 Live from Boston, Massachusetts, it's theCUBE, covering Red Hat Summit 2017, brought to you by Red Hat. Welcome back to Boston, everybody. This is Red Hat Summit, and this is theCUBE, the leader in live tech coverage. I'm Dave Vellante with my co-host, Stu Miniman, and Matt Hicks is here as the vice president of software engineering for OpenShift and management at Red Hat. Matt, welcome to theCUBE. Thank you very much. Good to be here. So this is where all the action is, is management and management of clouds and inter-clouds and intra-clouds, and it's the sort of next big battleground, and you guys seem to be doing really well there. I have a lot of momentum. It's been a good, it's been a good year. I think it's going to be a great year going forward because it adds a lot of customer value. You know, they're seeing the drive to get applications across all these environments, and I think we've hit a good balance of what we can provide in OpenShift, our middleware portfolio management, and you hear a lot of customers talking about it all through Summit, so. We saw some pretty sick demos this morning. Yeah. Well, I mean, I got to ask you. So I saw, it was basically the reference model was, okay, you got some web logic and web sphere apps, you know, wink, wink, and you want to modernize them. And so you guys showed like a five-click modernization process. Is it really that simple? Are people really, really doing that? Yeah, we have customers that have moved thousands of applications like that, and they're all different sorts of applications, but going from a proprietary EE stack to getting on something closer to EAP, to deploying it on OpenShift, that is our bread and butter. And it's great because EAP can take advantage of OpenShift, it lets customers re-platform the apps that they have. And like we said in the keynote, it sort of frees up your time then to start building the fun stuff, building the next apps, and yeah, we've had a ton of success with that. Matt, so we had the opportunity to talk to some of the innovation award winners but what we haven't actually gotten to cover too much yet is all the news. So there were a number of announcements in your space. Wonder if you could help us kind of unpack that for our audience. Sure thing. So we, yeah, you will hear a lot about the, just the enterprise production adoption of the new technologies because one of the things for us, it's easy to come up and talk about new technologies. We like actually bringing customers up that have taken that new technology to production. So that's one of the big themes you'll see here at summit. We launched OpenShift I.O., which for us like we've had great success of OpenShift as a hybrid app platform and prod, but as you heard from United Health Group Optum this morning, they have 10,000 plus developers to roll that out to and we knew we needed to close the gap on how to empower developers. So OpenShift I.O. was the new cloud-based services for that. We will also announce and talk about our container health index. So when you start really making the bet on containers, how do you know what's inside of them? How do you get a simple grading system to understand like A through F? How well maintained is this? As well as being able to look under the covers and understand what goes into that A or what goes into that F? Yeah, and maybe explain that a little bit more because I think about like, you know, okay, I remember in like kind of the virtualization world, I understood that. So many of containers live a lot shorter life. So is there, you know, is this just a dashboard that rolls that up? Because I want to know probably the general health of what's going on because there's no way human's going to be able to keep track of it. I mean, we're not all Google with two billion containers, you know, being brought up and killed every week, but it tends to be, at least from what I've seen, tell me if you see otherwise, that most containers are still much shorter lived than, you know, OSs or, you know, VMs were before. You know, I think that's, it's one of the advantages is that they can be pretty volatile like that. In fact, you know, we have capabilities like in OpenShift, like image streams driven to say, how do you respond and incorporate this? But at the end of the day, if you could grab a container that in our world has an A rating, no security vulnerabilities today, and in a week, you could have multiple critical CVEs that have been opened that now affect that container. And so the benefit of containers is, you can re-roll them and you can consume that update, but if you don't know about it and you stay on that old version, you carry the same risk as if you had an out of date OS that was very static. Yeah, I think that answers, I think back to, you know, banks used to have that golden image and they would, you know, harden that and they'd leave it that way for two to five years, right? And we all laugh because my friends in the security space, it's like that's the biggest problem we have is you're not ready for that. So this is understanding what you've got out there, being able to address that, remediate, you know, push out changes or no, like, hey, if you haven't, this is what you're at risk of. Absolutely, and that creates, for us, it creates this foundation of both trust between our customers in Red Hat, what they're consuming, but then also between Red Hat and our ISVs, because most of our ISVs, they're not in the Linux business or they're building specialized middleware capabilities on our products. So it's equally important for them to understand that if they're on an out of