 Live from New York, it's theCUBE, covering Inforum 2016, brought to you by Inforum. Now, here are your hosts, Dave Vellante and George Gilbert. Welcome back to New York City, everybody. We're here live at Inforum, Inforum 2016. This is theCUBE, SiliconANGLE's flagship product. We go out to the events, we extract the signal from the noise. Jonathan Lair is here, he's the managing director at Workbench, the New York City-based VC. Jonathan, welcome to theCUBE. Thanks for having me. So, first of all, tell us about your firm, Workbench, but especially your background. Love that story. Thanks so much. I'm a co-founder and managing director of Workbench. We're an enterprise-focused venture fund based here in New York. And really, the most differentiated value we bring is our deep corporate network, where if you think about early-stage enterprise startups, the most impactful thing you can do is connect them early and often with potential buyers. Everything from getting feedback out of the relationships to, hopefully, POCs. And beforehand, I was in the office of the CI at Morgan Stanley, where we would meet hundreds of startups here on behalf of the firm to see which solve pain points internally. And then for those that did, we would help them navigate the procurement process and get onboarded. And you were saying that you observed the shift in your work, in your stack. Your stack was transforming. How? And in what ways? Sure, so I was very fortunate to have that role at Morgan Stanley because banks annually spend about 62 billion dollars on IT and they tend to be the earliest adopters of new tech due to competitive pressures and whatnot. And in my role at Morgan, I saw firsthand really the way that startups were able to find use cases that legacy vendors weren't able to solve. Take any buzzword out there, whether it's big data, cloud mobility, security, et cetera. The paradigm had shifted while I was there. And if you needed to process more data, let's say, a lot of the legacy vendors just choked up and they were too expensive. So it created an opportunity for new vendors to come in targeting really specific use cases where they could showcase how they could do things better, faster, cheaper, and then the bank would end up adopting that tech and working with them. So you mentioned something in there that sort of caught my interest. Big data. From what we understand, a lot of the big banks put down, say, 10 or 12 node pilots of Hadoop. And it took a lot of skills to get going. What were some of the key use cases that put them into production? And now, how are they evaluating what to do on premise and what to do in the cloud? Sure, so there's a few questions. They're number one, I would say, when we were first looking at Hadoop and now as the banks continue to look at things like Spark, like Goldman is pretty active in, and I think even speaks at Spark Summit, for instance. It's really about starting with the use case, which is the very New York-centric point of view. Hadoop and all these other technologies are very interesting and have a lot of potential, but realize from a bank's perspective, they spend a lot on existing infrastructure. They're locked into certain contracts. They have employees with certain expertise, so the way we had went through it at Morgan, and I'm sure most of the banks do, is what are the use cases where we're struggling, or this can shine and really let us do things that we couldn't do historically? I can't comment on what use cases in particular got things to production, but it was really understanding where do your legacy, really, data processing methods and data storage ways not necessarily scale to meet your needs, or not even let you do some sort of analysis that you wanted to do. Now, in terms of things like working on-prem versus the cloud, a lot of it has to do with data, in terms of is it PII, is it public data, is it customer data, whatnot? And from there, these days, the banks are getting a lot flexible, and I think the rest of the 421,000 is following suit, where it's kind of understood as this is where the world is going. We have to make it work, and for folks even without regulatory compliance needs, they're getting a lot of extra power out of it, being able to work in the cloud. So we obviously have a presence, SiliconANGLE in Palo Alto, John Furrier's out there, spends a lot of time at the Rosewood Thursday nights. That's where all the VCs hang out, but New York, notably, has really come of age in the VC world over the last decade, far surpassed Boston, which used to be pretty competitive. What kind of startups are coming out of New York, and how has New York been able to compete so effectively in tech? Sure, so since we're out in forum, I'll focus really on the enterprise ecosystem here, which if you think back really to 2012, as MongoDB was really growing and getting a lot of emphasis on the ecosystem, as you had Buddy Media get acquired by Salesforce, those were some of the early data points that showed that we have some potential here. And now fast forward to 2016, we have over $2 billion in aggregate in VC funding for just our enterprise startups in New York, which is a great number. And that includes areas across infrastructure, data analytics, things within AI, security starting to creep up here, and it's really an amazing ecosystem. And what I think makes us most unique is that you compare both top-notch technical talent, but also with domain expertise. So whether it's someone like X.AI or Kazisto, which are playing really in the AI trend going on, with X.AI focusing on really enabling automated meeting scheduling, Kazisto offering a digital assistant for your banking app, both of them were able to leverage really Columbia, NYU and other talent here in data science, but pair that with domain expertise. Another big trend that we have going on here is actually infrastructure. So we've had a lot of web-scale companies here, whether it's everyone from AppNexus, the big ad tech company here, Tumblr, Etsy Square, Google and Twitter opened engineering outposts here, and we're starting to see those folks kind of leave those past lives and see that with this web-scale experience, they can actually solve enterprise use cases. So it's been amazing if you look at a company like Cockroach Labs to see a 25-person company just in New York City, fully based here, solving an amazingly difficult challenge for databases to basically bring a Google