 Live from the Mendeley Bay Convention Center in Las Vegas. It's theCUBE, covering VMworld 2016. Brought to you by VMware and its ecosystem sponsors. Now, here are your hosts, John Furrier and John Walts. Welcome back to Vegas as we continue our coverage here on theCUBE of VMworld, day three. Monday, Tuesday, Wednesday, I've been here for you. A lot of experts, a lot of input, a lot of perception of a show that has really had a lot of good energy to it and with us now to talk about this is Mark Ward, COO of Cobalt Iron. Mark, good to see you, sir. Thank you, sir. And Tim Connelly, a principal at ATS Group. Hey, Tim, how are you? Good, John, how are you, man? I think we could talk a lot about probably a Heisman Trophy, college football, high school football, but we're going to focus instead maybe on what you two guys are up to. First, if you would, for our CUBE viewership, people might not be familiar with your respective concerns. If you would, just run us through the elevator pitch, what you guys do, first, Cobalt Iron? Sure, Cobalt Iron delivers enterprise, cloud, data protection via a SaaS platform. So instead of the traditional approach of a perpetual license consumption model, we deliver it as a SaaS app, not very different from what salesforce.com does for CRM applications we do for backup and recovery. Okay, and then ATS? ATS Group's a premier IBM business partner. We don't sell anything. We do mainly infrastructure support services, architecture work, we work for IBM, IBM partners, our direct customers do a lot of architecture work implementation around servers and storage devices. Good, so this data first, data protection. What's the, I guess, the priority, the emphasis, maybe just in the broad picture, 30,000 foot, for what you're seeing in your clients now supposed to maybe two, three years ago, and the capabilities that you're able to provide them in order to meet those concerns? Absolutely. You know, I think the biggest issue that customers are facing today is a complex set of legacy solutions that they've been dealing with for about the past 10, 15 years. You know, whether it was solving a SQL server backup issue, whether it was an Oracle issue, a Windows client issue, they acquired multiple different products, and what they'd like now is just one throat to choke. They'd also like to consume it in a as-a-service consumption model rather than having to infrastructure it, rather than having to operate it and administer it. So what we're doing at Cobalt-Iron in partnership with VMware and IBM is making it easy to consume backup, covering all their different use cases so they don't have to have multiple vendors, and basically driving CAPEX and OPEX costs out of the equation, so it's affordable. Mark, I want to get your perspective on something. In VMworld, we've been talking about the complexities of IT, we were talking before we came on here in theCUBE, early employee at EMC, you've done some venture capital investing, you've been around the block, you know a lot of the inside baseball and the history of the industry you guys were, we're at EMC, we're a big part of that. Today's environment, right, you talk about the SaaS model, seems so simple, but the reality of actually implementing it for customers, is it more just inertia of their business model? Talk about this complexity around the legacy and the silos, and where are the customers stuck? What is the complexity around that you guys are solving and IBM's trying to solve and others? So not dissimilar to what Tim's company does, which is solve for those complexity issues. I would say the number one issues, the number of different technology stacks that a customer has to kind of combine to deliver value. As a SaaS provider, our job is to take the complexity out of all those different stacks. Let me make it a little bit more simple. Hardware on the compute and server and network side of the equation, software, databases, file systems, object storage, sand, NAS, you name it. The SaaS job is to eliminate the complexity of managing, monitoring and operating all those environments so the customer just can consume a business level service. Not have to understand nine different variants of technology, understand what they want for their company and how they want to pay for it. And the SaaS model allows for you to pay as you grow rather than over provision, build in advance and kind of consume over a course of one, two, three, four years of a period of time. Tim, you get in the trenches, customers call you and they call you the cleaner. I mean like that. I hate those muscles. No, but I mean you're in that you could deal in the day to day and in the war rooms as they try to look at the transformation. You know, it's a slog at one level but also there's opportunities to innovate. What are you seeing out in the customer environment? What are some of the conversations you're in? What are some of the use cases? Well, being here and being world makes a lot of sense. So server virtualization, I mean, VMware has been the King Kong around for eight, nine years. You know, back eight, nine years ago, customers would deploy in their lab, take baby steps into that. Now I have over 400 customers. I don't think I have one customer that doesn't have VMware in production, right? So that's compute virtualization and storage virtualization around the IBM platforms. We do a lot of work around that. So marrying the two virtualization products together has been a great success for our customer. The bigger the customers, the more power, the more benefit, the more efficiencies they're grabbing out of having both compute and storage virtualization working together. Let me ask you a question about the announcement on Monday that Robert LeBlanc up on stage about IBM Cloud Team and with Pat Gelsinger. That's interesting, right? So now you have VMware partnering with the IBM Cloud and a little bit of futuristic vaporware with the cross