 Live from Las Vegas, Nevada, it's theCUBE. Covering AWS re-invent 2016. Brought to you by AWS and its ecosystem partners. Now, here are your hosts, John Furrier and Stu Miniman. Okay, welcome back everyone. We are live here in Las Vegas for Amazon re-invent, Amazon Web Services re-invent 2016 user conference. 32,000 people, the center of the technology industry of the universe now. I'm John Furrier with Stu Miniman. It's been packed, housed, our next guest. We're excited to have the CTO of Rackspace, John Engates back on theCUBE here at re-invent. Incredible milestone status to talk about. Congratulations. Welcome back to theCUBE. Thanks for having me back. It's good to see you guys. 19 interviews yesterday. My, our voices are going, but we're going to go on and on today. So much going on here. I call the center of the universe because it's a consolidation of innovation. And it's not a land grab per se. It's cloud. You know a lot about that. You guys served customers going from hosting to cloud. Now Amazon, you guys have some special news. What's the big news? Well, this week we announced that we are part of Amazon's premier partner tier of their partner program. We're at the top tier and we did it, I think in record time. We went from basically launching about a year ago here. This was sort of the place where we announced fanatical support for AWS. A year ago and today we're in the top tier. We also have now over 500 certified engineers and architects on the AWS platform. So we're really building up a breadth of expertise on this platform or helping customers make that migration to the cloud and really creating great outcomes for customers. Take us to the journey of Rackspace within relationship to Amazon because what I find very interesting is that the innovation that you guys are doing really comes down to the heart and soul of Rackspace. You guys have been doing infrastructure for a long time. Talk about your journey vis-à-vis this new cloud world that's been spun to mainstream enterprises now. What is it all about? I mean, what's the big... Well, look, I get excited about cloud because it feels like the early days of Rackspace. Back in the early days, Linux was the new thing. The web was the new thing. Customers were trying to get to those technologies and those platforms were the foundation for the next new thing for them. The web was going to be this Wild West and Frontier. And today, cloud is sort of representing that. It's the thing that companies feel pressure and they feel excitement and they want to get onto these new platforms. I mean, all the announcements here are around things like machine learning and IoT and analytics and really cool technologies that many enterprise companies don't know how to take advantage of. They don't have the skills. They don't have expertise to take advantage of it. But they feel pressure to because of the fact that it's where they differentiate nowadays. Data is the true differentiation for companies. And so Rackspace is in a position to help companies do just that. For many years, we've helped them get up and running on infrastructure, use Linux, take advantage of open source. And today, we're translating that heritage into services and support for AWS. We got enough inbound questions from customers like, hey Rackspace, we love what you do. We love your fanatical support, but can you do it on other platforms like AWS? We're using those platforms. We're going to use multiple platforms, so it's not just AWS, but can you help us across these different platforms? John, Rackspace is a really interesting place to look at kind of the hybrid cloud, multi-cloud world. We're here to AWS, but you've got lots of different services you offer. You work with, I think, most all of the cloud providers out there. What do you hear from customers? How do they, when you talk to your average customer, do they use those terms? What do their situations look like? And maybe compare to that as to what you hear from Amazon. Well, look, I think the word multi-cloud is certainly on the mind of companies nowadays. This is something that they feel, again, a little bit of pressure to make sure that they have a couple of vendors in the race. This is like multi-vendor of a number of years ago. Everybody used to have an HP and a Dell or an EMC and a NetApp. And today, I think it makes sense to have multiple cloud providers. Also, it depends on the layer of the stack that you're thinking about, because certainly they're going to be multi-cloud up at the SaaS layer. I mean, they're using Salesforce and different service offerings at that layer. And so multi-cloud is kind of becoming sort of a given. And so when you start to think about the different layers of the cloud stack, they may have private cloud, they may have public cloud, they may have more than one public cloud, and they may want to keep the options open for where they place their workloads, especially in a geographic, global kind of a perspective. Yeah, offering those various offerings, do you help customers with kind of migrations or choosing or give them that decision tree? How do you help them move forward? Well, sometimes they come in with an opinion. You know, oftentimes they do it. It's like I tell people, I never convince somebody to move from Linux to Windows or Windows to Linux. They usually come in with an opinion about what they're going to do. And it's usually based on their skills and where they're coming from. And so oftentimes they come in with an opinion about which cloud provider or platform they want to use. But we do help them really navigate once they've sort of gone down that path, you know, what should I place where, which kind of workloads are best suited for which cloud, which particular