 in the heart of Silicon Valley extracting the signal from the noise. It's the Cube covering OpenStack Silicon Valley 2015. Brought to you by Morantis. Now your hosts, John Furrier and Jeff Rick. Okay, welcome back everyone. We are back live here in Silicon Valley. This is the Cube which is Silicon Angle Media's flagship program where we go out to the events and extract the signal from the noise. Wrapping up day two of OpenStack SV, hashtag OpenStack SV or hashtag OSSV15. Again, this is the Cube. We're going to wrap it up. Go to siliconangle.com. Go to wikibond.org, Silicon Angle's research team. Breaking down all the action. There's now a paid research subscription for all the latest up-to-date stuff there. Of course go to siliconangle.tv for all the Cube content and more and more to come. Obviously CrowdChat is our social engagement application. I'm John Furrier with Jeff Rick. Wrapping up day two and the entire OpenStack SV event here in Silicon Valley. Jeff, great day. First of all, this event is really about the vendors. It's about the industry players who are making it happen. People who are the news makers, the thought leaders, and the people building products. There's some customers here, but for the most part it's mostly the players, the tech athletes, the people that we love. And it's the tech athletes that are making it happen. And again, great lineup. Jesse Proudman just came on. Derek Collison, former VM. We're built that cloud now. Got to start up. We had lithium folks on here doing some cutting edge work. They have cloud. They got big data. Mark Interante, SVP of engineering at HP. Breaking it down to former Yahoo. Entrepreneur, Shang Liang, CEO of Rancher Labs. Boris Ransky co-founder of Mirantis with Intel. Talking about the $100 million investment in Mirantis. That's just today. Yes, today. Whole big lineup. What's your take? Yeah, it's still a vendor show. There's still a lot of excitement. It still seems to be on the edge of being ready to go. There's a couple customers that get touted out. The latest one being Walmart, who we talked to in Seattle. But hopefully next year we'll see more customers. We want to see more customers that are putting this into play. There's still a lot of conversations, which I thought interesting. We just had Jesse on talking about delivering the experience, not necessarily delivering a software and a hardware manual. And I think Carpenter see everything as a nail. This is still a lot of the vendors. They're still looking at it from the perspective of what are they building and how are they delivering it versus really flipping to look at it from the customer and the consumer's point of view, which is really what Amazon did in the first place to start this whole revolution is really focus on ease of experience for somebody that wants to get some compute power on tap. So I think there's still a ways to go. But there's certainly an enthusiastic community. Everyone's already talking about running off to Tokyo. They had Paris, they had Seattle, they had Vancouver. So it's a vibrant community still early days. Everyone's working hard sharing lots of ideas and you can see it in the hallways. But hopefully next year more customers. I want to see more customers, John. Yeah, and I think what I'm excited about is that the technology innovation is still vibrant. But OpenStack is at an inflection point. Taking on AWS on a frontal basis is a bad competitive strategy. I think they've come to realize that is a bigger picture. OpenStack with the open cloud fabric is moving the goalposts. They try to change the game on AWS, IBM, HP. These guys have differentiation that they could add. But one thing is super clear, that there will be multiple players in the enterprise, not just one. And the notion of hybrid cloud is still elusive. It is an outcome. It is not a product. And this is going to be a major battleground, a fight to the death of for some. And certainly a winner will will take a big part of the market. But again, it's not a winner take all market. The hybrid cloud is ultimately what everyone wants. Let's take into that a little bit more, John. You asked everyone that came on the show, what is a hybrid cloud? What does it mean? We've got a variety of answers. Yes, it exists. No, it doesn't exist. Actually, Jesse just actually gave a use case of a specific customer that had a single workload divided over two two different clouds of private and public. But kind of what's your takeaway now hearing from all the all the all the folks? Well, my takeaway is clear. It's unknown really what that is. And that's because the market is developing in real time. I think Jesse kind of simplified it using 451 research, which is kind of a elementary example of what it is. I don't think I agree with that 100%. But it's a nice sound bite. It's clean. But what he's pointing out is, in fact, even at the most elementary level called the kindergarten cloud is that if you have a workload on private or on premise and in public cloud and are moving it around, that is the minimum requirement to me for hybrid cloud. Others will poo poo it because they're