 Welcome to this special cloud virtual event, the Cubon Cloud. This is our continuing editorial series of the most important stories in cloud, where we're going to explore the cutting edge, most relevant technologies and companies that will impact business and society. Got special guests from Jeff Barr, Michael Lebo, Jerry Chen, Ben Haynes, Michael Skulk, Mike Feinstein from AWS. All today are presenting the top startups in the AWS ecosystem. This is the AWS showcase of startups. I'm joined with Dave Vellante. Dave, great to see you. Hey John, great to be here. Thanks for having me. So awesome, awesome day today. We're going to feature 10 great companies, Amplitude, Autogrid, Big ID, Gorgial, Dremio, Kong, Monte Cloud, Reltio, StarDog, Wirewheel, companies that we've talked to, we've researched, and they're going to present today from 10 to the rest of the day. What's your thoughts? Well, you know, John, a lot of these companies were just sort of, you know, last decade, they really, really were in chire kicker mode, experimentation mode, and now they're well in their way to hitting escape velocity, which is very exciting. They're hitting, you know, tens of millions of dollars of ARR, many are planning IPOs, and it's just, it's really great to see what the cloud has enabled, and we're going to dig into that very deeply today. So I'm super excited. Before we jump into the keynote, I'm wondering, Jared Arnon from AWS up on stage. Jeremy is the brain behind this program that we're doing, we're going to do this quarterly. Jeremy, great to see you. You're in the global startups program at AWS. Your job is to keep the crops growing, keep the startups going, keep the flow of innovation. Thanks for joining us. Yeah, we've made it to startup showcase day. I'm super excited. And as you mentioned, our team, the global startup program team, we kind of provide white glove service for VC backed startups and help them with go to market activities, co-selling with AWS. And we've been looking for ways to highlight all the great work they're doing and partnering with you guys has been tremendous. You guys really know how to bring their stories to life. So super excited about all the partner sessions today. Well, I really appreciate the vision and working with Amazon. This is like truly a bar raiser from the Q virtual perspective. Using the virtual, we can get more content, more flow and great to have you on and bring the top hot startups around data, data ops. Certainly the most important story in tech is cloud scale with data. You can't look around seeing more innovation happening. So I really appreciate the work. Thanks for coming on. Yeah, and don't forget, we're making this a quarterly series. So the next one, we've already been working on it. The next one is Wednesday, June 16th. So mark your calendars, but super excited to continue doing these showcases with you guys in the future. Thanks for coming on, Jim. I really appreciate it. Dave, so I want to just quickly, before we get Jeff up here, Jeff Barr, who's a luminary guest for us this week, who's been in the industry, been there from the beginning of AWS, the role of data and what's happened in cloud. And we've been watching the evolution of Amazon web services from the beginning, from the startup market to dominating the enterprise. If you look at the top 10 enterprise companies, Amazon wasn't on that list in 2010. They weren't even bringing the top 10. Andy Jassy, the keynote at Reinventus past year, highlighted that fact. I think they were number five or four as vendor in the end, just AWS. So interesting to see that. You've been reporting and doing a lot of analysis on the role of data. What's your analysis for these startups and as businesses need to embrace the new technologies and be on the right side of history, not part of that old guard, incumbent, failed model? Well, I think, again, if you look back on the early days of cloud, it was really about storage and networking and compute infrastructure. And then we collected all this data and now you're seeing the next generation of innovation and value. We're going to talk to Michael LeBow about this. Is really, if you look at all the value points and the levers, it's all around data and data is going through a massive change in the way that we think about it, that we talk about it. And you hear that a lot. Obviously you talk about the volumes, the giant volumes, but there's something else going on as AWS brings the cloud to the edge. And of course it looks at the data centers, just another edge device. Data's getting highly decentralized. And what we're seeing is data getting into the hands of business owners and data product builders. I think we're going to see a new parlance emerge. And that's where you're seeing the competitive advantage. And if you look at all the real winners in these days in the marketplace, especially in digital with COVID, it all comes back to the data and we're going to talk about that a lot today. You know, one of the things that's coming up in all of our CUBE interviews, certainly we've seen, I mean, we've had a great observation space across all the ecosystems. But the clear thing that's coming out of COVID is speed, agility, scale, and data. If you don't have that data, you are going to be a non-player. And I think I heard some industry people talking about the future of how the stock market's going to work and that if you're not truly in market with an AI or machine learning data value play, you probably will be shorted on the stock market or delisted. I think people are looking at that as a table stakes competitive advantage item, where if you don't have some sort of data competitive strategy, you're going to be either delisted or sold short. And that's, I don't think delisted, but the point is this table stakes, Dave. Well, I think too, I think the whole language, the lingua franca of data is changing. We talk about data as an asset all the time, but you think about, and what do we do with assets? We protect it, we hide it, we kind of, we don't share it. But then on the other hand, everybody talks about sharing the data. And that is a huge trend in the marketplace. And so I think that everybody's really starting to rethink the whole concept of data, what it is, it's value and how we think about it, talk about it, share it, make it accessible. And at the same time, protect it and make it governed. And I think you're seeing computational governance and automation really hidden. You couldn't do this without the cloud. I mean, that's the bottom line. Well, I'm super excited to have Jeff Barr here from AWS as our special keynote guest. I've been following Jeff's career for a long, long time. He's a luminaire, he's a technical, he's in the industry, he's part of the community. He's been there from the beginning. AWS just celebrated his 15th birthday as he was blogging hard. He's been a hardcore blogger. I think Jeff, you had one of the original Ping service, if I remember correctly. You were part of the web services, foundational, kind of present at creation. No better guest to have you, Jeff. Thanks for coming up on our stage. John and Dave, really happy to be here. So I got to ask you, you've been blogging hard for the past decade or so, going hard. And your job has evolved from blogging about what's new with Amazon. A couple of building blocks, a few services too. Last re-invent, I mean, you must have put out, I don't know, how many blog posts did you put out last year at re-invent? I mean, must have been a zillion. Not quite