 This is theCUBE, live from the Moscone Center in San Francisco. This is SiliconANGLE's continuous coverage of VMworld 2010. Now, Inside theCUBE. We're back to continuous coverage of VMworld 2010 live. I'm John Furrier from SiliconANGLE. We are in theCUBE. theCUBE is a social media broadcast that acquires knowledge, and this segment is going to be very fun. We have a group of entrepreneurs part of the Cloud Computing Club, and I'm proud to say that I was one of the co-founders of with Nate Demaco and James Waters, and these guys have been in the trenches from Cloud from the beginning, and I'd like to introduce to my left is Rich Miller, Bernard Golden, and Randy Bias. So these guys are entrepreneurs. They've been out in the field, ton of experience in the business. Cloud has arrived. They were there at the beginning. So we're going to share our experiences about why the Cloud is so big and relevant and entrepreneurship. What are the opportunities for startups? Because there is a lot of opportunity, VMware is putting forth a framework that is going to enable a lot of growth. And we heard from Todd Nielsen that for every dollar of VMware license, there's going to be about $15 of ecosystem money. So that's money. And the VC panel we had here on Wednesday was talking about huge dollars going into Cloud. So we're going to get the reality of kind of what's real, some proof points, and so the first question will go right down the line. We'll start with Rich. What is the reality of Cloud? And just at a high level, the entrepreneurial opportunities, it's a shift, it's big, it's relevant, it's happening right now, and we're on the scene here at Moscone. Well, there are two baskets, as I see it. Entrepreneurially, you're looking at Cloud backward, taking what's existing, a lot of legacy stuff, making it work appropriately, making it work the way you'd like it to work in a Cloud, getting all the benefits. Then huge entrepreneurial opportunities, Cloud forward, building new apps, Greenfield, all things web, web app, looking at this as a, you know, doing new things, not trying to repeat the old. And if you drop them into those two categories, enterprise is paying first for the legacy, but where the real fun is, and where the entrepreneurs really start to kind of converge, is on the Cloud forward stuff. Cloud forward, great message, good angle there. Bernard, what's your angle on this? Well, we see a lot going on in apps. I was in a breakfast this morning, and basically the whole message, the whole theme was apps, kind of driving everything, which is interesting, because it's kind of a change from a lot of IT organizations. Traditionally they've been very infrastructure focused, so a lot of stuff around apps, and stuff that helps apps. The other thing that came out of that breakfast was a lot about Cloud management. How do you manage these environments? How do you manage a lot of discussion about end-to-end management instead of siloed management? For sure there's great opportunity there. I don't know how to solve the problem, but there's great opportunity around that. Randy, you got a growing business right now. You started as an entrepreneur, and you grew a business, you're growing like crazy. You're on the doorstep of all the cloud scaling. Cloudscaling.com is your organization. Talk about your experience and what you see going forward. So the ecosystem is growing. There's a lot of people out there in the trenches deploying. As VMware changed with this VMworld this week, I mean, what's different, and what are you guys seeing from your customers and prospective customers in the environment out there? And what are the key issues holding things back, or what are the key issues that are going to accelerate real cloud deployments? And cloud service providers are part of this show too, and that's a new dynamic we're seeing. Well, one of the things that's pretty obvious about this show, and kind of you could almost draw a bright line over the course of the last year or 18 months, is that now we're no longer talking as much about infrastructure, getting that right, whether it's in the public cloud or in the enterprise. Today we're talking about platform, and not so much platform as a service, but here what you're looking at is the constructor, the construction kits, the piece parts by which you start putting together platforms and then specific software applications that are cloud-oriented. This show, both the influence of Spring, vFabric, all of that, the cloud, the director, all of that starting to look at moving up the food chain, much more about platform, much more about the construction of applications. On a scale of one to 10 rich, real deal, 10 being real deal, with the Spring source framework or zero non-starter. Spring, oh, it's already in the bag. It is, this is a real deal. What we have here is the beginnings of truly platforms, whether they're built inside the enterprise or platforms as a service, the construction kits for real applications, absolutely. Bernard, hyper stratus, you're out talking to customers all the time, and they got challenges, so walk through some of your experiences with your clients and the marketplace. Well, what I'll say is that what we hear about a lot and what we work on a lot is security. A lot of companies saying how do I secure my app, particularly in a public cloud environment? What do we do around that? Something that's kind of a second order is we get called in a lot with companies that say I put my application up in a public cloud, and the magic's supposed to be that it's scalable. How come my app's not scaling? And then we end up doing a lot of architecture reworking. So I think architecture is a big deal. This is a, if you want to take advantage of cloud computing characteristics, your application has to be ready to do that. So I think that that's a big challenge. Drill down on the architecture thing and it's not scaling thing. Just expand on that a little bit. What are the issues there? Well, the vision is somehow, automagically, load goes up and the application starts, spawns extra resources, extra instances. In the past, the way that happened was maybe had to