 Hello everyone, welcome to this special CUBE Conversation. We are here with the power panel conversation. I'm John Furrier in Palo Alto, California. This CUBE studio is, we have remote online here to talk about the cloud, technologies, impact entrepreneurship and startups. An overall ecosystem is Jim Long, who's the CEO of Digia, which is a startup around disrupting digital TV. Also has been an investor and a serial entrepreneur, Sarbite Joal, who's the in-cloud influencer, strategist and investor out of Berkeley, California Batchery, and that's with Joseph Jacks, CUBE alumni, actually you guys are all CUBE alumni, so great to have you now. Joseph Jacks is the founder and general partner of OSS Capital, open-source software capital. A new fund that's been raised specifically to commercialize and fund startups around open-source software. Guys, we've got a great panel here of experts. Thanks for joining us. Appreciate it. Go Bears. So we have a distinguished panel, it's the power panel around cloud technology. So first of all, let me get you guys' reaction to, you know, you're seeing a lot of negative news around what Facebook has become. They're essentially their own hyperscale cloud with their application. They were called the digital, you know, renegades or digital gangsters in the UK by the parliament, which was built on open-source software. Amazon is continuing to win. Azure's doing their thing, bundling Office 365, making it look like they're, they've got more revenue, they're catching up. Google, and then you've got IBM and Oracle. And then you've got an ecosystem that's impacted by this large scale. I want to get your thoughts on the first point here. Is there room for more clouds? There's a big buzzword around multiple clouds. Is, are we going to see specialty clouds? Because Salesforce is a cloud. So the, is there room for more cloud? Jim, why don't you start? Well, I sure hope so. You know, the internet has unfortunately become sort of the internet of monopolies and that doesn't do anyone any good. In fact, you bring up an interesting point, it'd be kind of interesting to see if Facebook created a social, you know, social cloud for certain types of applications to use. I have no idea whether that makes any sense, but Amazon's clearly been the big gorilla now and done an amazing job. We love using them, but we also love seeing you trying out different services that they have and then figuring out whether we want to develop them ourselves or use a specialty service. And I think that's going to be interesting, particularly in the AI area, stuff like that. So I sure hope more clouds are around for all of us to take advantage of. Joseph, I wanted you to weigh in here because you were close to the Kubernetes trend. In fact, we were at an OpenStack event when you started Kizmatic, which is the movement that became KubeCon, cloud native many, many years ago. Now you're investing in open source. The world's built on open source. There's got to be room for more clouds. Your thoughts on, on the opportunities. Yeah, thanks for having me on, John. I think we need a new kind of open collaborative cloud. And to date, we haven't really seen any of the existing major sort of large, critical mass cloud providers participate in that type of model. Arguably, Google has probably participated and contributed the most in the open source ecosystem, contributing TensorFlow and Kubernetes and go lots of different open source projects. But they're ultimately focused on gravitating huge amounts of compute and storage cycles to their cloud platform. So I think one of the big missing links in the industry is as we continue to see the rise of these large, vertically integrated, proprietary sort of control planes for computing and storage and applications and services, I think as the open source community and the open source ecosystem continues to grow and explode, we'll need a third sort of provider, one that isn't based on a monopoly or based on a traditional proprietary software business like Microsoft kind of transitioning their enterprise customers to services, Amazon and the first camp, vertically integrated menu buffet of all these different compute, storage, networking, services, application, middleware, Microsoft focused on sort of building managed services of their sort of software portfolio. I think we need a third model where we have sort of an open set of interfaces and an open standards based cloud provider. That might be a pure software company. It might be a company that builds on the rails and the infrastructure that Amazon has laid down, spending tens of billions in capex or could be something based on a project like Kubernetes or built from the community ecosystem. So I think we need something like that just to sort of provide speed the innovation and desegregate the services away from a monolithic kind of closed vendor like Amazon or Azure. I want to come back to that whole startup opportunity, but I want to get Sargeen in here because we've been in the B2B area with just last week at IBM Think 2019. Obviously they're trying to get back into the cloud game, but this digital transformation that has been a cliche for almost a couple of years now, if not five or plus, business has got to move to the cloud. So it's a whole new ball game of complete cultural shift. They need stability. So I want to talk more about this open cloud, which I love that conversation, but give me the blocking and tackling capabilities first because I got to get out of that old capex model, move to an operating model, transform my business, whether it's multi-cloud. So Sargeen, what's your take on the cloud market for the enterprise? Yeah, I think for the enterprise, the, which are sitting in the data center and moving those to cloud, it's a cumbersome task for that to work. They actually don't need all the bells and whistles what Amazon has in the periphery, if you will. They need just core things like compute, network and storage and some other in the sort of services, maybe database, maybe that's shared and stuff like that. But they just want to move those applications as is to start with some replatforming and with some changes. Like they don't want to make much changes to first when they start moving those applications. But our sort of minds are polluted by this thinking, like when we see if Facebook being formed by a couple of people or a company of six people sold for billion dollars, all