 Okay, welcome back to SiliconANGLE's exclusive coverage of the OpenStack Summit here in Portland, Oregon. I'm John Furrier, founder of SiliconANGLE, and joining my co-host, Jeff Frick, who's here with us, and this is theCUBE, our flagship program. We go out to the events and extract the signal from the noise, and my next guest is a star to see you have a startup, SaltStack, Mark Chen. Welcome to theCUBE. Thank you. First time in theCUBE. We'll always have love startups. We had an HP on earlier, Sargillai, who runs all of the cloud for HP, and I asked him the M&A question, because every startup, possibly one exit is M&A. I mean, obviously it's a growing cloud market. But you guys, no one ever says we're being starting a company to just be sold, but it is one of the liquidity side of it. So we're always interested in startups because that's where the action is, right? And then people want to know what are the new hot startups? You guys are having a great presence here. So first, tell the folks out there about your company, that you're leading, where it came from, how it started, and kind of where you are in the OpenStack Summit event here and what you're doing here. Yeah, Saltz had a good startup story thus far. We began in February 2011, really as an open source project that was developed out of the concept that there was a huge void in the area of configuration management and remote execution. And so my co-founder and partner, Tom Hatch, developed a technology that was focused on developing a solution that would provide scale, speed, flexibility in this particular space. And it was all based on this fundamental premise that we could communicate faster than other tools that were in the space. So we've had a good rise. February 2011, we open sourced the technology. The adoption within the community began to grow pretty rapidly thereafter. And today we're sitting right around 400 active contributors to our community. Wow. Last year at the end of 2012, GitHub named Saltz Stack to their top 10 list of communities with the most active contributor base, diverse contributor base. And we were right behind OpenStack in fact. So it was a good sort of nod to the cap to Saltz Stack there. Tell us about the product, what market you guys are in and specifically the problem that you're solving. Yeah, broadly speaking, it's the IT operations management market. Specifically we focus on remote execution and configuration management. And then there will be other solutions that follow along that, fundamentally with that platform of... And what's their pain point on that particular area on the config side? What specific things you've come in and nailing? Yeah, so again, speed is the first element there is being able to quickly send out commands and collect information from the infrastructure, being able to scale to the largest enterprises that are out there. So... And Mark, it's interesting from a startup perspective. It seems that the landscape seems to have changed with open source, to either start an open source project, which I don't know, was that originally started is just I'm trying to solve a problem and I think this is a better way to do it. Or using an open source project as kind of the kernel of your company idea, which is very, very different than what used to be where you try to write some piece of code and that was the crown jewels and that's what you wanted to protect. Yeah. Talk a little bit about that journey and how that happened and why you chose that path. Yeah, we're really benefiting today because of the maturation of a couple of different movements. One, obviously open source has become a more widely adopted way to begin a commercial entity and that's what we've been able to do with that particular wave and then the other wave is obviously the wave of configuration management, which is still a very nascent market for us. So for us, the idea was to begin as an open source project to very quickly disseminate and to find out if the technology was viable. And fortunately for us the community responded in the affirmative. So we've been able to take that and really run with it as a business strategy. Yeah. We've just commercialized the technology as of late and that's going to market and we've got paying customers today that are actively using it and are very happy, so. And what about being kind of an active, in an active role running an open source project? Yeah. And then trying to expand that or marry that or integrate that with some of the larger ones like the OpenStack. Talk a little bit about it. You know, you've got a huge community with a lot of active contributors that are kind of keeping wrangled and on track and then now you've got this bigger kind of framework with an OpenStack. How is that working out? Yeah, I mean, it's a balancing act, right? You know, you've got, you want to make sure that you maintain and you keep the active contributors of your community very happy. And I think that that's a key element to any successful open source company that then commercializes. You know, it's an interesting thing when you look at sort of the management team that I've come up from a proprietary background and Tom has come obviously from the open source side of the house and we marry those two mindsets together into, you know, effectively SaltStack as a commercial entity. So we've been over backwards to make sure that our community is very happy, that they're responded to, that their contributions are valued and incorporated into the core product. But then at the same time, you know, we're very open about the fact that we have a very direct commercial strategy in place, we want to be viable. We want to be around for years to come, you know, providing great technologies to not only the community, but then also to large enterprises that would use our software. Yeah. Mark, talk about the competition and what's going on in the market. A lot of CIOs out there, a lot of service providers. This is obviously on their agenda. You got self provisioning, you got software scaling, you know, with the cloud, for example. Talk about the competition you guys have and how you guys are differentiating in that market. Sure. So when you look across the landscape, I mean, it's a pretty broad landscape, frankly, in the IT operations management space. I think that traditionally, you know, I've come from the background of working with companies like Altairus where we were a systems management player and we focused on the desktop and we had some server elements to that as