 from the Sands Convention Center, Las Vegas, Nevada, extracting the signal from the noise. It's theCUBE, covering AWS re-invent 2015. Now your host, John Furrier. Okay, welcome back everyone. We are live here in Las Vegas. This is Silicon Angles theCUBE. This is our flagship program. We go out to the events and extract the signal from noise. Day two of three days of wall-to-wall coverage of Amazon re-invent, the big industry show. Now Amazon's show keynote just kicked off today. Day one, the official keynote, Andy Jassy, Senior Vice President of AWS Amazon Web Services, delivered the keynote, brought on a lot of customers, a lot of news, a slew of announcements, and we're going to again kick off day two of our analysis, our coverage. I'm John Furrier with Silicon Angle. My co-host this week, Brian Grace Leib, contributing editor, contributing analyst of wikibon.com and Stu Miniman, analyst at wikibon. Guys, my head's already full. It's already 10.30 a.m. A lot of action yesterday. We had the preview. We kind of got a feel for this whole freedom theme. We talked about it. That was the core theme of the show. That turned out to play. It was a good report there. But again, this is Amazon's cadence. Moore's Law, Intel, introducing more and more speeds. Amazon's got their own cadence. The slew of announcements, Stu, keep coming. Guys, this is, how do you stop this momentum? Stu, more announcements. We got more coming tomorrow. We got a feel for what's going to come on IoT tomorrow. But again, the database challenge, the tools for free, migrating the data. We talked about the Roche Motel yesterday. You can check in, but you can't check out. You pointed out that it's going to be a two-way communication between the data. Brian, you mentioned the data as the currency. Guys, what's your take on this? Stu, you sit back. Are you like pinching yourself? I mean, this is just unstoppable. The freight train is coming down the tracks. Everyone's got to be scratching their head going. How do we compete with this? So John, when we talk with the sports analogies, I mean, this is the game we want to be at. We want to see, this is the rising wave. Over 19,000 people here. And I tell you, we go to a lot of shows here in Vegas. Specifically, John, you know, boy, I can walk these halls blindfolded typically. But that keynote, it was packed and it was big. It feels bigger even than that 19,000. And it's growing really fast. I mean, from like 13,000 to 19,000 next year, it'll definitely be 25,000 or more people at it. We are overflowing in the hallways. Huge line out the bathroom for the guys. So much going on. And John, just so many good lines coming out of this. Some people have been saying for a number of years, and we say, if you think you can out-innovate Amazon, you're in big trouble because they keep adding. They add on to all the pieces that they're doing. A lot of cheers with like, you know, the open database moves that's going on. You know, phenomenal customers that I want to get to talk about. I mean, GE's saying that, you know, we're way beyond test and dev. You know, this is the future. This is inevitable. We're going there. You had the Capital One guys say that, you know, Amazon's more secure than our own data centers. I mean, these are, you know, really impressive testimonials from some, you know, really big name companies that are putting, you know, tons of resources and tons of dollars into this Amazon ecosystem. So the big news here, obviously in the keynote, we saw the product announcements. Again, Andy Jassy had a spring through his step. Almost like he just swallowed the canary. He's in the cat bird seat, whatever metaphor you want to use. But big data analytics at large scale, big announcement. We heard QuickView, Aurora, MariaDB, all these new toolings going on. Guys, I mean, if you're a content, I mean, a cloud service provider, Brian, how do you compete with this? You got to decide what street do you want, what side of the street you want to be on, because Amazon has continued to dominate and they're doing all the boring stuff. You're hearing about the tools and certifications, compliance, I mean, how do you compete? Well, you know, I think it's not so much a question of us analyzing how to compete. The market's telling us, right? We saw Rackspace yesterday, the day before, basically announced they're now going to do fanatical service for AWS, right? They were going to try and compete with them. Can't compete with them. They're basically moving their business model over to, you know, fanatical support for other people's clouds. You know, we've seen, in the last week alone, we've seen executives from VMware's vCloud Air have left, gone on to other jobs. You know, there's uncertainty about what's going on with VMware vCloud Air. They're struggling. There really isn't a great answer, especially for the smaller managed service providers, smaller carrier-centric ones. We had Accenture on yesterday. They essentially said, we're going to let Amazon provide that infrastructure. We're going to provide value on top of that, right? I think if you'd asked somebody like Accenture five years ago, they'd have gone, I'm a big company. I got to run my own data centers. They talked about being completely asset-free. You know, people are radically shifting their business models. If you can't compete, you're finding out real fast. You can't compete. And the ones who do want to be part of the ecosystem are taking a very different shift. So let's do it. We saw some tweets out there. We were live tweeting on CrowdChat all, all during the keynote. Alessandro Pirelli, ex-Gartner analyst now at Red Hat. Can't wait to see Gartner start placing AWS in the magic quadrant for Pass and SaaS. They're already in infrastructure as a service. We saw Merv Adrian say low-hanging fruits, the data business intelligence, seeing that dominate price points. What's your take on this? I mean, how is this going to impact the infrastructure players? Now they have infrastructure as a service, Pass and SaaS, GE up there in the States saying they're going to move 60% of their production into Amazon. That's going to be a 100-year commitment, they said, going to rough numbers. But GE, didn't they invest in Cloud Foundry? Aren't they a pivotal investor? What is this