 Okay, hello everyone. Welcome back to a CUBE Conversations here in Malboro, Massachusetts at the Wikibon headquarters. I'm John Furrier with SiliconANGLE. We have the cloud roundup with the Wikibon analysts, Brian Grace Lee, Stu Miniman, Dave Vellante. Guys, welcome to this CUBE Conversation. We want to get down and dirty with the cloud roundup, the state of the cloud. Certainly a lot of action going on. Re-platforming of IT, whatever you want to call it, bi-modal day, whatever you, all these buzzwords. Bottom line is that the market's upside down. Things are disruptive. A lot of innovation happening. Cloud is the platform. It's changing everything from the VMware ecosystem all the way across to web apps and mobile apps, mobile-first cloud-first. So, Brian, first up, what's going on with cloud? Is Amazon truly kicking so much butt that everyone is reacting to Amazon? Or is that just the trend where the economics are and that is where everyone wants to be? Did Amazon get to the territory first? Or is it their model that is working? Yeah, so it's an interesting thing. So, Amazon, absolutely first mover status, absolutely defining what services people want, the terminology people want, the API people want. And, but the one complication to the whole thing is so, they just announced numbers. They're doing six billion. They're growing 70, 80% year-over-year. And then you put that six or seven billion or eight billion, whatever it's gonna be for the year, in context and it's a small percentage of who they're competing against, whether it's Oracle or Cisco or VMware or whoever. So you have this unusual situation of, massive mind share, defining the market, but not enough revenue to say that they're gonna go knock down the really next five, six, seven dominant IT players. But they own developer mind share, they own the architectural mind share, and you basically have to convince people that you're a better Amazon. And they're working hard to win the enterprise. Absolutely. They're moving very quickly. So Amazon integrated stack, we've talked about this day, we've talked to Amazon and Stu about their model, how it's working effectively. Still kind of a lock-in, some will say, but it certainly changed the game. Kind of. It certainly changed the game. We went to Oracle, we heard Oracle for the first time, put Amazon on top of their competitive list. Not the usual suspects like IBM or EMC. Larry Ellison always talks IBM, IBM, IBM. Now it was Amazon. So Oracle Cloud's out there, you got VM where the VCloud, you got HP, you got OpenStack. What's going on, Stu? Yeah, so it's, as Brian said, Amazon owns the developer mind share. The last couple of years when we go to reinvent, it feels like there's two Amazons. There's the developer-centric one and the one that's trying to win the enterprise. Amazon is kicking butt when it comes to the developers but the enterprise stuff, it's going to take time. I hear what Oracle announced and absolutely Oracle is huge in the enterprise today but, you know, if I'm a developer, really I'm going to go to the red stack. I mean, that's a big question to me there as opposed to Amazon. If we're replatforming for moving things, it's kind of easier to move into that new world and start there, it's the green field, it's all these mobile developers, there's so much newness going on in Amazon that it feels like that's where the puck's going to and our forecast is, I mean, Amazon's doing well and the public cloud is going to continue to grow for quite a bit so we're nowhere near the equilibrium level as to where they'll sit in the overall marketplace. Dave, Stu just put down Oracle saying, would a developer ever go to Oracle? Do they really care? I mean, they have the enterprise, they have install base, they have pricing that puts their, quote, storage cheaper than Glacier. They have a DBA market. I mean, will it become as easy? Do they even need to have a hardcore developer? Well, Oracle owns Java and they own my SQL so, you know, there's a developer drag there and you can say, okay, but we're talking about, you know, mobile cloud developers but still a lot of developer leverage there. I think the couple things are clear. One is IT is moving to utility. People want to buy in the consumption model. IT, CIOs are under tremendous pressure from the corner office and the lines of business to act more like and deliver services more like Amazon. Those two things are crystal clear and then Amazon comes along and redefines the economics of IT. Remember when Microsoft and Intel, you know, first came out, it was like, oh, they're toys, microprocessors, you know, they're inexpensive. Okay, well look what happened. You had, now you have mainframe margins for Microsoft and Intel and I think you're going to see the same thing with Amazon. They've got the mother of all lock-ins. They've got the de facto standard through their API. You know, they bogart open source like crazy but they don't really give back. I mean, it is the modern day monopoly playbook and it's working. Okay, so what does competitors do? You got companies out there like CenturyLink. You got OpenStack growing and moving. Maybe not as fast as some say. You got VMware. You have HP, EMC, Pivotal. What's the state of the union guys? Are people winning? Who's winning? Who's not winning? Who's stuck in the mud commentary? To Brian's point, the vast majority of the market is still not Amazon. Amazon is a tiny little piece of it even though it's growing very, very quickly. So there's tons of opportunity there. The question is, is what kind of turbulence do these companies have to go through to achieve that opportunity? I think it's going to be heavily services led because it's really, really complex. So IBM, you know. Microsoft. And then you've got Microsoft and Google who very clearly have the scale to compete. Bottom line for me is you've got two ways to compete. One is you've got to have massive scale or you have to have some kind of differentiation like Oracle has with the database and the middleware and the applications layer or like a service now, which is really SaaS but we're, I think, talking mostly about infrastructure and or you've got to have local belly-to-belly