it just messes up with our mind on the enterprise side. Hey, we can do that too. We can move that fast and so forth. But that is a sort of a tragic that we think that way. What, having said that, and I think we have talked about this in the past, if you are doing anything innovative, like a system of innovation, if you're building those at even at the enterprise, I think cloud is the way to go. To your original question, if there's room for your cloud players, I think there is provided that we can detach the platforms from the environments they are sitting on. So that propriety necessity has to be lowered. The degree of proprietyness has to be lowered. It can be through open source. I think mainly it can be from open technologies. They don't have to be open source, but portable. JJ was mentioning that. I think that's a big point. Jim Long, you're an entrepreneur. I mean, you've been to VC, you know all the VC's been around for a while, but you also, you're an entrepreneur, you're a serial entrepreneur, starting out at Cal, Berkeley back in the day. You know, small ideas can move fast and you're building on Amazon and you've got a media kind of thing going on. What is a cloud opportunity for you? Because you are cloud native, because you're building the cloud. How do you see, how do you see playing out? Because you're scaling with Amazon. Well, so we obviously, as a new startup, don't have the issues the enterprise folks have. And I do, I could really see, you know, the enterprise customers, what we used to call the Fortune 500, for example, getting together and insisting on, you know, at least a base set of APIs that Amazon and Microsoft, et cetera, adapt. And for a startup, it's really about moving fast with your own solution that solves a problem. So you don't necessarily care too much that you're tied into Amazon completely because you know that if you need to, you can make a change someday. But they do such a good job for us and their costs, while they can certainly be lower and we certainly would like more volume discounts, they're pretty darn amazing across the network. So we, across the internet, we do try to price out other folks just for the heck of it. I mean, doing that recently with CDNs, for example. But for us, we're actually creating a hybrid cloud, if you will, a purpose built cloud to support local television stations. And we do think that's going to be, you know, along with using Amazon, you know, a unique cloud with our own APIs that we will hopefully have lots of different TV apps use our hybrid cloud for part of their application to service local TV can't. So it's kind of an interesting play for us. The B2B part of it is we're hoping to be pretty successful as well. And we hope to maybe have multiple cloud vendors in our mix, you know, not that our users will know who's behind us, maybe Amazon for something, Limelight for another or whatever, for example. Well, you got to be concerned about lock-in as you become in the cloud. That's something that everyone's worried about. JJ, I want to get back to you on the investment thesis because you have a cutting edge business model around investing in open source software. And there's two schools of thought in the open source community, you know, free contributions, great, and let that be organic. And then there's now commercialization. There are real value, there's real value being created in open source. You would put together a chart with your team about the billions of exits, billions of dollars in exits from open source companies. So what are you investing in? What do you see as opportunities for entrepreneurs like Jim and others that are out there looking at scaling their business? How do you look at success? What's your advice? What do you see as leading indicators? I think I'll broadly answer your question with a model that we've been thinking a lot about. We're going to start writing publicly about and probably eventually maybe publish a book or two on it. And it's around the sort of fundamental perspective of creating value and capturing value. So if you modeled, this is sort of a famous investor and entrepreneur in Silicon Valley who has commonly modeled these things using two different letter variables, X and Y. But I'll give you the sort of perspective of modeling value creation and value capture around open source as compared to closed source or proprietary software. So if you look at value creation modeled as X and value capture modeled as Y, where X and Y are two independent variables with a fully proprietary or sort of proprietary software company-based approach, whether you're building a cloud service or a proprietary software product or whatever it's just a software company, your value creation exponent is bounded, typically bounded by two things, capital and fundraising into the entity creating the software and the centralization of research and development meaning engineering output for producing the software. And so those two things are tightly coupled to and bounded to the company. With commercial open source software, the exact opposite is true. So value creation is decoupled and independent from funding and value creation is also decentralized in terms of the research and development aspect. So you have this sort of decentralized community-based crowd sourced or sort of internet global phenomenon contributing to a code base that isn't necessarily owned or fully controlled by a single entity. And those two properties are sort of decoupled from funding and decentralized R&D are fundamentally changing the value creation kind of exponent. Now let's look at the value capture variable with proprietary software company or a proprietary technology company. You're primarily looking at two constituents capturing value, people who pay for accessing the service of the software and people who create the software. And so those two constituents capture all the value they capture, the vendor selling the software captures maybe 10 or 20% of the value and the rest of the value I would express and say is that customer is capturing the rest of the value. Most economists don't express value capture as capturable by an end user or a customer. I think that's a mistake. Jim, your reaction to that because there's an article that went around this weekend from Motherboard, the internet was built on free labor of open source developers. Is that sustainable? So Jim, it's your reaction to JJ's comments about the interactions and the dynamic between value creation value capture free versus sustainable funding. Well, if you can sort of mix both together that's what I would like. I haven't really ever figured out how to make open source work in our business model but I haven't really tried that hard. It's an intriguing concept for sure, particularly if we come up with APIs that are specific to say local television or something like that. And maybe some special processes that do things that are of interest to the wider community. So that's something I do plan to look at because I do agree that, I mean, we use open source we use this thing called FFMPEG and several other things and we're really happy that there's people out there adding value to them, et cetera. And then we have our own, you know, versions, et cetera. So we'd like to contribute to the community if we could figure out how. Saabji, your reactions to JJ's thesis there? I think two things. I will comment on the protruding aspects. One is the lack of standards and then open source becoming the standard, right? I think open source kind of projects take birth and life in its own because we have a lack of standard because these different vendors can't agree on standards. So like remember we used to have service-oriented architecture. We have Microsoft pushing some standards from one side and IBM pushing from other. The SOAP versus XCBL and XML, different sort of paradigms, right? But then REST API became the de facto standard, right? It just took over. I think what REST has done for software in last about sort of 10 years or so, like nothing has done that for us. Well, Kubernetes is right now looking pretty good. So if you look at, you know, JJ Kubernetes, the movement you really were pioneering on is having a similar dynamic. I mean, Kubernetes is becoming a forcing function for solidarity in the community of cloud native, as well as an actual interoperable orchestration layer for multiple clouds and other services. So JJ, your thoughts on how open source continues as some of these new technologies like Kubernetes continue to hit the scene. Is there any trajectory change in open source that you see that you could share? I'd love to get your insights on what's next behind, you know, the rise of Kubernetes is happening. What's next? I think more abstractly from Kubernetes, we believe that if you just look at the rate of innovation as the primary factor for progress and forward change in the world, open source software has the highest rate of innovation of any technology creation phenomena. And as a consequence, we're seeing more standards emerge from the open source ecosystem. We're seeing more disruption happen from the open source ecosystem. We're seeing more new technology companies and new paradigms and shifts happen from the open source ecosystem and kind of all progress across the largest, most difficult sort of compound sensitive problems influenced and kind of sourced from the open source ecosystem and the open source world overall, whether it's chip design, machine learning or computing innovations or new types of architectures or new types of developer paradigms, biological breakthroughs, there's kind of things up and down the technology spectrum that have a lot to sort of think open source for. We think that the future of technology and the future of software is really that open source is at the core as opposed to the periphery or the edges. And so today, every software technology company and cloud providers included have closed proprietary cores, meaning that where the core is the data path, the runtime, the core business logic of the company. Today, that core is proprietary software or closed source software. And yet what is also true is that the edges, the wrappers, the sort of cross the periphery of every technology company, we have lots of open source. We have client libraries and bindings and languages and integrations, configuration, UIs and so on, but the cores are proprietary. We think the following will happen over the next few decades. We think the future will gradually shift to from closed proprietary cores to open cores where instead of a proprietary core and open cores where you have a core open source software project, as the fundamental building block for the company. So for example, Hadoop caused the creation of MapR and Cloudera and Hortonworks. Spark caused the creation of Databricks. Kafka caused the creation of Confluent. Git caused the creation of GitHub and GitLab. And this type of commercial open source software model where there's a core open source project as the kernel building block for the company and then an extension of intellectual property for wrappers around that open source project where you can derive value capture and charge for a licensed product with the company and a press customer. We think that model is where the future is headed and it's include cloud providers, basically selling proprietary services that could be based on a mixture of open source projects but perhaps not fundamentally on a core open source project. And we think generally like abstractly with maybe somewhat of a reductionist explanation there but that open core future is very likely, fundamentally because of the rate of innovation being the highest with the open source model in general. All right, that's a great start, Jim. You're a historian of tech, you've lived it. Your thoughts on some of the emerging trends around cloud because you're disrupting linear TV with Digia in a new way using cloud technology. How do you see cloud evolving? Well, I think the long lines we discussed, certainly I think that's a really interesting model and having the open source be the center of the universe and figure out how to have maybe some proprietary stuff if I can use that word around it that other people can take advantage of but maybe you get the value capture and build a business on that. That makes a lot of sense and could certainly fit in the TV industry if you will from where I sit. Bring services to businesses and consumers. So it's not like there's some reason it wouldn't work. It's bound to, it's bound to figure out a way and if you could get a whole mass of people around the world working on the core technology and if it is sort of unique to what the mission of what you're, or at least the marketplace you're going after, that could be pretty interesting and that would be great to see a lot of