 So self-service, we had Frank Slutman from ServiceNow talking about all kinds of services, fabric, but really the big thing that everyone's mind is, how do I move my business into an era where I can deploy solutions and drive my business value? So actually cloud has some economic advantages, there's some performance advantages, for the most part it's kind of process related but ultimately it's solutions for you. At the end of the day it's hey, I want to move this into the cloud, there's benefits. So first question is what do you see as the vibe of the marketplace, the flow is it highly active in terms of the customers that you're servicing and what are the common needs that you're seeing around this move to the cloud because there's private cloud, there's hybrid cloud, I don't see this pure public cloud which they can buy on a rack space but mainly in the, I have an IT infrastructure, I need to leverage that, how do I play with the cloud? What are you seeing for solutions? Well John, I would say first of all, thanks for having me here and we're pretty excited about the type of solutions that we're seeing with customers around the spaces that you're talking about, in particular evolving private clouds through our network into a hybrid type solution. We see really cloud is about agility and customers wanting to move quicker and needing to bridge the newer cloud services in many cases with their legacy infrastructures and needing to do that in a way that still maintains all the discipline that they've had in a private cloud setting around things like security and performance and control. And so those are the type of solution sets that we're trying to address with our services. Two years ago when we started doing the cube interviews was VMworld 2010 and the cloud service provider was a really big conversation and Dave Galante, my co-host, was saying that the security equation at that time and even today is still more solid on the cloud service providers on which you technically are one because of the experience, you just have to deal with that. So talk about some of the dynamics around like this cloud migration, cloud data center, the private cloud, and what are some of the false premises that people are kicking around there? I mean, obviously security is one everyone's concerned about. Data privacy is another one. So these are kind of core, fear-based topics that we see a lot of activity around on Twitter and in conversation. So can you maybe clear that up a bit in terms of where we are, relative security and data privacy? Yeah, I mean, certainly we hear both of those issues from our customers is kind of top of mind issues and we really see the security angle as in some ways being something we can overcome. In fact, we've spent a lot of time to enable customers to move into kind of a hybrid space through our public services across our virtual private networks. We call that a virtual private cloud. And in essence, what that does is it overcomes many of the security issues that people have been concerned about in a public cloud environment because in essence, basically they're extending their private cloud through a secure network. They are not exposing data, for example, to the public internet. They are not using public address space. They basically are just geographically expanding a private cloud through a secure network which is giving them a different level of security and control. Similarly, from a privacy perspective, we're building in security features into the network. So that's not an afterthought that you need to add on top of your architecture. It's a service that you can buy built into the network cloud service that AT&T offers. And so we see these certainly as barriers that have existed from an adoption perspective but are barriers that I believe are starting to come down. So one of the things that, obviously the trend we saw with a book reseller named Amazon built this huge scale. Hey, why don't we offer this as a cloud service, Google, same thing. So the question I have for you, I share with the folks, some of the scale of AT&T and your operations, you guys have a solid operations and you have a lot of experience there which lends itself well to being a provider in this area. So one, share some stats around that as the first question and then follow on that and talk about what are the table stakes that customers need to know about in terms of looking at other solutions because there's a lot of fun in the market, fear and certainty and doubt around, oh, this is going to be secure. So it's kind of like, you have to answer those two questions. We have the expertise, we have the scale, we've done it before for ourselves, now we're often as a service, as a provider of that service. And oh, by the way, if you're looking at other solutions, here are the table stakes you need to look at for cloud. No, great, great points. Well, AT&T has actually been in the hosting space for over a decade. We've been one of the leading service providers on a global basis for a significant period of time with a full solution set. We've got scale of our networks, obviously, which we believe are the largest, most robust and advanced service set in the world. We've got 38 commercial data centers globally across multiple continents that are attached to our network. And we've got services that wrap around all of that to deliver solutions to customers on a global scale. And that's, to us, table stakes to be successful in this marketplace. We also have a proven track record with thousands of customers for many years who rely on AT&T to run their critical business operations whether that's managing the websites, their critical ERP systems, or what have you. And doing that at a level of performance that's predictable, that's carrier grade, if you will. So to us, that's critical. And not to knock any other service provider, I think there's many other models out there, but gaining the experience to serve enterprises is something that comes with significant time and frankly, track record and credibility. You don't jump into the services business overnight and all of a sudden have the wherewithal to be able to support critical applications. You may be able to deliver a platform on which people can scale cloud services, but I see a big gap from