services. Well, let's name names. Guys, let's name names. Can I just poke at that real quick? Because when we did our big data and analytics forecasting, we think that fundamentally, services led offerings are not sustainable over the next 10 years. It needs to be baked into software. And when I look at what Amazon does, Amazon is a master at just adding service, adding software, new features on, you know, a usual marginal economics example for Amazon to add a couple new features or add to the next thousand customers is basically free for them. So, you know, it's the people that can help build that new platform and, you know- We have scale. Yeah, this is the point. The point is scale. Services, you know, belly-to-belly services aren't going to scale. So they got, you know, at volume, lousy marginal economics. And so I think our point was that in the big data world, software is going to eat the world, right? We buy into that thesis. But that doesn't mean services go away. It's still going to be the biggest market segment. It's just not going to scale. They're not direct sale. Belly-to-belly direct sales is not the way cloud works. Scott McNeely used to have a saying, services where big companies go to die. Now, of course, IBM was sort of the exception to that rule, but in a way they prove that rule. But services don't go away in this model. They're just not nearly as attractive from a margin standpoint as software. And what Amazon's doing with its provisioning services is creating a software-like economic model. Well, this breaks the question, Dave. First of all, I think services is an old definition. Scott McNeely's been out of the game for a long time. Services in the computing business were professional services. You now have self-service with SaaS business models. Yeah, absolutely. That's legitimate. That is indirect sales, high margin, scalable profit. And I think that's the model that wins. So services led can be somewhat different. So this brings the debate. Guys, who's winning? Let's get back to names. Microsoft, Google, Amazon, CenturyLink. The list goes on. Verizon's got, these all got clouds now. Everyone's going to have a cloud. How do people make sense of it? Who's stuck in the mud? Who's winning? Well, so if we go through the short checklist, Amazon's winning. I think Microsoft's turning the corner. I think they're doing a lot, lot better. I don't think OpenStack's winning other than from a marketing perspective. I don't think you're seeing big clouds running OpenStack. It's still a big mess of a lot of vendors and does it really work and all that sort of stuff. So you're not seeing them do that. To me, the big thing is, and this is the miss that a lot of these guys have, I think if you look at the really big vendors, they're so used to playing from the front of the game, the front of the pack, and they want lock-in stuff. So when you get pushed into a thing where you go, you can't lock in and you're behind, they don't know what game to play. And you talk about, well, what could they do? Well, they all admit that Amazon, to a certain extent, is a commodity play, yet none of them want to copy their technology. They don't sort of commoditize Amazon. Every one of them have bigger sales forces than Amazon, even though they're growing and they're probably around 1,500 people. Cisco has got 30, 40,000, EMC's got 10, 12, 15,000. Those, as they move into the enterprise, enterprise want to buy from people they know. They don't want to buy from a cold call. They don't want to buy the credit card. None of them are taking advantage of that. None of them are saying, commoditize Amazon, let my sales force get in front of you, give you similar type of technologies and then build on top of that. And it's, I think it's because none of them have ever played a game where the rules have been flipped over and it's been pushed back on them. Well, interesting, that's a great analysis. Oracle, Ellison stands up now, whether or not it's true, this is Larry Math. He says we will match Amazon price per bit. He's taking Brian's playbook. It's taking Brian's playbook. And, what he doesn't say is, and then we'll make a ton of money on top of that with our database licenses, which are not going to change the licensing and our applications model. Yeah, David, we've seen this more before. The earlier announcement this year, going after kind of EMC and the whole VBlock and said, we'll give you that infrastructure cheaper and higher performance and, you know, of course they'll make it up on their applications. But it's funny, I remember your interview with a stonebreaker, you know, earlier this summer and said, you know, the Oracle playbook was the America's Cup Playbook, which is getting the lead and then watch what your competition's doing and make shifts against that. But as Brian said, you know, people aren't trying to copy Amazon and Amazon is just, they're not standing still. So the question is to keep adding onto what they're doing. And the question to Brian's point is, can they even make those moves? So the assumption is they could commoditize Amazon. So does that make the Jerry Chen investment in Docker interesting? Did he see the opportunity to say, hey, if these guys can't move fast enough to commoditize Amazon, let's create Docker in a way that gives the weaker players or the enterprise guys who were always at the top of the pack an option. Is Docker filling that void as a way to faster accelerate some sort of play against Amazon? Or is that just luck? And your expectation that Microsoft will buy Docker, Brian, that's so good. What should you take on the Docker relative to that? I think Docker is an interesting company from a technology perspective. They really don't radically change the economics, right? There's been free, quote unquote, virtualization for years and years. And then the people that make money on that free virtualization are, you know, Amazon. They run on top of free hypervised. So you've got to be able to take whatever that sort of ecosystem is and make money on top of it. I think too many companies want to make money out of that commodity thing, you know? To me, the biggest thing is. So Docker is the biggest threat to