 from the Sands Convention Center, Las Vegas, Nevada. Extracting the signal from the noise. It's theCUBE, covering AWS re-invent 2015. Now your host, John Furrier and Brian Graceley. Okay, welcome back everyone. We are live here in Las Vegas at Amazon re-invent. This is Silicon Angles theCUBE. It's our flagship program. We go out to the event and extract the signal from the noise. I'm John Furrier, the founder of Silicon Angles. Brian Graceley, Wikibon analyst. Our next guest is Misha Govinsen, co-founder and CSO of Alert Logic. How'd I do on the last? You did pretty well. I'll take it. Just throw it out there. Well congratulations on your success. You guys have a great presence here. You're in the high rent district, big booth. You guys are actually doing well. Security is at the top of everyone's agenda again this year, but with cloud it's more critical you're seeing the announcements here at Amazon, the streaming, the data and analytics. All kind of converging in. That's your wheelhouse. Explain the meaning of all this. What's the state of the current market and security? Obviously perimeter list is obvious to everybody. But what's going on here at Amazon with security? You know security's always been important for the cloud ecosystem. We've been here since day one. So first re-invent, we were out here and we kind of saw the momentum. And obviously concern about security was great even then, but what's really fascinating this year is it's really coming full circle. You can really see that it's becoming more mature and you see a lot of real enterprises adopting Amazon solutions. You see real security vendors, real security capabilities. Everything's getting much more mature. So things that used to look theoretical are starting to really come to life. So you're kind of present at creation here with AWS ecosystem. Big part of their growth has been ecosystem partners. So what makes you guys different? Share with the audience out there. What's your approach to cyber security with the cloud? Obviously API economy, it's all the language we love to hear, but what is different about what you guys are doing and how does that relate to the next chapter of innovation? You know the biggest differences that we provide security is the service. And if you look at what Amazon does, it's very closely aligned with our delivery model. A lot of Amazon services are really about taking something very complex, deconstructing it down to its basic parts and really deliver it as an end to end service to where the provider really owns the delivery and we do the same thing with security. It's exactly the model that we've used with our customers. That's the reason why so many Amazon customers choose to go with us for security. Is it easy to stand up? Is it effective, all the above? I think it's not just software. It's software that's fused with service. But what you really get out of it is an outcome, right? So if you need security, you're not sitting there trying to figure out how it all fits together. The product and the solution comes to you much more naturally. So you're easy to integrate. Absolutely. That's probably the key value, right? That's an easy way to say it. Yeah, so a lot of times, we hear about lots of developers who come to AWS, they want to sort of, sometimes they're going around their IT groups and it's just a great idea. Do you find they engage with you guys initially or do they sort of realize I need security and it's sort of hard to find that internally skill so they'll sort of engage with you and you come in after the fact? What's the typical engagement model? That's interesting. We've been doing this for a long time and when you look a couple of years ago, you really were developers. And I think the whole notion that developers try to go around IT is not always correct. They want to be secure and I think they want to do the right thing. Our customers early on with Amazon were developers. Recently, in the last couple of years, we're noticing it's really enterprise IT people reaching out to us and saying, you know, we want to do the right thing. We have a lot of developers using Amazon. We want to make sure we give them a secure computing environment. So now we're working much more with actual enterprise IT shops as opposed to fringe groups within those enterprises. It's becoming much more standardized. Yeah, what? So the folks from Capital One stood up there today in the keynote and they said, you know, we're running banking applications, financial service applications. Basically said, you know, the AWS cloud is more secure than their data center. How do you prove that to people? Because people will hear that, but there's a lot of skepticism. So how do you prove that to somebody? Sure, you know, the most interesting data point we have for that is the cloud security report. And if you go to alertlogic.com slash CSR, you can see kind of years of research that we've done there. We have an interesting vantage point. We have a lot of customers that are on premises. We have a lot of customers that are in hosted environments and a lot of customers in the cloud. And one thing we notice