 From the SiliconANGLE Media Office in Boston, Massachusetts, it's theCUBE. Now, here's your host, Stu Miniman. Hi, I'm Stu Miniman, and welcome to a special CUBE conversation here in our Boston area studio. Happy to welcome to the program first time guest, Patrick Morley, who's the CEO of Carbon Black, course recently announced acquisition by VMware of $2.1 billion. Patrick, thanks so much for joining us. Stu, thanks for having me. All right, so we love digging into tech. There is no hotter space than security, all the cybers, really exciting stuff, and even your company's Waltham-based, so actually a little closer to Boston than we are here in Marlboro, Massachusetts. When we had a green screen, we used to kind of fake it with the skyline, but the Boston area, people know more than just Massachusetts tech, but a lot of great technology in Boston, of course, a lot of good technologies, a lot of good schools that have driven things. You have been CEO since 2007, and have seen quite a bit. Merger, Bit9 and Carbon Black many years ago. IPO, not that long ago in the past, and now acquisition, as we said, for $2.1 billion. So give us a little bit of a step back as to the journey, how we got here, and what's it like to be kind of at the home with your crew through all of those changes? Yep, well, certainly very proud and very thankful to all of the customers that have been with us for many, many, many years. And as you said when you first started here, Boston is an awesome place for cybersecurity. I think it fits a bit of the personality on the East Coast, and if you just look at Boston in general, there's a lot of great cybersecurity talent, a lot of great cybersecurity companies, and I'm extremely proud and grateful to all of my employees in Massachusetts who have built Carbon Black over the last number of years. And of course we have offices elsewhere across the globe, but Boston and Massachusetts is where the company's roots really come from. And as you said, 2007 is when I joined the company. Obviously, cyber was a very different world back then, and it's amazing if you just kind of roll back. In 2007, the idea of a CISO, a chief information security officer, was still very new. And most companies we dealt with back then did not have a CISO. They had a network administrator or somebody. So that's all changed. If you look at security as a board level issue, in 2007 there were certainly some areas of some sectors like the government where it had a lot of importance, but outside of that it did not have the same visibility as a strategic issue as it does now. It's amazing. So much, my background is networking and virtualization. I spent a lot of time, since 2007, looking at all the cloud world. And as I said, back in the early 2000s, security was top of mind, but often bottom of budget. The network people, back in the day, it was like, can't you just lock the door or make sure the rack is secure and well, we'll run things over optical and therefore we'll know if somebody splices into it from a networking standpoint. Today, as you stated, clearly it's board level discussion, CISOs rising power in the organization and often dictating a lot of how the stack is built. Absolutely. So, wow, it brings a little bit, your portfolio, security is not a thing. Any customer I talk to, there is no such thing as a silver bullet in security. Most customers I talk to really think of security as a programmatic effort. So, help us understand a little bit where carbon black fits today and then we'll get into your broadened scope once you're gonna be under VMware. Yeah, so the core founding idea behind carbon black was a simple one, which was that fundamentally, the adversary was in a position where they eventually would figure out a way to get in. And if you fundamentally believe that, then you do everything you can to stop the adversary, but you say I need telemetry, I need data in order to understand what's happening across my environment in order to be able to see and stop the adversary. And so, we began a journey to essentially be able to collect and analyze all the data that an adversary, that an attacker would touch in order to run their program. And we always have equated it to essentially a movie camera that allows you to rewind the tape. And with all that data that we collect, we can run tremendous analytics against that in order to be able to see and stop the adversary and understand what's happening across the environment. We essentially created a market that's now called EDR, End Point Detection and Response. And it's that simple idea of being able to understand and have situational analysis, situational visibility across the whole enterprise. We did that initially on premise. So we did all that analytics and each one of our customers back ends in their data center. And two years ago, we began a journey to say, look, we want to do two things. One is we want to leverage that data to be able to provide more security capabilities across a platform. So let's revolutionize, continue to revolutionize cybersecurity by offering a cloud-based platform. We're going to move all of that analytics up into the cloud. All those capabilities up into the cloud and offer a multi-tenant cloud-native SaaS platform. And over the last two years, we've done that with multiple services now up on that cloud with thousands of customers who are using it. And the benefits of the cloud are pretty straightforward and they've revolutionized other industries. They're revolutionizing cyber right now. Certainly, you can analyze data at a scale that's just not possible when that data is locked up in multiple customers. So that's one big change. Obviously, you- Yeah, I just want to help unpack and tease out that data piece. We always hear out there and it almost, it's a bit trite, the importance of data. Data is the new oil, it's the rocket ship. But the value of that data, how much of that