 Hello, and welcome to the Q pod. I'm jump forward Dave Vellante weekly podcast episode 49 Dave last week We're in Barcelona for the pod because we had to record it there since we were flying back And we didn't want to miss a week here. We're a little bit short on the time Got a lot of stuff going on. So we've got about a 20 minute podcast in here Apologize for the audience. I only got a short version, but let's just jump right in so a couple big things post Mwc fallout a lot of virality around the Broadcom interview with Charlie Quaz and and the CTO at Dell Technologies very interesting dynamic there and to Crowdstrike had earnings out of the park will Palo Alto get the get the billion dollar a hundred billion dollar market cap first You got Broadcom earnings at MongoDB coming out. We got super cloud next week and of course Elon Musk is suing open AI And so again crazy week. Let's just jump right in On the on the earnings crowd strike. Okay, and and security market. We got RSA coming up Of course, we'll be there with the cube. What should take on the earnings from crowd strike? So I tweeted this With my COVID brain, you know, as you know, I landed I got COVID but so hopefully we didn't affect anybody at MWC but They blew away their quarter. I mean they you know Q4 AR was three point four four billion. So that's net, you know, AR date 34% growth the big number to me in The the print was they did 282 million in in new net new ARR in the quarter and people were the high end of the range was 260 so they blew that away their free cash flow margin was 33% You know roll it rule of 40 you obviously know what rule of 40 is those who don't know you take free cash Flow margin plus your growth rate you want to have a 40% add those you want to be at 40% They're at rule of 60. So the analysts are really excited I'm frankly really excited because I've been watching crowd strike now since 2019 you know ascend and even before that but really could see it in the spending data And I think this company is going to hit I think they're really on track for five billion for the fiscal 26 I think they're going to be 10 billion before the end of the decade So this is amazing and what's exciting to me is Palo Alto Networks, which you just referenced much closer to a hundred billion They're like 90 billion crowd strikes, you know 70. Let's call it. I look it up but they is Palo Alto cited consolidation fatigue and spending fatigue and Palo Alto has a big consolidation play as you know, John Security is a very bespoke set of tools customers might have 30 40 sometimes hundreds of tools Palo Alto was benefiting from Consolidation they were giving away Free trials for six months because people weren't spending and so they're trying to keep them on the hook crowd strike Also is a consolidation play and very clearly they're not having that same problem The last thing I'll say is a very large portion of the Revenue is going to be coming has come at 25% now But it's going to be close to 50% within, you know a couple years outside of the core endpoint Into protecting identities and and other in cloud security So crowd strike is a true platform company. You're seeing that happen. They've got real AI They've been at it for a while. I love this company. Who's going to get to the hundred billion dollar market cap first them or Palo Alto Well, you know the old saying I invoke it here often the first disappointment is really the last I I would say Palo Alto so much closer They're probably only eight billion away is what the market takes off Palo Alto might fly with some people trying to speculate but I would say that crowd strike Has a really good opportunity to surpass the value of Palo Alto within the next 12 months Well, we got earnings coming up Broadcom earnings and Mongo earnings coming out So we'll see what comes out there. Let me see what they what the Feedback is here. What do you think's going to go there? I mean Broadcom obviously Had a huge pick up last week from multiple Congress Great network effect happening with our interview with Charlie Quas is the president of the semi group Clear that the chips are dominating the conversation at Mobile Congress and in the industry. We got NVIDIA's event coming up next week You're going to be out for that and Just a lot of action on chips Broadcom should do well and they should be squeezing VMware. So we'll see some action there, too You know, I want to say something. So I've been we you and I have been talking debating tug-of-warring whatever just discussing NVIDIA, are they, you know, going to be a monopoly and with legs or is it going to be competition? I put out a Twitter poll and you know, most of the people but not not a majority Not not more than 50% say NVIDIA is going to dominate for a decade You know about a third say Competition is going to level the playing field and then some about a quarter say a new leader is going to merge I think it's much lower probability than that But nonetheless, I have been saying on this Q pod that even if competition, you know Come comes comes forth. They're not going to have a monopoly like NVIDIA or like Intel did But I was talking about GPU competitors and completely blind spot on Broadcom which has monopoly like margins and so and that really came their strategy really came into focus when we sat down with Charlie cows for good 35 minutes last week and I the big takeaway there is they're not making GPUs They're making all the Connections across the XPUs that the GPU the CPU the neural processing unit the language processing unit the accelerators all those connections have to go communicate with each other and it's a memory and Broadcom makes those components and what you pointed out to me I didn't realize this. It's only two companies that make both connectivity inside the chip NVIDIA with infini band obviously Broadcom going open with Ethernet. We'll talk about that and Silicon for the switching capabilities, you know scale only two companies do that NVIDIA and Broadcom So it's again a duopoly with monopoly like margins. Yeah, and what's interesting is I think we're starting to get visibility on what we're calling clustered systems as new systems revolution that we've been Calling and we're getting a lot of people were agreeing with that