 This is SiliconANGLE.com exclusive coverage of OpenStack Summit. I'm John Furrier joined by co-host Jeff Frick here with the CTO of Service Mesh, Sean Douglas. Welcome back to theCUBE. Great to have you. Thank you very much. Good to see you. Good to see you. Thanks for having me. We like having alumni. We're on a different team now though so it's good to be back. Thanks for having me. So obviously OpenStack is going mainstream. We talked earlier segments about how awesome it is to see something grow open source wise the way it did organically. And now a lot of the big companies are coming on board. We're now a couple of years into the cloud wars, hypervisor conversations now evolved and OpenStack has now won that conversation. How do you describe the current state of the market? You were previously at EMC Ventures so you're pretty active in the cloud space. What's going on? You know the infrastructure level because there's a lot of things going on around people building clouds. What's your take on the current situation with the cloud? Well I mean so if you start first with the OpenStack space, I think it's really interesting times. So if you look, it really started out with just a few players. Now we've had fragmentation into all these different distributions if you will of OpenStack and getting major endorsement and support from IBM just like they did with Linux. And I think you're seeing the competitive hackles come up from VMware in the market where they really recognize that OpenStack is a potential competitive threat to their domination really of the enterprise, hypervisor and private cloud management market. And I think that every day we're seeing more and more people embrace OpenStack. And I mean we're big supporters. We manage both private cloud OpenStack solutions and can deploy OpenStack as well as we deploy two public cloud OpenStack solutions. You know pretty much the reason I'm here is I'm working with every one of the major distributions flavors of OpenStacks. And we want to work with the best of breed and provide enterprises with a solution that meets their needs and requirements and partnering with them as a key enabler because we're basically enabling the orchestration and management of all the OpenStack players. So talk about Service Mesh. I mean you guys are a company that's out there doing a lot of good work here. What does the company do? Just describe to folks what Service Mesh is all about. Yeah certainly. So Service Mesh is a cloud management platform for enterprises that are trying to transform their businesses to embrace a cloud operating model. We're really focused on the enterprise 2000 if you will and we've built the business over the past four years. I'm new to the team but I've been a huge fan prior to joining but we've built the business over the past four years focused on highly regulated industries such as financial services, healthcare where you need to have enterprise expertise and security and management capabilities that today up to this point have not really been available in cloud platforms so we're enabling enterprises to really go after a hybrid cloud solution. So we enable management across any of the 16 public cloud providers as well as the management of private cloud whether that be on VMware, whether that be on Hyper-V or on OpenStack and we can via a single built for purpose platform we can manage the deployment of your blueprint that's cloud agnostic across any of the public clouds or any of the private clouds all in context of your enterprise security and governance position and posture and that's a huge game changer for a CIO because a lot of these CIOs they recognize that they are going up and they're having to compete with the shadow IT if you will where people have started to use AWS in their enterprise and start to consume those resources and they get used to well why has IT been an impediment for me when my developers are going out and grabbing these resources and spinning these up but then they realized that hey I've got this whole compliance and governance and security issue where I've got people run amok, right? So what service mesh enables is you to take that problem and turn it into an opportunity and you can actually manage your deployment into public clouds in context of your governance and security compliance posture of an enterprise. So because we built our business in those environments we're just at an amazing advantage over other players today I'm not trying to just give you the pitch but over players today. But you are. But you are, talk about the other players talk about the competition then. Yeah. Who are those other players? So we run into BMC in almost every account BMC is their CLM product. It's really comprised of six different products glued together which requires about six to nine months install about $2 million in an army of professional services guys and we have a built for purpose package solution that has one common meta model and one policy engine that manages across all of that. So when we're in the account, you know, toe to toe we win when we, when they're already in there there's a sunken investment and it's a little bit more difficult. It's hard to throw that away. Yeah, it's hard to throw that away. So I'll talk a little bit. It's interesting kind of dichotomy