 Hello and welcome to the analyst angle. I'm Rob Streche and I'm so excited to be here. This is a topic That is near and dear to my heart. We're gonna really dive into cloud native applications How they are deployed? Where they're being deployed and what is coming next for companies and what they should really consider and I think this is one of those things like I said on the last analyst angle You know it you can't do this yourself So you got to bring some others in and we're gonna dive into this with a friend And we're really going to discuss, you know, where Digital transformation is going because kind of the word is coming, you know Digital transformation is kind of falling out a favor a bit But we really want to see that Organizations are really weighing the cost benefit of modernizing these applications and they're also looking at where to Monetize or modernize them. I think a big piece of that is is it on-premise or in cloud? Where is it both? Additionally, they're looking at what specific cloud Services if any they're going to use and I think that's a big key to this because that has some ability to lock people into particular clouds For today's discussion Like I was, you know Foreboding there a little bit is that fact that I'm thrilled to have a friend and former colleague in Paul Nash Wadi joining He's a principal Analyst over at enterprise strategy group, which is a tech target company He's risk recently completed a whole bunch of Research that I think is going to be very compelling to the audience and we're going to kind of go in and unpack this a bit What's going on in cloud native and how that's going to impact what you're planning? Over the next year or two or three even so welcome Paul, you know glad to have you here Thanks Rob, you know really excited to be here It's it's it's really an exciting time in this space, you know as you know as this is my main focus area This is why I live and breathe every day cloud native modernization application Modernization and the growth of what organizations are doing. It's it's really definitely an exciting time And very you know very exciting for organizations to kind of take on that journey Yeah No, I mean both of us have been in and out of this for a number of years and I think that it's you bring a very Unique perspective, which is why I love just getting on with you and riffing on this stuff but let's kind of jump into the deep end a little bit here and Try to get a understanding of what's going on in cloud native and what's the state of cloud native apps and Development in your mind and what you're seeing Yeah, definitely Rob I mean, you know, it is it is an exciting time as I was saying and you know We have been kind of going through this for for many years as it like you mentioned digital transformation A lot of organizations kind of you view that either as a noun or a verb I like to kind of equate that to modernization, but let's jump right into the research There's a lot of data that kind of goes along with what organizations are looking at today, right? And when we start jumping right in that micro services is a big part of that cloud native journey, right? And we look at research we see that 64 percent of Organizations are looking to build and deploy cloud native applications based on micro services architecture So it's it's pretty exciting to think about that You know, but organizations also need to overcome the challenges because when you look at it I like to tell the narrative of a past present and future, right for application modernization You have organizations that are working with their traditional or heritage applications So which may be a virtual machine then you look at today in the future, which is today's set which is basically looking at Containerization micro services orchestration and such and as I was stating that 64 percent are delivering Of the responses our survey are delivering cloud native applications based on micro services and we see that 33% are using multi-tier our traditional based cloud native application approaches and that's largely due to the Heritage or siloed applications that are being deployed the interesting thing about this though is not just today what we see today is But what's interesting is what we're seeing in the next two years of growth So when we look at the percentage of production applications and micro services and cloud native architectures, we see that and Basically, we see that 46 percent of organizations today and responded are running 26 to 50 percent of their production applications on micro services In contrast what we asked was what is happening over the next two years? We see that 39 percent of respondents indicate that they're running 51 to 74 percent of their production applications and micro services and 29 percent are going to be running 75 percent or more of their applications on micro services architecture So Rob really exciting times here It's a new world new technology stack a lot of organizations are still getting their heads around it But yeah, it's definitely excited. Yeah, no, I think that's that's key and in the conversations I'm having with companies and we're seeing the same thing where it's hey We're still trying to get our heads wrapped around this new modern architecture And which apps we're actually going to modernize because that there is that cost-benefit analysis And I think especially in this type of economy They're tying it back to revenue for more and more of what they're trying to achieve And I think that's a huge piece of this, but I also think that you know We've both been around the space again for quite a while and organizations Really aren't using one cloud and I think that to me, you know Even back multiple years ago when I was at AWS was very clear that people are not going to use just one cloud They don't want to be locked in and they're gonna really look into using several clouds It doesn't mean the same app lives in the same in multiple clouds It can be pieces of apps or different apps that are in different clouds for different