 From the SiliconANGLE Media office in Boston, Massachusetts, it's theCUBE. Now, here's your host, Stu Miniman. Hi and welcome to a special segment of theCUBE here in our East Coast Boston area studio. Happen to be able to dig into the technology space, what's happening in cloud, what's happening in the Boston tech scene with a first time guest to the program, Julie Austin, who is the CTO of Digital Ocean and also part of the, she teaches at Harvard Business School. Julia, thanks so much for joining. Thanks for having me. Great to be here. All right, so first time on the program, you're part of the V Mafia. You know, we talk to Steve Herrod, Jerry Chan, what we love to see where some of the people, especially on some of the early days, you work closely with Diane Greene, where you've gone, what's happened in your career. So for our audience, give them a little bit about your background, what you've been doing and where you are today. Sure, happy to do that. So first half of my career was on the IT side of the house. So I was always working on the backend side of things, inside of companies, in more of an operating role. Change in my career midway was to actually work with software. Always been a Boston, Massachusetts girl. So I was looking for opportunities to be in a startup community, work with software companies, and landed at Akamai. Mid-Dinies, I hate to date myself, but got to join Akamai pre-IPO and really got a taste for what it means to build software and scaled that company up, down during the bubble burst and really found my way as an engineering and technology leader on the software side of the house and taking from some of the 24 systems, seven systems that I had managed in my earlier career towards internet infrastructure platform work. Left Akamai and went on to VMware. It was really fun to get a call from VMware on a very wintery night, where very recently after the acquisition from EMC, where they were just in Palo Alto, trying very hard to hire out there, as things were starting to scale, the market was getting better. This was late 2004. And they called me and said, hey, we want to open an office on the East Coast. We have a great relationship now that we're part of the EMC family. Would you come and do that for us? So I joined VMware in very, very early 2005 with the initial charter of just expanding engineering from Palo Alto to Boston. Great place to open an engineering office. We were in the middle of Kendall Square, so tapped into the research and academic community. But also we're a new flagship company, Silicon Valley company, coming to Boston was exactly what we needed at the time. I like to say we were the first SV company in Boston during that era before Google, Microsoft, anybody else had come into Boston yet. So I had an eight-year wonderful career there. I got to work with Steve Herrod the entire time I was there. He was, I think that's one of my claims to fame is he was my boss for the entire eight years where we scaled from 800 employees when I joined to 15,000 and I somehow managed to stick with him throughout as we continue to evolve the organization. And while I was there, I did a number of things. I expanded from not just Cambridge to running all the global R&Ds as we expanded into different geographies around the world. I started our innovation programs and academic collaboration programs with the academic community, not just here again in Boston, but worldwide. Did a startup inside the company, mobile hypervisor project we did that turned into a business unit for the business. It was just a great run. It was a really great run. So I was there for eight years and then with a lot of growth and a lot of change decided it was time to do something different. So I left in 2013 and got plugged into the startup community here in Boston. I was blown away, had no idea. I was very VMware so I didn't realize all these great things were happening here. There was incubators and accelerators and all these great startups at the CIC. I mean so many good things going on here in Boston. So I got plugged in at Techstars here in Boston. Thanks Katie Ray, a shout out to her for bringing me in as a mentor in residence. Got to know a number of startups, learned how to mentor and invest in very early stage. That was new for me. Drew on my experience from both VMware and Akamai and more on the hard technology and cloud infrastructure side of things but also dabbled in consumer, et cetera, et cetera. Yeah, I'm wondering if you can, tell our audience a little bit about what you've seen in the Boston Tech scene. Most people, I mean obviously Harvard, MIT, great colleges, tons of universities here, really known for biotech, GE moving up here, gets a lot of people talking about how IoT is going to fit in. But what's kind of the breadth and depth that you see of the startup ecosystem here in Boston? Here in Boston, yeah, sure. So what's been interesting here is we've had certainly a preponderance of the biotech as you say and hard tech. I think that's really our roots and how it always has been from the old days of DEC and DG to where we are now and I think that will always be here given the strength of the computer science programs here in Boston. We just breed talent like that, which is great platform and infrastructure as well. A lot of talent here and a lot of smart people who are thinking about new novel ways to do technology in that space. But we also have a really growing concern around consumer, which I was really impressed to see as I started to plug