 From theCUBE studios in Palo Alto in Boston, bringing you data-driven insights from theCUBE and ETR. This is Breaking Analysis with Dave Vellante. Recent conversations with IT decision makers show a stark contrast between exiting 2023 versus the mindset when we were leaving 2022. CIOs are generally funding new initiatives by pushing off or cutting lower priority items. While security efforts are still being funded, those that enable business initiatives that generate revenue are taking priority over cleaning up legacy technical debt. The bottom line is, for the moment at least, the mindset is not cut everything, rather it's put a pause on cleaning up legacy hairballs and fund monetization. Hello and welcome to this week's Wikibon Cube Insights powered by ETR. In this Breaking Analysis, we tap recent discussions from two primary sources. Year-end ETR roundtables with IT decision makers and CUBE conversations with data, cloud, and IT architecture practitioners. The sources of data for this Breaking Analysis come from the following areas. Eric Bradley's recent ETR year-end panel featured a financial services DevOps and SRE manager, a CISO and a large hospitality firm, a director of IT for a big tech company, the head of IT infrastructure for a financial firm and a CTO for global travel enterprise. And for our upcoming SuperCloud 2 conference on January 17th, which you can register free by the way at supercloud.world, we've had CUBE conversations with data and cloud practitioners, specifically heads of data in retail and financial services, a cloud architect and a biotech firm, the director of cloud and data at a large media firm and the director of engineering at a financial services company. Now, we've curated commentary from these sources and now we share them with you today as anecdotal evidence supporting what we've been reporting on in the marketplace for these last couple of quarters. On this program, we've likened the economy to the slingshot effect when you're driving and you're cruising along at full speed on the highway and suddenly you see red brake lights up ahead so you tap your own brakes and then you speed up again and traffic is moving along at full speed so you think nothing of it. And then all of a sudden the same thing happens. You slow down to a crawl and you start wondering what the heck is happening and you become a lot more cautious about the rate of acceleration when you start moving again. Well, that's the trend in IT spend right now. You know, back in June, we reported that despite the macro headwinds, CIOs were still expecting six to 7% spending growth for 2022. Now that was down from 8% which we reported at the beginning of 2022. That was before Ukraine and Fed tightening. But given those two factors, you know, that seemed pretty robust. But throughout the fall, we began reporting consistently declining expectations where CIOs are now saying Q4 will come in at around 3% growth relative to last year and they're expecting, you know, or should we say hoping that it pops back up in 2023 to four to 5%. The recent ETR panelists or when they heard this are saying based on their businesses and discussions with their peers, they could see low single digit growth for 2023. So one, two, three percent. So this sort of slingshotting or sometimes we call it a seesaw economy has caught everyone off guard. You know, Amazon is a good example of this and there are others, but Amazon entered the pandemic with around 800,000 employees. It doubled that workforce during the pandemic. Now, right before Thanksgiving in 2022, Amazon announced that it was laying off 10,000 employees and Jassy CEO of Amazon just last week announced that number is now going to grow to 18,000. Now look, this is a rounding error at Amazon from a headcount standpoint and their headcount remains far above 2019 levels. Its stock price, however, does not and it's back down to 2019 levels. The point is that visibility is very poor right now and it's reflected in that uncertainty. It was seeing a lot of layoffs. Obviously the stock market's choppy, et cetera. Now, importantly, not everything is on hold. And this downturn is different from previous tech pullbacks in that the speed at which new initiatives can be rolled out is much greater thanks to the cloud. And if you can show fast return, you're going to get funding. Organizations are pausing on the cleanup of technical debt unless it's driving fast business value. They're holding off on modernization projects. Those business-enabled initiatives are still getting funded. CIOs are finding the money by consolidating redundant vendors and they're stealing from other pockets of budget. So it's not surprising that cybersecurity remains the number one technology priority in 2023. We've been reporting that for quite some time now. It's specifically cloud, cloud native security, container and API security. That's where all the action is because there's still holes to plug from that forced march to digital that occurred during COVID. Cloud migration, kind of it's showing here on number two on this chart, still a high priority. While optimizing cloud spend is definitely a strategy that organizations are taking to cut costs, it's behind consolidating redundant vendors by a long