 Live from Barcelona, Spain. It's theCUBE. Covering Cisco Live Europe. Brought to you by Cisco and its ecosystem partners. Welcome back to Cisco Live Barcelona. This is day two of theCUBE, the leader in live tech coverage. We go out to the events, we extract the signal from the noise. I'm Dave Vellante, my co-host, Stu Miniman. Ben Nias here, the CEO of Boston-based Turbonomic. Great to see you again, Ben. Thanks for coming out. Thanks for having me, Dave. Appreciate it. So what a show for you guys. I mean, everything's multi-cloud. I mean, that's your sweet spot. You saw the keynote yesterday. You got to love the messaging here. It's really a tailwind for you guys. The fit and the strategic rationale makes you feel good about a partnership we established a year and a half ago when it was still nascent, right? They were just starting the change to becoming a software company, to becoming a multi-cloud vendor, not making a decision at the time not to have a cloud of their own. And boy, does it feel good now. But boy, it's been interesting to watch the changes in organization, people, all the different elements of this monster company, $200 billion public market value company going through this change in the public markets. Well, and you guys have really executed well. Obviously you did some nice raises. You've got that velocity marketing thing down and you're scrappy and now you've got some resources behind you and you've also got some partnerships that are starting to bear some fruit. So let's get into the Cisco partnership specifically. What's that like? What's it all about? Give us some details there. So Cisco sells our product under their name. It's called Cisco Workload Optimization Manager. The acronym is C1. But our thesis, and I think what they buy into enormously is that as we've decomposed the infrastructure and decomposed the applications. Think about it, we used to have monolithic applications all the way down now to VMs and soon microservices, right? Containers and pods. You're going to need to think about how to resource those things at a scale that humans can't possibly manage. So the workload, the little humble workload becomes the centerpiece of everything. And workload optimization manager is that. It's an AI ops ability to assure the performance, manage the compliance policies and make it cost effective all the time. And those are trade-offs. So you can't do it once as demand changes. You've got to be able to make those trade-offs ongoing and that's the uniqueness. So the partnership was really embracing that concept. And what's fun is you can see how it's expanded with multi-cloud manager and the move to containers, just that many more zeros when you think about the number of workloads and the number of containers. Yeah, Ben, I've loved watching this discussion of workloads and applications because I've worked with Cisco most of my career, but I spent a decade on the storage side looking at the network people and it was just, oh well the applications and the data is just bits that run over the pipe. And therefore Cisco didn't really necessarily care that much, it was just, I want more traffic, yes, but maybe they do some things to optimize a little bit, but workload optimized management seems a very new thing for Cisco to be able to embrace and understand and fits into that whole software strategy. Maybe give us a little bit about how you've seen the maturation and change about how Cisco has data in the center of their keynote yesterday. Where it was, wait, this is the networking company, Cisco and ports and gear and massive million dollar purchases that you roll out and get certified on as opposed to kind of the new software world. So I think if you look at it, data without logic is data. It's when you put the two together and that's what a workload is, that you build all the way up. If you really say where did they get it, they were always great at moving the data and to service the logic in the application. Buying AppD I think was a critical and decisive move to really put them at the top of the stack, anchor the application and you can then make sure everything else is brought along with it. So AppD gave them both the ability to look at the topology of the application, the response time of the application and also give them this thing called business IQ which is the application runs your business, right? How do I take the data in the organization throughout, make sure I'm servicing it right, but also making sure that the application is running at all times well. And applications really are just a aggregation of workloads and so it goes back into the application, the workload and then the infrastructure which shares it all. Ben, you talked about kind of what it is, the workload optimization manager. What's the secret sauce behind it? Can you talk a little bit about the engineering and how it works? See how it works? Yes. Yeah, there's really, I call it the three A's, okay? There's the approach, then there's the abstraction and then there's the analytics. The first one is the approach. Everything we're doing is about putting demand in charge of supply. So we literally own the patent on using the principles of economics to manage IT. In other words, what's the best resource allocator we know? Markets. Let the workloads pick the resources on which they need to run and do it in that way as opposed to us trying to service some ephemeral demand when we're actually managing supply. The way it works is you have to have an abstraction and that means that I can't have every single vendor's product be different. So to a workload, all the flavors of storage, it just looks like IOI ops and disks so they can trade them. An abstraction we all use in everyday life currency, right? That's