that to mission critical services to support a business. Yeah, you know, always when you go to the conferences like VMworld where it's highly geek community and also a lot of real business, emerging business categories are exploding, you always want to kind of know what the cutting edge area is. So they're talking here about new experiences, old way, new way. So share with the folks out there. Some of the new things you're seeing that are enabled by some of the scale you guys have done and then talk about what people don't understand is available. In other words, is it easier than people think and what's the demand like in terms of the kinds of services that they would want to use? Okay, well I would say in terms of your first question, some of the areas that are interesting and available now, things like hybrid clouds. I think that's a real phenomenon and I expect that's going to be the future of where we see the enterprise. I don't see, for example, CIOs dumping existing infrastructures in private clouds. I think they've made significant investments in their data centers and their applications and systems in virtualizing those systems which have served the business well. However, to grow the business and gain agility or to build things like disaster recovery into their applications, they need more geographic dispersion, they need more capacity than perhaps it makes sense to build on their own. I think those expansions will be done through hybrid type clouds over secure networking type services. We're also pretty excited about mobility as you might expect and the way businesses are mobilizing every day, whether it's supply chain, whether it's their sales force or whether it's even machine to machine type applications and having a robust infrastructure called the cloud which marries nicely with your mobility based solutions is a pretty exciting space for us and I think that's one of the areas that you could imagine we spend some time in. The mobility is hot. I mean, the mobility is great because it's one of those things where they go, hey, no mobility, we need to have apps and the demo today, no more one PC, your desk is the obvious thing that's happening. But that brings up kind of the core kind of underlying driver we're seeing, Silicon angle and Joe Tucci kind of highlighted yesterday when he talked about the disruption, the horizontal shortening and the scale is going up on the vertical and that is time to market. So mobility kind of highlights, oh boy, we need to actually get this out there whether it's a mobile sales force, mobile service organization or whatever, they actually have to deploy some new services fast, right? So can you talk about the time to market kind of equation? How relevant is that? And what are you seeing that you can share in terms of experience of timetables? How fast from start to deployment are you seeing and how does that impact either the organizational structure or et cetera, et cetera? Yeah, I think cloud very much is all about agility and the time to market equation is critical. We're working with many customers across industries who for their businesses are establishing, let's say, SaaS apps which are more and more mobile based or other repeatable type applications that as they gain a new customer, as they launch a new program, if they're let's say an advertising company or someone in that type of industry, the ability to turn on a dime and literally put a service in the market or a new program in the market in days if not sooner than that is critical for their business success. If they can't get to that level of agility, someone else will. And so that's a very different change from the traditional models where it often took months per se to architect and design a new application. Here you're literally going from start to finish sometimes in a matter of a couple of weeks. And I think that's an exciting time for us but I think that's the new mobile cloud world that we're in. So a lot of the cloud conversation as you were talking about is really kind of an extension of existing infrastructure and that's obvious and there's a big market there. There's big conversations on our community around the cloud data center and that's not really not really well defined yet as a category. How do you guys view that cloud data center? Because obviously you want to have headroom in your network to kind of bring on new solutions especially around cloud specific data centers which means piling more in the cloud. And we're seeing that adoption although slower than expected most extension based solutions but there is demigration going to full cloud data centers. What do you see there? What do you see in that category? Slow growth, massive growth, not really it's... Well we see significant demand. I mean there are customers in all segments they're looking at whether it be private clouds or even multi-tenant clouds. The demand is not lacking in any of those degrees. From a data center perspective we're all about building multi-tenancy scale and we're doing that in a virtual basis across sites. So that's maybe an added flavor to the way we think about this is not only do we need to efficiently virtualize a single center but need to virtualize our services across centers on a wide area basis which we think allows customers to have the most flexibility to do things like tune latency for mission critical applications to address the performance for their eyeballs, their customers who are addressing those applications. Being able to move workloads dynamically across data centers. So it's about scale and infrastructure but also nimbleness to be able to move services across that infrastructure. We've been seeing a lot of trends we had some earlier conversations today about scale out transactional infrastructure, scale out NAS, scale out analytics. And that kind of brings up kind of the next question which is actually the different use cases but all the kind of play in kind of a general architecture which you guys can deploy kind of by throwing some switches. I mean I'm oversimplifying but metaphorically speaking throw some switches, add some new stuff. But this data center infrastructure now where data is at the center of the value proposition is a little bit more than just a standard converge infrastructure