a zillion. I think I personally wrote somewhere between 20 and 25, including quite a few that I did in the month or so, run-up to re-invent. And it's always intense, but it's always really, really fun. So I got to ask you, in the past couple of years, I mean, I quoted Andy Jassy's keynote where he highlighted in 2010, Amazon wasn't even on the top 10 enterprise. Players now on the top five. You've seen the evolution. What is a big takeaway from your standpoint as you look at the enterprise, going from Amazon really dominating the startup. Your startup today, you're in the cloud, you're born in the cloud. There's advantages to that. Now enterprises are kind of being reborn in the cloud. At the same time, they're building these new use cases, rejuvenating themselves and having innovation strategies. What's your takeaway? So I love to work with our customers. And one of the things that I hear over and over again, and especially the last year or two, is really the value that they're placing on building a workforce that has really strong cloud skills. They're investing in education. They're focusing on this neat phrase that I learned in Australia called upskilling and saying, let's take our set of employees and improve their skill base. I hear companies really saying, we're going to go cloud first. We're going to be cloud native. We're going to really embrace and adopt the full set of cloud services and APIs. And I also see that they're really looking at cloud as part of often a bigger picture. They often use the phrase digital transformation. In Amazon terms, we'd say they're thinking big. They're really looking beyond where they are and who they are to what they could be and what they could grow into. Really putting a lot of energy and creativity into thinking forward in that way. I wonder, Jeff, if you could talk about how people are thinking about the future of cloud. If you look at where the spending action is, obviously you see it in cloud computing. We've seen that as the move to digital. Serverless, Lambda is huge. If you look at the data, it's off the charts. Machine learning and AI are also up there. Containers and, of course, automation. AWS needs and all of those. And they portend a different sort of programming model, a different way of thinking about how to deploy workloads and applications, maybe different than the early days of cloud. What's driving that generally? And I'm interested in serverless specifically. And how do you see the next several years folding out? Well, they always say that the future is the hardest thing to predict. But when I talk to our enterprise customers, the two really big things that I see is there's this focus that says we need to really, we're not simply like hosting the website or running the MRP. I'm working with one customer in particular where they say, well, we're gonna start on the factory floor all the way up to the boardroom effectively from IoT and sensors on the factory floor to feed all the data into machine learning so they understand that the factory is running really well to actually doing planning and inventory maintenance, to putting it on the website, to driving the analytics, to then saying, okay, well, how do we know that we're building the right product mix? How do we know that we're getting it out to the right channels? How are our customers doing? So they're really saying there's so many different services available to us in the cloud. And they're relatively easy and straightforward to deploy. They really don't think in the old days, as we talked about earlier, the old days were these multi-year planning and deployment cycles. Now it's much more straightforward. It's like, let's see what we can do today and this week and this month. And from idea to some initial results is a much, much shorter turnaround. And so they can iterate a lot more quickly, which is just always known to produce better results. Well, Jeff, in the spirit of the 15th birthday of AWS, a lot of services have been built from the original three, I believe it was, the core building blocks. And there's been a lot of history and it's kind of like, there was a key decoupling of compute from storage, those innovations. What's the most important architectural change, if any, has happened or built upon those building blocks with AWS that you could share with companies out there as many people are coming into the cloud, not just lifting and shifting and having that innovation, but really building cloud native and now hybrid, full cloud operations, day two operations, however you want to look at it. That's a big thing. What architecturally has changed that's been innovative from those original building blocks? Well, I think that the basic architecture has proven to be very, very resilient. When I wrote about the 15 year birthday of Amazon S3 a couple of weeks ago, one thing I thought was really incredible was the fact that the same APIs that you could have used 15 years ago, they all still work. The put, the get, the list, the delete, the permissions management, every last one of those were chosen with extreme care and so they all still work. So one of the things you think about when you put APIs out there is in Amazon terms, we always talk about going through a one-way door and a one-way door says once you do it, you're committed for the indefinite future and so we're very happy to do that, but we take those steps with extreme care and so those basic building blocks, so the original S3 APIs, the original EC2 APIs and the model, all those things really worked, but now they're running at this just insane scale. One thing that blows me away, I routinely hear my colleagues talking about petabytes and exabytes and we throw around trillions and quadrillions like they're pennies. It's kind of amazing sometimes when you hear the scale of requests per day or requests per month and the orders of magnitude are, you can't map them back to reality anymore. They're just simply like literally astronomical. If I can just jump in real quick, Dave, before you ask, I was watching the Jeff Bezos interview in 1999 that's been going around on LinkedIn in a 60-minute interview. The interviewer says you are reporting that you can store a gigabyte of customer data from all their purchases. What are you going to do with that? Basically nailed the answer. This is a 99, we're going to use that data to create. That was only a gig. Well, you know, one of the things that is interesting to me, guys, is if you look at, again, the early days of cloud, we, of course, always talked about that in small companies like ours, John, could have now access to information technology that only big companies could get access to. And now you've seen, we're going to talk about it today, all these startups rise up and reach viability. But at the same time, Jeff, you've seen big companies get the aha moment on cloud. And competition drives urgency and that drives innovation. And so now you see everybody is doing cloud. It's a mandate. And so, you know, the expectation is a lot more innovation experimentation and speed from all ends. It's really exciting to see. It, I know this sounds hackneyed and overused, but it really, really still feels just like day one. We're at 15 plus years into this, I still wake up every morning like, wow, what is the cool new thing that I'm going to get to learn about and write about today? We have the most amazing customers. One of the things that is great when you're so well connected to your customers, they keep telling you about their dreams, their