talking more about the underlying infrastructure. Craig, Mick Lucky from Google will say, Hey, hybrid cloud is still elusive because there are a lot of underpinnings that in the services line need to kind of get straight now. There's a lot of gaps in the in the in the platform. This orchestration what what containers are doing are showing a new lightweight cloud. And this is completely different animal than what the outcome is. So to me, again, I think most of the majority is yes, no, but I think everyone is generally in agreement that hybrid cloud is ultimately the cloud. And that there will be interoperability developers that will run on multiple environments. And that that's not something that can really nail down. It really is hard to pin down. But ultimately, I think hybrid cloud is the cloud and public and private are subordinate elements and subsystems to that hybrid cloud. So again, hybrid cloud is a final destination. And it's all about resource allocation and cost. Yeah. And I think the other really thing that just jumps out is the whole container thing and Docker and how that has really changed changed the game. And you know, be careful what you think you think you're ahead of the game, you think you're the latest technology and boom, before you know it, there's somebody else that shows up. We see the same thing in the big data world with the with the spark, right? Suddenly, Hadoop's been clicking along all of a sudden spark is here and everyone's like spark, spark, spark. Let's shift gears a little bit, John. Let's talk about the stock market's been going bananas the last couple of days, right? It was down, down, down, up, up. And there's all this speculation about bubbles. What do you think? Where's the bubble? Where's not the bubble? Where's the meat on the bone? Where's the just the sizzle? There's definitely a bubble, in my opinion. I think the bubble is bursting as we speak, but it's a soft bursting. It's kind of elongated versus happening over a period of time. I think you're going to see valuations drop significantly. And here's why. Like the dot com bubble, the consumer mobile, whatever you want to call it, is experienced exactly the same thing. However, what is softening the blow on the bubble in terms of actually seeing a depression or a significant recession or a downward slope that's really in a that's got a high slope, is that the enterprise market actually is growing and changing and transforming. So that enterprise market has fundamental underlying technologies. I had quoted Dave Donatelli in talking with Jesse Proudman saying, there's radical change happening at the infrastructure level. And for that reason, his wealth creation and new startups, we had a startup on here. And again, that is going to be the case. Lou Tucker, who's a veteran in the business who's seen multiple cycles, said technology will out ride the business bubble. And I think that to me is the fundamental thing that's happening. Now, in terms of the general market, Joe Sixpack on the street, public companies valuations, in my opinion, are reasonably valued. There's a liquid market there. Things are trading. It's the private companies that are bubbled up, and that's driven by their need to compete with the with the big companies. So you look at private companies, accomplished on salaries and OpEx. They're spending money to look bigger, buying sales. When you start to see a cost of per order dollar or to get a customer, two dollars to spend to get one dollar, that's not a good sign. That to me is really a sign of the bubble. And when that money shuts off, it's going to be bad. And the economic effect is going to be similar to what we're seeing in China. And that's going to either come rapidly or happen slowly. And the air is going to let out and the correction will happen. But we are in a correction, in my opinion. And I think ultimately, if you don't have money in the bank or a business model, you are going to be screwed. And you need to think about what you're going to do to get to high ground or figure out a pivot. So to me, it's definitely happening. Enterprise is growing. That's kind of softening the general Silicon Valley bubble mentality, in my opinion. And how do you like just all the plays that Intel is making? You know, Intel is just a great company because they always play at the infrastructure level, right? They want the tide to come up. They support everybody's boats. You know, they're making huge plays in the data center, obviously, which is where most of the compute's happening these days. What do you think of the Intel investment in Mirantis as well as a plethora of other investments they're making all in the field of big data in cloud? I think the big companies are realizing and certainly seeing the open stack that they're going to ultimately be the winners in this consolidation or the bubble correction we were talking about earlier. I think that there's going to be a price collapse for the little guys. It's going to be hard to compete. Intel has always been a great player by getting ahead of the curve. Pat Gelsinger, a former Intel executive president, said