 Live from Vancouver, Canada, it's theCUBE. Covering OpenStack Summit North America 2018. Brought to you by Red Hat, the OpenStack Foundation and its ecosystem partners. Welcome back, this is theCUBE's coverage of OpenStack Summit 2018 in Vancouver. I'm Stu Miniman, my co-host for the week is John Troyer and happy to welcome back to the program two CUBE alumni. We have Margaret Dawson and John Alasio. Margaret is the Vice President of Portfolio Product Marketing and John is the Vice President of Global Services. Thanks so much for joining us. Thank you. Thanks for having us. Good to be here. John has gotten the week and a half now of Red Hat greatness being at Summit last week. I unfortunately missed Summit first time in five years I hadn't been at the show. Did watch some of the interviews, caught up on it and of course we've talked to a lot of your team but yeah, Margaret let's start with you. One of the things we're looking at is really it's not just the maturation of OpenStack but it's beyond where we were, how it fits into the greater picture. Something we've been observing is when you think about open source projects it's not one massive stack that you just deploy. It's you take what you need it kind of gets embedded all over the place and help us frame for us where we are today. It's a big question. So I think there's a couple things. I mean in talking to customers I think there's a couple trends that are happening. One is one you've probably talked about a lot and we've probably covered at the Red Hat Summit which is just this overall digital transformation, digital leadership, whatever you want to call it. Digital disruption tends to be a thing and open source is definitely playing really the critical role in that. You will not be able to innovate and disrupt or even manage a disruption if you're not able to get to those technologies and innovations quickly and be able to adapt to it and have it work with other things. So the need for openness, for open APIs, for open technologies, interoperability allows us to move faster and have that innovation and agility that every enterprise and organization needs worldwide. And tied to that is kind of this overall hybrid cloud. So it's not just open stack is a part of a much bigger kind of solution or goal that enterprises have in order to win and transform and be a digital leader. Margaret, I love that digital transformation absolutely something we hear time and again from customers. John, I've got a confession to make. I'm an infrastructure person. Okay. And sometimes we're always like, you know, why, you know, come on, we spend all our time talking about, you know, how all the widgets and doodads and things like this, you know, get where blinking lights up, up on stage, we have the worry fans. He missed the blinking lights. He did miss the blinking lights. They had a similar stack up on stage actually yesterday. Same fans you could hear in the back of the room. But the whole goal of infrastructure always of course is to run the applications, the whole reason for applications is to run and transform and do the business. So that's where I'm going with this is we're talking more about not only, you know, that foundational layer of open stack, but everything that goes with it and on it. So maybe you could talk about the services and things that you're at. So I think, Stu, that's exactly what we're seeing. So if you think about the last year and what we're seeing with services and projects around open stack, I think the first thing to talk about is fact that it's been growing quite a bit in fact. You know, from a 2017 versus 2018 perspective, our number of open stack projects have increased 36% year on year globally. So we're seeing a lot of demand, but we're seeing the projects be a lot more comprehensive. So these are open stack projects, but they're open stack with open shift with cloud forms with stuff as an example. And this combination is really a very, very powerful combination. In fact, it's been so powerful that we started to see some common patterns of customers building a hybrid cloud solution, using open stack as their kind of private cloud infrastructure, but then using open shift as their way to kind of deploy applications in containers in that hybrid way that we created a whole solution which we announced two weeks ago when John was at our Red Hat Summit called Containers on Cloud. And that's taking all of our best practices around combining these products together in a very comprehensive, programmatic approach to deploying those solutions together. And I think it's really important. I mean, as you know, I think you and I met when we were both in networking. So coming from that infrastructure background, but we really all need to talk about the workload down, starting with the application, starting with the business goal, and then how the infrastructure is almost becoming a services-based abstraction layer where you just need it to be always there. And whether it's public cloud or private cloud or traditional infrastructure, what developers in the business want is that agility and flexibility and containers provide that. There's other kind of architectural fabrics that allow that consistency, and that's when it gets really exciting. One thing that's been interesting to me this week at OpenStack, as we've drilled into different customers and talking to different people, even at lunch, is one, one, it's real. Everyone I've talked to, stuff in deployment, it went quickly, it's rock solid, it's powering, you know, as we know actually a lot of, that is technical infrastructure that's powering a lot of the world's infrastructure at this point. The other thing that was interesting to me is some folks I've talked to were saying, well, we were actually, we have enough knowledge that we're actually doing a lot of it ourselves. We're going upstream. However, so that's great, it's great, and that's right for some people. But what I've kind of been interested both, just coming from Red Hat Summit, is both the portfolio, the breadth of the stack and all the different offerings that Red Hat, you know, it's not real anymore, right? It's not just Linux anymore, there's everything that's been built up and around and on top for orchestration and management. And then also, and then the training, the services, the support and that sort of thing. I was wondering, that's kind of a two-part question, but maybe y'all could tackle that. What does Red Hat bring to the table then? So let me just start with, again, just to kind of position, what we do as global services, our number one priority is customer success with Red Hat