 Live from Las Vegas, it's theCUBE! Covering AWS re-invent 2019. Brought to you by Amazon Web Services and Intel, along with its ecosystem partners. Hello everyone, welcome back to theCUBE here live in Las Vegas for AWS re-invent. I'm John Furrier with Dave Vellante. As always, extracting the signal from the noise, we're here for our seventh re-invent of the eight years that they've had at WhataWave. One of the biggest waves is the modernization of procurement, the modernization of business, commercial business, and the rapid acceleration of public sector. We're here with the Chief of Public Sector for AWS, Theresa Carlson, Vice President of Public Sector globally, great to have you. Great to see you. Thank you for having me. It's so great to have theCUBE again this year. We appreciate God's being here. So we're just seeing so much acceleration of modernization. Even on the commercial side, AD talks about transformation. It's just as hardcore on the public sector side. You have so many different areas transforming faster because they haven't transformed before. That's correct. This is a lot of change. What's changed the most for you and your business? Well, again, I'll be here 10 years this month at AWS and my eighth re-invent. And what really changed, which was very exciting this year is on Monday we had 550 international government executives here from 40 countries who were talking about their modernization efforts at every level. Now again, think about that. 40 different governments, 550 executives, we had a fantastic day for them planned. And it was really phenomenal because the way that these international governments are thinking about their budget is how much are they going to use that for maintaining and they want to get that less and less a beckett for modernization, but then John, it's a beckett for innovation so that they continue not to only modernize but they're really looking at innovation cycles. So that's a big one. And then you heard from some of our customers that the breakfast this morning from ATF as part of Department of Justice what they're doing, alcohol, tobacco and firearms, they've completely moved to the cloud. They've gotten rid of 20 years of technical debt to the Veterans Administration on what they're doing for VA benefits to educational institutions like RMIT. Yeah, I noticed Andy had on stage here his keynote, Surner, which is the healthcare company. And what struck me about that and I think it relates to Europe is I want to get your reaction is that the healthcare is such an acute example that everyone can relate to. Rising costs, so cloud helping reduce costs, increase the efficiencies in patient care, it's a triple win. The same thing happens in public sector. There's no place to hide anymore. You have bona fide efficiencies that could come right out of the gate with cloud plus innovation. And it's happening in all the sectors within the public sector. It's so true. Well, Surner is a great example because they won the award at VA Veterans Administration to do the whole entire medical records modernization. So you have a company on stage that's as commercial as they are public sector that are going into these large modernization efforts. And as you said John, these are not easy. This takes focus and leadership and a real culture change to make these things happen. You know, the international expansion is impressive. We saw each other in London. We did the healthcare drill down at your offices. Of course, national health. And then you guys are in Bahrain. And what I discerned is it's not like these organizations are way behind. I mean, especially the ones that have moved to the cloud are moving really fast. So... Well, they don't have as much technical debt internationally as what we see here in the U.S. So like I was just in Africa, and you know what we talked about? Digitizing paper. Well, there's no technology on that end. So there it's kind of exciting because they can literally start from square one and get going. And there's a real hunger and a need to make that happen. So it's different for every country in terms of where they are in their cloud journey. So I want to ask you about some of the big deals. Obviously, Jedi's in the news. And you can't talk about it because it's in protest and legal issues. But you have a lot of big deals that you've done. Did you share some color commentary on some of the big deals? And what it really means? Yeah, well, first of all, let me just say with Department of Defense, Jedi or no Jedi, we have a very significant business. You know, doing work at every part of Department of Defense, Army, Navy, Air Force, in the intelligence community who has a mission for DOD, from NSA to NGA to NRO. And we are not slowing down in DOD. We had like 250 people at a lunch and yesterday giving ideas on what they're doing and sharing best practices around defense. So we're not slowing down in DOD. We're really excited. We have amazing partners that are doing mission work with us. But in terms of some really kind of fun things that have happened, we did a press announcement today with FINRA, the Financial Regulatory Authority here in the US that regulates markets. This is the largest financial set of transactions you'll ever see being processed and run on the cloud. And the program is called CAT, Consolidated Audit Trail. And if you remember the flash crash and the market's kind of going crazy from 2000 to 2008 when it started, FINRA started on a journey to try to understand why these market events were happening. And now they have won something called CAT, which will do more than 100 billion market points a day that will be processed on the cloud. And this is what we know of right now. And they'll be