And so there's kind of some consensus around that the second thing that's happening is we have our super cloud event coming up next week we've got another one in July and The super cloud event next week is gonna be about the AI innovators The people making making it happen in AI the newsmakers the entrepreneurs the big companies Because they're the ones who are building the next apps and the big thing that came out of super computing 2023 and now Mobile World Congress on the infrastructure side and certainly reinvent was a validation. Is that the infrastructure? To run AI is changing So you're gonna have the innovators that we're gonna feature next week and then July We're gonna feature this kind of the super cloud data Platform you we've called it the six data platform Some people say in the next frontier platform But the modern stack of analytics is changing and people were talking about that at a great length And this is the theme this year Dave that the data equation is changing radically The infrastructure to run on it is Changing and the apps will adapt to that because the apps are forcing it You can't have good AI apps without it and as a result you're seeing a lot of Excitement but that's starting to wane right now the results coming out Edelman had a survey that showed that public confidence in AI is dropping and I think that's because most people think of the AI and generative AI is that is open AI and these large LLMs we a type in you know give me a book report on this or write a paper from you write a blog post That's not real AI because this hallucinations as well. So people are seeing hallucinations and going I don't trust it so you have a big Inflection point happening right now specifically around the confidence of AI and some people is going to fall on the side of no confidence which could stifle growth pop the bubble if you will or It stays on the line and the confidence that stays high and Entrepreneurs and and the large innovators or the innovators who are making it happen change that so It's gonna be my personal bet is the bubble will pop But the confidence will stay high and the the development and the developer community is going to drive the change It's clear to me that the developer community will be the canary in the coal mine the big guys the hyper scalars are Gonna be the real power There as well because they need to have stay at the scale. So the combination of developer cloud scale meets AI will be the tell sign so it could go complete bubble pop nuclear winter or Pop the other way and stay strong up into the right So I'm betting it's gonna be up into the right Tony bear just disagrees maybe so what what's your reaction to that because we Can feel the pressure It's not accurate trust but I Wanted it's it's sort of not related necessarily to AI, but it come came out of that Edelman study. Did you see I don't know if you saw this journalists were basically in terms of the trust level were on par with Government officials. I know that's terrible like behind CEOs They trust CEOs more than they do journalists. How bad is that? It's like media is just Dying, I mean because the the bullshit. It's amazing Well, the pop well peep the media companies first of all their revenue models dying We called that years ago when we started working together with Silicon angle 13 years ago We knew them the revenue the ad models gonna die. It wasn't sustainable However Media is still holding on to that by the way the newspaper industry, which is pretty much defunct except for the big ones Used to make money on classified ads remember that and then that went to the internet So now journalism they held on to that banner advertising model Which only rewarded the large volume Facebook and those guys killed media because they sucked all the eyeballs So that the media independent media companies pretty much Went away except for the big ones like the New York Times Wall Street Journal because they could pivot to subscription We have it in pivot to subscription lost out. That's number one and two they became Political in their coverage. So, you know, that's the sacred cow of journalism is to be that independent third party, you know checking power of so to speak or You know working on behalf of the audience not for some political party So I think people just got sick and tired of that combination of that and also with no revenue. You can't invest in talent Right. So so if you don't have talent You can't have good stuff. You don't have good cause you don't attract the right audience And then you get to the the race of the bottom on the race of the bottom means crappy coverage crappy content Like baiting. Yeah, and just and then you start seeing other fake people emerge and waving, you know Taking selfies no substance and what's going to happen now is You're gonna see people get rewarded for for a high quality Network effect meaning pass along distribution in the social networks LinkedIn's growing like a weed. You start to see these pockets of communities where you're gonna see Action and reward is is the content good enough to have have legs to run in these social networks Where there's targeted network effect meaning pass along the content if the content is not being passed along You have nothing that means the content isn't good if you have a lot of views or No views and no network effect. That means it's not real So, you know, I think this is now going to be validated in the mainstream We've been seeing it for years again I saw it with pod tech and podcasting 20 years ago, you know You start to get these network effects. They're highly valuable, but the numbers aren't big So, yeah, that's that that's what's going to happen and trust by the way will be the number one Commodity that will people and I worry that the industry analyst, you know, the world that I'm in is Is is going down, you know, not a great path, you know with Obviously, we're big believers in disclosure. We I have no problem with people getting paid to do work and to write I do have problems. Somebody says, okay, we want you to write something good about us. Okay, and I'll pay you well Or or or lie or lying, right? You can't buy you can't buy industry a true industry analyst You can't buy their opinion and they will walk away from business First of all certain firms like Gartner Will not do sponsored content and I'm not sure Forster does IDC will but IDC when I was at IDC We had very strict rules on disclosure and and we would put stuff in a piece that says like these are the caveats These are the truth. Here's where the product is weak. Here's where it's strong You know vendors would say well, you got to take that out You got to tone that down. We like look if there's something technically inaccurate Tell me or if I've got my pricing wrong. Tell me but otherwise Yeah printing this, you know, that's why you're paying me is because I'm an independent You're not going to pay me because I'll write something good. So that that level of You know that strict level of disclosure and like the ethics is It's certainly cracks in the armor in our business and I get it You know people got to but I just think I want I want people to really be careful But I also want to come back to this full six data platform thing. We just make a quick comment I know we got not a lot of time. Yeah, but so it looks you got a follow-up on that topic and I'm happy to stay there Well, that's that's what I stayed out. That's what I wanted to bring in We don't a little change on the media, but you're right media relations and analyst relations If there's no more analyst firms to relate to you don't have analyst relations If there's no media companies to relate to there's no media relations. These are departments and companies So I think that's going to be a big topic of my talk with Ray Wang next week on the ethics of analyst relations. So Check out Ray Wang's tweets and you'll find the address of interesting DM if you're interested But David six data platform is the key that's going to power the apps That need that are going to take advantage of the new infrastructure you have to power dynamics the pressure to have generative AI applications being written by developers and then the underlying infrastructure to be Scalable and support the kind of data you need and then the data layers to make it all work in real time which is runtime real-time runtime and then Develop the data move data around make choices in real-time low latency data movement So this is a huge thing. You've been on it. We've been on it from the cube research This is a big part of that and that's coming down the pike This will be the determinant of whether generative AI has legs in the next year Yeah, and just when we talk about this new data platform six data platform Whatever going to call it and we're sort of working on the name Think about it stacks today. They're very much app centric right the app determines the everything else behind it How much are you going to spend who's going to pay for it? What the infrastructure looks like is very very application centric and we're shifting to a world. That's data centric You know the the implication of being app centric is you're automating processes There's a process. We're trying to cut the humans out or minimize human labor. So it's it's very much focused on okay What can we automate and I think we're moving from a world of automating processes to the one of automating decisions That's when people talk about co-pilots and systems of agency That that's what they're talking about is the the AI is going to be taking action You know on behalf of humans as a result data You can't have AI without good quality data. So right now you have data that all these application silos Companies want to put data at the core and and that is a big change And it involves having coherent data It with a lot of different types of information and we're moving to a world where all the people the processes the Places and the things that are represented In your business are going to be represented in data digital representation of your business and they're going to be connected In a coherent way and that is a big leap from where we are today It's why for example snowflake is a shove everything into snowflake and we'll manage it because we have to do that to make it coherent But the problem is you got to shove everything into snowflake and Databricks is saying no no don't shove everything in the snowflake We're going to unify everything with it unity catalog and you were you were there last year So you heard that very very strong and compelling story, but there's some holes in that story as well So there's gaps so that all these gaps that we're trying to fill with way to transactions fit How do you deal with open table formats? How do you make sure that metadata is unified in in in the same? Store you know store data store and if not, how do you get to it in a very timely manner with low latency? I mean very very complicated computer science and You know long-time data management problems But people are beginning to solve them and AI is showing us the way of you know light at the end of that tunnel Well, we only have I wish we had more time but next week on Tuesday the 12th We'll be live in Palo Alto studio for SuperCloud 6 we will kind of do an abridged version of a pod addendum So if you're listening this podcast tune in to the super cloud dot world the cube net check out those sites on Tuesday the 12th We'll be live. We'll do a little abridged pod to kick off at 8 30 Dave real quick to end out here Amazon is paying close to 700 million for a nuclear data center campus Nutanix CEO sees opportunity for VMware turmoil. These are all stories on silicon angle Right now crowd strike you talked about that You're seeing you're seeing essentially Salesforce launching new stuff Okay, we'll see how that that plays out because they had a cloud's hot Salesforce data cloud is hot I think data class hot and we have remember snowflake lost That has a new CEO, right? So we covered that last week a bit, but we didn't cover details stock dropped like a rock It's not it's it's been struggling. It was up a little bit today. I saw so some people, you know So you got snowflake you get snowflake summit coming up as a big event data bricks and snowflake Databricks reporting me being that not going to go public reporting Unbelievable revenue. Okay. I'll leave the CEO on blinked in Essentially going direct saying hey, we're kicking ass. We don't need to go public. So be be interesting