 from the Moscone Center. It's theCUBE, covering AWS Summit San Francisco, 2018. Brought to you by Amazon Web Services. Hello everyone, welcome to theCUBE here in San Francisco at Moscone West, the CUBE's exclusive coverage of Amazon Web Services Summit 2018. It's the first of their kickoff of their little satellite events, really about developers and training and educating people on Amazon Web Services products again theCUBE covers re-invent. That's their big show. This is more of a less of a sales in marketing but more of a really get down into developers and practitioners, I'm John Furrier. With my co-hosts this week, Stu Miniman all day today, wall-to-wall coverage, Stu. The keynote just kicked off, Andy Jassy not here. Notable, Werner Vogels does all the summits and he's always been the headline last year. Andy Jassy kind of did the keynote in a fireside chat. We had that up on our YouTube channel on SiliconANGLE CUBE. But here, the story is all about SageMaker and the continued dominance of Amazon Web Services. And then again, as we were speculating at re-invent and we've been saying on theCUBE, the maturization of Amazon Web Services is clear. Everyone knows the numbers, they're breaking out their reporting, they're clearly got competitive forces for the first time in AWS history. They have some serious competition upping their game, Microsoft nipping at their heels, Google putting out some open source tech, Oracle trying to throw fud into the fire and say, you know, change the rules and kind of keep the rules on their terms. So the competitive pressure. But at the end of the day, there's a whole new era of modern software development, modern business applications and we're seeing it with things like cloud expansion, on-premise consolidation, hybrid cloud, multi-cloud, decentralized infrastructure, blockchain, AI. These are the themes, this is what developers want, this is what businesses are doing. Let's analyze and discuss the keynotes. What's your thoughts? Yeah, so John, I mean, first of all, I mean, we watched the rolling thunder that is AWS, kind of just rolling through the entire industry and now rolling all over the globe. So the AWS Summit, I think they actually had an AWS Summit in Singapore like last night and we're going to be covering a few of them. I was last year at the AWS New York City Summit and I tell you, that New York City show alone was one of the best shows I went to all year. The amount of people, the excitement, what really differentiates, as you said, the big reinvent versus the summit, first of all, the summit, they tend to be a local audience, it's free for basically everybody to come in. So numbers are great, you know, we're in San Francisco, they're going to have 10, 15,000 people here, probably. Google Next, Google Cloud Next was here last year in February and it feels almost the same amount of people here for a regional Amazon show. So the numbers are wow, the announcements. Every day, Amazon's running an announcement. So, you know, Dr. Werner Vogels, Dr. Matt Wood, get up on stage, go through some of the usual. We're dominating every industry and every service and everything there, but when you piece apart, there's like, ooh, there's real announcements that are coming, things have jumped out. We talked about kind of the machine learning. Matt Wood talked about SageMaker is really growing super fast. People that I talked to that have been using it are loving it. They came out with SageMaker Local which means that I can develop it on my laptop and do it with that cool, like, take ML with that cool, what was it, the deep lens that they've got. It's, how do I get these environments? Amazon isn't just about, you know, infrastructure, cloud anymore. They've gone to Paz, they're pushing to Edge, they're doing all of these things. They had a whole ton of announcements, you know, when they already passed the time that the keynote's going to be done. Oh, you thought we're done well, security, security, security, and secrets manager, firewall manager. There's so many services, a theme. I've been looking at the last couple of weeks. How do we keep up with all of this? You know, even internally, you talk to Amazon people. You know, they don't know everything that everyone's doing because it's all those two pizza teams and how they're growing. And they always have to get all their sound bites in because they don't have a lot of time to get all that tacked into one powerful punch. Just on a quick side note for the folks that are watching, those of the Cube, we've been covering Amazon really since the beginning, since the re-invent started. You know we've been covering data center infrastructure and big data with Hadoop and now beyond. You're starting to see coverage around blockchain and cryptocurrency. So again, we are expanding our coverage of the AWS ecosystem and cloud to include most of the major regional shows of AWS Summit, continuing to go deep into the AWS re-invent and the community. We are also initiating coverage heavily on Google. Google Cloud Next will be at their show and soon to be at Microsoft Show, that's still to be determined with Microsoft that they will let us in. We're working on that. We think that's going to be good, but we'll be nailing and doubling down on the cloud coverage. So Stu, with that as a backdrop, people know we've been deep with Amazon. I've been calling Amazon fanboy many times, but the numbers are clear. And again, I'm a Google fanboy, by the way, too. I love Google stuff. Microsoft, I got to learn more about them. Obviously they have bundling in office, so they're a legacy player, Oracle legacy players. So you got two legacy players, you got Amazon and Google. I would put them kind of in two different categories. And then Alibaba and Shine are trying to, she's dipping as you got those, the real kind of cloud native companies, Google and Amazon on one end. You have the legacy players with Microsoft and Oracle and IBM on the other. So you have kind of this really highly competitive environment. We're seeing for the first or second time, Andy Jassy did that