all the main framing out. So I think that it's gonna have to become part of the business norm for that. To me, John, actually the interesting thing, I also, I'll reverse this interview and I'll ask this to you. So we have built an industry, right? Real estate prices in this neighborhood are dependent on people continuing to absorb increasing amounts of computing equipment and software and applications and people's services. If there is a lack of confidence in the security and the trustworthiness of those systems, people are not likely to buy more. So we as an industry kind of have our moment where we've had kind of a free ride where we can disrupt or we can create and we'd say, hey, by my system, you'll be more productive, right? That's kind of the mantra of the last 40 years of the industry we're in. And that may or may not be true. We could talk about fake news and B2B marketing as well. But if I don't have confidence in those systems, how am I going to use them? Yeah, I mean, when you're buying a box, it's a single value, probably just, but now you have a connected system. I mean, if you think your car is unsafe, that sets my phone going off, people calling in, we don't have to call in nothing yet. We're with Alan Cohn as the chief commercial. If you don't have confidence in your car, you're not going to drive it. If you don't have confidence in your food, you're not going to eat it. And if you think your kid's 529 college fund is going to be exposed in hackers, you're probably not going to want to have an online application to act. You might have to start going back to calling in, asking for your balance and asking them to do a check or wire transfer, which takes time and convenience. So those are kind of extreme examples, but the disruptions to human life is different than the disruptions that a startup would do to industry. So your point is, I think taken, is disruption has a point where it needs to be calibrated if you went into the society. Well, okay, it has to, so there's that this process, but if you look at the IT industry, we're at a three and a half trillion dollar industry, it kind of grows roughly, some of it's slightly faster or slower than the overall pace of GDP, right? And so on some level, the IT industry is not really exploding, the money is shifting around. This is what you do on theCUBE all the time. You bring in the people who are the shifters or the shiftees, right on, and you have this dialogue all the time, but if people, it is not inconceivable that that big IT pie can shrink. If people have less confidence in putting in computing systems, so because it's not dependent on just on innovation, it's dependent on confidence. Yeah, and also on the communication network that we're seeing out there with social media, let's see Trump using the Twitter as a circumvention around the mainstream media. Doesn't have to be advertising around me, right? He gets a straight, direct microphone, it's like a bully pulpit always on, and it pisses off the mainstream media, we'll get back to that in our next segment. We're going to talk about fake news, we're going to talk about the legitimate opportunity around this new environment where new social contracts are being fused and how that's impacting Silicon Valley and people in this country and around the world. We'll be right back with more from the Silicon Valley of Pride, I'll share it through the short break. I remember when I had such a fantastic batting practice, I walked by a couple of sports writers in that era. Paul of Famer, Reggie Jackson. It was like, you can rock at it out there. I kind of hope I didn't leave it out here. Reggie Jackson. When the game started, I got back in that moment. I got back in what was live, what was now. Hi! Goodbye! I went and did something with ESPN earlier this year. With Steph and Curry, they said, Reggie, we want you to come up and watch his practice, his pre-game. You know, it was very similar to your batting practice where people come out and watch, et cetera. And I watched the dribbling exhibition, I watched the going between the legs and the behind the back and the fancy passing, et cetera, and I watched the shots. And the guy asked me what I thought of the show and I said, well, it's a cool show, but I'm gonna see all that tonight. He does all that. He put it into the game. Yeah, I said, so it's not a show, but that's his game. Mr. October. I think our world now with the instant gratification of sending out a message or tweeting to someone or whatever, certainly in the moment is about what our youth is and who we are today as a country, as a university. Congratulations, Reggie Jackson. You are Cube alumni. Hi, I'm Stu Miniman. I've been an analyst with Wikibon and a co-host of theCUBE since 2010. It's been an exciting journey working with theCUBE. We get to go out to so many shows, help extract the signal from the noise, interact with such a wide variety of clientele, both practitioners, thought leaders, the big name industry people, and we've helped some people raise their profiles in there, especially love working with those practitioners. We've seen them move their careers forward and move their businesses forward as they take advantage of technologies and practices that they've learned, talking with us, working with our research people, and working with their peers. This is Stu Miniman. Thanks for watching theCUBE. You're listening to Cube Fridays, brought to you by SiliconANGLE Media. Now, here's