who? VMware? VMware. Number one. VMware, Pivotal, anybody who does platform as a service or anybody who does virtualization. I think if you're Amazon, your biggest competition is, can you build data centers fast enough? Is Jeff Bezos going to keep giving you money to reinvest or is he going to start taking it and putting it in the retail? Like they're their own worst enemy, if anything. Like they're kind of, they've got headwinds and their tailwinds and I don't think they look at that as much. The other thing that they do completely different than everybody else, and we talked about the Federation on a previous call. You deal with Amazon. You don't deal with, you know, business unit this and business unit that and business unit that and they keep building on top of their services. So, you know, their new database service builds on top of their object storage service. Their new database service builds on top of their, you know, fast compute service. You don't get the compute BU. And the structured, you know. It's all integrated. It's all integrated. It's all integrated, right. Integrated stack on Amazon works. But Amazon leaves a lot of openings for its competition, doesn't it? It's doing, they basically go in and say, we're going to be dogmatic about sweeping the floor. You know, our way of the highway, they don't recognize hybrid, you know, cloud as a valid concept. They don't make their own applications for the most part. So Microsoft's got a huge space there. All the SaaS vendors have a huge space there. What's Google's playing on this? They have scale. What else do they have? Well, they're relevant, right? Because of things like Kubernetes. But to me, you guys think they're just not getting it done in the enterprise. I mean, is Google committed to the enterprise? And maybe it doesn't need to be. Yeah, I mean, Google wasn't happy with my comments that I made when they said, we're not really facing, you know, Amazon head on. We're focused on, you know, just the analytics part of the market. And they said, forget about it. Google has the best network in the world, I think, bar none. I mean, if they want to be, you know, a player, if you talk about how much investment has to go into data centers, Google's made this investment. I mean, they're all around the world. And they've got lots, lots of bandwidth. Absolutely, they've got large scale. And it's interesting because Google, they have their own services, but they're partnering across the board. So Kubernetes is a very interesting play. If we talk about portability across clouds, you know, open stack, public clouds, you know, Kubernetes can be, you know, part of the catalyst to allow that to happen. And Google's quietly building off that dark fiber, right? So let's not forget what Google's working on. So Google has a lot of resources, but they have a lot of potential. And unfortunately, I think to the sports world, if you say somebody has a lot of potential, it means that they're not hitting on all cylinders and meeting the expectations that we have for them. Maybe we had set our goals too high for where Google's aspirations are in the cloud, but hey, they're partnering with VMware. You know, we had a good interview with them last year at VMware. Brian, to the point, to Stu's point, Google's kind of in, he's implying they're kind of in last place or blagging. The question is, are they even in the game? Because Google's cautious. You look at, you know, they do with Google Plus or Total Hail Mary, they pulled that back. But traditionally, Google tends to start things organically. They're already huge. They already have that kind of scale of an Amazon. Are they truly even in the game? I think, I mean, I don't have any direct insight, but I feel like enterprise, the enterprise to Google is boring. I think they look at it, they enjoy the launch, they enjoy the party, and then they don't care about the enterprise because the enterprise means I've got to quote things and I've got to do support and I've got to do boring stuff and to me, I don't think they care about that or at least it's not interesting enough to get above anything else. And if you look at their track record of launch something, kill something, launch something, kill something, they scare off developers because it's like, do I want to put my data with you guys? Do I want to tie my application to you guys? Are you going to kill it off? And so, you know, they're just like Amazon. They certainly do a good job on open source. They have a developer. They contribute like crazy. They do a great job with the things they're good at, but the rest of them, it's a spotty track record. So for them, you guys would agree that for them to be successful ecosystem would they have to build out an ecosystem because they wouldn't want to, that's not their core competency what you're saying, to build out end to end enterprise. Okay, Microsoft, stay with some Microsoft. We've been seeing them pop up. David Floyer and I were talking at the last event, you mentioned them. We've seen them on TV with advertising. Microsoft Cloud, what's the deal? So Microsoft's got, I mean, obviously getting some things done, they got some momentum, but they've got a huge technology install base that's been built up over decades and now they got to bring that over to the cloud. So they got some internal complexity with the plumbing, but they seem to be hiding it pretty well. Yeah, I mean, Microsoft, especially since Satya Nadella's come back in charge here, really seeing Azure taking off. Brian, I'm curious to hear what you think about the developer community, but in the private side on virtualization, they've closed the gap with VMware a bunch. They've got a good solve position in public and private, good hybrid story, cloud first, pull the pieces together. And as we said, they own a lot of applications. So Office 365 is getting a ton of people comfortable with the cloud and SaaS environments. So Microsoft is serious about what they're doing with the cloud. Yeah, no, to me, they're the sleeping giant. I think they've gotten over the hump. I think the new leadership allows them to embrace new technology. They're not fighting it like Walmart did. They've gotten more money than