 From Miami Beach, Florida, it's theCUBE, covering Acronis Global Cyber Summit 2019. Brought to you by Acronis. Hey, welcome back to theCUBE's coverage everyone. Two days here in Miami Beach at the Fountain Blue Hotel for Global Cyber Summit 2019. I'm John Furrier, our next guest. Phil Shee, founder of Structured Research, doing industry analyst firm, doing analysis of what's going on here. And the big story is cyber protect as a category emerging from data protection, but a lot of infrastructure going on underneath. Phil, thanks for coming on, appreciate it. Thanks for having me. So they got this platform, but underneath the platform they got a hyperconverged stack, a lot of storage, a lot of networking involved, abstraction layer, platform layer to enable sets of services, ISVs, whatnot. Pretty compelling. And you're seeing with cloud computing, cloud 2.0, modernization, these kind of white spaces can become categories. So I kind of like the cyber protection angle. We'll see how it kind of develops, but you got to make it work under the hood. What's your take of their infrastructure, the platform? What's underneath? What's going on there in your opinion? Yeah, I mean, I look at the world from the angle of service providers or infrastructure service providers. They come in all shapes and sizes. Typically the crowd here is probably what most would classify as small to mid-size. Those kind of organizations are typically challenged when it comes to resources. They have smaller staffs, less resources to acquire development talent. And so when it comes to approaching innovative products and services to drive their business, they often have to look for their party like Cronus. Talk about the evolution of service providers. The definitions change over the decades, right? I mean, Cisco, service, target service providers, what does that means in telcos? What's a MSP managed service provider? So the word service provider is kind of evolving as these platforms start to become more relevant. How do you shape the market? How would you talk about the evolution of what a service provider is? Yeah, I mean, I like to think of it as infrastructure provider, infrastructure service provider. So those that are managing third-party infrastructure that lives typically in some kind of off-premise, not on-premise environment, that's certainly a big chunk of the audience here. And those people will run data centers or they'll run multiple data centers, they might run some of their own data systems and they might run some stuff on the public cloud. And then they manage that for an end user which could be a small business, mid-size enterprise or a large enterprise. What are the top stories in that market dynamic that you're seeing involved? Is it IoT? Is it the SLAs that are required for latency? What are some of the dynamics going on in that service provider market? I think the big thing today is to boil it all down is the impact of hyperscale and what that does to the market that the service provider's playing. So you have hyperscale just grabbing huge chunks of the infrastructure in IT real estate out there and how that affects MSPs or service providers is that, hey, there's probably a little less market than you would have liked pre hyperscale. And so what that forces them to do is to do two things, I think, which is specialize focus and try to drive value from the infrastructure. You do get to host or manage or run on the public cloud. So that brings the punchline here to be, it's all about value add. What is the value add? Well, this is how kind of a chronist came there. They understood that organizations that are a little more specialized like to work with service providers, they need to back up infrastructure. They have security requirements, they have compliance requirements and then they have to deliver that to the customer. And being able to do all that is sometimes going to be difficult, but if you work with a third party like a chronist, what they've done is package that for you, hence the cyber platform so that people can basically turn the key and be able to deliver those kind of services and get back to focusing on what they're good at, managing customers and dealing with them. What's been the reaction in your opinion on what's happened with the chronist value proposition? Because again, like you said, they want to differentiate add services to it around it, seems like a good opportunity. Is it resonating well with infrastructure service providers? No, I think so because of where, as I mentioned, where we are in the marketplace. Hyper scale is maybe 10, the public family of 10, 12 years old. And it took some time to MSP to really feel it and now they're reacting, right? The market is changing, customer requirements are becoming more sophisticated and they're saying, hey, listen, we've got to get out there and do something. So absolutely, anything that drives value add on top of, let's call it. I don't want to use that word, but plain vanilla infrastructure? Or raw infrastructure? Yeah, anything about value add? I mean, we saw the global service providers like Accenture and these guys doing the same thing because their days were numbered on the consultant and they're building their own sets of services. Why wouldn't they? I mean, it's a whole nother cloud expansion opportunity for people with expertise. Why wouldn't they want to increase their gross profits and deliver services on top of something like this? So I got to ask you on the research section, how big is the TAM in this market that's in there? I mean, what's the size? Is it changing? Is it shifting or is it more than the same? No, it's definitely, I like to think of the world, like there's many ways to look at it. Some people throw around the word, sorry, the number, $1 trillion in IT spending. But what I like to do is look at, at least for a lot of the guys here, what they're doing is they're managing infrastructure or hosting infrastructure on a third party basis and that means the