on theCUBE, if you're not out in front of that next wave, you're driftwood. And I think Intel has always had a discipline for being ahead of the next curve. And I've seen this early on in the 90s when they were investing in the PC market. They were investing in multimedia back in the day and they lost a ton of money but they were doing a lot of investments. So they were actually putting bets out and fostering an ecosystem, nurturing the innovation. I think that's what's great about Silicon Valley, Jeff, is that the innovation and the technology will last through cycles. And that's what Intel has always done. Intel is the kind of player and now you're seeing with Google, significantly doing the same thing, investing in technology because technology will ride out the business bubble. Now, with respect to the Mirantis bets and then Cloudera, where they put hundreds of millions of dollars in the table, I call that, to use the poker analogy, the big blind. They're putting money on the table because they know whatever cards come out, they're going to be the winner. So even if, say, Cloudera doesn't make it or changes the outcome, they're still going to have big data DNA in their chip set. If Mirantis doesn't work out or that even grows, even to be successful, on either side of the scenario, they win because they can bring in some of the open stack stuff, bring that technology onto Silicon. That will power Internet of Things, mobile cars, wearables, watches, everything. So I think Intel is the platform, continuing to be that compute, integrated, hard, Silicon platform. And I love what Intel's doing. So the cloud week continues. So next week we go to the granddaddy of them all for cloud shows, I think, which is VMworld. We've been, I think, or 60 year VMworld. What are you looking for next week at VMworld, John? VMworld is going to be fun. Again, I'm super excited because we're going to be in Moscone North, which is the main lobby. I should go to the keynotes, half that lobby with two stages and we'll have a crowd chat section. But to me, VMware and particularly EMC's federation is under siege by Elliott Capital. Elliott Capital is forcing their hand and they might do something medieval. So I'm looking for signals around EMC's federation strategy with respect to Visa V to VMware. There was an article by Recode, which I may think may or may not happen where VMware buys EMC, I'm going to look for that. And that will dominate the discussion in the hallways. It's going to dominate the discussion with the analysts. But fundamentally, VMware has to put out a cloud product with their vCloud and other services. So to me, VMware under whatever scenario you're talking about has to have an end-to-end solution. They got end-user computing led by Sanjay Poonan. Pat Gelsinger better be architecting an end-to-end solution because customers are looking for engineered systems and they're going to want to coexist with existing partners. So I'm looking for that. And finally, I'm looking at the ecosystem. I've been seeing the ecosystem once vibrant, kicking butt, all VMware, all virtualization, slowly leaking out a lot of Azure conversations happening in the VMware ecosystem. And that's not a surprise to me, Jeff, because Microsoft's, Azure's been aggressive. They have a market share in the enterprise. So I look for Azure and VMware cloud to go head-to-head directly. And I think that's something that's going to be one of those tea leaves that I'll be reading. Yeah. Well, once again, we are the last people here. They're breaking down the set. So we've got to break it down. It's been a good two days, John. Always fun to come to. Well, it's nice to be right in our backyard here at the Computers Museum in Mountain View, which itself is a historical place. It used to be the Silicon Graphics headquarters before they built their new headquarters, which is now Google's headquarters and really right in the action. LinkedIn is just right across the way. And so it's great to be here. Big shout out to the crew, Andrew back in Boston, working hard. Alex is here doing a lot of extra pictures and capture. We're really excited about that. Leonard, Greg on the board. Ariana doing our social. So, you know, we come to these things. We bring a full crew. We really want... Who don't forget Patrick's over there too. Sorry, Patrick. Ariana. Ariana. I got Ariana. So... Jeff, let me handle the shout-outs. We land. We land. Let me handle it. We land. We come in and we got a really big production that we're excited about for VMworld. So this is going to be great. And thanks to our sponsors, Bluebox, HP, and Brandtis. Brandtis. Our second year covering OpenStack Silicon Valley. It probably won't be our last event. It's been a home run. Really founded by Mirantis. Congratulations to Mirantis and the entire ecosystem. Again, look for us next week. The three full days at VMworld. And then a slew of great fall coverage. Oracle Open World. Splunk.conference. Amazon re-invent. Pentaho World. So much more this fall. Look for theCUBE. Thanks for watching. This isn't signing off from Silicon Valley. See you next time.