well. You've got other large traditional enterprise players that have been in the space, Microsoft, Symantec, BMC, and so forth, right? And so they've been around for quite a while. The way I like to articulate our position in the market is that IT operations management is undergoing a renaissance and SaltStack is participating in that renaissance there. And so you've got players like Puppet and Chef and even CF Engine that have been around for 12, eight and six years, respectively, trying to, you know, partake of this open source, you know, DevOps movement and they brought good products to the market and I believe that Salt is a continuation of that trend. It's still very early, but we think that we have some feature sets that enhance and obviously differentiate us in the space. What about some of the customers you guys are working with right now? What are the early use cases and how you guys, obviously going to market as a startup, you don't have a lot of resources, you got to be resourceful. So normally the strategy is pick a beach head, come in, get a position and then sequence to a broader position. What is that use case that you guys are seeing specifically? Yeah, I mean, I think that the open source, I'm sorry, the open stack play is one that we've seen with a couple of companies where they're deploying open stack very successfully with Salt Stack. It's part of the reason why we've decided to sponsor and participate here in this conference is that we see obviously that wave moving forward and Salt Stack is able to enable organizations that are looking to move onto that particular platform and deploy it very quickly and effectively for them. That's just one use case. You know, we continue to see, you know, traction with companies that are looking for an enhanced configuration management solution that enables them to do the job quicker, faster, that scales out to a much greater extent. That's on premise. On premise. At this point on premise and then coming out with a SaaS based solution here in the next little while. Yeah, that's always a challenge. You got to be there. It's always a challenge. The cloud is growing like crazy. We heard HP talk about that as well. NetApp and whatnot. And storage has been a problem and NetApp's addressing that. We had Seth on earlier. How do you deal with legacy environments? I mean, that's always a challenge in a lot of these enterprises. A lot of check boxes. That's right. Or are you guys more green field, open source? How do you guys look at that? Yeah, you know, I think that the market is still split pretty evenly where you've got about 50% of the enterprises that are using the legacy solutions that you just described and 50% that are moving more towards either their own homegrown solution or something that's sort of brought to the market like a puppet chef or assault. So the way that we address it is that we can certainly extend and enhance a lot of the things that are being done with legacy solutions and systems. Our orchestration and remote execution tool enables them to do things much faster. Even if they're using some of the contemporary tools like puppet or chef, you can use SaltStack to extend those out very rapidly as well. You know, if they've got a manifest or a recipe that has been built through one of those tools, SaltStack, in many cases we found because of our orchestration and remote execution allows them to deploy that very quickly as well. Orchestration is a really key thing. And you mentioned OpenStack earlier as a key bet for you guys. We had the Miranda CEO on theCUBE yesterday and they're seeing great success with deployments and they know over 300 people and essentially what he was saying, paraphrasing not a direct quote is, hey, people want OpenStack and they want us to come in and turn key, not just small little POCs, but big production environments at some scale and they need help. That's a really big issue for them. And so OpenStack has a lot of demand, not a lot of resources. So how do you fit into that trend? One, do you believe that's a good trend or is it a real trend? And how do you guys engage in that marketplace where people say, hey, just help us. We don't really know how the expertise or know what to do. Yeah, we do. So and I think that we're fueled largely by the fact that SaltStack has such an active and open community that comes in and contributes to the work that we're actually a part of. So to come in and be able to find new and unique angles in ways that we can help organizations, we've got a lot of case studies that are out there, people that are using it on the front lines in their companies that are telling us this is the effective way to deploy it or here's another angle, here's another idea, so cool. So take a step back. Take your CEO hat off for a second, startup hat. And for the folks out there that are looking at the stream here and following us this week, explain to them what's happening at OpenStack. Obviously huge popularity. This is our first cube here. Obviously we bring the cameras because it's crossing over mainstream. As we said yesterday, we blogged about it. Is it an inflection point? It's actually going mainstream. There's a lot of real interest, a lot of users here. But in your own words, describe what is this all about? Why is OpenStack Summit so popular and the projections for the next show is going to be pretty big too? So why is there so much action in OpenStack today? Yeah, I mean I think it comes down to innovation. I think that a new solution has come to market. Clayton Christensen from Harvard Business School is one of our advisors. And he talks a lot about disruptive innovation in the market. And so I look at the OpenStack movement and I say this is about new tools that are coming to market that unify infrastructures that provide large enterprise organizations or small with a tool set that can help to further unify that infrastructure and provide them with tools. And build new ones. And build new ones, frankly. Yeah, adding on top of what they've previously used and moving forward with new ones. What advice would you give other entrepreneurs out there and entrepreneurs like to share? Share some insight into OpenStack. And it's open source. Free not. You guys are attacking. You guys are attacking and obviously a good spot. Automation's really key and that's going to be a big white space. What other white spaces are out there that you see for that entrepreneurs can say, hey, you know what? I want to really get in here. I want to participate. I want to