at one end you've got companies that rely on IT as a competitive advantage. Right. Who really want to take advantage of all that the cloud promises to be whether it's speed or scale or cost. At the same time, if I teach your competitive advantage you probably have all types of regulations and security and all those things. But it's really probably the same person the same organizations that want to drive it. So talk a little bit about how they're making trade-off decisions and how they're prioritying and how they are finding ways to go forward and kind of the innovation while at the same time dealing with the reality that they got some real restrictions and real inhibitors to their ability to adopt some of this new stuff. Right. So, you know, I think that that's actually, you know, the interesting thing today about people that are starting to embrace a cloud-based operating model because, you know, the global fortune 100 for example they should have a significant competitive advantage just on capital spend and war chest of existing infrastructure spend to be able to go out and compete with smaller, more nimble companies. But what's happening is the smaller, more nimble companies have built their businesses on cloud-based operating models and because they built their businesses on cloud-based operating models they have this agility where the slow, larger corporations have, IT has been an inhibitor because of their policy, their compliance, their procurement process. You know, 80% of their spend is really focused on, you know, sustaining engineering where 20% is, you know, growing, you know, new opportunities where, you know, the more agile guys, it's all in on the more agile stuff and what we do is we enable a CIO to adopt that cloud-based operating model by orchestration of whatever the underlying resources are whether that be Hyper-V or VMware or OpenStack or deploy into AWS or Rackspace or whatever. We can do all of that in context of the application. So we do application-centric orchestration of the underlying infrastructure and we can do that in context of the software development lifecycle. So it's really a DevOps for the enterprise story. So yes, we plug into Puppet or what have you there but we can deploy, for example, all your developers will get, you know, 10 AWS instances but when they commit their code into Git and it gets built in Jenkins, when they deploy, maybe they deploy in our data center on a VBlock or on a, you know, FlexPod or whatever and when they move to production, that'll be, they can move that around and we can follow that through the lifecycle being at the right place at the right time with the right security and role-based access model which is very much an enterprise play. So, you know, I think it's an interesting time. You know. And are they getting it? Are they getting it that the reality is that the credit card wants to do a little project on AWS, he's going to do it. So rather than really kind of fight the tide, it's more, you know, how do we, how do we embrace it? How do we make it part of our procedure and enable him to move from his little toy project which was fine into, you know, production and into kind of our mature and more regulated infrastructure. I think the CIOs fully get this problem and it's a huge challenge for them. Imagine if you're a CIO and, you know, you've got a whole business unit that's spinning up things that, you know, 10, 15 grand a month on AWS and they come to you and say, hey, look, programmatic API access, you know, available 24 seven, I don't need your help and I get what I need and turn it off when I'm done. And you're like, let me spend, order a machine, let's spec it, let's, you know, they're talking about nine month process. So if you can help the CIO transform their business into this cloud based operating model across public and private, I mean, it's game changing for them. So what does that mean? That means instead of nine months to deploy a new application that could be, you know, literally if you have some type of a platform, whether it's us or somebody else, whatever, if you can spin that up on demand in context of the application, spinning up VMs is not really strategic, right? Being able to spin up a VM and to do workflow automation around that. Okay, so I can spin up virtual machines faster but every single workflow is specific to a virtual machine and that's like building snowflakes. So now you want to do it automatically, so you've got a snow-making machine. We were talking about that with Randy Byas and I think this is a misconception is that it's not about virtual machines. No, it's about applications. It's about really transforming the data centers. Let's drill down the CIO thing. So obviously CIOs have legacy and they have a data center and the cloud is a resource, there's economics involved. Amazon has proven that this is a viable way. So they're all like, okay, I want some of that, but they have to fit it into their architecture. So hybrid cloud has emerged as this bridge between the data center, the old data center and the benefits of the public cloud, aka Amazon and web services. How do you guys look at that and tell us in your opinion, expert opinion, what is this hybrid cloud for the enterprise? What does it really mean and what can enterprises do today