different new mini clouds, if you will, develop around that stuff would be pretty cool. Sarvij, I want you to talk about scale because you also had experience working with Rackspace. Rackspace was early on, they were trying to build the cloud and OpenStack came out of that and guess what, the world was moving so fast. Amazon was a bullet train just flying down the tracks and it just felt like Rackspace and their cloud, it just couldn't keep up. So is scale an issue and how do people compete against scale in your mind? I think scale is an issue and software chops is an issue. So if, there's some patterns, right? So one pattern is that we tend to see that open source is not very good at the applications side. Like you will hardly see any applications being built as open source. And also on the extreme side, open source is pretty sort of lame, lame, if you will, at very core of the things, like OpenStack failed for that reason, right? But it's pretty good in the middle, as Joseph said, right? So building pipes, building some platforms based on open source, the hooks integration, it's pretty good there actually. I think that pattern will continue. Hopefully it will go into the deeper, into the core, which we want to see. The other pattern is, I think the software chops, like one vendor has to lead the project for a certain amount of time. If that project goes into sort of open, like anybody can grab it, and a lot of people contribute to jump in very quickly, it tends to fail. Like that's what happened to, I think, OpenStack. And there was no many other reasons behind that, but I think that was the main reason. And because we were smaller at all, and we didn't have that much software chops, I hate to say that, but then IBM could can throw like 100 bodies a week. And look where they are. So does HP, right? And look where they are. All right, so I'd love to have a panel, power panel on open source. Certainly, JJ's been thick of it, as well as all the folks in the community. I want to just kind of end on kind of a lightweight question for you guys. What have you guys learned? Go down the line and start with Jim, Sarbeat, and then JJ will finish with you. Something, share something that you've learned over the past three months that moved you, or that people should know about in tech, or cloud trends that's notable. What's that, something new that you've learned? In my case, it was really just spending some time in the last few months, getting to know our end users, a little bit better consumers, and some of the impact that having free internet television has on their lives. And that's really motivating. And something as simple as you might take for granted, but lower income people don't necessarily have a TV that works or a hotel room that has a TV that works or heaven forbid, they're homeless and all that. So it's really gratifying to me to see people get sort of tuning back into their local media through television just by offering it on their phone and laptops. And what are you going to do as a result of that, to get to different action? What's the next step for you? What's the action item? Well, we're hoping once our product gets filled out with the major networks, et cetera, that we actually provide a community attachment to it so that we have television over the air, television channels is the main part of the app. And then a side part of the app could be any IP stream from city council meetings to high schools, to colleges, to local community groups, local even religious situations or festivals or whatever and really try to tie that in. We'd really like to use local television as a way to strengthening all local media and local communities. That's a great mission at least. It's a great mission. You guys have a dig, thanks for sharing that. Sarvi, what have you learned over the past quarter, three months that was notable for you and the impact and that's gonna change you a little bit? So what actually, I have gravitated towards in the last, what, three to six months is the blockchain actually. I was light on that, like what it can do for us and is there really a thing behind it and can we leverage it? I'm seeing more and more actually usage of that in sort of food, SEM, supply chain management and healthcare and some other sort of use cases, if you will. I'm intrigued by it and there's a lot of activity there. I think there's some, there's some legs behind it. So I'm excited about that. And are you doing a blockchain process as a result? Are you still tire kicking? No, actually I will play with it. I'm a practitioner, I play with it. I write by code and play with it and see what is that level of effort it takes to do that. And as you know, I wrote the Alexa skill a couple of weeks back and play with AI and stuff like that. So I tried to do that myself before I say that. We're hoping blockchain helps even out the TV ad economy and gets rid of middlemen and makes more trusting and transactions between local businesses and stuff. So at least I say that, I don't really know what I'm talking about. It sounds good though. You get a new round of funding on that sound bite alone. JJ, what have you learned in the past couple of months that's new to you and changed you or made you do something different? I've learned over the last few months, OSS Capital is a few months and change old. And so just kind of getting started on that. And it's really, I think potentially more than one decade, probably multi-decade kind of mostly consensus building effort. There was such a huge lack of consensus and agreement in the industry. It's a fascinatingly polarizing area, the sort of general topic of open source technology, economics, value creation, value capture. So my learnings over the past few months have just intensified in terms of the lack of consensus I've seen in the industry. And so I'm trying to write a little bit more about observations there and sort of put thoughts out. And that's kind of been the biggest takeaway over the last few months. I'm sure you learned about all the lawyer conversations setting up a fund. Learnings there probably too, right? I mean, all the detail. All right, JJ, thanks so much, Sarbide, Jim. Thanks for joining me on this power panel, Cloud Conversation Impact to Entrepreneurship Open Source. Jim Long, Sarbide Jawal and Joseph Jax, JJ. Thanks for joining us. The Cube Conversation here in Palo Alto, I'm John Furrier. Thanks for watching. Thanks, John.