is Carbon Black leveraging the data? How much can the customer themselves take advantage of that data? Or this isn't in the vacuum. There are other security products, other pieces of that vendor stack that might be able to leverage that data. Yeah, well, Carbon Black's a cloud native platform, security platform is built on a totally, it's totally open. So from an API basis. So you should think about it. Our customers certainly think about it this way. As one, we're leveraging that data. We analyze a trillion security events a day. One trillion, just immense. And the benefit of that is if we see something across the globe that has a high risk score that's known now, where that might be a new form of attack, that might be a living off the land attack, all of our customers get the benefit of that analytics. So Carbon Black, we certainly leverage it. But in addition, the way we've built the platform, customers can get access to all the data from their enterprise. And they can correlate that data with other aspects of their security or their IT infrastructure in order to build a more holistic view across the entire enterprise. And we also have third party partners out there, managed security service providers and others, who also have access to that data for their customer set to be able to run analytics on it. So when we think about data, as you said, as the oil of the new world, we think we need to leverage that data. But we also need in this new world order to give our partners and our customers the capabilities to do what they want with that data as well for their own data. Yeah, love that. Especially if you're talking in that cloud native world, it can't just be something that's locked up and only used for environment. We track the observability companies out there. They have similar type of messaging. Of course, data protection. Once there is that breach, how do I recover from this information? So that ripple effect and love, openness, APIs, making sure that can be shared. Maybe not something that traditionally I'd heard from VMware when you talk about the openness and where they're doing. Maybe, I think there are a couple of things you want to talk about Carbon Black, but want to get to the VMware piece. Yeah, well, I was just going to, on the cloud side, the power of the cloud, obviously it's revolutionized other industries. And certainly one of it is the ability to provide analytics at scale. The other piece, which I already mentioned is the network effect of my ability to see something somewhere across the globe and help millions of other customers across the globe when I see something. And the other piece is just my ability to deploy quickly and my ability to innovate quickly. Because rather than having to deliver new software into each enterprise, I can do that on my cloud native platform. So I think it positions the defender, the security teams around the globe, where they can be more on the offensive than they've ever been before. Because suddenly I don't have to spend my time worrying about deployment mechanics or other pieces. I can focus on what I really want to do, which is I want to secure my environment. I want to be able to understand what the adversary might be doing. So we're real excited about what we've done over the last two years with our cloud platform. Okay, so the deal hasn't closed yet, but it's been announced that you will be leading up the cloud security group at VMware. Gives a little bit directionally, where's that heading? What will that mean? Of course, we've tracked where VMware touches a lot of that environment. With my background in networking, I talked to the ICERA team before and then through what's become a very successful NSX. Sanjay Poonan with the AirWatch acquisition and where they've gone, of course I would expect that. That's the closest piece that you started out with the endpoint protection with that team, with the workforce one. So explain kind of the security portfolio and interesting cloud security is the discussion because that's the newer piece of the carbon black portfolio, help us understand how the whole, all the pieces fit together. Yeah, so first I'll just reiterate what you said, which is the transaction is not yet closed. So everything I'm talking about is pre-closed and obviously post-closed will have additional commentary about what everything will look like. But absolutely we are very, my team, my customers, we announced the transaction a little over a month ago. Everyone is really, really excited. And I think fundamentally they're excited because organizations understand what carbon black delivers today and what we deliver are great security products. And increasingly the majority of those products are in the cloud. And VMware has a tremendous reputation in the industry for the technical capabilities, for the value that they provide to customers and just for the breadth of the portfolio that they have. You mentioned a few of them, right? Many organizations and people think about VMware from a virtualization standpoint. But increasingly over the last few years they've dramatically expanded their portfolio, network virtualization, NSX, the Workspace One as well, which was based on the AirWatch acquisition they did. Those are big businesses today and they're helping organizations transform their infrastructure, the way they manage devices, et cetera. And so carbon black on the security side, we've been partnered with VMware for the last couple of years. We've had an opportunity to get to know each other quite well. We had an opportunity to integrate in two key spots. One, we've integrated with their APTI capabilities, which you can think about essentially as helping to protect and provide telemetry for what's happening inside of the virtualized environment. And then secondarily, we've also partnered with Workspace One as well, again more on the device side. Those are two natural points