aspirations, their use cases. And we can just take that and say, we can actually build awesome things to help you address those use cases from the ground on up, from building custom hardware, things like the Nitro system, Graviton 2, the machine learning, inferencing and training chips. We have such insight into customer use cases because we have these awesome customers that we can make these incredible pieces of hardware and software to really address those use cases. Well, I'm glad you brought that up. This is another big change, right? And you're giving the early days of clouds like, oh, Amazon, they're just using off the shelf components. They're not buying these big refrigerator sized disk drives. And now you're developing all this, you know, custom silicon and vertical integration and certain aspects of your business. And that's because the workloads demanded. You've got to get more specialized in a lot of cases. Indeed they do. And if you watched Peter DeSantis' keynote at re-invent, he talked about the fact that we're researching ways to make better cement that actually produces less carbon dioxide. So we're now literally at the, from the ground on up level of construction. Jeff, I want to get a question from the crowd here. We got Sarbiche O'All, who's a good friend of the cube, Cloud, Cloudorati from the beginning. He asks you, he wants to know if you'd like to share Amazon's edge aspirations. He said, I mean, he goes, I mean roadmaps. I go, first of all, he's not going to talk about the roadmaps, but what can you share? I mean, obviously the edge is key. Outpost has been all in the news. You obviously at CloudOps is not a boundary. It's a distributed network. What's your response to Sarbiche? Well, the funny thing is we don't generally have technology roadmaps inside the company. The roadmap is always listened really well to customers. Not just where they are, but the customers are just so great at saying, this is where we'd like to go. And when we hear edge, the customers don't generally come to us and say edge. They say, we need as low latency as possible between where the action happens within our factory floors and our own offices and where we might be able to compute, analyze, store, make decisions. And so that's resulted in things like outposts where we can put outposts in their own data center or their own field office, wavelength where we're working with 5G telecom providers to put compute and storage in the carrier hubs of the various 5G providers, again with reducing latency. We've been doing things like local zones where we put zones in an increasing number of cities across the country, with the goal of just reducing the average latency between the vast majority of customers and AWS resources. So instead of thinking edge, we really think in terms of how do we make sure that our customers can realize their dreams? It's staying on the flywheel that AWS is built on. Ship stuff faster, make things faster, smaller, cheaper, great, great mission. I want to ask you about the working backwards document. I know it's been getting a lot of public awareness. I've been, that's all I've learned in interviewing Amazon folks. They always work back, they always mention the customer in all the interviews. So you've got a couple of customer references in there. Check the box there for you. But working backwards has become kind of a guiding principle. It's almost like a Harvard Business School case study approach to management. As you guys look at this working backwards and ex-Amazonians have written books about it now so people can go look at this really good methodology. Take us back to how you guys work back from the customers, because here we're featuring 10 startups. So companies that are out there and Andy's been preaching this to customers, you should think about working backwards because it's so fast. These companies are going into this enterprise market, your ecosystems of startups. To provide value, what things should, are you seeing that customers need to think about to work backwards from their customer? How do you see that? Because you've been on the community side, you see the tech side, customers have to move fast and work backwards. What are the things that they need to focus on? What's your observation? So there's actually a brand new book called Working Backwards, which I actually learned a lot about our own company from simply reading the book. And I think to be a principal part of learning backward is really about humility and being able to be a great listener. So you don't walk into a customer meeting ready to just broadcast the latest and greatest that we've been working on. You walk in and say, I'm here from AWS and I simply wanna learn more about who you are, what you're doing and most importantly, like what do you wanna do that we're not able to help you with right now? And then once we hear those kinds of things, we don't simply write down kind of a bold item of AWS needs to improve. It's this very active listening process. Tell me a little bit more about this challenge and if we solve it in this way or this way, which ones are better fit for your needs? And then a typical AWS launch, we might talk to between 50 and 100 customers in depth to make sure that we have that detailed understanding of what they would like to do. We can't always meet all the needs of these customers, but the idea is let's see what is the common base that we can address first. And then once we get that first iteration out there, let's keep listening, let's keep making it better and better and better. Just as quick as possible. You know, a lot of people might poo poo that, Jeff, but I gotta tell you, John, you will remember this the first time we ever met Andy Jassy face to face. I was in the room, you were on the speakerphone. We were building an app on AWS at the time and he was asking you, John, for feedback and he was probing and he pulled out his notebook, he was writing down and he wasn't just, you know, superficial questions. He was like, well, why did you do it that way? And he really wanted to dig. So this is cultural. Yeah, I mean, that's the classic Amazon. And that's the best thing about it is that you can go from zero startups, zero stage startup to traction. And that was the premise of the cloud, Jeff. I want to get your thoughts and commentary on this, love to get your opinion. You've seen this grow from the beginning. And I remember, because I've been playing with AWS since the beginning as well. And as an entrepreneur, I remember my first EC2 instance that didn't even have custom domain support. It was the long URL, you know. You've seen the startups and now that we've been, you know, 15 years in, you see Dropbox was just a startup back in the day. I remember these startups that when they were coming, they were all born on Amazon, right? These big, now unicorns. You were there when these guys were just developers and these gals. So what's it like? I mean, you see just the growth, like here's a couple of people with them ideas, rubbing nickels together, making magic happen. Who knows what it's going to turn into. You've been there. What's it been like? It's been a really unique journey. And to me, like the privilege of a lifetime, honestly, I've like, you always want to be part of something amazing and you aspire to it and you study hard and you work hard and you always think, okay, somewhere in this universe, something really cool is about to happen. And if you're really, really lucky and just a million great pieces of luck, like