 Okay, we're back here. It's four o'clock here in Pacific Time. This is SiliconANGLE's continuous exclusive coverage of Hadoop World 2012. I'm John Furrier, the founder of SiliconANGLE.com, joined with Jeff Kelly, an analyst at Wikibon, my co-host, and we're here with Paul Doscher, the CEO of Lucid Imagination. Paul, welcome back to theCUBE. Great to be here, thanks, sir. I want to just personally thank you for your generous underwriting support to allow us to bring this independent coverage to the world. And share that knowledge and you're an open source guy. You understand, bringing value to people. Absolutely, absolutely. We love the model. The freemium model. That's right, we drank the Kool-Aid, man. We're in. So, before we jump into some cool tech conversations, just tell the folks out there what's happening at the show here. Right now, on the ground, let's look at that. What's the vibe like? What are some of the conversations? What's happening? Describe in your mind your mind's eye for the folks out there, what's happening here. So, it's interesting, what's happening in the world, what's happening here? So, it's interesting. First of all, you have to be impressed with the number of people, right? That come through these events now and it just seems to be escalating faster, I think, than people ever anticipated. The second thing, which, you know, we're getting sort of the firsthand feedback from the booth is, it's going viral. It's going commercial, right? It used to be, it was a lot of open source, where it was all about Hadoop and it was all sort of an open source community thing and it was cool about the technology. Now you're seeing application developers come and really want to understand what the use cases are, what the value proposition is, how do I deploy it? I mean, the level of conversation have definitely gone up in terms of the value proposition for the enterprise. And again, that's just an indication that it's going commercial and it's going commercial in a big way and pretty quickly. So, it's very cool. We're really excited. So, we covered the HBase conference a couple weeks ago. We actually had the first SiliconANGLE 2 channel so in the spirit of the ESPN. Like ESPN, here we go. In the spirit of the ESPN of tech that our mission is for, we actually had a second channel. So, we were at EMC World. And I flew back to San Francisco to cover the HBase conference. And, you know, it was awesome. It was about HBase and about some of the commercialization. Facebook really did a good job, stumbled upon as well. Talking about some production, Adobe as well. But still it's nascent, it's still getting almost production. But one of the things that they talked about at HBaseCon was HBase and Hadoop were really turning into great opportunity to index things. Yeah, yeah. So, obviously, