 Live from the Mission Bay Conference Center in San Francisco, California, it's The Cube at Google Cloud Platform Live. Here are your hosts, John Furrier and Jeff Frick. Okay, welcome back everyone. We are live in San Francisco for the Google Cloud Platform Live event. This is The Cube, our flagship program. We go out to the events, you can see the noise. I'm John Furrier, my co-host. Jeff Frick, our next guest is Robert Mahowal, Vice President of SaaS and CloudServe at IDC International Data Corporation. Welcome to The Cube. Thanks very much. So you guys are our leading market research firm. What's the status? Who owns what market share? What's the TAM? Give us the data. What's going on? Share with us the numbers. Tell me the whole story. Amazon is the secretariat, thundering away the finish. They're going to win the triple crown early on in this game. But Google's got muscle. What's the take on that? So we pretty much have a good win-place show story to continue the metaphor. With Amazon commanding the biggest market share, they've been around the longest. I think they've shown that they can leverage what they already built out and their infrastructure to support the retail business to start selling compute and storage and networking. And Microsoft obviously had a huge interest in figuring out how do we migrate the operating system from the customer data center to our cloud. And they started work on that four or five, six years ago. Google, I think, is putting the most muscle into it. They've got the most points of presence. They spent the most money in the last year on infrastructure build out. So they are the new contender that I think we should be paying a lot of attention to. And they've got a unique angle to bring to the whole story. So I think it's a good thing to watch. What about the other players? What IBM and HP are certainly disrupted by this big force of cloud? IBM's making their moves with BlueMix and Cloud Foundry and certainly we see Watson Analytics, the deal with Twitter, they're partnering with leaders, HP's, got a new cloud with some muscle trying to put that sort of... Are they going to just focus in on the IT side, their workloads? Yeah. How does VMware fit into all of this? It's a big question. Well, so let me back up a little bit. Every tech company sort of skates to where their opportunity is and where the customers are. They cannot ignore those guys. I think the key thing about IBM is they were very... They didn't smart things in the last couple years. They had a huge strategic outsourcing business, right, that they got from back in the old days doing application management and IT outsourcing. And they said, this works pretty well, but we really can't define objects down to a granular level. We can't software define our environments for tenancy. We have to buy a software. That's a really important part of the strategy going forward is to buy the infrastructures and services. And then on top of that, they said, listen, we've got this portfolio of 100 SaaS applications. That's important for us to have. How can we open those things up and build this blue mixed platform so that we can start to suck critical pieces of our applications, things that do things like fetch content, start a collaboration, and allow developers to get access to it and build new stuff. That's really... They've got a great story IBM does. And I think a lot of it is simply telling customers, you used to do this with us, now you can do this plus. And Google is a big part of that story. I think HP is a little bit more of a French position because I think they're throwing everything they can to Helion, but I think they've had not quite as big uptake as they wanted to on their public cloud infrastructure. And I think what they need to do is put more muscle into the services business, which is deep into verticals and tell them, listen, this is where you need to do all of your hosting with us. And we have the critical development tools that they built out the last year around Helion. So their support of OpenStack is a huge thing. Obviously Microsoft, IBM, HP, everybody wants to be on the stage. They want to say, we at least have controllers that let you do things on OpenStack. We may not be built on OpenStack, but we want to let you do things there. So that's a big part of the story. So since 2012, looking at the map of the landscape, I want to get your perspective on this. You see a lot of leaders and visionaries now turned into niche players. So really, there's been a sea change. Literally overnight, OpenStack, the summer stays and shambles. Some will say that with the advent of Microsoft now, renewed focus, Google moving off from visionary to leader, you have all these niche players, Joy and Terramar, Savas, even CS season. They have no mention of Dell, no mention of HP, no mention of IBM in this mix. What does that mean? It's a good point. I think the danger is when companies like CSC buy service mesh, for example, they all of a sudden give themselves huge net new capabilities to serve their customer base. And I think from all of their perspective, it's not how can we simply change what we did for you last year or port it to the cloud or maybe put a subscription model on the front end. But how can we offer you net new capability, either through partnership or through acquisition, in the case of CSC. That's really where you can reach further and do better things. I think customers are going through a period where they're not really perfectly impressed by what they used to pay for licensed software, by the services they used to get from the big tech incumbents. And they're open to new ideas and these new guys. So I got to ask you about CSC that you brought it up, that you were just pontificating about the future of Dell and Dell being really innovating around supply