 Live from the Sands Convention Center in Las Vegas, Nevada, it's The Cube at AWS ReInvent 2014. Brought to you by headline sponsors Amazon and TrendMicro. We're live here on the floor of Amazon Web Services ReInvent. The Cube is starting to do their own events. I'm joined by two awesome guests here, tech athletes, luminaries, who at VMworld this year were all tight-lipped about their company, Lumio, PJ Kruger, CTO and founder, and Alan Cohen, chief commercial officer, CMO, but you're the janitor too in the startups. Absolutely. Guys, welcome to ReInvent The Cube. Thanks. Great to be here. So Lumio, let's go right into the company. So for the folks out there watching, very hyped up startup because they were in such a super-secret stealth mode, hyped up in a good way. They had great reputations, a lot of scuttle-button back-channeling in Silicon Valley around technology, star team, a lot of capital markets groping for the deal, which is chumming the waters, if you will, in Silicon Valley. But you guys are pretty confident, had a swagger at VMworld and you took the lid off everything. So let's go through that. PJ, tell us the core product in the launch. What happened? What was it all about? How did it all get started? Why this launch is so architected to be so stealthy? What's really happening is data centers are becoming more dynamic and distributed, right? And there is a lot of change going on. The new applications coming, there's scaling, there's all of these things that are creating a lot of change and interesting. And you needed a security platform that was designed from the ground up to actually be able to adapt to and manage that. So Alan, you were always teasing me, you've got to get in the cube, now you're out there, right? So I wanted to just rewind a little bit before you get into some of the fact toys because having a clean sheet of paper is one of the things that people talk about right now as a competitive advantage in this innovation cycle, which is data center in the cloud, which Amazon is trying to win that game. As entrepreneurs and technologists, that's a challenge. So take us through, was it a clean sheet of paper? You guys can comment. I want you to comment on this ground up product. It was a spark that said, hey, so PJ and Andrew Rubin, the two co-founders, found each other through a serendipitous way. Both guys come from a security background and an infrastructure background. And I think as PJ was just saying, what we recognize is that security would have to mirror the computing model that's evolving, which is distributed, which is divorced from the infrastructure for the most part, which is software or software defined. And the only way you could do that is by inverting the model. So the traditional model and security was around choke points and the infrastructure and actually physical boxes or software, you know, a box running on a piece of software. Unfortunately, that doesn't really work. So as we started to engage with now literally over 100 customers over the last two years, we realized a whole bunch of things. First of all, we're in a post virtualization world. It's not about physical or virtual or cloud or data center, right? It's really about anything working anywhere because it's, these are strictly choices people make about their computing. It's about doing things very rapidly and it was about doing things in a way that they're going to have confidence and trust, right? We're all here, you know, Amazon's got a $5 billion business. It's growing extremely quickly. Well, that's what you think. It could be more. Could be more. It could be 10, but if people have more confidence then it's good. It could be 20 or 40. So people were only kind of one or two depreciation cycles from people talking about infrastructure as a device as opposed to really basically set a processing capabilities to do a bunch of functions. PJ, I want you to comment on that thread. I want to double down on that with you because when I talk with Steve Herron at VMworld, you know, he was talking about Peruminos IT, kind of teasing a little, teasing out a little bit. That's basically what you're doing. But when I sit down and also talk to Andy Jassy and I talk to the folks in the government who are also here today, CIA, Health and Human Services and their Chief Security Officer, you know, they're misunderstood. Amazon is one of the most misunderstood companies because they're turning the world upside down. So you guys are kind of in the same, cutting the same cloth with Amazon. You know, disruptors but innovators at the same time, which is a hard trick to balance as a startup. They're a little bit off the platform a little bit. They're growing like a rocket ship. You guys are that same kind of company. I agree. I love being here. I've been here three times. I've been to all the shows. And I mean, these are where people are actually changing the world, change the way things are happening. The idea of, you know, there's this concept of devopset, right, which is the combination, which is breaking down the walls between the development cycle, the operational cycle and the security cycle, and that's really what needs to happen. And, you know, what Lumia has done is sort of built a security product that actually works within that world and works the way people want to work. And, you know, if you think about it, John, Amazon broke the perimeter. They ended the perimeter. So they released the Kraken on our term, right? They unleashed the Kraken and computing. Explain this Kraken toy. This is not a toy. This is our mascot. So, look, if you remember your- I