shot. There's very little evidence that cloud repatriation, i.e. moving workloads back on-prem is a major cost-cutting trend. The data just doesn't show it. What is a trend is getting more real time with analytics. So companies can do faster and more accurate customer targeting and they're really prioritizing that obviously in this down economy. Real time, we sometimes, what's real time? Real time we sometimes define as before you lose the customer. Now in the hiring front, customers tell us they're still having a hard time finding qualified site reliability engineers, SREs, Kubernetes expertise and deep analytics pros. These job markets remain very tight. Let's stay with security for just a moment. We said many times that prior to COVID, zero trust was this sort of undefined buzzword and the joke of course is if you ask three people what is zero trust, you're going to get three different answers. But the truth is that virtually every security company that was resisting taking a position on zero trust in an attempt to kind of avoid, they didn't want to get caught up in the buzzword vortex, but they're now really being forced to go there by CISOs. So there are some good quotes here on cyber that we want to share that came out of the recent conversations that we cited up front. The first one, zero trust is the highest ROI because it enables business transformation. In other words, if I can have good security, I can move fast, it's not a blocker anymore. Second quote here, ZTA, zero trust architecture is more than securing the perimeter. It encompasses strong authentication in multiple identity layers. It requires taking a software approach to security instead of a hardware focus. Next one, I'd love to have a security data lake that I could apply to asset management, vulnerability management, incident management, incident response, and all aspects for my security team. I see huge promise in that space. And then the last one, I see NLP natural language processing as the foundation for email security. So instead of searching for IP addresses, you can now read emails at light speed and identify phishing threats. So this is a small snapshot of the mindset around security. But I'll add, when you talk to the likes of CrowdStrike and Zscaler and Octa and Palo Alto Networks and many other security firms, they're listening to these narratives around zero trust. I'm confident they're working hard on skating to this puck, if you will. You know, good example is this idea of a security data lake and using analytics to improve security. We're hearing a lot about that. We're hearing architectures, there's acquisitions in that regard. And so that's becoming real. And there are many other examples. Because data is at the heart of digital business, this is kind of the next area that we want to talk about. It's obvious that data as a topic gets a lot of mind share amongst practitioners. But getting data right is still really hard. It's a challenge for most organizations to get ROI and expected return out of data. Most companies still put data at the periphery of their businesses. It's not at the core. Data lives within silos or different business units, different clouds, it's on-prem, increasingly it's at the edge. And it seems like the problem is getting worse before it gets better. So here are some instructive comments from our recent conversations. First one, quote, we're publishing events onto Kafka. Having those events be processed by Dataproc. Dataproc is a Google managed service to run Hadoop and Spark and Flank and Presto and a bunch of other open source tools. We're putting them into the appropriate storage models within Google and then normalize the data into BigQuery. And only then can you take advantage of tools like ThoughtSpot. So here's a company like ThoughtSpot. And they're all about simplifying data, democratizing data, but to get there, you have to go through some pretty complex processes. So it's a good example. All right, another comment. In order to use Google's AI tools, we have to put the data into BigQuery. They haven't integrated in a way AWS and Snowflake have with SageMaker. Moving the data is too expensive, time consuming, and risky. So I'll just say this, sharing data is a killer super cloud use case and firms like Snowflake are on top of it, but it's still not pretty across clouds and Google's posture seems to be, we're going to let our database product competitiveness drive the strategy first and the ecosystem is going to take a back seat. Now, in a way, I get it. Owning the database is critical and Google doesn't want to capitulate on that front. Look, BigQuery is really good and competitive, but if you can't, you can't help but roll your eyes when a CEO stands up and I'm not calling out Thomas Kurian. Every CEO does this. It talks about how important their customers are and they'll do whatever is right by the customer. So look, rolling my eyes on that. Now, let me also comment, AWS has figured this out. You know, they're killing it in database. You take Redshift, for example. It's still growing as is Aurora, really fast growing services and other data stores, but AWS realizes it can make more money in the long-term partnering with the snowflakes and data bricks of the world and other