anybody in this game so they can invest, they can, whether they're investing in data centers or they're investing in anything else. To me, the big thing is, can they convince their channel to, can they make money for their channel to push people towards their services? Because in their game, it's all software. It's software in the private side, software in the public side, there's margins to be made there. And then they've got to get developers to get back to going Windows. That's for old people, that's not for my application. They've got to find a way to reinvigorate people to want to develop on Microsoft technologies, maybe not so much Windows technologies. Yeah, and Brian, actually on that, Microsoft really embraced Linux. I mean, talk about open source. I mean, Microsoft plus open source is goodness. Well, the numbers that I see, it's about 25% of the Azure cloud is running on Linux. So there's people that trust them enough with their Linux workloads because they trust the company. But to your point on Windows, you see the commercials, Microsoft? Is this child, these kids grew up with Windows? And you ask your kid, what? That's the new push for Windows. What's Windows? They'll go, huh? What do you mean? But also they had the Docker announcement.net really energized that old community of developers with Docker. Interesting things going on Azure. IBM certainly on the messaging side now. Second year in, day full throttle, cloud mobile, social big day, that kind of old thing. Blue mix, cloud foundry. Is that open stack momentum herding IBM? Guys, what's your take on IBM? I mean, there's certainly all in. You're seeing a lot of effort and they're accelerating fast. But what's the outlook on IBM? Well, $2 billion for software. At the time, you and I had a conversation with Cube, like, is this a hosting company? Can this actually work for IBM? But IBM's making it work because they're a big giant services company that is enforcing revenue. We don't know, we'll look at it. I mean, there's revenue that they're shoving in and maybe it's a kitchen sink accounting model. But IBM's got a cloud story and it's going to keep its customers in that big blue cloud blanket. And so I think- It's not lip service. They're putting a lot of dough in there. Yeah, and Blue Mix is their cloud web sphere. And web sphere worked pretty well for IBM. It just sort of keep pounding, keep forcing. A great sales company. And now you look at EMC, it goes out and buys Virtustream. Is Virtustream? How about we go to Virtustream? Yeah, yeah. Let's get to it. Let's stay on IBM. Let's stay on IBM. But my point is IBM's got a lead on the rest of the legacy vendors. I think they're ahead of where HP is from a public cloud standpoint. Now, people would criticize them and say they're forcing you into the software public cloud because they're giving up on the hardware business. All right? I mean, that's the sort of criticism at IBM, but well, their story is a same choice. Guys, what you're taking on that? Right, I think we turned back the clock to when IBM bought SoftLayer was kind of, I don't know what they are and are they going to be able to make hay with it. We knew IBM could handle the applications and was going to build out a SaaS portfolio. I think if you look at kind of the enterprise SaaS marketplace out there, other than Amazon, IBM might have the second best from a broad ecosystem that's there. Just lots of choices out there. I'm not sure. They've purchased hundreds and hundreds. But I'm saying, because their ecosystem that they've built, I mean, the services organization, I'm not saying this is IBM and what they have, but they've got a lot of partners in there, but right, how much revenue is in all of those buckets? And from an infrastructure as a service standpoint, at least the way that they show it, they're now number three. I mean, they have more infrastructure as a service revenue than Google. So they're playing with the big boys. They fall out of bed, they hit the water, generally out of a boat, they get revenue. Let's talk about, let's talk about product, cloud product. Is there product, cloud revenue? I mean, you know, BlueMix has a nice story, but you know, I've yet to really talk to customers that have fully embraced it. You know, Pivotal with Cloud Foundry has a lot more customers there. You've got HP Healion with an alternative message there. BlueMix has built on Cloud Foundry. Right, but I'm saying out of that Cloud Foundry ecosystem out there, I haven't seen the customer from IBM yet that I want to see. Again, same up and stack story. And IBM is still making lots of acquisitions. I mean, they bought BlueBox, friend of the cubes, you know, we've seen that number of other acquisitions in the space. They keep it out. They have a big DevOps culture developing. Look, IBM's a player in the space. Well, they're acquiring and building. But my point is that, yes, you're right, but let's get Brian's take on this. Brian, what's your take on IBM? I think they've got potential, you're right. I mean, they've got the biggest install base in terms of big revenue customers. They're not chasing after people that don't pay them. They know how to make money. I think they hedge their bet. They go, we do Docker stuff. We do open stack stuff. We've been doing open source for longer than any of you sort of established players. So we know how to play that game. My big question is like Stu said, they talk about 400,000 BlueMix customers, right? They're past, but are they making any revenue, right? Because they play these games of like, how do you report revenue? Are they, I'm one of those revenue customers. And I don't know. Well, here's why I think IBM wins in the long run. What does IBM have that none of the other big enterprise hardware guys have, hardware sort of software guys have? And that's like deep, deep, deep services. Deep, deep, deep industry expertise. They have industry expertise that's comparable to Accenture, Ernie Young, Deloitte. It's because of the PWC acquisition. So what IBM, point number one, point number two is analytics is very, very complicated. So it's very, it's really extremely services led. But as we talked about earlier, services don't scale, bingo. So