 Live from Mountain View, California, it's The Cube at OpenStack Silicon Valley brought to you by headline sponsor, Mirantis. Here are your hosts, John Furrier and Jeff Frick. Okay, welcome back everyone, live here in Silicon Valley is the OpenStack SV event, special big tent event, really an ad hoc flash mob here because just the demand for OpenStack is so high, they sandwiched us some time in Silicon Valley with innovations happening between Paris and our recent event that we covered in Atlanta. This is The Cube, our flagship program, we go out to the event, cover all the signal and extract that from the noise. I'm John Furrier with Jeff Frick. Our next guest here is Josh McKenzie, co-founder and CTO of Pivotal Cloud Computing. Welcome to The Cube, again, Cube alumni. Great to be here again. We love the high energy chats, my brain's a little full from that last one, but I'll try to hold it together, but in all seriousness, a lot of action going on. So the first question I got to ask you is, a lot of commentary this morning on CrowdShat Around, direction of OpenStack, should be more product focused, general consensus across the board, growth is there, and there's some growing pains. I mean, not like fatal wounds, but you know, nicks and bumps are hitting the way. So it sets your take on it, you're involved and you've been there for the beginning. Where are we? Are we growing pains? These are growing pains. These aren't like teenager, seven-year-old growing pains. This is sort of like we've moved out, gone to college, we're remembering we got to do our own laundry. So the product management stuff came up at the last board meeting. Well, we're going to start checking out who is doing their laundry. That'll be the hint. Who's doing their laundry at OpenStack? Last board meeting, we had a lot of discussion around product management. Was that a role the foundation staff could support more? Was that something that the vendors involved could pony up and start providing some of those resources? The TC themselves have stepped up really nicely this release cycle to focus more on collaboration between those projects, which I think is where the sort of product focus fell down the most. And we're now looking at ways to open up the release cycle a bit. This is all part of that maturation. So I think these are all really positive signs. So I got to ask you about the networking piece. That's been something we just talked about with Juniper here. Is that, on a scale of one to 10, 10 being it's done, it's baked, it's cool. Two, one, it's a complete. That word you're not going to use on television. Show, something show. So a little disclaimer, I'm also on the OpenContrail advisory board with your last guest. So I have a little bit of a bias towards Contrail as being the way that I think. Contrail now Juniper. Yes, but now the project, the open source project is now called OpenContrail again. So it's been spun back out. I see that as really the open source solution that's going to win in the SDN space, in the same way that OpenStack has won at IaaS and Cloud Foundry is winning at Paz. It has all of the same ingredients. And as usual, I'm probably predicting this five years before it will come true. Two years before anyone else will believe me and a year before we should start drinking. Okay, so a question from Tim Crawford, our virtual host out there on the crowd chat. Does OpenStack need more distributions or fewer i.e. consolidation to help engagement? Sure, so we saw the acquisition of Eucalyptus by HP this week. We saw Inovance being picked up by Red Hat earlier this year. I think we're going to continue to see some consolidation. I was on Twitter yesterday, predicting that Apple would buy AT&T for their OpenStack team. I'm being a tiny bit facetious there, but I think it's equally likely. And I think the right number of distros is something the market is telling us as we go forward. You know, at the point at which my customers can't tell the difference between Piston OpenStack and the Cloud Scaling Open Compute System is the point at which you should probably just buy Cloud Scaling. We're not quite there yet. They still have different value props. They address different needs. And I think that's really still a pretty healthy number. So the private cloud is something that's not really panning out in some minds. Hybrid Cloud takes more of the marketing front line. I mean, private cloud exists. I mean, it's kind of kind of in the shadows, basically a data center. But Hybrid Cloud is where the action is. You look at VMware, like what everyone's talking about. Hybrid Cloud is definitely what everyone's pushing. How do you see that? And do you disagree or not agreeing? I think it's for sure where the market attention has moved, the media attention. I mean, it's kind of like the joke, just rub some docker on it, you know. People are excited about Hybrid Cloud because there are problems left to solve there. And a lot of the problems with private cloud have been addressed. I like to point out, this is the year that OpenStack got really boring, right? We've got lots of customers have been in production for a couple of years now. There's no exciting failures, you know. The rate of feature development is now way, way faster than the rate of media coverage. We've had our 15 minutes of fame and we've actually conquered everything there was to conquer. And now we're just down into the daily grind of helping people run infrastructure. And how do you balance the, some of the commentary we saw earlier online where the marketing war has won, OpenStack is now there, you can live to sell to HP, CloudStack's final chapters. Achieving the success now is there's a kind of a sentiment of did we over market and can 2015 be the year that they don't fall short? In other words, are we over promising under delivering the risk of that? Sure, well again, remember my other role is co-chair of the deaf core committee