reinvent, but Werner Vogels put up the competitive slide. He said, this is what we're doing. And he showed the number of services that Amazon offers vis-a-vis the competition. And they didn't actually call out the vendors, but we kind of know. I put up my Twitter feed. You can see it's number one, second one's Microsoft. Google, they put in the Google color sets obviously Google and red is Oracle. Amazon is clearly dominating on the number of services available across the cloud. So when we've been squinting through the numbers on who's leading who, you really got to look at two perspectives. The broad range of available services and the number of customers using those services versus point solutions that might be one instance of the cloud. This is a new architecture. It's not the old waterfall model. It's not the old six months of provision into it. Mention that. This is a highly competitive device. Let's do it. I got to ask you, how do you squint through that and look at the competition that Amazon has? Obviously the numbers are great, but how should customers look at the competition? How are you looking at it? How is our team evaluating the competition? Yeah, well, first of all, John, it is not a zero sum game and it's very nuanced and complicated. And for most customers, it's not a solution. It's many solutions. And it's something that Amazon doesn't love is you talk about things like multi-cloud and they would say, well, we have the best service everywhere and we're the cheapest everywhere and everyone's all in on us. Well, when you get down to it, I hate, I have to defend a little bit. You say like, Microsoft and Oracle, legacy. Microsoft has business productivity applications. They are the leader in this space when you talk about applications. They're the leader in legacy applications. But you start with the Microsoft Office suites and say what you will, but it's still dominant out there. It's there. Microsoft gave enterprises the green light to go to SaaS and they really don't drive that. That's a direction. But they're a legacy vendor. What you just said is they're legacy. But Azure is doing quite well. Oracle's going to the cloud. Oracle's got a phenomenal team. They've been building some really interesting things in cloud, but obviously no doubt about it, Amazon's leading. But when you talk to users and you say, okay, there's lots of reasons why they might be using Azure for various pieces. Everybody is using AWS. Except for those people, John, you didn't implement the ones that compete against Amazon. And obviously that's a concern because today Amazon is competing against more and more companies. So, you know, that's a little bit. Well, I'm not down on the legacy. What I'm trying to point out is that IBM was clear about this. They were upfront about it. At IBM, think we were just at, which is they're saying the legacy has to evolve. Doesn't mean legacy is going to die. I mean, Microsoft clearly is going to the cloud. There's stocks at like 90 plus. It was at 26 a few years ago. So Satya Nutella taking over from Balmer. Clearly that's the direction Microsoft has to go and they're doing it. Now, they're a legacy company doing cloud. Oracle, legacy company doing cloud. IBM, legacy company doing cloud. So that's not necessarily a bad thing. I'm just saying these would be the competition. I would put Google and I would put Amazon in a new modern non-legacy kind of world. Yeah, look, and you find one of the lines I love that Warner Vogels talked about is he talked about AWS customers are builders and he said builders have a bias for action. And I love that because if you talk to companies and we've talked a lot on theCUBE, digital transformation, much more than a buzzword, John. I've not talked to anybody that they're like, oh, kind of hogwash. I'm just going to keep doing the same thing I've been doing for the last 10 years and I'll keep being successful. We understand that change needs to happen and it's not easy. So if you've got data scientists, if you've got understanding data, if you're embracing developers, Amazon has affinity with these groups and that's why they build and they listen to their customers and there's new services and another thing, I mean, Amazon gets up on stage and it's not so much, oh, here's the vision of where we're going, here's the stuff that we GA'd that we already had you in the beta. Here's the new things and they might give you a couple of things in preview, but they iterate and move so fast. They're checking the boxes on the product side. They put it much more than checking the boxes to listen to their customers. Well, of course, that's what they say, but we know they're doing that, but they're checking the boxes, they're on the cadence of the Amazon releases, which we've talked about that. But fundamentally, Stu, I think the two big things and this is what I want to get your reaction to is, what's going on with Amazon, the consistent thing is that they lay out the preferred architecture of the modern stack and it's not the same architecture as the old way. Two, the SageMaker and machine learning and where AI is going, if you look at what Matt would discuss, SageMaker, my prediction will surpass Aurora as the number one shipping service for Amazon in the history of their product. That thing is on a torrid pace and the way they lay it out architecturally, they're not head thinking, they're saying, this is what we're doing. They lay out the architecture and they're putting in the machine learning. So to me, I love that. Now all the other stuff that they're doing is just the cadence of Amazon, more announcements, more services, general availability, they're moving the ball down the field as Jeff Frick would say, matriculating the ball down the field. So, your reaction to the modern architecture and the SageMaker machine learning for all developers. Yeah, absolutely. Amazon is setting the bar for how we think about architecture today. They're leaders in serverless and area. I've been hot on the last year or so. Werner was up on stage talking about iRobot who I got the chance to interview last