provision hardware and then admin had to sort of go in and reconfigure everything. The application had to be brought down, brought back up. If you want to move that from a hands-on thing to an automagically kind of thing, your application has to be written such that it can gracefully add and subtract resources. You have to have a management framework that supports that. And those are new kinds of things basically because the old model was very static, very hands-on. So those kinds of challenges or concerns that we run into a lot? Randy, you're getting your hands dirty out there. You're stitching all these things together and you got a lot of successes. Talk about your experiences and things you've learned that were surprises and things that were not surprises and challenges going forward. The two pioneers in cloud computing, they're folks like Amazon and Google and what they have really pioneered is operating in a massive scale. I mean, moving from enterprise computing to cloud computing is like moving from the assembly line mechanism for manufacturing cars to the robotics factory mechanism for manufacturing cars. It's very, very different. If you actually look at Amazon's operations team, there's two core components. Infrastructure engineering which writes software that automates hardware and data center operations which changes out the hardware. And there's nobody in between. Just like in a robotics factory for cars, you have people who design the robotics in the factory and you have the people who do QA on the line and do maintenance on the robots. And there's really nobody in between. And so, when you go and you look at these guys and what that means and you talk about scalability like Bernard's talking about, you'll notice that somebody like Google has a huge number of sort of horizontal services, something like Google FS or Bigtable or MapReduce which are sort of these horizontal services across the entire data center that every single application leverages. And that's how a single application for Google is able to get scale. But when you look inside an enterprise data center, every single application is its own silo, sometimes all the way down through the network and the storage. And that's part of the reason why it's difficult to scale. There are also application architectural constraints, of course, which somebody like Bernard can help you out with. But the fundamental way that you're actually designing the data center and how you provide horizontal services is also what's going to enable true platform as a service to work on top of any infrastructure as a service. So if you kind of ignore one to the detriment of the other, if you don't build an infrastructure as a service right with those horizontal service layers, then you can't really do the rest of the job. We had theCUBE down in Orlando for SAP event. We had the CIO of Levi Strauss-Tom Peck on it. And one of the things that came out of that conversation, Randy, was busting down the silos. And he absolutely saying, from his organization standpoint, he wants to bust down those silos. What can you share? I mean, you're in there, you're busting down silos with your team. What's the team configuration like? What's the dynamic? And just what are some of the conversations that you have? People like, hey, we love you. And all of a sudden we can't do that. I mean, we've talked at the cloud clubs about some of the politics and just riff on that a little bit. It's going to be scary. Are you sure you want me to go there? Yeah, go ahead. We've got to bring it out on theCUBE. In our most successful engagements, we basically sideline the CIO and his entire stack because they wanted to do enterprise computing with a cloud label on top of it instead of real cloud computing. And they were obstructionist and they did not know how to desiloize themselves. I mean, if you think about it, Enterprise IT as a centralized department has effectively been a monopoly inside of that each of those enterprises for 30 years. And they do not understand how to fix their own monopoly. And the only way that you break down a monopoly is through competition and through funding those successful competitors. That's part of why you see Salesforce.com being so successful in the marketplace. Their core competition for the longest time was internal implementations as CRM. And so if you really want to build a real deal cloud today, you've either got to have a CIO who's a visionary and is willing to make significant dramatic changes to the organization. Or you have to sideline the CIO in a stack and you actually have to go rogue and you have to build out a whole separate cloud division, build out true cloud computing there and then somehow roll that back in or roll IT under it at a later date. How do entrepreneurs out there learn from that? So what would you share? Obviously sideline in the CIO is always kind of a rogue. It's not a real long-term strategy but you want to get the CIO there but what you're basically saying is is that CIOs are doing it because they're under pressure. CFOs, CIOs under pressure and they're saying, just do cloud and they want to go cloud but the monopoly if you will, kind of like an old mainframe mindset is pushing back. And what they'll do is they'll throw some cloud out there and call it cloud, right? Is that what you're saying? And they're not really doing real cloud? Is that what you're saying? I'm saying that just running, just providing virtual servers on demand is not a cloud. If you look at the bar that an Amazon or a Google or the pioneers in cloud are set, it's about very low friction self-service IT capabilities which can only be delivered through automation. And I'll tell you a brief story about a colleague of mine who's now at VMware. I don't want to mention his name, he was at Credit Suisse. They built one of the first real deal clouds there five years ago and as soon as they had it up, they had a self-service portal and UI and API and everything as soon as they brought it up, they put in a ticket wall because the IT support staff felt threatened that people could turn on their own servers and they didn't want them to. So they