chain, going direct, you know, bill to order. Yeah, I can white box some things here. But for the most part, what are they going to do? Cloud brokering, some say, you know, forested guys are saying, hey, you know, great cloud brokering. But CSC telegraphs a move there. It's interesting. They're a management consulting firm now offering a cloud brokering position for the customers. That's a very interesting play. Do you see that as a trend? I think it's, I think for Dell, it's the right move. I think they're going to gain a lot of ability by being a bit more opaque by going private. And I think that having these deep, deep legacy vertical ties is going to help them because with the brokerage position they could be vendor neutral. And they could sort of say, listen, we're not in applications. We're not going to be in any of these backyards. I think it's a smart play for them. And they've gained sales force to key partner in the cloud brokerage. I think that they should probably stay there and not go into the applications business. So cloud services becomes the new go-to-build-to-order, if you will. So the assembly of resources, the CSC and the Dell's, telegraphs, opportunities that if you're not going to have your own cloud, then you might as well own something. Yeah, it's a great analogy. I think it is a way for them. And they can very reasonably take a sort of center of gravity provider position and say, listen, we can do the e-commerce. We can do the integration. We can do the critical things, but we're not going to compete with Microsoft. We're not going to compete with IBM on core applications or SAP or Oracle or any of our huge partners. Because this is the guys who supply all the applications that Dell does the application outsourcing businesses with. So they're not sort of biting the hand that feeds them, but it lets them sort of stay in the game, stay relevant and say, listen, we will be the assembler and provide all the integration. And I think integration is really pretty key. So I'm going to ask you from an IDC perspective, because we've been following IDC for many, many decades. Obviously it owns the market share reports for certainly a lot of these guys like HP, Cisco and whatnot. But that was the old way, ports and market share, gear. How are you looking at it as an analyst, trying to dissect the complicated market, what the TAM is, a lot of cross overlap between DevOps, SaaS, services. How are you looking at the market? I mean, TBR put out a report. I don't know how they're quantifying. AWS a 20% share. Obviously it seems relatively interesting, good order of magnitude relative to the others, but how do you guys look at this? Yeah, it's a really tough thing to do, because most of our market shares, most of our competitors market shares are based on revenue, right, based on net new revenue, based on a run rate of revenue. And so that kind of all goes out the window when you start talking about new versus install base, right, and what really leadership means. We have had to take our software taxonomy, which the whole view of the cloud is based on what kind of capability do you bring? Is it collaboration? Is it CRM? And throw some of that out of the window, because what we're starting to see, especially in the platform as a service arena, is that we're seeing new ways of combining different functionalities that are brought to market in new ways. So for example, integration and service orchestration. Usually in the package software world, they're delivered very, very differently. Here in the cloud, Pivotal can deliver that in the same package on a subscription basis. So we're taking the 98 or so software taxonomy categories and in some cases we're having to say, this doesn't make sense anymore. We're going to have to recombine them in new ways and that dramatically changes who the leaders are. So you're driving that by consumption, by the buyout? By consumption, yeah. So it's almost workload-based, right? Get all most migrated into there, because people are spinning things up, spinning things down, assigning tax and workloads to different clouds based on fit. Yep. Well, you've got a great point also. How do you evaluate, how do you measure something when it's not bought, consumed for three years, and then end of life? If the workload consumption is intermittent, how do you know whether there's, are they still on that platform? And we're trying to figure out, what's the best measure of that? Is it, do they own that asset, or do they have license to that asset for more than an hour, more than a day, more than a month? What means that they're a user of that asset in a meaningful way? It's very, very tough. It's almost like a meter, right? Like a meter on the house. I mean, like the guy that was in the keynote, in the comic, takes you guys, they spun up 12,000 chores, they ran it for about five minutes, and then they turned it back off again. Right. So where does that fit in terms of market share? We're towing around with measures like a meter by being able to say, listen, no matter how many times you started and stopped the usage of this, what was your monthly bill? What was your annual bill? And is that a relevant way to measure consumption of infrastructure and platform resources? That's starting to make some more sense, but we're a long way from figuring it out. How do you tell who's winning? I mean, that's the thing that we're trying to understand, we have kind of anecdotal and we can kind of feel who's winning. But as an analyst, that's our top road. So like, how do you benchmark that? Yeah. So I mean, the way we've been doing it thus far has been basically based on revenue. And for public companies, that's a 10K picture. There's a lot of sort of intermittent buzz throughout the course of the year on the kind of deals that are made, the kind of marquee