 Live from the Mandalay Convention Center in Las Vegas, Nevada, it's theCUBE at IBM Insight 2014. Here are your hosts, John Furrier and Dave Vellante. Okay, welcome back everyone. We are here live inside theCUBE's Silicon Angles production of theCUBE where we go out through the advanced structure to steal it from the noise. We are here at IBM Insight getting all the data, sharing that with you. I'm John Furrier, my co is Dave Vellante. Our next guest is Derek Shuttle who's the CEO of Cloudin, which is the recent company that was purchased by IBM. Really launched, Silicon Angle picked these guys right out of the cast right away. These guys were doing some database work, no sequel before it's fashionable. Derek, welcome to theCUBE. Glad to be here, John. So you guys got bought by IBM, which we were talking to Steve Mills yesterday and Dave and I were talking about their critique of their acquisition strategy. They tend to be tuck-unders product features. They plug them in. They really explode and bring that IBM magic to them. So we've been following you guys for a while, databases and service. You got some new announcements on stage that you're related directly into. So they plugged you pretty much right in. So give us the update. What's it like with the acquisition, post acquisition? Everyone happy and what are some of the highlights of hitting the ground running with IBM? Yeah, sure. I mean, I think first and foremost, anytime you go through an acquisition you're a little unsure about what you're getting into. And I have to say all of us in the team are really pleasantly surprised that it's been one welcoming. They do a great job of assigning resources to everyone on the team to understand how to take advantage of IBM. And I think everyone looks at it as a platform. IBM is a huge organization that has resources from whether it's human, technical, capital, and they basically want to lean in. They want to invest. And if you look at our retention rate, I think we're at about 98%. So I think that's a great reflection of everyone's enthusiasm about what IBM can offer us. In terms of the announcements, I did not think we'd see the day where we'd be able to actually deliver on our promise of becoming a standard data layer, which is really what cloud is all about, right? Being able to move data between different endpoints, whether it's in the cloud that's public, whether it's private, and with the announcement of cloud local yesterday, we basically extended our IPs if someone can start in the cloud for free, begin their development exercise, and then if they want to go private behind the firewall, they can do that. If they want to keep it public cloud running on software, dedicated environment, they can do that. And so we're thrilled. And in terms of, you know, I think the overall market landscape never felt better about being a part of an organization that, yes, it's going through a lot of change, but I, top to bottom, everyone understands the importance of cloud data and mobile, which, if you look at cloud, we're at the epicenter of those three kind of market forces. So I think future's bright. That requirement that you mentioned about, you know, cloud and local being able to go on premises with your product, was that something that your customers were asking you for as a private company? You just didn't have the resources to do it. Now that you've been bluewashed, you can, you can. You know that term too. We do. Yeah, yeah. Got a lot of friends who've got their companies purchased by IBM. Yeah, it's an exercise. And then you've survived it, so congratulations. Well, yeah, I like to think we have. No, it's funny, I had a meeting yesterday, Dave, with a large financial institution in the UK. Their challenges, they've got a lot of data, you know, and the majority of the data that is small is personally identified, and they'd love to keep that behind the firewall, but all of the data associated with that personal identified information is massive. They want that to be an elastic, scalable, low cost, managed by someone else, right? So if you look at cloud and we can let them run their application behind the firewall, access that personal identified information, and then tie it to that massive, you know, I'll call it non-secure information in the cloud. Right, so it's the perfect world where I think hybrid is going to be realized in that manner, right? The world where friends don't let their friends build data centers is real. None of those folks want to build their own facilities anymore. They want to find a way, though, that to bridge the gap between, hey, I can't let my information outside of the corporate walls, but all of the ancillary data that's being collected in the terabytes, if not petabytes, keep it in someone else's infrastructure, let it expand and contract as needed, and that's what we're all about. I mean, that's for us, you know, if you think of the language we use, we use fluid, right, the fluid data layer. That means you're moving data between different endpoints, and an endpoint can be, you know, whether it's a device, you know, mobile, whether it's a car, whether it's, you know, a node within a data center, we're going to help you move that data around that infrastructure seamlessly. So, John and I talk about this all the time. I mean, it seemed like a couple years ago, not just IBM, but virtually all the traditional guys were fumbling with cloud, and then you had the whole situation with, you know, Amazon and the CIA, and then all of a sudden IBM said, and IBM does this, right? Sometimes they take their time, but when they set their sights on a trend, they then go for it. They're really good acquires, they commit. So, have