 Okay, welcome everyone. This is theCUBE, our flagship program. We go out to the events, extract the signal from the noise. We are live in San Francisco, California for the Red Hat Summit. This is theCUBE. We go out and talk to all the tech athletes and it's going to be a great event around open source. I'm John Furrier, the founder of SiliconANGLE. I'm Joe Mike, co-host for this week. Stu Miniman from Wikibon. Taking the place of Dave Vellante, who's out back on the East Coast. Stu, great event here, Red Hat Summit. Red Hat, 10 years celebrating their event. They had a great show last night and they're going to have a mega party Wednesday night. But really, this is about open source, open source developers, open sources in the enterprise with a real emphasis on what Red Hat is doing with their cloud strategy, all the open source greatness that they've had over the years and how they are transforming to maintain the Red Hat of Red Hat. So Red Hat's business model has been a great success in open source over the years. But overall, a great energy and a good vibe from Red Hat. So I want to get your takes too. What do you think so far, early indication from the keynotes? It's mainstream software infiltrating all the top vendors. IBM has been here for 10 years. Great support, Cisco first time attending Red Hat. Very notable and riveting keynote from the Cisco executives. Yeah, so John, first of all, I mean, it's open source, it's about community. It fits into really the ethos of theCUBE and Wikibon and SiliconANGLE, giving back to the community, getting people involved in the conversation. So there's a great energy at the show. I'm glad we could be here. Understand there's over 4,500 people at the show. I've talked to some people that have been here at multiple events and they said Red Hat's really blown it out this year. So a lot of excitement, a lot of engagement. And right, John, as you said, Red Hat, which everybody knows from Linux has really pushed in a lot of environments. If you look at virtualization, of course, they've taken Red Hat Enterprise Linux and moved it over Red Hat Enterprise Virtualization, which is the leading KVM solution out there. They're pushing into cloud, big data, lots of environments. So I've got to ask you, so tell the folks out there, let's set this up. Why, what's the big deal about this show? I see Red Hat's done this for 10 years. We're in a sea change. You've written some amazing research. David Fleuer has been doing some research. The bottom line is why is today more relevant for this event and why are we seeing massive adoption from Intel and how important works, Docker, the startup, IBM, Cisco. Why is this show so important here in San Francisco? It's a great question, John. And if you look at the keynote this morning, the way Red Hat positioned it is there were really only two operating systems in the enterprise. And that means it's Linux and it's Microsoft. And it's kind of interesting to see that Microsoft actually would probably embrace that message also. Proprietary operating systems like Unix and Mainframe have really seen a decline. And is there a future for the operating system or will the operating system be broken into components? Lots of buzz around this show about containers, platformers, the service is growing. So open source is critical for software environments. And John, as you've often quote, Mark Andreessen, software is eating the world. So if software is eating the world and open source is a major player, a major component of that future of software, then this is the epicenter of that revolution. Stu, I want to get your take on a few things. And this is why I think this is so important in this event here. One is in San Francisco. It's in the epicenter of all the action and technology. But Red Hat has a brand that's been entrenched for decades in open source and has really grown up with the industry. And now open source is maturing at an accelerated rate faster than ever before. But the game is still the same. We've heard from some of the Intel executives talk about that. Let's break down the impact of what Red Hat's playing with right now. If you look at the movement of the cloud, Amazon has forced everyone's hand here and open shift is really the strategic bet for Red Hat on top of open source. So if you say, okay, open source bet aside which they're winning one and I continue to win. Red Hat's transformation is in the cloud. So let's break this down. You got infrastructure component of the cloud. You got application development component of the cloud. You got the integration, automation, orchestration, all that middleware stuff, right? At the platform, it's the service layer. And finally, you got the ecosystem. So those are the main action areas right now. So break down for us to why those areas are important. Infrastructure obviously we've been covering, converged, ecosystem application and then the integrated orchestration. So first of all, John from the cloud piece. While open shift might be the future and open stack is an important piece. It's interesting to look at just Linux in the cloud. We got to talk to Red Hat at the AWS summit last year. And if you look at recent announcements, I can now put Red Hat Linux on Google's cloud platform. As a matter of fact, if you look at everybody wearing their badges for this show, it's Google cloud platform on everybody's land here. We've been at a lot of the shows this year. Inside the bigger show, there's a smaller show focused on the developers. We've talked about it before. John, John, give me your take on this. Obviously Red Hat has good credibility with coders. Does that translate to the developer community? Here's my take on Red Hat right now relative to this event. Red Hat's brand is superior in open source. They have a track record of generations. The work they've done just with Linux is just hall of fame worthy by itself. You got Jboss, you have all this other technology. And this is just communities, years and years of built communities that have a lot of value already built into it. At the same time, a perfect storm of innovations hitting and you're seeing new opportunities around rebuilding or extending existing technologies. Certainly cloud is kind of a green field for building. Building and growing and monetizing is really the goal of all communities. And at the end of the day, we're in the front end of the build phase, which is going to move fast into the growth phase. So I really believe that Red Hat is poised for this. I think a lot of the stuff is going