write some code. I want to contribute to the community. But where are the opportunities to start a company that you see that are just sitting there low hanging fruit? Wow, that's a great question. I always say three things. I say, look at the market, look at the platforms, and then choose your team wisely. And I think that when you get those three elements together, great things will happen. I obviously had a bias for the infrastructure and operations management space because of my days at Altairis. I took a little hires to go into banking at Morgan Stanley. But it's okay, everyone gets drunk once in a while. That's something bad. Goldman Sachs, Morgan Stanley, you know. You got the names. You got the names there, so. That's okay, you're forgiven. You're in the cube. Ultimately back among the IT ops. Everyone else, I was talking to my friend, a lot of young kids coming out of Harvard, they're not going to the bank and they're going into big data. That's right, exactly. All the quant shops are not going to Wall Street, they're going into big data. That's where it's at. That's the new hot thing. That's where it's at. So I do have a bias for infrastructure. I think that it's always going to be a part of what folks will need to do. And I do think that there will be some interesting angles there, whether it's monitoring, whether it's finding some add-ons to the existing infrastructure players, I think that those are all. So one of the things that during the key notes, we were very impressed as the users were coming forth here at OpenStack, talking about real deployments. There's not a lot of vendor hype, real deal happening, a lot of signal, not a lot of noise here. So Bloomberg was up there and they're talking about OpenStack and then below OpenStack and above OpenStack. There's action going on, obviously below is the plumbing, a lot of action going on there and then above the stack, we're seeing more of the application areas. What do you see above the stack, above OpenStack that needs a lot of attention right now or are opportunities? Gosh, that's a great question. I'm not sure that I'm... I think that from a manageability standpoint, I think that you're going to certainly need solutions that are going to help to deploy the systems that are going to be coming to market. Let me ask you a different question then since you had a little banking experience. A lot of the analysts that we follow, obviously Goldmine Protocol had to dig Goldmine, but they're doing their job but the old school analysts are collecting data. They're looking at the tech industry from a different lens, right? This is some old data, right? I mean, traditional licenses, licenses, metrics, but we're transforming to a modern infrastructure now and you mentioned some of those things in your comments. I mean, whole new way to do business, classification really is about softwares of service, cloud should be just this invisible resources just working and so that's going to take some time. You know, see infrastructure as a service, platform as a service, variety of tooling, et cetera, et cetera. What do the analysts need to look at for someone looking at IBM and HP and trying to figure out where the puck will be as they say. So how should these analysts look at future positions and competitiveness? Like for example, Goldmine was downgrade HP because they're quote PC margins, but the world's changing, that might be zero and that might be okay as I was saying. But I mean, how do you look at that and how would you advise analysts to say, hey, if you want to look at who's going to be the winner in the future, here's some characteristics that you should look for. Yeah, so I believe that there's a shift in organizations. I mean, we're often seeing now within large enterprises that shift of power is moving away from, oh, there's obviously still power within the CTO-CIO office there, but the users, the end users in our case, the CIS admins and the DevOps professionals are the ones that have a lot of influence over buying decisions there and the technology that they're using. And oftentimes they're moving more towards open source initiatives because they can use those very quickly and easily in the organization. Another trend that I'm seeing is sort of this concept of sort of stealth IT, the way that you buy your software increasingly, I think, the enablement. We talk about technology and infrastructures on demand. The ability to actually have a technology that you can start using and pay for very quickly without a lot of barriers from legal, from operations and so forth. I think that if you can get those models right, that you're at least assured of a good fighting chance to have a successful technology. And that's assuming obviously- And competitive advantage. And competitive advantage as well. If you can certainly have obviously the technology platform first and then the, what I call frictionless entry into an enterprise, those types of things will win, I think, long term. Great, great. Final question for, thanks for coming on the queue. This is great. Final question, next year, obviously as you grow your organization, talk about some of your goals for the company and what are some of the things that you guys want to knock down and nail down over the next 12 months? Yeah, so in 2013, the commercialization of SaltStack will have happened, will be knock on wood that will be viable and successful. You're going to see some interesting partnerships and alliances that are coming forth that are already taking place and shape at this point in time. Moving forward, I think that you're going to find the open source community continue to support and stand behind what SaltStack is doing as a company. And that will further serve to fuel visibility and adoption on the commercial side of things as well. You'll see an expanded suite of products and technologies as well that I think will be quite interesting to the market that will show obviously a broad base and capability to manage infrastructures from. So look for some good things from SaltStack moving forward. All right, Mark Chen inside the cube here, SiliconANGLE's exclusive coverage of OpenStack. The big guys are here, but also a lot of startups. He's one of them, hot startup here, SaltStack. We'll keep an eye on you. Congratulations to your sponsorship here and your participation in OpenStack. Great stuff. I'll be right back with our next guest here on SiliconANGLE's continuous coverage of the cube at OpenStack Summit. We'll be right back after the short break.