 Museum in the heart of Silicon Valley. It's theCUBE, covering OpenStack Silicon Valley 2016. Brought to you by Morantis. Now, here are your hosts, John Furrier and Lisa Martin. Hello everyone, welcome to our special live presentation of theCUBE, SiliconANGLE Media's flagship program. We go out to the events and extract the signal from the noise. We are here live in Silicon Valley in Mountain View right around the corner from Google's campus in the heart of innovation. As we're covering the OpenStack Silicon Valley where OpenStack community comes to Silicon Valley. Obviously put on by Morantis and obviously we're glad to be here. We've been covering every OpenStack event since the inception of the open cloud movement of OpenStack. I'm John Furrier, host for the next two days with my co-host Lisa Martin. Lisa, we have been covering OpenStack for a long time and it's exciting to see a lot of, I would say, coalescing around the industry forces. M&A, companies trying to be successful. This open cloud initiative is still alive. The flame is still burning. But yet the big guys are getting bigger. So we're going to be here for the next two days analyzing, squinting through the noise to get the signal. We're going to extract that signal from the noise. So great to see you. Great to be here, John. Thanks for having me. So I want to get your thoughts. What's your impression so far? It's kind of an interesting Silicon Valley crowd. A lot of developers, a lot of industry folks. Right. Walmart Labs is here and also we're interesting to hear about from those guys. Very interesting. They have any comment about jet.com, big acquisition of billions of dollars. Interesting company taking on e-commerce with Amazon. Right, right. So we're at the Cloud Show, AWS, Amazon Web Services, a dominant force. So it's going to be super exciting. It is, I agree. I'm very excited to be here and co-hosting with you, John. From a keynote perspective, one of the things that was really clear that both Marantis talked about Alex Freeland on stage this morning. From a thematic perspective, technology has changed. You talked about that. It's now this ecosystem of collaboration. It needs to be the big guys, as you said, John, getting bigger. They have to be. They have to embrace OpenStack in order to do that. Progression of this hybrid world is becoming more of a reality. A lot of challenges within that we'll explore today. Also that what they're seeing from an OpenStack perspective is workloads are now being optimized, which to them shows, hey, the industry is maturing. Very excited to get your take today on what your thoughts are, given that you guys have been following OpenStack for its entire history of six years. It's interesting, a lot of times. The last time we were here, we had interviewed folks from the previous year that were no longer with their company. CEOs of startups that have moved on. Some went to Pivotal, some went to Google. But what's really happening is a maturization of the reality of the OpenCloud. And that is, is that the OpenStack community is kind of at a period of really soul searching and really looking at where's that breakout point in their community because a lot of things have changed. Certainly public private cloud has kind of given some swim lanes to the vendors. Private is where the enterprise action is. Public cloud is where all the growth is. You see Amazon Web Services and certainly Microsoft Azure dominating. But it's that hybrid intersection. And I just put a post out there that was quoted from the Wikibon stuff that said, friends don't let friends build data centers and BlueBox, Jesse put an image up. I was going to put that up. I pitted the fool who builds their own clouds. And that really comes down to it. The cloud business model is changing the execution operations of enterprises. And that means investing dollars on a capitalization standpoint versus operations. And what that really means is how you write it off. But more importantly, what your business model is. So as the business model shift to the cloud, the revenue models and the business models of the companies have to be aligned with the how people consume. And that is subscription. So subscription based revenue has to match the expense models of the build out. And that's really where the action has been on the business side. And that's been a forcing function for this community again to consolidate around what's expected and how can they grow in a very healthy way. So to me, it's always been every show we've gone to the death of OpenStack. Will OpenStack survive? And I think unlike the Hadoop ecosystem, there really is an open cloud opportunity for hybrid IoT, certainly NFV has been a great use case. So, you know, the successes around NFV and now IoT bring down the value proposition to a lower bar. I think that's hopefully what we'll see today. Exactly. And one of the things you talked about forcing function that they talked about, Jonathan Braisted in the keynote this morning is another forcing function is sort of moving a little bit away from the technology challenges that are prevalent with OpenStack deployments, but it's also a forcing function of cultural change. And as you look at some of these large enterprises, it's not just aligning the business and the IT, but it's also the alignment within IT, leading from an IT C level perspective. How do they align with what the developers need in order to make cloud deployments successful? We've seen some interesting stats. In fact, an OpenStack survey that they did in the last few months demonstrated that of 1,100 survey respondents, over 65% of their clouds are in deployment. But then you also see John Converse to that, a CIO.com survey that was also then recently showed that over 50% of enterprises trying to deploy OpenStack are failing. Why are they failing? What's the rub there? I think we're going to learn from that today with Joe Weiman from some other folks as well, wanting to understand how are these enterprises going to be successful going forward? So, forcing function on the culture side is another element. Culture of OpenStack has been about surviving. And I think one of the things that I tip my hat to to the community here is that they've been survivors. They've always been navigating very turbulent