definition or cloud. People are really looking at that data so storage plays a key role in that. What are you guys seeing as cloud service providers the role of storage in your architecture and in the solution mix? Well we actually see it as critical. I mean if anything is growing astronomically it's certainly the amount of storage that customers need to process and to maintain. However what we do see is it's still about solutions and storage is a means to an end. So for example we can create cloud based storage type solutions and we have but what gets really interesting is when we turn those into services for our customers. Let me give you an example. One of the probably highest data intensive applications is medical imaging and in our healthcare practice we've actually introduced a solution for medical imaging and information management in our cloud and then we've mobilized the access to that data so a healthcare practitioner using a tablet or smartphone can view a patient record securely and mobily from the ATT cloud. That takes the raw infrastructure and turns it into a pretty interesting and mobile based solution and that's where we see a lot of customer interest and excitement. It's not just the raw capacity or the infrastructure but it's turning that capacity into a solution set. Okay so next question is around customer mix because this will speak to some of the demand side. Obviously at this VM where I was talking to one of the VM where executives last night at one of the events obviously the huge focus on SMB small medium sized businesses or SMB small medium sized enterprises. Obviously with healthcare and these other verticals you guys have the big monster companies, big IT companies but also there's the growing SMB category. People who are just growing and need IT infrastructure related stuff. What's your mix of your current customer base relative to the demand? Can you share some basic kind of global data and then that global data, not specifics but enough to give a sense of it? Sure, I mean certainly we've served the enterprises of all sizes for a good period of time. We see demand across the segments from a pure large global enterprise basis. We see significant demand for both private clouds as well as the hybrid clouds that I spoke about. We have always seen our strongest demand set in what I'd call the middle market space. So middle, mid-sized enterprise if you will and I don't see that changing substantially in a cloud based world. In fact I see those firms in many cases who lack the infrastructure to run their own data centers or even a significant IT staff to benefit even more so from a cloud based model. As you get into real small business, down market, what we see is much more of a demand for finished services and solutions. Often leveraging a third party, VAR or reseller in some cases, typically with a vertical solution that's pointed at their particular business. So it varies to that degree. I mean certainly a dynamic marketplace. I mean obviously people want to have turnkey prefabricated solutions, push some buttons as easy as that, sell service, et cetera. Kind of brings you back to the whole SOA kind of days where you can just deploy some services and now we got app stores and all kinds of cool stuff there. Next question to have is relative to the disruption that you're seeing because it's a dynamic market you're living in. What do you guys have to deal with on an ongoing basis that's on your radar in terms of the solution sets? Well from our standpoint, probably the biggest solution set we're spending our time on is the marriage of our network services with our cloud services because we see that as a big differentiator. The ability to offer cloud basically as a feature of our network. Much as we've offered things like class of service for example, the ability to turn a lever and enable customers to turn on computing as a service on demand in addition to class of service for example, or storage capabilities or various other application capabilities and then leverage the intelligence in the network whether it be for security, whether it be for workload distribution or parameters that they want to set relative to their application. That's an area that we believe we're on the forefront on and they're spending a significant amount of time to continue to differentiate. Okay we're getting out of time here. Thanks for coming on theCUBE. I want to ask one final question. Looking at the marketplace, knowing what you guys are doing internally with your scale and some solutions that you're rolling out. What are the key business drivers? Share with the audience what you're seeing as the key business drivers that are really driving enterprises, executives and business line managers and even ops guys to move to the cloud. I mean mobile you touched on, that's pretty obvious and there's a lot of things underneath that. What other business drivers that are consistently you're seeing in your conversations? Certainly speed and agility, the ability to move quickly, to reduce cycle time, to get new applications that differentiate the business to market in the quickest time possible and certainly cost. Cost is always a factor driving away from a capital intensive model to one that's more of a pay-as-you-go type model but then the next step beyond that we've heard a lot at this conference as well is how to reduce the OPEX lever too and to be able to truly drive cost out of the business and be able to spend your valuable CAPEX and OPEX towards differentiation not just infrastructure. Okay Steve Kenyano AT&T VP of cloud operations. The move to the cloud is happening but it's not a pure off-prem solution. It's a hybrid, it's IT on-premise infrastructure working with cloud. Congratulations on all your success. Thanks for coming inside the cube. Thank you, my pleasure. We'll be right back with our next guest. It'll be Ping Li from Excel Partners, one of the leading venture capitalists in Silicon Valley. Ping is the top 10 of all VCs in the business, certainly on the top in big data. We're going to hear from him on what he's seeing in the landscape of cloud mobile and social and certainly in the world of big data and data infrastructure. We'll be right back with Ping Li from Excel Partners right after this short break.