 Live from San Francisco, it's theCUBE, covering Google Cloud Next 19, brought to you by Google Cloud and its ecosystem partners. Okay, welcome back everyone. We're here live in San Francisco on the ground floor here. Day three of three days of wall-to-wall covers. Cube coverage of Google Cloud Next 2019. I'm John Furrier, my co-host Dave Vellante. Dave looking good here. Thank you John. You're feeling good. Day three, we're getting energy. Our next guest is Ukuro, who's the technical director of financial services for Google Cloud. Thanks for joining us. Well, thanks for having me. Good to be here today. So obviously all the verticals, the big theme here is all industries have opportunities with Anthos and all the data-driven activities and open source greatness, but financial services is always kind of an early tell sign. All the trends kind of happen in financial services because the data, whether it's algorithmic trading or whatever, is clearly a competitive advantage from fraud detection to competitive advantage revenue, big driver, that's your sweet spot. What's going on there? What's the signals from the marketplace? How is Google Cloud Next here impacting? What's the big news? What's the big stories? Yeah, it's a very exciting time in financial services. You know, Google Cloud is enabling financial services customers across the globe, across all the sub-sectors. You know, whether you are a retail bank in capital markets, you're an asset manager or a hedge fund, insurance, fintechs. Cloud is enabling all of our customers to transform their businesses to reduce their costs and to create better and new products. And it is very exciting for them. They're using our data platforms to be able to look at the data that they have and understand their customers better, to be able to create better experiences for them, whether it's through chat bots or our contact centers or better online experiences. They are able to provide more customized products for them. They're using our, especially on the trading side, on the retail banks and hedge funds, they're using our high performance compute environments, our HPC offerings, to be able to create better risk management systems. You know, to look at their portfolios and understand the risk, whether it's in credit risk or market risk or fraud, or they use it for anti-money laundering. We're seeing customers in the insurance space to create personalized products. They are streamlining their actuarial processes. Fintechs, obviously, are using, you know, they're cloud-native. It's very exciting for them to have this opportunity to challenge the big players. Don't forget blockchain. It's coming right around the corner, too. I mean, fintech. Okay, so you're a technical director. What does that mean? What's your job? It's a number of things, you know. I sit mostly on the engineering side of the house to make sure that our product offering works for financial services. And it includes things like making sure our security offerings are there, our compliance works, our data platforms, our computational platforms, high level services. They do what financial services customers need them to do. I also have the privilege of spending a lot of time with our clients across the globe. And I get a view into what they're thinking about how cloud is changing their businesses. So we spent a lot of time in New York and 10 years ago when we started theCUBE, when you talk to financial services company, there were two narratives. One was cloud is evil, we're never going to go to cloud. And the other was, well, we have global scale, we're going to build on our own cloud. Couple of things have happened, as you know. They're obviously going hard into cloud, but they are building their own global clouds. They're just building it on top of your cloud. So talk about that change and what are some of the big trends that you're seeing today in terms of their adoption? Yeah, that has changed quite a bit. The narrative, it used to be that, yeah, we're never going there to, well, maybe we'll go there and now it's how quickly can we get there. And customers are now using, now they're seeing the cloud as a place to innovate and actually change their businesses. Initially they started maybe as a cost play, they had big legacy platforms and cloud came in and the ability to be able to reduce that cost base, especially under the competitive pressures they're in, it initially maybe started with a cost play, but then it very quickly turned into, this is now my innovation play. This is how I can change my business, this is how I can stay competitive, this is actually how I can up level my security and compliance. So it has become very much a partnership between us and our customers to actually think about how the future of financial services is going to be. We, again, we've been in New York a lot, back in my previous life, in the late 80s, early 90s, I covered a lot, sold and did systems engineering work with all the banks, all the financial institutions and other in New York. They're good customers, but also they're tough customers. They buy a lot, early adopters on everything new, but they're tough customers, they're very demanding because the stakes are high, money. I used to be one of those customers. No, you know, also risk management. So they're pushing the envelope with the R&D, buying early. They have stringent demands in terms of performance, but also risk and security all kind of come together. So how does that boil into today? What are they looking at? What tires are they kicking here at Google Cloud? What are some of their tough questions and requirements? And obviously security has got to be baked in. Your thoughts? Exactly. I think financial services is a business of trust. So usually the conversation starts there and trust is established through security and compliance and privacy and transparency. So and that happens to be one of our differentiators. Our security offering actually allows them to create a product for them that is actually even more secure than our on-premise settings. The second thing is a hybrid and multi-cloud. Especially if you are a financial services institution that's been around a while, you're carrying a lot of legacy. You get a lot of technical debt. You want to be able to also have flexibility to be able to run your workloads wherever you want. So Anthos, if I were to pick a word that dominated the conversations with our financial services customers over the last couple of days, has been Anthos, our multi-hybrid cloud solution. The ability to run workloads on-premise, on Google Cloud and on other clouds at the same time and to have that flexibility to be able to choose where to put your workloads depending on your needs has been very exciting for them. What specific questions were they asking? Were there certain technical attributes