all, it's odd, it's fascinating. But John, that goes right together. GE is an investor and pivotal and where that's going to live is going to be on Amazon. So those fit quite together. The last couple of years, Amazon said, we don't like these distinctions of infrastructure as a service, platform as a service. When we do our look at the market here, we understand that Amazon's moving up the stack, they keep adding services and they keep adding onto it. I mean, Brian, you might have some commentary on this from the platform standpoint. We don't see Amazon coming in and saying, oh, we're going to build the cloud native, everything like that. But we want to be your home for a lot of your things and we want to offer more and more services to help you with that. And the thing that we've seen is, and we've done a bunch of research on this, there really are a couple of approaches. You can either buy a platform, something like Cloud Foundry or Red Hats OpenShift, or you can build a platform. In essence, Amazon is saying, look, for those of you that don't want to build a platform but you don't necessarily want to be tied to a specific opinion on how to do that, we're going to give you those tools and collectively those tools look a lot like platform as a service. They've got database service, they've got data services, they've got security services. They can spin up containers if you want that. You want to spin up virtual machines or even dedicated machines. It's that old analogy of it looks like a duck and walks like a duck, it's probably a duck. Their thing looks like a platform as a service. You don't have to build it, they built it for you and there's the massive scale behind it which is so appealing to customers. Yeah, John, I'm wondering if, I have a question for you actually, so Andy actually shared some of the numbers here. We're talking on an annualized run rate, Amazon is at what, it was like 7.3, 7.7 billion dollars. I mean, and they're growing at over 80% year over year. So Andy Jassy is like CEO of one of the largest cloud companies out there, huge growth. You got to meet with him in Seattle. We've talked with him a few times over the last couple years. We've watched this meteoric rise, he came out there, he talked about his teenager, he's wearing sneakers, so give us a little insight about what you see about the man behind this huge success. Well, we've had great access to, as you know, we had access to Andy Jassy. He loves theCUBE, loves what we do at Wikibon. He loves this open concept. He loves the ethos of what we're doing. We're offering free content. We're offering it, it's free in some cases, lower price points on the research side than say Gardner. So he said to me personally, I love what you guys are doing. You see he loves media, he bought an Elemental, you see MLB, he loves sports, he loves the ESPN of tech in theCUBE, but as an individual, as an executive, I had a chance to sit down with him many times and most recently at LinuxCon, I had a dinner with him after that event. It's clear, he loves open standards, he loves disruptions, but he's a Harvard business school guy, you know, he's very competitive, but he's also very humble and he's also worked really, really hard to build a team to do AWS and it's been a startup within the big company, certainly he's had unlimited capital, as he said on stage today, but you see the spring in his step, you see the glimmer in his eye, you see his smile, you see color, you see a side of Andy Jassy that you just don't see very often and he's proud because Amazon has been taking a lot of arrows since it's been funding. Ah, that's not, that's just a kid's toy, it's a playground and developers certainly loved it because of the cost structure, but what they've done has been legitimized and over the past three years at theCUBE, every year we say, this is the year of the enterprise, they are doing the things right. They have the right formula and he's proud, you can see him up there. I mean, it's not very often in history of the computer industry where you can get up on stage and do what he's doing. So as a leader, he's proud and as someone who's got a great team and they work their asses off at Amazon. I mean, it's not like that's sitting back, they have a great team, they're committed, they're open source, they're using open source and they're using integrated models and they're integrating tools and the platform and they're really seeing the value. The fruit is coming off that tree, you're seeing it on the numbers, on the revenue side and you see it on the expansion and growth. More importantly, it's an absolute relevant model. So you see him smiling, you see him kind of proud, you see him kind of talking about his kids, the metaphors he uses. He is excited, he is genuinely pumped up now. I mean, John, it was funny, on stage a couple of times he said giddy up, he really seemed to enjoy the crowd cheering for some of the new announcements and it's an impressive team. They are pros. They've just got hundreds of features coming out, keep growing, keep moving. They don't talk much about the competition even though he had a little bit of fun poking specifically at Oracle and Larry up on stage. So it is impressive to watch him as well. He deflects his success to his team and he's a team guy, right? But he's also competitive. The side of Andy Jackson that no one really sees that I've had a chance to see up front is he's a loyal guy, he knows the business coal, he's a numbers guy, he knows how to run the business, but he's very, very, very competitive and he has a mission to provide a platform at a cost structure. You're hearing a tenth of this, free tooling. They really believe in this mission and you have the Amazon employees, they want to disrupt and innovate at the same time and we said this on theCUBE years ago prior to even doing re-invent and Brian, you kind of tease it out in your comments around competition is they're doing something that's very, very rare in the business that I've seen in my career. They are innovating and disrupting and commoditizing infrastructure and software at the same time. Usually it's one or the other. Usually you commoditize and you get volume and price advantage and then you don't really innovate much or you innovate and you charge more