 Okay, welcome back to SiliconANGLE and Wikibon's theCUBE. We are live at VMworld 2013, live in San Francisco, California, in Moscone, South Lobby for live coverage, day two of three days of wall-to-wall coverage with great guests, customers, VMware executives, industry executives, customers, people who are implementing cloud, talking about cloud, talking about the future, cloud style, as we were just talking about earlier today. I'm John Furrier, the founder of SiliconANGLE, I'm going to join with my co-host, Dave Vellante at wikibon.org. Hi everybody, Rick Jackson's here, he is the CMO of Rackspace, formerly the CMO of VMware, and a big part of the reason why we're here, REC 2010, we were set up in the same place. I remember it well. And thank you for bringing it back to San Francisco, so welcome back to theCUBE. It's nice to be here as a guest again. We're like a tick that gets embedded into VMware, can't get rid of us. We've been here four years, thanks to you. You had a great run as CMO of VMware, now living easy in Texas as the CMO of Rackspace, which we know a lot about, because more women come in Rackspace when I first met Lou Mormon and the guys were building the cloud space and stuff, and then obviously OpenStack has become a huge success. Yeah, we did the OpenStack Summit, of course, and just a great event. Yeah, it's getting real momentum. Great company, hosting, get the cloud business, just great support, great customers, and it's in the cloud space, so you have a cloud. So first, tell us what's new about your new role as CMO of Rackspace and just what's new with you in Austin, you moved to Austin, what are some of the things you work at? Yep, so I did, I moved to Austin a little over a year ago, actually while I was part of VMware and had the opportunity to join Rackspace, which I did as of July 1, so I'm two months into the role and kind of learning what it's like to be on that service provider side, because it's very different than being at a software company, runs at a very different pace and a different operational model, et cetera, so I'm actually enjoying myself because I'm having to kind of retrain, you know, everything I know about marketing and my instincts and take it to, all right, what do you do in a service provider business where it's 24 by seven, 365, and not the quarterly end of the quarter thing and once a year product launch, we're launching products and services into the market almost on a weekly basis, so it's fun, it's fascinating, I'm really enjoying it. It's challenging, you get the big boat that kind of turns slowly and now you've got the speed boat with Rackspace just innovating. It's very, very fast. It's a highly competitive market, I mean it's not like it's no competition. Yeah, there's a couple of companies out there that I think people are probably very good at. So you're saying it's faster, shorter bursts, you know, you're running shorter sprints. It's just constant, it's sprinting all the time. My email box is filled with dashboards that I'm looking at on a daily basis, you know, instead of quarterly basis. It's just a completely different pace. So it's like training for a marathon, you've got to be getting, you know, a whole new sport, really, you've got to get a whole new routine. What would you be doing here this year? So compare and contrast what you're doing here versus what you were doing last year. What's some, it's easier, you're going to meetings, doing one-on-ones, last year you'd be running around. What's the difference? Yeah, still really meeting with customers. That's kind of the focus here. You know, obviously we have our managed virtualization offering that is based on VMware. And we've got a lot of joint customers with VMware that are using our services as well. So spending a lot of time with customers. But actually, you know, the nicest thing is being here and not having any stress whatsoever about anything that's going on around me. Yeah, you're chill. Not my problem. That's the theme of Boston when I always go there. It's easy living. It's a nice town. Talk about open cloud, because you know, you're actually part of the Software Defined Data Center positioning, you know the history of VMware. You were inside the, on the captain's bridge with the commanders, now Pat Gelsinger's in charge. They got to be aggressive in the cloud. So you're not a stranger to the cloud, but now you actually work for Rackspace. But a lot of changes with OpenStack, the game has changed significantly in the past 24 months from a Amazon only to Rackspace coming and getting market share to a whole new ecosystem. And it's changed open source. It's changed the landscape. It's changed the ecosystem. Now you got a zero vendor controlled framework with OpenStack. So what does this mean for folks out there? Explain to them the opportunity. Also you went to Rackspace, obviously a good opportunity, but what is open cloud and what is the opportunity? Yeah, it's, you know, there's a huge dynamic happening in the marketplace right now. First off, I look at the IT stack. And if you look at the IT stack over time, there's always an open source alternative that comes in and kind of wins out in the long run. So Linux at the operating system layer. I used to run marketing for BEA. Jboss came in and there went WebLogic and WebSphere, right? You know, Tomcat WebService, right? You just look over time, open source comes in and takes a dominant position. So in the cloud world, the de facto open source leader now is definitely OpenStack. And it's gaining significant momentum with every major vendor behind it, including VMware. You know, the consistent innovation that's being contributed from over 1,000 contributors now on the OpenStack projects. And it's being adopted, not just by service providers, but also by