services and things like that What are you seeing? I think again, I from what I know I'm sure you're seeing something similar to this in the data as well Yeah, it is into very again and another kind of point that Organizations are looking at and very intensely looking at because it does add a level of complexity But let's kind of take a step back and we will look at Production applications we find in our distributed cloud series Cloud native research. That's a enterprise strategy group. It does this annual study in our 2022 study. We found that 88% of respondents indicated that they're running their production application workloads on a public cloud infrastructure In 2023 we found that the same number 88% are running those the production applications in the public cloud The difference that change that occurred year over year was when we asked how many cloud service providers organizations are running on in 2022 11% of respondents indicated that they are running on a single cloud service provider So that means 89% of respondents were running on two or more clouds to your point Rob But the other piece that comes up is in 2023's research. So the trending data that we're seeing only 6% indicated that they're running on a single cloud service provider and 94% indicated that they're running on two or more clouds. So very interesting there We also another data point is 65% are running on four or more Clouds so lots of consideration around this but also as that level of complexity to organizations, right? So do you have the skill gap that or the skill set to kind of manage those individual our technology stacks across different clouds? Do you have You know the resources that can actually accommodate these different things. Are you managing these these clouds? Holistically are you looking at it's more siloed. So there's a lot of questions and challenges Rob when I think about this and Rob I think there's another piece that we could talk about and it goes into that portability aspect Absolutely, I think to your the manageability part of it is is a huge thing And I mean you have the announcement where Terraform where I Hashi the parent of Terraform is changing some of the licensing to BSL on some of their Applications and what the impact is is not clear necessarily for everybody yet But you have all of these folks trying to have these multi-cloud management Systems there's also Morpheus out there and a number of others that are really aimed at this and making it simple To have that but like you said, I think a big piece of it has been You know what we've been talking about for a while is that making things portable? Not because you're gonna have the application span those multiple clouds, but you may want to repatriate and redeploy I think that's what we've been seeing is that you know, it's something around the data We see I think it was just out of Intel recently was that about 14 10 to 14 percent of companies have repatriated But most of them are taking it out to another cloud. They're not running it necessarily on pram Where do you where do you stand in this whole debate around? Repatriation multi-clouds and portability because I think you definitely have a different angle on it as well Yeah, yeah, you know, I wouldn't be an IT if I didn't say it depends right because it always is a It's it depends scenario. I will kind of touch on it touch on it from this perspective Portability is a key factor and when we think about portability, it's you touched on the point about not running applications across different clouds and that could may or may not be a situation or may not be an idea I typically think of Reducing complexity in the context of harmonization across these clouds So having a cloud operating system and I kind of would put that in air quotes, you know Like a cloud operating system that allows you to do management and monitoring and functionality across different cloud providers and harmonize it across basically public cloud private cloud as well as on-prem The interesting point about portability is we asked this question in this cloud native research and what we found is 20% of respondents indicated that it is critical that their applications are Portable and they can have the ability to move those cloud native applications across different cloud Architectures or ecosystems we find that 67% indicated it's very important to their organization The interesting thing is and again on trending data when you look at cloud native deployment environments We see that 48% of Organizations today Indicate that they're running their cloud native architecture and applications deployed in the public cloud and 42% today Indicate that they're running their cloud native Applications running across public clouds and private cause including edge locations and private data centers now What's interesting is we asked about trending information where they think they're going in the next two years Today only 11% of respondents indicated that they're running their cloud native applications On-prem and it on-prem data center But yet in two years 30% of the respondents indicate that they're running those cloud native applications on-prem Going to your repatriation comment on on you know, I'm where it's going So we also see in the next two years a drop-off going from 48% running on public clouds to 43% So a slight drop there and we see going from 42% to 28% on a combination of a hybrid Public cloud and private cloud and edge locations But we see a significant jump and on-prem data centers will host in cloud native applications. So Net net Rob. I think it comes down to you know Organizations are thinking about what's best for themselves Repatriation is not just about cost, but it's about compliance regulations a latency Performance you name it. There's a whole number of reasons why organizations do it But yeah, it's an interesting kind of paradigm shift that organizations are going through. Yeah No, I think it is and I think to your point It's a lot of the cloud native operating systems or and the manageability