John Furrier. Hey, you're back. We're listening to the Silicon Valley Friday show. I'm John Furrier. Joining me this week is Alan Cohen who's the chief commercial officer of Alumeo, also industry legend, former Cisco executive and loves startups, always comes in as usually the first business guy or chief marketing officer. And then now, as he gets more senior and more experienced, more knowledgeable, he takes a commercial role, which is basically COO or board member. And you've got a lot of investments and advisories out there. So you got a great view. And one of the things I really respect about you, Alan, I want to get your thoughts on this segment is, you've seen a lot of stuff. You've seen the movie many times. You've seen the good, bad and the ugly. You've seen through multiple cycles. So this is kind of the cycle that's going through its motions in Silicon Valley. I was saying we're in a bubble, which we were, but it really wasn't a bursting bubble because we had so much dynamic action in the enterprise. And if you look at the recent election with the crumbling of the mainstream media, the advent of how Twitter was a vehicle for Trump, how Facebook became a propaganda platform for fake news to the rise of Silicon Angle Media Inc. That's self-funded, no advertising, there's no layoffs here. Medium's laying on the third of its staff, funded with 150 million in venture capital. Your company's booming with a security focus as a whole new dynamic going on, the startups, and how people are investing. And the two hottest areas are enterprise technology, which is cloud, big data, and lifestyle tech. Drone racing, automotive, Tesla's. Autonomous virtual reality, AI-driven, heads up the play cars. I think that crystallizes to the common person out there that the future is really weird and different, right? And the enterprise side is the reality is you could change your business and transform how you operate to get a competitive advantage or you're out of business. So interesting juxtaposition, your thoughts on this dynamic because look at what Twitter did with Trump. I mean, you're seeing a whole new media landscape. Well, you know, it's funny, we, when people come onto the cube and they talk about the cloud, they say the cloud flattens business, flattens IT advantage for a business of any side, right? Because it's infinitely elastic and Twitter is the media equivalent of that. It is infinitely elastic, right? You can actually pick up 18 million followers in a year or two and create effectively your own broadcasting channel, which is what the president-elect has actually been able to do. Whether you love or hate what he says, you cannot, at the minimum, you have to admire his ability to use that mechanism, by the way, and save a couple hundred million dollars in the running of a campaign to get elected. You know, what I think is whether- Well, we said on the cube, I mean this show here, going back to weeks, first we thought he wasn't gonna win, but then we saw the fact, and we were the first ones to use the word that Trump trolled his way to the presidency. Trolled his way. I mean, he literally had no chance of being president if you go back to two years. He basically trolled the media. He used the media against himself. You're actually describing 95% of the B2B technology market, trolling your way to an IPO, trolling your way to an acquisition, trolling your way to your first customer. So talk about that trolling of the success. As you said before we came on, the start-up for the Silicon Valley was, buy yourself a stairway to heaven, essentially use all of venture capital, rocket fuel to get into orbit, which is critical mass, and then things materialize. But I think the issue is that there's different kinds of wars. So if you are in the media war, you can be extremely efficient because there are no barriers to entry other than how good you are in word of mouth and spread and how good you are at messaging and all of those things. And I think that's what's happened when people have large Twitter followers. If you're in the IT world, you're not gonna build a self-driving car in a million and a half dollars of your friend's seed funding, right? So it's the difference between the Pal doctrine and let's say other million. The Pal doctrine is if you're going to go into a major fight, going with overwhelming force. So if you're gonna try to be a player in B2B software or infrastructure, successful like an aluminum partner like Nutanix, it took a couple of dollars to get there, but the stakes are so large and the cost of entry and the cost of getting through the noise. And think about the large enterprise selling force you still have to build. It's a frontal attack on a market. It's more like World War I. One is war, so you could actually say the infrastructure war is more like World War I trench warfare and the media war is a little bit more like terrorism where a couple of super empowered individuals with some clever ideas and some explosive capabilities can actually show up on the scene and capture a lot of attention. So we started with blogging initially and now you're seeing, now with social media, all these different channels, the arbitrage opportunity. Well, it's the difference between what you guys do in theCUBE and Wikibon versus Gartner, which remained a $900 million acquisition and consulting this week. I mean, so there's kind of two different wars going on at the same time and that's kind of what