waters in terms of how the market's been growing. So, the community really has been tight-knit. Yeah, certainly contentious at times, but they've been surviving. And I think they've been digging and zagging at the right times within the trends. But the OpenStack community in the foundation particular has done a good job of understanding OpenStack's role in the bigger picture of cloud computing ecosystem. And I think that's been positive. The question on the table is, can they reduce the complexity of getting the technology in the hands of the customers? This was the challenge we've been seeing in the big data ecosystem around Hadoop, which has moved to things like Spark, and you're seeing that friction force customers in a certain direction. So, the question to the OpenStack community, can they continue to decide will they zig at the right time and zag at the right time and will they have the right approach? And ultimately, it's going to come down to the success cases. And to me, it has to be beyond NFV. To me, it's about IoT and having those kinds of capabilities with the business model, which is kind of in place with the subscription. Can they knock down the operational complexities and be in position with hybrid and private cloud for an IoT solution? To me, that's what I'm looking at and swinting through to see some success points for OpenStack. Speaking of success points, one of the things John and I were talking about before we went live this morning is one of our guests today, Sean Roberts from Walmart Labs. Really going to be exciting, especially given the news that was just announced a couple days ago with the biggest deal in U.S. e-commerce history. A lot of people think of Walmart as a retailer. In fact, you mentioned NFV, a big use case that has been shown success with OpenStack, but also now retail and the transformation that these companies are going through from becoming a retailer to becoming an agile technology company. John, talk to us about what you're looking forward to with Walmart on the program today. Well, first of all, I don't think Walmart guy is going to talk about the acquisition, but we certainly will ask, but here's my take. The Jet.com sales at Walmart really absolutely is a proof point of why these ecosystems are very, very relevant and valuable, because Walmart dominates the commerce business. This company, only a short time ago, was founded to take on Amazon's retail. A bold bet, they grew like a weed and they had a real technology differentiator around the data analytics and the guaranteed pricing. Essentially it was the Costco online and that really was disruptive. So at any given times, anyone in the ecosystem could put together a disruptive enabler, whether it's big data analytics or some tweak in the stack that could put a big incumbent on their heels. Essentially, Walmart's model, and certainly their model is deep with technology, wasn't in position to compete with Amazon. That ultimately proves that one, can little companies take on Amazon, you'd say if Jet.com continued, maybe they could have taken on Amazon's e-commerce value, but the value to Walmart was so much more because their potential failure in digital was 10 times more valuable than that. So you're seeing that and I think that proves that Microsoft Azure, Google Cloud, a lot of the big comments are potentially at risk by this open cloud initiative because the innovation could come from anywhere. And I think that to me is the tea leaves that I would read from that deal and that again, a young company, $3 billion plus acquisition, proves that innovation could come from anywhere. And that's why I love this open stack community because they are survivors and I can't tell you how many times I've heard the death of open stack. They're not doing this right. They've been digging and zagging and navigating the waters effectively and again, putting it into a position for a lot of these companies to be successful. Speaking of news and digging and zagging, Rackspace, one of the, obviously with NASA, one of the founders of open stack back in 2010, recent news, they beat the streets expectations, but there's this sort of cloud, no pun intended, looming over them from an acquisition perspective. What's your take on the future of Rackspace and what that will mean to open stack? Well, Rackspace is one of the really initial founders and they didn't take the credit for open stack because they did justice by the community by making it a community event is under a lot of turmoil and they're basically, I believe, under pressure because of the forces we were talking about with the cloud and the big guys. They're stuck in the middle between being an agile innovator and a public cloud big vendor. They're obviously losing to Amazon and everybody else with Microsoft and now Google and others with the cloud presence, has huge scale. Rackspace is struggling at the cloud level. So the news about the private equity potential buyout really is the state of the art move financially to do a pivot. So startups can do a pivot by just changing strategies. They have enough money in the bank, they make new changes, they go into new markets and we report on that all the time. But what's interesting about Rackspace is they have to pivot. So I expect Rackspace not to fail in any way. I think it's private equity or if they do some things internally, they have to pivot. And I think we'll see Rackspace pivot quickly probably to some sort of private cloud or some sort of hybrid position and use this open cloud initiative and a lot of players that are around the table that they could take advantage of versus going frontal attack on the big whales themselves. So I think Rackspace is in pretty good shape. I haven't been impressed with Rackspace but they have challenges. So they will pivot, we'll see that happen and we'll see what they can do. So taking a look at the lineup that we have today, we've got a great lineup of guests today. We mentioned Walmart, going to be talking to them momentarily this morning. That's Sean Roberts, who's the director of the technical program management there. We also have Lisa Kaywood on the show today, director of ecosystem development from Open Daylight. Probably going to hear a little bit about NFV from Lisa. And then John, you're going to be