said, fill out a ticket and then we'll use your password and your credentials to turn on a server for you. So that's the sort of mindset that's been broken down. That facade was needed to keep the heat shield almost from the attacks, right? From the sabotage? Is that what you, yeah? It's not so much sabotage. It's, you know, any organization that builds up is going to send out the antibodies whenever you put something really distinctive and new in it and to Randy's point and actually to Bernard's about architecture, if you try to take the way things have been built up until now and just drop them into a set of virtualized servers and say, that's cloud, it isn't. It's basically taking a, and creating a virtual version of your old data center. That's not going to get you where you want to go. Okay, so play out how you think it's going to go down. Do you guys think it's going to be organically bottom up or top down or both? I mean, how is this going to be like client server kind of evolve that way? You know, some PCs were hanging around, lands came around. So is it going to be a slow roll or a big bang? Can I ask you something? I was very interested. I heard a guy from Forrester this morning talk and if you might know, Forrester came out with a report not too long ago that it was something like building your own private cloud. It's a pipe dream or is it like it's much harder than you might expect. And the interesting stat that he came out with was if you ask enterprise developers, something like 25% of them are doing cloud based stuff, typically in Amazon. If you go to the infrastructure group, something like 6% of them say, oh yeah, we're doing something around cloud. And that told me two things. One, there's a lot of stuff going on that is stealthy or semi-stealthy. And the second is, there's a big bow wave of stuff that's being done up in some public provider that's going to somehow go into production. And I don't know if that's going to go into production in that public provider, or if eventually the development team is going to come back to the ops team and say, I've got a gift for you. I'd like you to start running it. And by the way, it's designed as a cloud, it's architectures as a cloud, and you need to have the infrastructure to support that. So it's a very interesting strategy. Open the present, hey, I happen to have a cloud right here. Well, so it's a very, to me, that was a very interesting set of stats because that implies there's a lot of impending change coming down the road toward internal IT groups. Well, we've talked about bursting out, taking the enterprise and bursting out to the cloud. A lot of the app development, a lot of the pre-production versions of these apps exist in the cloud. And what's going to happen is, as soon as you open the door and people are feeling safe enough, it's going to be inbound, not bursting out, it's going to be bursting in. Randy, one of the things I'm hearing is that data security is the number one issue around cloud. Can you talk a little bit about that from your experience? So is that true or is it not true? I think it's a little overblown. I mean, security's definitely a concern. I mean, you would be foolish not to be concerned about it, but I think you are going to take the same steps you would if you were going to use an outsourced data center facility, managed hosting. I mean, it's not, I think one of the things that's really humorous about this is people get really worried about the hypervisor when the hypervisors are relatively proven, relatively secure technology, but then they ignore things like VLANs, which are completely unauthenticated and everybody assumes they're secure, but in actually a cloud environment, they're far less secure. So there's a weird disconnect between what is a real security issue in the cloud and what people's concerns are, because they don't understand the underlying technologies or structure so much. And then when you look at some of the folks who are building certain offerings, there are kind of on-demand private cloud offerings that people are working on where you're not going to share your server and pretty much all those issues go away. And so it's just, it's really, some things have changed, most have remained the same. If you take your same kinds of ways that you go about enforcing security today behind the firewall and bring them out to the cloud, they're mostly tree-as-like. Actually, not to confuse the issue, you've got security and then you've got the pragmatic issues of compliance. Most of these people, most of these organizations live under a cloud, if you'll pardon the expression, which is their requirement to be compliant with various kinds of regulation, whether it's defined by the industry, by the enterprise, regulatory, and being compliant means hitting the checklist. Those checklists have been built on the back of last-generation's architectures, last-generation's technologies. How do you determine whether a cloud implementation of a production app is compliant? These guys are very conservative if there's any risk of not meeting compliance. Well, that's a big message here. That was a big message here for VMware in this hybrid cloud was that compliance was one of the things that they were wrapping around that. I mean, is that a real deal? Is that going to be good? Is that going to be no big deal? I think compliance has to change not so much the technology. I mean, really, what do we think is valid and all of these aspects of compliance have got to be revisited? So I was doing security before a lot of the regulations went in for compliance. And in the early days, kind of mid-90s, the focus was around actually building secure systems. And there was a certain amount of best practices that came out of that. And then those were codified into a lot of the regulations. And those codifications of those best practices are about 10 or 15 years old a lot of the time. And so the way that they don't translate to the cloud is if you just take them piece, if you just say, look, we have to have perimeter firewall. You're on a cloud and where are you going to put your perimeter firewall? There's no