Spanner to the masses. And interesting, Google Spanner is a whole another conversation. But so you mentioned two companies off camera, V-Armor and Tamer, those two companies that you help fund, right? Is that correct? Yes, so at Workbench we invest across the country and we also have a physical workspace to grow the community in New York, which we can touch on in a second. But if we think about companies like V-Armor and Tamer, they're solving massive pain points for the enterprise. If you look at V-Armor right now, if we could say the last couple of years were the year of CASB, this year really is focused on cloud infrastructure security and V-Armor is the leader in the pack led by the CEO Tim Eads. And what they're able to do for highly virtualized environments in terms of really the visibility and then the protection through micro-segmentation, it enables unparalleled ways to protect your enterprise and specifically the data they're in. And if we then look at Tamer, they're taking a problem that you couldn't even throw enough humans at, which is really around data aggregation, data cleanup, data cataloging, and they're enabling big companies to save millions of dollars by aggregating business cross data silos and then having that unified view can now run analytics on it. So one of their great use cases has been around procurement to enable a unified view of all your suppliers and then figure out where do you have redundancies where you can cut costs. So it's been an amazing time in the enterprise right now. So what's the funding climate like? I know, again, the West Coast, B rounds are getting tougher, money's getting a little tight, VCs are a little nervous, maybe not publicly, but privately. What's the climate like, the sentiment like in New York City? Sure, so maybe it's heresy to say but we're actually excited by that because the tightening of the belts on the VC side means that there's going to be really a flight to quality. But if you look from the enterprise side, as I just mentioned from my background at Morgan Stanley, there is about, if you look at Forrester, $700 billion a year in software spend, right? Gartner pumps that number up even higher. There's unprecedented disruption across these stacks where these large corporates need these new technology solutions to keep their businesses running, right? Fortune 1000 isn't going to disappear tomorrow. So there's this huge opportunity where for the best companies, they're going to break through the noise. And actually, in my opinion, having less me too means that the leaders can be able to hire easier without having to compete for talent as much. So from our perspective, it actually is healthy for the ecosystem. So, Jonathan, let's put this in the context of Infor for a minute. Yep. One of their big initiatives is predictive analytics. Another is, you know, Internet of Things are really more the industrial Internet of Things. What do you see growing up in the ecosystem and how do you see that being applied to enterprise application vendors if they are the primary channel for these new technologies to get into established enterprises? Sure, so if we start with predictive analytics, I think that there's a huge need to really empower people beyond IT, right? And predictive analytic built applications that come in with really a pre-built focus, have had their algorithms tuned to unique use cases, enable business people to really get to work and be more productive leveraging that. So whether it's a startup or Infor doing it for an industrial client, I think that's actually a huge opportunity right now. If we look at industrial Internet of Things, it's still in its nancy, which is healthy, of course, for an ecosystem, but things like even what standards will be, how we're going to view use cases internally and how infrastructure investments will be made, right? Everyone talks about sensors being everywhere, but in order to actually, if you're a legacy company, make that investment, you have to understand what the ROI will be. So I think there's an opportunity here for both startups to do some cutting edge work around streaming data and security for IoT, but there's also place for a lot of big tech companies here to step up and really develop stacks that will enable things to be built off them. Yeah, the disruption is amazing. I think you also invested in CoreOS, if I'm correct, right? So you're obviously seeing a lot of innovation in that space. VMware certainly changed server virtualization, hasn't been able to apply that to application containers and so forth, which have been around forever, but now you're starting to see this whole DevOps culture emerge in a new way. Maybe talk about that a little bit. Yeah, so if we back up at a higher level to quote Alex Polvi to CEO of CoreOS, there's really a trend called GIFI, which is Google infrastructure for everyone else. They face the biggest data challenges. The hardest core processing needs, right? The most distributed applications and that expertise now folks have since left Google and people are trying to mimic that for the masses. So CoreOS is a wonderful example where they're working closely and commercializing Kubernetes, which is Google's open source technology for really running and orchestrating containers. And we think that Alex and the team are really poised to do this well because unlike some of their competitors, they started with security focus from day one. So when they talk about their tectonic stack, which is really an end-to-end solution for a corporation to leverage everything from microservices to containers and really enable a more agile developer base, CoreOS is really leading the pack and doing a wonderful job. You think Docker would be more challenged to sort of bolt on security? So I think that everyone's realizing that security is going to be key for enterprise adoption. Docker is of course a wonderful company. They've been really more focused on the developers to date and a few weeks ago they released a swarm kid, which really is kind of their play against Kubernetes and messos. So look, it's a huge market. We're in a once in a decade ship to be the next VMware. So I think there's a lot of room out there but we obviously put our chips behind CoreOS and what they're doing for Kubernetes adoption. Yeah, we've had those guys on and Alex has actually been on the queue before and doing some cool stuff. And like you said, the market is just so