customer, the end user, are letting go, not running it themselves in-house in server closets in their own IT, their own data centers. And in terms of going from that model, which is a traditional model, to outsourced infrastructure and all its flavors, we're still not, we use the baseball and the Aussie, we're not, we used to say that we're in the first or second inning. We're further along now, but we definitely haven't hit the seventh inning stretch. So we're middle innings. We're like middle innings of this game. I would argue maybe only the third or fourth inning. And not only that, if you think, so you can think of that as, hey, if you put a number on the total value and we're only 30% of the way there, there's still all that addressable market left, but you also have to think about all the new workloads, content applications that are being built and created. They are invariably moving to either the public cloud or something that an MSP or a third party provided would touch. It's a big market. Yeah, it's a big market. And this channel businesses are very efficient. I was talking earlier with the sales guys here who runs growth. It's like, they don't mess around. Like they're pretty efficient. If it works, they take it and they run with it. It doesn't, this feedback comes back pretty quick. So I can see MSPs liking this kind of approach. The question that I have is that, you know, they're adding here at this show, one of the top stories is they're opening up APIs. They're doing some developer action. Question is, does that developer action translate down into like, say, storage and these other areas? What's your take on the ecosystem and developer specifically opportunity? Because the ecosystem's been nice to Acronis. They have some success there. Now they have a developer piece to it. What's your assessment of that developer angle? No, absolutely. It's important because they need everybody to get together. They need the ecosystem to come together, try to innovate. If you're looking at, if you're managing infrastructure, competing against some pretty innovative platforms and we know the names of those and the resources they can throw at that are just, they're unbelievable. So smaller providers have to team up. They have to work together. They have to work in an ecosystem. They have to encourage each other and what Acronis, I think, is doing a great job of is creating a venue and a platform for them to say, hey, you guys, you can be part of this channel. You can also work, we're going to open up our platforms so that you can innovate and build cool tools that we haven't thought of building that are specific maybe to your US case and maybe another provider can use them as well. Platforms are hard to figure out and easy to say, hard to do, but I think one of the validations that I always look for for platforms is, is there an enabling technology angle? Is there a disruptive enable that's going to create some enablement? And then true, what's the validation from the ecosystem? So I can talk platform, it's like a dance floor. I mean, people are on the dance floor. You know if the music's good. Here, the platform's good, the ecosystem rises up and you can see it. Absolutely, that's a key thing. Phil, take a minute to talk about structure research. Okay. What are you guys doing? What's your focus? How long have you been doing it? And what do you see evolve? Give a quick plug for what you're working on. Yeah, we're an eight-year-old firm. We were founded in 2012. We're based in Toronto. We described ourselves as a smaller, focused boutique research firm. So we cover, we don't cover multiple sectors. We cover infrastructure services, what some people call internet infrastructure. But we live and breathe on a daily basis the life of the service provider. And that service provider could be one, you know, a 10-man shop that's walking around here. There are many of those. All the way up to a rack space, to the hyperscale clouds, as well as the underlying data center infrastructure, encompassing real estate facilities. So you guys are laser focused? Absolutely, service provider is what we're all about. You know, we're a six-man analyst team. So yeah, we only have time to focus on this. What we do is, what we've taken with it is try to take a global approach to it. So we're based in North America, but we do a lot of research in form. It just feels to me, I mean, I'm not in the weeds as detailed as you guys are, because you're laser focused on it. But Dave Vellante and I always talk on the queue about how the richer you're getting richer, the bigger you're getting bigger. And it's really been sucking in the title waves and the beach wave comes out and then there's a tsunami of, the hyperscale is dominating. But it's interesting that with the IoT opportunity, you're starting to see, and with machine learning and AI kind of really out front, you're seeing a renaissance of what I call domain-specific apps and services. And we think that this is going to create a massive innovation around what I call tier one B or two clouds. Why not build on Google, Amazon or Azure and create a unique service provider model for something that's very domain-specific? I mean, that seems like a great business opportunity. Why? I think it's been a part of the space and I think it more so we're headed there faster and to your earlier question, where the impact of hyperscale cloud, how it's taken out certain parts of the, more commodity parts of the business and then it's driven service providers to go to pockets of value. We did a panel earlier on, that featured four service providers that had decided to take a vertically focused strategy. So get into areas where there's specific expertise with certain platforms or certain software packages targeted and then the kind of customers that use those have specific security and compliance requirements, certain backup and DR requirements that obviously a furnace is more than happy to enable and then these service providers