is that this notion that cloud customers get attacked more and this notion that the cloud customers are less secure. It doesn't show, you can't see it in the data. In fact, the level of control is higher. So the number of break-ins we see is actually smaller in cloud environments because you can control it much better. Yeah, yeah. You guys, your focus is sort of this intersection of security and analytics. You know, we're seeing more and more services from Amazon to help with analytics. Is this a new sort of a new security person who's looking at this? Do we have to combine data science? Do you guys kind of provide the data science behind that? What's, you know, for a lot of folks, the new stuff sounds cool, but it's like it's a lot of new skills. How do you help them get over that? You know, we build analytics and we obviously have our own data scientist at Alertlogic doing the metric extraction, doing analytics. What's really interesting is that we ourselves are an Amazon customer and a major one. So a lot of the stuff that Amazon releases are things that you're going to see as relying on more and more. For example, the latest product that we just released called Cloud Insight is natively integrated with Amazon, uses a lot of Amazon APIs. I think analytics is really the next frontier, right? In the future, we're not doing this now because these services just got announced, but I think in the future, you're going to see us rely on those analytics services from AWS more and more. What's the biggest surprise to you with the Amazon growth? I mean, obviously the numbers and the headlines, we've been covering it. We were the first ones to really see it, but now you're seeing the mainstream blogs picking out, oh my God, $7 billion. We kind of started coming, but what surprised you? I think I get surprised by the same thing every year. I think it's just how vast this market is and how quickly it's growing. It's an incredibly rich system of products and there's a lot of customers attracted to it and every year it grows richer and you would think that one company can't really deliver this much functionality and really not fall apart, but they've done a tremendous job of it. What's really amazing to me is just how quickly it's grown and how quickly it's matured, but also how much more opportunity there is. So I think I look at that every year and I see it can go even further than that, right? You feel good about your choice of Amazon? I think we feel pretty good about it. You made a good call. That's the reason the booth is bigger this year, right? It's a big investment for us, yeah. Yeah, and paying off, you've got great customers. What's some of your customer use cases that you see in the enterprise? Because you've got the cloud natives. They know cloud real well, totally API based. They'll do things from Direct Connect with that IIX or fully API based workflow. And then they get the enterprise kind of like, okay, I'm transforming. My favorite customers, because you hear a lot about startups in here, a lot about these fast moving IT departments, but the ones that are really interesting to me are these 100 year old companies innovating extremely fast. When you look at our customer base, and we have hundreds of Amazon customers, the ones that are really leaning in, really adopting cloud in the most aggressive ways, some of these 100 year old firms, I think GE was a really interesting one, not a customer of ours, but that's a fascinating story, right? They're really using cloud for everything it gives them. I think these companies realize they get so much more access to agility, and these are my favorite customers, usually. Yeah, and it kind of breaks in the old, or debunks the myth of big companies are slow aircraft carriers. They can be nimble, relatively speaking, they can't be as fast as a startup, obviously, size, but like the size of a company, they can pivot too. That's right, just three years ago, Lean Startup was a book, and then Lean Enterprise came out, but we actually see it in practice now. We see kind of old companies innovating, and innovating faster than some of the startups, and that's pretty exciting to see. That means that the level, the playing field is getting more level, right? That means that a startup can get to market faster. That means that an existing enterprise can innovate faster as well. Overall, I think everybody wins, right? Okay, so what's some of the challenges of companies that have been successful with Amazon, with you guys, they get some success, and they start growing, right? They have to kind of scale up even higher to the next level. What are some of the challenges and opportunities that they have? What we notice is that they're really rebuilding the way they do everything, including security. They do a great job, but all the way up to the point to where it's a new application cycle, it's a new application that gets secured. Everything is relatively simple. I think the long tail of it is going to be much more complex, and that's where some of the Amazon announcements today are really interesting. There's hundreds of thousands of applications out