what they do is package services or industry oriented templates, analytic templates, and they can start to scale that. That is a winning formula. And that's what I think Pitchiano's group is challenged to do. I mean, that plus Watson. Well, the vertical focus. The vertical focus, there's always been industry focus, IBM and all the big Oracle friends the same way. Industry focus, with big data, that is interesting, right? And if they could prepackage those analytics, take away the headaches and almost prepackage DevOps. To me, I think that's a strategy. I think IBM I'm impressed with with the DevOps focus. The guys I talked to at IBM aren't no ops. They know their cloud. They might not have the product. I don't think the product is even baked out yet and they know that, but there's some holes they got to fill. But they move it fast. So to me, it's like they have time. So the question is, can they bring their services piece in there and package it up? So I think IBM is really more misunderstood than understood. Yeah, I think they've done some things organizationally. Ginny is jamming big components of the services organization into the product groups. And I think that's a smart move. Okay, let's talk about EMC now, because you brought that up to a virtual stream. Yeah, EMC made an acquisition. Yeah, okay. They bought cloud scaling. They bought virtual stream and a variety of other acquisitions. Guys, we all know EMC. Is that just to kind of get ready for the VMware spin in? Well, I think it's a signal. What's your take on it? I don't know. Well, first of all, my first reaction was there. Well, VCloud Air must not be working if they've got to go get, you know, virtual stream and as I said, it's virtual stream EMC software. And they're a couple of years behind that whole play. So they need, you know, a better hybrid cloud, better cloud story. I mean, what's your take? Yeah, well, I don't think that EMC is going to, you know, start spending billions of dollars building out data center. It's, they felt that they had a gap between what they were doing in VCloud Air and, you know, what EMC was doing with EMC hybrid cloud and, you know, just the traditional, you know, understand the infrastructure layer and virtual stream. Or as IBM has an outsourcing business and they can afford to do that for other reasons. So, you know, I think, you know, what one of the benefits if EMC was to spin in VMware is they might be able to have a more holistic cloud strategy because it does feel like there's a few different strategies and who do they report to and how does that structure work is something I'd like to see mature a bit. Brian, you just came from EMC, just left through there. What's going on? Give us the inside baseball without breaking any laws and you know, as much as I can talk. I mean, I think you know, you look at VCloud Air, you look at what virtual stream did. Both of those focus on what they call platform two applications. Virtual stream's got an expertise in SAP and VMware's trying to sort of play the VMware on both ends of the pipe thing. That's kind of right in EMC's wheelhouse in terms of, you know, traditional, churn the business, do those sort of things. But the question, you know, the question I would ask Joe or Rodney Rogers or any of them is, where does this drive you in terms of growth, broader growth? Does it make the market any bigger? It's a 2.5 product. I mean, it's a 2.5 thing, right? Not a platform three, which is the crossover. Right, and neither one of those VCloud Air or virtual stream had massive footprints. They had, you know, footprints in the US and then small footprints and the rest. They're going to very quickly get into that game of how many data centers can you build? How many servers can you buy? How much capacity can you take on? Because a billion two, you better drive a lot of revenue in there. So I come back to the marginal economics argument. So it reminds me of when everybody was trying to compete with Microsoft, you know, in the early days. And, you know, they thought the word perfect and they thought they could compete. And Novell thought they could compete, but they just didn't have the volume and the scale. Not really. Until Windows Server. Until Microsoft killed them, they did great. And Amazon is taking a similar kind of playbook. It's like, you see an Uber do now the same thing in its industry. And so it's going to be very difficult for the HPs. We'll see about IBM. IBM's got some other advantages like Oracle and EMCs to compete from an economic standpoint with Amazon. And so they're going to have to do it with other sort of techniques that add value. Yeah. I would be remiss that we forgot about HP because HP is an interesting company. Martin Fink knows open source. He's got the ear of Meg Whitman. They're clearly going in on open source, but it just doesn't seem like the cloud's getting in town over there. It's like, what's going on with HP? I mean, I like the group over there. They got some good heavy hitters. Sar was over there, and then he's doing this over here. Fink's got the open source. They believe in open source, so I love that mission. Is it translating the product? It seems to be confusing, guys. What's your take on HP? I mean, John, there's no doubt that HP is relying on open source. And if they want to move fast, they're going to need to rely on that more. One of the biggest challenges we've seen is it seems at least every 12 months, there's a new person in charge. And that the high level direction hasn't changed all that much. But they've made some acquisitions. You collect this acquisition, Martin Mika's comes in and then he's out, so. Sar galized in, he's out, Beery was there first. Now you got new people coming. So you're basically saying too many revolving executives. Absolutely, that is a big concern. Healy on cloud is one of the solutions using cloud foundry. So there's some opportunity there, but, and they are a big player. I mean, big bet on open stack. We haven't spent a lot of time talking about it here, but HP feels like they're pushing a lot of chips towards that side of the board to be able to leverage open stack. Is HP the company that doesn't get enough respect in