 Hey, welcome back everybody. Jeff Frick here with theCUBE. We are having a CUBE conversation in the Palo Alto studios with a many time CUBE guests. And actually, it's kind of funny. If you look back through the history of our conversations, they've slowly migrated from our studio two versions ago to one version ago. I'm really excited to welcome to them to send our new title, GM of cloud. It's a star storage. No, I'm great to see you. You too, Jeff. Thank you. Yeah, absolutely. It's funny because then we were at the little studio across the street in our, so I didn't like our new digs. I think that was the first one at the interim studio. Right. Right. Everything was still kind of in a jumble, but up and running. Yes, well, we never really passed the jumble stage. Thankfully, this place came open and moved across the street. So first off, great to see you as always. Get an update. We were just at the Western Digital event last week talking about mammor and hammer and really a lot of excitement about a new S-curve in hard drive media. Love to get your take on it. You've obviously been in the business for a long time. They were really psyched. I know there's some detractors that are, you know, still spinning rust, but it didn't seem to be the case when we were down there last week. Yeah, we're super excited. It's high capacity magnetic drives. Our customers are crazy about it. I think it's obvious that by capacity, that's a majority of our business. And the reason is that customers need affordable storage and we can provide the high capabilities, the full featured in even performance and caching and so forth around magnetic storage. We're agnostic in the sense that customers can choose SSDs and or magnetic drives, but the bigger the drives, the lower the cost per gigabyte. And our customers love that. We see extremely elasticity with regard to price. Yeah, that's interesting. One of their big themes was kind of fast data versus, they call it the big data, but really more kind of archival data or data in rest versus data in motion. And the two of them together, leveraging both the technology seems to be the right way to go. Absolutely. And customers understand that data is mixed. There are some data sets that are purely low performance. Let's call it archival or cold. Some data is really hot all the time, but most of the data is in between. It is large, it's big data, but it has parts that are hot and parts that are cold. And there's no better solution for that from performance and price perspective than a magnetic, let's call it magnetic background storage with a cash, an SSD based cash in the foreground. In the front. So let's give an update on what's coming up with Czar. Just a quick glance of the news before he came in. I see you guys are getting all kinds of award or red herring, top 100 award. Looks like Exana got to CRN Women in Channel award. So a lot of great awards and good things going on. But unfortunately, we were talking about off camera. There's a bunch of bad stuff happening. We just this never ending crash of waves of Houston then Florida, then Puerto Rico. And then unfortunately here, Northern California, I guess there's new ones. He said coming in and Santa Cruz, the fire. So it was great to see that you guys are trying to figure out what can we do to help. Yeah. Yeah, and it's, we're not insulated from the rest of the world. And so we work and we watch the news and we talk among ourselves. And we, at first we thought that we were helpless, that there's nothing we could do to help. And then the idea came, well wait a second. We provide storage services that are very easy and quick to bring up. And somebody, company that lost its storage probably needs to bring storage up quickly. And one of the challenges of course is they're probably hurting financially because the business is not running, especially if the data is gone. And also even if they're insured, there's a whole process around that. Plus everything else, fix the offices and restore electricity and so on and so forth. And we said, wait a second. Let's just do this for them now. We can help now. And then a few months later, then they can decide what their permanent solution is. So we said, hey, it's in our power to help. Let's do it. So we're offering to any business that has been affected by any of these hurricanes, storage to replace whatever they had before up to a petabyte at no cost, no commitment, nothing. Well, show us what you had before. Tell us where you need it. We'll send you the new storage at our expense. Six months later, we'll call you and say, may we have it back? And no questions asked, we'll take it back. So when did you announce this and are people starting to take advantage of it? So we've actually just announced this and we're trying to get the word out. One of our challenges is that these businesses are very, very busy with all things having to do with recovery. So they may not be able to hear what we're saying. So we're trying different ways to get the word out. So it's just trickling in now. And to be honest, we haven't cracked the formula yet on how to do this and maybe we need to talk to FEMA. I don't know. But right now we've used the commercial channels to get the word out. Well, it's very generous and super to be able to help somehow. And like you said, unfortunately, storage is probably not at the top of everybody's list when your house is burned down and