customers that come on board. But at the end of the day, the way all these companies operate, because this is what they cop sales on, this is what they build quotas around, this is what they invest in new businesses around, it's money, revenue. I know you guys had some, on your cohorts in your other parts of the department have addressed this challenge with VCE and Cisco and HB and who's the leader in server shares. And because now you've got this bundling effect. Amazon is the poster boy of bundling. They're the masters of hiding the ball, some say, you know, people try to dice it. They don't break out the numbers, so people are always trying to inspect that. Andrew Symbol was had a post on it, the profitless business that everyone's buying. I just read the UBS's report on this. Certainly, Amazon's a buy overall. As a retailer, including AWS. But AWS specifically, you got to break that out. How do you get your arms around that piece of AWS? It's a particularly challenging thing with AWS, because companies like AWS that are really massive scale, they can go to ODM, they can actually go out and influence the on the ground fab and have it change in as little as 48 hours to better fit their system, their way of doing things. It's phenomenally talked to Amazon about scale and how they achieve scale and efficiency. They said last year that they had a couple guys working full time on how to optimize a $248 power supply piece. Working full time on this, because they know at the end of the day that thing to hum just right, they can save in scale a dollar. It's a big deal for them and they're very sophisticated at that. They don't break out what they buy and it's been something we've been trying for a long time to figure out. At the end of the day, we have to do some working backwards work based on the number of workloads they support. That's detective work. You go through their trash, look at their POs. I mean, it's detective work for you guys, right? That's exactly right. Talk to me about utilization and really the sweeping impact that Cloud has been able to deliver in terms of utilization of computing resources where there was so much fat before, just so much fat. Yeah, it's a good point. There are varying estimates depending on the kind of resource, but just in general, I think an efficient data center uses about 30% of its resources adequately. So, maybe make it a five year old picture. 30% is probably about right. I think that number is probably still around 50%, but when you start to sort of break the world into what you currently run and maybe you can operationalize it a bit more efficiently and build a private cloud out of it versus what your source is net new that you can very granularly mirror and use efficiently, I think the overall effect of this rate goes up a little bit, but even so, I think in a large organization you're still fighting against so much in terms of asset equity and what you want to keep and reuse and your skills, your aging IT skills. I think those things all figure into that whole notion of how efficient you can really be. Right. And on the security thing, it used to be, that was always the first thing that came up when talking about cloud. Nobody wants to go to the cloud, security from an enterprise perspective. Are we past that? Is that table sticks down in terms of there's a presumption of a level of security that that's not the inhibitor to the adoption? Yeah, I don't think we're past that yet. I think there's a recognition that it's an absolute reality and that everybody's got to deal with it. I often make the point that something like one-times U.S. GDP trades over financial services wires every day, right? We've been doing this for a long time and we're going to get deeper and deeper into it. I think it's a matter of how you build yourself redundancy and backup operations into your system if you're an enterprise company and the level of willingness you have is if you're a consumer to say it is what it is, if I'm not paying for a service I have no expectations about data leakage or about breach behind that. If I am paying for it then I need to be a better consumer of SLAs, a better understanding of SLAs and no one I'm getting myself into. I think it's not going to really be a huge speed bump to greater adoption but I think it's a recognition that everybody's finally coming around to. It's just not a matter of if it's, but it's one. Right, right. And I wonder, as you said earlier, there's a lot of big players. You know, Google has a unique angle, a unique point of view, unique entry into the smart place. If you can dig into that a little bit deeper as you see that. Yeah, so a couple of things there that I think are really interesting about what we heard today. A lot of what we heard around Kubernetes and around, you know, GitHub and the Google Container Engine these are things that are really, really meaningful to developers. Particularly, you know, commercial and enterprise developers but particularly I would say enterprise developers. To me, that seems like it's a piece of the equation, a piece of the overall, you know, if you think about IT as being divided roughly into network ops, dev ops and run-offs. This is the dev ops piece without a doubt. And Amazon is not sort of a great deal of willingness to spend a lot of time there. They're much more like failure of compile, host and we'll give you access to all the resources that you need to do that effectively and stay on for the life of the application, presumably. I think Google's position here is they have got a large applications portfolio. Right, I was going to say that you think that's because they have such a much broader application portfolio. And Amazon doesn't have it at all. We're big believers that if you have that application sweet spot that the natural place to want to