 Okay, welcome back everyone here live in San Francisco for the Amazon Web Services, AWS Summit. This is where they teach and people learn about cloud. Not their big event, reinvent which we broadcast live last time, but it's really one of their 15 events that go around the world. This is theCUBE, our flagship program. We go out to the events, we strike the signal from the noise. I'm John Furrier, the founder of SiliconANGLE. I'm Jeff Frick, general manager of theCUBE, and our next guest is Joel Daveney, CEO of CloudNexo. Welcome to theCUBE. Thank you for having me. So, let's talk about what your business is. Cloud wars are happening. You guys are in the middle of your disruptor. You're disrupting the incumbents. You have a different model. Talk about your company and what your business model is and what's unique about your business. Well, I think a good way to talk about what we do that's so different is that everybody heard the announcements this morning about price cuts, especially in the Amazon ecosystem. 43rd time and John is already on the guys for the test to do it again. Just released it at 10. He's like, when's the first price cut? So, what we tell our customers often is, hey, the very first time that you engage with us, I promise you this will be the most expensive time that you ever spend with us. Because we know Amazon's going to cut their prices and with the CloudNexo business model, we've taken a utility approach to delivering services, which is very unique. How do you survive in that price cut, which essentially, if you don't have large scales, it's a race at the bottom, so you have to introduce those services. So, okay, you can compete with those price cuts. What other things are you going to have? You know, I don't really think it's competing with the price cuts. It's enabling the customers to get full value of those price cuts. I mean, this is why customers, all of our customers are driving to Cloud computing. They want to plug into a lot of innovation that Amazon drives our customers, and they also want to take advantage of those deep price cuts. So, if you have a traditional services model that says, well, just pay us a lump sum of money and then we're going to get you there across our fingers and hope, it really is not a true utility model of professional services. So, at Cloud Next, we've developed Cloud Management as a service, and what we tell our customers is that we're in it with you. We're going to do the architecture. We're going to do the migration. We're going to do the advisory services. All the things that traditional integrators do, but guess what? We're not going to charge you one penny until you're actually spending money on Amazon and able to realize the value of the commitment that you've made to this technology. And, you know, that moves a lot of barriers away. You say it's a race to the bottom. It's not really a race to the bottom. It's a race to consuming logical technology that a lot of firms, large and small, have difficulty consuming, and we really remove that barrier. Yeah, so you shift with the values. So, your value is on the higher end services. If they're just going to offer gear, okay, that's their business. Well, it really depends on the type of customer that you're talking about. It is a value play in making sure that the customer gets the full value out of your solution. That's also a big leap of faith, because one of the things that we do differently is we don't have tying contracts, even though we're dedicated towards Amazon. And customers can actually leave our tutelage in any time. If they don't like the services we're providing, if they're not getting good value, if we're not reducing their prices or reducing the technology they need to be successful on the platform, they can either take it in-house or go to another party. So, we're in it, we put our technology up there for the customer and we have skin in the game to make sure that they're going to reach their goals. So, we were talking earlier, there's a lot of talk in the early days, right? It's all test dev and shadow IT is where a lot of the implementations are going. Where are you seeing it going now? What are some of the leading applications where people say, I want either, A, this is a safe thing, I think we can get in in the cloud and kind of not test dev, test in terms of being this infrastructure or where are the ones where people are saying, oh my gosh, we have got to get here now, whether that be competitive pressure, the boss, the board. So, that is the million dollar question, right? Where do you bet? I think a lot of that depends on where your feet are. I mean, here in the valley, we're in the high tech mecca but there's lots of other pockets around the country and the planet that have much different technical requirements and solutions and solutions that they need. For example, we do a lot of work with the Amazon public sector team and in the public sector organization, we're working with the federal government on large implementations and the government customers have certainly unique sets of compliance and obligations that you must fulfill, not only security but things like ITAR and things that a lot of other organizations don't necessarily think about it but you can move down from that and within the public sector you go to education and universities, what are universities like? Universities want to expose this technology so that their constituents, their researchers and their students can rapidly have access to technology very similar to most businesses, right? So, when you're looking at the type of customer, education has one set of criteria, governments have others, then you look at nonprofits all in the public sector space. Non-profits probably more so than any customer in the universe are concerned about costs because they're working on slim budgets and the value proposition of what cloud offers them, being able to have probably available applications running on websites, being able to service their mission for the lowest possible cost is really key. Take that over to the