you sensed that culture change, or are you part of that culture change? Do you feel like IBM is different, i.e. more committed than maybe some of its competitors? I wonder if you could talk about that a little bit, from a recent insider. Yeah, I certainly did. I mean, from our perspective, I think, you know, if you talk to Beth Smith, or Bob Picciano, you know, basically are, you know, the SGA folks, they wanted clouding for its IP and its ability to operationalize that IP, right? Which all of us, you know, it's one thing to build something, it's yet another to operationalize it as a service, and that is a non-trivial sea change. It's something I think a lot of companies don't quite grasp. You know, building product, shipping it is one thing, but then taking it into a data center, replicating it across thousands of nodes around the world is a whole other exercise. And I think that was something that was very attractive to them, to IBM. And I think, right in the same vein is, there is no shortage of enthusiasm for where this market's going and IBM's belief that they want to be at the head of that. And I think it's about building IP that can be operationalized, whether it's private, public, forget about that piece. It's more just about making it easy and accessible for clients. And clouding does that from day one. I mean, you can go to the website, you can sign up, create an account, you'll never hear from anyone. You can have all the content needed to make a good decision about what you want to build with us. And then, based on your behavior, we can engage and provide you the right resources. That's where this market's going. I think that's what, you know, I think IBM believes that and very much is leaning in on that. All right, John wants to jump in. But so I want to come back and talk about the tech at some point. No, no, no, go ahead. I understand this ease of use thing is interesting. IBM's a big user of our CrowdChat product, which is really on the same lines of standing stuff up quickly. And one of the things you mentioned, and I want to drill down on this, is that this is the power of the cloud. Really, the idea of, you know, Amazon with startups that's disrupted, you know, obviously the investment in startup community, but now we're operationalizing data and cloud is extremely difficult. Especially when you're organizing across multiple entities, et cetera. So, talk about that ease of use, standing up the data's piece of it because data is more focused on real time right now, whether it's security, whether it's, you know, cohort analysis at the edge, whatever the applications will need. Yeah. I mean, that's a real big thing. Elaborate on that, standing it up easily. Yeah, so I mean, I think it starts from design. I mean, one of the things I've been impressed by, you know, back to the comment Dave made about what it's like to be a part of IBM. I mean, IBM's made a committed investment in a design center, meaning a whole philosophy on what it means to build products for this next generation of service. And we've been influenced by it and I think it's something you've got to start from day one. I think the challenge for any company that's looking to enter this marketplace is that if you've not built product that's meant to be delivered as a service, meaning it's meant for failure, it's durable, it's scalable, it's a challenge, right? And that's again, you know, something we have day one that we're helping influence other parts of IBM, and if you look at DashDB, new offering that was announced yesterday, that is directly influenced by the cloud mindset of has to be always on, has to be easy to use, has to be intuitive, and I think you're going to see more of that, absolutely. So can we talk about the tech a little bit? Yeah, absolutely. Because people I think are somewhat confused. I was talking to Jeff Kelly the other day and he called you guys a key value store, but you really, actually, you know what? No, he said you're no sequel. I said it's a key value store. He said, well, no, not really. It's more like, you know, think techs, think Mongo, but there's some aspects of Dynamo, and so help us understand where cloud fits. Yeah, I mean, so the first thing I'd say that when we talk about cloud and we really talk about the data layer, right? So we're as much about the end state, meaning the storage, as much as we are about operationalizing, moving the data between those different endpoints. So we're at our core, a document data store that believes in an eventually consistent model, DynamoDB. And I'd say that's the one thing I think if there was a, if I had one wish for this marketplace, is everyone would understand that 99% of the applications we run are eventually consistent. It is not a bad word, it's actually a good word. It means that you're writing three copies, meaning you'll never lose the data, and you're just trying to get a quorum, meaning find two copies at the same time and then you'll present it back to the application. That is one of our guiding principles, because again, if you're trying to build a service and you're trying to operationalize it, you have to make a commitment to your customer that one, you've got a service level agreement, but two, you'll never lose the data. You'll never lose the data. And I think the core project that we back ourselves on is CouchDB. We put a lot of work into it, pre-acquisition. And one of the things I'm really, really excited about being a part of IBM is they absolutely believe in open and they are committed to investing in open technologies. And CouchDB is going to be, I think you'll see in the next 12 to 24 months, a key piece of that broader mosaic of technologies that IBM