to either fall off the tree and not make it. Some will make it, some will get repurposed. I think OpenStack clearly is a ship that Red Hat needs to get on. So I think that with the brand value that Red Hat has and their penetration in large enterprises and service providers, that they are absolutely enabled to extend out and bring value in OpenStack for those enterprise customers who want to look under the hood because that is the key. Now on top of that, they have a huge developer market. And right now it's a race for the developers. So you hear every cloud vendor talk about one thing. Well, actually two things. Economics, time to value, disruption, and then developers. Or it's a race for the developers. Red Hat's got that bird in the hand. They got to nurture that, extend that out. They have the brain and the enterprise. And now they got to take what I call the fast pass, which is just my way of saying, get the enterprises to the cloud in a very fast way within the look under the hood. So I think they're perfectly poised. Now there'll be some urinary Olympics, as Dave Vellante would say around, who's got what version of pass, what's version here and there. I think it's going to be some sharp elbows in that space. But I think ultimately the democratization of OpenStores will settle that. It's a totally capitalistic market relative to the developers. So I think they're well-positioned students. So John, let's look at that cloud a little bit. If you look at kind of the cloud environment and the cloud operating system, from a networking standpoint, it's a given that it's Ethernet, right? I understand it's going to be there. And when it comes to the cloud, Linux is going to be a key component. However, the threat to Red Hat is, do I really want to pay for Linux? So if we look at Google, Google spun their own version of Red Hat. You look at some of the alternatives that are out there, Amazon's built on a flavor of Zen. And so even if we look at OpenStack, it is really early days, but companies that are deploying OpenStack today are looking for free versions. So Canonicals Ubuntu is in a survey that was done towards the end of last year, the number one distribution. And there was some interesting news earlier this year that Red Hat actually has a partnership. They actually hired some of the lead developers of CentOS, which is a free version of Linux and becomes the foundation for things like OpenShift and the free version distribution of OpenStack and Gluster and it's a free version in there. So while Red Hat's built a billion dollar business on the subscriptions and services around Red Hat, is that sustainable going forward and will they have to shift because having a sustainable business model and OpenSource is hard to do. It's good, that's a good point. I mean, this is the tea leaves, this is the chess match that we always like to talk about. You bring up a good point, let's talk about the threats to Red Hat. So I just love Red Hat for the reasons I just mentioned. Let's talk about the threats. And the threats are, you mentioned Google, VMware, others that want to own the cloud OS. So it's clearly a land grab going on and that's why I asked the Intel guy about social media because now those tricks of the trade to slow down innovation by the guys who are behind may hurt VMware and Pivotal and others and IBM and so forth. But ultimately the best solution will win, in my opinion. However, what Cisco said was interesting, the application value is where it's going to be happening. So to me, the big threat to Red Hat is the encapsulation of technology away from the users. So automation and orchestration, where we can automate and extract away complexities, create that hard and top, like Intel did with the microprocessor, no one cares. If it's a hard and top, as long as it works, it's functional. That's what the Oracle model is showing me that if you have a fully purpose built system and it works and it's interoperable and has some standards with other vendors, no one cares. It's a cost value perspective. So I think what Red Hat and Open Source has to watch is, are they too dogmatic on their certain open source principles that are evolving with the modern era of the business model with cloud? So that's an unknown. So what I would be watching is, okay, people trying to grab the cloud OS, does that track more into the abstract away complexities and you move the line up the stack where you move shift the value to the applications? And that's why I think the DevOps and the past layer is the battleground for the cloud. Yeah, John, you know, some really good points there. And yeah, I mean, Red Hat has, you know, a lot of opportunities because, you know, some of the moves that they're making are, you know, aggressive to make sure that as that next generation is built that they are a key component in there. So seeding OpenStack with a lot of contributors. On the networking side, they've got heavy engagement on the Open Daylight project that we talked to them at the Open Networking Summit earlier this year. You know, Red Hat's going to be, you know, heavily at OpenStack. So, you know, Red Hat is making bets with their resources and their dollars to make sure that as the market is changing that they've got some good position and, you know, good will in the community also. Yeah, so you mentioned Department Warrior, the question of SDN, you bring up a good point. And one of the other factors that's interesting that you made me think of that was there's an interdisciplinary aspect going on with the cloud that's interesting. And with the convergence of IT, you're seeing with virtualization that software-centric DevOps culture is really about kind of a multi-disciplinary approach. And we're seeing things about the internet of things here at the show. You're hearing about analytics. So all of these things are converging. So it's not just infrastructure convergence. So Cisco's obviously recognized that they're moving up the stack. And I think that is one notable point, Stu. Cisco has always been about, should we move up the stack? Should we move up the stack and be more value? Clearly Cisco is moving up the stack and our talk this morning highlights that. Yeah, so, I mean, Cisco's definitely trying to be the interconnection between cloud, internet of things, mobile. They definitely buy into the whole cloud mobile social aspect. John, I'm surprised we've gotten this far in the discussion of Red Hat without talking about Hadoop. We had the Intel discussion earlier. They obviously made a big bet