line up in series, sometimes it actually all works out and you get to be part of something like this. When it does, you don't always fully appreciate just how awesome it is from the inside because you're just there just like feeding the machine and you are just doing your job just as fast as you possibly can. And in my case, it was listening to teams and writing blog posts about their launches and sharing them on social media, going out and speaking. You do it, you do it as quickly as possible. You're kind of running your whole life as you're doing that as well. And suddenly you just take a little step back and say, wow, we did this kind of amazing thing, but we don't tend to like relax and say, okay, we've done it at Amazon, we get to a certain point, we recognize it and five minutes later we're like, okay, let's do the next amazingly, amazingly good thing. But it's been this just unique privilege and something that I never thought I'd be fortunate enough to be a part of. Well, then the last few minutes we have, I really appreciate you taking the time to spend with us for this inaugural launch of the Cubon Cloud, maybe a startup showcase. We are showcasing 10 startups here from your ecosystem and a lot of people who know AWS and for the folks that don't, you guys pride yourself on community and ecosystem. The global startups program that Jeremy and his team are running, you guys nurture these startups. You want them to be successful. They're vectoring out into the marketplace with a growth strategy helping customers. What's your take on this ecosystem as customers are out there listening to this? What's your advice to them? How should they engage? Why is these sets of startups so important? Well, I totally love startups and I've spent time in several startups. I've spent other time consulting with them and I think we're in this incredible time now where it's so easy and straightforward to get those basic resources, to get your compute, to get your storage, to get your databases, to get your machine learning and to take that and to really focus on your customers and to build what you want. And we see this actual exponential growth and we see these startups that find something to do. They listen to all of their customers. They build that solution and they're just that feedback cycle gets started. It's really incredible and I love to see the energy of these startups. I love to hear from them at any point if we've got an AWS-powered startup and they build something awesome and want to share it with me. I'm all ears. I love to hear about them. The emails, Twitter mentions, whatever. I just love to hear about all this energy, all this great success with our startups. Jeff Barth, thank you for coming on and congratulations. Please pass on to Andy Jassy who's going to take over for Jeff Bezos. And I saw the big news that he's picking a successor on Amazonian coming back into the fold, Adam. So congratulations on that. I'll definitely pass on your congratulations, Andy. And I worked with Adam in the past when AWS was just getting started and really looking forward to seeing him again, welcoming him back and working with him. All right, Jeff Barth with AWS. Guys, check out his Twitter and all his social coordinates. He is pumping out all the resources you need to know about if you're a developer or you're an enterprise, looking to go the next level, next generation, modern infrastructure. Thanks, Jeff, for coming on. I really appreciate it. Our next guest we're going to bring up stage, Michael LeBeau from McKinsey, CUBE alumni who's a great guest who is very timely in his McKinsey role with a paper he and his colleagues put out called Cloud's trillion dollar prize up for grabs. Michael, thank you for coming up on stage with Dave and I. Hey, great to be here, John. Thank you. Hey Michael. One of the things I loved about this and why I wanted you to come on was not only the report, awesome. And Dave's got a zillion questions they want to drill into. But in 2015, we wrote a story called Andy Jassy's trillion dollar baby on Forbes and then on Medium and Silicon Angle where we were the first ones to profile Andy Jassy and talk about this trillion dollar TAM. And Dave came up with the calculation and people thought we were crazy. What are you talking about, trillion dollar opportunity? Like that was in 2015. You guys have put this together with a serious research report with methodology and you left a lot on the table. I noticed in the report you didn't even have a whole section quantified. So I think just scratching the surface, trillion might be a little light, Dave. So let's dig into it, Michael. Thanks for putting it on. Well, and I got to say, Michael, that John's trillion dollar baby was revenue. Yours is EBITDA. So we're talking about seven to eight X what we were talking back then. But great job on the report, fantastic work. So tell us about the report. Give us a quick low down. I got some questions. You guys are unlocking the value drivers. Mike, give us a quick overview of this report that people can get for free. Everyone who's registered will get a copy, but give us a quick rundown. Great. Well, the question I think that has bothered all of us for a long time is, what's the business value of cloud? And how do you quantify it? How do you specify it? Because a lot of people talk around the infrastructure or technical value of cloud. But that actually is a big problem because it just scratches the surface of the potential of what cloud can mean. And we focused around the Fortune 500. So we had to box us in somewhat. And so focusing on the Fortune 500 and fast forwarding to 2030, we put out this number that there's over a trillion dollars worth of value. And we did a lot of analysis using research from a variety of partners, using third party research, primary research in order to come up with this view. And so the business value is 2X, the technical value of cloud. And as you just pointed out, there is a whole unlock of additional value where organizations can pioneer on some of the newest technologies. And so AWS and others are creating platforms in order to do not just machine learning, analytics and IoT, but also for quantum, for mixed reality, for blockchain. And so organizations specific around the Fortune 500 that aren't leveraging these capabilities today are going to get left behind. And that's the message we were trying to deliver that if you're not doing this and doing this with purpose and with great execution that others, whether it's others in your industry or upstarts who were, you know, motioning into your industry. Because as you say, you know, cloud democratizes compute, it provides these capabilities and small companies with talent and that's, you know, with the skills can leverage these capabilities ahead of slow moving incumbents. And I think that was the critical component. So that gives you the framework. We can deep dive based on your question. Well, before we get into the deep dive, I want to ask you, we have startups being showcased here as part of the showcase. They're coming out of the ecosystem. They have a lot of certification from Amazon and they're secure, which is a big issue. And it prices you guys talk to, McKenzie speaks directly to the, I call the boardroom, CXOs, the top executives. Are they realizing that the scale and timing of this agility window? I mean, we're going to go through these key areas that you would break down, but, you know, as startups become more relevant, the boardrooms that are making these big