invests in. Yeah, well, John's talked about this a lot, about how the database market five years ago was kind of boring and it ain't anymore. I was at Vertica, so I mean, I wrote that from 07 to 2011. Well, it's interesting though, the MPP guys, Vertica, Natisa, Par XL, et cetera, they had their little niche, but it feels like the NoSQL crowd has a lot more innovation building around it. Plus, of course, a lot of it is, much of it is open source. Whereas, you really didn't have that with the column store guys and the MPP guys. Juxtapose, the two, what's your sense of, I mean, it seems like a lot more value is being created in this new open source world. Yeah, it's an ecosystem approach, right? It's a platform approach. I think with, you know, one of the takeaways from my experience at Vertica was that we'd built a really unique proprietary technology that was incredibly valuable, but it was really difficult to build an ecosystem around it because organizations didn't want to invest in something that ultimately was going to lock them in. And I think Cloud and this next generation of technologies that are really targeting mobile and web or, you know, kind of online applications have to be open. And that's a big sea change. IBM certainly recognizes, and I think other organizations recognize, is that companies don't want to feel like they're beholden to one vendor or two vendors. They want optionality. They want to be able to make investments in IT that are going to allow them transience. And really where you can find, I'll call sustainability, is the relationship. Are you able to create value on a regular basis versus I'm going to sell you something, lock you in, and then, hey, maybe I may update that software in six months, maybe I won't. You know, maybe that's the indicator, John, is what Derek's saying about, you know, opens a spectrum. I mean, we go to Oracle Open World and Larry Ellison stands there and says, we're the most open because we're Java, right? And you're laughing, right? But so, and he looks at the camera. He says a lot of good stuff about it, you know. You have to. But so, maybe the sort of metric is the ecosystem, how much value and momentum the ecosystem has. I mean, that's kind of the new definition of open. We look at this and you know, I'm really bullish on the fact that you can have proprietary stuff hardened in a platform. As long as you have choices, no real locking. When I say locking, I mean, talking about serious, evil, genius lock-in, which is, you know, splitting competitive strategy from a business objective to really offering choice, which means, hey, if the needs change, I can actually plug something else in. I think that's the difference, Dave. We really, I mean, I think you'll see some hardened solutions, quite frankly, on purpose-built hardware. That's just kick-ass and you say it works, and I don't really have it. Well, those are premium, right? They're niche offerings that are going to capture one kind of high end of the market. My thing is, what we talk about at Cloud, and I think at IBM and the broader spectrum is, data is the, you know, whether it's the new currency, we think of it as the next operating system, you know, over the Cloud. Data really is that normalizing effect. And where you're going to create value is not on the infrastructure, meaning security and network and storage, nor I think you're going to create it, you know, exclusively at the data, you're going to create it on top of that. Meaning, what applications you're going to build, it's going to collect and present the data in a way that's going to create value for the customer. That's where you're going to get a premium, you know, specific experience that's going to complement open. It's what you do with the data. Absolutely. You say it's an operating system, we'll put a little operating system hat on. You need to have a linker, you need to have a load, you need to have a compiler, all these things are going to be gone. And that's basically Cloud. Orchestration and automation are two concepts that you're very familiar with. Do you see that becoming the key item for speed right now? Because what's coming out of this event, for me at least from a, quote, signal metadata is obviously money's being spent and speed quickly deploying new apps is number one. And what does that mean for automation and orchestration? You want to reduce stuff, the steps it takes to do stuff. Yeah, I mean the themes I hear, you know, and being a part of IBM, now you know, Cloud is engaged with the organization that we never have a chance to talk to. I mean, let's be clear. No one would take a call from me nine months ago that now they can't wait to talk to me. It's a big bank, yeah, a big bank or whatever. And you walk right in the front door. Global organizations that have made significant investment in data center and orchestration. I mean, all of that. And you know, the themes I hear are first, you know, we want to understand how to take advantage of something that's going to allow us to have that hybrid experience. Because they definitely want to take advantage of the Cloud but they want to do it in a way that allows them to take advantage of the existing infrastructure and people and technology they have, but get them on a course towards that kind of next rev. And I'd say that the second piece that, you know, we spend a lot of time talking about is the fact that folks want to remain anonymous. People want to engage with technology and remain anonymous until they've done their homework. And I think, you know, 10 years ago where it was a lot harder to build things and it was a lot harder to understand, we're now at a place where it should be easy. You