in after leaving VMware, a number of companies thinking about everywhere from pain points for the consumer and e-commerce or pain points and travel is a lot of interesting things going around on the travel business and in healthcare as well, whether it's on the consumer or on the B2B side of things. So I've been pretty impressed with what's happening here and there's a really big commitment both by the venture folks here as well as the locals to stay here. It's been a struggle. Certainly there's a big pull to the West Coast. I think the investor community here is a little bit more conservative in some ways in what they invest in but when you look at companies like Gebo who I've worked with for a long time and others doing interesting things with robotics, there's just a fascinating swath of things happening here in Boston. Yeah, and you've been an angel investor yourself. You'd say a little conservative but robust from an investor community. There's plenty of pitches. There isn't a day that goes by that I don't get an email from somebody here in Boston who wants to put something in front of me personally. The VC community is very vibrant and they're not lacking for things to take a look at here. Okay, so let's talk about what led you to Digital Ocean. So you spend a few years after VMware. What led you to go to, I guess Digital Ocean's been about five years out there so still start-up-ish but not a brand new small company, somebody that many of us have heard about for years now. Right, for sure. So what's funny is I got to know Digital Ocean through the Techstars community. They're Techstars class from Boulder. They're a 2011, I think. And they had been looking very, they're based in New York and they were looking for leadership on the technology side for quite some time. We've had incredible growth over the five years. I can't share revenue numbers, but amazing growth, really, really successful fundraising. And I'd grown the company almost to 300 people and we're still relatively flat. I got to reach out from them and say, hey, do you know anybody in Boston or New York who could help us run our technology organization? I personally wasn't looking to do that again. I'd already done it twice as I had no thank you. I'm happy to see what I can do with my network. But then I went and met the team. I was in New York a lot so I said I'd meet the team. And what really struck me, it was sort of three things that really struck me about the business. First, what they had built in five years was just incredible. We have close to a million registered users on our platform. The revenue numbers were outstanding. The culture in the team itself just blew me away in terms of how they had formed as a business in such a short period of time. The technology itself was superior in terms of how we think about simplicity and what developers really need from a cloud solution. So it was no longer, these are all the five, 10, 20 features you need, but really how does a developer do their job and what do they need so they can just go write software and not worry about setup and configuration and everything else that they need. Really struck me the simplicity model and how they had thought about that. Just blew me away. And then the founders themselves, their passion and their intellect was just, I've seen this before. I've been into pretty amazing companies. And when you meet founders where you think these are not average people, these are people who really have taken things to another level and get it. And you want to be part of that. So that's how I ended up from not really wanting to have a conversation to next thing you knew I was CTO of the company. All right, you mentioned a couple of things there that I want to unpack a little bit for audience. So developers in simplicity, when you hear cloud, I mean that was like, oh yeah, cloud, it's swipe of credit card, it's easy to get started. Developers love doing it. We look at the cloud marketplace today and it was like, wow, the cloud's getting kind of complicated. All the things that we live through in the enterprise, you know, like yourself, I've got lots of history on the infrastructure side. And it was like, oh, we start out simple. And then we keep adding things, adding features, adding knobs and buttons. And it becomes a lot more complicated when I went to Amazon re-invent. Even when I went to Google show, its developers are a major audience there. But boy, it doesn't really seem like simplicity is kind of job one. So how do you, you know, what do the developers need? How do you balance that simplicity with actually giving them, you know, flexibility that they need? Right, so at the end of the day, they need a highly performant and feature rich cloud to do what they need to do, whether that's a simple, stand up a small, you know, hosting of a website or it's a more sophisticated set of workloads. Set up and configuration should be easy. It should be, you know, as close to a one click as you can get, as far as, you know, this is my environment, this is the workload I'm going to go run. You figure it out and let me know what I need versus me spending a lot of time not only doing set up and configuration, but then on the monitoring side and even on the billing side. I mean, one of the things that's fascinated me as I've gotten back into this now is how complicated the bill is. I have, I'll give you this example. My head of engineering that I just brought in from a very large software company, he had two full-time engineers on his team to