of Anthos that was interesting to them? What was some of the, when they started to look under the hood, what are the conversations like there? Well, I think the most commonly asked question is how soon can we start? So there's demand. There is definitely demand. There is definitely demand and excitement. And for the reasons that I've just laid out, to give them the flexibility that they want and the reality that the on-prem setup is going to live for a while. So for them to be able to manage this across a single pane, no matter where their workloads are working is a big interesting proposition. You know, I want to get your reaction to something that we've been doing a lot of customer digging into the requirements around on-prem, hybrid, multi-cloud and pure cloud. And there's a debate around cloud selection. And I was just going to read a quote from one of my article I'm writing right now. It says, now I want to see the customer name. We are currently over 500 existing plan cloud efforts across the company. And we're going to support, and we've got thousands of networks, data centers, and more than 500 cloud efforts with industry leaders, but we want to manage it individually. So the trend is, hey, I got a workload. This workload looks great on X cloud. This workload works great on Y cloud. This workload works great on this other cloud. So it's inherently multi-cloud, but the workloads are dictating cloud selection. And they still want to manage it themselves. So a little bit of control, freak action going on there, but also flexibility on cloud selection. So it's not a one cloud rules the world, but if the one cloud can certainly serve the workload, the workloads are driving it. Do you agree with that? Are you seeing the same thing? I think what's important to financial services clients is to be able to have scale and reliability. And they've started on this journey first with standardization. And that standardization was offered by Kubernetes and containerization. So they already started taking their legacy workloads and started containerizing them so that they can actually now put them no matter where they want. And now on top of that Kubernetes and containerization availability, the services that MPOS brings, observability and security and a single control plane is now, I think, is an extension of the desire for standardization, which brings the security and reliability across the board. It's something like an operating system to me. Cloud operating system, maybe? Maybe, we're talking about an operating system. It's not about cloud, it's operating the cloud. Maybe UNIX was the operating system, Anthos is the operating system of the cloud. What's the disruption conversation like on it? Because banking really hasn't been highly disrupted, but I've certainly heard CIOs in the banking world ask the question, well, do banks need physical banks? And we're becoming a software company. But the industry itself hasn't been highly disrupted. I mean, the leaders are still really strong. Lots of disruption scenarios, but is there paranoia? Is there, they're obviously aggressive people. Are they getting out ahead of the disruption? What's that like? You know, financial services is an industry that's been slow to move to the cloud in many ways, because it's a very heavily regulated industry. You know, it's got a lot of legacy. But disruption happened, right? Fintechs have started happening everywhere. You know, it's a reality of today. I don't think it's whether disruption is going to come. It's here. And I think it's actually creating a very healthy environment in the financial services sector, because now, you know, initially, I think financial services firms were saying, oh, wait a minute, I need to stay competitive. Then it turned into, wait a minute, maybe we can be collaborative. So now we're seeing the big players collaborating more and more for Fintechs. And now we're seeing a lot more open systems where, you know, we've got open banking, open APIs, where we're seeing a very healthy ecosystem being created in financial services. So I was going to ask you, do you think traditional banks will lose control of the payment systems, or do you feel like this new mindset is going to allow them to, you know, maintain their hold on that? You know, I don't have a crystal ball. It's an interesting question though, right? Yeah, but I think it's going to be a more of a collaboration. I think there's going to be more players. I think there is going to be healthy competition and also healthy collaboration across the board. You mentioned blockchain before. We've had Nick Kukuru from MasterCard on many times, and he's talked about their blockchain initiatives. But the other thing that's interesting is, they're actually, as I said, becoming a software company, providing services and becoming more marketing oriented, not just to consumers, but to other businesses. It's fascinating changes. Yeah. One thing I want to ask you is that you mentioned earlier, ecosystems open more collaborative, which we agree, we see that 100% as well. But the interesting dynamic of these big financial institutions is, they've had a huge build out on data centers over the years. So just go back a couple decades, all they've been doing is gearing up and building out. And now in comes the clouds, so they're not going to just let that on-prem go away. I get that. But now you've got new white spaces emerging with clouds. So what cloud is off bringing in is, not so much not the big guys off their perch, it's more of white space opportunities for point solutions that could be funded and grow by just being creative, whether it's slinging APIs together or using new glue layers software or some sort of connective tissue around data. What's your, how does that evolve? Because in New York's got a new renaissance around this entrepreneurial ecosystem. Yes, New York's becoming the next hub of... What are these white space opportunities? Do you see that either service providers, either global service providers or ecosystem partners could take advantage of it? Because white spaces where the opportunities are, that's where the ecosystem will develop, your thoughts. Yeah. So I think you're absolutely right. I think as financial services providers are using cloud to be able to bring their costs down and handle their legacy, now they have more resources that they can use to create new products, new solutions, new opportunities to be able to reach maybe different kinds of clients that they haven't considered in the past or weren't able to address. Because I think it's all about using their data, whether it's data about their customers to be able to create new products for those customers or using market data. You mentioned market data. Financial services has always been a very data heavy industry looking at the market data