application, you know, or which services within a particular cloud or the appropriate ones, which ones are mature, which ones should I, you know, adopt now or later. And I think those are hard things to know unless you've sort of been there and done it a number of times. And we do that with customers across the spectrum. John, I want to get your take on some of the themes here at the show. Obviously Andy Jassy's on stage, Verner today. The theme is pretty much old guard versus the new guard. New way old guard references to Oracle and others. But really the buyer, Verner Vogels, like, hey, I don't want to buy it the old way. I want to, you know, pay a big, a bunch of cash to get a discount. And I was talking to Peter Burris, our head of research earlier today. And the new guard and the new persona making decisions are changing too because the capabilities are different. You're seeing scale, speed, AI, machine learning, virtual reality, internet of things, whether it's consumer enterprise, the new game has changed. So when you're out engaging with customers, who's in the room when you're talking about this new way? Who's sitting at the table? Does that defines kind of the new architecture? That's true. I mean, look, in the past, the CIO had all the spend. He had all the, you know, he held the pocketbook for where IT spend went. But today, business units tend to sometimes drive the decisions, especially for net new applications. Things that are greenfield, things that are consumer facing. We hear a lot of times that the CMO or the chief marketing officer is getting more and more wallet share, you know, of the IT spend. And that to me is an indicator that, you know, changes going on within organizations. Big changes are going on in terms of what they want to do. I mean, IT is now a differentiator. It's not just a keeping the lights on behind the scenes kind of thing, but it's a thing that feel, you know, companies feel pressure to go adopt cloud technologies because they feel like it helps them have an advantage or at least keep pace with the other companies out there that are disruptive. And so if you think about who's driving that, it's marketing folks, it's business units, it's product line leaders within organizations. And they're trying to make their products and services more compelling by tying them to the IoT world, like making a connected device versus just a dumb device or having data presented back to the user so that they've got a better user experience. In the old days of when I grew up in the business in the 80s and 90s, you bought the big software and platforms because as a customers didn't have the expertise to build it and come to Facebook, Google error, they build their own stuff. They build their own stuff. You guys build your own cloud. Now we're kind of going back to the world where, damn, Amazon's growing their scale so damn fast, speed of new services, competition's coming in, I'm a customer, I can't build, I can't build those services as fast but yet I need to have some control. How do you reconcile that new shift now that's happening where I won't say it's multi-purpose cloud or general purpose cloud, it's general purpose sets of tools that can be composed. So it's kind of a different animal but the world is shifting where Amazon's shipping more capabilities than the customer's sales can build. So it's kind of shifting. It's true, you're drinking from a fire hose when you're thinking about consuming Amazon's services because they're just coming at you left and right and they're really changing very rapidly. Even if you look beyond just the launches of new services, the iterations within existing services are going very rapidly too. And a lot of our customers are excited but at the same time they feel a little bit of concern about like if we adopt these too rapidly what happens if our expert gets poached to another company down the street that's got a bigger budget or more interesting tech and so they're reluctant sometimes to go too fast, too deep into these technologies. So I think that's a balance that every company has to take. The intellectual capital with people is huge. Yeah, that's right. A lot of times companies are heavily invested in the existing expertise they have, the people that have been certified on technology platforms for their entire career are now having to sort of rethink how they approach IT and so we're helping companies navigate that. We're giving them a little bit of a safety net when it comes to that. So do you de-risk that? You're looking at de-risk it. We certainly do because we give them a backstop in terms of expertise on all these different platforms. I mean, it is no longer simple like the lamp stack. It used to be one engineer could keep the whole stack in his head or her head and now it's not so easy anymore because you've got this matrix of all these different services, all these different ways of composing applications, serverless and microservices and really complex components and that's hard to really be an expert on all of that and so that's a way that Rackspace also really takes the risk out of it. John, I want you to give us a little insight into kind of the enterprise mindset. We've interviewed you a bunch of times at OpenStack shows and it was very much, you know, a lot of it's an infrastructure discussion and for years we're like, oh, is it private cloud? Is it public cloud? Is it safe? Is it secure? Today I try to follow, it's the data and the applications and it's a little bit less of a discussion about like where it lives and more about, you know, where are the tools I need? Where can it have, you see a broad spectrum is that kind of infrastructure versus applications? Is that a good way to look at it or how do you see it? What are