 Live from the Sands Convention Center in Las Vegas, Nevada, it's theCUBE at AWS re-invent 2014. Brought to you by headline sponsors, Amazon and Trend Micro. Okay, welcome back everyone. We are live here in Las Vegas for Amazon Web Service and AWS re-invent. Their conference is changing the world. It's all about the cloud. Amazon is just absolutely doing great. I'm John Furrier, the founder of SiliconANGLE, and I'm here with special guest Jerry Chen, who's a general partner at Greylock Partners, venture capital firm. Tier one, some people say, Tier one, looking at all the hot deals. You know, great firm, great bunch of guys over there. Jerry Chen, the new minted partner over there. Welcome back to theCUBE. Thanks, John. It was a pleasure to be here. I love when people say Tier one, Tier two VCs. I roll my eyes on that. It's like, come on, who's keeping track of what a tier is? You know, you're either good or you're not. Certain deals are... It's far by storage. Just Tier one storage, Tier two storage. I just want SSDs. I want an SSDVC. Low latency, high power, fast, you know, really awesome. Good for transactions, great for cost per venture. Seriously, welcome back. Thanks. It's great. Hey, congratulations to theCUBE. All these years I've been working with you from my previous life. It's amazing what you guys have done. Any show that's relevant has a cue. It's a great sign. Well, you know, Jerry, we love digital. We're in all the R&D crowd chat you're very familiar with. We love digital. We've got our eyes on this digital transformation. And it's a lot like Amazon, right? This whole world's changing. What's really exciting is a new guard of companies. New brands are emerging. Docker is one that you've invested in your first investment. We joked last year here on theCUBE Jerry, when you're going to, you know, get going, pop one out, you're first. And, you know, not bad. Thank you. Wow. It's so early for both Docker, the company, the open source ecosystem. I think Ben Golub said it's 18 months old, right? And I invested about a year ago right after I saw you and the past year has been incredible. Both from the, not only the development of open source community, but the past year, you've been all these shows. Red had IBM, VMware, Microsoft, Amazon, pretty much every single cloud provider is embracing Docker and making Docker the de facto element of the cloud. And so, I mean, I think everyone here in this conference to myself I'm very bullish on what this could become. And so, I'm happy to part of the ride and watch Solomon and Ben just drive. It's great to see you, young gun in the VC community. I mean, not super young, but I mean, relative to the other VCs. I mean, you made that first investment. You're the lead investor in Docker. And then they raised the risk in like six months, you know, could be a record. I don't know. But last year you made a comment to me. I think we were walking the hallways. You're like, John, what do you think? I'm like, Amazon's kicking ass, kicking names. It's a tsunami. Who's going to put the C wall up? And I think your comment was, whoever can build Amazon for the enterprise will win it all. So it's interesting. That's not happening. But Docker is a unifying opportunity that brings some solidarity with the developer community. I think what you're seeing, so a couple of things have happened in the past year so we last spoke. I think I remember some last year that Amazon was trying to be one thing for all people and open stack as the time you're asking was trying to be all things to all people. In the past year, I think, in the public cloud space, especially Google and Microsoft Azure have, you know, made huge investments technically and marketing wise and try to like close that gap with AWS from still far ahead, but trying to close that gap. At the same time, VMware and kind of that Red Hat, the private cloud stalwarts are trying to catch up as well. And what all those players see, Docker as that unit like currency or transport to say, oh my goodness, if now my application really is that portable and that delightful to use, I can reasonably have an Amazon, Google, Azure, VMware, Red Hat base options that all work and look and feel the same. And I think Docker's kind of unlocking that value for the first time. Yeah, and DevOps really was the indicator that, okay, Dev guys don't want to be infrastructure dudes and that was all kind of laid out there. Everyone saw that, but no one actually had anything. So Docker was really not a new concept from a container standpoint, but really bringing it together and making developers, okay, all those dependencies, all those steps, all those hassles go away and it's a rallying cry, right? Yep. So do you expect that to like just explode more growth in the enablement side? Have you looked at that? Do you guys talk about that in board meetings? Yeah, we talk about the growth. I mean, we track all the numbers from the open source community, developer community, the partner community. And like every wave of technology, it's bigger and greater and faster than the previous one. So I think Docker is just the beneficiary of, look, years and years of container technology from Linux containers, Lares containers, but VMware I think pioneered kind of the idea of running in isolated portable boxes, right? Virtual machines then. And then I think OpenStack kind of like led the concept we need open source scale out cloud for the next generation. And then Docker is just riding on both of those pioneering efforts to say, you know, the right way to build that next gen cloud is with Docker. All right, so now the personal