 From Boston, Massachusetts, it's theCUBE. Covering Actifio 2019, Data Driven. Brought to you by Actifio. We're back with theCUBE at Actifio, Data Driven. Day one, Dave Vellante with Stu Miniman. You're watching theCUBE. Steve DiPlessis here, he's the, let's see. I'm going to say benevolent dictator of enterprise strategy group, chief analyst, founder. Welcome, welcome back to theCUBE. Thanks, nice to be here. How are you fellas? We've been doing great, congratulations. Newly, newly married. Betrothed. That's awesome. I was, yeah, thank you very much. It's great, looking good. You're here for your honeymoon. This is it, this is it. After a few marriages, this is the honeymoon. Well, it's good to know that the honeymoon's not over. So, let's talk data. Data? What's happening? That is a terrible question, Dave. So, yeah, data. Okay, so everybody talks data. You hear the bromide, data is the new oil, data is the new competitive advantage. I do like that one. You do like, what, data is the new oil? So, it's funny because we're, I think I'm way older than you, you look better. God, no, not even close. But if you go back in time, as long as we've all been doing this, it's been kind of hilarious, really, in retrospect when you watch me, we watch these massive industries get created like the EMC has just created because all they were about was building bigger buckets to put data, zeros and ones, but no context, completely useless, just big buckets. So, we valued, wow, you built a big, fast bucket and then IBM or Hurtachi, whoever was gonna leapfrog you next built a faster, bigger bucket and that was what the world considered valuable and it's now fast forward to the modern day and oh, maybe the thing that's really valuable is those zeros and ones in context. Maybe it's not really the bucket that's so valuable anymore. So, do you think the bucket builders, still bucket builders, are they actually becoming data insight creators or is it just still build a better bucket that's cheaper, faster? So, that's a great question. I think that we're, first of all, you still have to have the buckets, right? It's a relative, who's gonna make a smarter bucket builder? I don't know. You need some place to put it though, right? You're gonna have to put it someplace and you're gonna have to deliver it and the good news, storage and or infrastructure I would say is the most brilliant business ever from a capacity demand perspective. No one ever needs less, right? You always need more. It's just a matter of what you're gonna do with it and how you're gonna address that. So, we've propagated for 50 years in infrastructure business that build a bigger, faster bucket, build a bigger, faster processor, build a bigger, faster, and every time you solve one of those particular problems, as long as data growth doesn't abate and it never does, as long as there's more versus less, it's just, every time we fix one problem, we stick your finger in the dike and another hole springs out. So right now, we've got more processing capabilities than we could ever possibly use. Not true, right? We'll figure out a way to use it more. So the, probably the last five years of, and for the next five years, we didn't talk about analytics. We didn't talk about IoT. We didn't talk about any of those things that are all just precursors to, oh, crap, we can make a whole bunch more data and do stuff with it all. So compute is kind of a similar dynamic. It's sort of insatiable, but compute is a relatively crappy business compared to storage, right? Storage is 60% plus gross margin business servers. I don't know, you're lucky if you're getting in a low 20s. Why is that? Well, number one, it's essentially a monopoly and so 20% is wonderful if you're Intel and you get it all, right? Well, Intel's got great gross margins, right? Everybody else does it, there you go. They don't, down the supply chain, it's where you're gonna add value and so it's difficult for any of those guys to add value. Hard to get gross margins out of like, spending cheaper. Yeah, a box. So Steve, ESG is now 20 years old. I know, it's not crazy. When I think back 20 years ago, sure, you know, disk capacity, price per dollar, price per gigabyte, all that stuff has changed a lot. The other thing, I think back 20 years, talk about automation and intelligent infrastructure. We were using those terms back then. One of the things that I mean, right, well, that's what I wanted to ask you about, is like, right, back then, when you talked about, well, how intelligent was it and what could it do and automation was there, it was a lot of times, you know, I'm just building a little script or I'm doing something like that. At least, you know, from what we see, it feels like today's automation and intelligence is light times away from what we were talking about 20 years ago. Oh, for sure. And it's true. What have you seen in that space? Well, so remember where we came from. When we were talking originally about automation and orchestration, we were talking about how to manage a box, how to expand a box, how to manage infrastructure. Now, it's data operations, right? Now, that's the whole point of Actifio. To begin with is, all right, if you are good enough and smart enough to have the data, sort of everything's kind of matters there. You've got to have the data. Then what can you automate and orchestrate from a data out perspective, not from a box, not from, oh, let's scale out or scale up or something like that. But again, that's just a bigger bucket. It's a better bucket. But to be able to actually take data and say, you know what, I don't even know necessarily what I'm going to want to use this for, but I know that I've got to have, I have to be able to go click, click, click and get it. If and when I figure out, hmm, I want to find out how lowering the price of Charmin in Seattle at a Walmart is going to affect my revenue or my supply chain or whatever it is. So one of the things I've talked with you in the past about is the pace of change in the industry. And I've said it, we know things are changing rather fast, but the average company, how much are they actually, are they good at adopting change? And you've called me on stoop. Enterprise is slow. Are they getting any faster? Are they open to change more? What do you see in 2019? Is it any different than it was in 2009? That's a great question. So the answer is yes, they're getting better. We are finally getting better. The problem though is as an industry insider or a watcher or a voyeur or whatever it is, you are, is you see it and know what should happen. 