 Live from Washington D.C., it's theCUBE, covering AWS Public Sector Summit 2018, brought to you by Amazon Web Services and its ecosystem partners. Been a busy day today. Welcome back to Washington D.C., everybody. You're watching theCUBE, the leader in live tech coverage. I'm Dave Vellante with John Furrier. We're covering the AWS Public Sector Summit. Barry Russell is here as the general manager of Worldwide Business Development and Operations for the AWS Marketplace and Service Catalog, and he's joined by Dmitri Al Parovic, who's the co-founder and CTO of CrowdStrike, hot new company. Just raised the boatload of dough. We're going to talk about that, but welcome gentlemen. Thanks for coming to theCUBE. Barry, let's start with you. So we saw Teresa pull up a slide. I tried to count. I think it was over 200 ISVs and SaaS providers for GovCloud. The marketplace is booming. What's going on from your perspective? Yeah, well, so we launched Marketplace into GovCloud at New York Summit last year, back in 2017, and we launched a little over 400 products that were available, and the team is more than double that now. There's 950 or more products available, but the exciting thing for us is that today we were able to make SaaS, SaaS subscriptions, SaaS contracts available from partners such as CrowdStrike. It just gives customers more flexibility and choice in how they deploy software into a region like GovCloud. Yeah, so Dmitri, we're going to get into the funding and the news in a second, but from your standpoint, Marketplace, why the attractiveness, no concerns, it's all systems go, go hard in, what's your perspective? Absolutely, AWS has been a huge partner for us since really the beginning of the company. We built our entire business on AWS, we're a cloud endpoint security vendor, so we have a little agent that lives on every server, desktop, laptop, in both on-premise and cloud environments, but the back end is all on AWS where we process massive amounts of data, and the exciting thing in the last year or so in partnering with AWS is being able to offer that capability to their customers through the Marketplace where every asset that you have on AWS can now be protected by CrowdStrike, and we're very, very excited about that, and actually today we launched our Falcon, is the name of our product, on GovCloud offering to target primarily the federal government as well as the state and local, and other enterprises actually, they're interested in that higher level of assurance that GovCloud provides. What specifically, can you just drill down the product? I want to make sure we get that right. So you're on Amazon, you're protecting Amazon endpoints within their cloud, that's great for Amazon, commercial enterprises. What's the, just repeat one more time in the public sector piece, how does that work? Who's the customer, is it just the agency or is it also enterprises who work with that? Talk about the dynamic. Yeah, so when you look at our customers, it's a mix of large enterprises, about 20% of Fortune Firing companies are customers, and various federal agencies, and basically we install on every machine they have that runs Windows macro Linux systems. So servers, desktops, laptops, everything within the environment, but there's no on-premise equipment. So the agent connects to our cloud, which runs on AWS, and we collect all the execution activities that are taking place and apply machine learning and artificial intelligence to discover security threats. So it's a big data problem, and we collect over 100 billion events every single day, just to give you a sense of how much that is and in two days we process the amount of data that Twitter processes in a year. So really huge amounts of data. So Barry, would you go out to partners? I mean, do you even have to sell them on this concept? Are they like beating down your door? What's that dynamic like? Yeah, no, we work with partners to, well first of all, we have to get them to architect for AWS. So before we even think about listing a product in Marketplace to meet you, I'll tell you, they have to first architect to run well on AWS so that when the software is deployed or the customer access is that environment, it's running optimally. And the customer is protecting both assets that they have running on AWS and on-prem. But I think vendors have really warmed up to the idea of Marketplace as a sales channel for them. And the reason for that is we really serve two different types of customers. One type of customer who can go to the public Marketplace website, subscribe to a product, deploy that, and immediately purchase it. And then for large enterprise and public sector or federal government customers, we still have that feature of private offers, which enables the customer and the vendor to negotiate on price and terms, but still transact digitally through Marketplace and have it all seamlessly billed by AWS. Lots of flexibility for sales teams that are in the field. Okay, so they work out the financial arrangements and you guys facilitate that experience. That's right. We handle the deployment subscription and billing for the customer. So obviously, the commercial space SaaS is exploding. What are the drivers in federal? Are they similar? What are the differences? For customers that are wanting to move to SaaS-based applications, I think it's pretty simple. Customers have reached a point where they don't necessarily want to manage the underlying infrastructure or software itself. So they're really looking to manufacturers like CrowdStrike who have a fully managed SaaS-based environment running on AWS. All the customer wants is the outcome, the functionality of the software for it to be performant and do what the vendor said that it was going to do. Managing all of that infrastructure and underlying technology, that's the expertise of the manufacturer themselves and the movement to SaaS is all about simplifying for customer. Talk about CrowdStrike news. I want to get to the valuation question. You guys are valued over $3 billion, just reported on SiliconANGLE.com and around the world. You guys raised $200 million in a round of funding. Total capitalization is about $400 million, roughly? Yeah, over $400 million. Okay, so you're feeling good today, right? Very good, very good. More than anything else, it's an indication of our growth. We've doubled the company in terms of revenue last year. We had a year-over-a-year increase of 500% in terms of $1 million deals that we've closed. So it's really an indication we're separating ourselves from the rest of the pretty crowded endpoint security marketplace and establishing ourselves as a leader. And what's the money going to be used for? Mostly expansion, sales, marketing? It's further expansion