enterprises. And we're doing some great work with some Fortune 50 companies that are really looking at taking their next gen applications into OpenStack. Yeah. And the competition's interesting. You mentioned how Jboss just took out, you know, decimated some of the, you know, proprietary or smaller, you know, other vendors within OpenStack. You had cloud scaling out there, which has some traction on the Hadoop side. You see Cassandra and Hadoop. So it's not a zero sum game. There are still going to be competition within the open source community, which continues to fuel the innovation. Well, I think that's the beauty of OpenStack is that it is a modular framework. So you can actually plug in different technologies and it is designed to have different community projects that are going to inter-operate with it. It, OpenStack, by definition, will create a very large ecosystem. And that's ultimately what's going to be needed for its long-term success. So talk about the OpenStack conversations within VM, where obviously lots of change with VM, where Pivotal and Palmaris took that. I always call the developer more focused up to the top, out of the company and separate company, spin out. We all know that. But it's changed. So internally, you were having conversations. Do we support OpenStack? Do we not support OpenStack? You guys are obviously involved. So is HP and IBM and others. What was the internal conversations at VMware like, you know, to give the exact conversations, but what was the pros and cons against going for OpenStack within the VMware stack? I mean, obviously it's nice to have that growth on the open source. Is it a hedge, is it a compatibility mode? Is there, was there business reasons to have reasons? You know, I'm probably not the right person to comment on VMware's decisions at this point. Tell us. You know, I think it's obvious that there's going to be an open source alternative. It just, it happens in every layer of the stack. There's going to be one. OpenStack is proven to be that de facto leader. There's so much momentum going on, even within the customer base that VMware has, that it's, you can't ignore it. It's kind of like, you know, Microsoft ignoring Linux in the early days. You know, you just, you shouldn't ignore it. You should look at how can you embrace it and support it. And I applaud VMware for having that approach. Well, but I think that, you know, there's, you're not the only historian in this business, right, people have seen the effects of open source and it does win the long game. So, you've got to have a strategy to embrace, you know, but embracing alone doesn't necessarily ensure your success. So that's the interesting kind of dynamic here, what's the play for the guys that have some degree of lock-in and sometimes a substantial degree of lock-in regarding open stack and, or open source. And to me, it comes down to, well, okay, how compelling is that lock-in and how open can they actually be? So Amazon and VMware in particular, I think both have substantial, you know, lock-ins for different reasons. You've also got people out saying things like the open stack community should embrace AWS APIs. Yes, there are people that believe that. And I presume from the look in your face, you're not necessarily one of them. Not in that camp. So, okay, so let's start there. So why not as an open stack, you know, practitioner or, you know, proselytizer, if I can call you that, why not take that approach? What's your, I've heard the other side, so I'm going to hear yours. I think it's real simple. It's open stack is about community innovation. And that's one of the value propositions of open source is that so many different people and organizations can contribute to the ongoing innovation behind that technology. Essentially, if open stack relegates itself to being a AWS compatible cloud, we've taken all of that potential innovation and now put it in the hands of control of Amazon and we can only innovate as fast or as quick as Amazon innovates. So we're basically now saying for the cloud era, we're going to trust one company for all the innovation that's going to happen in the cloud era. I look at things a little bit differently, which is every time we've had a major technology shift, you know, and Pat talked about it yesterday on stage. We went from mainframe to client server. Now we're moving to cloud, which is an entirely new era of how applications will be developed and designed. And those applications are obviously being created by developers. Developers are really kind of the bellwether of where things are heading. And in the new cloud era, there was at one point only one real choice, which was Amazon. So if you look at where are all the mobile applications developed? Where are all the modern day SAS providers developing their software? They're developing it all in an open source environment using open source technologies. That's a real significant difference as we enter this cloud era. Costs go down too. I mean, drives the infrastructure cost them. I mean, drive software, and drives an infrastructure that's commoditized. Absolutely, because infrastructure is there just to keep things up and running, and the innovation needs to happen at the higher levels. And that's what's happening, but it's happening in open source. So I think this era is really about the full embrace and adoption of open source to really drive that new set of applications. So your argument would be a single company, in this case, Amazon's objectives would not be aligned with the open source community of open stack. And it may in fact be, I'm going to test the premise, may in fact be a reasonable short-term tactical play, but long-term it would really not serve the open source community. Is that a fair summary of? Exactly, I think it would limit what the future potential is of for the community, and ultimately for the customers of that. Well, I mean, they're going to have plug-and-play services, but it's going to be Amazon specific. Yeah, it's going to be different. We're going to move at the pace of Amazon. You know, Amazon was the first one out of the gate, so they're the clear leader, but usually when we have a technology shift, the first one out of the gate is building a proprietary advantage. Why wouldn't you? You get to capture all the early customers and you get to lock them in. Yeah. Somebody's got to break that sign. So you like Hortonworks strategy better than Clouderis, that's right. You don't have to comment. Well, we can, if you want to, but you're going to get good commenters in the queue. So you know, we've been following Jim Curry and Lou Moore and we're going back again when they were, just before they even went to NASA. It was all this, how do you onboard developers? Rackspace was bolting on and building their own cloud in real time. Kind of like changing the air, or building an engine of the airplane and mid-flight of the old business, but so they had, they had no developers. They told me, hey, you know, we didn't have enough developers so we can either hire them or go out and grow them in the open source community and make it open. And so that all hit. So it's been a huge success. I want to ask you, what has this done for Rackspace's business? What has OpenStack done for Rackspace's business and brand? I'll see this halo effect. We saw that at the OpenStack summit when we broadcasted a live for three days up in Portland. But what's your take? And you're new to going to be fresh eyes and fresh eyes on the site, on the team. You're a marketer. You got to go get the store ready for business and market it. What do you look at? What's your, what's your, what's your eye go to? Well, I think the fact that because Rackspace is a founder of OpenStack and obviously so tightly associated with OpenStack, it does bring people's attention to Rackspace. But ultimately, you know, I think people choose what's the right platform based on the application that they're trying to either develop or host or what have you. And the real advantage that Rackspace brings to this market which no one else can do today is it's hybrid cloud platform. And we define hybrid slightly different at Rackspace than what's been banditred around in the industry today. Most people in our industry talk about the ability to either run a workload inside the data center or outside the data center and somebody else's data center and they call that a hybrid cloud. We actually think about a hybrid cloud as an architecture for creating infrastructure that supports different pieces of the application using the best fit technology. So we have a significant amount of customers. Aka Lego blocks. Well, in a way it's actually taking advantage of what public cloud is good at for parts of the application but also being able to take advantage of dedicated bare metal servers for other parts of the application that frankly they just don't run well or scale well in cloud technology. Not cloud style. So it's not, it's not cloud, public cloud as commodity, horizontal scale isn't best for all applications. All the top startups, Twitter, you name them. They all start on a cloud and then they go, wow, if we don't put this on bare metal and at least lock in and have system admins have guys run that bare metal. You need to use the cloud. You need to architect for the application. One size does not fit all. That to me is actually the rack space advantage and what customers are really taking advantage of. So you come from the school of thought of it's an application centric model. The applications drive and define infrastructure configuration. Absolutely. Because at the end of the day, what do people care about? They care about their apps. So let's make sure that the infrastructure fits the app. Yeah, we were talking about that yesterday. That is the fundamental shift right there of between old way and new way. Old way was I stacked some gear, I got a couple apps, I'm done, call for help. Yep. Now it's different. Very different. So the competing angle against Amazon is openness obviously, but that's going to serve you long term. It doesn't necessarily per se serve you as great near term. It does in some cases. Yes. Maybe 15, 20% of the cases ask we want open, but you got to compete head to head. So you're saying you're competing on flexibility. Wait, we can offer you bare metal serve you competing on hybridness as you've defined it. Yes. Best fit architecture. So let me just understand. So if I go to Amazon, I'm not going to get a bare metal. It's going to be virtualized. I'm going to pay for maybe a dedicated instance. Pay to the nose. Which doesn't change the architecture or the blueprint underneath the application. Doesn't get you out of the performance issues. So where Amazon thrives is speed of innovation that every time you turn around, they get something new. You guys have done a good job of trying to match price cuts and innovation. You're one of the few in my opinion actually that is really focused on that. That's why it was interesting when you started this segment about the pace. Yes. Do you feel like you're going fast enough? Or do you feel like you have to spin that flywheel even faster? I think actually that what we've got to do and part of my role at Brackspaces to more clearly communicate the advantages of hybrid cloud. Give you an example. If you look at our top 25 customers, well over 50% of them are new era SaaS companies. And well over 50% of those companies are all running with a hybrid architecture. Some of those companies came from Amazon, didn't scale, didn't perform the way they needed to. They had