decisions realize that their businesses are up for grabs. Do they realize that all this wealth is shifting and do they see the role of startups helping them? How do you see, how did you guys come out on the report on that piece? Well, you know, in terms of the whole notion is we came up with this framework, which looked at the opportunity. We talked about it in terms of, you know, three dimensions, rejuvenate, innovate, and pioneer. And so, you know, from the standpoint of a board, they're more than focused on not just efficiency and cost reduction, basically tied to recognition, but innovation, tied to analytics, tied to machine learning, tied to IoT, tied to two key attributes of cloud, speed and scale. And one of the things that we did in the paper was leverage case examples from across industry, across region, there's 17 different case examples. My three favorite, you know, one is Moderna. So software for life, couldn't have delivered the vaccine as fast as they did without cloud. My second example was Goldman Sachs, got into consumer banking, you know, is the platform behind the Apple card, couldn't have done it without leveraging cloud. And the third example, particularly, you know, in early days of the pandemic was Zoom that, you know, added five to 6,000 servers a night in order to scale to meet the demand. And so all three of those examples, plus the, you know, the other 14, you know, just indicate in business terms, you know, what the potential is, and to convince boards and the C-suite that, you know, if you're not doing this, and we have some recommendations in terms of what CEOs should do in order to leverage this, but to really take advantage of those capabilities. Michael, I think it's important to point out the approach and sometimes it gets a little wonky on the methodology, but having done a lot of these types of studies and observed, there's a lot of superficial studies out there, a lot of times people will do the go out, talk to a customer, what kind of ROI did you get and boom, that's the value study. You took a different approach. You have benchmark data, you talk to a lot of companies, you obviously have a lot of financial data. You use some third party data, you built models, you bounded it, and ultimately when you do these things, you have to ascribe a value contribution to the cloud component, because Fortune 500 companies are going to grow even if there were no cloud. And the way you did that is you, again, you talk to people, you model things, and it's a very detailed study, and I think it's worth pointing out that this was not just the, hey, what'd you get from going to cloud before and after? This was a very detailed deep dive with really a lot of good background work going into it. Yeah, we're very fortunate to have the McKenzie Global Institute, which has done extensive studies in these areas. So there was a base of knowledge that we could leverage. In fact, we looked at over 700 use cases across 19 industries in order to unpack the value that cloud contributed to those use cases. And so getting down to that level of specificity really I think helps build it from the bottom up and then using cloud measures or KPIs that indicate the value, how much faster you can deploy, how much faster you can develop. So these are things that help to kind of inform the overall model. Yeah, and again, having done hundreds, if not thousands of these types of things, when you start talking to people, the patterns emerge, I wanna ask you, there's an exhibit two in here, which is right on those use cases, retail, healthcare, high-tech oil and gas banking and a lot of examples. And I went through them all and virtually every single one of them from a value contribution standpoint, the unlocking value, came down to data, large data sets, document analysis, converting sentiment analysis, analytics. I mean, it really does come down to the data and I wonder if you could comment on that and why is it that cloud is enabled that? Well, it goes back to scale. And I think the word that I would use would be data gravity because we're talking about massive amounts of data. And so as you go through those kind of three dimensions in terms of rejuvenation, one of the things you can do as you optimize and clarify and build better resiliency, the thing that comes into play, I think, is to have clean data and data that's available in multiple places that you can create an underlying platform in order to leverage the services, the capabilities around building out that structure. And then if I may, so you had this again, I want to stress is EBITDA, it's not a revenue and it's the EBITDA potential as a result of leveraging cloud and you listed a number of industries and I wonder if you could comment on the patterns that you saw. I mean, it doesn't seem to be as simple as Negroponte bits versus Adams in terms of your ability to unlock value. What are the patterns that you saw there and why are the ones that have so much potential, why are they at the top of the list? Well, I mean, they're ranked based on impact. So the five greatest industries, and again, we're lined by the Fortune 500. So it's interesting when you start to unpack it that way, high tech, oil, gas, retail, healthcare, insurance and banking ranked top. And so we did look at the different solutions that were in that, tried to decipher what was fully unlocked by cloud, what was accelerated by cloud and what was perhaps in this timeframe, remaining on premise. And so we kind of step by step, expert by expert, use case by use case, deciphered of the 700, how that applied. So how should practitioners within organizations business, how should they use this data? What would you recommend in terms of how they think about it, how they apply it to their business, how they communicate? Well, I think clearly what came out was a set of best practices for what organizations that were leveraging cloud and getting the kind of business return, three things stood out, execution, experience and excellence. And so for under execution, it's not just a transaction, you're not just buying cloud, you're changing your operating model. And so if the organization isn't kind of retooling the model, the processes, the workflows, in order to support creating the roles, then they aren't going to be successful. In terms of experience, that's all about hands-on. And so you have to dive in, you have to start, you have to apply yourself, you have to gain that applied knowledge. And so if you're not gaining that experience, you're not going to move forward. And then in terms of excellence, and I was mentioned earlier by Jeff, reskilling, upskilling, if you're not committed to your workforce and pushing certification, pushing training in order to really evolve your workforce or your ways of working, you're not going to leverage cloud. So those three best practices really came up on top in terms of what a mature cloud adopter looks like. That's awesome, Michael. Thank you for coming on. I really appreciate the last question I have for you as we wrap up this trillion dollar segment, pun intended, is the cloud mindset. You mentioned partnering and skilling up. The role of the enterprise and business is to partner with the technologists, not just the technologies, but the companies. Talk about this cloud-native mindset, because it's not just lift and shift and run apps and have an IT optimization issue. It's about innovating next-gen solutions. And you're seeing it in public sector, you're seeing it in the commercial sector, all areas