how markets work. We have to have a common currency. And then the last one is the analytics. If you let the workload pick the resources it needs, it knows it because it knows how much demand. Demand goes up, more resources. Demand goes down, you leave resources. But then we know the right order of the resourcing that it needs all the way down the stack from the application to the virtual to the physical. And that allows us to give exact right actions, not recommendations. Recommendations we think are like opinions, right? You can't automate them and alerts. But if you think about being able to be so accurate and so exact in the analytics you produce that you can actually automate them, that's the aha. Well, that's brilliant. I mean, you got the marketplace demand and that decides. But you've also got to do this in near real time, right, to have a business impact. So is that your analytics? That's some machine intelligence going on? So people talk about AI ops, this is AI ops. We have a data model. The data model covers the customer's on-prem environment as well as their off-prem if it's Amazon or Azure. And now I can see all the workloads I run and all of the performance issues, all of the compliance exposure and all of the efficiency opportunities inherent in each one workload. We show it to the customer and then they can run what if scenarios in offline not with a synthetic but with their actual workloads. Say, how would you like to see that workload in one of these other environments in any direction? And that's now we're getting into multi-cloud management, right? Yeah, and you abstract all that API complexity and all that diversity and just one more follow-up if I may, Stu. I want to understand the business impact. Sure. So we covered kind of what it is and how it works. Why do customers buy? What's the business impact? So the most important thing is you got to have application performance. If your apps aren't running, your business isn't running. Bear? The second one, though, is, boy, compliance regulations just keep coming, right? And there's lots of different forms of compliance and policies. It could be a static one like HA or data affinity or anti-affinity, things like that. But then there's also a myriad of raising level alerts. People are trying to enforce all of these policies manually, which means they don't really know at any given time whether they're in conformity with their own policies. Then you could ask, well, then why have them? So that's a second big driver. The third one is just cost. If we actually run the environments well and we know that demand picks it, then actually you don't need to over-provision the virtual or the physical or both environments which is what most people have been doing for years. Then the area I want to drill into is that multi-cloud management that you mentioned there. Managing environments has always been a challenging situation for IT. I think back 10 years ago, vCenter is the center of the world for anybody in virtualization. System center from Microsoft shops. In the multi-cloud world, it's still a bit of a jump ball. Cisco, of course, with their cloud center suite, want to have a strong position to live in that multi-cloud world. What are you seeing in the marketplace today? Where does your OEM solution with Cisco fit into this overall orchestration and what are you hearing from customers? So there's a couple of things. If you look in the customer side, when you go multi-cloud, you have to have different skill sets. They're different platforms, different vendors, right? And by the way, so extreme in some cases where one is principally a fixed cost environment versus two that are variable expense-based environments, right? So I have to think about which is the type of workload I want to run based on the demand parameters for each of those to make the most economic sense and the best performance attainable. If I have something that's going to scale massively, I want to leverage the elasticity of the public cloud more likely than not. But to do that, I better be ready to manage it in that fashion, right? And so somebody has to understand the nature of demand and when to scale that up and when to scale it down. We've had customers literally take monthly change control windows down to nightly in order to manage that because the savings are so material, right? So it's really a matter of they need some level of automation, Stu, to be able to know which workloads should run in a given environment in a given way, consistent with what the platform vendor is offering. And that's what we do. I love stories like this. I'll harken back to Frank Slutman, who's kind of a mini-business hero of mine. He founded Data Domain and CEO and obviously helped service now grow. And he would say to me that I love ROI stories. Like going in and just being able to show people bottom line impact. You clearly have that here. Application performance is very clear how you affect that. When you talk to customers about the economic potential, what are you seeing if you sort of scanned your customer base? You know, what kind of savings are you seeing? I mean, it sounds to me, I'm inferring 20% it's kind of a no-brainer, but I could imagine 30% plus savings. What are you seeing if you took an anecdotal scan of your customer base? So very typically we can find because the VM is over-provisioned in the virtual layer and the physical is over-provisioned to manage the environment, try and assure performance. Typically we'll find 40, 50% of a customer's data center available to be made more efficient, okay? When you then go though, and this is really interesting, if you go to, let's take ECS in Amazon. There's 1.7 million combinations that you can pick from in ECS. So Amazon refers