10 years. It takes 10 years in general for the world to actually catch up to the stuff that we're talking about. So it's not really that helpful to the poor schlebb that's running an operation that builds sneakers in Kansas. That's not really that helpful that we're talking about, oh, this is what you could be doing and should be doing. The pace of change is much faster now because, and I give VMware most of the credit because once that went into place all of a sudden, and that, you gotta remember there, everyone thinks VMware was an instant home run. It was 10 years of the same code sitting in a corner in a QA environment before finally we ran out of room in the data center and that's the only reason they were able to come out. But once it was there and it enabled you to stop associating the physical to the logical, once we could just disaggregate that stuff, that I think opened up a tidal wave of kind of what else can we do? And people have adopted, now it's pervasive, so VMware is everywhere. Now we're moving to the next level of kind of, well, why can't I just build a containerized app that I can execute anywhere I want? Matter of fact, I don't even want it in my data center and no one has to know that necessarily. So as modernization exercises have started to take off, they actually pick up steam. So what we know empirically is those that are halfway down, call it the transformation or the modernization curve are going three times faster than those just starting and those guys are going three times faster than the ones that are sitting there in idle doing stuff the same. Sitting in with the inertia going on. What do you make of this bubble-licious backup market? Let's talk about that a little bit. You got these big install bases of Veritas, Commvault, LEMC, IBM, little Tivoli install base. Everybody wants a piece of that action. Although I guess Cohesity and Rubrik also want a piece of each other. Sure. Which is kind of, you know, they get that urinary Olympics going on, I like to say. And then you got these guys, which is kind of, you know, playing, I said to Ashley, kind of East Coast, West Coast. He goes, no, no, it's not East Coast, West Coast. But there's definitely more conservatism on this side of the flyover states. What's your take on what's going on in the landscape right now? So backup is awesome. From the perspective, again, still probably the single most consistently line item budgeted thing for five decades now, right? It's a guaranteed money in and out. And by and large, it still sucks, right? General rule, it's still, it's crazy that we haven't been able to solve that particular problem, but regardless. The reason that it's so important is besides the obvious, yeah, you need to protect stuff in case something goes away and something bad happens. But really it's, that's the ingest point for everything you do. You create data today, I'm backing it up an hour later. So backup becomes the ingest engine and it also is the kicking off point. So at Kiffy Oak where it started as wow, this is a better backup most trap for lack of a better term. But really what it was, it didn't matter what if it was backup or something else, it's I need to have the data in order to do other stuff with it. And backup is just the natural easiest way to be able to do that. So I think what's finally happening is we're moving from, Kristoff would say, it's really about intelligent, intelligence more so than just capturing those bits and being able to assemble them and put it back together. It's understanding the context of those bits so that I can say, ah, Stu in test dev has a different use case than Dave in whatever, analytics, et cetera, et cetera. But they both need to copy the exact same data at the exact same state at the exact same point in time, et cetera. So if long as backup's gonna be kind of that tip of the spear in terms of going from what I will say, production or live data to the first copy is almost always backup, it's gonna matter. Yeah, Kristoff Bertrand, one of your analysts. And so we saw it, Vyma and Danny Allen put up a slide, showed a $15 billion TAM. And backup being the big chunk of that, probably half of it. I don't know, does that jive with your gut feel in terms of the opportunity beyond backup to have ops? I don't know, ransomware, insights. So you think that's low, high, and makes sense? I think I could justify the number and what history has taught me is that it's probably low because we're only talking about a handful of use cases that we've all glommed on to, but there will be. Remember, like 11 years ago, there was no iPhone. You know, and how bad did that change everything that we do over there? And when did, you know, at some point during that particular journey, the phone became, who gives a shit about the phone? Excuse me, but it's a text machine and it's an Instagram thing and it's a video production facility and all these other things and the phone's almost, I only use it when my mom calls me kind of thing. So you don't really, it's difficult to imagine. I certainly don't have the mental capabilities to imagine what the next 10 things after dev ops and this, that and the other, but it's still all predicated on the same. You got somebody's got to have a copy of that data and you got to be able to access it and you got to be able to put it where you need it for whatever the reason. Again, a disaster's an important thing to recover from, but so is being able to farm that data for nuggets of gold. Well, I guess I asked the question because the logical question is, is the market big enough to support all these companies that are in that Gartner thing that they do? And I hope so, because we love competition. I mean, I think I can answer it this way. Everything, even the oldest guard, Veritas for God's sakes, 1,000 years old, TSM, 1,000 years old, Comvault, Codebase, 1,000 years old, these are all big companies, right? And they're not perishing anytime soon. And don't get me wrong, love the startup, love the actifios or the cohesities coming in, but what they're really trying to do is not, they might have started as in a common ground, back up as a common war zone, because there's money there, right? There's consistent money there to go get, but they soon turn in to other value propositions. And that's not as true with the incumbent backup guys because of their own legacy, right? It's hard to turn a million year, million lines of code into something that wasn't designed to do. Yeah, and it's not trivial to disrupt that base, but I guess if you get, you know, raising, I don't know how much the industry has raised, but it's well over a billion dollars. Now, I mean, actifios raised 200 million and that's like chump change compared to some of the other raises that you've seen. Cohesity was 260 and the last rubric was even crazy. It's crazy. Even count the private money that Veeam got is, you know, that was half a billion, right? Yeah, well, that's an off-camera discussion. All right, we got to go. So Steve, thanks so much for coming to theCUBE. It's great to have you. All right, keep it right there. Everybody will be back with our next guest. You're watching theCUBE from Actifio Data Driven from Boston, right in the harbor, right back.