 Live from the Computer History Museum in the heart of Silicon Valley. It's theCUBE, covering OpenStack Silicon Valley 2016. Brought to you by Morantis. Now, here are your hosts. John Furrier and Lisa Martin. Okay, welcome back. We are live in Silicon Valley for the OpenStack SV, OpenStack Silicon Valley event hosted by Morantis and the Industry and the OpenStack Foundation. This is theCUBE Silicon Angles Flagship Program. We go out to the events and extract the signal from the noise. I'm John Furrier with my co-host, Lisa Martin. Our next guest is Alex Friedland, who's the CEO of Morantis, also sponsoring the event, also sponsored theCUBE with the OpenStack Foundation. Thank you so much for supporting theCUBE. Welcome back. Good to be here. So we'd like to get you at the end of the day because one, you're tired, you're going to just tell us things. Spill the guts, not idea. Yeah, yeah. Well, we're spilling the guts today during the confidential session, right? We can't share any of that. We promise it's going to stay in the room, right? It's all live. Don't worry, you can't put the genie back in the bottle. That's right. I've been commenting at the opening segment, at least than I did our editorial segment, being on the front row of watching OpenStack grow from the beginning, the twinkle in the eye of Rackspace and NASA here back in, oh, back to, oh, eight, I think it was. 10. Yeah, oh, 10. Well, they kind of were thinking about it earlier. Yeah, they were thinking about it. Yeah, you know, Amazon's out there. But all of a sudden, every year everyone says OpenStack is dead. Since the foundation really pivoted around contribution, not a vendor-centric model, growth has happened. So my theme this year was, OpenStack continues to be the survivors. The navigating, the zigging, zigging properly and we've seen the evolution. But this is the year that we're talking about thriving, going to that next level. So survive and thrive. So my first question to you is, as you guys grow, you guys have been surviving, but also building real value for your customers and thriving as a standalone company. We have it. But as an ecosystem, where's the thriving going to come from? So I believe the ecosystem, again, there's been continuous development of the ecosystem. It started with people proving that it is able to do things. Then it continued with saying, hey, let's put certain workloads. Now there are some very large users who are understanding that this is the only way to build the cloud. And there is a movement of large operators who are making OpenStack their de facto cloud standard and putting serious money. It became public in December, but AT&T is building AIC, which is AT&T Integrated Cloud, which is meant to be an Amazon size cloud. Over 75% of all the workloads in the AT&T data centers, both on the IT side and on the network side. So not only they're building this very ambitious program, they're doing it out on the open and they have announced it to the world. And now what they're saying is that everything that they've delivered, they're looking to open source and they're partnering with the ecosystem and with the other operators to be able to drive the ecosystem together. And there was an innovation blog published by Sorab Saxena, who is the head of AIC, that says here is the way to do open ecosystems. We're kind of leading in that and we are suggesting that whatever we've done, you guys take and reuse and let's do a user group that does it across all the operators and big players. So complete contribution in the open. Right. All the cards on the table. Correct. Because ultimately what they're saying is we're not really competing in cloud with Verizon or Reliance, right? We're actually partners to make sure that the open technology works better. So the agility and the cost is better. And then we're competing with Facebook, right? That's becoming a new digital telephone company, right? So that's what they're trying to get. Some say government. Well, that could be huge, right, whatever. You can replace the post office. There you go. I mean, they're that massive and you got China too, other big, I mean, Telco's got some challenges, these guys. It's very true. So they have to innovate faster and they have to do it at the scale and the cost that the hyperscalers are doing it. And unless they do it together, they're not going to have the innovation that's necessary to get it done. So from that perspective, China, mobility, and the Verizon are actually partners. And they're starting a very focused outreach to each other and then bringing other non-Telco players into the mix. And to your point, the stakes are high, right? I mean, the consequences for not doing this are massive. Massive, they're not going to be around for much longer. So they have to do it. It's a forced move, but that will drive further ecosystem development because these guys don't have an agenda to kind of verticalize and lock in because they have products to sell. They're actually trying to disintermediate to make sure that every layer, they keep all the profits so they can be profitable at scale, right? And that is what every operator wants. And now finally, there's a critical mass of operators that are all coming together. So that- So you think the scale thing is their big move? Well, scale and agility. They have to do it fast, right? I mean, you've heard the stories that, I mean, the technologies are great. You know, Opus Tech is wonderful. Kubernetes is wonderful. It's all great. But today, you go, you know, inside of a big organization, you're trying to get yourself the infrastructure to get things done. Unless you go to Amazon, you