looking for indicators of nefarious behavior within the markets and we'll look for indicators on a continuous basis. Now, what we've talked about is we don't even know what we don't know yet because we're getting so much data. We're going to start processing and crunching coming out of all kinds of groups that they're working with. But this is an important point even for FINRA. They're going to be retiring technical debt that they have. So as they roll out CAT, they'll be retiring other systems like OATS and other programs that they run. Well, as you say, so that flash crash, this is really important, the consolidated auto trails because the flash crash, they'll chalk it up to a glitch in the system translation. We don't really know what happened. So to have a consolidated auto trail and having the data and the capabilities to understand it is really, really important for transparency and confidence in the market. It's huge. And by the way, FINRA has been working with us since 2014. They're one of our best partners and our prolific users of the cloud. And I will tell you, it's important that we have industries like FINRA, regulatory authorities that are going in and saying, look, we could possibly do what we're doing without cloud computing. Teresa, tell me about the technical debt because I like this conversation because we talk about on the commercial side in a developer kind of thinking, most businesses, startups, whatever. What does technical debt mean in public sector? Can you be specific? Well, it's years and years of legacy applications that never had any modernization associated with them. In public sector, you know now because you've talked about these procurements, you're very, both of you are very savvy now in public sector procurement. We know how bad it is. It's horrible. It's like 1995. It's not for the faint of heart, so for sure. But when you do a procurement over the years, when they would do something, they wouldn't build in new innovations or modernizations. So if you think about, if you build a data center today, a traditional data center, it's outdated tomorrow. The same thing with the procurement. By the time that they delivered on those requirements, they were outdated. So technical debt then has been built up years upon years of not modernizing, just kind of maintaining a status quo with no new insights or analytics that you couldn't add any new tooling. So that is where you see agencies like ATF that have said, wow, if I'm going to have a modern agency that tracks things like forensics, understands the machine learning of what's happening in justice and public safety, I need to have the most modern tools, and I can't do that on an outdated system. So that's what we kind of call technical debt that just maintains that system without having anything new that you're adding to it. Yeah, and the capabilities lag and everything's, the product's bad. Okay, great, thanks for that definition. I got to ask you about something that's near and dear to our heart, collaboration. If you look at the big successes in the world and within Amazon, Quantum, Caltech's partnering on the Quantum side, you've done a lot of collaboration with Cal Poly for Brown Station, Amazon Educate. You've been very collaborative in your business and that's continuing to be a best practice. You have now new things like the Cloud Innovation Centers. Talk about that dynamic and how collaboration has become an important part of your business model. Well, we use our own principles from Amazon, we got building things. In our Cloud Innovation Centers, we started out piloting those to see could they work and it's really a public-private partnership between AWS and universities. But it's universities that really want to do something. And Cal Poly is a great example. Arizona State University, a great example. The number one most innovative university in the U.S. for like four years in a row. And what we do is we go in and we do these public sector challenges. So the collaboration happens John between the public sector entity, the university with students and us. And what we bring to the table is technical talent, our technology and our mechanisms and processes like our working backwards processes. And we're like, we want you to bring your best and brightest students. Let's bring public sector in the fold. They bring challenges that are real that we can take on. And then they can go back and absorb. And they're pretty exciting. Today I talked about, we have over 44 today that we've documented and we're working at Cal Poly. The one at Arizona State University is about smart cities. And then you heard we're announcing new ones. We've got two in France, one in Germany. Now one that we're doing on cybersecurity with RMIT in Australia. Two we said in Bahrain. So you're going to see us add a lot more of these and we are getting the results out of them. So we won't do them if we don't like them but right now we really like these partnerships. The results are looking good. What's going on with them? The results are great. And I'll tell you why they're different. We are taking on real public sector issues and challenges that are happening. They're not kind of pie in the sky. We might get there because those are good things to do. But what we want to do is let's tackle things that are real. Homelessness, opioid crisis, human sex trafficking that we're seeing. Things that are real in these communities and those are kind of grand but then we're taking on areas like farming where we talked about can we get strawberries that are rotting on the vine out of the field into the market before you lose billions of dollars in California. So it's things like that that were, so it's challenges that are