unpack the monthly bill for their cloud provider. And that was just hearing that to me said, you know, there's gotta be a simpler way. If developers are spending their time or VPs of engineering are spending their time worrying about the bill and bills they can't even decipher, they don't even know what they're paying for, right? So it's not just who's spending what where, but also I don't even know what I'm buying, that's a problem. So we really attacked it from the other side which is the developer should have the fastest, shortest path to getting their environment set up so they can write their software so their companies can make money because that's at the end of the day what they want to be able to do is serve their own customers, right? And it shouldn't be the headaches that they go through or the decision trees that they go through to decide how to even get to that point. And that's what we try to abstract away from them. Okay. When you see the developers inside the companies, how is kind of the churn, the stickiness of what they're working on? Do they build something and then it moves on premises and they take care of it? Are they looking at other clouds? What is kind of your typical customer profile look like? It's shifting. I think it's really changing. So it's gone from, I pick a cloud, the obvious one, two, or three that are out there in the market and then I'm with that for life. And what I'm seeing now more and more of as I'm talking to not just my customers but others at prospects and others that are in the space is multi-cloud. So it's no longer there's one cloud that does everything for me. Some of that is pure contingency planning. Doesn't make sense to have all your eggs in one basket. But some of it is my workloads require different types of support, different types of performance. It's not just about price. And I think that's again, what the developer today is thinking. I want something I can get on to, the on-ramps very easy and easy to manage but also serves the needs for the particular workloads that I'm focused on right now. Ideally full life cycle. So not just the cloud for prototyping or testing but also for full life cycle to delivery to the customer. Again, performance, secure all the other things that they're looking for but they're not necessarily saying today there's one solution for me and that's it. And you see that with even all the other apps. I mean, when I came to DigitalOcean, the number of apps I had to learn and know because we use them all over the business for different parts of the business. That's just what we do now, right? Everything's distributed. You find the right application as we say at HBS, the job to get done, right? So there's a job to get done. What tools do I need to do it? And I will pay anything for that tool if it will get that job done for me. Absolutely, can you talk a little bit about kind of your customers? So I know you've expanded. It's not just the individual developer teams and developers as well as whole companies that use DigitalOcean. What's that progression and where are your customers today? The evolution has been fascinating. We started off with more of the hobbyist individual developer, DigitalOcean's roots really, where if you're going to build some big business application, we weren't the choice for you. We have seen amazing shift with our customer base now and I'm packing that every day in terms of who's using our products and why. It's a couple flavors. So one flavor is the startup community who is tapping into DO because we, again, we're easy to spin up and use. We can call ourselves DO. So rapid spin up and now these companies are getting traction and growing and scaling with us and they want to stay with us. They love us. That was another thing that struck me when I decided to join the company is how many of our customers, people I know who use our product to say we just love you guys. And it's not just the product itself, it's our community, it's our content, our tutorials, everything that we offer to them and it's a rich experience. It goes back to your days in VMware, I'm sure. Completely, it felt so familiar to me to come. Do you have, I love DO bumper stickers yet or? No, we have heart stickers and sharks. I'll make sure I send you some because they're really part of our brand and they're really fun. But DO love, and love is actually, we joke, we use the heart emoji more than probably any company any of us have ever worked at before. It's part of our culture. So the companies are shifting again from early stage startups or what we're also seeing, early stage startups, sorry, to growing businesses. What we're also seeing are developers, more and more developers are bringing us to work. So they work in, whether it's a big Fortune 500 company or it's a middle market company where they're saying, you know, actually Digital Ocean can do a lot of the things that we're trying to do on other platforms, easier, faster, better performance, et cetera. Whether we start just sort of as a prototyping option for them or test option for them and then they really, you know, actually we can keep these workloads going for production. We're seeing a lot more of that and that's been an interesting progression for the company from the individual developer to the professional developer. And then we have this new class of mid-market customers who are, again, pushing the envelope with us in fun and interesting ways and trying to use us beyond just a couple, we call them droplets, you know, our VMs are