can't do it. It takes, you know, three months to provision VM. It takes five months to, you know, to put something from test to production. That cannot last, right? So you have to do it automated and self-service. Continuous. The Opus Tech today is the only game in town to, you know, you know, VMware in some ways, but the model doesn't scale, right? So there'll be others that will come in and augment that story. But that's what's driving those companies to do it. And there's enough of them to start driving the ecosystem. In terms of drive, just a question popped into my mind as we were talking and you were talking about AT&T winner of the Super User Award at the Austin Opus Tech some month back in April. How much has, we're talking about collaboration, the, what, over 600 supporting companies as part of OpenStack Initiative, but how much has it been driven by AT&T as the dominating use case? How much has AT&T driven OpenStack to where it is today? A little bit, but not a lot yet. And they've taken whatever Opus Tech had and they've took a project and made a platform internally and they've incurred a certain degree of technical depth, as they say it. And again, this innovation blog talks about it quite well. And now what they're doing is they're saying, we solved all of these problems. We have a contribution team internally that is now, you know, upstreaming all of that. And you guys, the partners, you know, can use it, but also come and help us. And they're creating a platform so that the reuse will happen. So today they've done, you know, quite a bit of innovation internally that they're just starting to trickle back up, but they are completely committed to my surprise, actually, and admiration that such a large company, they have to change a lot of things internally to allow to, you know, open source things and all that. And they've been going through all those changes and the speed of that change is increasing. So, you know, if they continue on the same path when we're here next year, they will be actually a very huge driver of this whole thing. So how about the tagline for this event, the Unlocked Infrastructure Conference? I noticed that some of the signage, you guys position, Miranda says pure play, you know, open stack. Yes. Kind of tied in there. Obviously, NFD, you mentioned the telcos. I don't want to really go there. It's been talked about for a long time. What is Unlocked, and then second question is, what is the next, you know, 20-mile stair? What's that next horizon? Is it IoT? Is it the big data? Can you share your thoughts on that? Yeah, sure. So Unlocked means that in whatever choices you make when you choose a platform, you don't have a dependency on a vertical stack, right? So, I mean, the traditional business, you know, you buy something from Cisco. They have wonderful products, but you get stuck on their APIs, and when you kind of start moving, you can only buy stuff from Cisco, or EMC, or HP, or what have you. So with this intermediation through an open platform, what happens underneath is obstructed by an API, which means that you can actually take, I don't know, a Cisco router and replace it by Juniper router by Rista router, and so long as they're both compliant in the API, in the Neutron APIs, you can replace them, right? So Unlocked means that you can bring- That's not good for Cisco. Well, but- They want that nestedness. But it's good for the user that has to buy Cisco to run its network. But remember- From a lock-in standpoint. From a lock-in standpoint, right? So then remember the famous phrase that Jeff Bezos is saying, that your margin is my opportunity. So if Amazon is driving commoditization of that space and destroys the margin, and if somebody who competes with, who's born in the cloud digital player that competes with the traditional player that has been disrupted by digital innovation has to pay Cisco margin at scale, guess how long they're going to be able to compete? Right? Both on innovation and on cost. So unless that problem is solved through the cloud movement that we're pioneering or we're ushering in, these companies are not going to be around. So whether you like it or not, whether it's good for Cisco or bad for Cisco, Cisco will have to evolve and change their business model as we're seeing happening across the board. And we're seeing the financial players are taking over some, you're seeing what's happening in Dell, you're seeing what's happening in HPE. And that means they have to change the business model to go away from highly profitable locked-in solutions to a more agile services-based and value-based solutions, right? But that's required for the industry to survive. So along the theme today I've unlocked, OpenStack can't guarantee, right? There's no vendor lock-in. But Morantis does. Talk to us about your zero vendor lock-in product and how has that been leveraged to help you achieve a forex increase in subscription revenue over 2015? You know the numbers, eh? Ha ha ha ha ha ha. So, well, we at Morantis, I mean we have a distribution, again, which is a standard, horizontal, disintermediated OpenStack distribution. We don't have any components inside the stack. We don't necessarily provide an operating system. We work with many. We don't necessarily tie ourselves to hardware, but we do certify with all, right? So, and in the early days it was kind of difficult to get big guys like Cisco and HPE and Dell come to us and say we'll certify with you. So the conversation kind of went, okay, Morantis, you're small, we're large. You need our hardware, so go and invest and buy our hardware and you can certify if you want. Now, you start winning some