cloud. But yet, do you buy that story? Do you see that synergy? Can you share your thoughts on that? Because that's VMware basically saying we're going to start working with the cloud companies and IBM obviously first in the roster to be kind of be tightly coupled there. Your thoughts on that, what does it mean for customers? That's a great question. We're actually spending the rest of 2016, I nominated two of my lead engineers, architects to go out and figure out what's fact and fiction in the cloud, right? Cloud means a million different people, right? So we're trying to figure out what does cloud mean to our customers and what's factor fiction. So this announcement with VMware and IBM is very compelling. With software, IBM purchased them a couple years ago. We've been working with software probably for the last three or four months trying to understand what it is that they're doing, what makes them different. And then also we have a performance SaaS offering. So we're actually deploying that into a lot of the cloud vendors and measuring their performance capabilities so that our customers can rely on some real information as they try to determine where they want to go to the cloud. And IBM's got their big event coming up, IBM Edge, which is their big storage event. theCUBE will be there as well, Dave Vellante, Stu Miniman, we hope I'm not going to be able to make that event. Mark, on the industry trends you saw Pat Gelsinger update this cross-cloud thing. Does that impact your SaaS product at all because, or is that just an industry dynamic that you roll with? I mean, how does that impact you? Well, I think your point about PowerPoint versus reality is true. There are some imposters out there. Fortunately, by partnering with IBM and VMware, software is able to deliver a true cloud platform. And it's a cloud platform we've been using now for the past three and a half years on four different continents to back up and recover storage for customers from small 10 terabyte configurations to massive multiple petabyte configurations. The other component part of the cloud is that not all clouds fit one use case. So with our solution, we work with Azure, we work with Google, we work with AWS, and we work with a soft layer ecosystem. So depending upon workloads, which is what Tim's company does an outstanding job helping customers determine what workloads belong in which cloud, we are then the service provisioning entity that can deliver that cloud of choice when they need it at the right price. So you have the flexibility to roll with whatever the customer tool for the job or cloud for the job. It's not an option. You know, again, that imposter comment. That's the table stakes. If you can't do it, you're not in the game. So you guys are guaranteeing your table stakes across the cloud. On the cloud workload, that's a good point you brought up. This is, you know, the classic tool for the job and sometimes everyone's got a hammer, everything looks like a nail in IT. So whatever expression you want to use. But it really will be a multi-cloud world. That's pretty clear we're seeing. Where do you see the workloads? I mean, is it a trade-off between just economics? We're, you know, we haven't really got that fact and fiction out yet of true performance in the cloud visa on-prem. Okay, economically it's cheaper. I'll use the cloud. I don't really care about performance. What's the trade-offs that you're seeing with that conversation? Are you down that level yet? Yeah, that's a good question. So cloud and, when you mentioned cloud customers, they go, oh, I'm going to save money, right? Well, are you really? So I mean, the economics is absolutely part of it. And customers have absolute workloads to move cloud. Like email. Every customer should have their email in the cloud. It's a no-brainer to do that, right? So trying to figure out, from a performance perspective, what can I move to cloud and what needs to stay on-prem? So some of our larger customers, they're simply not going to be able to move their, let's say, their five petabytes storage environment to the cloud. It's not going to happen. But there's lots of applications. Mark was talking about earlier today about net new applications. Sure, put them in the cloud. You know, because you don't have anything to measure, to monitor, so you're not sure how big or small it's going to be. And a lot of cloud vendors have very granular capability to ramp up CPUs, ramp them down. You can buy it in hours, days, weeks of stuff. So it's very easy for customers to try to cloud out. And that's the key, right? I mean, the workload will define the consequences of that effect architecturally. Absolutely. If you've got a production workload, where it's a lot of storage, or and, or security, or compliance, you may not want to have it in the cloud for either performance reasons. Right. So you just build it on-prem, right? So, yeah, I mean, it's a no-brainer. But the cloud has some use case for elasticity. Yeah. Yeah, we're trying to get at that. I mean, I'm looking at Microsoft right now. I'm trying to think what shoe will drop with those guys relative to where does the data get stored? And that's kind of things that we're looking at. You guys' thoughts on this whole data fabric philosophy? It's almost like a religion. Do you go horizontal data? Do you go vertical data? Or both? I mean, there's a really interesting kind of points out there that no one's really settled in on this whole, how do you do the data architecture? Thoughts? Yeah, yeah, I think, well, yeah, I get thoughts. And I think the thoughts kind of focus again around cost and customer consumability. In fact, Microsoft has been a leader in what's called the object storage environment. Object storage basically a technology that makes information very reliable and super low cost for applications like backup, archiving, data that's not frequently accessed. IBM paid over a billion