your mind here, or is it self-inflicted? Because they do a lot of good work. You look at open stack as one dimension. They got a huge install base. They have a huge can, just with their own customers, it's kind of like an Oracle model. Are they getting enough respect or are they just not getting it done? But they do inflict a lot of their pain. Yeah, you're right. You know, the management changes, the autonomy acquisition, I mean, a lot of missteps. Yeah, it feels like big companies change their message every year. They change it every three to six months. And when you got to retell the world with your story, you're in public cloud. No, we didn't mean we're not out of public cloud. We're in, we're out. You can't recover from those sort of things, or you can't convince people that you're going to do it. You said confusion. That's the word that comes to mind when I think of what HP is doing around cloud. It's, I can't tell from month to month. You don't know what kind of animal it is. One minute it's a lion, next minute it's an alligator. What is it, what's going on here, right? I mean, well, it's a huge company with a very loyal customer base. Used to work there, so you know the company pretty well. And people, you've said this before, John, people want HP to win. Their customers want them to win. Their channel partners want them to win. Everybody's rooting for them. And now they're going through the distraction of, you know, splitting the company in two. And it's like that. It's like that video on YouTube where they give the guy the ball and he moves out of the way as the old guy stumbles across the finish line. It's all kind of staged. I mean, that's the way I feel what HP's going on here. They just can't get the ball over the finish line. Everyone's not going to get out of the way in the cloud. It's too competitive. So it's cloud system, it's on premise really, right? It's, and it's choice, HP does. Well, what do you think about Dave Donnelly's comments that I quoted him on my Forbes article where he says, if you don't have a public cloud in the future, as an infrastructure player, you won't make it. Do you believe that to be true? XHP executive now works for Mark Hurd, ex-former CEO of HP. You better have a public cloud strategy, you know? So owning a public cloud, if you can make money at it, is probably a good thing, but just owning a public cloud to own a public cloud is probably not such a good thing. So, right? But you have to accommodate public cloud in your portfolio or you're going to miss a big chunk of the market. So that's a real conundrum for companies, right? I mean, if you can't make money at it, you kind of, okay, guys. Got to do it as a lost leader? So, wrap up this segment here. Share it to the folks out there. What's this year going to look like in the cloud battleground? Obviously it's competitive. HP's going to try to bulk up and get better. IBM's continuing to pedal faster. Oracle's putting a stake in the ground. We're there, we're complete. Watch the numbers fall out of the sky. We're going to put the numbers on the scoreboard. Amazon's just going to continue doing their thing. Get CenturyLink out there. A lot of service providers like Verizon doing cloud. What's going on with all the stuff out there? I'll take a line from Club of Lang. Pain, there's going to be a lot of pain. Do you think there's going to be a game in the trenches or is it going to be an air show? What's going to happen? I think you're going to see both. I think Amazon has a major air force and they've got a good ground game as well. Feet on the streets. I think what we've seen so far, this conventional wisdom of the momentum that Amazon has, I don't see that slowing down anytime soon. And I think the big question is, how will the large enterprise players respond? Can they respond? By the way, I think they can. I think the rich keep getting richer in this game. You just got a new player called Amazon. There will be some pain, but I think the guys, the big guys have so much cash flow and they're not stupid. They're not going to give up their territories. They're not stupid. The guys who run these organizations are smart. They've seen, they saw the Ken Olsons and the Edson DeCastros and the Ann Wangs got crushed. They did a lot of the crushing. And so they're putting in place systems and strategies so that doesn't happen again. And they have tons of cash. So you're saying it's a strategic battle at this point? It is a strategic battle at this point. Absolutely. And I think there are some moves in the chess board. Microsoft buying Docker is an interesting one. The whole EMC spin in, spin out. I mean, that's clearly high stakes games of guys who are really smart. To me anyway, putting out signals like stop messing with us. Okay, yes or no question. Radical transformation in this industry, yes or no? Yes. Yes, yes. Okay, what are we going to see in that area? So John, I mean, building off what Dave said, this is truly one of those transformational, disruptive technologies out there that is going to be really painful. So the way I get margin, the way to go to market, the way I deliver services, it's all changing. We've talked a lot about the vendor ecosystem. Look at the people that have been selling infrastructure for years. There's a very small percentage of those, kind of the VAR systems integrators out there that have public cloud as part of their service, but the ones that are doing it have actually been doing pretty well, becoming trusted advisors, even more to their users, but they have to change how they do things and they have to retool and boy, it's changing fast. Retooling. We talked about, came out of DockerCon, Brian and I were talking and said, the speed of change is just so radically different. You used to think in the enterprise, major update, maybe every 12 months, maybe 18 months, follow Moore's law from a software development standpoint. It's now maybe every six months or heck, every two months we're going through revs in there. When I'm in a public cloud, I don't even think about revision control anymore. They're going to do that all on the back end. So everything is just going to move much faster. I need to be more agile. I need