 Hello, wonderful cloud community and welcome back to our wall-to-wall coverage of AWS re-invent here in Las Vegas, Nevada. I'm Savannah Peterson, joined by the brilliant John Furrier. John, how are you doing this afternoon? Doing great, feeling good. We've got day three here, another day tomorrow, wall-to-wall coverage. We're already over 100-something videos live getting on YouTube. You're holding them well. And the cloud show is just popping. It's back to pre-pandemic levels. The audience is here. What recession? But there is one coming. But apparently, this has seemed to be an unnoticed with the cloud community. I think we'll be talking a little bit about that in our next interview in the state of the union, not just our union, but the general global economy and the climate there with some fabulous guests from software one. Please welcome Neil and Bernd. Welcome to the show guys, how you doing? Great, thank you. Really good. Yeah, like you said, just getting over the jet lag. Yeah, yeah, pretty good today, yeah. I'm glad we did it today. I love that, Neil. Since you're smiling and I can feel your energy, tell us a little bit about software one and what you all do. Yeah, so software one, we're a software and cloud solutions provider. We're in 90 countries. We have 65,000 customers. Just a few. Yeah, and we really focus on being close to the customers and helping customers through their software and cloud journey. So we transact, we sell software and cloud, 10,000 different ISVs. And then on top of that, we add a lot of services around the spend, optimization, fin ups we'll talk about as well and lots of other areas. But yeah, we're really a large scale partner in this space. That's awesome. FinOps, cost optimization, pretty much all we've been talking about here on theCUBE, it's very much a hot topic. I'm actually excited about this and Baron Domenos, I want to fill this one to you first. We haven't actually done a proper definition of what FinOps is on the show, at the show yet. What is FinOps? Well, largely speaking, it's cloud cost optimization. But for us, it's a lot more than for others. That's our superpower. We do it all. We do the technology side, but we also do the licensing side. So we have a differentiated offering. If you would look at the six hours of application migration, we do it all, not even an extension does it all. And that is our differentiation. You know, yesterday, Adam's last season on the keynote, he's waving his hands around and saying, hey, we got, if you want to tighten your belt, come to the cloud. I'm like, wait a minute. In 2008, when the last recession, Amazon wasn't a factor. They were small. Now they're massive, they're huge. They're a big part of the economic equation. What does belt tightening mean? Like what does that mean? Like do customers just go to the marketplace or they go to you guys? There's a lot of moving parts now on how they're buying software. And they're fine tuning their cloud too. It's not just eliminate budget. It's fine tune the machine, if you will. Make it smarter cloud. Explain this phenomenon, how people are tackling this cost optimization, cloud optimization, because you're not going to stop building. No. They're just right sizing and tuning and cutting. Yeah, we see, of course, with so many customers in so many countries, we have a lot of different views on maturity. And we see customers taking the FinOps journey at different paces. But fundamentally, what we see is that it's more of an afterthought and coming in a panic stage rather than building it and engaging with it from the beginning and doing it continuously. And really that's the huge opportunity and AWS is a big believer in this of continued optimization of the cloud is a confident cloud, means you'll do more with it. If you lose confidence in that bill in how much it's costing you, you're going to retract. And so it's really about making sure all customers know exactly what's in there, how it's optimized, restacking, reformatting applications, getting more out of the microservices and getting more value out of the cloud. And that will help them tighten that belt. So the euphoric enthusiasm of previous years of building, water just falling out of the pipes, leaving the lights on when you go to bed. I mean, that's kind of the mentality. People were not, I won't say they were not paying attention but there was some, just keep going, we're all good. Now it's like, whoa, whoa. We can turn that service off and I was using it or do automation. So there's a lot more of that mindset emerging. We're hearing that for the first time, price performance, being mindful of what's on and off. Common sense basically. Yeah, but it's not just that the lights are on and the faucets are open. It's also the air condition is running. So the FinOps foundation is estimating that about a third of cloud spend is waste. And that's where FinOps comes in. We can help customers be more efficient in the cloud and lower their cloud spend while doing the same or more. So let's dig in a little bit there. How do you apply FinOps when migrating to the cloud? Well, you start with the business case and you're not just looking at infrastructure costs. Like most people do, you also look at software licensing costs. For example, if you run SQL on premise, you have an enterprise agreement. But if you move it to the cloud, you may actually take a different, more favorable licensing agreement and save a lot of money. And these things are hidden. They're not to be seen, but they need to be part of the business case. When you look at the modernization trend, we had an analyst on our session with me, Dave Vellante and ZS, a curvella from ZK Consulting. He had an interesting comment. He said, spend more in cloud to save more. Which is a mindset that doesn't come across, but spend more, save more. You can do that right now with the cloud. So this is kind of the