commercial side of the house and we can stratize that right up. We can say, well, small businesses, they're probably single app technology firms or building their apps or ISVs that want to mill their application into the cloud. All of those are fair game then as you move up from there into a large organizations, ERP systems are certainly coming to play, collaboration systems, give a shout out to one of our partners, Alfresco. You know, lots of really- Wait, we had them on earlier. Louis Sal, I mean really good solutions that are geared towards- He heard us talking about him, his ears are burning. Louis Sal, and so, okay, Louis. So, you know, it's not a one size scale. I know everybody would like it to be but I think what you really need to do is look at the company, look at the solution and hey, isn't it great? Here we are, Cloudnexa, a Philly based high tech firm. That's something you probably won't hear too often but really owe a lot of where we are today getting here from, you know, the VCs that supported us in the float off of community with Ben Franklin technology partners and how it's going to work. I went to Warren, first round capital, Michael Carter, safeguard scientific, so it's a, well actually I keep getting on the first round capital guy today we need to do a cube Philly event for the Philly tech community. That's great. And you know, it's a really great thing of Philly and I think it really takes us a little bit out of the fray. Right. And it's kind of somewhat disarming and you know, we come in as a trusted partner and advisor and we give our customers high value. Yeah. Everyone wants to know what's going on with the quarterback controversy. That's the real big. I'm not a young Mark Sanchez, welcome to Philly where they throw snowballs at Santa. I got an email from one of my buddies and one of my good former business partners is a giant Jets fan rather, a big Jets fan and he was all happy about their quarterback and I was like, thank God. Just wait. A little swap, a little swap. So talk about new apps being deployed in this great cloud environment versus migrating old stuff over. What are some of the factors that are driving all that migration into this new infrastructure? I assume that's probably a good part of your business doing integration and migration of old stuff. Well, a large percentage of our customers actually are existing Amazon clients who either are understanding that it's a little bit more complex and there's a lot more innovation than meets the eye. And so, whether it's a new app or an existing app, this existing app, there's a certain amount of re-engineering architecture that's involved and will advise them on that. New apps, I mean, they have a big advantage. They're building for speed, they're building with the latest solution sets. If they're smart, they're taking all the Amazon bits to make it really easy and cost-effective for them. You know, it really just depends on your starting point. Not everybody's lucky enough to start from beginning and get moving. Right, but won't that be the true kind of indicator when there's this big migration of the old stuff into this new infrastructure? Or is it just too painful? You know, I had a- Is there enough opportunity in the new stuff that that just gets put to the bottom of the list? You know, I had a really good friend from a very large open-source company who had a really strategic management leadership position there who put his arm around me back in 2009 and he said, come on, Joel. Nobody's going to move their ERPs, this links to the cloud. And at the very same time, we were working on the very first SAP migration for Lionsgate. So, I would say if you believe that it's not going to happen, you can put your head in the sand and you can live that nightmare. But, you know, we're going to eat your lunch. We're going to be out there. We're going to find those opportunities. We're going to work with those customers that want to take advantage of the technology and the cost reductions and make it happen for them. Final question for you. A little bit of Philly in the response. Yeah, no, I love Philly. I grew up in Jersey, actually, northern Jersey, Burton County. I love Philly. And it's a tough town, Philly, believe me. Great, great town. I know. Southern Jersey is either part of Philly. It's like a middle, no-man's land Jersey. Anyway, so folks out there, share with them your perspective of the industry. A lot of people want to know what's going on. You're on the chessboard every day. You see the company and the cloud. Great space, a lot of opportunity, a lot of things going on. Bottom line for people out there, what's happening? What is the true transformation in the cloud? What is this all the hub-up about? Yeah. Well, it's all about bringing innovation to your organization. It's all about reducing your total cost of operations and being able to streamline your go-to-market strategies, taking more attempts at creating your applications at a lower possible cost. And if you're a little gun-shy about your own particular internal team resources, we see this a lot from customers, reach out to a partner. Amazon has a phenomenal partner network. I believe there's something like 8,000 Amazon partners in the ecosystem. Cloud Next, of course, is a premier partner, one of 22. But we're the ones that are going to help these customers really get over those hurdles and help them adopt. It's real. I mean, if you just look at the statistics, if there's in our own little segment of cloud management and security, Gartner pegs the segment of $3.8 billion for 2014. I mean, that probably didn't even exist four or five years ago. So it's here, it's real. Get on board, pick a small project, get your feet wet with it, live the dream. There you go. Joel Daphne here inside the Q, CEO of Cloud Next. I check out their business model, cloud management as a service, obviously. This is a big space, a lot of stuff happening, early days. This is the Q, we go where the action is, and the action is here in San Francisco. We'll be right back after this short break.