you spend your time working through. And I think the other thing that's going on and you hinted at this in the bumper for this is that we're going through a generational transition. And one of the things I've learned is you only get one generational transformation in your career. So we're going from this client server, infrastructure consolidation to this cloud mobile, distributed, software driven, guy like Mark Anderson will come up with a better name than I will, right? But that we're going through and then we're going through it and you and I are working at the front end for this but we won't be working for the end of the cycle. And you were talking about buying your way this their way to heaven. The other thing going on generationally is the brains and leadership of this industry is also going through this transition. So you're gonna see the Aaron Levy's of the world and folks like that who, by the way, who's most respectful about the last generation of anybody in our industry today, started with the file storage, built a cloud business, took it into the enterprise, took a lot of- Well he targeted Microsoft, which is smart and he knew for day one. Partner with IBM. He was gonna target- Kept that war going. Yeah. Right and it's an incredibly brilliant business which is a utility for a lot of companies today. Well you know the Cube started inside the Cloudera office, was the first office as you know and next door was box.net at the time they were called. And we saw some pretty early fun parties over there. Wasn't the wrong having fun. All under 25, having a great time. Yeah but I think to be successful at our advanced age in the industry you actually have to be respectful of the bomb throwers, right? Cause we were once bomb throwers ourselves and you don't get change in significant industries without trying to blow things up. And you know sometimes you blow yourself up, that's the danger of carrying bombs. And though actually in this industry you can blow yourself up a couple of times and people will still give you new bombs. We're probably making material to keep going. So the start-ups of the new terrorists, so that you know essentially most terrorists will die and some will win, that's the VC playbook. But I, come on you need to go see Hamilton, send terrorists to become the founding fathers and write a constitution. And actually and you don't think about them that way but the British called you know our founding fathers terrorists and we call them legends and you know the gray beards and the intelligence of our industry. So what does the bomb thrower look like today? Cause right now we are living in a very interesting time where you said people can literally show up like Aaron Levy at Box and there's new markets opportunities with software, big data, so look at Ford and GM and all the car companies, BMW, they're all coming to Silicon Valley because that's where the action is on the software side. Well, the one lesson that I think all of us can learn is that industries have concentrations, right? The finance industry hasn't left New York. The legal industry is still very dependent on New York. The entertainment industry is still very dependent on Hollywood that they shoot all around the world to save money on production costs. And the technology industry is still concentrated here because you have a community effect. You have the ability to move from company to company to take IP, not take IP but take intellectual power. That was the IP I was thinking about from place to place. Of course publicly we would never say take IP from one company to another. That's exactly right. As good terrorists would do by the way. And that people can actually meet each other and get together and you can't break that apart. So the power of community is still very much here and that's why it's hard to replicate Silicon Valley. People try to say with the Silicon Valley of Eastern Europe or with the Silicon Valley of the East, it's the community of the ecosystem of suppliers. It's this community of intellectual capital. And all these founding technology ideas, very few of them really make their way into mainstream production, but they kind of morph and then show up in another place because there's this incredible energy in this obviously this capitalist dream that's fueled by venture and ambition in the valley that it attracts a certain type of people. And what's interesting is that the radicals become the rulers, right? And they change their moderation. I mean, the contrarian also will thrive here too because sometimes the contrarian one day becomes the winner. Well, and I've been, look, I've done four venture deals in the last 18 years and what I've learned is like the more difficult and weird and crazier idea and you are the more interested in like the best VCs are in you, right? Because they have to fund that way if they're going to change it. Because I mean, they have very high standards on what they want to invest in and take risks on. So, and it's a great risk reward. Years ago, I'm Andy Radcliffe who founded Benchmark. He was my investor at Nasera. We were talking and he's very even. He's actually running Malthfront, very, really interesting company. He's done a lot of great things. And I said, how come are we so calm? Like I've known him over the years and I finally went to work for him because you know, Alan, I make 10 investments. If two or three pan out, it's great. I love all of my investments equally but