technology, that's the first and foremost thing we do. And second is really around building expertise in the ecosystem, so our customers have choice on where to go to get that expertise. So if you start to look at kind of what's been going on as it relates to OpenStack, and again, many customers are using upstream bits, but many customers are using Red Hat bits. And we see that when we look at the number of people who are getting trained around our technology. So over the last three years, we've trained through our fee-based programs, 55,000 people on our OpenStack portfolio. And in fact, from 2017 to 2018, that was up 50% year on year. And so the momentum is super, super strong. So that's the first point. The second is it's not just our customers, right? So part of my remit is yes to run consulting and yes to drive customer enablement and training, but it's also to build an ecosystem through our business partners. Our business partners use a program we called Open, online partner enablement network, which actually will just be celebrating five years just like OpenStack will. We'll be celebrating five years for Open. And our business partner accreditation on OpenStack specifically are up 49% year on year. So we're seeing the momentum in our regional systems integrators, our global systems integrators, our partners at large, building their solutions and capabilities around OpenStack, which I think is fantastic. No, and it helps a lot with the verticalization of that, right? Because every industry has slightly different things they need. The thing I would add to that, in terms of do-it-yourself community versus a distro that's supported from someone like Red Hat, is it really comes down to core competency. And so even though OpenStack has become vastly simplified from a day one, day two ongoing management, it is still a complex project. I mean, that's the power of it. It can be highly customizable, right? It is an incredibly powerful infrastructure capability. And so for most people, their core competency is not that. And they need that support, at least initially to get it going. What we have done is a couple things, is I've actually talked to customers a lot about doing that training earlier. And it's for a couple reasons. One is so that they actually have the people in house that have that competency. But two, you're giving infrastructure folks a chance to be part of that future cool stuff, right? I mean, OpenStack's written in Python, and yeah, there's other languages that are newer and sexier, I guess. But it's still kind of moving them towards that future. And for a lot of guys that have been in the data center and the ops world for a long time, they're looking out there at developers and going, I'm not the cool kid anymore, right? So OpenStack actually is a little bit of a window, not just to help companies go through that digital transformation, but actually help your ops personnel get a taste of that future and be part of that transformation instead of being stuck in just mainframe land or whatever. So training them early in the process is a really powerful way to do a lot of things. Skill set, retention, as well as then you can manage more of that yourself. And then all the way up the stack, right? We're talking about containers. There's containers, but then there's container native storage, container native networking. You've got the rest of the pieces in OpenShift and the rest. That's correct. And I think, John, you were at Red Hat Summit, we had a number of different innovation award winners. So I think one good example of kind of this kind of transformation from a digital transformation perspective, but also kind of leveraging a lot of what our stack has to offer is Cathay Pacific. And so we talked about Cathay, they were one of our innovation award winners. And what their challenge really was is how do they create a new modern infrastructure that gave them more flexibility so they could be more responsive to their customers in the airline industry. And so what they were really looking for was really truly a hybrid cloud solution. They wanted to be able to have some things run in their infrastructure, some things run in the public cloud. And we worked with them over the last little over a year now, Red Hat Consulting, Red Hat Training, the Red Hat Engineering Team, and really building a solution that leveraged OpenStack, yes. But also a number of other capabilities in the Red Hat portfolio, OpenShift, so they can deploy these applications, these containerized applications now, both to the public cloud, as well as to the private cloud, but also automation through Ansible, which we're hearing a lot about Ansible and products like Ansible here at the conference. Well, the OpenStack and Ansible communities are starting to really work well together, just like Kubernetes. You've got a lot of this collaboration happening at the project level, not to mention when we actually productize it and take it to customers. So it's been super, super powerful and I think it's a good one where it really hit on what Margaret was saying, which was giving the guys in infrastructure an opportunity to be a part of this huge transformation that Cathay went through, because they were a very, very key part of it. Well, I think we're seeing that also with the Open Innovation Labs. So this is something which is really an innovation, incubation process, it's agile, scrum, whatever. And in those, we're not just talking to the developers, we're actually combining developers, functional lines of business leaders, infrastructure, architects who all come together in a very typical six-week kind of agile methodology. And what comes out of that, I don't know, I've seen it a couple of times, it's magical is all I can say, but having those different perspectives and having those different people work together to innovate is so powerful and they all feel like they're moving that forward. And you come out with pilots and we've seen things where they come out with two apps at the end of six weeks or eight weeks. It's just incredible when they're all focused on that and you start to understand those different perspectives. And to me, that's open-source culture, right? It's awesome. Yeah, Mark, I'd love to hear your perspective also on that hybrid cloud discussion because so many people will look at OpenStack and be like, oh, that's private cloud. And of course, every customer we talk to, they have a cloud strategy. And they're doing lots of SaaS, they've got public clouds, multiple, Red Hat, I know you play across all of them, big announcement with Microsoft last week. Last year it was Amazon, big