where security, building security intrinsically into that compute stack we've seen with customer reaction has a fundamental impact on being able to have security right there rather than having to bolt it on afterwards. Yeah, you walk into an interesting configuration. First of all, as you said, VMware not thought of as a security company per se, lots of products that absolutely fit in the security space and are there. When you look out, of course, VMware, primarily owned by Dell, there's SecureWorks, there's RSA, those are well-known security brands. Give us how you think of how all those pieces go together and kind of the trajectory of where things are headed. Yeah, well, goal number one, once we close the transaction, goal number one is to do two things. One, we're going to continue to drive forward with the cloud roadmap that we have. It's an aggressive roadmap. We've been innovating aggressively over the last couple of years and we're going to continue to do that within VMware. The second piece is obviously to maximize the opportunity to build security into the compute stack of VMware so that when customers think about security, they don't have to think about it as a separate piece, but it's already there at their fingertips. And then as you mentioned, so those are two big goals right there. And as you mentioned, obviously Dell has a large portfolio. There's other security products within the Dell portfolio. And when we think about that, obviously over time, we're already partnered with some of those. SecureWorks, for example, has been a very close and valuable partner of Carbon Blacks for many years. You'll see us continue to partner. There's other parts of the Dell family where we have partnered in the past, not tightly, but I think we'll have the opportunity to do more as part of the Dell family. All of this means for customers more value. Because rather than having to go and figure it out themselves, we're going to be delivering it in conjunction with the solutions that are already using. All right, Patrick, I want to help you have you address a schism I see in the marketplace when it comes to the messaging around security. When peers of mine went to the RSA conference this year, they came back almost unanimously with two words, doom and gloom. Right. In Boston this year, Amazon held the inaugural reinforce, positioned itself as the cloud security conference for the industry. We covered that with both of those shows with theCUBE and Stephen Schmidt from AWS said, the state of cloud security is strong. VMware very much, we hear from Pat, we need to do over security is broken. Friends of mine in the security industry, Carbon Black's been around since 2002 is come on. It's not just another acquisition. It's not going to be a point product. Yes, we have work to do as a whole, but saying we need to do over it's broken is a bit hyperbolic from my peers in the industry. So what is the state of the industry? Is there traditional storage and cloud storage? Is all rainbows and unicorns or where do you see it today? Of course we know as an industry there's always work to do, but how do you round that circle? Yeah, I would take it. And you're right by the way, I hear all the same commentary. And I think we have to take a step back and just look at industry, the industry in general, look at security in general. We started the interview talking about well what was the world like in security in 2007. Security has gone from, hey, it's a niche area over here and we know it's important but don't talk to us to super strategic. Again, at a board level, at a company level. And so that rapid growth has driven a lot of funding into the environment, a lot of vendors. There's over 5,000 security vendors out there today all competing. I don't know how CISOs and CIOs and practitioners really figure out who does what, it's very challenging. And at the same time, you've got the adversary, this third party continuing to advance their attack types, using new techniques. You've got ransomware, which is a huge industry now driving billions of dollars. So you have all of that happening and so in hyper growth environments like that, you get a lot of vendors. The average enterprise security team has 75 different products and so they have to stitch that together. So the fundamentals of what, the way you described it, I think are accurate on both sides. One, security's broken, it is broken. We've got too many vendors and we're bolting it on. We've got to fix that. VMware is in a position partnered with Carbon Black to do that, I think, really well. The second piece is that the cloud does allow us, I'm not sure about rainbows, but the cloud does allow us to change security fundamentally because of some of the characteristics I described earlier. And if you take Carbon Black plus VMware, plus what VMware is doing to deliver across any cloud, any device, any application, I think we're in a really interesting spot to help customers get more value from their compute stack and from security. Yeah, one of the things that VMware has always done well is they play in multiple environments. Back in the early days of server virtualization, didn't matter what hardware, they would get that across. Their cloud strategy went through quite a few iterations. Sanjay Poonan came in our program and said, VCloud Air, we failed, we got it wrong, we did it, but today, every cloud show I go to, there's a VMware piece of that. They're partnering with AWS, with Azure, with Google, with Alibaba, with Oracle even, and IBM recently. But still one of the critiques I have for VMware is, VMware does good at managing their house. But security customers, as you said, they've got 75 tools and they're going to have their VMware state and they're going to have their native cloud pieces and they're going to have their non-VMware environment. So how can, once you're under VMware, participate in that