to see what happens there Cyber security Just tons of stuff going on and check management changes at Cisco Cube alumni Liz Santoni got promoted to executive by president general manager applications and chief strategy officer She's now going to run a big part of that business Mark Patterson chief of staff takes over some of her Corp dev roles and incubation part of that team which is a whole nother group of Cisco And and just a lot of action Going down who runs a it's just go That's a good question Cisco I'm probably running up by committee right now But it's gonna be hard because AI is a feature across all the things so Jonathan Davidson runs networking this AI and networking G2 Patel's running collaboration and security tons of AI there Listen Tony's running apps of versability and all that stuff. That's had tons of AI So you can't have an AI centralized AI division because AI has to stripe across all those different Sections of Cisco so right now. Oh, can you have an AI czar? Should you have an AI? I think I think they're struggling with that question right now. So, you know, we're not in the board meeting But I guarantee you That Chuck Robbins and sitting in his room with his team. They're having this conversation It's like the CDO conversation chief data officer Do we have a centralized chief data officer that becomes kind of a figurehead or aggregator of knowledge and put standards together throughout the organization? Or do you have it individually place-holded in the divisions? That's a top topic and worthy of a deeper conversation. Yeah, so that I wish we had more time AWS, you know Fallen suit. No, you know who's an egress fees. I also wanted to just mention a couple new hires Bob LaLiberte New network analyst comes to us from ESG and Mike Bodette Bodie many people in our community know Mike Bodette Long-time friend colleague very well respected super excited of those guys on You know having a lot of new analysts coming on board to have more announcements coming You know, one of the things that's really exciting day And you know give props to stand the course on wikibon, which has been renamed the cube research is the quality of The model that's developing but the cube research is impressive because it's not your yesterday's analyst relations analyst model It combines the best of analyst quality service ability and standards and integrity but at the speed of The market now at the real-time data coming in off the cube and the tooling we built so, you know It's almost like that the the the magic of silicon angle media Which is the publishing side the cube and now cube research together with the back-end video AI cloud It's really an interesting combination and we're getting insights Faster and uniquely and unique insights. We've never seen before So what's clear to me is is that gives us the ability to synthesize the picture of trends Connect the dots faster look at buyer behavior and identify things months in advance of normal normal tooling and technology Huge opportunity for customers to help them architect the best solution I mean just understanding clustered systems is going to be important. So as these big tectonic shifts happen Enterprises need the best data and the best service possible more than ever the 80s 90s every major inflection point The service had to step up And that's how you put you can find the winners and the losers And the people who step up during the times of crisis and opportunity And we are in the biggest chaos Up a system now, but the opportunities are massive And I just want to it's just awesome to watch the the the pace of innovation Qba i.com now brings in articles from silicon angles soon It's going to bring in research from the cube research And it's very interesting john to see how that's working Because you you you insisted that we architect this to keep the The data sets separately because the linguistics of the spoken word are different than the written word But from a user experience we can combine them. So we're playing around with that It's I was talking to some practitioners recently and they have they're having similar challenges They noted similar things and then they brought into transaction data or structured data and unstructured data This is really interesting to see the developments. It's you know, it's far from perfect But it's I mean our cube ai with very little capitals almost as good as perplexity within our world So we we're linking directly to to the articles Directly to the videos where the where it's actually mentioned not just sourcing a video As an as a file. So We're going to see a lot more ai that looks a lot like a runtime assembly and a compiler theory So you think about compiler design compilers and computers Those notions of compiling and running things At runtime that's coming to genovai in a big time. That's computer science, Dave That's distributed computing. That's why, you know, my conversation with the broadcom president Charlie koaz was it was so good because those guys are working on the systems That are going to power this next level computer science the next level of system management the next level of technology That's going to allow open source to soar And that's where the action will be and nobody sees it coming I see it we see it and I think that's going to be where the magic is So again, the cube pile will chronicle as all this the cube will be out there on the ground going to events and in studio and Silicon angle will be covering all the articles and the cube research will be Rolling it up together and getting the insights out of it. So I can in uh, last thing I had is next week oracle asana ui path sent in alwant adobe page Pager duty fox come on and smart sheet are all Announcing so we're going to a lot of talking next week. John. Yeah. Yeah. All right, Dave Could give chat with you again on the 12th Tuesday. We'll do a cube pot addendum. Sorry for the short version We had so much to go over elan must our rants so much more and tony bears story on silicon angle. He wrote a guest post It's pretty compelling Really really critical analysis in a good way of where the industry is and we've got to check that out So of course go to silicon angle dot com for all the articles cube dot net See you next time