thesis of FinOps. You don't have to cut. Just kind of cut the waste out, but still spend and build if you're smart. There's a lot more of that going on. What does that mean? I mean, yeah, a good example of this is where the largest Microsoft provider in the world. And when, of course, when you move Microsoft workloads to the cloud, you don't, maybe you don't want a server. You can go serverless, right? So it may not win the server. Burn said SQL, right? So it's not just about putting applications in the cloud and workloads in the cloud. It's about modernizing them and then really taking advantage of what you can really do in the cloud. And I think that's where the customers are still pretty immature. They're still on that journey of throwing stuff in there and then realizing, actually, they can take way more advantage of what services are in there to reduce the amount and get even more in there. Yeah, and so the secure, oh god, do you want to say something? So I was just building on the stereotypical image of cloud customers is the marketing person with a credit card, right? And there are many of them and they all buy their own cloud and companies have a hard time consolidating the spend, pulling it together, even within a country, but across countries, across the globe, it's really, really hard. And if you pull it all together, you get a better discount, you spend more to save more. Yeah, and also there's a human piece. We had an intern two summers ago, playing with our cloud. We're in a cloud with our media plus stack. Left of service was playing around, doing some tinkering and like, where's this bill? What is it? Extra $20,000 came from. He just left the service on. It's a really good point, actually. It's something that we see almost every day right now, which is customers also not understanding what they've put in the cloud and what the implications of spikes are. And also therefore having really robust monitoring and processes and having a partner that can look after that for them. Otherwise, we've got customers where they've been really shocked about not doing things the right way because they've empowered the business, but also not with the maturity that the business needs to have that responsibility. And that's a great point. New people coming in and or people being platooned through new jobs are getting used to the cloud. That's a great point. That brings up my security question because this comes up a lot. So that's what's a lot of spend on people dialing up more security. Obviously, people try everything with security. Every tool, every platform, throw everything at the problem. How does that impact the FinOps equation? Because DevSecOps is now part of everything. Okay, we're moving security to the CICD pipeline. That's cool, check. Cloud-native applications, microservices, event-based services, check. But now you've got more security. How does that factor into the cost side? What do you guys look at that? Can you share your thoughts on how your customers are managing their security posture without getting over the barrel, if you will? Since we are at AWS re-invent, we can talk about the well-architected framework of AWS. And there's six components to it, and there's reliability, there's security, cost performance, quality, operational quality, and sustainability. And so when we think about migrating apps to the cloud or modernizing them in the cloud, security is always a table of stakes. It has to be. Yeah, go ahead. I really like what AWS is doing with us on that. We partner very closely on that area. And to give you a parallel example, on Microsoft, I don't feel very good about that at the moment. We see a lot of customers right now that get hacked. And normally it's... Yeah, it's such a topic. You mean on Azure? Yeah, and what happens is that they're normally, it's a crypto mining script that the customer comes in, they come in as the customer, they get hacked. And then we saw an incident the other day where we had 2,100 security incidents in a minute where they're all exploded on the customer side. And so that's also really important is that the customer's understanding that security element, also who they're letting in and out of their organization, and also the responsibility they have if things go bad. And that's also not aware. Like when they get hacked, are they responsible for that? Are they not responsible? Is the provider wanting to... Shared responsibility. Yeah. Well, that security data at Lake is key, the open cyber-scree schema framework, that's going to be very interesting to see how that plays out to your point. Absolutely, absolutely. Yeah, it is fascinating and it does require a lot of collaboration. What other trends, what other big challenges are you seeing? You're obviously working with customers at an incredible scale. What are some of the other problems you're helping them tackle? I think we work with customers from SMB all the way up to enterprise and public sector. But what we see as more in the enterprise space, we see a lot of customers willing to commit a lot to the cloud based on all the things that we've said, but not commit financially for all the PNLs that they run and all the business units of all the different companies that they may own in different countries. So it's like, how can I commit, but not be responsible on the hook for the bill that comes in? And we see this all the time right now and we're working closely with AWS on this and we see the ability for customers to commit centrally but decentralize billing, decentralize optimization and decentralize FinOps. So there's that educational layer within the business units who owns the PNL where they get that fitness and they own what they're spending but the company as it owned can commit to AWS. And I think that's a big trend that we're seeing is centralized commitment but decentralized ownership in that model. And that's where