 John Furrier here in the Palo Alto studio here with Gary Blum, the CEO of Mark Logic, former industry executive, former Oracle executive, been around the block, seen a lot of innovation cycles, seeing the ups and downs here in Silicon Valley and certainly in the tech business. Gary, welcome back. Great, happy to be here. Innovation cycles, we were talking about on our radio show this morning about, we've seen the movie before, but tech companies are different now than ever before. We're seeing more private equity, a lot of M&A, a lot of financial engineering, we're seeing HP getting broken up and there's a rumor that VMware's going to do it. Did you sell some assets to AWS? The cloud game has certainly been a hurricane force like we're seeing in Florida today. Yet the incumbents like Oracle are still holding on and others like IBM are transforming. But these guys have to change and you wrote a post about Oracle OpenWorld and going to the next generation database. What does an Oracle have to do and what do the existing legacy players, incumbents have to do to modernize? I mean, you guys have been around for 15 years, but you've been agile, you're small, you're still nimble, but the big guys can't move that fast. Right, right. What do they do? Innovator die is what people say, but I mean, how do they innovate? Yeah, well, to your point, I mean, we've lived off of innovation. Yeah, we created a new generation of technology. Yeah, really for this big data world before anybody knew there was such a thing as big data and before they were calling it. And so that having that vision to start using modern technologies to build modern applications is really critical. The reason it's kind of complicated in the database world is we haven't really seen a transition in about 30 years. And that's when Oracle took over the marketplace from IBM. And if you think back to that timeframe, Oracle took it over. They were the same size company Markologic is today at that time. Roughly 100 million, roughly 500, 600 employees. And the reason they took it over is because IBM had to protect their hardware revenues and IBM had to protect their services revenues. Roll the clock forward 30 years later and what do they even come that's really... Well, IBM basically enabled Oracle to get the SQL database going and they basically gave it to Oracle. Well, yeah, I would say they created the opportunity but then they had innovators... You kind of handed it right to you. They did, but then they had innovators dilemma as to how to embrace that new generation. Oracle faces the same challenge. When we run our product, it's very agile, it's very quick. You build applications in a fraction of the period of time. So if I do all those things, and oh, by the way, I run on scale out commodity until hardware. So all of a sudden, if you're Oracle and you say, well, I'm gonna embrace the next generation so much for your sun revenues, so much for your exadata revenues, and oh, by the way, those 5,000 people you put on projects, they probably aren't needed or if they're needed, they're needed for weeks, not months, not years. Maybe some consolidation coming for Oracle. Well, I think Oracle has an interesting strategy. They've been very much on the acquisition trail of SaaS-based companies. I used to be on the board of Tileo when they came in and that was a pretty quick move by Oracle at that time. They're not afraid to make some M&A moves. Right, they've got... Up and running companies, bring them in, put them in the portfolio. Absolutely, and they have NetSuite running now. And so for their applications business, they've been very acquisitive. For their database business, they're trying to preserve their maintenance revenue stream. And they talked a lot about cloud at Open World, but they didn't really talk much about the database. And what I can tell you is simply taking an old database and moving it to a new environment does not modernize the database and it doesn't help it solve modern data problems. So their pitch of we can run Oracle on the premise and the cloud, which is, of course, it's their cloud. So it's Oracle on Oracle. Same code base, it's basically their database. That's modern for them. Well, it's modern for an old database, yes. You know, we can also... It's also licensing from lawn-prem licensed to a... Right. As you go? Right. I mean, that's a shift, that's not necessarily modern. Yeah, well, it's a modern shift, I guess. Well, it's a modern change in how you're licensing and pricing. It's not innovation on the technology. You're still trying to build applications with a technology model that was created 30 years ago. What does Oracle do in their strategy? So you're seeing them hold the line with the messaging and I was very critical at Oracle Open World on this, how Mark Hurd and Safra Katz were like, obviously just cloud, cloud, cloud. And that's, believe me, they're really good at it. They should be in a business school class on how to do analyst relations because all they do is bang the drum. Cloud, cloud, cloud. And they got a lot of other stuff going on. They have hardware, you mentioned Sun. They have Exadata, a great product. They