droplets. So beyond a couple of, a small cluster of droplets to full production systems running on our platform. Yeah, when we kind of step back and look at the cloud industry, a lot of times people mischaracterize. They don't understand what's going on. You know, when we first did our first kind of what is the revenue in cloud? It's like, well, the big thing of cloud today is really SaaS, you know, two thirds of revenue today is software as a service. I'm curious, have you done kind of the jobs to be done, look at things like infrastructure as a service and say, you know, how was the cloud market today? How was it delivering on those promises and how do you guys differentiate between kind of those big players that we mentioned before? So I want to be sure I understand the question in terms of, is it just SaaS applications? Is it beyond SaaS? I guess the premise was, you know, when I go read, you know, we've got some of the financial channels on the TV outside. When they say cloud, I don't think they understand what they're talking about. And even when you read lots of articles, we boil it down, we oversimplify it to be like, oh, okay, there's a shift because of something they understand and Amazon's a huge company or Microsoft owns all of your apps and you know, there's a little bit of truth there but it misses a lot of the nuance that's going on. When you say, what is the business justification? What's the jobs to be done that I get by using infrastructure as a service or cloud in general compared to what I was doing before? Because it's not, we know today, it's not just, oh, hey, building data centers is really tough and I'm not good at it so I can do something cheaper by turning to some other service. I mean, part of that's true but it's way more, you know, nuanced. Yeah, it's a lot of, several business cases, right? So there's exactly what you just said, which is I don't want to be in the hardware business or own a data center or manage a data center because that's expensive and not just the hardware itself but the people to manage it. So that in itself can be very compelling. Some of it is the flexibility and agility you have with elasticity in the cloud, right? So when I need to have, whether it's seasonality or I have certain workloads that hit peak, being able to scale up and down is very difficult. When you're working on-prem or you have your own hardware, right? That becomes challenging. So I think the cloud affords that set of capabilities as well as geographic reach in terms of how far you can go and what you want to do depending on where your customers are. So I think it gives you a lot of that flexibility as well as balance and contingency around security and other things that a lot of companies are trying to solve for right now. And it's a challenge. I think there's still, certainly not from the early VMware days where we were trying to convince customers to go from test and dev to putting real production applications in VMs, right? You know, it's kind of, we're way past that now. We don't have to convince anybody of that anymore. And there were some simple models. I mean, I remember there was, I think it was IBM did a commercial and it's like, where'd all the servers go? Oh, I took my 100 servers and put it down to, you know, 10 servers and oh wow, that was a simple straight utilization. I kind of understood that. Cloud's a little bit cloudier. Yeah, it's funny, right? But I think it's proven it's a real thing, right? You're no longer questioning what's this ether or nervous. You know, I talked to a venture guy locally a couple of years ago who said there's going to be a day where everyone's going to give up on the cloud and put it back into hardware again and not there. I think maybe there's something. I think we understand that there's still hardware in the clouds and we're getting to hear about that a little bit more. But yeah, this cloud, you know, wave is definitely for real. It was definitely for real and as our CEO likes to always say, you know, at the end of the day you still, you know, when we talk about serverless and microservice, you still need to server, right? So the servers are still there. But I think also what's interesting and we used to wonder about this back at VMware as well is what does happen to that hardware? Do we do, is it no longer interesting anymore for the business but now the hardware itself is getting more sophisticated and its capabilities more is lost. Certainly it's evolving the way you would expect it to evolve. But it's enabling us to do more interesting things in the cloud that we weren't able to do before and just memory in CPU and how we're able to optimize theirs, it's terrific. All right, so you've got an operations background. Here's the thing I've been kind of looking at is I remember VMware had a great utilization story but storage and networking caused a lot of ripples that took over a decade to fix and from an overall operational model I didn't feel it had a huge push on how much I'm spending in my data center from an operation standpoint. Cloud, we understand some of the changes but operationally you already mentioned, you know I need to have a couple of people working on pricing which before it would just out procurement take care of the boxes and then I run around and take it. How is the operational model of cloud today and what do we need to fix as an industry to make it even better? Yeah, I think it's shifting in that it was still that question and it is today very much so most of the big providers you're