know, we'll give you an account. We'll give you the content. We'll let you figure it out. That's how Cloud works, land and expand. We were talking about it earlier. Absolutely. Premium works and you look at all the new age companies that are really kicking ass. It's, they don't have the big monolithic sales cycle that says, hey, you know, seven million dollars. Yeah, I mean, that's not working. Yeah, I got to ask you. So you're a young guy, cool startup guy, right? I mean. Absolutely more. I'm going to go with Dave. Yeah, I know. Okay, so you're on theCUBE. Yeah. So Andy Jassy says that they're going to be very few and we love him too. Yeah. Awesome, right? Yeah, he's created the whole thing. He's helped create it. So he said very few companies are going to own their own data centers and those that do, they're going to be very, very small. Number one. Number two is, you know, this whole notion of hybrid, he says the big guys like IBM, HP, EMC, et cetera, they embrace hybrid because it's not disruptive to their business model. So you're saying something different. You're saying, no, our customers want hybrid. So we, we get two ends of the spectrum. Help us square that circle. Yeah. So how I net it out is the following is that if you think about the majority of people that are storing a lot of data, 90% of the data is useless. There's 10% of it that is specific to you. Like that's in a consumer instance, right? They want to understand you as a buyer. That's the information they want to lock up and keep contained and they're worried about letting that go outside of the four walls. The other 90%, they're happy to share into a public cloud. That's hybrid. Hybrid is not, I'm going to lock one entire application stack sitting behind the firewall and I'm going to have a whole and other class. It's building a bridge between an application that relies on those two data sets. And that for us is, I mean, that's why we're at the tip of the spear. Cloud and local, back to what we've announced yesterday, is an ability, you can build an application that moves data between those different endpoints. Keep your large data volumes where you don't want to pay a big premium, you don't want to manage through the headaches and then keep the personal stuff behind the firewall. And I would say the thing about Andy and AWS, which I cannot say enough about what they've done for the marketplaces, they absolutely have set a standard which we're all trying to catch up to and trying to capitalize on, is we really believe that the next kind of wave of this market is going to be as much about IP as it is about integration and quality of service. So we spend an inordinate amount of time on our DevOps and customer service and just kind of client engagement. And I think that's where there's a lot of value to be created in this next rev. For those organizations that have not quite invested in the cloud that want to, but just don't know how to. IP around the cloud experience. Absolutely. End to end. Absolutely. We think of it as integration services. We think of it as taking discreet, open technologies, bringing them together in a way that allows a customer to use it in an efficient and scalable way. That's what they're looking for. They are not looking for the next atom split. They just want an easy and simple way to take advantage of what all those small companies are doing. Trust me, they all want it and they don't want to admit it, but they all want it. So what's next for you guys? Now that you're inside the mother sh**m, what's next, what's changed? Trust me, the sales access channels go to market clear. How about the technology side? Have you gotten any, you know, the secret password, secret handshake from the other groups? You got a little Watson in there. Give us a taste of what's going on. I love it. I like that. I know you're John, just about what it's like to be a part of IBM. It's a platform. They all realize the value that cloud has in terms of operational. And that's where we spend a lot of time where there's Watson, the Tisa, DB2. I'd say the macro picture is we want to create an end to end experience that allows a developer to start for free in the cloud in a multi-tenant environment and then over time scale into a variety of end states, whether it's dedicated private or whether it's behind the firewall that they manage in partnership with us. And that's something that's going to happen over the next quarters if not years. And that's what gets us excited is if you look at the competitive landscape, we don't need 27 technologies. We need about five. And they need to work really well together. All right, Derek. Thanks for coming on. Derek Shuddle, CEO of Cloud and who's not CEO of Cloud anymore. Is there a price? Is there an official title? There's two CEOs at IBM. They're so good. So what's your official title? Still CEO of Cloud. All right, so they haven't really kind of, you guys are still a little reservation yet. One of two CEOs. Yeah, listen, it's an exclusive club. Cloud and IBM company. Okay, Cloud, great job. Congratulations, you guys were great success. Again, you know, I mean, misunderstood at first years ago, but look at you guys had the right call all the way from the beginning. So congratulations. We've been following you. We really liked what you guys done. So congratulations. This is theCUBE extracting the data from the noise here at IBM and say we're live on the ground inside the social lounge. Insight Go is the program. Amazing job by the social media team here. IBM really knows their social business. They've got their influence. They've got theCUBE, everything's rocking. We're glad to be here. We'll be right back after this short break.