predicted Godzilla. I predicted Godzilla. No, it's the Kraken. If you think about Greek mythology, right, when the gods basically let loose, they released the Kraken. So we believe that by breaking down the perimeter and basically unshackling computing from physical place and physical infrastructure, they've released the Kraken. What we've actually provided is actually security so you could deal with the Kraken. That's why we talk about the Kraken. So Kraken always brings up drugs, you know, hand out the Kraken for customers. But this is not about the- Are you talking to a vendor about Kraken? There's no Kraken here. There's no Kool-Aid. Let's talk about the Kraken. Because the perimeter is dead. I would agree that the Kraken has definitely been out for a while. And the security holes right now are so massive in IT. I mean, the breeches alone and incidents are up. Incidents are up. In big time, there's a lot of breeches. You're seeing it every day. And so people are sitting there scratching their heads saying, holy shit, what do I do? So how do you guys solve that problem and share with where you're at in the product? Because some will say, hey, this is a hyped up startup. There's no real product there. Think of through that. Let's break this down. You're right. It's the soft and chewy inside problem, right? I mean, things get through, they're going through what is left of the perimeter. And then they just get to go wherever they want to. And what we've done, and we've actually, we've put product in our customers' hands for 14 months now, 14 releases of the product. We've actually got people to use the product, worked with the customer's help, understand what their problems were, understand how they wanted to use the product, what they needed. And we've built something pretty amazing. I mean, and when you talk about the product. You guys have paying customers now? Well, yes. Actually, all our customers are on launch for paying. That includes Morgan Stanley, Plantronics, Yahoo, CAA, and I miss who I miss. That's pretty good validation. You got investors that pay you for equity. Yes. And customers that pay you for value. Well, I mean, and I think to PJ's point, that this didn't happen overnight. This took over a year of working with some of these folks to really bring this along the line. They have enormous issues. And you know what? Their issues are not homogeneous, right? So, before we get into some of the content, John, I want to fill in the customers. Just take back the timeline. So, just for the record, when did it start? You mentioned, you know, you did some developments. It's not like you guys did it in a garage, threw it out there. Talk about the seed funding, the A-Round funding, how long ago, how much of the development. So, the company was officially formed in January of 13. We raised $8 million from Andreessen Horowitz, PJ, and Andrew, and a bunch of folks started writing code. I actually joined these guys about five months later. And we raised another $34 million. Ben Berghese came over from VMware, who's employee number 50. Steve Herrod led that round. And then Mark Benioff, Jerry Yang, and John Thompson, who just joined our board, joined the round. So, we were pretty much heads down based on the work with customers in delivering code for the last few years. You're smiling. I'm making you happy. I like Steve Herrod, man. He's a great investor. We like him too. He's one of the smartest guys on the planet. So, you know, investors are solid. So, I mean, in recent, they'll throw money at anything, but you guys have, you know, a good team. So, that's their mojo, eight million with a team. I can see them throwing money at it. Now you've got the team. You've got the bank going. What goes on with the product? What happened next? PJ, share with us that. I mean, I don't mean Andrew's the first money at anything, they actually don't. But when they see a good team, they'll write an $8 million check. Right, and that's what I mean. We really took a practical approach to start a solving problem. We knew it was a complicated problem. And, you know, we just, we weren't, we needed to engage with the customer and work with them, right? So, about five months in, we actually, you know, delivered some products to some initial customers. And, you know, helped them understand, helped us understand what the complexities were about what this, I mean, this dynamic data center, right? And all the, like, the static security model is kind of broken. And there was this gap forming between those two. So, what was the reaction of the customers? Take us through the emotional and, like, the response. But you guys, like, nervous. We were like, well, shit, they might not like it, or we hope it'll be a home run. Well, so, I remember one, you know, there was one session we did and, you know, we sort of pitched, okay, here's the big idea, right? And we knew we couldn't do everything. There's no way you can do everything, you know? And so, we sort of took this little, this little slice of what we thought was valuable. What really struck me was, when we actually delivered that to customers, customers said, oh yeah, okay, I get your big story. I get it, but that one thing that you gave me first, I really need that right now, right? And that's what kind of started the whole thing and left the fire. Yeah, that was like how Splunk started, too. I mean, Splunk had this great vision, had this little tool that everyone wanted. Exactly. And then kicked in, so that's good. So, Alan, take us through where it goes from there, because now you start to get into, like, this thing has legs, right? So