 Live from Las Vegas, Nevada, it's theCUBE. Covering AWS re-invent 2016. Brought to you by AWS and its ecosystem partners. Now, here are your hosts. John Furrier and Stu Miniman. Hi everyone, we are here live in Las Vegas for Amazon web services re-invent 2016. This is theCUBE, our flagship program. We got to the events and extract the signal from noise. I'm John Furrier, my co-host. This week's Stu Miniman and our next guest is Teresa Carlson, Vice President of Worldwide Public Sector, booming business, CUBE alumni. Great to see you. Thanks for coming on again. This is your box. I love you guys, thanks for having me back. Great to see you. So, honestly, we see a lot of government, public sector, action, business is good. Give us the update, how big is it growing? Can you share some stats? The business is doing really well. I'm very proud of what our customers and partners are doing on AWS because generally in an environment where everybody thinks about it being really sort of stodgy and slow, it's actually moving really quickly. And in fact, here at the re-invent session, we had a closed door event just this morning with the intelligence community and we had a lot of people there, I'll just say that, and they are growing like crazy and adopting the cloud, mission critical solutions, applications, workloads. So they're an example of it. Again, a group that everybody said, wow, the intelligence community and they are moving fast. We had Department of Defense here, we've had intelligence agencies. We had the American Heart Association today where we just a couple of weeks ago announced a precision medicine platform with them. So it's going really well and I see that on a global basis. So while again, people would say, yeah, commercial, it's moving really fast, government, education, not so, actually they're moving very fast. I want to get to the CIA update deal, but before that I had a chance to sit down with Andy Jassy for a two hour exclusive interview at his house at the helmet head. He's got a freaking sports bar in his basement, so the best man cave of all time. But we had a serious long conversation, I wish I could have enjoyed the sports bar more, even though the Seahawks game was on. But I asked him about what he thought was really going to be big, both commercial and public sector. He talked about IoT and behind us is C3 IoT, Tom Siebel's company, quietly doing a lot of business, I hear in public sector because of the data growth in IoT. Thoughts on how that IoT is shaping up in public sector? Oh, definitely. So if you think about vertical markets like justice and public safety, transportation, health, all those touch across every aspect of public sector, and IoT is really big in this business. In fact, I don't know if you know what CGIS is, but it's the criminal justice information system. It's a mandate or a compliance that comes out of the Department of Justice that states have to meet for justice and public safety data. Well, they are now, everybody almost is mandated for body cams. So if you think about body cams, there's lots of sensors now shaping up around just the body cam world of justice and public safety. Autonomous vehicles, transportation, drones of every type, video cams that are out there, sensors on light poles everywhere, transportation, sensors everywhere. So it's very big in that data. By 2020, they think there's going to be over 30 billion data points coming from IoT devices, right? Well, if you think about that, a lot of that's going to come out of a public sector space through smart city applications. Citizens just touching and wanting to know every point and aspect for mapping. Even if you go to places like Singapore, they have something called OneMap where every component of the city now has IoT sensors around where they look for, where is traffic being amassed? Where is a population gathering? So they're really looking at IoT even for capabilities like that. And because of AWS and serverless computing, right? It's very cheap and easy to use and these applications are quick to be built. Terry, so you've been traveling the globe and you must have a phenomenal viewpoint as to how things like security and compliance fit into people's thoughts about the cloud. Last time we talked to you, a lot about things going on in the States here and we know that the adoption here in the US, what do you see as the global view? How do they look at things like security and compliance globally? Well, I will tell you that they are still very concerned about it. In many countries, data sovereignty is still very on top of everyone's mind but as you see, we're keeping pace with that because we're launching regions around the world. So when we launch a region, that's very good for the public sector business because we can go into government in a partnership mode and immediately start doing their security and compliance. So we take in what we've learned from the US but you might say to global countries, other countries outside the US really care about that, they do, they look at US as a model because the US wasn't early adopter of cloud. So we've taken the NIST standard, the National Institutes of Standards and Technology, we've taken the FedRAMP model from US and we literally share that as well as other things like SOC1 and SOC2. So yes, they care, yes, they're concerned that we have an answer in a model and just start programs to help them. So we are very hands on and we actually are like, what concern do you have, less address and head on? We do not back away from that step. We hit it head on. When you look at the maturity of how customers are adopting things, a lot of people start out kind of that base infrastructure service level and move up. Do you see that same kind of overseas? Did they jump some of the maturity because cloud is more mature in general now or did they still go through some of those kind of basic crawl, walk, run? They still go through crawl, walk, run and it's mainly because it's a new model and we encourage that because we want them to have a well-architected design for anything, especially mission critical applications. So from a well-architected model, if you think about the workloads that they're driving, it's essential that they start and then they learn now. The really interesting thing is once they get going, they just take off. So that crawl, walk, run is very condensed. It's not the traditional model of IT. They move out fast. Theresa, what have you learned from the CIA? So you guys had a landmark win there. We