 We're back here live in Las Vegas. This is SiliconANGLE and Wikibon's theCUBE, our flagship program where we go out to the events, extract the signal from the noise, and we are here, exclusive coverage at Amazon Web Services Reinvent. A lot of signal here, not a lot of noise. If there's any noise, it's people cheering the innovations of Amazon in the cloud, extending their lead. It's an amazing story, we're going to get into it. I'm John Furrier, the founder of SiliconANGLE. I'm joined by co-host Dave Vellante, co-founder of Wikibon.org. Terry Wise is in theCUBE, director of business development at Amazon Web Services, partnerships, the ecosystem. Welcome to theCUBE. Yeah, thanks. Great to be here. You got to be excited. You doubled the number of partners from last year. You guys are just dominating the public cloud, infrastructure as a service, adding new features in like VDI, which sends Cisco stock down 12%, VMware stocks down. Startups are already using you guys. There's a done deal on the startup side. Enterprise is interesting, right? So now you have some announcements. Yeah, we do. It's been a great show for us. I think the thing we're most excited about from an ecosystem perspective is the growth in the number of partners across the globe who are now supporting AWS. And we now have over 8,000 partners in the Amazon Partner Network. We've seen over 70% growth in the number of products through the AWS Marketplace. This gives our RISV partners the ability to sell their software very much in the same manner that we sell infrastructure. One-click provisioning, on-demand pay as you go. It's a very powerful platform. I think the more impressive number there is more than 700% growth in customer hours consumed through Marketplace. So a lot of great growth. And I think, as you said in the enterprise space, we're seeing our partners really have a major impact on our big enterprise transformational projects. It's very exciting. So you guys have really innovated. We were discussing it earlier. I don't want to go into now, but just to reiterate quickly, you got these three levels of innovation down to the hood. Instance gets improved by a zillion factors, scaling up at a large scale. James Hamilton's doing some badass work in that area. Then you got the red shift. You got the middle of the stack. You got all kinds of greatness from elastic beanstalk to RDS, SQS. Then you got the top of the stack, the managed services, and Kinesis. So you guys are essentially closing the loop in the stack. Really excellent move. I think that's, we talked about it earlier. So that's going to open up some doors for more potentially closed doors depending on how you look at it. It's an ecosystem challenge. You're in charge of that map of the ecosystem. And you live or die by the ecosystem. You ultimately, your success will be if you're an API based platform or internet operating system. You need to live and die by the ecosystem. Share with us your vision. What are you doing? How are you going to extend and build on the momentum around the ecosystem? What's the strategy? What's your vision? Yeah, no, it's a great question. What we're seeing from customers, and this really does, as a customer first approach to the ecosystem, is our customers are asking us to enable services and enable the partners that support those services much more at a higher level in the stack. So customers want to buy application services, vertical expertise, really the solution bundling and packaging from the ecosystem. And that's really where the long-term play is. That's where the higher revenue play is for the ecosystem. That's where the bigger margins are. And that's what customers want to buy. So we're taking care of all of the plumbing underneath, which frankly, over time, will be smaller revenue opportunities, smaller margin opportunities. And the other thing we're doing is really investing in training and enablement to get the ecosystem partners to move up in the stack to provide much more of the solution. So I got to ask you one question before I give it to Diggs. I know he's got a lot. So we talk about Amazon has a two prong strategy, use our football analogies, because we love football. Niners and Patriots fans, not so much Seahawks. I know you're Seattle. I'm a Jets fan, so. Okay, good. The ground game is you just yard at a time, move the chains, first and 10, do it again. That's blocking and tackling, continuous innovation. And then you throw the ball downfield with Kinesis. What's your big passing play to move the ball in the ecosystem? Because obviously you got your normal suspects that you're knocking down, first down, the little partners in the ecosystem. Remember, rising tide floats all boats. But we saw our tweet by Sanjay Poon in a VMware. We said, welcome to the VDI market. Kind of desktop as a service with workspaces. And then said, let's partner. That's interesting. It wasn't arrogant, it was saying, let's partner. So how do you go and move the ball down with these big players? Potentially where the sands are shifting, you guys have really an enablement model. How do you partner with the big guys, like VMware, like the big dogs? Yeah, sure. I mean, well, big