of the large customers. You know, we got AT&T, we got VW, we got Verizon, Shenzhen Stock Exchange in China. And suddenly you start looking around. Most of the buyers who are buying billions of dollars of infrastructure are having conversations with the vendors who are saying, well, it's wonderful. But for this motion, we work with Morantis. So if you're certified by Morantis, great. Go certify and then you can bid for a continuous RFP because we're now not gonna make our decision once every five years, we're gonna run it on a continuous basis. And if you're on the list, you can participate. So suddenly we have a line coming to us of different people underneath and above who want to be certified and we have a sole certification process by which we bring them into the fold. And even our traditional competitors, like helium people have called us because their customers are telling them if you want to sell servers, you have to make Morantis your first class citizen. So we're actually talking to HP around their helium about partnership and becoming part of their story. And, you know, that's actually out in the public domain. So... But the opportunity for you is really the SLA aspect of it, which gives an opportunity for the partners to make their margin. So the opportunity for us is to be able to provide, exactly, to provide a platform that will provide SLA to the operator, to the user. And then, you know, we don't have a preference as to who comes in. If they're certified. If they're certified. Well, I mean, yeah, if they're certified because, you know, there is a bomb issue, there is, you know, all those complexities issue. And so, yeah, we don't want any surprises. So they need to be certified and then they can go in. But the process of certification is fairly simple and can happen in real time. It's not like you do it once and you're locked in for a minute. You can go and re-certify every time you have a revision. And, you know, we make it pretty easy. In fact, a lot of the certification we've put in the community. So if you look at the partnerships that are happening, you know, in stack analytics, there's a page that talks about, you know, that kind of certification. So we're trying to not keep it inside Mirantes, but we're trying to push it so you can do it again. Well, it's more efficient that way because the game's changing very quickly. Correct. About like orchestration and containerization. Yeah, we're exactly right. So in fact, the value of containers is not necessarily the fact that you can put them on top of open stack infrastructure. The value of containers and orchestration is the fact that you can use container, well, you can use the container itself to abstract any workload, right? Any part of an application. And then you use Kubernetes as an example, as tooling to lifecycle manage anything, right? So that means that in infrastructure, no matter what you're delivering, you don't have to worry about the actual bits of the application. You can have a standardization across the supply chain. And that's the game changer that's happening. Yeah, you completely take that complexity way around that standardization. Right. And even if it is, it might be an interim step to what may happen, which is all speculation because it hasn't happened yet. I got to ask you a question because one, we've been following you guys and you know, I got to say you and your team, probably the hardest working guys out there. And you know, it's not, it hasn't been easy. You've been had a good business, you've got a good business going on here. And so what have you learned? I mean, what's, I mean, obviously the world's moving in the right direction. So that's a positive. Well, the world is moving in the right direction that's moving, by definition is the right direction. It's like, wait, what a wrap. You don't know, until it's over, you're all adrenaline's pumping. But you know, you guys are working, you're putting the work in and you got a lot of customers and you're doing some great work. What have you learned? What's happening now in your opinion that you're looking for that next paddle, that next turn? What have you learned and what are you looking at? Well, I'm learning that change is hard. And change is hard for us and for the customers as well. And as the world is changing and disruption is happening, traditional business models are being disrupted. Traditional buying patterns are being disrupted, but at the same time, the traditional patterns are still there, right? So it doesn't matter how- Still need up time. Well, yes, but it doesn't matter how visionary you are. You have to be able to solve a problem that your customer is getting ready to solve today. So that means that you cannot have a straight path to, you know, you have this direction, the straight path doesn't exist, there'll be an abyss in the middle. So you have to constantly attack. It's your zigzag, John. Zigzag, yeah. Don't zig when you should be zagging, that's the key to success, right? Exactly, so that's number one. Then you have to work with people, internally and externally, in your own organization and your customers to be able to explain and craft a path. And you have to be able to operate in the state of uncertainty and still make progress because the complexity is large and you can't wait for clarity in order to make the next step. And that's a huge cultural shift, both for us and customers. Just seeing your toes too. Well, that means working hard, right? But it's about being able to make progress in the situation of un-clarity that is not getting easier. Okay, so what are you getting excited about right now? Obviously you're doing