partnerships with. So, is Kubernetes the story, or is just Kubernetes a piece of the story? How do all these plug-ins and any customers? Kubernetes is one. And so, especially when you look kind of at the broader architectural level, OpenStack becomes obviously the private cloud and enables them to start to do things that are more cloud-native, even in their own data center or if it's hosted or managed, but more in traditional infrastructure. But it really has to be fluid. And a lot of customers initially were saying that their strategy was cloud first. And they would say, oh, we're going to put everything in the public cloud. And then you actually start going through the workloads, you start going through the cost, you start going through the data privacy or whatever the criterion capabilities are. And that's just not practical, frankly. And so, this hybrid reality with private cloud traditional and public is going to be the reality for a very, very long time, if not forever, right? There's always going to be things that you want to have better control of. And so, Kubernetes at the orchestration layer becomes really critical and able to have that agility across all those environments. But you have other fabrics like that in your architecture too. We talked about Ansible. It allows you to have common automation and do those playbooks that you can use across all those different infrastructure. KVM, what's your virtualization fabric? And can KVM take you from traditional virtualization all through public cloud? The answer is yes. So we're going to see increasingly these kind of layers of the overall architecture that allows you to have that flexibility and that management, but still the consistency, which is what you need to keep your policies the same, your access controls, your security, your compliance, and your sanity. Whereas before, it was kind of ad hoc. You know, people would be like, oh, we're just going to put this here, go to public cloud, we're going to do this here. And now people are finding standardizing on things like even Red Hat Enterprise Linux, right? That's my OS layer. And that allows me to easily do Linux containers in a secure way, et cetera, et cetera. So doing hybrid cloud means both the agility, but you've got to have some consistency in order to have the security and control that you need. So it's a little bit different than what we were talking about a few years ago even. And I think one of the things that, you know, we've learned in the services world has been, we started this idea about 18 months ago, we called these journey adoption programs, which were really the fact that some of these transformations are big. It's not about a single project that's going to last four to six weeks. It's a journey that the customer is going to go on. And so when we talk about hybrid cloud, we've actually created this adoption program. Which can really start with the customer in this whole discovery phase, or really what are you trying to accomplish from a business perspective? Then take them into a design phase, take them into a deployment phase, take them into an enablement phase, and then take them into a sustainment phase. And there's a number of different services that we'll do across consulting, training even within Marco Bill Peters organization, which is our customer experience and engagement organization around, you know, what role a technical account manager can play in really helping our customer in the operational phases. And so we've learned this from some of the very large deployments, like Verizon, where we've seen some very, very... And it's cyclical, right? I mean, you can do that many times. Well, you do. In fact, you absolutely do. And so we've created now a program specifically around hybrid cloud adoption to try and demystify it, because it is complex. Well, and the reality is there's somewhere around 30% of organizations still do not actually have a clear cloud strategy. And we see that in our own research, our own experiences, but, you know, industry analysts come up with the exact same number. In market, by the way, 70% the ink's still pretty... Yes, it is. It's still wet. Yes, I mean, I'll tell you, I love saying cloud first to people because they kind of giggle. It's like, yeah, that's our strategy, but we know, we don't really know what that means. Which cloud? Exactly, exactly. Exactly, I guess all the clouds. Exactly. All right, well, Margaret and John, want to give you a final word, key takeaways you want to have, or, you know, anything needed to show that you want to point out? I would just say, you know, we are still in early days. I think sometimes we forget that we, both in the open source communities, in the industry for a long time, tend to be 10 years ahead of where most people are. And so, you know, when you hear jokes about, oh, is OpenStack still viable, or is everything doing this? It's like, you know, right now, we only have a very small percentage of actual enterprise workloads in the cloud. And so we need to just now get to the point where we're all getting mature in this and really start to help our customers and our partners and our communities, you know, take this to the next level and work on interoperability, right, and ease of use and management. I mean, we're so mature now in the technology. Now let's put the polish on it so that the consumption and the utilization can really go to the next level. Yeah, and I'll play off what Margaret said. I think it's very, very key. When I look at where we've had the biggest success as defined by, you know, in that discovery phase, the customer lays out for us, here's what our business objectives were. Did we achieve those business objectives? It's all about figuring out how we can create the solution and integrate into their environment today. So Margaret said, I think very, very well, which is we have to integrate into these other solutions. And every one of these big customer deployments has some Red Hat software, but it also has some other software that we're integrating into because customers have investments. And so it's not about rip and replace, it's about integrate, it's about leverage, it's about time to market. And that's what most of the customers I talk to, they're very worried about time to value. And so that's what we're trying to focus in, I think, as a whole company around Red Hat. I agree. Absolutely. Summed it up, you know, very well. John Alessio, Margaret Dawson, thanks so much for joining us again. Thanks you guys. For John Troyer, I'm Stu Miniman. Lots more coverage here from OpenStack Summit 2018 in Vancouver. Thanks for watching theCUBE.