I also understand the law of numbers. And that, you know, it's very hard to think about, I'm, you know, that's the way a baseball hitting coach would say, if you're a 300% hitter, you get to make the All-Star team. So it's, you know, it's not a zero sum game. But they say, and a player that's a 100 hitter on one team might be a 350% slugger on another and that's kind of how the mix moves around. So I'd say people, community, and talent is what drives the Valley and drives it. I mean, if you look at the community, I bet you there's about a thousand people that have been in and around the Cube. I don't know what your numbers are, you know, over the last couple of years. Over 5,000 people have been in the Cube. 5,000 people have been on the Cube. That is probably the same as the recruiting database of the best venture capital firms, of the people they track when they're investing in funding. In fact, Cube probably would be great talent source. This is your third business. And how well people do on the Cube should dictate whether they should get picked up for the new deals. Because you're tracking the same talent that the investors are tracking that the technologies that are coming from. Yeah, we have all the metadata. And speaking of metadata, Alan Cohen here is with me this week on Silicon Valley Friday show. Chief commercial at Alumio, great perspective, great understanding of the Valley, how it works. Well, let's talk about the VC firms. I mean, how would you, I mean, summer change, you see, you saw the rise of the past, you know, 10 years from angel investments, transform the angel list, you see, you know, this emergence of super angels, you know, as they call them, you know, early stage has changed. Syndicate funds were Sequoia sprinkled some cash down. Right. Friends that are covertly looking at deals. Has there been, has this changed the landscape? I mean, Sequoia, is the Sequoia XL and the new Ivory Tower, you don't really see them out in the street much. You see Greylock more than I see. Well, there's, I think there's kind of two models that I've seen and I part of this in the other one. There's the Andreessen super firm model, which this is my second time working with them, which is a, if you are a portfolio company in the Andreessen family, you are a lucky person because there is help in every possible business function from recruiting to meeting customers, to helping you with advice on enterprise selling to financing you. I mean, they have created a firm around supporting entrepreneurs. And if people don't think that model works, I'm a walking example. As long as they don't run out of cash. Well, you know, they're in Pinterest, they were in the Sierra, I think they're doing okay. Right? You know, they got a lot of really good deals going on. I mean, I think it works and they actually helped foment that. And they're also a source of IP. What most people don't understand though is that when Andreessen and Ben started that fund, their initial pitch to the limited partners was 50 million and we're gonna do early stage investments, a lot of them and they had that operating cycle. And then completely went off to reservation and bet it all on Skype. Well, if you look back at the history, I don't think anyone's actually reported this but this is original content. They told the LPs one message and did the complete opposite. I don't, you know, I mean, and but Skype paid off huge. But this is what I'm a bomb throw is that's. Well, but they did something. You say, well, you need to get the cash and then you lay your own hand. I don't know if that's really true. And I will investigate that. Yeah, I will investigate. I don't know if they were actually Andreessen Hart said they were just Ben and Mark when they did that. So I think it was super early. Yeah, I think it was super early. I mean, this is before when they, I think they're pretty consistent. They built the firm that they wish they had when they were entrepreneurs. And as somebody who builds companies, for me, it's a no brainer. So there's this model and other people. No, but let's, let's, let's unpack that. Yeah, let's just say what I said is true. And I think it is true. And I'll, I think the facts will speak for itself because I have all the access and Silicon Valley, as you know. But let's work for those guys. But let's, let's, but no, we're not talking trash about it. I want to get unpack why even Mark Andreessen, the founder of the browser the inventor of the brand Ben Horowitz, two solid dudes, entrepreneurs, breaking into the VC business, even for those guys is hard. Well, they had to change the model. Well, this is my point. I mean, the limited partners, I don't care what you've done. And it's like this, how do you become a great VC? If you've never done it before because the track record issue is huge when you try to start a new fund. Well, I mean. Everyone I talked to said, I want to start a new fund, but you have no track record. How do I get a track record if I have no fun? So at some point you have to have a track record. Well, I think you start by using your own money, right? Which is a, which I think, you know, they ponied up to it, but they changed the model and they created the most entrepreneur friendly firm and useful firm to work with in the industry. And I would argue that other firms have tried to emulate elements of what they do. Yeah, but what I'm saying, what I'm suggesting and what I'm saying is that you can call it