year. So, absolutely, they are the bar that everything is measured on in this industry and if they're not, have the leading product in everything, they're a close second and they have so many services that there is just this flywheel of not only services and customers and the new flywheel we talked about on theCUBE two years ago with Andy Jassy is data. John, I want to throw back at you a question. Amazon released something called AWS Secrets Manager. Do we trust Amazon with their secrets? Is the government coming after Amazon now? There's some of these macroeconomic things happening. You're hearing everything here in Silicon Valley. What are you hearing lately? Well, what I'm hearing is one, people are really kind of not happy with Amazon's success because they market share the expensive other old guard or legacy vendors. And so that's taking its toll. Oracle to me is the biggest company that's impacted most by Amazon. It's clear that the war of words is happening between Allison and Jassy. Two, there's a big policy battle going on in DC. I think Bloomberg broke a story that Oracle is trying to incite Trump to tackle Amazon proper, but then Amazon's affected, Amazon Web Services is affected because they have all that Department of Defense and the CIA deal. So you seeing Amazon for the first, Amazon Web Services for the first time dealing with competitive pressures that's old school tactics, which is policy formulation. And as they say in the policy game in DC stew, the battle is won before it's even fought. This is new territory for Amazon. They really got to get their act together. And if I had to tell Andy Jassy, any advisor would be like, look it, you got to start thinking chess game at this point and understand that the competition is not going to roll over. We've said this on theCUBE many times. Oracle's not going to roll over. IBM's not going to roll over. Now, other companies like Cloud Air who's down 30% on earnings, they're going to have to do a deal with Amazon just like VMware did. So I think you have these big cloud players sucking the oxygen out of the room and there are impacts. The growing startups or pre-public companies or public companies have to either join the ecosystem or find another partner. The major cloud players are going to fight tooth and nail for market share as stakes on the table is the future internet. It's basically everything in cloud that's going to extend to democratization around decentralization, the future of money, sovereignty, government, digital nations, internet of things. These are, it's a high stakes chess game and Amazon is now on new territory. And I think that to me is the big walk away is that no one's going to let them take this uncontested. John, look at this crowd. The Expo Hall is filling up. Customers, you know, are still excited. You know, the buzz that I hear is, you know, Amazon, they listen, they still move really fast when they need to make changes. I remember a year ago when we were here for the Google event was talking, it's like, ah, Google's got such better pricing for the small business and everything like that. A week later, Amazon changed all of their pricing, you know, billing by the microsecond. I talk back to some of my sources and they're like, yeah, Amazon like listened and totally, you know, flipped the game. So there are, you know, sustainable advantages. So difficult in the fast pace of change, but Amazon, you know, is doing better than what Oracle used to do in the past. They were past. They were kind of like, we get the lead and we kind of watch the competition and tack with them with the old sailing analogy. Amazon doesn't worry about the competition. They listen to their customers. They're moving forward. I think they do, they don't admit it, but they have to watch. They got to look in their review mirror a little bit, it's duty to end out the analysis, I would say the following. My observation is this, Andy Jassy and his team are very customer-centric. He said it on theCUBE many times. So as an organization, they're very process-oriented. They all listen to customers. But if you look at what's happening in the world today, is that in the old way, the way that Intuit laid it out that took months to provision software, the old technology business model or venture architecture for a business was make a sound technology decision and all the chips will fall in the right places. It's completely opposite now. If you look what's going on with cloud and blockchain and cryptocurrency and decentralized applications, it's the business model that matters. The technology switching costs are now fungible with Lambda is starting to see these sets of services that could be spun up in parallel. So the scale and flexibility of the platform and Werner Vogels pointed this out on the keynote. This is fundamental. The decisions that are fatal to a company is the business model, the business logic. This is where the action is. That means it's not just a developer game anymore. It's the CTO, it's the data scientist and Werner Vogels lays that out. I think that to me was my big walk away from today's keynote is that Amazon recognizes that it's not just about developers, make developers more productive but bring all those people together to do the right for the business model and the business logic and applications. Yeah, John, we're always looking for what are those things together? Slow down the company, the roadblocks, the one thing Amazon I think did a great job. They're out in front of GDPR, that are super hot topic out there and they just say, you know, categorically, you know, we're ready for GDPR on all of our services so, you know, full steam ahead, you know, don't stop your spending, keep growing. Couldn't be a better time to be a cube host to analyze and talk about the competition. Let's see how Amazon handles the competition. Do they just keep, pedal to the metal or do they address it and play those 3D chess games at the cube here in San Francisco for live coverage of AWS Summit 2018 in San Francisco. More coverage after this short break. We'll be right back.