with Cloudera and Intel says that they will be flexible on this. But Hortonworks has a big booth down there. And I actually went to his panel last week and Red Hat got up actually Tim Yeaton who's going to be on our program tomorrow. He basically said that Hortonworks lives by the same open source philosophy that Red Hat does and therefore almost positioning Hortonworks as being the Red Hat for Hadoop. So John, I got to get your take on this. Well, I think what's interesting is, is that Cloudera, I don't think is here and not participating in the event as Hortonworks is. We asked the Intel executive about the Cloudera deal and I said it's a big bet for Intel. But what he mentioned was that Hortonworks is going to be an upstream benefit to what Intel's working on. So essentially what he's teasing out to do is that it's not a zero sum game. It's not mutually exclusive. Hortonworks and Cloudera are going to still be in play from Intel's perspective. So that was one interesting notable point. So I'll see Intel recently invested a significant amount of cash into Cloudera, buying equity positions out from some of the VCs in management and that was well reported on Silicon Angle. So Intel's making a big bet on Cloudera, but what Intel gets from Cloudera is simply this, a leader in Hadoop in a scale out commodity hardware world. So it might not be a creative to earnings today for Intel, but if Cloudera's mission continues and I've talked to Amar Awadallah about this all the time, their mission is to get commodity hardware and that's open compute, anything that's commodity, that helps Intel. So Intel looks at this as kind of like a downstream advantage for them on the market. The more scale out open source, more commodity hardware, everyone wins. So by accelerating Cloudera only helps Intel. At the same time, the danger of the Intel investments to do is the alienation of the Hadoop ecosystem where they be perceived as picking a pony too early. So here Hortonworks' testament to Red Hat pretty much solidifies Hortonworks position in that ecosystem because Hortonworks has just got the tried and true business model of open source. They are the closest to a Red Hat of Hadoop that you can get. They have subscription license support. It's pretty clean, there's no other trickery going on there. So Hortonworks is steady sales. So I see Hortonworks benefiting from the Intel deal indirectly because they're going to get the downstream benefits from the Intel ecosystem, the rising tide floats all boats and puts them in play for someone else that needs a partner. And Hortonworks has a great partnering strategy. All right, so John, we've got a day and a half left, I think to wrap up our kind of quick, peeling the onion of Red Hat Summit. I've got a few questions I want to dig into for the rest of our event here. One of them is service providers. We've written a lot at Wikibon that some of the big data centers, not only kind of the biggest cloud providers, but the next tier down are going to be critically important over the next couple of years and want to understand how many of them are willing to buy into Red Hat's whole support model. We were talking about CloudOS before and it's pretty straightforward to me. Customers that have an enterprise license agreement or ELA with VMware, probably are going to consider things like VMware's vCloud hybrid service. Companies that have the agreement with Red Hat are more than willing to try out things like OpenStack with Red Hat. So how is Red Hat courting some of those really big accounts because Linux is ubiquitous, it's everywhere and Red Hat has good positions. In fact, there are almost too many places. You talk about saturation in the market. I think the stat I heard, let me see, is that Red Hat actually is in, gosh, I think it's like 90% of the Fortune 500 or something. It's ridiculous. We're past the early majority, we're into the late majority and the companies that are buying Red Hat now, the quote that I heard on this is that they're not even buying because it's open source, they're buying because there's the value of what Red Hat does to simplify the environment, make it that kind of hard on top, as you said, and be a solution that makes their job easier. So John, over the rest of the next day and a half, what are you looking for? Well, first I got some breaking news. I said I coined the new term FastPass. Turns out Dell actually used the term FastPass. I was trying to goof on the FastPass toll booth, but actually Dell actually coined that term so I just wanted to make sure that clear. I want to thank the Microsoft guy for pulling that out and Brandon from Network World chimed in as well. Stu, on this show, what I'm really interested in finding out is really about the open source business model of the future because what's happening is there is a modern era upon us. A new way is here, and that's certainly software that's open source. So I don't think open source is at risk from a business model standpoint. I do think it will morph and change a bit. So I'm very interested in hearing from the leaders around how they approach that. I'm also interested in hearing about this data first theme that we have been coined, we coined data first, and we're interested to know what people think about the data role in aspect of cloud. That's something of interest to me that I'm digging into. And more importantly, the more front page news is the war in the past area. The battleground for platform as a service is the number one action point here in cloud because that middle layer is critical for the services. Now, I don't think it's a one vendor buys all kind of deal there, but I think that's a really important nuance around the technology and how it applies to the business outcomes and the business value up the stack. And that's the developers. At the center of all this is the DevOps culture, which now is becoming mainstream in the cloud. DevOps is the preferred way, but there's still a lot of work to do. So I'm interested in finding out how developers feel about that and what areas of white spaces are they thinking about that they need help on right now? Is it automation? Is it orchestration? Is it more versioning controlling? Is it integrated stacks? These are all what we're trying to find out. And I think this is the right forum in San Francisco here at the Red Hat Summit. So we're here for two wall-to-wall live days inside the cube. I'm John Furrier, Stu Miniman, covering for Dave Vellante. We'll be right back with our next guest after this short break.