Machiavelli the way that might have done that, but the way that he did it, they did it their way. And the point is if they had gone out and said, hey, limited partners, the traditional foundations that donate, the harvors of the world, we're going to start this founder friendly super fund. We're going to be like, what? No way we're putting money in that. But that's what I would look at. Yeah, but the flip side is, look how fast they've moved. Yeah, no, I know. Right, so I mean, you know, so they've built on success. The other side of this is what you brought up is the concept of super angels, right? Which I work in the super angel group as well. And, you know, there's just a, there's a fluidity of moving from super angel to super firm along the way. And then there's kind of traditional funds. I mean, the model works across the board. I would say about Andrew. So I was joking. I said, you know, they've essentially have figured out Silicon Valley through their own experiences, kind of like those deep jobs has learned through the scar tissue as all the senior guys do. And they've vertically integrated Silicon Valley. Well, they've created their own stack. Well, as you said, they've created their own stack and other people are trying to emulate that stack because the model apparently works really well. But what I think the thing about it that everyone has learned is that you want to be as early as possible, right? So the race in the venture business, and by the way, I'm not a venture capitalist, right? But you do some investing. I do some investing, but I basically work for venture capitalists and which if you believe in something, you always want to be early. Because one, you have, the return is always highest if you were the first money in. Doesn't mean it's not valuable to be at different stages, but then you take a different risk reward profile by going early, right? I mean, you put five, 10 million dollars into somebody who hasn't done something before. Sometimes it works. Sometimes it doesn't work, but if it works, it works really well. All right, Alan, we're going to be back for the third segment. We're going to get into CES security, some of the things that you're doing in the business. I want to get down and dirty on and talk about some of the deep under the hood stuff. Okay. Okay, we're here with Alan Cohen. John Furrier, you're listening to the Silicon Valley Friday show. We'll be right back. I walked by a couple of sports writers in that era. Paul of Famer, Reggie Jackson. It was like, you could rock at it out there. I kind of hope I didn't leave it out here. When the game started, I got back in that moment. I got back in what was live, what was now. Benton did something with ESPN earlier this year. With Stephen Curry, they said, Reggie, we want you to come up and watch his practice, his pre-game. You know, it was very similar to your batting practice where people come out and watch, et cetera. And I watched the dribbling exhibition. I watched the going between the legs and the behind the back and the fancy passing, et cetera. And I watched the shots. And the guy asked me what I thought of the show. And I said, well, it's a cool show, but I'm going to see all that tonight. He does all that. He brought it into the game. Yeah, I said so. It's not a show, but that's his game. Mr. October. I think our world now with the instant gratification of sending out a message or tweeting to someone or whatever, certainly in the moment, is about what our youth is and who we are today as a country, as a university. Congratulations, Reggie Jackson. You are Cube Alumni. Hi, I'm Stu Miniman. I've been an analyst with Wikibon and a co-host of Cube since 2010. It's been an exciting journey working with the Cube. We get to go out to so many shows, help extract the signal from the noise, interact with such a wide variety of clientele, both practitioners, thought leaders, the big name industry people. And we've helped some people raise their profiles in there, especially love working with those practitioners. We've seen them move their careers forward and move their businesses forward as they take advantage of technologies and practices that they've learned, talking with us, working with our research people, and working with their peers. This is Stu Miniman. Thanks for watching the Cube. You're listening to Cube Fridays, brought to you by SiliconANGLE Media. Now, here's John Furrier. Hey, we're back. You're listening to the Silicon Valley Friday Show. I'm John Furrier. Joining me this week is Alan Cohn. He's the chief commercial officer at Alumeo, also industry veteran, been around the block, seen in many cycles. Angel investor, seed investor. Great to have you this week. So he's great to be here. Third segment, this show is really a drill now. I want to get your thoughts because, you know, it's kind of nuanced, but there's some stuff going on under the hood in this industry and under the hood, meaning the car analogy, pun intended, with CES being kind of an automotive show. That's changing the game. I mean, we grew up in a client server, data center, you know, big footprint, and then everyone had PCs on their desk and then laptops. And then obviously since 2007, the seminal moment with the iPhone, you've seen the whole world shift. And then with cloud computing, you're seeing Microsoft, for instance, their stock has had like 56. I mean, just a couple of years ago, it was like $24 a share. I mean, so since Steve Ballmer