date version of RHEL, and they've embedded that in their container, that can cause as many problems and they need to apply the updates in their stack as our customers. So that kind of gets to the business model a little bit. And you're an engineering, but so I have an engineering question, but I think most people in our audience understand that Red Hat is a company built on open source and other people say, well, I buy the cow, if the milk is free, well, you perfected that model, you know, $2.4 billion in revenue, $3 billion in booking, so you're obviously doing something right, although not many have been able to create, actually nobody's been able to create a business model like this. My question is from an engineering standpoint, when you're built on open source and you're not driven toward a proprietary mindset of, okay, let's lock them into the next rev, how does that change sort of the engineering mindset, the culture and the protocol going forward? I love it. I've been at Red Hat 11 plus years and every day you're not tied into dropping a new feature and pushing customers to that new version for revenue. And so it changes our mindset of, how do we provide value across the entire range of supported offerings that we have? In the case of RHEL, you could stay on some versions of RHEL for quite a while and we provide value there and keeping that thing working, but at the same point, we're constantly moving this long adding new innovation, we're able to provide value there and it, as an engineer, it is refreshing. Sorry. That's okay, so I'll chat for a minute. So a lot of companies that are 20 plus years old are criticized, they don't innovate. You hear that all the time, they do incremental R&D and it's true, they may spend a lot on R&D but R&D is like a feature here or another feature there and designed to just keep putting the crumbs out and what you're saying is incrementalism is not really a fundamental part of your plan. Absolutely, we want to provide the same value for a customer if they're on RHEL 6 or they're looking towards the next major version of RHEL and they can move anywhere on that lifecycle and that's what they get as part of their subscription. Same thing with OpenShift and that choice of customers of being able to take a product, consume anywhere on the lifecycle of it, it's good for customers and it's nice for us because they're just different ways that you innovate of driving like the next new great feature and you have other customers that you are going to provide value through stability. So, if we go to a lot of these events, as you can imagine and when you talk to the traditional software players, you get this massive dose of, well we do that too. We do containers and we do cloud and we do hybrid so help us understand the difference between how they do it and how you do cloud. I think for us, if we picked containers, every, I was talking to a group of customers this morning, of every upstream technology we pick that we're going to pull together into our products, we don't just pick them up and repackage them and give them to a customer because we're a sport business so if it breaks at 3 a.m. and I have to re-roll a kernel to be able to fix it, I need to understand every piece in the stack so we start with, we're going to drive a contributor position in the technology. We pick our bets and we go all in on those areas so Kubernetes will carry with Google as a great technical partner, we run the majority of the SIGs with them, we have a top contributor position in it and we invest really heavily in understanding the technology inside and out and I think that's what shows in the customer value of we could certainly take stuff, repackage it and ship it, it doesn't carry the same value as being able to work with a customer, drive new features into the product and keep them running in prod. So you mentioned Kubernetes and I was actually a little surprised this morning in the keynote, I didn't hear Kubernetes and I think the reason was because I heard a lot about OpenShift and that's just your mechanism for rolling that out there. I'm assuming your customers kind of understand that, maybe you could help explain that a little bit more. So OpenShift is our enterprise distribution of Kubernetes and that's sort of the business we're in, we have Linux and RHEL is our enterprise distribution of that. We now have Kubernetes, it's a really popular community and OpenShift is our distribution of that and for our customers- I was just saying, I guess you couldn't call it REC which Red Hat Enterprise Kubernetes probably wouldn't be a good idea. World change is too fast, we picked names a long time ago. But it's a nice model because we know it, it's what we've done for a long time and it builds on everything we've done with RHEL and it connects our middleware portfolio as well so I've been on the ops side and I've been on the development side and I love seeing us address stuff right in the gap there for customers and I think that's why we're seeing so much customer traction is it's a sweet spot for where they've had pain adds a lot of value for them. Could you speak a little bit to your customers? Where are they with containers, Kubernetes, that whole adoption? A lot of them in production, which is nice. It's nice from a support business because if you have excitement or you have early traction, we're a subscription business. We want to make sure the more customers use it, the more they're going to grow and actually utilize it and when you hear customers like UHG saying they have 4,000 projects built on OpenShift there, those are, they have built up