have a lot of other products and the middleware group. So meanwhile, Kurean's got the database team. Right. Are they going to ever go out of their swim lane? How do they get, they have to go beyond the database. Oracle has to, to be successful. Well, one would think so. But we sure didn't hear any news out of Oracle Open World around that. You have simply providing a cloud infrastructure. Like I said, it doesn't change your database technology. We have a modern database technology. You can run it on-premise. You can run it in the cloud. And when you talk about Oracle's technologies could be on the Oracle cloud, we look at it and say, well, customers don't want that lock-in. They want cloud neutrality. So we run in Amazon's environment and Google Cloud. You can run in the Microsoft's cloud. We don't really care. And in fact, you can mix your workload half in the cloud and half on-premise with a MarkLogic system. So you were critical of Oracle Open World. You're not critical. You basically came out and said, we didn't hear so much, which is polite for saying, you know, they don't have any Enterprise NoSQL database modernization. What did you mean by that in that post, that whole narrative? What was your point? My real point is that Oracle is in the innovator's dilemma that IBM was 30 years ago. And they are essentially creating an environment where they're going to concede the database market to a new generation player. And right now MarkLogic's the leader in that category. You know, we're the biggest. We do the same kinds of systems, operational transactional systems, except that unlike Oracle, our projects don't take years to build. We build them in months. And unlike Oracle, it doesn't run on really expensive proprietary hardware, which was the same problem IBM had 30 years ago. Ours runs on very open Intel scale-out architecture. So you're clearly trying to go after some of their market share? Well, I wouldn't tell you we're trying to go after their market share. We've already taken market share from them. You're eating some of that. So let's try to put the progress bar on the levels of eating away. So there's the croissant crumbs at breakfast, or there's lunch, and then there's dinner. How far along are you relative to eating into Oracle? Are you eating at their lunch at this point? Are you still kind of on breakfast? Well, I think we're transitioning towards lunch. If we want to use that analogy. I'm not quite sure I follow that analogy. When you're eating someone's lunch, you're pretty much about to take their dinner. We're clearly starting to eat their lunch. Listen, we're one of the only next generation database technologies that's north of $100 million. We've been there for two years. Over 50% of my revenue is finishing projects that loyal Oracle customers tried to solve with Oracle first and couldn't complete the project. So I'm in the business already of finishing projects started on Oracle. And we're living a very healthy lifestyle on that. Are all your customers, most of your customers, are shared some of the percentages of customers of on-prem versus cloud? Do you have any cloud native all-cloud customers, or is it all mixed on-prem or on-cloud? I absolutely have both. And so as an example, Saturday Night Live application that NBC created for the Saturday Night Live 40th anniversary show, that was a Mark logic application built in about two months, deployed entirely on Amazon. And oh, by the way, one of the top iPhone apps for the anniversary show, delivering 40 years of content across your mobile device. So you're exhausting depending on how the customer wants to deploy. You don't really care. Completely agnostic. There's lots of reasons to keep things on-premise. There's lots of reasons to go to the cloud. And there's lots of reasons, by the way, to mix the two environments. And we allow our customers to mix the two environments as well. You can have part of it running on-premise and part of it running in the cloud. It's just a deployment platform. I was having this conversation with Dave Vellante and Peter Burns, who now heads up our research, former Forrester analyst now out of research at Wikibon. And we were saying, why wouldn't anyone want to put a new application on the cloud, except for when the specific regulatory and or specific business reasons to have an on-prem? I mean, why wouldn't you have it in the cloud? That's like saying, I want to build an app for a BlackBerry versus an iPhone. You want to be on the most advanced, more flexible, most used, most powerful system. But you hit the issue, right? Which is, today, not all data can be in the cloud, because in some cases, that won't meet the regulatory requirements. Yeah, this is some of the use cases where absolutely cannot be in the cloud. Yeah, and so. But if it can, why not? But what customers are waiting for is kind of the regulatory ready cloud, just like they want a regulatory ready database, which is something we've provided regulated industries and done very well in. And so they need security. They need high availability. They need data governance. They need to know where the data came from. They need to understand the time