then... Well, there's two things you should understand. The first thing is, we will show everybody everything that's happening in their data center in Amazon. It's a view of all their computing that they've never had before, and knowledge is powerful. The second thing that we do is, we're constantly recomputing the security. So, unlike a device, we're talking about a firewall or an IDS device, the traditional security discussion, we're constantly recomputing the topology. So, we're actually a little bit more like Google, the company's built on top of math, and that's really where PGA is. So, what we're going to do over the next couple of years is take in more context, more information, and constantly re-competing people's postures and make it much more effective, much more locked down, and allow them to have a great degree of confidence to take advantage of massive infrastructure that's available with push of a button from a company like Amazon or inside their own data center. And those are really the insights. I mean, one is understanding the relationships of what's happening behind the perimeter in your data center. People don't know. There's lots of stuff going on. There's been lots of changes those lots of times. There's startups running millions of miles an hour. They don't know. So, getting to understand this. Well, also the API economy, this idea of notifications, mobile infrastructure is really not hardened out. So, you have this kind of like gaping holes, small little cracks everywhere. You have lots and lots of change and you need a platform, a security platform that can keep up with that, right? And back to what Alan said, that constantly recomputing based on the changes is what the power is. To give you a sense on how large this is, so if you look at how the security model is built. Large market or the, Large market is both. People spend 95% of their money protecting the front door, right? Which has about 30% of their computing traffic goes through it. They don't spend any money on 70% of it. So we're focused on that 70% that hasn't had security before. And the good news with our models if your security's running in Microsoft Azure or in Amazon Web Services or in a VMware data center in your own thing, we work across all of them. It's the classic 70-30 operations versus investment. Okay, let's step back. I want you guys to help me out and for the audience to do the Lumia 101. What's the product? What's the 101? What does it do? What is it solving? What's the premise? Use case, take us through the, again, 101 of the product. I mean, it's very simple. What we've built, and we call it the adaptive security platform. And they put the target audience in it. Who's it for? It is a, so there's three communities that we work with the Chief Information Security Officer and we work with the infrastructure and operations people. And what we do is we let these guys get together and allow the developers to create and drive applications velocity and trust very quickly. So the product is a software topology. It sits across all of your computing images and as PJ was just saying in a second, it constantly calculates the ideal security posture. If something changes, we change the security posture. If something scales up, auto-scales, we auto-scale with it. If something looks like a piece of malware wakes up, we actually alert on it and take action. So effectively, we are really much more like a series of bodyguards on each one of those computing images as opposed to a lock on the front door. Who needs our product? Everybody needs this product. Anybody. It sounds like a vaccine. A vaccine. It sounds like a vaccine. That's Paula Long's comment. I'd rather it just be the cure. That was, yeah. So what's the 101, PJ? Give us your version. You could add to that. Yeah, I mean, I think the, is it big data software? Is it like, is it a box? Is it more innovation in software? So a lot of the innovation is actually understanding the relationships and the graphs of dependencies between what those data center workloads are doing, who they're talking with, what services they're using, at what time these things are happening, understanding all that context, gathering all that context. And actually, again, providing that level of visibility, understanding the customer, but then being able to provide access control and other confidentiality services back to those data center workloads. Where are a bunch of hall monitors out there? Is network management meet system management? No, it's actually computing solves the needs of computing from a security point of view. Our backhand, what we call our policy, it was a giant brain that is watching everything going on and making decisions. It's really like Terminator. It's like the Terminator too, when it actually knows what it's doing and constantly think. All right, so I got to ask PJ the question. So, what would, what makes this possible today in this world that wasn't possible five years ago? Because, you know, you bring up, I bring up this whole metaphor of network management. The reality is with virtualization and all this new stuff, commute, you can do things. So what enabled you guys to tackle this problem that wasn't around just five years ago? Or 10 years ago, whatever. Yeah, I mean, well, the problem didn't really exist because the data centers which were much more static. So, this is a new problem. I mean, it is the problem that the cloud brings, whether it's public or private, and just the speed at pace of which everybody's going. So, it's a relatively new problem. What allows us to, I mean, what we're sort of