 Everyone, this is our final wrap-up of the Amazon Web Services Reinvent Conference. This is SiliconANGLE and Wikibon's theCUBE. It's our flagship program. We go out to the events, extract the signal from the noise. I'm John Furrier, the founder of SiliconANGLE. And of course, I'm joined by my co-host, partner in crime, Dave Vellante, co-founder of Wikibon.org. Really exciting event, Dave. I got to say, this is our wrap-up. Let's put a bow on this show. Let's put the bumper sticker on the car, and let's see what's, let's just document what happened. Day one enterprise, day two infrastructure, day three ties it all together with Kinesis. Amazon is doing two things that's very, very rare in tech history, and that is they're disrupting and innovating at the same time, magic. It's the magic formula. And to me, that's really two tactical executions. One, moving the ball yard by yard, first and 10, do it again to use the football analogy, moving the chains, moving the ball down the field, kind of a running game, ground game, whatever you want to call it. And then the big yardage passing play with Kinesis, I think really brings their success of an integrated stack. And I believe they're going to be the iPhone-like model for the cloud. They're light years ahead of everybody else on public cloud. They're winning the developers. And again, we just heard from Dr. Matt Wood, kind of reiterating what we were saying in our previous segment about the diversity of the successes. This is not a one-trick pony. They got diversity from startups to large enterprises to NASA. So Dave, I mean, who is going to take on Amazon? Who is going to challenge Amazon? That's the question that we want to know. Right now, it's not looking good right now there. Got a commanding lead in the cloud space. And it'd be really interesting to watch how the Kinesis, the enterprise movement, with VDI announcement and workspaces and all the enhancements in the performance, is going to shift the sand in the industry. And you're already seeing Cisco down 12%. VMware stocks down. I mean, game changing. The sands are shifting. What's your take? Well, I think we're seeing history in the making here, John. I mean, I think last year at Reinvent, leading up to Reinvent, we realized that this event was going to be big. And not just the event. The event is a metaphor for the shift that's occurring in the industry. We're talking about a trillion-plus dollar marketplace that Amazon is disrupting. And believe it or not, they're tiny, even though they're three or four billion, they're tiny. It's a trillion-dollar TAM that is absolutely getting flipped on its head. And what do I mean by that? Every premise about the IT business is changing. We talk about it a lot. Amazon has turned the data center into an API. It's a very powerful concept. I think you're right on. It's the iPhone of the enterprise. Yes, they're not like hall monitors checking about every application in the app store. That's not the point. The point is it's a consistent environment that is controlled by Amazon, very tightly controlled. And it works. You know what you're getting. And it's innovating at a breakneck speed. It's the antithetical to everything we know about IT. So you've been asking people all week what the bumper sticker is on the show. I can't wait to go back and see some of those. But I mean, this is the trend. And the trend is your friend or it might be your enemy. So when you say, who's going to be able to compete with Amazon? I think Martin of Eucalyptus said it best. Historically, in economics, there's always people that will rent and there's always people that will buy. And the old guard as Amazon calls them is not going to take this lying down. But the old guard has to replicate Amazon's model. How does it do that? It's got to create an open entry into its system that's equivalent in terms of simplicity and power to the Amazon API. Number one, number two is it's got to be able to demonstrate to the developer community that you can interoperate across those platforms in a way that you can get critical mass the same way that you can with Amazon. And that's going to be the massive battle that's going to take place in the cloud wars. I mean, I think one of the things that's interesting is that the word lock-in was something that we were talking on day one, especially in the enterprise, it's a word that gets kicked around. And my feeling has always been lock-in is not necessarily a bad thing if you can have switching costs that aren't super high. Lock-in means switching costs are so high that you can't switch. I can switch from my iPhone to Android anytime I want. But the problem is that iPhone's a better product. It's integrated with the apps and I can buy all the same apps. So that's a very key thing. And I think the switching costs here are a lot higher. And I think there are, Amazon, let me go on the record, Amazon is the mother of all lock-ins. I mean, this is a beautiful business model. And here's what's so great about it is the customers, you heard them this week say, if you took AWS away from me, I would burst out into tears. So Amazon's, I think brilliant challenge here is to how do they keep innovating, they're doing that, but how do they keep lowering prices so people don't want to leave? So that's what I see as the disruptive piece of the model. Well, being in this business all these years we're a little bit older than some of the young guns were on the cube, to me lock-in is moving, right? You see in the old days, huge capital outlays for equipment, you had maintenance, all this stuff was lock-in. Now the lock-in is shifting to OpEx and agility. So what's happening is Amazon is basically