a lot of great deals. The Kubernetes deals prior to this event, obviously with the enterprise Linux deal this morning was announced, kind of, you know, you can see the stability. I mean, getting a bulletproof Linux kernel and that's solid, right? That's a big deal. But what are you excited about? I mean, as you look out and that change is still going to be there. Yes, so I think the game changer that happened in the last, you know, 12 months since you and I talked here at theCUBE is that the world seems to be standardizing. I mean, the world already standardized around Docker containers even last year. I think the world is now standardizing across the standard delivery vehicle by which container lifecycle management is managed, which means that we think it's Kubernetes. I mean, there are people who are not yet, you know, in 100% agreement, but that standardization is important, whatever that is, because that means that the whole innovation lifecycle management of innovation and infrastructure can now become unified. If it can become unified, you can automate it and you can run it as a service in an automated way. And that means that finally there is a way to provide an Amazon-like delivery model across infrastructure innovation on-prem or on a managed data center. And before it was very difficult to do because everything that you delivered was application-specific and there was no unification. Right now, for the first time I can see a light to say, hey, we can take the innovation of AWS, which is the delivery model, apply it across, you know, with the help of Docker and Kubernetes across any innovation that happens and make it standard. Now that will scale to the size of Amazon. I think we are kind of in the forefront of that moment. And the management software is baked in. Yes. That's the key criteria. Yes, you have to have the management software and we have the components and the industry is going into management so we're standardizing there too, but that finally will cause another zig, or zig, depending on how you want to call it, that will actually have a lot more legs to scale all the way to that nirvana that we're all hoping for. So that could be the key inflection point. Yes, I think we're getting to the point where we can actually see it. So as we're halfway between development cycles, right, with Barcelona, OpenStack Summit coming up with end of October and near Halloween, what's that forecast, what's your predictions as the community, I'll use John's term of the day, zigzags towards Barcelona, what are you expecting to hear and see at that summit coming up? Well, I mean, first of all, I expect the size of the summit going to be probably similar to the previous summit because usually America is a little bit more crowded than Europe, but every next summit is a little bigger than the previous one, so it means we're going to be lateral probably, but it's going to be a lot of new people who are now taking OpenStack and Cloud seriously, who are Europeans and all that, so I expect a lot of new people, new faces that we haven't seen a year ago. The next thing that I see is the container conversation is going to get even more important, and the whole merging of the container and OpenStack ecosystem into one, and the community will have to understand what it is because there is now a lot of splintering happening because some people still see containers as workloads, some people see containers as something that need to be obstructed by OpenStack and some people see it as an underlay, and really all of that will have to come together, and then suddenly when it happens, the next conversation is going to be about the fact that everything is a workload. Infrastructure is a workload, workload is a workload, and there's a unification going on, and you will see conversations happening in all three layers where the visionary people will be making the statements like it just did, and there'll be a lot of darts flying at them, and there'll be a lot of conversations around that. It will be a good contentious debate, which is good. And then others will be still making big progress, explaining how their view that already is accepted is making progress, and there'll be more proof points in the industry, and the spectrum everywhere in between. Any projections on the next Super User Award winner? I have some ideas, but as somebody who is on the board of the foundation, I'd rather not say. Come on, spill the beans. No. Make a prediction. It's confidential, remember. I'm going to put you on the spot, some prediction. I could have made a prediction at AT&T one last year, and I got into an argument with one of the other contenders who didn't win, and I can still see some darts, you know, some scars in my body, so, but maybe these guys will win this time. Sometimes just can't hold the line, you know. Maybe outside of the telecom NFC space. I think we should consider the SaaS players. Maybe it's time that they did something amazing. Okay, there it is. A little bit of leg. We're showing some leg here in the cube, virtually speaking. Alex, thanks so much for coming again, and thanks for sponsoring the cube. Of course. And Miranda, you guys have been great partners at this event, and you're the founding event here at OpenStack SP, and of course, we've covered everyone on one. Thank you personally, thanks for supporting us. Always a pleasure to talk to you guys. We're here, extracting the signal of noise with the CEO of Miranda, also putting on the show with the community, not just the Miranda show, but it really shows the value of OpenStack. I'm John Furrier, Lisa Martin, right back with more of you watching the cube.