talking with Michael Miller, who's the president of strategy alliances and marketing at SUSE alongside of Kamesh Pamaraju, the VP of product marketing for Morantis. They're going to be on the show today talking with John. And then we also have the host or the emcee of OpenStack Summit SV today, Joe Weinman, who's noted author of Cloud Nomics, the business value of cloud computing and digital disciplines. Obviously quite a comedian from today's keynote this morning. I like his dry sense of humor. And then we've got John also talking with some folks from Giga Spaces, Gershaw and Diner, EVP of strategic alliances, customer service and technical support. Amir Levy, director of solution and solution architect in the office of the CTO Giga Spaces. And then our last three guests today, we've got Matthew Lodge, the COO of Weave. We've got Andrew Randall, the CEO of Tigera, John. And then we also end the day with Alex Friedland, the CEO of Morantis who's sponsoring today's events. We talked about Walmart from today's lineup. Who else are you very interested in speaking to today? And what are some of the things that you really want to learn from them? The lineup that you mentioned is really interesting and unique. And when we put the lineup together, one of the things that the folks don't know and we have our production meetings, we look at the lineup and we want to kind of have a cross-section of what we think represents the top stories. And if you look at that list, it's really diverse. You have a lot of Linux-like background players, kind of raw technology. And then you have app folks. So you're seeing a blend between folks who understand the convergence between unified communications, voice, video, apps, and mobile, because they're the ones who have to essentially live on the cloud. And then you have the people under the covers, under the hood, as they say. So people building the engine of this open cloud. So to me, I'm excited to really tease out, I like to use the car analogy. You know, what is this race car going to look like? What is it going to look like? What's the engine, what's under the hood? Let's get it down in the weeds on the geek feeds and speeds. But more importantly, what is that disruptive enabler? Because the app guys have to run these seamless applications that have a convergence of technology. So, you know, Joe, for instance, has a ton of patents around voice and switching, all that stuff. And also he knows understand the economics of cloud. But that really teases out where the app guys are. They don't want infrastructure. They want infrastructure as code. And a lot of their customers are actually enterprises. So it's an interesting blend. This Linux kind of, you know, DNA, you have the cloud DNA, they also have the application DNA. So to me, that's what I'm most excited about. One of the things that I'm excited about is understanding the enterprise conundrum. And wanting to get some advice from, like you mentioned, success cases. In fact, that's actually one of the things that Jonathan Bryce talked about on the keynote is, is moving to this collaborative innovative future direction with OpenSec and being able to share successes, being able to duplicate them. One of the challenges we mentioned a few minutes ago that's been historically present with OpenSec John is deployment and management. I'm excited to hear from Morantis what their 9.0 product is doing to help facilitate and mitigate some of the challenges there. But I want to understand from Joe's perspective, what advice would he give to those enterprises? You know, recent CIO survey that said 50% are failing when they're trying to deploy clouds on OpenSec. What advice would he give? Not just from a technology perspective. It's something we talked about earlier, culture. It's the people and the processes and the things that have to change, which presumably are much harder for enterprises to be able to pivot and turn, like you mentioned earlier. One of the things I'm excited to learn about today is what is the future for enterprises to be successful in this open cloud era? Yeah, and to me, the thing that Wikibon research guys have pointed out, that the OpenSec community and the technology behind it really has stabilized around the private cloud value proposition. And those deployments are becoming more realistic for enterprise customers. And customers should be exploring the breadth of consumption opportunities. So to me, that really is fundamentally the high-level value proposition that OpenSec has today. And certainly from there, you've got IoT, a variety of other use cases, and that V and IoT. But what that will do is it'll be interesting is to see how the IT departments transform some of their blocking and tackling workflows, like the provisioning storage, provisioning networks, provisioning servers. Building and operating basically the cloud from the trunk of OpenStack can be difficult. So who from the ecosystem is going to enable the IT guys, the guys in the trenches, the ones who want to transform the business with applications in top-line revenue, not just consolidation. Can they bring the OpenStack in as a change agent to really allow the businesses to explore these new consumption models of technology and provide their business with real enablement for application development, for top-line revenue growth. And again, private cloud is the nice beachhead that a lot of these guys can plant and grow from. So from that spot, they have access to the hybrid cloud, and then IoT would be a complete land grab at that point. So again, these are the forces that we see kind of teasing out with on our team at Wikibon and SiliconANGLE on theCUBE. So we'll see, we'll be covering it live and it'll be exciting, and we're going to ask all the guests the tough questions. And of course, bringing the Silicon Valley perspective here on theCUBE, our hometown, and of course we're going to get the innovation questions in there. If you have any questions, hit us up on Twitter at theCube, at Furrier, and we'll be answering those questions. Not a crowd chat up yet. We'll see if Bert Lattimore's online. If he is, we'll get a crowd chat going. I'm John Furrier, Lisa Martin, kicking off day one of coverage of OpenStack Silicon Valley. We'll be right back after this short break.