to us as a customer control plane because we understand the fundamental demand on the workloads. We'll pick the right instance family, so you don't have to go and try and pick and guess and allocate based on compute instance types, memory, network, storage, then whether or not to put an RI, reserved instance against it, what region to run it in, all of those things we can take care of and help find and land that thing in the right order. When you don't have that, people will naturally allocate, they're going to do what's called a lift and shift, take an over-provisioned VM on-prem and bring it into the cloud and that's the source of these incredible cloud bills. People go, wait a minute, this is too expensive. Cloud was supposed to be cheaper. Well, that's because they didn't optimize it before they moved it. So our strong preference is, let's look at your workloads on-prem, let's find you the right home and the right instance family off-prem, to assure performance and then we'll manage it ongoing with that continuous actions that we do. And that changes the operating model. And of course, when you talk to Amazon about this, they actually love that because they understand that there's price elasticity. If they're saving customers money, that means the customer's going to buy more compute, they're going to buy more storage. Have you seen that in your customers' lives? Absolutely, so Amazon's on record is having cut price in EC2 62 times. They have a retailer's mindset and Microsoft has to match them and does. So they're both interested in taking costs down to serve the customer. When they don't, there's a problem. The problem is a customer gets a cloud bill that was far and excessive what they expected to see. Gartner's got some great data on this about just how big those numbers can be. But what happens is two things. One, they go into a pause and that pause can reduce the rate of migration for a year or better while they're trying to digest and get the skills and learn how to manage their workloads in that environment. The second thing is there's a loss and a slight erosion of trust and then they want a dual source and then they want to bring in other vendors and so forth. And the reason is they're just trying to figure out how to make this migration which they know they have to. Every CIO has a cloud MBO but they have to have a way to know that they're not going to bleed themselves out in the process. So those are the two things that I see most frequently from customers. Yeah, Ben, as an observer what you've seen from customers is how do they look at Cisco as a software provider in general and as a partner in this multicloud world specifically today? Well, I think Cisco's done a number of things. Again, I would go back to they really sent a new direction with the direction that Chuck Robbins has provided as CEO with the purchase of AppD with the services. If you go to the innovation hall and you'll see the solutions hall, you'll see the cloud services that they're offering. And then I think finding folks like Turbinomic and literally branding it under their name and selling it as CWAM, those are pretty big demarketers of their commitment to cloud, to multicloud and to software. So we were talking in our open about this whole multicloud marketplace, the horses on the track. Cisco clearly come at it from a networking standpoint. Obviously you got VMware doing its thing, coming at it from what used to be purely hypervisor now expanding, you got IBM and Red Hat, certainly Microsoft in the mix. It's a really interesting dynamic. You guys are a best of breed player. That's your strategy to keep ahead of the competition or the supposed competition and partner with some of the big guys. What gives you confidence Ben that you guys can keep that technical lead and that market lead relative to both the competition and some of your partners? Custom, smaller companies have to focus, right? So we focus, we focus on workloads and we're going to let those workloads run. We do not have a bias in our pricing model, in our infrastructure allegiances or anything, we have a bias on making sure that workload is always performant, compliant and cost effective, wherever it runs. So our thesis is, customers will always want to have multiclouds, not one provider, but multiple and therefore want the best workloads that will stay and grow with them. And so that's why we have such good alliance with both Microsoft and Amazon. Because again, they're the net receivers of a lot of these workloads. One of the reasons we have such a good alliance with Cisco is because they're not going to be a cloud provider. They're going to be a technology provider to those that want to provide services and technology to the cloud providers. So I think there's a nice match there in terms of our focus and our ability to continue to evolve. And let's just remember how dynamic this is. I mean, we were just talking about VMs in the last 10 years. Now in the next five, you're going to see a complete shift over to containers, pods and microservices, different kinds of schedulers, different kind of IP stack. And that's the bet I think you mentioned that Red had and IBM are making as well. Your timing has been phenomenal. I mean, obviously coming out of the downturn, cloud had a huge uptick. And now it's very clear, like you said, every CIO has an MBO on getting the cloud and you guys are well on your way to hitting escape velocity. So congratulations on that. And thanks so much for coming on theCUBE. Thank you, Dave. Thank you, Stu, pleasure. Okay, you're welcome. All right, keep it right there everybody. We'll be back with our next guest, Dave Vellante and Stu Miniman. We're live from Cisco Live Barcelona. You're watching theCUBE. Thanks. Thanks.