of growth, internationally, sales and marketing, engineering, helping build out more of the platform capabilities. I want to get your take on the cloud, because you guys built your business on day one. We were commenting off camera saying with our company, we've never owned a data center. Have you ever owned a data center? We do a few things, small things, but most of our stuff is on AWS. So what's the, for the people out there that are trying to do cloud that don't have that clean sheet of paper startup like you guys were seven years ago, the key to success, to really take advantage of the cloud, not just migrate to it, but actually use it? Well, you know, it's interesting. Insecurity has been an interesting journey because when we started back in 2011, doing security in the cloud was a heresy. In fact, I remember meetings with major banks back in those days when we're telling them about our plans and how we're going to do security in a very different way. And they said, you know, this sounds intriguing, but we'll never be a customer because we never do cloud. Now most of these guys are customers. So the mindset has definitely changed a lot. And what we're seeing now is actually our competitors that for years have been trying to compete with us by saying, well, we're on premise, crowdstrike is cloud, you can't trust cloud. Now they're desperately trying to move to the cloud. And of course, unless you build it natively in the cloud to begin with, it is very, very hard to do. You can't just put an appliance in a data center and call the cloud, and that's what they're struggling with. How do the customers determine whether something's got this, how does it pass the smell test? Because, you know, you can say you do things, what's the flaw in having that non-optimized, fully cloud-ready or born-in-the-cloud solution? What's the test? That's a great question. So one test of scalability, we've replaced a lot of our competitors because they just couldn't scale because they used traditional SQL-based databases, single appliances, not a multi-ten environment. They deploy it to 200,000 endpoints and the thing just comes crashing down. So that's one big thing. And then in terms of better security, unless this is what the cloud really gives you in security, unless you can aggregate all this data and we process 100 billion events per day and do machine learning on that data to try and discover new types of attacks, you're not leveraging the benefits of the cloud, you're not delivering better protection. We've had many interviews over the year, Dave and I went around security with Amazon and you took a lot of heat, unlike it's not secure. Turns out cloud is actually becoming more secure. You're an expert in security, you've done a lot of thread analysis over the years and looking at your bio and you're successfully leading a great company. Hackers love to attack where the data is, right? So the cloud's complexity, if you will, or the distributed nature, makes it less hackable some say. What's your take on that? How do you view that opportunity to say, look, if I put everything in one spot, I can brute force it or I'm going to get a hack. What's your take on using the cloud as an opportunity to have better security? You know, in this day and age, almost every single company that is not considering moving to the cloud is making a huge mistake because the reality is when you look at the security teams that Amazon has or other cloud providers have, they're way ahead of virtually everyone in this market. They're way ahead of the big banks that have a lot of money. They're certainly way ahead of the federal government. So you are getting the best of the best in security technologies. They have the same level of scale that we do in terms of seeing all these types of attacks and can react a lot faster. So yes, while it may present itself as a bigger target, the reality is you're getting much higher level of protection than you can ever do yourself. So what's the inside scoop on the tipping point? We were talking before, years ago, financial services customers, for example, said, never, we'll never go to the cloud. We've had many interviews. That's an evil word. That's right. What was the tipping point? Was it the realization that companies like Amazon could do a better job? Was it fear of missing out? Was it economics? Was it the losses that they were taking? What was it? I think it was a combination of everything. And it's funny because in those days, we actually asked them, well, how did you feel about virtualization when it came out? I bet you didn't like that either. And they're like, no, we didn't like that. Now we use the virtualization. How'd you feel about open source? No, no, no, we hated it. Now we use it, right? So it's a journey for a lot of companies. Whenever something new comes out, that's a big paradigm shift. But a few years in, typically they realize the adoption. What we're seeing now, particularly in the public sector, is that realization that the commercial sector went through probably three or four years ago. And now we're seeing the big push and the executive order from the president that you have to adopt cloud. You have to move to modern IT infrastructure. And we're seeing a lot of success in the federal government agencies that are realizing we need to do security in particularly very differently. And the cloud is a huge differentiator. Talk about anything you'd add to that, Barry, your perspectives on it? No, we're seeing enterprise customers and not just financial services across all industries. On the public sector side, you have organizations like Goodwill or City and Newport. And then on the enterprise side, you have really large organizations like Siemens or 3M that are not only leveraging AWS, but have also started leveraging the solutions that are available in the marketplace. And I think in the past couple of years we have seen a turn both in enterprise customer and public sector customers that are really starting to adopt cloud and move to that as their primary mechanism. And we have seen in the last year huge adoption in the public sector across many sensitive agencies that are starting to adopt our solution on the GovCloud platform because they're seeing the benefits of that security model. It's a no brainer really. If you look at the speed and scale, you can do things, but you got to check the boxes in public sector. A little bit different than the commercial enterprise. So talk about the public sector. We're here at the public sector summit. It's like a reinvent in and of itself for that ecosystem. What's the current landscape look like? What's the orientation? What's the posture of their technology strategies? What's their appetite? I mean, can you guys just give