your business is burned down, et cetera. But good for you guys for taking a proactive step. So let's talk about how the business is evolving. You know, we've got this big show coming up right after Thanksgiving called AWS Cloud or AWS re-event. AWS just continues to march forward at a really fast pace with Google, Cloud, and Azure not far behind. So public cloud is still booming. How are you kind of seeing market evolution? Market, is there just kind of more of the same at an increasing rate on the public cloud side? It's still where innovation happens. And there's a reason why AWS re-event gets bigger and bigger and bigger every year. It's, I'll tell you an anecdote. When we formed Zadara in 2011, we were going to put the word cloud in the name of the company. It's at, you know, and I don't know. There's a lot of cloud something in that kind of era. Exactly, so it was, you know, cloud age was one of the suggestions because our predecessors come to go store age. But we decided not to use the word cloud at all. And the reason is that we realized that if you wait long enough, cloud just becomes how IT is done. So the word will become meaningless because IT will be cloud, cloud will be IT. So we decided let's not even use the word because the word will become obsolete soon enough. So we're seeing this happening. It's becoming a default way of doing business. Definitely the OPEX way of doing business, something we've talked about multiple times. For us, it's the majority of our business. We have, so we have two businesses, a public cloud business and a non-prem business. And the public cloud business is larger. It's maybe either 60, 40, or 55, 45, split. So both nice and big businesses. But we see things changing more quickly in the public cloud. Why? Because they can't change more quickly because everything is elastic and everything is flexible and companies can innovate faster and experiment more. And route find their optimal solution more effectively. Whereas where they own their own equipment, then they're hobbled by the blessing and the curse of ownership. Right. And the other thing you mentioned off air is that that's where the real rabbits are, the real high growth companies that you guys are seeing. Because their business is growing so fast in that infrastructure and you guys basically get a piggyback along for the ride. Yes, yeah, exactly. The fun statistics dimension are those companies that are multiple of them that are spending with us 50 times more now than they were when they started per month. That's amazing. And we're not doing 50 times the amount of work, right? So they're happier because whatever they were doing they wanted to do more of and they get to do it at the push of a button, we're happy because we're seeing more revenue. Also we're adding more value. And at the same time, it's neither one of us is resting in our laurels. We have to re-earn the business every day because any day that customer can say, I'm terminating, I found a better way to do it. So we have to make sure to keep them happy every day. And then they're happy because they have sort of insurance or future proofing. They're not stuck with us. Right, right. If they need to tack left, they can tack life. It's interesting. We did the Zora subscribe show and kind of the attitude that you have to take with a customer when they're paying you every month versus paying you once and then collecting a maintenance fee is you have this ongoing relationship and you have to continue to keep delivering value because they're getting that bill every single month. So you got to make sure they're not only happy with the service but you're over-delivering and innovating and continuing to provide more for that dollar. So it really creates a tighter relationship with your customer. You got it. And the really strategic customers understand that and they take advantage of it in a positive way and they put a premium on the agility. And an example is one of these 50X customers got quite big as you can guess and we decided, hey, we should probably get this customer in a longer-term contract because it would be kind of painful if they call us tomorrow morning and cancel. So we went to them and said thank you for your business as a reward for your business and to introduce some stability, we'd like to offer you a discount, a significant discount for a 12 month commitment. And they said no, we'd rather pay list and have the freedom to change. And we thought, that's amazing. This is a whole new world where what you pay for is flexibility. Right, right. And then on the private cloud side, what's interesting is we've got a concept here, with the true private cloud, is they want to have that same flexibility and that same agility but just not necessarily have the data at Amazon or at Microsoft or at Google but still have all those capabilities and flexibilities to execute in the cloud-based matters. And you said it's just the way business is done. It's not even really a place. Right, so we have a car manufacturer, top very small number car manufacturer and they are worried about industrial espionage. So their design data cannot be in anywhere that's network connected. So it can't live in the cloud by definition. So we provide them storage as a service on their premises in an air gap network, that has no connection to the internet whatsoever. And then we have a mechanism with them where we do billing offline. So