there for a lot of enterprises that are just sitting there and on-premises data centers, and they got to get moved somewhere. Getting those right is going to be difficult. It's going to be a long road. So the new apps are moving really quickly. It's the old apps, really, that's the sedimentary layer that's sticking around in data centers. That's the hard part. I mean, Brian and I were talking in the intro. It's Stu Miniman, another Wikibon analyst around how the boring stuff now is sexy, the compliance. This is the tooling, right? So I think the big surprise to me at the keynote that's not getting a lot of fanfare is some of the boring stuff. I mean, it's relevant, but I mean boring, it's not like the big headlines, but it's the tooling is a big part of this year's announcement. They got this some flash and they got some flash out there. They got some glam on the announcements. We got some stuff coming tomorrow. But the basic stuff, the tooling. I think that means the ecosystem is just growing up, right? That means that what people care about is not just getting it done, but getting it done right. And that means that you go through the compliance audits and you don't let those become a sticking point because that's where it really slows down innovation. There's nothing worse than having a development team that's lathered up and they're moving really fast and then the audit comes in and says, shut it down, right? That's a moral killer. That's disruptive to the band of bad ways. Absolutely. So we'll sort of wrap up. Last question. You guys are a SaaS vendor. You have a ton of insight into what your customers are doing. Lots of continuous data. Realistically, can existing security vendors compete with you given they've got, not as close to their customers, they typically have a middleman channel. I mean, is SaaS sort of the only business model that's reasonably competitive going forward? Can they compete with us? I'm not sure. I think we're going to have to see, but frankly, I want them to. I want the security space to be larger. I think the more customers believe that there's choice in the cloud ecosystem and they can choose between the approach that I believe is the right one versus some of the approaches that our competitors offer. I think that's all a great thing, right? I think that one of the biggest impediments to moving to the cloud is just customers feeling like, you know, there's just not that many security choices. Maybe now is not the right time. So actually kind of welcome more competition there. I don't think it's going to be a winner or take hold now. Do I firmly believe that our model is the best one? I mean, obviously, but overall. But you've got some success. The cloud is a new way to do things. That's right. We've got customers to prove it, but still, I think it's going to be a pretty big market. And I think we have, we've only scratched the surface of it, right? So one of the things we talk about on theCUBE is we collect the dots and then try to connect them. So in your business, you're out here doing your stuff, great success. You've got customers, but you've got a corner to turn. Still, you kind of got a little bit of a straighten there where you can go a little faster. But the cloud business is a lot of hairpin turns. What's next? How do you guys see it? Quickly, what's your view around the corner? What do you guys got to do to stay competitive, relevant, et cetera? You know that you would think that we changed our direction frequently, but really we made a, we've been working in a hosting space for many years. We took a pretty hard pivot into the cloud and it's growing so fast now that making sure that we meet those customer expectations is the number one priority for us. So if anything, we're getting more and more focused on making sure we do the right thing for those cloud customers and revenue is really following with it, right? So 40% growth kind of year over year and probably in a couple of years, look at an IPO. So I think we're on the right track. I don't think we're going to see a lot of strategy shift from us. Well, Misha, congratulations on your success of your company, co-founder and chief strategy officer, which is kind of great. You're the co-founder and you have the strategy to play chess all day long with the market place. It's a fun job, but... It's fun when you get it right than I think we have, yeah. Congratulations and thanks for sharing the data here on theCUBE. Did you know that theCUBE is doing podcasting now? Go to siliconangle.tv and check out the podcast there. We do guests of the week. We do women on Wednesday, top women interview. Every Wednesday we highlight the women in tech and of course guests of the week gets their own podcast segment on siliconangle.tv as well as all the other videos you'll see here. If you want to check out the event page for re-invent, go to crowdpages.co slash re-invent. It's our new technology we are put out there. All the videos are up there, all the chats, all the trending topics are all at that page. We'll be right back with more live in Las Vegas for eight years re-invent after this short break.