quick and real. And the thing about cloud is you can create an application and solution and test it out very rapidly without high cost of doing that. And no technical debt. You mentioned smart cities. I would just attend to the session. Marty Walsh, the mayor of Boston has got this 50 year smart city plan and it's pretty impressive but it's a heavy lift. So what do you see going on in smart cities? I mean you really can't do it without the cloud which was kind of my big input. Where's the cloud, where's the data? What do you see? Cloud IoT is a big part of all these sensors that Andy talked about yesterday in his keynote and why the 5G partnerships are so important. These sensors are going to be everywhere and you don't even know they really exist because they can be everywhere. And if you have the 5G capabilities to move those communications really fast and encrypt them so you have all the security you need, this is game changing but I'll give you an example. I'll go back to the kick for a minute at Arizona State University. They put IoT sensors everywhere. They know traffic patterns, how many parking slots are filled, what utilities of water if their trash bins are being filled up, number of seats that are being taken up in stadiums. So it's things like that that they're really working to understand what are the dynamics of their city and traffic flow around that smart city. And then they're adding things on for the students like Alexa skills. Where's all the activities? So you're adding all things like Alexa apps which go into a smart city kind of dynamic. Where do I shop? Where's the best activities? Where do I buy my books? Where do I buy my clothes? What's the pizza on sale tonight? So and then to things like you saw today on Singapore where they're taking data from all different elements of agencies and presenting that back to a citizen from their child as an example. Day one of a birth. Even before, where's all the services? What do I do? How do I track these things? How do I navigate my city to get to all those services? These seem like kind of time this guy things, they're not, they're real and they're actually happening. Well, it seems like they're instrumenting a lot of the components of the city learning from that and then deciding, okay, where do we double down and where do we place our bets? And it's making them a resilient government, a resilient town. I mean, these are the things that citizens can really help take control of and have a voice in doing. Teresa, I want to say congratulations to your success. I know it's not for the faint of heart have been in the public sector these days. A lot of blockers, a lot of politics, a lot of government blockers and old procurement systems, technical debt. I mean, Windows 95 is probably still on a bunch of PCs and on F-50, 45 fighters, 15 fighters. So you've got a great job. You've been doing a great job and riding that wave, so congratulations. Well, I'll just say it's worth it. It is worth it. We are committed to public sector and we really want to see everyone from our war fighters to our citizens have the capabilities they need. So thank you John. And you know that we're very passionate this year about going into 2020 for theCUBE and our audience to do a lot more tech for good programming. This is something that's near and dear to your heart as well. You have a chance to shape technology. Yes. Well, today you saw we had a really amazing not-for-profit on stage with us called Game Changer. And what we found with not-for-profits is that technology can be a game changer if they use it because it makes their mission dollars go much further. And they're an amazing father and son team that started Game Changer. Taylor was in the hospital five years with terminal cancer and he and his father through these five years kind of looked around and said, look at all these children. What do they need? And they started, he is actually still here with us today and now he's a young adult taking care of other young children with cancer using gaming technologies with their partner Twitch and AWS and helping analyze and understand what these young affected children with cancer need both personally and academically and the tools he has he's helping really promote this and give back. And it's really heartwarming. So I was happy, my partner Mike Clavel who is my, who runs commercial sales and business and I run public sector today were honored to give them a small token of a gift from AWS to help support their efforts. Well, congratulations. We appreciate you coming on theCUBE sharing the updates and good luck in the 2020. Great to see you. 10 years at AWS. I know. It's day one still. It's day one. I feel like I just started. Is it like still like 10 o'clock in the morning or is it like still eight AM? Is it like afternoon? It's like eight AM. I still wake up every day with a jump in my step and excited about what I'm going to do and cut. So I am, you know, I am really excited about what we're doing and like Andy and I say, we're just scratching the surface. You're a fighter, hard charging. We love you. You're a great executive. You're the chief of public sector. You did a great job. Great to follow you and ride the wave with Amazon and cover you guys work. We're documenting history. Yeah, exactly. We're going and happy holidays to you all and hope to see in our summits in 2020. Thanks so much. Cube coverage here live in Las Vegas. This is the Cube coverage. Extracting the signal noise. Want to shout out to AWS and Intel for putting on the two sets without the sponsorship. We wouldn't be able to support the mission of the Cube. Want to thank them and thank you for watching. We'll be back with more after this short break.