and all of that can be done on-prem Or in the cloud or in colo for that matter and we're seeing a huge uptick in use of colo and Specific clouds or sovereign clouds in specific areas and I think that's contributing to this multi-cloud multi-premise Type of application and I think you know cloud native apps are designed for this So they're designed to have the data in one place and have you know Different layers of the stack like you were saying is it traditional, you know app layer and you know Visualization layer on top of a data layer and I think organizations are really Rethinking and saying hey that wasn't so bad, especially if I want to keep my data in a particular place But I think they're also leaning pretty heavily on open source, which I think you and I are both, you know big open source guys very very positive on what's going on in the cloud native foundation and And you know been to Kubcon and you know, both of us will be back out there in Chicago in a you know a couple months now What are you seeing? From a supportability perspective because that that's the one area around open source that I always find very interesting I know a couple companies that are very heavy Users of the Hashi stack and some of the components they're using are really pure open source components knows with no support contracts whatsoever What what are you seeing in your data that you know? Jives with that or kind of supports it yeah Supports it as no pun intended there, but it's it's interesting. It is another interesting perspective It would be a miss not to talk about open source when we're talking about cloud native development especially when we We let off this conversation around microservices and the the tech stack that goes along with the ecosystem But open source is a is an interesting area. There's a lot of reasons to go with open source. It's community There's uh tested well-rounded testing. Um, you know, but there's also, uh, you know the perspective of What do you do when you purchase and or you use and deploy open source within your ecosystem? And you know, you can kind of do it a number of different ways Um organizations can look at it and have their own bench, right? If they have their own bench that's supporting they they flex their technical muscle to say hey, we can do this We got this. We don't need any help. That's good, right? Organizations are paying for that bench, right? They're paying for those resources Alternatively Most organizations are looking for paid enterprise level support In fact, what we found in our cloud native research at 48 of respondents indicated that they're looking for paid enterprise level support Um, and then we also found that 24 of respondents indicate that they're looking for Some paid support but mostly non paid community support So that means that their bench is leveraging the community for that for that support And then we found that 18 percent are looking for a pay-as-you-go kind of support model now with all that said In my opinion, uh, you know just in my assessment, you're paying for it one way or the other You're either paying for it with your bench or you're going to pay for it with uh, you know Having an organization that you you you want, you know a vendor that supports you in that space When I talk to cio's and I ask about their, you know, number one challenge their number one challenge is modernization and they run into the challenge of You know keeping the wheels on the bus with the resources they have So to modernize usually brings on another set of projects and another set of initiatives You mentioned digital transformation at the beginning of the session here That's a big kind of push that modernization push The problem is is you know Either they don't have resources or they try to find their higher resources Which is really hard to do these days and then the other side of it is once you've hired those resources It takes about nine to 12 months to come up to speed So the alternative is to work with a service delivery partner in order to uh to do that so Many kind of directions and many approaches again. I use the term it depends But it really does depend on the the situation the configuration that your the organizations are trying to achieve here But uh research shows that they are looking for that support and vendors to support them Definitely and I think that it's not surprising and I think you know Open shift doing over a billion in arr last year is just crazy and I think it shows that Open has won as part of it and now I think but people are looking also at how what's going on with the licensing and What what's going on with open source licensing and licensing in general and trying to protect themselves From that and I think to your point you're paying for it one way or the other Either through the support contract or not and I think that's why it's been uh very very interesting But uh, so hey, this has been great. Uh, you know, I think we're going to do this You know a couple more times at least uh, you know, this is a lot of fun And there's so much we didn't get to and I know you have a lot of data And we'll put the link to the data down below To your cloud native studies and the cloud series that you and esg and tech target do And everybody can go and check that out and find out. It's always, you know, just a ton of fun to You know rift with a friend and get to go into some of this detail To help people understand what's going on and really separate the noise from the signal That's what we like to do here at the cube is really help people understand that I really appreciate you coming on the analyst angle and I look forward to the next time Thanks, Rob. It's been it's been a pleasure Thank you and stay tuned for the next analyst angle We'll bring you some breaking news on and deep in in depth research that we continue to do Really again extracting the noise from the signal and helping you understand how you can plan Your different projects in cloud native, security, sustainability is coming pretty soon Stay tuned and we'll be back