left, Satya Nutella came in, you see them go all in on cloud, all in on open source, a complete shift from Microsoft. Oracle. You run Linux inside of Azure, right? You can run Linux. Linux was the cancer, as Steve Ballmer said, of the industry. So Woody Allen said in sleeper, all those things we thought was bad for us were really good for us. He read me, the wine smoking, all those things. Exactly, so that's all happening. Well good, and so now Oracle is going cloud. Yep. You can run Oracle on premise, Oracle on the cloud. You can run Oracle licenses on Amazon. Yeah. Web services. So again, EMC, essentially, I won't say go out of business because they got bought by Dell, but essentially EMC, the biggest storage company on the planet, is no longer. They had part of Dell. Right. HP split in two. And they're becoming a hardware company. Right. I mean, does that have legs? I mean, what's your thoughts? This is all the engine of innovation. Well, I mean, computing power, the software. This is what's going to power the next generation. So by the way, you don't know this. I'm trained as an economist, right? I mean, I work with engineers, but I'm actually an economist. So what we're having is a consolidation of the hardware industry into the smallest amount of players that can control the supply chain, control the economics of it, and basically, you know, just like people run copper or, you know, machine tools, right? And, you know, they're, let's say, maybe won't have the same kind of innovation cycle, but concentration really matters. And that's probably what the Dell, EMC, and the HP movements are about. And, but, you know, you get into that kind of cycle. I mean, look, the biggest change in our industry, I don't know if people call this software as writing software, software as programming software. And if you're not part of that cycle, you're on the other side of it. And it doesn't mean, you know, you look, industries don't go away. It's amazing. Like there's a couple hundred million dollar companies up and down Sunnyvale that build chip stepper products and, you know, even billion, multi-billion dollars. It's still in business. I haven't been doing, you know, delivering great profits, but you don't talk about them. You don't think about them. You know, you don't get up in the morning and read about them in the news. They're just billion-dollar businesses. They're just billion-dollar businesses, you know, paying probably good dividend and, you know, treating their employees well and, you know, praying that they don't, you know, the ocean doesn't fly over them. Well, just thoughts then of being an economist, being also an industry veteran. Your thoughts on Amazon Web Services, because they are dominating the public cloud game. You see Microsoft coming in. I think it's very interesting. So, by the way, I'm a great sports fan, right? And a long-time warrior fan, not even when they were good. And since I've been here, and it's interesting to see, you see these powers rise up in Seattle. So we have a new power in rising. So actually now you have two, right? You have kind of like the two towers. You know, you've got Microsoft, which is reemergent. And you have Amazon. And Amazon has clearly collated a model. And for, like, as long as the eye can see, their innovation, their speed, they're pushing the cost down. And they're an incredible retail business. Like, they're going to be a dominant force for good part of the rest of our working lifetime. But they're also first mover. And I've been in this industry too long to think about that that will be the only model that ever exists. Like, I mean, I love Office 365. So I have a new business model with Microsoft. I don't have the contract for the suite that I download to my laptop. My whole company runs it. I don't know how to use it personally. So your company uses 365? We use 365. It's a great product. Which is the cloud. Which is the cloud, right? Because I needed to integrate with my other cloud product called Salesforce. Which, by the way, no offense to our friends at Google. We started on Google, but it didn't integrate with Salesforce. I stopped to run my business. So, you know, you either disrupt yourself or you get disrupted. And, you know, most companies don't disrupt themselves that they've had a near-death experience. So when I see the innovation at Microsoft, I see brilliant leadership. Because you have to actually create the crisis to do this. But none of us are really good at creating crisis. And particularly when you're doing as well as companies like that. So the companies that create the crisis, I think, can go to Microsoft. What was Microsoft's crisis? The fact that Balmer kind of missed everything and then new CEO came in and... You know, I mean, I'm not in it. I'm not close to it that way. I think the new leader and the leadership, because it's probably across the board there, sort of the growth of the cloud. And they said, we don't want it to happen to us. What happened to the Debt Corporation? Right? They're pretty smart, right? You're going out of business. You know, Windows NT came from Debt, right? There's that much. You know, they also have a general... VMS and WNT are the letters right after each other. Yeah. Frank Cartel would be the first one. Well, I mean... They copied VMS, basically. I mean... They actually hired the VMS OS cop. Oh. I mean, look at... I actually know that history. Think about this. Walmart's got 3,000, 4,000 developers