question, are you doing more deals or are you just kind of like trying not to screw up Docker? Look, definitely trying, you know, to let those guys run and not get too much in the way of Ben and Solomon. But yeah, so I just joined a second board of a security company with my partner, Sheem Chanda. We incubated with an EIR, Michael Callahan that you know. And so I'm lucky to work with him. Michael, this is a world-class town. He's a former founder of CTO, another great law company. And we haven't announced it publicly yet in terms of what it is, but I'm working closely with Sheem and Michael to kind of incubate this new idea. You know he's my neighbor, so I've been going through his trash, looking for business plans. I'm like, where's the emails? Well, I told Michael to throw out fake business plans, so to throw you off the sand. I have my kids go through it, so I don't get caught now. I'm like, kidding. We'll be talking more about that in the near future. Jerry, you're really a nice guy. People like you a lot. Do you find that being a VC has changed your persona a bit? I mean, you've always been kind of a smart guy, but certainly, happy go lucky. People like working with you. Sure. You got to say no a lot, entrepreneurs. People that are your friends. Has that changed your demeanor, made you more tougher, more East Coast-like? Oh, goodness. I was born on the East Coast. I would say, look, you've known me a while, so hopefully you'll say no. I'm still the same person at course. So two things. One, even when I say no to investment, I try to be helpful, right? That every interaction is, even when you don't have a long-term investment, it's still useful in that interaction. Number two, you just be honest about it, and quit, right? It's like we're not going to invest with the company or the friend. You just say it's not for us. And rather than like string along people or just look for excuses, you just be a little more... Versus going through that book of excuses, rotate, excuse 117. It's early for us. Yeah. That's a good fit. You just say why, you just be a little more forthright. Yeah, just say it. I don't believe you guys. I don't think you can do it. Mark, it's too small. Prove me otherwise. I mean, honesty is the best policy. Yeah. It's easiest, right? It's not only the best but it's also easier too, personally. My personal experience, not everyone's the same way, and who knows? In three years from now, it might be very different. Okay, so I got to ask you. Ryan was on from Storm, great investor, great guy. He had some good points. He said, you know, developers are nerves with the past layer. Now, he's investing a lot in OpenStack. Yep. That's what he's betting on. And the reason why he said Amazon isn't hard because it's hard to know what the horse is what the track looks like. Yep. So it's really difficult from a risk standpoint. OpenStack, pretty clear. The enterprise play all the way. Yeah. And he knows that space cold. When I asked him about Cloud Foundry and someone would be like, pass? Yeah, yeah. He's like, it's weird in there because that's where the lock-in is. And he says, he thinks it's a tough area. Do you see that same or do you think that's a non-issue? You know, I don't think, I want to call it not lock-in. I think past looks like OpenShift, Cloud Foundry and a whole bunch of others. They're not, initially, lock-inspecitions or open-source, but they're prescriptive, right? The past layer is kind of telling you how you should architect your application. How you should build it. How you should scale it out. And they'll do a lot of that for you. And so what happens is you got to trust the creators of that past layer of, you've architected that correctly. Otherwise, you know, you're not changing it. So if you trust how they build out those late-out-of-the-building blocks, then you're fine. So it's not, I say, lock-in, especially the open-source ones or ones that aren't, but it's definitely prescriptive. So I've got to ask you, what are you looking at now for deals? What's your investment thesis right now? Obviously you've got Docker keeping you busy, and it's a great first investment. And it looks looking good off the tee, as they say, in golf. You've got to make a few more shots, make some more bets. What's your current investment thesis right now? You know, so the way I work, John, you've seen over the years, is I have the different layers of technology. I form a hypothesis or a model of the world, and I kind of test them talking to smart people, because I don't have all the answers. And quite frankly, I'm probably wrong most of the time. And, you know, you have to keep that humility that you're always learning. And so the couple of the hypothesis models I have, in different parts of the stack, on the low level part of the stack, I am continually fascinated by what's happening with low level infrastructure hardware. Like CPU clock cycles aren't getting faster, throwing more cores, right? More cores on a motherboard, which changes like power dynamic latency. We're throwing, you know, terabytes of flash storage right next to CPU. I'm not a hardware investor, but if you think about how would you rewrite Oracle or a database for a world where that is the new hardware that's interesting. And then the next layer up, I think a lot about event data. So what Amazon announced today were the AWS event data, time series data. So what Amazon announced today with Lambda is fascinating too about how you think about processing streams of data, right? Because pretty soon the explosion of data is not just human-created data, machine-created data, you know, health