 Live from Las Vegas, it's theCUBE, covering AWS re-invent 2018. Brought to you by Amazon Web Services, Intel, and their ecosystem partners. Okay, welcome back everyone. Live here in Las Vegas for AWS re-invent 2018. All the action is happening for Amazon Web Services. I'm John Furrier, Dave Vellante. Dave, six years covering Amazon. Great opportunity, a lot of news. Red hats, a big part of it. Mike Ferris is here. Vice President of Technical Business Development for Red Hat. Welcome back, good to see you. Likewise. A lot's going on with you guys since our Red Hat Summit days in San Francisco just a few months ago. Yup. Big news hit, everyone, the bomb around the world up. The rock that hit the ground really hard, shook everyone up, surprised everyone, including me. I'm like, wow, IBM and Red Hat. What an interesting relationship. Obviously the history of IBM has been good. Talk about the announcement with IBM because this is huge, big numbers, but also impact-wise, pretty big. Yeah, it's exciting times, right? And if you kind of look at, from the perspective of Red Hat in this, this will allow us to really scale and accelerate what we've already been doing for the past, since really the 1994 era when Red Hat was founded and it kind of validates a lot of what we've put in to open source and enterprise customers since then. We really see a couple of key outtakes from this. One of which is, certainly it's going to give us the resources to be able to really grow at the scale that we need to. It's also going to allow us to invest more in open source in emerging areas, bring the value of scale and certainly choice and flexibility to more customers. And then ultimately kind of the global advantage of hybrid and multi-cloud, we'll be able to reach more partners and customers everywhere. And it puts us several years ahead of where we have been or where we would have been, frankly. And ultimately, our intent is that with IBM it will become the leading hybrid and multi-cloud provider as well. Yeah, Ginny and Jim Whiter has kind of ruined our Sunday. We were sitting down and watching football and then he's got the announcement. And then Ginny kept saying it's not back and loaded. It's not back and loaded. Then you start to realize, well, IBM is an enormous business of managing applications that need to be modernized and OpenShift is obviously a great place to do that. So it's got to be super exciting for you guys to have that giant new opportunity to go after as well as global scale that you didn't have before. And this extends the stuff that we did announced in May at Red Hat Summit with IBM where we really focused on how do we take WebSphere DB2MQ running on IBM Cloud Private, running on OpenShift and make that the hybrid choice. And so it's a natural extension of what we've already been doing and it gives us a lot more resources than we would have otherwise. This is good pivot into the next segment I want to chat about is that as well. And what people might not understand from the announcement is the synergies that you guys have with IBM because being a student of Red Hat, being just in the industry, when you guys were rebels, open source, second tier citizen in the enterprise, the adoption then became tier one service. I mean, you guys have level of service, that's what, 17 years or something, huge numbers. But remember, we're all started, right? And then you became a tier one supplier to almost all the enterprises. So you're actually a product company as well as a huge open source player. That's powerful and unique. Absolutely, and even if you look at kind of what Amazon is doing this week and have been doing over the years, right? They're a huge value add provider of open source technology as well. And one of the statements that we've always made is the public cloud would not exist if not for Linux and open source. And so everything has been based upon that. There's one provider that doesn't use Linux as the base of their platform. But certainly as we've taken the inroads into the enterprise, I mean I was there when it started with just turning Red Hat Enterprise Linux on and then bringing it from the edge of network into the data center and talking about major providers like Oracle, HP, Dell, IBM as part of that. Now we're looking at it as a facto standard and everyone including Amazon, all of its competitors are really invested heavily in the open source world. And so let's talk about the impact to the products. So one of the things that has come up at least on my Twitter feed on the conversations is, okay, it's going to take some time to close the deal. You're still Red Hat, you're still doing your things. What's the impact to the customers and to the ecosystem in your mind? How are you guys talking about that right now? So it's more of the same, keep the Red Hat same, unique, independent, what new things are going to come out of this? So to be clear, the deal has not closed, right? So there's not a lot we're going to say otherwise. A year away, yeah. Our focus is what it always has been, is let's build the best enterprise products using the open source development model and make those available across all public and hybrid cloud environments. At a service level that's enterprise, multi-year, the old Red Hat model, the same Red Hat model. All right, so let me follow up on that because you're a believer in multi-cloud, we're a believer in whatever you call it, multiple clouds, customers are going to use multiple clouds. We believe that, you believe that. It seems like Amazon has a slightly different perspective on that and that there's greater value, right, because there's one cloud, there's greater value, but it seems like the reality when you talk to customers is we're not just one company, we've got different divisions and eventually we've got to bring those together in some kind of abstraction layer. That's what you guys want to be, right? So your perspective's on multi-cloud. Absolutely, so each individual department, each project, each developer in all of these major enterprises has a different vantage and yes, there are corporate standards, golden masters of RHEL that get produced, everybody's supposed to be using, but the practicalities of how you develop software, especially in the age of DevOps and containers and moving forward is actually, you have to have the choice necessary to meet your specific needs. And while we will absolutely do everything we can to make sure that things are consistent, I mean, we started this with RHEL consistency on and off-premise when we did the original Amazon relationship, you know, the point is, you need to be able to give people the flexibility and choice that they desire, regardless of what area of the company that they're in and that's going to be the focus, you know, regardless whether it's Microsoft, Amazon, Google, IBM clouds, you know, international clouds with Alibaba, it's all the same to us. We have to make sure it's there. What's always great about the cloud show, especially this one, that's one of my favorites because there's really as DevOps deep in the mindset culture, as you see AI and machine learning starting to get powered by all this great resources, compute, et cetera, the developers going crazy, it's going to be another renaissance in software development. And then you got things like Kubernetes and