environment, will you primarily be VMware environments in the VMware cloud environments or will it be a broader cloud security strategy? Yeah, well, I think certainly VMware has done an amazing job over the last few years of really pushing this any cloud model, right? Hey, no matter where your workloads are going to be in a hybrid cloud environment, we're going to be there to help you and help run them more effectively, more efficiently, faster, better performance, strong ROI. And so if you look at Carbon Black's roots, and I mentioned this earlier, one of our core beliefs is that one vendor can't do it all. You have to build on an open, extensible API-based platform and that's what we've done since the beginning of the company. And so you will not see Carbon Black change our philosophy. We will continue to be very, very open. And I think, by the way, that reflects very much VMware strategy as of late, which is an open strategy where they're playing with lots of providers in the marketplace. Again, the benefit of Carbon Black plus VMware on that platform is that for VMware infrastructure, their products, I think you're going to see out of the box security capabilities that are going to give advantage to customers from ease of use, from the way that that security works, et cetera. And then we will continue to partner with other vendors out there across the market. All right. Patrick, we know, you mentioned how many different tools customers have to deal with. There are more new threats coming out every day. There's no way that a person or a team can keep up with all of this. So is AI the answer? How are these technologies going to be able to allow our systems to be able to protect us better in update? We haven't talked about AI yet. I know it does fit into your portfolio. So just understand how the systems and the software and the solutions are going to help enable teams to be able to keep up with the rapidly expanding and changing landscape insecurity. Yeah, AI is a tool. We use it. And just as I've mentioned cloud, right? Along with the ability to analyze trillions of events on a daily basis, things like AI can play a very significant role in helping me to understand what's happening across very large corpus of data. And so we use a lot of it. And that allows us to understand when there's an anomaly somewhere across the globe on some system, some endpoint or device anywhere across the globe and then leverage that to help our other customers. So AI is playing an important part. It will continue to play an important part. But AI leverages the data that we collect. So if you go back to where Carbon Black is today with all that data that we're analyzing, one of the really interesting things is VMware today has 70 million VMs. 60 million of those are on-prem, 10 million of them are on the cloud. Part of the benefit that Carbon Black gets from VMware is we're going to get all this additional telemetry that we're going to be able to again consume, leverage AI-like capabilities to help with the analysis of that. And again, provide more customer back to the value on seeing and stopping the adversary. That also extends to what VMware's doing on the device side with Workspace One, et cetera. So there's a lot of opportunity over the coming quarters and years to provide more value for customers in understanding what's happening across their environment. Because of all of the touch points we're going to have as part of the VMware compute stack. All right, Patrick, final thing. What does this mean for your customers? I think back to, not that long ago you did an IPO. What would that mean for the growth, the investment into technology and growing the team? Now, in industry parlance, you had another exit and you will be part of VMware. So we might not get as much visibility into the specific revenues and the hiring that you're doing there. But what will this ultimately mean for Carbon Black's current and potential future customers? Yeah, so we have over 5,000 global customers out there today. And first and foremost, it's going to mean more investment from a product roadmap standpoint. If you look at 2019 this year, the number one area of investment for Carbon Black was in R&D. And as we move forward, again, post close, you, our customers are going to see continued investment in the platform, in our cloud security platform, in order to ensure we continue to bring more capabilities to market. And then, as I said earlier, in conjunction with that, do everything we can to integrate in with the VMware product portfolio, again, so that security's not bolted on, but it's intrinsic to the compute stack. And so I think that's the biggest thing. I have had the opportunity to go out and speak to many customers over the last four weeks. Customer and partner reaction has been outstanding. They get it, they understand it, they understand that there's a better way, and that's what we're going to be doing as part of VMware. Yeah, any surprising nuggets in the last month talking to the customers and partners more that you've learned? It's going to sell in self-serving, but it's the truth. I will tell you that the VMware reputation out there is outstanding. I mean, and I have been surprised at how little I have to do to tell them why this makes so much sense. They get it, the majority of our customers get it, they understand the possibilities of what we can provide, and there's a level of excitement out there, again, with our customers and partners. It's just, it's awesome. Patrick Morley, CEO of Carbon Black, thank you so much for joining us on theCUBE. Stu, thanks. All right, lots of coverage, of course, through 2019 and gearing up for 2020, where we'll all have perfect hindsight, I'm sure. Check out thecube.net for the events we've been at, search where we're going to be, and please reach out if you have any questions. I'm Stu Miniman, and as always, thank you for watching theCUBE.