they expose to us their usage in a way that we consider trusted and then we build them accordingly. But we cannot access the system remotely nor can anyone else. So that's one example. Another interesting thing is that because we offer our own hardware at Amazon and Google and in Microsoft Azure, we can actually provide the paradox of how do I use, how do I run an application at AWS let's say without exposing my data to AWS? Because imagine that you're a competitor of AWS. You want to use them because they have capabilities that they have. But per your corporate risk guidelines, AWS is a competitor, I mean Amazon, the parent company is a competitor. You can't actually do that. But we solve that problem because when you use us at AWS, you're not storing the data at AWS, you're storing on us. We're connected to AWS via private high-speed fiber with very, very low latency. So your experience is a local experience. We look like local storage, but from a data governance standpoint, it's not at AWS. And in fact, not only it's not at AWS, it's on your own dedicated drives, be they the big magnetic drives we talked about or SSDs. So if you need to have these drives for any reason, you can have them. We will sell you the physical drives that contain your data. You want to crush them with a steamroller? Go ahead. So is that like the direct connect concept? Or are you in the physical, are you at their physical building? I was used to laugh. What does direct need mean? How close is it across the street? It's really close. Across the building, across the IOA and the data center, across a plane of steel in a box, kind of closest close on the same board, but down a little ways. So they won't exactly tell you, because they're secretive about where their actual servers live, but we can test the latency and draw conclusions. It ranges from the next building over to the same building. You don't know. You're just told, terminate your fiber here and we will connect it the rest of the way. And you don't know where the rest of the way is. But yeah, another way of putting it is, it goes from one to two milliseconds and that's it. So that's basically inside the data center or the next building. Very, very close. So we'll keep picking on AWS because the show's coming out. Here's gonna be 45,000 plus people, it's bananas. One of the things when you watch Andy speak, Andy Jassy, it's just this continuous innovation. It's funny, I saw him speak in San Francisco earlier this year and S3 and EC2 was like the itty bitty little corner of this giant slide that had a ton of lives, this constant pace of innovation. As you look for it and it's a different kind of attack than looking for these big, giant gains. They just are constantly moving. What are some of the things you're looking for as we turn the calendar on ending 2017, looking forward to 2018 at Siddharah as it just continued to make incremental change. Is there any big things out there that you're looking at or big goals you're trying to achieve or just keep doing what you're doing and doing better? So the first big picture strategy is at AWS, we provide premium storage. If you think of AWS as engineering effort on storage or any of these many, many, many other services is they have an audience of one million customers plus to serve. They need to develop things to serve that audience. It's hard to justify the development for the elite sub-sub-subsection, but that's our target market. So if the pyramid, base of the pyramid is a million customers, we're focusing at the top 1,000 customers. And our business model is all around those 1,000 customers. So we can afford to invest in pleasing those customers at AWS while AWS invests in the million customers and at the end of the day everybody's happy because we complete the list of critical features for AWS, which means AWS can attract customers that they otherwise would not be able to attract or to be more precise, attract those applications from those elite customers that the customer didn't think they could move into AWS. Just like the story you just told in terms of the separation of the data. Precisely, that company is a Fortune 10 company. So they are very, very demanding and we have other stories like that. So from a strategy perspective is keep adding value to AWS customers above AWS' own very aggressive roadmap. They're developing, they're releasing new features and over time those features overlap with what we do, but that's okay. If that's a slope up, ours is a slope up too, that's higher than the AWS slope. So that's overall strategy. In furtherance of that, we do plan some, at least one big announcement for 2018. It'll be our third generation architecture. I won't spoil any of it, but it is designed from the ground up. It's quite exciting. It has some of the latest technologies that are flying around as buzzwords and I can tell you they're way more than buzzwords. They work, it's just really cool stuff. Our engineers are having a lot of fun with it and yeah, I'll leave it at that. Okay, well I can tell by your face that you're excited about it. They've probably been working really, really hard. All right, well, no, I'm always great too to catch up. Welcome to our new studio. And I guess we'll see you in Vegas if not before. I will be there, I can't wait. Absolutely, all right. He's Tom Shander, I'm Jeff Frick. You're watching theCUBE from our Palo Alto Studios. Thanks for watching.