that you guys have experience on that you could share? Okay, that's a lot there. So fundamentally I believe that private cloud or public cloud is where we're at in the industry today. I think where people need to go is to be able to manage effectively cloud brokers across your public cloud and your private cloud. And you want to be able to say, I want to put the right workload at the right place, at the right time, at the right cost point. And if you go with just a one vendor solution that only manages a private cloud and one vendor solution that only manages public cloud, by definition, you've locked yourself in. In a cloud broker like us, or there's other players out there that provide this cloud broker function, really, enables you to have vendor contestability across, hey, I'm going to negotiate my VMware enterprise license. Hey, watch this, click, watch me move to Hyper-V. Click, watch me move to AWS. Move my, rebuild my application in each of those environments. That puts the power back in the CIO's hands, right? They're not locked into a vendor. They're now realizing the value of a cloud-based operating model. And that's, that's, that's huge. So have they gotten to the maturity where they can delineate projects and or enable people that need to spin up projects to allocate that project to the most appropriate cloud option? So different customers are at different stages, but for example, you take some of our, you know, early showcase customers like UBS, like Commonwealth Bank of Australia, like Visa, some of these guys, these guys are what they'll do is they've, this becomes the architectural control point, really, and across their public and their private clouds. And they can do at a very fine level of granularity. Well, that can actually start at a business unit, okay? The, you know, credit card processing business unit. I'm making this up, right? We'll have this ability to consume, manage, deploy, scale up, scale down resources based upon who they are, where they're at in the application lifecycle, right? But then they can do lower levels of granularity, for example, and we do this and other people do this as well. And you can, by giving this role-based access control in context of the software development or application lifecycle, it's a huge edge for them because they can automate and remove manual process and steps. And if you, like, we've got, our marketing guys have slides, I'm sorry, I'm the CTO, not the marketing guy, but if you look at that, there's customers like, you know, one of the, I think it's Commonwealth Bank in Australia that saved hundreds of millions of dollars just cutting out in additional process and infrastructure and what have you and accelerated their business and in time to value for applications. We're seeing similar things in the converged device players. People are going and buying, for example, Vblocks or Flexpods or whatever HDS this thing is, right? And they're going, hey, I love, I'm doing a data center refresh. You know, over the next three years, I'm going to get rid of all my servers and I'm doing standard converge on a converged device. And they're going, well, even if I get a converged device, it's still three weeks to six months to time to value. So, you know, you get something like this on top of that where your application focused as opposed to virtual machine spinner upper. Well, it's almost, you can kick ass. The attributes of the application and those people that are executing it to find which cloud, which resources is pulled from a pool of resources. And I kind of got, you got cloud, cloud squared, right? I have many options and based on the requirements and the cost, I may choose to deploy based on how you define your project on this pool of this pool. You don't know, it's still a cloud within a cloud. I'm just doing it. It's a developer angle, right? So, the developers are in charge. I think I want to drill down on the point you made about pressing the button and limiting those licenses and moving things around on a hypervisor. The developers are in charge and you and I talk pretty much about infrastructure as code. What is going on about OpenStack today that makes this possible? Because that seems like a little bit of a fantasy. You just go back a couple of years, wait a minute, CIOs are in charge and that's a good theme. They want to be in charge. They would love to get rid of their data centers if they could. So, okay, there's some new stuff happening. Each of you's got new servers for low energy. Okay, cool, density, power, cooling. But the developer angle, how does that affect and what is OpenStack? Why is OpenStack relevant in that context? So, I think OpenStack is incredibly relevant in that context because effectively, OpenStack has the potential and is becoming the cloud operating system, alternative to VMware's cloud operating system, right? And it's a preventative against Amazon. Yeah, exactly. So, behind the firewall, you can have Amazon-like services, right? So, I mean, I think that in order to do that type of management at scale, you have to start treating your infrastructure as code. You have to embrace a DevOps model. What does that mean to you? So, describe infrastructure as code. What does that specifically mean? So, I mean, look at what people have. I mean, if you go