talked about that on theCUBE when we last spoke a couple years ago. And now you see with the VMware relationship, you're seeing them a hybrid coming together where in essence, you're going to see Amazon being much more configurable to the needs of the environment that might have legacy constraints or environmental issues or whatever their requirements are. It might not be a pure cloud native. It might be that hybrid. What have you learned from the CIA deal and how are you moving that into operations as you go to market and drive your business? Well, it's a great partnership. Let me just say that. It's not really like a customer-vendor relationship. It is a true partnership model. And as a result of that, we have really transformed the way government is adopting cloud. Very fast, very mission critical. We are learning together. And I'll tell you, one of the things we've learned is how to speed the accreditation of a system. And what I mean is the security compliance. We move through that accreditation very fast. We've learned very much on the AWS side. What are the requirements that we need to meet at the most sensitive side of data? And we've been able to move through those kind of things. That as well as new services that we need to offer. And when you learn from a community like that, you have to remember, every time we do something from a community like that, we roll it into the rest of the world. So every customer of AWS- A lot of leverage there. Completely. So every customer gets to take advantage of the things that we're learning from great customers like the intelligence community. So one of the things on the stage this morning on the keynote was Vinra talking about cloud. And one of the- My customer. Exactly. I love Vinra. His comment that I want to get your thoughts on, because you mentioned security and stuff. He said security in the cloud is better than doing it on-prem, which has kind of been what Dave Vellante and Dave in particular have been talking about going back four years with Pat Gelsinger at VMworld, is security a do-over? Is there new security models? And the big thing was multi-tenancy. And the debate, there's a variety of nuances around that debate. But I find it striking that they're standing on stage saying this is what we've learned. Can you expand on and expand that nuance? Because that seems to be now the thought process in the mind of folks who have a very secure security mindset that they want to have that. Why are you guys doing this better than people can do it on their own? Well, the first thing that AWS did, and Vinra, by the way, they are like amazing. They have moved down on the cloud and they are power users of the cloud. I just have to tell you, if you ever want anybody on to talk about it, these guys are power users and they are moving their data and applications so fast. And the way they've adopted and learned, I think it's quite innovative as well in terms of just getting their users on board with cloud. But why, if you take a customer like that and they say AWS is more secure, why do they say that? Two reasons. One is we do not shy away from answering any question a customer brings up. So when you do that sort of arm waving and saying, oh, we can't go to cloud because it's not secure, we break it down, item by item by item, we're like, okay, why? And we literally answer every question and check it off. And if we can't, we say, okay, let us go back and we come back with an answer. So we love those, I mean, we love hard things to solve. So for us, it's been like security's going to be the most important thing we have to deal with. So for the folks watching, go check out the replay of that keynote on day one, been a great, impressive speaker. But the comment that Andy Jassy made as he was leaving the stage, kind of read into the tea leave there, connecting the dots. Andy said, thank you very much. I beat the guy's name. Thank you very much. We've learned a lot from you. And implying that they brought a lot to the table for AWS. Could you share things that they've brought to you guys? You said power user, what are they pushing you guys on? What are they doing to make you better? Well, the one thing, again, I think that differentiates AWS model with customers, that obsession side of us, is we ask a lot of questions and we don't mind hard answers coming back to us. So when you have a customer like Fenra that deals with highly regulated data and industries, critical information that cannot fail because the market could fail, they push us. And they're like, okay, this, like certain kinds of tools and technologies, they tell us if they need a different adaptation or tweaking and we listen to them and we work together. So when Andy says that, he's really talking about the model that AWS works with our customers, which is that give and take of what's working, what's not, how do we improve it? And our service teams, which is the beauty of cloud, you can change that in real time. Like you don't wait much, you don't have to wait two years to cycle a feature or service, you're like, okay, let's update that now, let's make these tweaks and changes. And that's what cloud offers you, that experimentation, filling fast, recovering and then moving out. Teresa, I'm curious how policy fits into what you're working on. I heard the announcements this morning about AWS AI. You see things like image recognition. And when you talk about the public sector and a lot of uncertainty going on in the global world, everything from Brexit to what's happened in the US and people are trying to, are regions going to be a little bit more insular with how they need to think about things. So how does Amazon approach this? How do you work locally and globally on these kind of issues? Thank you for asking that question. That's actually a great question. A lot of people do not realize how much, how important policy is and how it plays into a global company like AWS and our partner ecosystem. And what we do, we take a very proactive approach. We have a policy team around the world and it was fairly new to us though at AWS. We didn't really have a tech policy team. So we've created that, but like everything else we do, we roll up our sleeves and we get in there and I'll share my first trips to Capitol Hill almost six years ago, we'd walk into congressional offices and they were like, oh, you're here to talk about Kindle or tax, right? No, we're here to talk about technology. And they would look at us because they had no idea what AWS is. Today