part of our strategy from day one has been to really partner with the products and vendors that our customers want to use. So Oracle's been a fantastic partner for us for the last five years. We've got a terrific partnership with SAP. I will say SAP is very much an innovative thinker in this space. They recently certified HANA to run on our CR-1 instances fully in production in both a single node and scale out cluster model. That was announced four weeks ago at SAP TechEd. We've run all kinds of Microsoft products on the platform in production for a number of customers. So we've always had a big partner ecosystem play. I'll say at the same time, one of the more exciting things I'm seeing is the rise of the upstarts. Some people refer to them as born in the cloud ecosystem providers. Everybody from a second launch and a cloud reach and a cloud package in Japan to Data Loose in Latin America on the systems integrator side. Then you've also got really interesting software companies like Acquia in the content management space that didn't exist five years ago. And now they're really reinventing the content management space. So it's a really, really interesting mix of kind of the old guard coming into the new world. Being pulled along to a large extent by a lot of new players. Terry, you guys were talking about football before, Rex Ryan, defensive oriented coach. You don't have a defensive mindset with regard to the ecosystem. It's customer driven, any customers want. You'll open up your arms and bring the folks in the ecosystem in. Having said that, you mentioned some of the companies that you're working with Oracle, SAP, great partners at the same time. A lot of what Amazon is doing is disrupting. We've heard the term old guard. Many, many times here. These are old guard members of your ecosystem. So how do you deal with, let's call it specials within the ecosystem. They might not want to list some software in the marketplace. So they might want special terms. How do you, I mean, you guys are very much like consistency. It seems. So how do you deal with that dissonance? Square that circle for me. Yeah, we do. I think the big thing is helping our partners understand what the long-term market opportunity is. I mean, Amazon as a company as a whole is a long-term player in whatever market we're in and very much so in the web services and cloud computing space. And I think it's up to us to really demonstrate to the ecosystem, hey, what is the long-term play? And where is the long-term value? And I think most of the ecosystem has now figured out that creating an annuity-based revenue stream over time is a better overall business model. You're not starting the year at zero. You're providing a much better customer experience, a much stickier customer experience. And that's what the marketplace is doing. And that's what a number of our software as a service partners are doing by bringing their product to AWS. Yeah, there's certainly some holdouts there and in niche parts of the ecosystem. But I think over time as they see the value they can provide to the customer and in turn the value that they're going to capture as from a company and shareholder perspective. And we're seeing that move quite a bit faster. Do you sit down and do hardcore business cases with these guys? You pretty much give them the parameters of the model and say, you guys got to figure it out yourself. No, it's a great question. We absolutely sit down and help them understand the license model and market opportunity. We spend a lot of time investing in the technical enablement to get the developers up to speed so they can build quality products on the platform. But the other side of that is, if we don't help them understand the business opportunity to help them build the business, then the model falls apart. So we absolutely help them understand, hey, what is the near term? How do you make that change crossover into annuity-based business model? And ultimately long-term, how do you capture more of the value for their organization? You know, you guys don't obviously break out AWS. It's something that you keep very close to the best. Do you get pressure from the ecosystem to get visibility on those numbers so they can sort of measure how much, what the ecosystem economy looks like relative to AWS? We get a lot of pressure from the analyst community, not so much the ecosystem. Well, I'm an analyst. Yeah. That's what I'm saying. It's like back to our way of asking. Hey, you know, that's a hidden question. The day we actually tell people what our revenues are, there's probably going to be a whole lot of people out of work are looking for something else to do. So, you know, we don't want to damage that part of the ecosystem. We are collecting small puzzle pieces, as do we always say, right, Dave? We'll have that puzzle put together. I got to ask you about the, that's just the dominance of AWS at this point. You guys really do have a lead, the way you're executing in the public cloud, dominating the infrastructure as a service marketplace. That's obvious. But we're all changing. So if we're to find data center DevOps is the future. You're seeing that heavily. That's why you're getting