in the valley because of Amazon, right? They bought JET. They're building this business. Well, I say Amazon is... I mean, I talked to Andrew Jackson about this, and he's kind of... He brushes it off, because I think he doesn't want to tell... Let me give a tell sign on this, but I think Microsoft's more of a competitor than Oracle. I mean, they go after Oracle. I mean, Amazon... Well, Michael... And the database piece, maybe strategic, but I'd be worried about Microsoft if I was AWS. Yeah. I think... Look, I'm like a robot. Those are like the aircraft carriers like in the Persian Gulf, kind of like slipping by each other. I'm like one of those little speedboats just trying to get blown over by the water as well as the wave, the weight. Better than a speedboat than a robot or a canoe at that point. The wake of those things. Well, you have to be fast. We're a canoe. We're a speed canoe. If you're going to be around the big guys, you better be fast. They're throwing off a huge wake. I mean, this is your point. I mean, these are the big aircraft carriers. They're not as mobile as a speedboat, but... But they have enormous amounts of customers. They have long customer relationships. And by the way, at the end of the day, we're shifting from a product to an agency model and following with me on this for a second. Think about, like, if you were to buy a new microphone for the Cube, now you have brilliant sound engineers here. Like, I could steal my wood when I build my studio. Yeah. And just keep an eye out for that, guys. We'll do the studio as a service. Don't eat that. Yeah. It's like 365. Yeah. So, you know, like, if I was to buy a microphone for the Illumio podcasting studio, traditionally, like, I would, like, I have to have the sensor size or mic or so-and-so mic. I don't do that now. I go to Amazon and I look up and I read the reviews. So I make my choice based on a channel and agency more than I make it on product. And I think what... Because there's trust there. There's trust. You have some sort of crowdsource data you can look at. Or it's suggested you do this in your entertainment. You do it with Netflix or Amazon, you know, Prime. So I think what's happening in the IT buying cycle, people still buy products. Like, I'm in a product business. And people buy my security platform, one, because it's unique. And number two, because it solves an incredibly unique problem for them, that there's no other alternative, right? That's why they're buying it from us today, where they were buying us from two years ago when we got started. I don't have the benefit of agency. The large companies have agency. They have relationships. They have the ability to direct you. And when you get to a company like AWS, you have super agency. Like, because they could direct you to their own product or somebody else's product. Like, they're a channel for IT consumption as well as retail consumption. I think Microsoft has the ability... So when you're in the agency model versus product, you're more about the outcome, less about the speeds and feeds. When you buy a product, you open it up and look at it. Yeah, and you have both of those models, but increasingly, large parts of the IT buying cycle move to agency, which is really funny, because this is what IBM used to do about 45 years ago. You go to IBM, you'd buy a computing system. You didn't say who gives me the printer and who gives me the network attached device and who gives me the spinning disk. You just bought it all from them. And I think that's what Amazon is actually recreating. We're here with Alan Cohen to see CCO, Chief Commercial Office of Lumio, security startup heavily funded by Andreessen Horowitz, one of the best VC firms on the planet. I need you to say that. That's very important. Yes, they are. Yes, and they're respected. They're founder-friendly. A lot of great respect for them. We got to get them on the show sometime to answer some of the questions we have to them. Of course, but great guys. Big fan of the firm. We love what they do. Again, they have their added value. And we should do a whole segment on added value and versus value subtract venture capitalists, because there's a lot of ones out there that don't add a lot of value. Andreessen Horowitz does try and put the effort in to be there. But you're seeing a lot of the infrastructure stuff. Let's now shift into the edge of the network because of the edge of the network because there's no perimeter anymore. The security is weak. You see IoT and you see things like Alexa and the Tesla you mentioned in the car that you have. The edge is where the consumer is now. So that's the sexy area. Your thoughts on all this voice-activated Alexa that was a viral video going around during the holidays where the kid was trying to get a song from Alexa and it was basically spit out porn tags, basically. Stop Alexa, stop Alexa. Like it was a dog. There is an article in Today's New York Times business section about how voice is getting better. Maybe it's in reaction to that. It's not always perfect. That's your point of view. Virtual reality is the same way. There are scobles out there talking a lot about it. Where's the... Well, look. First of all, your voicing. I talk to my Tesla. I say navigate to, you know, transport way in Palo Alto. And I give it the address and I come, right? So I think voice is slowly becoming a primary interaction with computing and things like Alexa and now the Google equivalent and then