where the relationship with partners and companies and startups in particular, this is the startup showcase. These are startups are more relevant than ever as the tide is shifting to a new generation of companies. Yeah, so a lot of, you know, the thing about an engine, a lot of things have to work in order to produce the kind of results that we're talking about, to grab your more than fair share or unfair share of the trillion dollars. And so CEOs need to lead this in bold fashion. Number one, they need to craft the moonshot or the Marshot. They have to set that goal, that aspiration. And it has to be a stretch goal for the organization because cloud is the only way to enable that achievement of that aspiration. That's number one. Number two, they really need a hard-headed economic case. It has to be defined in terms of, you know, what the expectation is going to be. So it's not loose, it's very, very well and defined in some respects, time box. You know, what can we do in here? The thing I would say is the cloud data, your organization has to move, you know, in an agile fashion training DevOps. And the fourth thing, this is where the startups come in is the cloud platform. There has to be an underlying platform that supports those aspirations. It's not just an architecture, it's a living, breathing, live service, you know, with integrations, with standardization, with self-service that enables, you know, this whole program. So Michael, thank you for coming on and sharing the McKinsey perspective. The report, the cloud's trillion-dollar prize is up for grabs. Everyone who's registered for this event will get a copy. We appreciate it's also on the website. We'll make sure everyone gets a copy. Thanks for coming on, appreciate it. Thank you. Thanks, Michael. Okay, Dave, big discussion there. Trillion-dollar baby, that's the cloud, that's Jassy. Now he's going to be the CEO of AWS. They have a new CEO they announced. So that's going to be good for Amazon. It's kind of got clarity on the succession to Jassy, trusted soldier. The ecosystem is a big for Amazon. And like Microsoft, they have the different view, right? They have some apps, but they're cultivating as many startups and enterprises as possible in the cloud. And no better reason to change gears here and get a venture capitalist in here and a friend of theCUBE, Jerry Chen. Let's bring him up on stage, Jerry Chen. Great to see you. Partner at Greylock, making all the big investments. Good to see you. John, hey, Dave, it's great to be here with you guys. Happy, happy March. Good to see you guys. Hey Jerry, good to see you, man. So Jerry, our first inaugural AWS startup showcase will be doing these quarterly and we're going to be featuring the best of the best. You're investing in all the hot startups we've been tracking your careers in the beginning, you're a good friend of theCUBE. Always got great commentary. Why are startups more important than ever before? Because in the old days, we've talked about in theCUBE before, startups had to go through certain certifications and you got tire kicking, you got to go through IT. It's like going through security at the airport, take your shoes off, put your belt on the thing. I mean, all kinds of things now, different. The world has changed. What's your take? I think startups have always been a great way for experimentation, right? It's either new technologies, new business models, new markets. They can move faster in the experiment and a lot of startups don't work, unfortunately, while a lot of them turn to be multi-billion dollar companies. I think startups are more important because as we come out of COVID and the economy is recovering, it's a great way for individuals, engineers, for companies, for different markets to try different things out. And I think startups are running multiple experiments at the same time across the globe, trying to figure out how to do things better, faster, cheaper. And Mackenzie points out this use case of rejuvenate, which is basically retool pivot, essentially, get your costs down. Or, and the next innovation area with this TAM, this trillion dollar zone lock value and where the bulk of it is, is the innovation, the new use cases and existing use cases. This is where the enterprises really have an opportunity. Could you share your thoughts as you invest in the startups to attack these new waves, these new areas, where it may not look the same as before? What's your assessment of this kind of innovation, these new use cases? You know, I think, you know, we talked last time about kind of changes of COVID the past year and there's been acceleration of things like, you know, how we work, education, medicine, all these things are going online. So I think that's very clear. The first wave of innovation is like, hey, things we didn't think we could be possible, like working remotely, you know, e-commerce everywhere, telemedicine, teleeducation, that's happening. I think the second order effect now is, okay, as enterprises realize that this is the new reality, everything's digital, everything's in the cloud and everything's going to be more kind of electronic relation with the customers. I think they're rethinking, what does it mean to be a business? What does it mean to be a bank? What does it mean to be a car company or an energy company? What does it mean to be a retailer, right? So I think they're rethinking that brands are now global, brands are all online and they can now have relationships with the customers directly. So I think if you are a business now, you have to re-experiment and re-think about your business model. If you thought you were a Nike selling shoes for the retailers, like half a Nike's revenue is now digital, right, all online. So instead of selling sneakers through stores, they're now a direct-to-consumer brand. And so I think every business is going to re-think about what they are. Airbnb is like, are they in the travel business or the experience business, right? Airlines, what business are they in? The Cube, we're direct-to-consumer virtual, totally and open up our business model. Dave, the cloud premise is interesting now. I mean, let's reset this where we are, right? Andy Jassy always talks about the old guard, new guard. Okay, we've been there, done that. Even though they still have a lot of Oracle inside AWS, which we were joking the other day. But this new modern era coming out of COVID, Jerry brings this up. These startups are going to be relevant and take territory down in the enterprises as new things develop. What's your premise of the cloud and AWS prospect? Well, so Jerry, I want to ask you, the other night, last Thursday, I think we were in Clubhouse, Ben Horowitz was on, and Martine Casada was laying out this sort of premise about cloud startups saying basically, at some point they're going to have to repatriate because of the Amazon Vig. I mean, I'm paraphrasing. And I guess the premise was that there's this variable cost that grows as you scale. But I kind of shook my head and I went back, you saw, I put out on Twitter a clip that, you know, we had a couple of years ago. And I don't think, I certainly didn't see it that way. What's, maybe I'm getting it wrong, but what's your take on that? I just don't see a snowflake ever saying, okay, we're going to go build our own data center or we're going to repatriate because they're going to end up like service now and have this high cost infrastructure. What do you think? Yeah, look, I think Martine is an old friend for VMware and he's brilliant. He