enormous. The ecosystems are just exploding now. You're seeing a huge focus on developers. Talk about developer leverage and the importance of developers from a startup's perspective. Sure, so I think that whether you're a startup or a corporate, developers kind of rule the world now. I have a friend, Lenny Pruss at Redpoint that actively blogs about this and really what's going on is developers kind of used to be the second class citizen, right? And you would talk about bottoms up adoption and really kind of maybe not think it could happen but look at Twilio's recent IPO, right? A purely developer driven company. It showed how big businesses can be built in this space. And for our perspective, when we were talking I actually spoke at CoreOS's summit here back in December up on stage talking about adoption of containers. And when I had Goldman and B of A on stage what really blew my mind versus my Morgan Stanley days is in the past it was let's talk about TCO, let's talk about ROI and what money are you tangibly saving? The name of the game now is really about agility. It's around collaboration between developers. It's really about being able to get things done quicker and smoother and really look at the end of the day all these banks like to call themselves software companies. The broader Fortune 1000 likes to say we're big startups trying to move quickly. If they're going to do so they need to enable their developers to lead the charge. We make a Facebook and what's going on inside of Facebook both with applications, media. You know a lot of talk about Facebook basically taking over the media world. How does a firm like yours look at Facebook? Sure, so candidly I think we're a little bit shielded and it's a little bit outside our purview. What we look at from Facebook is things like the open compute project and all of their amazing open source contributions to the broader ecosystem. When you have a focus on things like media and bias I mean you catch me for a beer and that's a very interesting conversation to have around are we going to be subliminally messaged to think one way versus the other and what happens with media. But really from our perspective it's about their world-class engineers and looking at some of the challenges that they face. What are they solving and what's the applicability of some of those challenges to the broader 420,000 community. As opposed to Facebook as a competitor to the software startups. That's not our future. I wouldn't treat it as such. I think that Facebook really and Google and Amazon are all kind of competing in different ways across everything from advertising to if you look at Google versus Amazon now in the hosting world and things like that. But none of our folks maybe you could say Slack is competing with Facebook's for work concept but I don't know anyone who's really been putting a big push behind the Facebook for work. So it's really interesting that you talk about sort of the Googles spinning out engineers who then build software for the enterprise. And we've talked about here and elsewhere developers sort of ruling the universe and every startup says their strategy is land and expand. So they don't have the capital intensity of building up a data center and they say we're going to go essentially viral so we don't need a big expensive sales force. But has any startup actually really hit scale without having a sales force to take developer adoption and take it across the enterprise? So I think that a lot of people who would naively say land and expand you can build huge companies off that unless you're in Atlassian which kind of successfully did that. And the reason they get so much attention is because I think they're the only ones that have successfully pulled that off. Really it's a function of for the early days in your company life cycle when you're targeting maybe individual teams you could have a small sales team or you could go bottoms up if you're selling a developer tool but it's really focused on what's the right go to market approach for your company. So a database company is going to want to go bottoms up through developers if you're selling a BI tool maybe it'll go top down if it's going to be used organization wide or at least go to the team heads. And what I think has happened in IT is we've really had a big shift where over the last five years we've moved from CIOs making purchase decisions to really now it being line of business heads. So we've seen a lot of companies successfully attack those people who actually control large budget dollars. But with our New York centric point of view and really understanding how the enterprise works I think it's naive to say only relying on land and expand for the most part. That's interesting you say Atlassian is really the only example I mean do you not consider that too big like a Splunk or a Tableau certainly service now has succeeded with that. So maybe early days they did that but look I knew all those sales guys when I was at Morgan Stanley right to land the banks you needed. I'm talking really all the banks were using Atlassian and didn't really have dedicated sales people. Of course as you get bigger you need the support capability but I would say yes Splunk is a good example in the early days that did a lot more of that but it can't be your only strategy you will need enterprise sales teams to help navigate those organizations Excellent, Johnathan we're out of time but that's really great story. I'll give you the last word Inforum your relationship with Infor happening in New York City close it. Yeah so we're talking here about New York and great going on. It's amazing that such a multi-billion dollar tech company fully behind if you look over there the cameras can't catch it but we've partnered with them on a startup alley to showcase some of New York's best startups both work bench companies as well as the broader ecosystem and it's amazing that they've been so forward thinking to connect them with their 8,000 customers that are in attendance and really led by Charles to make this a place where we can have amazing technical talent in New York and great things happening. So it's great to have them here. Johnathan thanks very much for coming on theCUBE and sharing workbench's story. Thanks. All right keep it right there everybody we'll be back with our next guest is theCUBE we're live from New York City we'll be right back. Thanks. Sometimes losing a value to