bringing in terms of innovation is understanding and computing the dependencies and relationships. And there's a lot of algorithms that we've sort of put in place to do that, to be able to, you know, calculate those, show you those, calculate those, and actually be able to adapt dynamically. Being able to do it in real time, and there are a lot of time to be able to do that is, so you have horsepower at the computing. Is the workload shift a big driver in your trend? I mean, this idea of outcome-based workloads and absence and whatnot? Yeah, I mean, we love things moving around. We love things being distributed, being heterogeneous. I mean, we have customers who sit stuff in Azure and Amazon and have data centers back home, right? That is the perfect environment for our product. The more kind of, the more... It's only getting worse, right? I mean, that's what everybody understands, right? I mean, GitHub announced today their enterprise version from local hosts, booming the cloud, and they don't use those. I mean, John, the way you need to think about computing is the way people think about transportation, right? In the old days, you bought a car and now people use Uber, right? I mean, people are increasingly going to focus on what computing can do for them and not owning the infrastructure means. Once you move into that world, you have to have a different paradigm to own it, to manage it, to secure it and to build application on it, and that's really where we come from. Okay, now let's move into more of the fun conversation around the buzz of the launch. What was the most impressive thing or weirdest thing or interesting thing that happened with the launch? Because you guys had a really interesting launch. Very stealthy, you wanted to come out, lining up your ducks, classic old school kind of launch. I liked it, kind of keep everything on the tight lip and then launch big and then just drive that bus home. So what happened? How did it go? What's the results? Share some information. Well, I'll tell you something that's really weird is that for the first time in my career, you know, we probably briefed 20 analysts and the same amount of number of press. People got the story accurately. I've never seen, in my entire life, must have launched a dozen products and companies in the last 25 years. I've never seen anyone get a story so accurately across the board as ours. It was actually bizarre. Like, normally you're banging your hands on the table and go, they don't get it. I don't understand, we spent hours with them. People got it. But I think the thing that worked for us is the marquee customers we led with, people knew it was real. And they really grok the technology. I mean, what about you, PJ? No, I agree with that. I mean, it was being able to sort of talk to people, get them to understand, get them to go from zero to, you know, understanding what the product was, what the value proposition was. It was great to be able to do that. A lot of people are trying to really figure out what's real. I like that notion because a lot of hype in the market, a lot of noise, especially people who are groping for technology or market position or bull, just a lot of stuff out there. You've got good investors. You've got some customers against deep areas, solid guy. So with that, I want to ask you more the Silicon Valley question, venture question. Because again, you guys are very experienced and I really admire that. I think that's worthy of highlighting because a lot of entrepreneurs out there, the market shifts, we've got to get in the end, oh, enterprise is hot, let's get in the enterprise. Share with the folks out there, how easy it is to just win in the enterprise. I mean, enterprise is really- You see all these lines under my eyes? Enterprise is easy. Come on, isn't the enterprise just like you wake up, blow some code, you know, you're up and running? Oh yeah. I'm getting, of course, share in the enterprise. What's it take to win in the enterprise? How to launch a company? How to win the product value? I want to put something mission critical in your environment. Why don't you just throw it in and talk to the New York Times for us? It's easy. Well, share. I mean, the valid value right now and certainly is very hot. There's a lot of demand in the enterprise. Certainly, convergent infrastructure and stuff that you guys are working on. I mean, I think the thing that's driving us, and PJ, you should definitely jump in, is that we solve an immediate need right now. People do not trust their data centers. They don't trust their networks. And you know what? Their business doesn't stop. So every day you read about a piece of malware hacking something. Well, guess what? You have to get up every day and still run your business, whether you're under threat or not, whether you understand your computing environment or not. So I think- Well, what's your advice for entrepreneurs? You're a vet. You're a 25-year veteran launching companies, building stuff. Do 14 releases of software with customers. Build your products with your customers day one. Don't spend nine months building a beta and then just figuring out if somebody wants to use it. You have to have some guts not to know that you're iterating through it and not to jump to conclusions, right? What would you- Yeah, patient. I mean, patience is important, right? I mean- And a lot of what we've done in terms of building the team is we've brought together people not from the same background, not like everybody from the same company. We've brought a heterogeneous set of people. There's a lot of different ideas in the room and