dimension of their data. So there's a lot of requirements and they're all experimenting. I have very few customers that aren't looking at the cloud and saying, oh, that's not for me. I'm never going to be there. In fact, you can look at JPMC as an example. Jamie Dimon for years said, my data will never be in the cloud. Well, over the last two years, a cloud-first mentality at JPMC. Some people are saying that the cloud is actually more secure than on-prem for a variety of other reasons. But I want to ask you more of an IT philosophy question. So let's put our IT buyer hat on. So imagine we're, you and I are working together. We're managing a huge IT shop. And there's a $3 trillion IT budgets out there. It means massive numbers. Most of them haven't even shipped to the cloud. Maybe it's higher kickers and early adopters, what not, but still huge trillions. We're sitting here saying, Gary, we got to modernize it, we're going to be dead. We got to move this data center into the cloud. But we got all this stuff. We got VMware, we got Oracle. What do you suggest to the folks watching and potentially that are in that IT buyer or designer or CIO hot seat? Because they have to make decisions. And what specifically should they look for in a vendor to know whether their lunch is being eaten or they're dying or they're ready for the future? How do buyers and decision makers and folks in the IT enterprise or CXO or CIO decide whether a vendor is good or not? How do you talk about that? Well, one of my- So I have good revenues and loyal customers. Right. One of my primary talk tracks that I use is avoid the hype cycles. So, you know, we've talked earlier today about the whole Hadoop hype cycle. You know, and at the end of the day, people spend a lot of money on it. And now all the articles suggest, well, I didn't really get my value out of it. In other words, I put all that data in, but I can't use it. So the good news as you consolidate, the bad news is you can't access it. And we're solving that data integration challenge for our customers. And so when I think about, it's avoid the hype cycle and look at the capabilities of the technology and then look at where the companies are doing their business. In our case, as I mentioned, over 50% of our revenues finishing projects started on Oracle. So we're enterprise focused. We built the enterprise features into our product in version one back 15 years ago. It was always targeted- One thing is make sure the company that you're working with is enterprise focused. Make sure it's enterprise ready technology, certainly. You know, a lot of the open source databases, in fact, all of them in the NoSQL world, they all share a common trait. None of them have transactional consistency. So if you're willing to accept in perfect data, use those products. Or be cloud ready too, if you're enterprise cloud ready to that point too. Well, and that goes to the next thing is, is this customer, is this vendor giving you flexibility? You know, can you take that application if the cloud is a big transition? Can you run in the cloud? Can you move it to any one of the cloud vendors you want to go to? So cloud neutrality, can I bring it back on premise? So we offer our technology, you can run it on premise, you can run it virtually, you can run it physically. And a lot of our customers, by the way, have made moves to the cloud because they don't run good data centers. And they found that that's a way to get better operational excellence. Great leverage in the cloud. Okay, IOT, final point for this segment. IOT is in the hype cycle, no doubt. It's rampant right now. But it's very relevant. I mean, IOT is seeing autonomous vehicles. You're seeing your wearables, consumer devices. So you can see the, you can connect the dots and obviously the industrial side of it to the analog coming together. No one really knows how big the T is in IOT. What's your thought as someone who supplies a database and next generation solutions? Why should they deal with this tsunami of IOT? Well, I think the big challenge for IOT companies today and companies that are focused on it is do you know all the things in the future you're going to want to do with that data? And I would argue that most companies have an idea of what they want to do but we're in the early innings of the game. And so they're not really gonna know what they want to do with all that data. So an advantage of putting it in a product like MarkLogic is we're a very agile environment. And so if I put it all in there, I don't have to know all my requirements today of what I'm going to do with the data five years from now. You do the same thing in a relational database or the same thing in a lot of the open source databases. You put it in there. The only thing you're able to do with it is meet your requirements today. So we essentially are trying to say, think about future-proofing your strategy because you won't know what you want to do with it until you're ready to do it. All right, Gary Bloom here inside the studio. Thanks for joining me today. Gary Bloom here inside the studio in Palo Alto. I'm John Furrier. You're watching theCUBE. Thanks for watching.