such great residents with the enterprise, as well as the developer. So I got to ask you, some people are saying, oh, you're the Microsoft of the next generation, in kind of a negative way. Like, you know, Microsoft was dominant, also great. They all had a great ecosystem, they had a great competitive advantage. You guys have that feel right now where the ecosystem is going to be a key part of it. And Andy Jassy is on stage saying, we want to reduce the prices for our customers. The ecosystem's the opposite. You want to increase the money that they make. So as your partners, I want to hear your strategy on how, what's in it for me? That's a partner angle. They want to know, okay, I love Amazon. I'm going to commit. I'm going to go all in with Amazon. What's in it for me? Am I making what order of magnitude profit? What are you guys doing to help me mark a place? What's out there? Yeah, sure. So, you know, we don't look at it really for, you know, we don't spend a lot of time looking at the competitive nature of this and all the different comparisons are out there. You know, they're interesting and perhaps amusing in some cases, but this very much is day one of cloud computing. We got a lot of work ahead of us. The partner ecosystem is absolutely critical to the success, most importantly, of our customers. You know, at the end of the day, we're not going to be successful or capture, you know, the overall opportunity for AWS. If we don't help our partners be successful in serving our customers. And a big part of that is actually, you know, helping them understand how they make money and what the economic opportunity is. But if you look at it, you know, in the system's integrator side. Is that marketplace in particular? Or is that more on just? Across the board. Across the board. I'll start with, you know, kind of the consulting partners. Yeah, all of the things that consulting partners have traditionally done almost all play in the cloud space. Yeah, determining what projects you bring over to the cloud. What does the architecture look like? What is the security model? What are the integration plans? Use cases. Exactly. All the use cases? Exactly. So everything that they've traditionally done for clients is more the higher value work that clients really like to pay for. And you know, are happy to pay for that expertise. That all applies in this model. It's just a different deployment and hosting mechanism from that perspective. Now we got a lot of value added services that they can take advantage to do new things. We were talking about big data before. Here's an entire new revenue opportunity for most of these guys, because there's some capability that just hasn't existed in the market before. So that's pretty exciting. Then on the ISV front, you know, I think one of the funnest things I see in the ecosystem are new products coming to market. And that could be from a brand new vendor, or it could be from a more traditional vendor that's getting into a new space and bringing a new product. All of a sudden they launch a product through Marketplace or on AWS and they've got a global business overnight. Let's drill down on that, because that's interesting. So one of the trends that we were pointing out earlier on theCUBE is that you're seeing some of the older companies and the new companies. You guys, you see Uber, clean sheet of paper, no problem, they all get the cloud. But you got older companies like, you got CSC buying service mesh. We had another firm on earlier that's fully integrated web development user experience, full of, you guys are enabling folks to essentially be a technology provider, not just holding hands and walking them into another vendor or a mish-mash solution. You actually are enabling these guys actually to live their own products. So that's a new dynamic. So I want to drill down on that. How does that work? If I'm a company that's like, hey, you know what? I used to go to a vendor for that solution. I want to just do it myself. I have the touch point with the customer. I want to provide the cloud. What do they do? They just join up with Amazon. I take us through that. Yeah, so it really kind of depends, it's use case driven as you mentioned before. It kind of depends on what gap do they see in the market and how do they want to serve that, fill that gap with their product. Is it more of a technology infrastructure product? Is it more of an application and solution? Is it something brand new like an SAP HANA in-memory database? Again, sort of bringing that next generation of capability to the market. So we engage at the level that our partners want to engage with. We'll get very deep technically with these folks to help them architect the best solution using the components that we bring to the table. But also recommending other third-party components in the ecosystem so that they can stitch together the solution they want to bring to market. And I'll point to the NASDAQ, FinCloud. We would traditionally think of NASDAQ as a customer for our services. But what we've been able to do with FinCloud over the last year, it really is creating a whole new ecosystem, a whole new solution and reinventing a market to