to over provision to try and accommodate for that. That ended up with very large price tags. They were able to move their application to Rackspace, reduce the footprint significantly because they take advantage of both public cloud and dedicated servers, bare metal servers, and reduce the footprint, reduce the cost and have better scalability and performance. That's the message we need to get out there. So there's real value. A company like Workday for example, might be a good example. Good example. I think John, I think you and I wrote about that when HP claimed that Workday went off of Amazon and turned out they were on Rackspace. Yeah, we broke that story. We don't break many stories when we let them. Every once in a while it's about to hit a home run and just walk around the bases. But the story thing is interesting and Wall Street is also having a hard time with a lot of these new plays. So we're talking about the VCs being a deer in the headlights with yesterday about enterprise investments. There's also kind of a deer in the headlights on Wall Street analysts around where does the money come from? Because there's a lot of different channels of services, essentially new business models. So what is most misunderstood about Rackspace to those Wall Street analysts out there, to the folks who are interested in investment opportunity, or just how do they make sense of the mega trend called cloud, right? Well actually, the interesting thing is, is that I find both in the financial community as well as quite honestly in the industry analysts, there's so much focus on enterprise IT shops. But what are enterprise IT shops doing? Enterprise IT shops are not creating the next generation of cloud apps. Those are happening in startups, in SaaS companies, and in business units within enterprises, not core IT. And so people are fixated on asking, well how many enterprise IT shops are running your cloud or using your cloud? That's not the right measure. The measure is, you always look at what are the developers doing? What's the trend to create those new generation apps? Follow those and you'll find the money. That's who's coming and using the Rackspace cloud. The quote yesterday on theCUBE was follow the apps. Follow the apps? I say follow the developers because the developers create the apps. Yes, exactly. And it's not so much the outside developers, it's also internally to the company. The developers are going to either use marketing money or whatever money to go higher, or have guys in-house do it. And then say support this. That doesn't work very well. We say support it. If you enable it, that's your strategy. You're saying you want to enable application developers in and across the business core IT and beyond. That's basically what you do. With a focus on those next gen apps. Next gen apps. Where are all the mobile apps being developed? Right? They're not being developed inside of central IT. They're being developed outside of that. That's where we want to be. Where are the next generation SaaS applications? Where are the new modern applications that are going to take advantage of all the open source technologies? The big data applications? Where are those being developed? That's who we're attracting. Okay, so we always ask the CMOs when they come on what their marketing budget is, and you never get the answer because everyone wants to know. You're never going to get the answer out of me. But your new rack space is not new to marketing. Been doing a lot of marketing. You guys have done a great job and you kind of do a lot of grill marketing as well. What is your plan for the year? I mean, you're going to take the range, you're going to get in there, get used to the players, the personnel, the budget. What's your view of the landscape and what are you going to do as the CMO in short-term priorities and what's the long-term play? Yeah, well, I think it's a collective strategy that the company is moving towards. So it's certainly not my strategy, but as part of that executive team, we're looking at how do we really focus the company, take advantage of our hybrid cloud platform and go after companies and developers that would be advantaged by that hybrid cloud platform. So one of the things that you're going to see us do is really go and embrace much more of the developer community, where we want to be the best place for open-source technologies to run would be in a rack-space cloud. And we're going to take that message very strong out to the developer community and get those next-generation applications. And that's what our focus is going to be on. And you're going to provide services to those guys? You know, the great thing about fanatical support is that when it started in the company, it was really about doing everything possible in a reactive mode to anything that goes down or anything that needs to be fixed, rack-space is right there on top of it. What it's really developed into is what I would refer to as fanatical expertise. You know, unlike every other cloud vendor, we actually engage with the customer upfront. So we're with you in the design, build, and run process. And that's what fanatical support has become. To make sure that your application gets the right fit architecture to have the most successful deployment. Okay, Rick Jackson, the new CMO of Rack-Space, company that we know very, very well. We actually have some rack-space service for some of our stuff. And of course, OpenStack Summit and the OpenStack community is growing great thanks to their leadership there. Congratulations on the new job. And I'm always a friend of the Cube tech athlete, as we say, thanks for coming here inside the Cube VMworld Live all day today, day two, day three tomorrow, full house. Stay with us, more guests coming right after this short break.