the marketplaces kind of fit in as well as a point. Yeah, yeah. Do you want to add some more on that? Marketplace, if you're going to cut your bill you go to the marketplace right there. You want a single dashboard or your marketplace. Where's the customer, what's the customer going to do when they're going to tighten their belt? What do they do? What's their workflow? Marketplace, what's the process? Well, on marketplaces, the larger companies will have a private marketplace with dedicated pricing, managed service, they can call off but that's for the software of the shelf. They still have the data centers, they still have all the legacy and they need to do the, which ones are we going to keep? Which ones are we going to retire? We purchase, we license, we host, we locate all of those things. That's your wheelhouse? It's a three, yes, it's our wheelhouse. It's a three to five year process for many most companies. That's going to be a tailwind for you guys. This is like a good time. I mean, FinOps is super cool and super hot right now. Not that you're biased. No. But look, it's great to see it because we are the magic quadrant leader in software asset management which is a pedigree of ours but we always had to convince customers to do that because they're always worried oh, what are you going to find? Do I have an audit? Do I have to give Oracle some more money or SAP some more money? So it's always like, you know, don't look, don't ask, don't tell. How compliant do I really want to be? Yeah, yeah, yeah. Is anyone paying attention to this? Well, FinOps, it's all upside. Like it's all upside and so it's completely flipped and now we speak to most customers that are building FinOps internally and then they're like, hold on a minute, I'm a bank. Why do I have 100 people doing FinOps? So that's the trend that we've seen because they just get more and more value out of it all the time. Well, also the key mindset is the consumption-based model of cloud. You mentioned Oracle, because they're stuck in that, whoa, whoa, whoa, how many servers are licensed? And they're stuck in that extortion. Yeah, exactly. And now they've got cloud, once you're on a variable, what's the downside? Exactly, and then you can look at all the applications, see where you can go with serverless, see where you can go with native services, all that sort of stuff is all upside. And for the major workloads, like SAP and Oracle and Microsoft, defined that customers save in the millions. Well, just on that point, those VMware, SAP, these workloads, they're being rolled and encapsulated into containers in Kubernetes runtimes, moved into the cloud, they're being refactored. So that's a whole nother ball game. Yes, a lift and shift usually doesn't save you any money. So that's relocation, these containers may save you money, but in some cases you have to be back in the cloud now than ever before. Yeah, yeah, yeah. Before we take them to the challenge portion, we have a little quiz for you, or not a quiz, but a little prompt for you in a second. I want to talk about your role. You have a very important role at the FinOps Foundation. Can one of you tell me more about that? Neil, why don't you go? All right, so, yeah, I mean, we're a founding member of the FinOps organization. You can tell them super passionate about it as well. I wanted to keep that like a poster boy for FinOps right now. Great, I love the energy. We have some major down that is going to go up on the table and then... We're ready for it. We're waiting for that performance here on theCUBE this week. I promise I would keep everyone up and alert. And I suppose what our value to the foundation is, is first of all, the feedback we get from all our customers, right? We can breed that back as an organization to that. Also, as one of the founding members, we're one of the only ones that really deliver services and platforms. So we'll work with cloud health, cloud ability, our own platform as well. And we'll do that. We have over 200 practitioners completely dedicated to FinOps as well. So it's a great foundation. They're doing an amazing job. And we're super proud to be part of that. Yeah, I love that. You're contributing to the community as well as supporting it, looking after your customers. All right, so our new tradition here on theCUBE at Reinvent, is we're looking for your 30 second Instagram reel, hot take, sizzle of thought leadership on the number one takeaway, the most important theme of the show this year. Baron, do you want to go first? Of the Reinvent show or our presentation? You can interpret that however you want. We've gotten some unique interpretations throughout the week, so we're open. Everybody's looking for the superpower to do more with less in the cloud. That will be the theme of 2023. Perfect, I love that. 10 seconds, you're my condo man. Very efficient, you're clearly providing an efficient solution based on that answer. And the introvert, we don't talk that much. That's it. It's the Swiss. And what about you, Neil? Give us your thoughts. I'm going to steal your comment. It's exactly what I was thinking earlier. Tech is super resilient, and tech is there for customers when they want to invest and modernize and do fun stuff, and they're also there for when they want to save money. So we're always like a constant, and you see that here. It's like, it's always happening, it's always happening. It is always happening. You really can feel the energy. I hope that the show is just as energetic and fun for you guys as the last few minutes here on theCUBE has been. Thank you both for joining us. Thank you very much for having us. Thank you all so much for tuning in. I hope you enjoyed this conversation about FinOps, cloud confidence, and all things AWS re-invent. We're here in Las Vegas, Nevada with John Furrier. My name is Savannah Peterson. You're watching theCUBE, the leader in high tech coverage.