commoditizing the old way of how people would spend and shifting the lock-in to the OpEx side of the equation, I call it the heroin addiction, where hey, it's so low cost and the agility is the lock-in. So the functionality of agility guarantees the lock-in. I think that's what Amazon's betting the ranch on, is that when I can go to time to market to value quicker, that is inherently a lock-in. That's a quote, user experience to use my iPhone example. If I'm gonna have a good experience making money as an enterprise, that's good lock-in, right? So it's all a relative term. I mean the lock-in has been around, I mean they call it differentiation, but at the end of the day, I think Amazon's got a good play there. But like I said, I don't think Amazon has cracked the IT nut yet. I think they're gonna have some IT penetration, and this is top of the first inning, as we were saying earlier. You mean the enterprise IT nut? Enterprise IT is not, the nut has not been cracked. What do you need to see to be convinced? Well I just think the stack is gonna be the same paradigm of having an integrated stack. I'm just gonna see different levels of services because the table stakes for the enterprise are different, there's certain compliance issues, and they're checking the boxes right now. This is the ground game I was referring to earlier. Amazon's gonna start checking the boxes. Oh VDI, we got some workspaces. I got this, I'm gonna check the boxes. Ultimately the list is just too long to win everyone, right? So I think it's gonna be an opportunity, I think OpenStack is a great hope. I think VMware and IBM and HP are big players, and I think OpenStack needs to step up its game and have a big player pop down a billion dollars with IBM, Divided Linux and saying, look at OpenStack, we're behind it, and rally the troops, that's the solid reason. So I wanna go back to the lock-in comments because this is critical. Because to me the definition of lock-in is it's less economically attractive to leave than it is to stay, and that's what Amazon's doing. They're making it more economically attractive to stay than they are to leave. Here's why that's so important. The more people that they pull, and this is why Carl Eisenbach said, we can't lose to the bookseller. He said that because they know, the old guard knows that if people go to Amazon, they're not gonna leave, because it's gonna be less attractive for them to leave than it is to stay. So there's a huge battle over that trillion dollar tamp. So the key is, John, that OpenStack and IBM and VMware and Oracle and all the others have to make it economically attractive to not go into Amazon, and that is the battle. One of the things that's very clear, Dave, that's coming out of the show for me, my bumper sticker is DevOps wins, and I think what that means by that is that, and we refer to the cloud being in the top of the first inning, meaning really everything else was spring training to use the baseball metaphor in the sense that this is all activation of a paradigm shift that is so game-changing. The DevOps concept of software developers writing code that trickles into a fully integrated stack is really amazing. This really replaces the pain of provisioning hardware, cost of IT, cost of the infrastructure, that stuff, that is the real value of the crowd. So if you take the DevOps concept, which to me is already a winner, and put that into the enterprise market, that's gonna be cloud-up. So to me, I think the opportunity right now for anyone who wants to compete with Amazon, in my opinion, is to go out there and say, look it, you got to win the software developers. Look at what MongoDB has done. We had Elliot, the co-founder on. They made it good goodness for the developer. Whoever can do that for the enterprise will win. And I don't think that there's a direct one-to-one mapping of what DevOps is in the Amazon world, and what DevOps is in the enterprise. I think that's more cloud ops, because the guys that are provisioning EMC drives, dealing with IBM and Red Hat, they're a little bit slower, I would say, in terms of deployment. They're used to the big slow cycles. DevOps guys are pushing code a little bit more, you know, nimble startup, clean sheet of paper, Uber, Airbnb, those younger generations. But this is a generational shift, and it's happening, and it's all on the software. So to me, I think DevOps speaks to it. So I want to keep this thread going. So what's the playbook for the old guard to compete? You're saying you got attract developers, but that's not enough. You need a cloud platform, right? So take, for example, VMware. VMware announces, you know, hybrid cloud. Infrastructure is a service. It's early days. They need a cloud platform. So what else do you need to compete? You need developers, you need a cloud. You got to have trust and security, right? So here's the thing, developers care about success of creativity for the solutions. And what Amazon's demonstrated is the time to value is the key thing. You're hearing people, whether they're startups or a big company, get to some value, double down on success, figure out how to be agile, succeed fast, move on. What the problem right now is that developers are like, deer in the headlights, they go where the action is, right, and it's always been that way. I think OpenStack, to me, is an opportunity, or whatever platform that is. Someone's got a big anchor tenant in that platform, needs to step up and be the galvanizing force and create some solidarity around that approach for IT. That is an opportunity for VMware. I think Pat Gelsinger is probably best positioned to do that. Pivotal, Maritz is a genius, but I think ultimately, they might be