significant deployments on that and Barclays and I know we have a whole list of them that are here today and so I like that fact of it's not just a cool technology, customers have taken all the way into production and they're being really successful with it which as an engineer you love. You want to see people using your products and solving problems with them. Absolutely, Matt, you talked about the ethos of commitment and committers to open source projects. One of the challenges for a company like yours is you got to support a lot of different projects although you say you make your bets. We've talked a lot about okay, will there ever be another Red Hat that emerges in the big data space to see Cloud Air and Hortonworks and are always looking at those guys as possibility but they always cite the challenge of having to support so many projects. How do you manage that and did you, you've been with Red Hat for a while, did you hit a tipping point at some point? Cause you're, I mean certainly you have software margins, 80, 90% margins, you got a great operating margin so you've crossed that chasm so to speak to pick a bromide but others have had such a challenge. Is it because they have to support those projects and it just takes a long time and you guys baked over 20 years. I wonder if you could give us some insight there. You know I think it's as much art as it is science I would love to say like this is a cold formula that we apply but we have a good gut feeling for if you're going to back a technology or an upstream project you want to make sure that it's going to expand beyond your own investment and we've certainly made a lot of wrong bets that the technology doesn't evolve but you've got to be able to change and when we see some of the early indicators like in Kubernetes those are the ones where we like how it's governed, we like how it's structured, we like the other players that are in there and that's just been one of the unique aspects of Red Hat is we pick pretty well. Okay let's hang out, yeah it goes. So Matt I'm wondering if you're willing to comment we were at DockerCon a couple of weeks ago they've done a shift to how they're managing kind of put the Moby project to do the open source stuff. What's your take on that? You know what we're at hat positioning there. It's been an interesting dynamic between Docker and Red Hat to watch the last couple of years. Yeah you know I think Moby for us it's one of just about 1600 different upstream projects that we pull in across our portfolio and so we're certainly watching it and we see that evolve, we've been involved with the technology for a while now but we don't necessarily know where that's going to go right now but we certainly look at it like we do the whole breadth of open source projects we pull in. What else is on your horizon, what's exciting in these days? You know I think just seeing the reality of hybrid cloud becoming real for our customers where they're able you probably saw some of the Amazon announcements today where you're able to take services that might be in the public cloud and now pull them on premise. You heard customers talk about taking OpenShift and running that all the way out to the public cloud and we love that aspect because being able to use infrastructure to power applications I think it's going to change IT and then all the pieces that emanate around that it's exciting for ISPs, it's exciting around our management products from Ansible to CloudForms it's just a lot that we can do there. Yeah Matt, on the management products Dave said one of the bromides out there when I became an analyst seven years ago it's like we can say well it's security and management are the biggest problems we have feel like I can go to that well anytime I need to do. How we do it in industry and management obviously you've got your position but the surface area of the landscape is just expanding exponentially you talked about how many customers are multi-cloud today so we know that there's not a single thing that can do everything but how are we doing as an industry in Red Hat specifically? I think from Red Hat's position we've had a lot of success with Ansible just becoming a core automation technology because I think the one common thread is you have so many choices, you have so many pieces you have to start automating them. How we did IT 15 years ago just will not it won't scale anymore. I think building up from that stack how you move to policy-based management that's earlier in the space but there is a ton of capabilities and we've seen customers using from our perspective it's combining cloud forms on orchestration and satellite for content Ansible for automation because I describe so I have the operational teams that run our OpenShift online environments that's a relatively small group of people that manages millions of applications and they change faster than a human could push a button and so as customers get into that world we're certainly not in the Google world yet but when you get that foray it changes how you have to manage it has to become automated, it has to become policy-driven and it's fun. I like it like doing ops in the 90s versus how you do it today it is refreshing as an operator to just have these tools hit your fingertips. High-frequency application development. Matt, thanks for coming on theCUBE. It's great to see you and congratulations and good luck going forward. Fantastic, thanks, yes. You're welcome, all right, keep it right there everybody, Stu and I will be back with our next guest. This is theCUBE, we're live from Red Hat Summit in Boston. We'll be right back.