the raft of things, the M2s that we're going to see behind that, are going to make that because it is a very natural way to do that. What's interesting is that all of these edge devices from a security point of view have two kind of important considerations. One is they are creating an enormous depth and range of data, right? The amount of data being collected is staggering. I don't know. We were talking earlier about storage. I don't know. Somebody's got to store all this stuff somewhere, right? Yeah. Maybe it's all going to be in EBS, right? But enterprise block storage. But it is... You have this... We had this kind of shift to the cloud and that's where the crown jewels were and now the money is spread every place else. So once again, you always have these two models. It is a huge issue. But this is the opportunity again we were seeing in entrepreneurs earlier is that the disruptors, the ones who can come up with a better solution service and it's a service-oriented model. You mentioned Salesforce and Google how Microsoft is kind of fitting in there that the engine of innovation has to be compatible under the hood with componentizing or composing services. It's just completely vertically integrated. You can use Salesforce and use Microsoft. Microsoft will say, no, no, in the old days, no, you don't want to use Salesforce. They're working together pretty well, right? So what's interesting is I was... There is the technology option and I'm sorry, the technology issue, but then there's also just human nature. So I was visiting a customer in Chicago a couple of weeks ago and I asked them about, VMware moving their stuff into AWS and I said, is that attractive to you? And he goes, yeah. And I go, why? Why don't you use the AWS native? He goes, the training and time I have into my people using ESX is extreme. He doesn't want to retrain his people but he wants to get rid of buying hardware. So we're going to have all these weird marriages, right? Yeah, and with aircraft carriers and the Persian Gulf. And the Persian Gulf. I mean, this is... I mean, VMware is one of those. They have a lot of customers and a lot of money and they did it to deal with Amazon. So we're going to start to see this. But there's one overriding principle. By the way, it's the theme of Tom Friedman's new book, right? Instead of the world being flat, the world is fast. And I think the winners in any tech is fast. So the companies we were talking about, those aircraft carriers, some of them are moving actually pretty quickly. I would argue Microsoft moved extremely fast. The word agile does apply also to the other bigger companies. Of course. The world is going more agile. The speed goes faster and the aircraft gets bigger. You have to go fast. Like at the threat horizon, you're in security. The threat horizon is really fast. I mean, in the old days, if I wanted to hack the Cube data center, you didn't have that much data. And if I could get it and wouldn't take me real long, then we have enormous amounts of data. And it would take a long time to take it all out. Now I have all this AI and all this cloud computing power. So my ability to go in, take your data out is accelerated. So everything has to be fast. You know, I'm one of my degrees in computer sciences and operating systems. And I always say this to my geeky friends, is that the world is now a global operating system where runtime assembly is really critical factor. And it's not necessarily yours. It's other stuff. As stuff gets pulled together, the ability to work with stuff and whether it's content, whether it's containers. Well, containers are just fast runtime assemblies for sub-processing. Compiling, linking, loading, all these OS concepts. APIs, yeah. I mean, it's just... APIs and tokens and domains. But it's all fast. So it's broken into millions of pieces. So it's a speed game. It has to be a real assembly very quickly. Competitive advantage is speed. Right. You know, I mean, the core value of the Alumeo platform is not just that we micro-segment data. If we see an anomaly, we know it in seconds. Yeah. Well, security, you need that. Well, you need that because the biggest danger is dwell time. I mean, the analog of this is, imagine somebody was living in your attic, you wouldn't like it. And you said, oh my God, they live there for a day. I would be terrified. And then you found that they've been living there for two years. And then you're really like, this something's really a little long. So the ability, we spent all of our money in security for the last 30 years on detection. And the truth is, now you just have to assume that the bad guys are in. You need to know when they're doing something. And they got to be able to do that fast. Okay. We're running out of time. Yeah. We can do another show. If you're going to come back and come back. I'm always happy to come back. I'm coming to the new studio. Just, yeah, the new studio is going to be right across the street. Yeah. And just tell your Tesla, you know, go to the Cube studio. Palo Alto, just drive you there. I'm going to mark it as a favorite. We should do a little, you know, Alexa, get Alan on the Cube. Yeah. Yeah. Great to have you. Thanks. Great perspective. Again, great insight into what's going on. It's always fun to be here. Thank you. We'll be back with another Friday, Friday show. Join us next week. Again, Friday live here in Palo Alto. We're in the new studio. I'm John Furrier. Thanks for listening. Thanks.