they know what AWS is. And I love it because now we are shaping technology policy. We are explaining to them how the use of cloud is a differentiator for mission, how it creates jobs, how it creates companies. And we can go in and talk to a minister of finance or a leader, a congressional leader on the house or Senate or whatever hill it is around the world. And they get that AWS is a driver of jobs, which we don't talk about a lot because when you think about startups and the number of startups that run on Amazon Web Services, that creates entrepreneurs, that creates jobs. And when we can talk to them about that, that helps to shape policy so they're not, so they don't think about policy in a way to inhibit innovation but to create policy that drives innovation. And that drives jobs also brings up the point of reshifting jobs, training, thoughts on how you guys are educating pre-existing job roles that are coming in, I mean with machine learning and you got Polly and you got Lex, the Alexa stuff, Echo, I mean all this new transformation, how are you guys re-educating the workforce? Well it's, if you ask me around the world, the number one thing I get asked about from ministers, prime ministers, CEOs, CIOs, they say how do I get jobs? How do I get these skills created? And here's what we're doing. So we created a program that we rolled out a year ago called AWS Educate. We announced the version two of this just a few weeks ago and V2 is basically what we're doing with crowd source content. We get millions of dollars away to professors and students on computer science. So we encourage them to both create content for cloud, share that content and then we help them curate it. We do hackathons on campus, we do online training and education but what we've also added this year is a career pathway and the career pathway gives these students badging. So they can badge and select, if you go online, they can select their career on cloud. They can do like a security badging, an IOT badging. So we're going to allow them to have a badge they like. Now the best thing about it, when they create their career pathway, they get the skills they need, they can put their resume on our job skills board. So we've created a board, they can place their resume and now we have all of our partner ecosystem putting their jobs up there. Salesforce, Amazon, AWS, we're saying, put all your cloud jobs that you have and select from these students that are now cloud-enabled workers. So we are really excited about the possibility of this program and you're going to see us put a lot more into this. It really combines the marketplace of ideation ideas. Ideation starts innovation, that marketplace of ideas that we see that conversation happening with the marketplace of applicants. Yeah, exactly. And we have partners like Trend Micro wants to help us create that security badging. And I was just at the Peace Institute in Washington DC and that's a who's who that comes to the Peace Institute from around the world. They want to create a peace badge for IT and they even explained to me, which I had no idea, MIT and other universities have worked with them on an ethical model for peace IT. And so they want to create a badge with us for cloud. So these things to me, it's just career after career and we can get these students then connected on a global basis, not just a U.S. basis, but a global basis to actually get a new job. Now can I just tell you one more thing about FINRA because I want you, they actually transitioned their workforce really interestingly. They gave out free credits. They said, here's credit card, go by cloud. And they let their IT workers go by cloud and those workers that had a propensity toward AWS and cloud, they started a whole new team with them. So think about it, they just allowed them on their own. It's like giving the keys to the candy store. And they just learned. So there's like a lot of creative ways to get people to actually do a transition of skills. Well, we're really excited for you. It's great to watch you continue to have a great performance on the business side and the impact to society with what you're doing. It's been fun to watch your team grow and you expand the kingdom of public sector. It's been a fun ride. What's next? What are we going to see this year from your group? What's the big to do item? What's the big mountain you're going to climb next? So the big thing you're going to see from us this year, we're going to have a big focus on the K through 12 side. You're going to see a lot more coding academies. We're really going to try to focus on the education side on that really young population. Get them really excited about cloud. And I've hired a diversity expert and you're going to see a big focus on women in tech and diversity in tech from my team. It's important. I mean, even if you still look at this conference, it's very low on women. Well, we'll have to take our new nonprofit tech truth that we launched in July and we kicked off at the Grace Hopper Women in Celebration, our first class integrated with some of the things you're doing, super exciting. I would love that. In fact, I'll invite you guys. We have our women in tech panel tomorrow, which we have girls who code SBP as moderator. I'll be on the panel. We have a Netflix executive. We have a Salesforce executive, University of Maryland. And you're going to see us doing things around the world. And also, government worldwide, you're going to see us partnering with countries, doing things with countries. We should be filming that live on theCUBE. We need like 10 cubes for Amazon re-invent stew. I would love that because countries, when you go into countries, they want you to partner with them. So places outside, they need to understand what does this cloud thing bring? And we've got to make sure that they understand it's a new way of doing business and it's a new way to create an economy. And the benefits of being agile, focused creativity on high impact opportunities. Congratulations, Teresa. Thanks for coming on theCUBE. Teresa Carlson, Vice President of Worldwide Public Sector for Amazon Web Services, continuing to change society with technology and create more regions, more availability zones, all this stuff that James Hamilton's building. All goodness for you guys, congratulations. We'll be right back with more live coverage here, live in Las Vegas at AWS Amazon Web Services re-invent 2016. I'm John Furrier, Stu Miniman, we'll be right back with more live coverage after this break.