monitors, mobile phones, et cetera. So I think that's interesting how you rethink that layer. And obviously we're investors' clad era, which is a forefront of trying to be the center of that data space. And then the application space, I continue to believe that different verticals will be disrupted in different ways by mobile or big data from like oil and gas to manufacturing. But also with mobile, the way you interact with your customers, with your users, changes dramatically. So the old world was web and email, right? The new world is tweets, texts, in-app modifications, in-app messaging, period. And if you think about that, the way you react, the way you interact with your customer, the data you collect with your customer from all those different signals, social or not, is tremendous. And I think the old world doesn't really think about that quite well. They don't process it at the right speed. But if you get the signals from where you're at, I'm in Vegas. I'm at theCUBE. I'm tweeting that. I'm posting that. There's an application. I can push the right message, the right market context at the user at the right time. That's tremendous. And so low-level hardware transforms how you write application software at that level. Clearly, Dockers is the forefront of that. The data level, the amount of data coming through in a stream, that's going to change how we think about analytics and your applications. Then, again, this explosion on mobile is fascinating, especially around marketing apps in my mind. So three areas, among others. That's a great dissertation there. Awesome. We appreciate it. OpenStack, quickly. Where are they? Is it becoming the big guys just getting moving quicker? A little bit of a bumps in the road. Some people falling off the bus, if you will. As it goes faster to kind of get that built out. I see HP's going all in. IBM's in cloud boundary. And you've got Marantz and a few other players. But there's been some consolidation. Yeah. I think you're seeing some consolidation. There's been, obviously, some acquisitions. Eucalyptus, MetaCloud, cloud scaling all within the past six months in that space. So I think what OpenStack's done really well is agreed on a lingua franca. The APIs, the way you talk about the cloud between all the vendors out there has done a great job of being that kind of way to have that conversation. So number one, that's not going to wear at any time soon. What's been interesting to watch over the past few years is the actual instantiation of that dictionary. The grammar of OpenStack has been established by the foundation by all the major vendors. The grammar, how you talk about it, the nouns, the verbs, the syntax. The actual words and how you put together a language has varied from vendor to vendor. And so I think what you're seeing now is different vendors consolidating and getting acquired. But pretty soon, syntax and grammar agreed upon, vocabulary and the actual language, really bad metaphor probably. They got to go faster. I mean, look at Amazon. It's just a freight train. The horse is running away. It's a secretariat. It's boat lengths. Whatever analogy you want to use, they're running away with it right now. Or you don't agree. Or do you think they're running away with it? A year ago, I would say they're running away with it, right? I would say a year now, I'd say what Google and Microsoft have done the past year, I think they have a chance to actually be relevant players in the public cloud. I think OpenStack and the private cloud can be that language, that lingua franca. I think going faster is always better, right, in general. Look at what doctors done the past year in terms of speed. But I think by design, because of the way OpenStack's organized as a community, they're going to move at the pace they're going. And the fact they do summits every six months is kind of they're forcing falconry to kind of move this thing forward. And so, by design, that's their pace. Alright, so I got to ask you a personal question about this segment. Are you happy with the V-Mafia? What they're doing now? There's a lot of VMware folks that are graduating to VMware now, maturing quickly. Pat Gelsinger leading the charge there. But, you know, it's only like not that old of a company. I mean, people now are popping out, venture capitalists, other companies. Is there like a group now? I think they're, look, it's always great to come to reinvent or VMworld or some of these other shows. You see the alumni of the V-Mafia. So, two things. One, I think past students do a terrific job. When he's done the past year in terms of some of the acquisitions, like AirBots, et cetera, he's doing great things at VMware. So that really makes me feel great as being an alumnus. But then watching my fellow former VMware employees out there start companies, join companies, become investors, it's just a great, it's a great network and it's really nice to see your friends, you know, do other interesting things. And you had no idea they had in them or you just, it's just nice to reconnect. Jerry, great to see you. Thanks for stopping by. I know you're super busy in between meetings and doing deals. All the VCs are here, by the way, in Silicon Valley where I live. I've seen them all over the place. I've seen them have meetings. Even though they might not be advertising it, they're hunting deals down here. So, good luck with your deal hunting and congratulations on your investment in Docker. And certainly Callahan's deal is awesome. So, congratulations. Great luck, great firmness in Silicon Valley. This is theCUBE. We'll be right back after this short break. Thank you.