still asking the question what am I paying for connectivity or what am I paying for bandwidth? What am I paying? I mean it's still there, right? So that hasn't gone away, we've just put it in the ether it's not physical anymore. But my assertion is that becomes less and less what anybody wants to think about nor should they, right? So I draw a lot of parallels to the telcos, right? And there was a point where we would see the commercials and say, do you hear me now? Do you hear me now? It was all about where your cell towers were, right? Nobody cares about that anymore, right? We care about the data plans, we care about whether I'm on the family plan who's chewing up more downloads on Snapchat than someone else on my family plan. But at the end of the day my phone service is my phone service and I think that's what we're gonna get to with the cloud which leaves us open to them what's interesting after that. And for me what's interesting after that are the tools developers need on top of the cloud, right? Which is a lot of where I'm spending my time thinking in our roadmap, a dissolution is we cater to the developer, the developer knows we trust them, we're developers, we get them. Okay, so the cloud has to be the best it can possibly be for you. But let's not get caught up on all the details in minutia. Let's give you the additional tools you need to go from coding to deploying to operating the software that you're writing. What is important to you to do that? What's getting interesting in terms of whether it's edge computing, IoT, interesting applications that are tapping into AI and machine learning. What do we do to ensure that you can build upon that cloud to do great things? And I think that's where we're going. I think it's less again about the hardware itself or optimizing everything underneath in the platform. That's our job, we have to do that. Excellent, and we do, I think. It's again, now let's take you to the next level on what you need to do to build your software. Any comment on that edge computing that you brought up? Something we've been looking at from a research standpoint at Wikibon for the last couple of years. Peter Levine wrote, kind of cloud computing is dead. You work for a cloud computing company. We do, and he's on our board. So maybe give your take as to what that means, the shifts that you're seeing in data center's cloud edge and how that puts out and how DO fits. In some ways, it's a lot of what we saw at Akamai, which was at some point everyone's going to get this internet thing, and then the next question is, what are they going to do with it, right? And how far out are we going to go? IoT is no longer something people are maybe thinking about, it's real, right? And as we start to think of the devices that are now out there and the capabilities that are closer to the edge for performance and other capabilities, and even data, for that matter, how close do you get the data and the performance to your end user? Again, I think we have to build pathways to that, and we have to understand that is the trend, that's where applications are going to tap into those devices and the connectivity back, whether it's to the cloud or it's some hybrid environment, we have to be able to support that. So I think that's where the world is going. We're definitely, I've seen a lot of interesting research even here in Boston in that space. And to not be thinking about it and how you're going to support it underneath, I think you'd be missing something. Okay, last question I have for you, Julia, is you're a CTO and you teach at HBS. What's exciting you these days? Maybe even forget the cloud space if you want. What's interesting, what's catching your interest these days? So what I'm fascinated is my personal interest has always been around AR and VR and what's happening as the, what will be the killer app, but what are we going to be simulating or what are we going to be experiencing? And I would say even in how developers work, as we have more and more distributed teams in engineering, we have more and more distributed development efforts. What does that really mean experientially? And I'm waiting to see the thing that's going to be, that's what we use VR for, right? But in my world, in technology, I think understanding and embracing that we are going to be in a world where, whether it's holograms or whatever it is, we're going to be interacting with people in a different way. How leaders think about managing those teams or managing this new suite of technology. And even IOT, I think at that point is passe, it's AR, VR is happening. It's not even the infrastructure and how it supports that, but how people and humans interact with each other in this new type of hybrid world where I've got humans right in front of me and I have humans on Google Hangouts and I have this new sort of headset thing that I think over time won't be a headset anymore. It's going to change the conversation and how humans behave with each other. There's really interesting research happening here in Boston in that space. And I think that's the stuff that we'll start going from, again, it's a toy, it's not real too. These are things that are actually impacting our jobs, our day to day, our homes, everything. It's fascinating stuff. All right, well, Julia, I wish we could stay for a couple more hours to talk through some of this, but we will catch up with you next time. Julie Austin, CTO of DigitalOcean. Thanks so much for joining us and thank you for watching theCUBE. Great to be here.