and it's not a lot of price advantages. They are doing both and they're scaring the Jesus out of people. EMC, VMware, IBM, Oracle, these companies are taking notice. When you have GE moving up there, you hear Capital One, serious players. This is something that we're watching and it's a great time and I just think guys, you're the analysts. What does this reflect in the numbers? Stu, Snowball is a new product they announced. It's a storage device that's in a shipping container. They're in the shipping business. They have fulfillment. This is Amazon kind of integrating in their core competency. I wrote the monopoly question yesterday. You guys were like, whoa, I was talking monopoly. Come on, they're going to be shipping containers of storage, hell is freezing over. There's no storage business. I, interesting, right? It's a piece of hardware coming from Amazon. It's this ruggedized, it's actually 48 terabytes of usable, we rounded off to 50, but the storage world is kind of for snickety on that. It's 48 terabytes there and we say, what did they put together? Oh yeah, it's got a Kindle on there. So the label is on e-ink. It tracks via whisper sync and it's only going to cost about $200 per job plus shipping and handling. And oh, by the way, how's the shipping done? Oh, you're probably going to get it in two-day shipping and the joke at the analyst conference was like, oh, if I'm a prime member, does that mean I get free shipping on it? And they're like, well, you know, not yet. We haven't figured out that piece. The thing I poked in, John, there really isn't. It's not like AWS is a separate company from Amazon.com. There are people I've talked to that have worked on both sides of the business and they're sharing their technology. It's something that I've asked Andy about a couple of times and they're leveraging just the growth, the knowledge, the data. I mean, Amazon is a data company when it gets down to it and it is impressive how they're using it and learning from that. Right, let's talk about some of the numbers because we were talking off camera about just kind of rough tan sizing of their business. If you just say, let's just say $10 billion for round numbers, right? Say they're $10 billion in revenue, Amazon Web Services. You say roughly 20% of that might be storage. That's still, you know, $2 billion, $4 billion number. What companies are doing $4 billion, $2 billion, $4 billion, whatever the numbers you want to use in storage. Look at networking and servers. What's that component? Software, what's the growth? I mean, it's pretty significant. Yeah, no, it's, I mean, they're the fastest growing storage company in the industry. They're the fastest growing database company in the industry. Andy talked about that, you know, they're doing over a billion dollar run right now just around their database platforms and most of them open source, right? You compare that against something like MySQL. Look, the bottom line is they are, you know, like you said, maybe $7 to $10 billion. They're growing 80% year over year and they're just now getting to the point where people can go, they're secure, they're fast enough, I can trust my data in the enter, you know, enterprises are starting to come out. They're at the beginning of what's going to be a very, very big ramp. They could very easily be a $25, $30, $35 billion company very quickly. They talk about fast growing storage, pure storage IPO this morning and congratulations to Pure Guys, a lot of hard work, exciting to see that. But, right, if we were to measure Amazon on what they're doing from storage. And they're talking about being a $200 million year revenue company. They're $200 million, Amazon is much bigger and growing at an amazing rate. So, John, the line I used last year, as I said, I sum up Amazon in two words. They are scary good and the more I hear the more that I think that summarized how a lot of people think of it and you said right there, they're humble and you talk to them, they don't understand that the ecosystem's like, oh, okay, the announcement up. Well, you know, the firewall stuff got announced up. Well, there's a whole bunch of companies that are worried about that. The security announcements up, we're going to be talking to people today that it's like, well, how do I compete against that? And Pure Storage went public to the housing storage company. They want to be the next EMC. And I think EMCs of the world don't look at Pure as competitive in the sense of, I mean, they're more ankle-biting revenue for EMC, but maybe they chip away at some of it. It's about a couple hundred million dollars in revenue, but that's not what EMC's afraid of. EMC's afraid of, Stu, of companies like Amazon, because Amazon could put EMC out of business. Pure Storage is not going to put EMC out of business. Amazon can put companies out of business. This is a disruptive force. This is a tsunami that's hitting the beach. The question is, how much will this wave take of the marketplace? And that's going to be the question we're going to talk about all week and continue to analyze you guys at Wikibon doing some great research. I'm interested in some of the sizing numbers, what's going to come out, how you guys see this for your forecast, and let's end the opening segment on day two here on that. What's your thoughts on how this will impact your analysis on the cloud? Well, for me, I'm interested to talk to the guests today. I want to dig into what's going on. It's going to help us influence how fast these numbers are going to grow, but want to really get to these guests and figure out, again, how these announcements will impact them on the positive side and the negative side. Okay, well, theCUBE is coming to Oracle Open World. We're talking to the smartest people in the room. You're going to hear from all the top guys, Mark Herd, all the top EVPs at Oracle Open World's coming up, and you're going to see a lot of stuff there. The CrowdChats, rock and go to crowdchat.net slash reinvent. Join the conversation. We're at Amazon Reinvent Live in Las Vegas. This is theCUBE with wall-to-wall coverage. We'll be right back with more in Las Vegas at ADS Reinvent. This is theCUBE with the Wikibon analysts and all the customers and thought leaders. We'll be right back after this short break.