develop is around where those applications are. There's a lot of gravity in data. There's a lot of gravity in applications. It's natural if I'm going to build a new front-end or a new UI or a new mobile extension or whatever it is to my application, I'm going to want to be on Google to do that. It makes a lot of sense to me. The thing that they need to work on more that I see that Amazon has put a lot of time into is a migration story. I've got all the applications like I still want to do things to improve my efficiency in running them. It makes sense to run it on third-party infrastructure. Google helped me move those things that are not going away to cloud infrastructure so I can manage them in a way that I manage my new applications that I'm building. That's a story that Google still needs to figure out. Talk about Kubernetes impact to the cloud. Obviously it's getting a lot of buzz here. We heard Google say that it's the biggest ramp they've seen on adoption in a long time. What is Kubernetes and how does that relate to things like Meisos and SaltStack? Do you see Kubernetes being run on Amazon? Is that... Yeah, it's an interesting idea. That would be a good story. I would write about that for sure. We only bring up the best of the cube. The hardest question is the Rubik's Cube here. So, help us understand that. Yeah, yeah. So, I think... So, Kubernetes is an open-source project that allows for more efficient hosting of containers and doing all kinds of things around the containers. You can do event-based workflow on containers. You can do more single-panel glass management of containers. So, it's phenomenal technology and there's a lot... I agree with what Google has said. This is some of the fastest uptake of any open-source project. Linux, Git, OpenStack... Go-Lang-House. Go-Lang-House. Yeah, we'll have a little doubt. And so, it's been a phenomenal ramp-up. I think at the end of the day, with all these open-source projects, they eventually fork or evolve into something else and what can be usually be done at the enterprise level to take it from being a project... a great project tool to being something that we better our enterprise dollars on. And I think that's the next step for Kubernetes. Have you seen anyone use Kubernetes in any of this? I can't say that I have, but I wouldn't have that much insight into it personally, so I couldn't say. I don't want to rule it out. So, Solstack's here. I didn't get a chance to talk to them, but they got a lot of traction. NaSOS has obviously got an open-source project as well. Interesting. You know, Chef, I've been very successful. Now, all of a sudden, Solstack, I'll put some Solstack on that food. You know, a lot of Chef is getting a lot of traction. People are standardizing on Solstack. So, a couple of practitioners earlier in the week that said, you know, we're moving to Solstack. We had all this, you know, CF engine, all this stuff kind of around. And Solstack was a better solution. Yeah, I don't look upon Solstack as being so much of a... I look upon as being an extension of a way to use Chef better. Use cookbooks better, essentially. And there is a metaphor buried in there, I'm sure. But it's... They are getting a lot of traction. At the end of the day, speed. Speed of building applications. I mean, as these guys were saying today, a lot of times, you build, you hit a stumble in your code, and then you want to be able to identify a tag where that is, and then you want to be able to iterate, and not have that be the thing that slows the application down. I think that Solstack helps that, and they're going to become very popular in the future. Robert, I want to thank you for coming on theCUBE. Great to have IDC. I want to give you the final word. Share with the folks out there what's going on here at the Google event. What's the big news? What's the big smoke signal coming out of this show that's worthy of taking note of? Yeah, great. Thanks. So for me, the exciting things. The Google Container Engine is exciting for me. I think container, container, container. This is the story coming out of Google today. They say we've been using containers for the last two or three years. We use containers for everything that we do. We're deciding to, especially to enterprise developers, because they point to mobility. Nobody wants to be tied into a cloud. There's a lot of strategic safety by saying, we're going to use something that lets us be mobile. So I think that's really key. The other thing that kind of got me excited outside of Kubernetes and the other developments is the notion of the cloud, the cloud interconnect engine. So they're, you know, Amazon has got Direct Connect. It's hugely popular with their Google Virtual Cloud platform users. Acquanix has got a very similar thing with, I think it's called EIX. So this is a big deal. And given the number of points of presence that Google has, I think that this could be, this interconnect thing could be a really big deal. That solves the Netflix problem we've been talking about and people can relate to, which is the middleman, the service provider throttling deep back in inspection. That cloud, you know, the service provider, they can go direct into Google. Thank you, team mobile. And have a hearing. We're here bringing it down, of course, to tell us in, talking about what's happening with the horse on the track. Amazon really running away with it at this point. Google, great big muscle entering the market, big splash in the pool with some real tech, and obviously Microsoft's out there and folks of others kind of niche niche players trying to make their way. This is theCUBE, always breaking it down here. Live in San Francisco at the Google Developer Conference, Google Platform Live, Google Cloud Platform Live. This is theCUBE. We'll be right back after this short break.