biting off more than they can chew. So I worry about, you know, their car not being fast enough right now in the game. So, you know, I worry about Pivotal there, but I think VMware probably is a better position there. So they need infrastructure, they need this middleware, which is database, queuing, notifications, a lot of the stuff you see Amazon do at the top of the stack manage services. So streaming data and all the goodness on the API side. So we got developers, you got to have a cloud platform at scale, you got to have trust and security. I would add to that, you got to do things that Amazon's not going to do. So for instance, we heard all week, Amazon doesn't want to do one offs. They don't like to do customization. Whatever they do, they want everybody to benefit from that. Enterprises want customization. We've talked about this, John. That's why, for instance, you find that some of the customers won't go into Amazon. Not because the security's bad, it's just different. And Amazon's not going to change the security profile. They're not going to change the policy. So enterprise players, the old guard so to speak, must continue to do custom stuff. One offs that Amazon won't do. But here's the bet that Amazon's making. Amazon's betting that its ecosystem will over time be able to do those one offs for the customer and put a buffer in between the Amazon platform and the customer. And that's really interesting. Yeah, and I would also add to that, that the main differentiation with Amazon and other potential people to compete with Amazon is scale. Scale matters, scale gives leverage. Amazon is proving that. And they're trying to use that leverage now to catapult into other markets for market expansion. So that's one thing. So for the enterprise in particular, one area we watch heavily, I see two major trends. I see a cloud service that's similar to Amazon. It smells like an integrated stack, but it just has different feature sets tailored for the enterprise. That's more of, that's the hybrid cloud. Clearly, hybrid cloud is a winner. Amazon is not using that term hybrid cloud. They use a hybrid ID, which is basically a head fake. It really means hybrid cloud. So that's hybrid cloud. The second thing is, I think you're going to see data centers be Amazon in a box. So that's why I like IO.com. Because IO.com has essentially built pods and containers and essentially is cloud in a box. And I think shipping data centers is the future. And I think what I like about IO and why I'm interested in double clicking on that company is that they're basically shipping data centers. You've got Goldman Sachs, big companies. So IO's got that going on. And then you've got hybrid cloud. And then the third thing that's really relevant is that you're starting to see the vertical integration, Dave, of services. Look at CSC, CSC bought service mesh. We had this guy, Jeff, on earlier with that company that's doing all the user experience. They're offering full end-to-end, full stack developers for essentially web apps. That is a shift to what I call the DevOps world. Those two things, you're going to see these industries where it's ISVs and integrators are going to vertically integrate. They're going to actually build their own stuff. And that's going to be the innovation on the channel side. So the channel is up for grabs. Everything's being disrupted. So the battlefield, we've got developers. We've got cloud scale. We've got trust and security. We've got customization and I'm going to add another one, which is the ecosystem, which is essentially your, in part, your channel, but got to have a strong ecosystem. I want to pick up this discussion with you. We're getting the hook. So Dave, what's the bumper sticker for the show? Give me the Dave Vellante bumper sticker. We heard everyone's story here. AWS, the trend is your friend. My bumper sticker, I'm going to throw a hashtag in there. The hashtag next generation computer revolution. To me, this is the next generation computer revolution, total transformative, hashtag next generation computer revolution. I think Amazon's leading the charge and I think they're going to shift the sands and everyone else is going to have to adjust. And that's good for everyone, Dave. And the market wins. Arun Murthy on Hortonworks tweeted, hey, we love it. Market expansion, rising tide floats all boats. And I think that's ultimately the ultimate piece. Brilliant dollar, Tam, John. I'm thrilled to be part of covering that with theCUBE. Awesome. I want to thank everyone watching. Thanks. This is a day three wrap up. This is the CUBE exclusive coverage from Amazon Web Service. I want to thank the crew here, all the guys back at the ranch, Kristen Nicole, Art Lindsey, Mark Hopkins, Andrew. We got Mick, we got Alex. Good job, Jeff Frick, Stu. Everyone, Jeff Kelly, we have the analysts come on. We've got this show covered. Dave, I think we fished this pond out this week. So look for us next at HP Discover. We'll be there in December, the week of the 10th or 11th from 12th. We'll be doing the OpenStack Summit as well. Look for that when that gets announced. Maybe doing the Node Summit in December. We got also the Spark Summit at Berkeley. The MIT event in January, the security event. We'll be at Berkeley. We're going to all these great events. CUBE's out of control. We got storage, big data, now cloud. Look for a lot of research. You're going to see a lot of cloud coverage coming out on the research side. Look for that over the next few months at Wikibon.org. Thank you for watching everyone. That's a wrap. Day three exclusive coverage. This is theCUBE. I'm here with Dave Vellante here in Las Vegas. Until next time, take care.