has probably a lot of insights. There is some insights around at some point of scale, use a startup and probably run things more cost effectively in your own data center, right? But I think that's fewer companies more of the vast majority, right, at some point. But number two, to your point, Dave, going on premise versus your own data center are two different things. So, you know, on premise in a customer's environment versus your own data center are two different worlds. So at some point, some scale, a lot of the large SaaS companies run their own data centers, that makes sense. Facebook and Google, they're at scale. They run their own data centers. Going on premise or customers environment, like a Fortune 100 bank or something like that, that's a different story. There are reasons to do that around compliance or data gravity, Dave, but Amazon's cost, I don't think is a legitimate reason. Like if price is an issue, that can be solved much faster than architectural decisions or tech stacks, right? Once you're on the cloud, you know, I think the thesis of the conversations we had like a year ago was the way you built apps are very different in the cloud and the way you built apps on premise, right? You have assume, stories, networking and compute elasticity that's independent of each other. You don't really get that in a customer's data center or their own environment, even with all the new technologies. So you can't really go from cloud back to on premise, is the way you build your apps look very, very different. So I would say for sure, at some scale, run your own data center, you know, that's why the hyperscale guys do that. On premise for customers, data gravity compliance and governance, great reasons to go on premise, but for vast majority startups and vast majority of customers, the network effects you get for being on the cloud, the network effects you get from having everything in this elastic cloud service, I think outweighs any of the costs. I could agree more, and that's where the data is. And the way I look at it is your technology spend is going to be some percentage of your revenue and it's going to be generally flat over time and you're going to have to manage it whether it's in the cloud or it's on prem, John. We had a quote on theCUBE on the conversations I had, Gerald, we'll get your reaction to this. The executive said, if you don't have an AI strategy built into your value proposition, you will be shorted as a stock on Wall Street. And I even went further and said, you'll probably be delisted because you won't be performing. With the tongue-in-cheek comment, but the reality is that that's indicating that everyone has to have AI in their thing, mainly as a reality. What's your take on that? I know you've got a lot of investments in this area. As AI becomes beyond fashion and becomes table stakes, where are we on that spectrum and how does that impact business and society as that becomes a key part of the stack and application stack? Yeah, I think, John, you've seen AI machine learning turn out to be some kind of novelty thing that a bunch of CS professors working on years ago to a funnel piece of every application. So I would say, the statement of the sentiments directionally correct that 20 years ago, if you didn't have a web strategy or a website as a company, your company would be shorted, right? If you didn't have kind of an internet website, you weren't real company. Likewise, if you don't use AI now to power your applications or machine learning in some foreign fashion, for sure you're gonna be a competitive disadvantage to everyone else. And just like, you know, if you're not using software intelligently or the cloud intelligently, your stock as a company is gonna underperform the rest of the market. And, you know, the cloud guys on the startups that we're backing are making AI so accessible and so easy for developers today that it's really easy to use some level of machine learning in any application. If you're not doing that, it's like not having a website in 1999. Yeah, so let's get into that whole operation side. So what would you be your advice to the enterprises that are watching and people who are making decisions on architecture and how they roll out their business model or value proposition? How should they look at AI and operations? I mean, you know, big theme is day two operations, you got IT service management, all these things are being disrupted. What's the operational impact to this? What's your view on that? So, you know, I think two things. One thing that you and Dave both talked about, operations is the key. I mean, operations is not just the guts of the business but the actual people running the business, right? And so we forget that one of the values are going to cloud and one of the values are going to these services is you not only have a different technology stack all the bits, you have a different human stack meaning the people running your cloud, running your data center are now effectively outsourced to Amazon, Google or Azure, right? Which I think a big part of the Amazon big as Dave said is so eloquently on Twitter, right? You're really paying for those folks to like carry pagers. Now take that to the next level. Operations is human beings, people intelligently trying to figure out how my business can run better, right? And that's either accelerate revenue or decrease cost, improve my margin. So if you want to use machine learning I would say there's two areas to think about. One is how I think about customers, right? So, you know, we both talked about the amount of data being generated around enterprises, individuals. So intelligently use machine learning how to serve my customers better. The number two, AI machine learning internally how to run my business better, right? Can I take cost out? Can I optimize supply chain? Can I, you know, use my warehouses more efficiently? My logistics more efficiently. So one is how do I use AI learning to be a more familiar, more customer oriented? And number two, how can I take cost out be more efficient as a company by writing, you know, AI internally from finance, ops, et cetera. So Jerry, I wonder if I could ask you a little different subject, but question on, you know, tactical valuations. How coupled or decoupled are private company valuations from the public markets? You're seeing the public markets, everybody's freaking out because interest rates are going to go up. So the future value of cash flows are lower. Does that trickle in quickly into the private markets or is it a whole different dynamic? You know, if I could weigh in public versus private markets, Dave I would have a different job than I do today. I think that the reality is in the long run it doesn't matter as much as long as you're investing early. Now that's an easy answer to say, but I would say the following. Yes, interest rates will probably go up because they're hard to go lower, right? They're effectively almost zero to negative right now in most of the developed world. But at the end of the day, I'm not going to trade my Twilio shares or Salesforce shares for like a 1% yield bond, right? I'm going to hold the high growth tech stocks because regardless of what interest rates are giving me 1%, 2%, 3%, I'm still going to beat that with the top tech performer, Snowflake, Twilio, you know, HashiCorps, you know, a bunch of the private companies out there I think are elastic. They're going to have a great 10, 15 year run. And in the Gorillac portfolio, like the things we're investing