you have to pay attention. You actually have to listen and your employees need to listen. You need to listen to your customers. And that is really what has actually brought some of the innovative ideas to the tip. How much feedback did you get from customers that recycled back in the product? Were you guys on this like hardcore take us through some of the product marketing, product management, go-to-market integration? Why don't we talk about the on-premise versus the cloud? Well, yeah. So one thing that we have done is we do get feedback from customers, but we are actually patient about it and we need to see actually a trend occurring because we get the same, we get different feedback, different perspectives from different customers. Actually being able to see the big picture, the bigger picture and then be able to act on that bigger picture is- What was the biggest thing that surprised you? At the end of the day, looking back now, whether you were like sitting there going, drinking the beer going, we should just kill up, it's not going to work or anything's going to plan. What surprised you? What couple, what one thing or a few things surprised you about this venture that was not expected? One thing I didn't realize was the policy complexity problem and the policy debt that people have was so great and so costly to them that it really kind of slowed them down and having a product that allowed you to sort of move faster, be able to move at the speed you needed to move, that the rest of the infrastructure was moving and nothing else about it. I didn't understand how big that gap actually was. That's my biggest surprise. So the complexity of the policy, all this kind of like infrastructure that they had, the legacy or complexity? You go to a large enterprise and they tell you we have four million firewall rules and you go, great, how many of those rules are active and they say, I don't know and then they say, do you feel better? And they're afraid to touch anything because they think the whole thing is going to fall apart where they're going to be opening themselves up to a range of hackers. It really has become over the 90s and 2000s it's become a solidated house of cards. There is one other thing that I think, so if you've been to Rome. Yes. Okay, so if you've been to Rome you know that if you go to Rome. I'm sorry, Milan, not Milan. But you go anywhere that there was an ancient civilization and you find the next civilization is built on top of it. So you go to customers that are here today, they're built on top of mainframe, then client server, now cloud and virtualization computing and none of it goes away. And if you don't, and you can't span those environments, you can't really solve any of their problems. So how do you guys get a customer up and running? Is it a rip and replace, work lift? Is it just, you know, bland and expand? How does a customer move all over to you guys? All the above? Yeah, I mean, the... You're shaking your head, which was that mean? All of them shows up. All of them shows up. Some of them are land and expand like Clan Tronics. They had a brand new application. We just started there. You go to some of the New York financials, they want to talk about the entire enterprise. It's a longer cycle and you've got to go through months and months of working with them. So I mean, it depends who it is. If you put a brand new application in Amazon, you could bake Lumio into the Chef Puppet Ansible Scripts and you could be up and running as fast as that application goes. But it depends on, you know, is it Greenfield or is it Brownfield? And if you don't do both, you really can't serve the enterprise. Because it's a diverse base, right? Yeah. Different people. So if you have a much more mature product and you're sort of going in that way, people take the visibility and the understanding first and then they sort of craft policy. If you get people who want to bake you into the beginning of a developmental life cycle, then the policy authoring and development is much more important for them. But they need both and being aligned with that whole development life cycle, I mean, that's also, actually give us the update. What's the plans? Product, market, you guys just all gassing it up right now. Full throttle, promotional, you're post-launch, so obviously customer acquisition, you're hiring, give us all the above, give us the facts. We're open for business, right? So you have customers, send them our way. We want everybody here in this room. I see $10 billion of computing, we can help secure it, right? We want all of that. But you know what, we want all of the computing that's not leaving the enterprise, that's not moving to the cloud too. And we want everything in between. So we're rapidly hiring people in the field. We're opening up in other geographies. And direct sales force. Direct sales force, channel partners, everything. It's all going on. So full build out. I mean, we have burned the boats. We're a building company, that is what we're doing. Burning the boats, as I'm referring to the, burning the boats, you're stuck on the island and you have to survive and win. So product, give us the product view. I mean, in terms of the customers, I mean, the more complexity, the better, right? I mean, because we are independent of the infrastructure, we can work across all those things. So we kind of like those specific challenges. All right, so guys, what does Amazon have, right? And what do they need to do better? Well, I mean, look, they've made it easier than anyone in the planet to establish an additional computing capacity and use it in