for the foundation board where we're really dealing with clarifying for the market, their perception of what does it mean for a cloud to be OpenStack? It's a very narrow, small core set of APIs. All of those work extremely well. And so when we're helping to get this message out of, here are the things you can expect in OpenStack Cloud to do and do really well. Anything that the vendors providing above and beyond that, your mileage may vary. You're really relying on that vendor to be delivering great differentiated value and it may or may not be there, but OpenStack itself, I don't think it has any distance to go. We've already arrived. I definitely already arrived. Now that when you say boring, you mean just get down to business and build out. Yeah, that's right. Just scale out and another hundred servers, another hundred servers, another data center, another two data centers. So the theme, other theme that's coming out, see James Ward from Cloud Foundry kind of pumping his fist. Yeah, we won, we're winning, we're big, the big boys are going to win this. The stack is the stack, the big boys are going to are in there, where are the little guys? Is it a do it yourself OpenStack kind of guy out there? Just kind of trying to make a living or they're going to have to play around the stack, tooling, a lot of folks are scratching their head, not only from a standpoint of consolidation potential of how and where I could fit, but mostly how do I sustain myself in the ecosystem? So everyone's always trying to figure that out so they don't get rolled over. Well, you know, every startup is built and the nice term for this is hyper growth, right? But the reality is startups are mostly about get rich quick schemes. And so when you look at, oh, we're going to go jump into a new market where we can be an OpenStack consultant instead of a data center consultant and we can charge $1,000 an hour instead of $100 an hour. Those days are fading. I think we're going to see a lot of the professional services revenue dry up in this ecosystem as folks shift over to using mature products. I know there's some great analysts reports came out in the last couple of weeks highlighting where the revenue is projected to go as this market explodes in the next couple of years. And that certainly matches what we're seeing. There's always going to be room for great, I don't like the terms devop or agile or scrum or whatever, but helping folks, especially in larger traditional organizations, keep up with the pace of change, adopt new ways of doing things, adopt new languages, new tools, new processes. I think there's great opportunity for smaller businesses in that space. Are you worried about funding? I said piston? No. Revenue is the best source of funding. No, absolutely. It's two ways to raise money, get customers to pay you or raise you for the capital markets. But that's one of the things we're watching is companies that were founded a few years ago. You're two, three years in, a lot of other companies are in the space that were venture backed that might not have a revenue model. We had great conversation with Blue Box. They got revenue sustained on their own. But they were a company a long time before they were an OpenStack company. So let's see what they can do with OpenStack. So they had funding, sustainable funding. They weren't banking on a revenue stream with OpenStack. So some folks aren't really raking in the dough. So they looked through the capital markets. So you're saying you're fine for revenue, you're good on funding. I love revenue. I sort of feel like we're in the boring phase. We're four years into, well, six by my count, but let's say four years into OpenStack, three and a half, almost four years into Piston now. When companies are three or four years old, you better have some revenue. If you haven't figured out how to get people to pay you, maybe you're not doing anything important. Yeah, usually the two years in, you start to get the trajectory going. And in three years, you kind of figure out where you are in the inflection point. Exactly. And where's that hockey stick ultimately, right? So for you, what's your hockey stick moment? Where do you see that? What do you envision that preferred kick up to be? Not year, but like in terms of environment, landscape picture. How would you envision certain things being in place? Oh, it's already happening. And the big pull for us has definitely been application development. The partnership with Pivotal, which was a couple of years ago now, we're still the preferred mechanism for running OpenStack under Cloud Foundry. Our biggest customers are using it that way. Our most revenue producing customers are using it that way. And it's a very large percentage of new deployments. At the end of the day, what is IT infrastructure for? It's for running apps, right? Well, who writes those apps? Those are developers. Those are the people we're trying to serve. All of the rest of this is like, whose API talks to whose API and compare. It's all just noise. Just focus on solving real problems for developers. It's infrastructure to serve the purpose. Right. It's noise if it becomes the lead, optimized conversation. Yeah, exactly. If you optimize for the under the weeds. If you go home at turkey dinner and you talk about SSD performance to your mom, like that's not good Thanksgiving conversation. I've had a second in my conversations. That's all I do is talk about low latency and milliseconds, you know. And that was- How did we talk about this last time? Go to your room. Anyway, so let's go back down to the outcomes. One of the other things that came out of the event here and Rodriguez, when I was, Flores, when I was talking on Twitter about it, it's there's too much bits and bytes going on in the weeds and there's no senior level conversation. So you're actually doing revenue. So you're actually talking to customers, providing a service, getting cash