containers now mainstream, Kubernetes almost, I say de facto standard, absolutely happen. You guys had a big part of making that happen. People are now agreeing on things. So the formation's coming together pretty quickly. You're seeing the growth. We're hearing terms like co-creation, co-opetition. Those are signals for large rising tide. Your thoughts. So, you know, it's interesting. We were an early investor in Kubernetes. We actually launched OpenShift prior to Kubernetes. And then we adopted it, made a shift of our platform before it was too late. We did the same thing with hypervisors and a move from Zen to KVM. But, you know, this overall approach is once we see the energy happening both in the community and the early customers, then you see the partners start to come on board. It becomes the de facto standard. It's really crucial for us as an open source company to make sure we follow those trends and then we help mature them across the business ecosystem. And that's something we, you know, we've loved being able to engage with. I mean, Google certainly, you know, instigated the Kubernetes movement, but then it starts to propagate just like on the open stack side. It came out of Rackspace and NASA and then moved on to different areas. And so, you know, our focus is how do we continue that choice and that evolution overall? How would you talk about the impact of Kubernetes? If someone says, hey, Mike, what's the real impact of Kubernetes? What is it going to accomplish at the end of the day? What's your view of that? It will have the same impact that the Linux kernel standardization has had, you know, but in this case for microservices and application packaging and being able to do DevOps much more efficiently across heterogeneous platforms. Does it make it easier or more less painful or does it go away? Is it automated under the covers? Yeah. I mean, this is a big, awesome opportunity. So the orchestration capabilities of Kubernetes combined with all the other tools that surround key container platforms, like OpenShift, right? Really give that developer the full lifecycle environment to be able to take something from concept through deployment and then onto the maintenance phases. And you know, what we end up doing is we look at, okay, the technologies are there. What value ads do we have around that to make sure that a customer and a developer can actually maintain this thing long-term and keep their enterprise applications up? So it's all that, for example. Security's a great example, right? How do we make sure that every container that gets deployed on Kubernetes platforms or by Kubernetes platforms that every container that's deployed, which, keep in mind, is an operating system. It has an operating system in the container itself. How does that kept up to date? How do you make sure that when the next security a rot is released from us or a different vendor possibly, how do you make sure that that container is secure? And we've done a lot in our registry as well as our catalog to make sure that all of our partners and customers can see their containers, know what grade they have in a security context and be able to grow that. That's one of the core things that we see adding into this Kubernetes value and the orchestration level all the time. It's not a trivial technical problem either. Sometimes microservices aren't so micro. And it's been core to what we've done from REL from the start, right? It's been, how do we bring that enterprise value into technology that is maturing out of the open-source community and make that available to customers? One of the key things you guys, first of all, OpenShift has been phenomenal. You guys have done a great job with that, been watched that grow. But I think a real seminal moment was the CoreOS acquisition. That was a real turbo boost for you guys. Great acquisition, fits in with the culture. And then Kubernetes just lifted from that. That was the point. But at the timing of all this, Kubernetes gets mainstream lift. People recognize the standardization on it is a good thing. And then boom, developers are getting engaged. Yeah, and if you see what the CoreOS environment has brought us from over there updates for our platforms to being able to talk about a registry and the Quay environment. Being able to say that is kind of additive to this overall messaging really rounds out the offering for us and allows us to participate even more deeply in the communities. But we're looking forward to continuing to cover. We love Kubernetes. We've got a special report called Kubernetes Special Report on SiliconANGLE.com It's called The Rise of Kubernetes. It's a dedicated set of content. We're publishing a lot on Kubernetes. Final question I want to get to you is something that's super important. What's the relationship that you have with AWS and take some time to explain the partnership? How many years? What are you guys are doing together? I know you're actively involved. Take a minute. I mean, it is somewhat blurry. It's been a long time. So 2007 era is when we started in depth with them. And I can remember the early days actually in the development of S3 prior to EC2 being able to say, all right, what is this thing? And how does Red Hat participate in this? And I think yesterday Terry Wise even mentioned that we were one of the first partners who actually engaged in the consumption model and claiming partial credit for our $34 billion valuation that we just got announced. But overall, the relationship really spawned out of that. How do we help build a cloud? And how do we offer our products to our customers in a more flexible way? And so that snowballed over the years from just early adopters being able to play with it to now where you see it's many, many millions of dollars that are being generated in customers. And I think in the hundreds of millions of hours of our products being consumed, at least within a month if not shorter time frames, every time period we have. You know, that's an unsung benefit that people might not know about as with Red Hat is that you guys are in early markets because one, everyone uses Linux for pretty much these days for anything core, meaningful, and you listen to community. And so you guys are always involved in big moving things. Cloud, Amazon, 2007, people could, it was command line back then. It wasn't even, I think RightScale just came online that year. So you remember, so you guys are always in all these markets so it's a good indicator. You guys are a bellwether. I think it's a good beacon to look at. And we do this certainly on the container space and the middleware space and the storage space. You know, we replicate this model and including in management about how do we actually invest in the right places where we see the industry and community going so we can actually help those customers. And you're very partner friendly and you bring a lot to the table. I love the open source ethos. I think that's the future. The future of that ethos of contributing to get value downstream is going to be a business practice, not just software. So you guys are a big part of the industry on that. I really want to give you guys props for that. Okay, more cube coverage here in Las Vegas. We have to reinvent after the short break, more live coverage. I'm John Furrier, Dave Vellante. We'll be right back.