perimeter, right? But should you have host-based firewalls? Should you have intrusion detection? Yeah, all of that translates. The problem is is that you have to, we've been moving away from a perimeterized world for 15 plus years, but you still see a lot of organizations, security organizations that don't know how to provide real deal security, clinging to what's easiest as opposed to trying to figure out what is real security? How does that mesh with the compliance requirements they have and coming up with a strategy that melds those two? And most of those strategies will actually translate directly to the cloud because it's about bringing the security closer to the data. Absolutely. One of the things that's happening here, guys, is cloud service providers are very visible in the announcements and IT's changing and that IT can provide the kinds of services that cloud service providers can provide. And Dave Vellante, Wikibon and I were talking about, well, that might not be true that cloud service providers will always stay at the bit ahead. And we had Verizon on yesterday talking about some of their things. Is the cloud service provider model going to be ahead of IT? And will that be the security compliance component of IT? How do you guys see the whole cloud service provider evolving all the above observations, predictions? To believe that somebody like Verizon is at the leading edge of implementing cloud services is, well, I don't want to dig on them too much, but it doesn't really make sense. If you actually look at the leader, that's Amazon. And in 2009, Amazon had 43 major releases, four per month. Who can keep up with that pace? Google, Yahoo, maybe Microsoft, but certainly not any of the major telco service providers are not geared up to be software development or featured delivery shops. And the same can be said of most IT departments who look at any of these projects as being two to three year kinds of engagements that they're going to do six to nine months to do diligence on. In our engagement with the largest telco in Korea, one of the largest in Asia-Pac, we stood up their private cloud in eight weeks. Eight weeks, soup to nuts. So what's the prediction on the viability and position of the cloud service providers? These guys have to get in the game. They've got to build out more capabilities and they've got to stop worrying about the virtualization piece, which is trivial, and start thinking about the portfolio of services that run on top of that. Platform as a service offering, mobile device offerings, integration to 3G and wireless systems, enabling new mobile apps, social media apps. They've really got to think about how what's the new set of cloud applications that's driving Amazon to 80,000 servers and more than half a million VMs in four years time? What is that? I mean, the enterprise is not adopting right now. These guys are going to get in the game by actually going to where the fire is, not where the smoke is, and then they've got to actually build cloud-class systems in the same way that Amazon or Google does, and they've got to have an ecosystem of services that actually allows them to be competitive on a portfolio basis, not on a virtual machine basis. You don't feel strongly about that, do you Randy? No, I don't feel strongly about that. They'll distinguish themselves on the basis of either markets they serve, geographic markets, industries, or the collections of added value features that they'll specialize in. Okay, final question to wrap up guys, because I look at that clock, we're a little bit long. What is the outlook of cloud? And just give your perspective, just from your entrepreneurial position, and also as a practitioner and as a guru, all of you guys are there in the trenches, you're building businesses, you're getting stuff done. Just share in your mind what this future will unroll to look like. I mean, will it really be game-changing? What are some of the things that you may see? What is your vision? Well, it already is a game change. What the focus is right now for the next few years, it's going to be all ops and apps. I mean, it's operations making the management of the infrastructure work correctly, and building the next generation, the cloud forward apps. Full stop. Bernard? Where do you go from that? Well. Oh, your perspective. I mean, you're in there. The thing that, you know, is there's no question in my mind in five years or 10 years, we will look back on the way IT has been done with this kind of very manual, very long time. The way we look back on, you know, when you see a movie, you see somebody hand cranking a car. You'll just go, you know, yeah, that was quaint and that was good, but there's a reason why we don't do that anymore. Dialing a phone. And we're dialing a phone. And so I, for sure, there's no question. There's going to be a lot of pain between now and year X. And that pain is going to be localized into different groups. But for sure, this is the way IT's going to be done in the future. No question about that. This is the biggest disruption that there has been to the IT industry in 30 years. And it will be a 20 year transition. And if you look at how many mainframe companies are still standing in the same way that they were standing before, that just tells you the amount of opportunity there is. It is huge. There are all kinds of ways for you to figure out parts of this equation. Solutions for different parts of the problems here, which are enormous, as Bernard and Rich can tell you. I mean, there's just a huge number of problems to solve here. There's all kinds of clever ways that you can get in the game and you can be involved and you could be part of the disruption rather than be part of the disrupted. And that would be my key message. Disrupt. Don't be disrupted. 30 years of disruption, 20 years of growth. We'll be covering it on cloudangle.com and siliconangle.com. Thanks guys so much. Rich Miller, Bernard Golden, and Randy Bias in the trenches, true entrepreneurs. Been there, done that from the beginning and now going to ride the wave. So good luck with everything and we'll check back in with you. Thank you so much. Thanks John.