for that service and put it in the bank and doing it again and again. Rinse and repeat. It requires you to have a senior conversation with senior executives to get the cash. It requires us to talk to somebody who's allowed to buy. And this is really the crossover for us. Most application development teams are allowed to buy whatever they want. This does not require a C level. So you don't have to go and sell the CIO on OpenStack. You can go and sell a senior director on OpenStack and he can stand it up for his FDF team and his project or almost any marketing organization now can buy their own infrastructure. It's amazing how many folks can buy even for private clouds even when it comes to rack and stack of hardware because shadow IT is a bad term but traditional IT is not designed to keep up with rapid pace of change. They're designed to do boring things really well at scale very securely over a long period of time but when you have rapid innovation like OpenStack is only four years old. It's very young. So let's talk about those conversations for the OpenStack community. Folks here, what is the senior level or buyer conversation for OpenStack that is just straightforward for those outcomes? So about app developers in particular, the buyers. Right. So we published a TCO calculator last week on the Piston website just comparing your AWS bill to the cost of building and running a private cloud including hardware, including sysadmins and power and data center and cooling and everything on Piston OpenStack. And it's a super simple conversation now even with startups in Soma, if you're spending $20,000 a month on AWS, you're paying too much. You could do this cheaper in-house. Almost anybody can have that conversation, right? There's a lot of small dev teams, a lot of small operations. And that's not hard to cross over on that threshold at all. Given order of magnitude, 20K a month, what kind of profile company is that? What kind of app they running, what kind of? It really varies but let's say it's 100 to 150 people as a sort of Soma tech startup. And they might be doing a little bit of data analytics, a little bit of sort of BI work and a bunch of app instances. Yeah, so they say, hey, I can save X, so cost of ownership right there, done. That's how you guys are winning? Yeah, absolutely. That TCO calculator has been a great tool for us. It's the hockey stick right there. Let's talk about Cloud Foundry. You said they're winning. James Waters says he's winning. Yeah. So people will debate that. Are they winning or are they not? So look at, look at, look at, how did we know that OpenStack was going to win in the early days, right? It was who joined? First, you look at the leading indicators, okay, who's signing on board? You know, the day that IBM and Red Hat announced they were joining OpenStack, people were like, oh, I guess that's game over. There's not going to be anything else that matters in this ecosystem. So who's not a part of Cloud Foundry? The AWS, Amazon? I mean, Amazon, Azure? So Amazon's not a part of anyone but if you look at the software only, the open source past software, you've got the Docker ecosystem, which by the way is a great partnership with Cloud Foundry. We see a whole bunch of Docker integration going on there now. You've got OpenShift, which is really Red Hat by themselves, and then everyone else has doubled down on Cloud Foundry, right? IBM BlueMix is Cloud Foundry, HP's in there for Cloud Foundry, Pivotal, Piston, you've got a ton of customers, Swisscom up on stage at the last CF summit talking about what they're doing with Cloud Foundry in production. Like, it just, and now I'm going slowly, so I don't mention a bunch of customers I'm not supposed to talk about yet. Good catch. Yeah, it's a really exciting time. We'll get those customers. Josh, it's great. One of the things that's great talking with you is one, you have such great knowledge of what's going on and the relevance of right now, but also the historical perspective. Looking back now from the early days when we were all kind of hanging around pre-OpenStack, it was a handful of people, now it's thousands of people. At least here in Silicon Valley, it feels like a homecoming because everyone can see each other. Hey, we work together, we're going to show you that barrister. How do you feel about the current situation? I mean, I see you're an entrepreneur, you've got a business to run, you've got some good revenue coming in, you're part of the foundation, you're part of the ecosystem, you're one of the founding principles, the industry here, what's it, you ever reflect and go and pinch yourself and think, where am I? Who am I? It felt like that for a lot of the first couple of years, and at a certain point I made the Thanksgiving dinner joke. It really feels like family. I run into these folks all the time. Every single event I go to, there's OpenStack people there. I went, my kids are in Victoria, I live up in Victoria part-time, and I went to some local little tech event in Victoria, Canada, thinking nobody will have ever heard of OpenStack, I could just like hide out. I was wearing my piston hoodie, I went up to a table and the guy goes, oh, you're from Piston? And I looked down and his company was R2 OpenStack. And it's a one-man shop, just selling OpenStack in like small towns in remote parts of Canada have OpenStack distributors now. So it feels like we've actually just changed the entire landscape of IT. And it's just beginning too. I think this transformation, it's totally a game changer in terms of, we're changing computing. You guys are really done a great job. Josh McKenzie with Piston Cloud, great guy, great guest, Cube alumni, great to have you on another tech athlete as we say, we're here live in Silicon Valley extracting the data and sharing it out of their heads, right to you. Here on theCUBE, I'm John Furrier with Jeff Frick. We'll be right back after this short break.