some degree. That's the exciting thing. If you believe the notion that the API economy or data economy, whatever hashtag we use in our crowd chats is going to happen, you're going to have essentially one big connected at data center on the world distributed, which kind of speaks to the vision that you guys have. And we applauded Andy Jassy right up for that. Hey, good job, great job, done deal. If you believe that, then the whole notion of service catalogs comes into play across the board, not just IT, but for developers and service providers in the ecosystem. What are you guys doing with the marketplace? Is there an app store in your future? How new is that? I mean, obviously you're not new to retailing. So as a core competence, what's going on internally? Share with us, what's going on in Amazon? What does that culture just look like? Distribution, I want sales. Yeah, I think one of the things that we like to do here is launch things into the marketplace, primitives to a certain degree and see how the community takes that and evolves that. We get a far, far better response from a massive community that takes our services and evolves versus what we can do internally, even though I think we do some of that pretty well ourselves. In the marketplace, I think it's such early days for marketplace and what customers are you going to want to buy from us in that one click on demand pay-as-you-go provisioning model. Today we have a number of software products. We have infrastructure, but you mentioned APIs. We have some data sets. I think we're not even scratching the surface on data marketplace. All the different data out there, both public data sets, private data sets, how do you bring those together? People publishing APIs into our marketplace and others, bringing these marketplaces together. I mean, yeah, very, I mean, I wouldn't even call it early days. I mean. Yeah, Dave and I always joke, and we do like to talk about the competitive landscape because we have to keep track of the horses on the track, but we say you guys are only seven years old, really in cloud with the formal structure, going back to the original OP1 that you guys put out there to beze us back in the day. So really what's happening is that Dave and I say, hey, this is top of the first inning. Everything else was spring training, right? So you still have pressure. You got a good lead. This is so early. How do you deal with the fact that you're disrupting the market on one hand and innovating and developing use cases in real time? So you got to balance that because I can see the consulting guys kind of trying to keep up. You're disrupting the existing market and innovating. It's rare you see a company do two things. So on the ecosystem side, how do you keep track of all that? Yeah, it's a good question because software companies have traditionally had long-term product development cycles where they might have one or two major releases during the year and we may have three major releases during a week. So it's a fundamentally different way in terms of how we operate as a company. And I think what's incumbent upon us to help the ecosystem understand and start to bring in more of that agile development, scrum development model, whether they're building a software product or delivering a solution for a customer. That rapid iteration really lets us respond to customer needs a lot faster because we had a one-year roadmap. I guarantee customer needs are going to change a lot sooner than that and we might miss the mark. And that's not just an AWS situation. I mean, that's a market situation. Yeah, the customer dynamic, they're moving much, much faster. It's a global economy. And I think we've got to change the way we've traditionally done business to respond to that and better serve our customers. So when you look at the history of the IT business, IBM, its peak had half the industry's revenue and two thirds of the industry's profit. And it really didn't have a great ecosystem. The ecosystem was dominated by IBM and it was everybody trying to plug into their model and reverse engineer what they did and then Intel and Microsoft when IBM handed the monopoly over and you were at Intel, so you know this had great ecosystems. The size of the opportunity for the ecosystem was much, much greater than either of those companies, even though, of course, they made more profits than anybody else. And now open source has really sort of created new opportunities. So when you think about, so the great ecosystems, here's the premise, the great ecosystems create, the leader of that ecosystem, in this case, Amazon, creates more opportunity for the ecosystem actually than it does for itself, collectively. Can you say that about the AWS ecosystem? Do you believe that? I absolutely believe it. I mean, again, you said it, it's still very early days here, but it would be very narrow-minded of us to think we could do this ourselves in any form or fashion. I mean, this is very much a global economy. There's all kinds of different needs in the countries we serve. We have to have a vibrant ecosystem on the software side, on the consulting side. If we're going to really help our customers maximize the