dollars for a company called Cleversafe last year to acquire the same technology. So, storage, data, data protection are big, big parts of the cloud value proposition because of cost and the elimination of complexity of management from the end user customer. Customers want to basically give their problems to a cloud-based consumption model. Again, it's less expensive from a capital acquisition perspective because you're not buying it all at once. You only buy it when you need it and that pay-as-you-go model works very, very well for storage. So, I'm going to have Eric Herzog and talk to him from IBM Storage coming up soon. What's the conversation like with him? He wants to sell more storage. You want to sell a service. Is there a conflict there? Is there just natural synergies or they're not mutually exclusive? You can still work together. You know, I would say that Eric is a Lego block manufacturer. What we do is actually create a toy that a customer can use and have fun with. So, part of being in the Lego box business is you have to have the best, most durable and highest-performing and nice-colored Lego blocks. What's the point of that buy when he gets here? Yeah. The old joke from Larry Ellison is the cloud is just a data center that no one knows the address of. So, you know, your thoughts on this whole data philosophy because it's in the day. People are looking at data as a potential lock-in spec. Not a proprietary thing, but like where the data sits will be a strategic decision because of the need for it, the need for real-time apps. This is an interesting kind of new dynamic. Yeah, that's a great question. In my mind, compute's been solved. You know, compute's been solved for years. So, the cloud is very readily built to consume compute power. So, if you have a compute workload, heavy intense CPU, memory, whatever, you're good to go. It's the storage is the kind of, I'd say, the last train in to figure out if I have high performance requirements for storage, whether it's IOPS, latency, whatever it may be, because my application demands it, that's the last train to leave the station. We're trying to figure that out now because a lot of the vendors are trying to put commodity storage out there, which is fine, but certain workloads can't run on that. And then IBM's got, talking to Eric, a lot of energy going into software-defined storage. So, they're trying to solve that problem with less hardware sales, with higher software sales. They got a lot of multiple years into that initiative following those guys. Yeah, we were talking about the trenches and dealing with real problems and headaches and being problem solvers. All right, so you're dealing with some folks in that regard and you're providing them with that aspirin, right? And there's a whole bunch of other people out there who have that headache and they don't, maybe they don't want the aspirin quite yet. So, how are you trying to address that, crowd? That reluctance to even consider. I mean, how do you get people to open the mind a little bit and realize that you really can bring simplicity to their table? How do you do that? You know, I'll point to a famous book, Crossing the Chasm by Jeffrey Moore. Every vendor wants to accelerate the laggards and the maturity consumers into the early adopter stage. Why? Because that's where the profit pools exist. Our job is to make it so easy to eliminate barriers of onboarding leveraging our technology that what's happened with Salesforce.com, and I think we all agree, they are the panacea for SAS and they are the panacea for CRM. We believe Cobalt Iron and IBM can do the same thing for backup and recovery SAS. So we're eliminating barriers and those are technology barriers and they're cultural barriers on how companies work, department of department, finance organization to IT organization. We're giving them tools like billback and chargeback tools within the SAS offering so that companies now can become service providers to their own internal customers. You free up resources too. I mean, I think you free up a lot more shackles that have been tied to the desks of administrators. You know, as we joke starting off, you know, one thing EMC had did very, very well and I'm sure they continue to do it is make a very compelling argument for cost savings and greater value delivered to the end user. And that's what we're doing today. And then Tim for you. I mean, again, what's your primary tenant? What's your fundamental here when you talk to maybe a potential customer, somebody like, what's your go to to get them to open up their mind and realize that there's a pretty, there's a nicer world out there for them. That's a good question. So a lot of our customers come back from events like VMworld, Gardner conferences and the CIOs, the CEOs, they're always coming back saying, cloud, I got to go to cloud, I got to go to cloud or I'm dumb, I'm not following the train out there, right? So they're really scared about going to the cloud but they want to do it, right? So it's trying to figure out what's real, like I said earlier, factor fiction out there. So our job is to figure out what cloud vendors are real, not real. And then it's very likely that a lot of our customers will actually go to multiple cloud vendors. One cloud vendor for this type of workload, one for this type of workload. So it's educating our customers on where they can move and what workload that they currently have that actually can go to the cloud. They need that handholding. And you take that away from here. Yeah. I assume that there's a lot that's translatable in that world. Absolutely. Good. Gentlemen, thanks for being with us. No, it's standing. We appreciate the input and we'll get to that Heismann talk off air. How about that? All the best. Go Christian McCaffrey. All right. Late plug. Back with more from VMworld. Right after this, you're watching theCUBE. Thanks, guys. Yeah. Thank you, John. Good job.