deliver that. So yeah, you'll absolutely could see, and obviously more people popping up. Yeah, doing kind of have an entire business focused on just serving the specific requirements on financial services for even the dental sector. And yeah, and they can run on private infrastructure but they also can run on the public cloud. There's a lot of marketplaces popping up too. I had Ingram, MicroOn, Amazon's got a marketplace, Google's going to have one, they're going to have these marketplaces for their clouds. How does multi-cloud fit into your world? First of all, I think multi-cloud is just BS, me personally, but I think everyone has multiple cloud providers. If you've upgraded with Office 365, you technically have Azure. Doesn't mean that you're using Azure. You might have Amazon and Google, but people might have multiple clouds, but hybrid seems to be the operating model. How does hybrid and this hype around multi-cloud impact your research area in any way or way? Yeah, absolutely. I mean, we care about how people deploy their infrastructure and we closely track how the way they do it and how those patterns change. I would say, I would slightly disagree. I think multi-cloud is starting, I would probably agree that it's not very pervasive. Yeah, it's not very pervasive, but it is a model we've tracked, sorry, end-users we've seen, have definitely taken a liking to that or at least are putting that on the roadmap and saying, hey listen, if we're going to build most of the architectures that are being built are hybrid, but how, I think the question is, in what way or how are they hybrid? Does that mean I'm running exclusively on the public cloud and running on AWS and Google for other stuff? Am I running private infrastructure on-premise and then private cloud and backing that up to say the public cloud? There's so many different ways to do it. You know, it's interesting, Phil, you bring up, first of all, I agree, well, we can debate, I love the debates, but to me, I think you're right. I look at multi-cloud in terms of the hype. The hype is good, but you've always got to be careful of it, not to overplay their card on that. But yeah, I would see that multi-cloud, basically to me, is multi-vendor. I got Microsoft, I got it. So as that shakes out, that's going to be an operational dynamic and I think that's going to be interesting to see how a company will operationalize their tech stacks to deal with the multi-vendor or multi-cloud case because the workload shouldn't care, ideally. If it's true multi-cloud, and I'm a workload, I mean, just should run, right? So, I haven't seen a lot of that across multiple clouds. I mean, some people just have use case analytics, I get that, but running a workload on any cloud? Probably not there yet. Not there yet. All right, what's the coolest thing that you're covering right now that you think is important for folks to know that in your space, what's the top burning issues of your sector? Yeah, I mean, I would say that just the global buildout of the cloud, the hyperscale clouds, that short list of very big platforms is going global at a rapid speed. And also just the pace at which they are expanding is just incredible. And that's not just the infrastructure, but also just the product and service development, the tool sets have gone from dozens to hundreds to probably thousands, as we're speaking right now. Just the pace at which this is growing is just, you know. It's pretty tough to comprehend, and it's tough to comprehend because not that long ago we were debating what is the cloud, or yeah, I'm running a few things on the cloud, but now people are making much bigger bets. There are businesses now out there that you use on your phone that are run completely on the cloud. I mean, that's big. I mean, just go back with the queues been around for 10 years riding this wave and covering it. Remember OpenStack? Yeah, of course. Yeah. It's not called OpenStack anymore, but just the hyperscale has just blew that away, and then it found its place. Yeah. And it's just crazy, great time. Yeah, and I think it's, you're right, the pace at which things are changing is incredible. I mean, the other thing, you know, to answer your, my second part to the question was not only, you know, we're following the global buildout, but at the same time, almost kind of paradoxically, we're talking now, and I think it's a really exciting part of our research is the edge. So the decentralization, you know, everything is building out really rapidly into the end, you know, computers and IT infrastructure is consolidated around centralized locations, you know, but now how do we hit mobile eyeballs or eyeballs in kind of more distant locations? And so just edge infrastructure or the decentralization is something we're really excited about. I think edge is a beautiful thing. It's going to open up. And by the way, we were talking last night, funny sales guys here always like to debate them. Their edge is a box, but there's the deeper edge. There's almost a deep edge. You're on an outer edge, right? There's humans, right? So there's edge edge. So it's just so many surface points now. It's just an architectural challenge. Yeah, there's edge on a, kind of like on a geographic basis and then there's edge, you know, how close to the user's device can you get? And that device may not be static, right? Like they'll be moving around, so. Yeah. Thanks for the great insight. Founder of structured research. Is there a URL for your site? Yes, structureresearch.net. Structureresearch.net. Check it out. Hyper focused on service providers and infrastructure, super important area as the clouds continue to grow as hybrid multi-clouds. Certainly IoT is going, industrial IoT from national security and physical security to digital security, all big part of it. Data is going to be there. Storage and compute. Phil, thanks for coming on. I appreciate it. Cute coverage here at Miami Beach. I'm John Furrier, back with more coverage after this short break.