in, I'm super bullish on from rock set to Chronosphere to true era in the AI space. I think in the long run next 10 years, these things will outperform the market. That said, right, valuation prices have gone up and down. They will in our careers. They have in the careers we've been covering tech. So I do believe that they're high now. They'll come down for sure. Will they go back up again? Definitely, right? But as long as you're betting these macro waves, I think we'll all be good. Great answer as usual. Would you trade them for NFTs, Jerry? You know, that $69 million people piece of artwork. Look, I mean, I'm a long-term believer in kind of IP and property rights in the blockchain, right? And I'm waiting for theCUBE to mint this video as an NFT. So when we do this, guys, we'll mint this video as an NFT and see how much people pay for the original Dave, John, Jerry, Jen and her name. Hey, you know what? We can probably get some good bang for that. Hey, you know, it's all about this next generation. Jerry, great to have you on. Final question as we got this one minute left. What's your advice to the people out there that are engaging with these innovative startups? We're going to feature starts every quarter from the Amazon ecosystem. They are going to be adding value. What's the advice to the enterprises that are engaging startups? The approach, posture, what's your advice? Yeah, you know, when I talk to CIOs and large enterprises, they often are weary, like, hey, when to engage a startup? How, what business is and is it risky or low risk? Can I say just like any career managing, just like any investment you're making in a big company, small company, you should have a budget or set of projects. And then, you know, I want to say to a CIO, hey, every priority on your and wishlist, go use a startup, right? I mean, that would be 10 for 10 projects, 10 startups, probably too much risk for a lot of tech companies. But we say to most CIOs and executives, look, there are strategic initiatives in your business that you want to accelerate. And I would take the time to invest in one or two startups each quarter selectively, right? Use the time, focus on fewer startups, go deep with them because they can actually be game changers in terms of inflecting your business. And what I mean by that is like, don't pick too many startups because, you know, you can't devote the time, but don't pick zero startups because you're going to be left behind, right? You'll be shorted as a stock buy by the John, Dave, and Jerry hedge fund, apparently. But pick a handful of startups in your strategic areas, your top two or three things, because really these could be accelerators for your business. You know, I have to ask you real quick while you're here, I've got a couple minutes left on startups that are building apps. Obviously DevOps and the infrastructure as code movement has gone full mainstream. That's really what we're living right now, that kind of first generation commercialization of DevOps, now DevSecOps. What are the trends that you've seen that's different from say a couple of years ago now that we're in COVID around how apps are being built? Is it security? Is it the data integration? What can you share as a key app stack impact? For a couple of years? I think there are two things. One is security has always been a top priority. I think that was the only key going forward period, security for sure. That's why you said the DevOps and DevSecOps, like security is often overlooked but I think increasingly this could be more important. The second thing is, I think we talked about Dave and mentioned earlier, just the data around customers, the data on-premise or in the cloud. And you know, there's a ton of data out there. We keep saying this over and over again, like data's in the oil, et cetera. It's evolving and not changing because the way we're using data, finding data is changing in terms of sources of data, we're using and discovering. And also speed of data, right? In terms of going from batch to roll time is changing. The speed of business is changing to go faster. So I think these are all things that we're thinking about. So both security and how user data faster and better. Gary, you were in theCUBE a number of years ago and I remember either John or I asked you about, you think Amazon's going to go up the stack and start developing applications? And your answer was, you know what I think? I think no, I think they're going to enable a new set of disruptors come in and disrupt the SaaS world. And I think that's largely playing out. And one of the interesting things about Adam Salipski's appointment to the CEO, he comes from Tableau, he really helped Tableau go from that sort of old guard model to an ARR model, obviously executed a great exit to Salesforce. And now I see companies like Salesforce and ServiceNow and Workday as potential for your scenario to really play out. They've got, in my view anyway, outdated pricing models. You look at how Snowflakes pricing on a consumption basis, same with Datadog, same with Stripe and new startups seem to really be leading into the consumption-based pricing model. So how do you, what are your thoughts on that? Maybe thoughts on Adam and thoughts on SaaS disruption? Yeah, I think my thesis still holds that. I don't think Salipski, Adam is going to go into the app space aggressively. I think, you know, Amazon wants to enable each generation of apps and seeing some of their new services they're doing, is they're kind of deconstructing apps, right? They're deconstructing the parts of CRM and or e-commerce and they're offering them as services. So I think you're going to see Amazon continue to say, hey, we're the core parts of an app like payments or custom prediction or some machine learning things around applications you want to bake in. They're going to turn those things into API and sell those as services, right? So you look at things like Stripe, Twilio, which are two of the biggest companies out there, they're not apps themselves. They're components of the app, right? Either e-commerce or messaging communications. So I can see Amazon going down that path. I think, you know, Adam's a great choice, right? He was a long-term early AWS, AWS exact from the early days. Leth and to your point, Dave, really helped take Tableau into kind of a cloud business acquired by Salesforce, worked there for a few years under, you know, Benyoff, you know, the guy who created, you know, quote unquote, cloud. And now it's him coming home again back to Amazon. So I think it'd be exciting to see how Adam runs business next year. And John, I think he's the perfect choice because he's got operations shops and he knows how to, he can help the startups disrupt. Yeah, and he's been a trusted soldier of Jassy from the beginning. He knows the DNA. He's got some CEO outside experience. I think that was the key. He knows, and Amy's not going to give up Amazon's baby, but this is baby, right? So he's, he's got him in charge and she's a trusted Lieutenant. You think? You think he's not, yeah, you think he's going to keep, he's going to hold the mic? Yeah, yeah, we got to go. Jerry Chen, thank you very much for coming on. Really appreciate it. Great to see you. Thanks for coming on our inaugural Cube on cloud AWS startup event. Now for the 10 startups, enjoy the sessions at 1230 Pacific. We're going to have the closing keynote. I'm John Furrier for Dave Vellante and our special guests. Thanks for watching and enjoy the rest of the day and the 10 startups.