the conversations you have? Well, I think, again, you're- And in any commentary on OpenStack I'd kind of be interested to. Sure. I do think that the person writing the application or owning the data owner, the person trying to build a new product is oftentimes in control of where something goes and their needs have to be met for them to be comfortable or, you know, really be effective in building an application. I mean, they really have to kind of take into account all the things they need. And I had this analogy the other day in my head. You know, we oftentimes use the utility grid as the analogy for cloud, but I thought instead of electricity, how about water, right? Water is something we usually get from the public utility. It's easy to get, you know, everybody accepts that. But then there's companies and organizations that dig their own well. Why do they dig their own well? Because sometimes geographic reasons dictate that they do. Sometimes they have a use case that's bigger or different than, you know, a typical consumer. And so I think that same thing applies in public and private cloud. I think we're going to have users that continue to see use cases where private cloud makes a lot of sense. I've had discussions here where companies are using both of those. They're using them for different applications. Sometimes they're using even together. And I just don't see, I don't maybe see it as big of a debate as it was in the early days of cloud where like it was this religious war of public versus private. I think it's all of the above. I'm going to, you know, if I'm a big enough company, I'm probably going to have all of the above. So wait, is private cloud the artisanal bottled water that I pay a lot for? And public cloud is good clean drinking water that you get out of the cloud. I don't know if I've taken the analogy that far, but it's certainly something that, you know, companies, you know, they certainly know that there's a lot of options out there, they're going to use every option that available and they're going to make the best use out of it. And I think now the world's changed to the top line drivers really are impacted to your business unit driving, some of the budget. That's right. And also choice. I mean, multi-vendor in the old world really came out of lock in. And so choice became a buzzword. Now choice is ultimately a toolbox decision for customers. I don't think that makes it a, you know, win or take all environment, but certainly gives the customer hell of a lot of choice. They've got a lot of control, a lot of choice, a lot of options, you know, competition is a good thing. Having people building these competitive tools around AI and machine learning and IoT. I mean, we're going to have tons of opportunity to go build really compelling application. Sometimes even mixing and matching capabilities from different clouds. I imagine that that will happen more in the future than in the past. Stu and I are competitive strategy junkies. We think Amazon strategy, I think Amazon strategy is scale and speed faster than the competition. Leverage open source, go hard, run hard and get the economies of scale. And people who try to replicate that won't have those, will have this economy. So it's interesting to see that play out. Yeah, John, you know, Rockspace is now a private company. So you've got the ability to kind of, you know, move towards where it needs to be. How important is public cloud in general and AWS specific for the future of Rockspace? Well, public cloud is a huge investment for our company. I mean, we have put a lot of resources into this. A lot of our new marketing campaign that you'll see out on the Las Vegas strip and in news media, it's basically about, you know, what we're doing with the public cloud. And Amazon is a great partner. They're the fastest growing cloud out there. They're the biggest cloud out there. They're the one with the most mind share, I would say, in the market. And so certainly they are going to be a big focus for us. But again, you know, people are going to have a lot of choices in cloud and they're going to need help on all of those. Yeah, you're one of the, probably the largest service provider for VMware too though. What's your take then? Do you have a play in the VMware on AWS? Or, you know, how does that impact what you guys do? I don't know yet about the VMware. You know, the VMware, I mean, it's a relatively new product. And I think that's just getting started. You know, we do have a ton of VMware customers hosted in Rackspace data centers. A lot of those companies are looking to Rackspace to help them take steps to move some of those workloads to the cloud over time. We may end up, you know, working with the technologies that are available in the AWS cloud to make that easier. If they work for us, if they don't work for us, we'll, one way or the other, we will get these companies to where they want to be and how, you know, however that makes sense. Well congratulations on the fastest partner to achieve a premier status on the certification. Absolutely, very excited about that. And no surprise, you guys have a great team of people. I mean, we've worked with Rackspace since you started cloud back in the, when the whole open stack, pre-open stack days, you built your own cloud, you guys done a lot of work. And I think it's going to pay off for you guys. Congratulations. Thank you so much, yeah, thank you guys. All right, John and Gay, CTO of Rackspace, now a privately held company, which by the way, when that happens, innovation usually comes out of that. So they're not on the 90 day shot clock, as Michael Dell will say as well. This is theCUBE, back with more live coverage. With Stu Miniman, I'm John Furrier, you're watching theCUBE.