us some color commentary on the public sector customers? Sure, go ahead. Yeah, you know, one of the reasons that GovCloud was built and stood up was to give customers that needed, FedRAMP or ITAR Compliance an opportunity to environment, operate those workloads that they were moving over. Here's what I would say. It's not just traditional public sector customers like government agencies or the federal government that are operating in GovCloud. It's also enterprise customers that serve those needs. So there's this cross-section, a pollination of customers and consulting partners that are serving the federal government and government entities and large educational institutions or state and local government. But they want the same level of innovation, scale. They want to free up their developers to develop new applications and services for the citizens that they serve. They want all of the same things that the enterprise customers that we've been talking about have had for a number of years. They want the exact same thing. The paradigm shift to me, we were talking off camera about public sectors looking for the private sector because there's leadership there. No one says, hey, let's just do what the government does. There's no real inefficiencies and use cases there. You mentioned paradigm shift. How has the paradigm of operating and servicing and selling and delivering product value to the public sector changed? I mean, we still hear the Oracle thing was in the news about the DoD Jedi project. We're on you guys. So the old way of selling and procuring is changing. It is and the fact that customers can now leverage in Amazon and buy through the marketplace all these services directly from Amazon without having to go and do separate contract and vehicles and separate procurement is really huge. But the other benefit you get is the SaaS deployment model and time to value. Traditional security solutions as an example take literally 12 to 18 months to deploy. We had an agency in the US government that bought our solution recently and deployed throughout the entire agency in two weeks. So that ability to automatically get value of the solution helps secure the enterprise is something that you can only achieve. You know, I talked to a lot of people in DC we've been covering, we'll open up more coverage here. It's so hot market for the cloud area and certainly government as well. And then off the record conversation, he won't say the name, but he says, look, I can't deny the Amazon solution. This cloud native stuff is amazing. When have prices ever gone up? They don't, they go down, but they take more account control because they get more penetration. So the prices go down and the old way prices went up. So again, this is the shift of the mindset where you get more business but you're driving the prices down at the element level. Is this a key thing that you're hearing too? Absolutely. And when you look at some of the customers that I don't want to speak for you but that Amazon has acquired in terms of the intelligence community and others that you would never think would ever move to the cloud given the sensitivity that they have. And yet they've realized that to do things differently to accomplish their mission they have to use the cloud. So we're absolutely seeing that paradigm shift and the nice thing is that it's coming both from the bottom up with these agencies realizing they have to do things differently and there is support in the White House in terms of IT modernization that we need to adopt the cloud to be successful. So do you feel like we'll finally start turning the corner in security? What I mean by that is if you look at, you know, some of the metrics about, okay, a company gets infiltrated, they don't even realize it for whatever, 275 days. We spend more on security every year but we feel less secure. Is the cloud beginning to change that? Are there some of those metrics or even subjective measurements? Are we starting to, I'm happy to spend more but I want to be more secure. Are we starting to see the fulfillment of that promise? Absolutely no question about it and I'll give you a very concrete example. We actually launched two weeks ago a guarantee. If you're a customer using our service and you get breached on a system we protect we pay up to a million dollars of various costs that you have because we believe that we can actually secure you and we're willing to put our money where our mouth is and establish that guarantee and there's no one in the industry that's doing anything like that. That's putting your money where your mouth is. I mean, that's fantastic. I mean, usually these guarantees are okay. Well, you get a free month of service. No, no, no. We will pay cash to reimburse various expenses and certain response, legal fees, everything else that comes into the breach. Congratulations for taking that step. I mean, others are going to have to follow. Yeah, that's good leadership. Well, what would the guy from the CIA say on stage, Dave, you had the quote. Yeah, he said that cloud security on its worst day. Right, cloud security on its very worst day is far better than my client server systems. Yeah, so there it is to your point. Okay, let's get the plug in for you guys. So you got eight months and you started working together at the marketplace. We did. Talk about that relationship. How's it going? How's it working? What do you guys do? You're doing selling products together. Give a quick update on the relationship between them. Yeah, so our Falcon platform in the last eight months has been on marketplace where customers that are coming in and provisioning resources on EC2 on AWS can immediately get Falcon to protect those resources. And that's been a fantastic growth area for us. We've also been partnering on the new guard duty offering that Amazon launched last year where the intelligence provider for that platform. So it's been a great partnership. We're looking to do a lot more and particularly with the Guff Cloud and the public sector. Last work, well, for us now we're able to have a solution we can recommend to customers that's fully SaaS based running on AWS, you know, improving in its capability. So it, you know, it's great to partner with their sales and alliance team on the commercial and public sector side. We're going to look forward to seeing what we can do for the rest of the year. Well, Barry, thanks for coming back again. It's great to have you on theCUBE. Dimitri, wonderful. Congratulations on the raise and making some progress. Really appreciate your insights. Thank you so much. You're welcome. All right, keep it right there, buddy. John Furrier and I will be back with Stu Miniman. We're live from AWS Public Sector Summit. You're watching theCUBE.