to be able to change even more and that's really hard for a lot of people to do. So, truly disruptive and we've seen a lot in the last few years and it's only going to accelerate as time goes on. Brian, your thoughts on the battleground out in the field. I agree with Dave. I think there's going to be blood in the water. We haven't talked about like Cisco, for example, another huge player, but chambers before he left, he said, look, some of you big guys aren't going to be around. I think you're going to see big companies like a NetApp or Citrix or maybe HP, they're not going to be around. This is a billions of dollar investment every quarter, tens of billion dollars in cash to buff it yourself. You better be a software-centric company and you better figure out how to start figuring out the economics of doing things on demand. If you're massive sales force, capex centric, don't have the money, thanks for playing because the game has totally changed. Remember Cisco was just one of those little companies back in the 90s. Yeah, well, we didn't talk about them. They've got a brand new CEO who's bought a couple of software companies lately. Maybe this is, you know. I mean, I think one of the things that I see in the CUBE interviews and looking at history and then looking at being in the trenches now is a lot of these companies that we're talking to really don't recognize the fact that, you know, eight years ago when the iPhone came out, smartphone industry changed, big data, all these things just now connected. Internet of Things we were talking on in CrowdChat today are a forcing function to a purely radical underlying infrastructure change over. And I think that is so transformational that the next Cisco is out there. There is another startup out there that will be the next Cisco, or in a new way to make the underlying infrastructure work better for all these new ways. We'd be remiss if we didn't mention Red Hat. I mean, that's another company that has, you know, multi-billion dollar, you know, 10 billion dollar potential that's directly in the cloud playing in the, you know, the past plus market and has a lot of people that are, you know, excited about what they're doing, you know, the old Sinec people buy. Why you do it, not what you do. And so that's sort of Red Hat, a lot of momentum and a lot of leverage. Yeah, as Dave, when we interviewed Jim Whitehurst in his book, the open organization, talked about, you know, Red Hat's whole mission is to catalyze communities. So if open source is going to be a big, you know, play in what we're talking about in cloud, you know, Red Hat, Red Hat's going there, but, you know, they're living in a lot of the public clouds. But just also to circle back, talking about Cisco, I remember back in the 90s, talked about the, you know, four horsemen of the internet era. And it's, you know, Oracle's still standing. Cisco's doing okay. You know, sun's gone. And, you know, Intel's Intel. You know, we didn't talk about Intel. You talk about, there's so many players you could go into here. I mean, you know, if we talk about infrastructure, you know, Facebook is now a player. You know, we talk about what's going on in OCP. Talk about all the chip manufacturers that have been bought recently. I mean, Apple, you know, makes their own chips. The computing form factor has changed. Everything is just, you know, going through such major structures. So the edge of the network now is computers, people, devices, IoT, everything. And that's radically changing everything. Yeah, the cloud is putting forth this vision of a consolidated set of infrastructure that's, you know, accessed through an API. And that's a horizontal layer. And it's going to be a considerably consolidated industry. And you've seen that with converged infrastructure as being sort of a second layer. Okay, so what inning are we in final question? This radical change we just talked about, we all believe, if you believe that to be true, it's going to happen. It's matter of time. Are we in the third inning, one inning, second inning? No, I think we're getting to the, you know, middle part of the game here. You think so? Yes, I think, yes. Deep innings, five? Yeah, I think we're getting, not deep innings yet, but I think we're midway through the game here. Fourth, fifth inning, you know, top of the fifth, yes. That's what I think. National anthem, come on. No, I don't think so. Did Dave, the starting pitcher starting to get tired is what you're saying, and we might be having some more of the team coming. That's the case, it's jump ball, and I don't see it as jump ball. I don't, I see it as, I see Amazon, you know, solidifying its moves. I see, we talked about, you know, Red Hat, I think Microsoft clearly player, Intel clearly player. You know, so I- iPhone's eight years old, Uber still, no one understands what Uber does in Airbnb. I mean, these new innovations are- Are we talking about industry transformation or the IT industry? Oh, I mean, everything is based upon the workload now shifted, so if the workloads are going to be changing, if software's eating the world, and that's forcing them to like change the infrastructure, you could argue, we're in the lower innings. I mean, virtualization, that's the endgain, I mean. So look at the last big, look at the last big transformation. What's the disruptive enabler, technically? Look at the last big transformation. Outside of mobile and IoT. What was the last big transformation? Let's go back to the PC era. What was it, 1982? Right, IBM PC? Right, was that the first inning? I would say that was, yeah, probably first inning. So by 1990, you know, 10 years in, you knew, even though nobody admitted it. Everybody thought it was early game. Nobody wanted to touch Intel and Microsoft stock in 1991. There was no Cisco in the first inning? Yeah, well, I guess no, there was no three common. Not in the first inning, not in 1982, but- Is that third inning? By the early part of the 90s, it started to become pretty clear. So where are we analogous to that? Okay, picking inning. I'm saying fourth, fifth inning. Now you're coming back, Capcom. No, I said fifth inning before. I'm saying bottom of the first. No! I'm going on record