ecosystem vendors versus sub-optimizing their relationships with partners and customers in order to sell more of their own homegrown tools. I get it. It's hard not to feature your own product. IBM chose OS2 over Windows and tried for years to popularize it, failed. Lotus, go back way back to Lotus one, two, three. They refused to run on Windows when it first came out. They were running on DeckVax. Many of you young people now, it's never even heard of DeckVax. IBM wanted to run everything only in its cloud, the same with Oracle originally. VMware, as you might recall, tried to build its own cloud, but eventually when the market speaks and reveals what seems to be obvious to analysts years before, the vendors come around, they face reality and they stop wasting money fighting a losing battle. The trend is your friend, as the saying goes. All right, last pull quote on data. The hardest part is transformations, moving traditional informatica, teradata or Oracle infrastructure to something more modern and real-time. And that's why people still run apps and COBOL. In IT, we rarely get rid of stuff. Rather, we add on another coat of paint until the wood rots out or the roof is going to cave in. All right, the last key finding we want to highlight is going to bring us back to the cloud repatriation myth. Followers of this program know it's a real sore spot with us. We've heard the stories about repatriation. We've read the thoughtful articles from VCs on the subject. We've been whispered to by vendors that you should investigate this trend. It's really happening, but the data simply doesn't support it. Here's the question that was posed to these practitioners. If you had unlimited budget in the economy miraculously flipped, what initiatives would you tackle first? Where would you really lean into? First answer, I'd rip out legacy on-prem infrastructure and move to the cloud even faster. So the thing here is, look, maybe renting infrastructure is more expensive than owning. Maybe, but if I can optimize my rental with better utilization, turn off compute, use things like serverless, get on a steeper and higher performance over time and lower cost silicon curve with things like Graviton, tap best of breed tools in AI and other areas that make my business more competitive, move faster, fail faster, experiment more quickly and cheaply, what's that worth? Even the most hard-o CFOs understand the business benefits far outweigh the possible added cost per gigabyte. And again, I stress possible. Okay, other interesting comments from practitioners. Quote, I'd hire 50 more data engineers and accelerate our real-time data capabilities to better target customers. Real-time is becoming a thing. AIs being injected into data and apps to make faster decisions, perhaps with less or even no human involvement. That's on the rise. Next quote, I like to focus on resolving the concerns around cloud data compliance. So again, despite the risks of data being spread out in different clouds, organizations realize, cloud is a given and they want to find ways to make it work better, not move away from it. Same thing in the next one, quote, I would automate the data analytics pipeline and focus on a safer way to share data across the states without moving it. And finally, quote, the way I'm addressing complexity is to standardize on a single cloud. Mono cloud is actually a thing. We're hearing this more and more. Yes, my company has multiple clouds, but in my group, we've standardized on a single cloud to simplify things. And this is a somewhat dangerous trend because it's creating even more silos and it's an opportunity that needs to be addressed. And that's why we've been talking so much about super cloud as a cross-cloud unifying architectural framework, or perhaps it's a platform. In fact, that's a question that we will be exploring later this month at super cloud too, live from our Palo Alto studios. Is super cloud an architecture or is it a platform? And in this program, we're featuring technologists, analysts, practitioners to explore the intersection between data and cloud and the future of cloud computing. So you don't want to miss this opportunity. Go to super cloud.world. You can register for free and participate in the event directly. All right, thanks for listening. That's a wrap. I'd like to thank Alex Meyerson who's on production and manages our podcast, Ken Schiffman as well. Kristen Martin and Cheryl Knight, they helped get the word out on social media and in our newsletters. And Rob Hof is our editor-in-chief over at siliconangle.com. He does some great editing. Thank you all. Remember, all these episodes are available as podcasts wherever you listen. All you got to do is search breaking analysis podcast. I publish each week on wikibon.com and siliconangle.com where you can email me directly at davidotvalante at siliconangle.com or DM me at dvalante or comment on our LinkedIn posts. By all means, check out etr.ai. They get the best survey data in the enterprise tech business. We'll be doing our annual predictions post in a few weeks once the data comes out from the January survey. This is Dave Vellante for theCUBE Insights, powered by ETR. Thanks for watching everybody. We'll see you next time on breaking analysis.