the most efficient, cost efficient and operationally effective efficient way in the world. And that's why their business is so great and nobody has caught them to do that. What they need to do, which we hope to help with, and others I'm sure are trying just as hard as we are, is give the enterprise the confidence to take advantage of that operational efficiency and the ease of use. And you put those two things together, there's no end in sight for that. Well, the CIA announced today they're going full consumption with Amazon that was announced in the analyst session. There's other breaking news. I got a scoop, I can't say I will get killed regarding Jeff Bezos, but that's coming tomorrow. So, given that, who will be the driftwood? The clouds and enablers, so final question for you guys. Both answer. Who's the driftwood in this market? Who doesn't, and if they don't move fast enough, the big incumbents. And talk about like the enterprise cloud gain, okay? Like because Amazon trying to win the enterprise, Pat Gelsinger says if you're not out in front of that next wave, you're driftwood. But Amazon is not, doesn't have the whole package yet. But they're also not alone, right? I mean Google is in this business, Microsoft is in this business, other people are in this business. I mean, Amazon clearly has got a huge lead in size and complexity. I mean, people who don't adapt die, right? And so the driftwood will be the people who are so wed. They have their boats, they need to burn their boats. You know there's this little thing called Maslow's Hammer. If you're a hammer, everything's a nail. So vendors in this market doesn't make this if you're a startup or if you're an incumbent. If you think the only way of doing something is the way you've always done it, you're going to have a hard time. All right, so I'm going to check, go ahead. The only one is the people who are trying to protect their silo, right? I mean, back to your point about the API economy and all those things, it's the people who can work together, you know, are the ones who are going to. Protecting those silos, you're going to get screwed. Basically, because you're holding onto a sacred cow that's going away. Exactly, things are moving faster. So the real question is the money making, right? Let's talk about money making. So I'm a channel partner. My kids came up today in a crowd chat I was doing on infrastructure. Where's cloud enable with tools like Elumio? Where's the money making? I'm a partner. I want to bolt on some services. Where's the opportunity on top of Elumio, on top of this new model? Share with the folks out there. Well, you know, I mean, there is an enormous. Is it packaging? Is it just services? Well, I think it's all over. There's an enormous learning curve. You say, look, I'm used to using a bunch of devices in my network. And now you're telling me to deploy the software. And I'm going to do things. And I used to write things in IP addresses. And now you're telling me to write my policy in English. And what about that thing? And do I still use it? Well, that takes people, right? It takes people that you mean, you know, I like Coursera and I like Udacity, but I also like going to school and learning from people. So it's going to take an enormous amount of people and services to make this transition. And I think that's why I think, you know, opportunities like ours are extremely attractive. Do you see Udacity as possibly the human capital model? Yes. You see channel partners building their own tech. You see CSC, for instance, they're going into orchestration. So there's a huge money making opportunity, certainly deploying with partners. That's pretty, it's a boring topic. There's got $300 billion of infrastructure that's jumping up in the air. And when it lands, it's not going to land in the same place. So who knows who's going to land on some of it. We're hoping that some of it lands on us. But, you know, I think you, I mean, this is the largest transition since we started the move from mainframe to client server. And from where we said security is the last piece that people have dealt with. There are great answers to compute. These docker all over the place, right? There's increasingly efficient, you know, there's things like cumulus in network, but there isn't a lot in security. Al, I want to just get your final word on that. Tell the folks out there why this point in time is so exciting. And what's how big is the opportunity? And you mentioned, and I agree with you, this is really a point in flexion and shift happening at the same time. And you've been there, I can see that you know and you want to share, but I want you to, just say, why is it so big? What's the key force? And just paint a picture on how huge. It is really simple. Customers have never been more open to change because they've never been under so much change. In the old days, if you built a car, it would take five years for somebody to build a model and catch up. That's something that can catch you in a year. Every business in the world is under assault and has to move faster. Customers are all looking for new paradigms from IT. PJ, thank you very much. Founders of Alumeo, founder and chief commercial officer here inside theCUBE, Alumeo. Hot startup launched, open for business, ramping up. They burned the boats, exciting to watch. Great investors, Steve Herrod, great customer base. Thank you. It'd be fun to watch you guys build up. This is theCUBE, we'll keep a track of you. This is theCUBE, be right back. We're live here inside the ground floor of Amazon re-inventing Las Vegas, theCUBE, be right back.