bottom of the first. Let's do it. Yeah, no, I have to side with Dave because I think if you look and say, okay, five years from now, is Amazon going to be a player? It's like, absolutely. That is determined. We know who some of the big players and big winners they are. John, first inning? I don't know what team showed up. It's, you know, I'm still figured out as my pitcher of his A game or, you know, did he throw no hitter last time? That's fair. This time he's going to get balled. I'll give you that. We're deeper into the game. I think we're sixth, seventh inning in terms of that new cloud infrastructure, like what it's going to look like, whether you deliver it or not. I think we're in about the first or second inning in terms of those cloud native applications because it's always going to drag because it's the application plus the new business model. It's not productivity anymore. It's the new business model. Brian, you sound just like an analyst. It depends. Okay, so we're living in software. One day in, there you go. So the takeaway from this is on the infrastructure side, it's clear who the big winners will be. That's what you're saying. I'm saying it's clearer. Clearer. So there's still some question marks with our EMC, right? With the corporate structure. HP splitting up. I'm not sure I see Amazon winning this game. Okay, I mean, I would say that. I'll take that bet. I will bet you. I mean, you know, how they have, are they running the table on the enterprise? You know, we didn't even talk about Dell. I mean, you talk about, you know, kind of HP and Dell with their servers and where do they live in the future? Is Amazon running the table on the enterprise? They're only doing seven billion in revenue. Yeah. On 80% of years. So they're accelerating the growth. I think Amazon is running the table. I'm a fan of AWS. They're still getting it wrong. But I mean, and when they start running the table on the enterprise, then it gets my attention. You know, public cloud, pretty easy business. What number tells you they're running it? Is it $20 billion? What's the number that tells you they're starting to run the table? 100 billion in revenue. Nice number. What was Facebook's quarterly, less quarter? 100 billion in revenue? That's running the table. Okay, well, there are ways away from that. Okay, well guys, any other parting comments on the cloud besides the inning, pegging the inning and laying out the horses on the track in this case? Well, I think that one of the things that surprises me, John, is the extent to which some of the large established companies that we've been following don't have a big strategy. And we've been talking about this since 2006, 2007, right, and this is not like a big surprise that this is happening. It's not a big surprise that there's a big switch on. Nick Carr wrote about it for crying out loud. And so it's what is the surprise is how long it's taking a lot of the enterprise companies to really have a strategy in place. That's why I give IBM credit. They said after the CIA debacle, when Amazon kicked them out of the CIA and they lost that high profile case, they said, holy crap, we have to do something. And I do give them credit for moving fast. So IBM moved fast. So IBM, surprisingly, the elephant, I guess, Ken Dance, I see other companies fumbling. We talked about HP's missteps. You see VMware and, okay, vCloud Air, Whoopi. You see an EMC with Virtustream, NetApp, what's NetApp's cloud strategy to do a one-way ticket into AWS? So the better analogy is not so much what ending in the game, what part of the season. It's early on in this game right now. So there's plenty of time. Let's do what you take, final thoughts. I don't think there is plenty of time. I disagree with that. I think if you don't have a- You said most companies don't have a clear, big strategy. Yeah, and I think that's problematic. Is it customers or vendors? Well, suppliers are the customers. I think customers are confused too. But look, let's face it. Traditionally, it's the vendor community that leads the customers down a path. A lot of times that path is not a safe one, right? It's a tough road. I tell you, it's a lot of opportunities. So I think it's still, the economics are, as you point out, the margins are there. I mean, the benefit of cloud is there. So to me, I think everyone's moves to cloud at some point. It's just a matter of time. I do think data is a big wild card. That's again, why I think IBM's making some moves that easy to criticize IBM, but they've got a lot of assets there. Guys, final thoughts, Brian's too. For me, the big thing I want to see is, so Amazon's done great. Microsoft's made money, IBM's made money, basically living in places where a couple of data centers, they're in the US or they're in the UK or something and they could get away with it because they didn't have all the regulatory stuff. They didn't have to be in specific countries. When you've got to deal with 100 and something odd countries and 100 and something odd laws and governments in it, then it's a little bit different. And I think once we start to see those things happen, will they invest in every country? Do the laws change so that those countries don't send data to the US? Then we'll find out if you go to 100 million as opposed to seven, eight, 10 billion or a billion. Yeah, great point there. I mean, so much of the discussion is North America today. And the other piece is there's a real barrier to entry. If you didn't start building this a few years back, it's really too late. So there's not, at least I'm not aware of, another soft layer out there that I can spend, a couple of billion dollars to pick them up. Rackspace was one that was on the table for a while and thought maybe pick up those data centers and it could propel somebody. But there's a trajectory here and it's going to be tough to get in this horse race if you're not really close. Guys, thanks for the time. We did a great job there. A lot of it went over time a little bit. This is theCUBE conversation in Malboro, message the Wikibon headquarters. I'm John Furrier, the Wikibon analyst, breaking down the cloud roundup, breaking down the horses on the track. Thanks for watching.