to create new trading opportunities, to create new portfolios to understand how the market behaves, what are the correlation between different instruments. So all of those capabilities now, they can build on Google Cloud with our cloud partners as well. I want to get your thoughts on Apigee. I interviewed Ed enough earlier and then Mick Xavier came on. He's new to the company only a couple of months in. But it's clearly Apigee is going to be a real interesting opportunity because API marketplace is going to involve from just connecting APIs together to be much more programmable. This is going to be a big part of it. How do you see that playing into your role because you're brokering APIs now, you're adding more codeability to it. Coding APIs is now the next level up. What's your thoughts on that? Exactly, like API is becoming the connective tissue now between all the players in the financial services market. I mean, that's how you create the ecosystem. You know, you need a language to talk to each other and the APIs are the ones that are creating that language. And I think it's helping in two ways. You know, one, it is creating this universal language for the providers and the consumers and the different players to talk to each other. It is also enabling financial institutions now to expose some of their legacy systems without having to completely re-engineer them but put a veneer on it, containerize them, put an API layer on them so that they can actually be agile in this new world without having to rewrite everything. And the business model opportunities are having new business models are emerging from this. We saw AccuWeather came on, was talking about this. This is potentially a money-making opportunity. Absolutely, absolutely. Not just you, but the partners. Yeah, that's exactly what I mean. What are some of the harder technical problems that maybe 10 years ago were unsolvable, that you've helped customers solve or that Google is in a best position to solve that you're working on? Yeah, when you think about Google's differentiators, you know, one of the places is data analytics and AI. You know, as we talked about, you know, financial service is a very data heavy business but unfortunately the data had been sitting in different silos for a very, very long time. And Google's data analytics tools to be able to take all of that data, put it together and then put that data in front of business people that doesn't necessarily have to have a computer science degree and to be able to get insights from that data is creating a massive shift in the market. And of course, the next stage from that is using our AI and ML capabilities to create new insights from that data. You know, at Google we've been using ML and machine learning and have been embedding them to our products for a very long time. And now our focus is to be able to make it as easy for our customers to do the same in their systems. So everything from how you source that data, how you process that data, and then how do you build the models? How do you train them? How do you execute them? And how do you create control over those models? And those are the places that are very attractive to financial services because as you've rightly said, it is a data business and it's important to the core of their business. You know, one of the things I want to get your thoughts on this may or may not be in your wheelhouse, but I've given your experience. I think you might have a comment on this because technology is a big part of the shift. Culture is a big part of the shift, you know, in terms of either mindset, whether it's not the age, it's not an age thing. It's more of a mindset thing. But one of the things we're seeing from customers telling us that slowing down adoption on the innovation curve is procurement. And then a lot of these companies have 1995 procurement rules. That's client server. That was before the web started, right? So procurement, how do you procure a modern, Apigee API marketplace, programmability, DevOps, infrastructure as code, completely different application renaissance is happening. So you got modern applications, multi-cloud, hybrid cloud. There's no rules in procurement. There's a, oh well, split the deal amongst three vendors. You can't do that anymore. Well, either Google's great for this cloud. Why even? Or Amazon, so, or Amazon for this, Google for that. So procurement has lagged. Yes. And so how, does that get in the way? Do you bring it into that way? And just generally, what's your comment? And how should procurement evolve? Yeah, I think especially in financial services, like procurement takes a long time. And in some cases, rightly so, because you know, you got to make sure you have the right, you know, security. You got the right process in place. But I think, you know, it's probably time for us to modernize our procurement processes as well. Make it faster. I mean, a lot of times it's on the customer too, not just you guys, but self-services change the game, certainly, but even just the procurement rules. Well, we're running out of time. Thanks for coming on. Appreciate the insights. Great to have you. Final question, what is the biggest learnings over the past couple years? Now, you're starting to see some clear visibility into programmability and networking layer. Now you've got Kubernetes service meshes right around the corner. What's the big learning? What's the big revelation in your mind of where we are? You know, I think, especially for financial services, we've been on this journey for a while. And I think, you know, the conversation I've shifted, I think that was the very first question that you've asked. And I think, you know, we are now at the place where it's no longer just experimentation or just doing peripherally systems. We now have customers that are doing mission critical global systems on Google Cloud. You know, HSBC has been on us with stage, Scotiabank and some of the biggest customers. So what have we learned from that experience? I think, one, you got to start, you got to start. You got to start getting your hands dirty because it is a different paradigm and it does take a while to learn that. And it is not just a technical paradigm shift. It is a cultural paradigm shift. So if you don't start early, it's going to take you a while to bring the entire organization with you. So start the technology early. Start the cultural transformation early as well. Ugu, thank you for coming here on the insights. Congratulations, good work. Financial service, it's a tough business. You're doing a good job. Thank you very much. Thanks for having me. LiveCube coverage here in San Francisco. I'm John Furrier, Dave Vellante. Stay tuned for more live coverage after this short break. Day three of three days of wall-to-wall coverage here on theCUBE in San Francisco. Stay with us.