opportunity that cloud provides, it is an ecosystem driven thing. Frankly, I just don't see how it could work otherwise. Well, so we were talking to Andy Jassy a few weeks ago in New York, and we were talking about the TAM. John knows I love to talk about the total available market, and we just sort of threw out a trillion, and said, yeah, sounds about right. And we really believe that. I mean, in fact, it could be bigger than a trillion, but let's say a trillion, because that's a- Just a round number, yeah. A big enough number to grok. And so it is early days, because while you don't break out numbers, we know it's in other, and we know how big other is. So you're tiny relative to that TAM. We are. So how do you guys look at the TAM, both for yourself, but more importantly from the standpoint of the ecosystem? What kind of conversations do you have with your ecosystem about that TAM, knowing that some of that for them is cannibalization. It's not for you. So talk about that a little bit. Yeah, I mean, I think there's as much new opportunity in this space as there is replacement of things we've done in the past. So I think that's really, if you look at it, I think the total adjustable market grows to significantly greater than whatever number we pick. You said a trillion, let's use that. I mean, with all of the enablement that we have and the new products coming and the growth of the ecosystem, I think we grow it together. But at the same time, we get a chance to go help customers reinvent the way they've done things. And I think the thing I'm most excited about is as an industry, there's been so much inefficiency in what we've provided to customers in the past. When you're getting 15% utilization of your software licenses and hardware infrastructure, maybe 85% of the investment is sitting idle at best. And that's just something that we've got to change to help our customers deliver more value to the business. And those that are on this journey with us and leading with us are definitely going to be the winners in the marketplace. Well, I actually buy that because I have sort of a setup question because the market is elastic, no pun intended, but if you cut the prices of compute and storage, historically, the market's always grown. And essentially that's what you're doing. So you're not, I like the term paving the cow path. You're not paving the cow path. And that's why you're able to, your customers are able to disrupt industries. Companies like Uber are totally changing the game. Terry, I got to get your, we're wrapping up on the time here and the segment, but trust is important in ecosystems. And all the successful ones over the years, you've seen this movie before, dynamics might change a little bit in the marketplace, but trust always is the key. So I want you to quickly talk about trust and just your philosophy on examples of, customers have stepped up and give you the kind of testimonials and your vision going forward in this dynamic marketplace. Yeah, I mean, I think one of the things that it helps us establish trust across the ecosystem, I include customers in this, is in our pricing model. We're very transparent at what our pricing is. We don't discriminate against customers based on the size of their business. There's opportunities for everybody to get into a discount tiers, which we publish on our websites, regardless of whether you're a Fortune 5 company or a four guys in a garage that just started their business yesterday. So I think that's how, one way we establish trust, and I think another way we establish trust is when we release services, we release them in production and they're ready to go and they're released. It's not an endless string of betas. And it's something we take great pride in making, making sure what we release is ready to go. Well, we really love watching you guys. We're going to watch the ecosystem, a very important part of it. I think it's one that's emerging and really fast. So you're going really fast and you don't want to hit that corner too fast. You got to be mindful of that. Really appreciate your time. I want you to end the segment with a bumper sticker on the car that's leaving Las Vegas at a reinvent. What does that bumper sticker say on that car that's speeding down the freeway? What's the vibe? What's the takeaway? What does that bumper sticker say? Yeah, something along the lines of everybody at this conference was at the forefront of reinventing an industry and the models that we're all putting in place are going to be the model five, seven, 10 years from now. But I think more importantly, 50 years from now. I mean, that's the legacy we're looking for. Total game changer, modern era. As we say, it's the modern era, the modern era of tech sports and that's the platforms in Amazon. Only seven years old and doing great. Again, top of the first inning, Dave. Everything else was spring training. That's our quote from here. That's what I'm going to say. Top of the first inning, everything else was spring training. We'll be right back. Exclusive coverage at Amazon reinventing after the short break. This is Silicon Angles theCUBE. I'm John Furrier with Dave Vellante. We'll be right back.