back to, if you really roll back, peel back the onion on this, people have been treating their infrastructure as code for a long time with shell scripts and with Python and Perl. And I'm doing that 14 years ago in my career when I was still writing code, right? But I think what's different is that it's all about trust. Automation is about trust. And I think we're getting to a point in the industry where people trust the automation tools to do management at scale. And instead of managing one or two or a hundred or like, you know, when I was at LoudCloud, it was like we were managing a thousand or 2,000 virtual, I mean, physical machines. That was amazing scale. Now, people manage, you know, hundreds of thousands of machines in order to do that, you have to automate that. In order to automate that, you have to have treat those configurations and check those configurations in so you can roll forward, roll back. And if you don't do that, you have a manager. So, Amazon is automating a lot. So, if you look at the current state of Amazon web services, they are eliminating the ops and dev ops because the developers just code and all the ops has been automated away. We're still dev ops, we're just using their ops. Yeah. A developer doesn't need to be an ops guy to run on Amazon, but that's a little bit, you know, a unique corner case when you're just, you know, in a vacuum by yourself. But if you're an enterprise, talk about why Amazon is feared by CIOs and folks. Oh, this is an amazing story, right? I mean, if you talk to the AWS guys, I've talked to them quite a few times in the past, and they have waged a long-term war on enterprise software where it's margin compression over time. And they want it. And they're doing it. And they're doing it. They're killing it, right? I mean, we love AWS. We're working with them all over the place and as well as with Rackspace, as well as with, you know, the open stack guys for, you know, the public cloud providers. I mean, it is. I mean, Amazon is a phenomenon. They're commoditizing infrastructure and the same time innovating. This is the Larry Ellison Linux play, you know, 10 years ago, right? Where he just, you know, tried to just commoditize everything except for the database. Well, Amazon is like, hey, we're used to operating at 3% margins. We're going to, you know, now go after this 90 plus percent margin of business, right? So, you know, there are, you know, very strategic- So why are CIOs afraid of Amazon? Is it just the way things were done in the past? Is it really this data security? Are there things that are legit fears? Well, I think that the legitimate fears are, you could go to jail if you put the wrong data there and it gets, you know, something happens to that, right? I think that's a legitimate fear and I think that's why we'll have hybrid clouds. You will put what is, you know, regulated by compliance that you go to jail if somebody gets into it behind the firewall and you can do non-core or adjacent or bursting functionality into public clouds or development into public clouds and you have to be able to broker across those. And for us, that's a great story because that is our story, right? What is the biggest trend driving your business at Service Mesh right now? Oh my, it's such a massive convergence of so many things right now. I think that cloud has reached maturity. I think people have started to embrace DevOps in general. They're reckoning, I mean, if you like, go like there's a Gartner slide somewhere that shows this transition from, you know, transition to a cloud operating model and it starts out in the beginning, ah, virtualization, I can get increased density on my servers and I can get a better ROI. And then you go, okay, well, that doesn't help me spin up applications any faster. Okay, well, now we need to do continuous integration and continuous delivery and then you're like, okay, well, I've done the whole DevOps thing. Then the CIO goes, holy cow, I got all these guys running loose in a muck in AWS. I didn't even know I had the risk there. Now I have this risk there. So now it becomes, I have to have a hybrid cloud. Well, now I have a hybrid cloud. You're like, well, I have this cloud and I have this cloud, well, now it's, how do I tie those together so I can really deliver infrastructure as a service to my business, platform as a service to my business, treat my enterprise applications like software as a service and maintain that service level that people have come to expect from AWS. It's a tough position to be a CIO right now. I mean, that's a tough job. I throw the more rocks on his back and say power and cooling costs are up through the roof. Oh yeah. I mean, power alone is killing them. The density for machines is just, it's just insane. You look at, have you, that's why we're on the Columbia River up here in Portland, right? We've got all the cheap hydro power up here. Put your data center up here. Have you guys seen IO data? No. So IO data is this company that they're doing these modular building block. They started out shipping like containers. Now they're doing the whole inside of data centers and they're basically treating them, each of those elements as autonomous units that self-regulate heating, cooling, spin up, spin down. We've got this project. We're working with them. Can we actually orchestrate the movement of workloads around based upon energy, heat, cooling, consumption? Right? It's a crazy time. People, I want to ask you a question because this is what people will say about your business in general. It's not your company, but like the category. Automation's great, but it's the car before the horse. How do you respond to that? Is that true? Do you not believe it? Is there certain instances in order? You have to have the infrastructure first then automated. Or is there low-hanging fruit that you guys can go in and do business with on the automation? Explain this whole automation thing. Yeah, so we fundamentally believe that people are going to have data centers. They're going to have private clouds. They're going to have public clouds. So you have to have that, right? That's the baseline. So if you look at the Gartner model, there's the resources. There's the server, switches, storage. You virtualize those, et cetera, et cetera. You build on that, on top of that. And then you have this, we're above that line. We're not in the business of building clouds. We're in the business of operating and running across clouds and managing those resources. So we would agree with that. They're like, yeah, sure. You got to have all that stuff and we're going to increase the efficiency of operation, consumption, and make it application and business focused. So empower the CIO to reduce the time to value. All right, final questions. We're coming up on the time limit here. Future of this business, cloud, and specifically, what's going to happen with OpenStack? How do you see OpenStack evolving? So one, future cloud, how it will evolve in the enterprise and with service providers, obviously creating a modern era of infrastructure, infrastructure as code, whatever you want to call it. And then what do you think about OpenStack's prospects and their growth? So I think that the world is bifurcating or splitting into maybe more than two, but there's the VMware views of the world and there's the OpenStack. And then Microsoft's actually making an aggressive play that I'm pretty impressed with what they're doing with Azure and System Center, Scom, et cetera. I think that you really, those become the new cloud operating systems. It no longer becomes about the hypervisor or hyper V or whatever, right? I think it's about having this cloud-based operating system. And I think that OpenStack is effectively the next cloud-based, the open vendor, kind of neutral cloud-based operating system. And I don't see how it cannot be successful. I'm a huge fan. We're working with just about all of the players trying to make sure that we can enable- People are bringing code to the table. Yeah, it's huge. And there's massive contributions. There's a lot of deployments. So there's meat in the bone and this hype. So it's good. Look at PayPal. I mean, you saw the PayPal story. That's huge, right? Yeah, we've got the consult angle covered on. Yeah, yeah. Marentus, they don't want to talk about it. It's kind of like cats out of the bag. They're killing it. Fusion IO was really successful. They had Facebook as a client and Apple. And they just weren't allowed to talk about it as one of those things where their best deployments were under QT. Okay, so with OpenStack, I see 3,000 people here and growing. They have an event, just a spectacular growth. The final, final question is, tell the folks out there in your opinion who are looking at OpenStack, maybe been reading about it on Silicon Angle or kicking the tires, who want to dip their toe in the water, who want to maybe join and contribute or participate, explain to them what's going on here and how do they do that? I mean, what's the best advice you can give them? I think that they just get online and start working with some of the thought leaders in the space. I mean, you've got to look at what, like, Piston's doing, look at what Morantis is doing, look at what Rackspace is doing. Piston will be on next. Yeah, yeah, so, I mean, those guys are thought leaders. Look at what they're doing. There's real customers using this today. If you're not aware of what's happening, you're behind the ball. And for developers, what's your advice for developers? There's a certain profile. What's in demand right now for developers? I think, well, I mean, there's still, there's the classic, you know, whatever code you write, but people who are aware of the ability to orchestrate infrastructure via AWS's APIs or via OpenStacks APIs, it's a no-brainer. If I was a developer, I'd be all over it. Hey, the service-oriented architecture's coming back. Yeah, it's kind of funny. Hey, it took 10 years after the dot-com bubble burst before the web was actually functional, as they say. But yeah, we're back. We're back to service levels and services, APIs, Amazon, again, great stuff by Amazon. And I think they've forced the market. Right. And that's exciting to see. And the enterprises are retooling and there's investments. A lot of people are investing in cloud-building. The question is, you know, what kind of clouds will they build? Yeah, exactly. Okay, Sean Douglas, CTO of Service, Mesh here inside theCUBE, exclusive coverage of the SiliconANGLE's coverage of theCUBE. We'll be right back with our next guest after this short break.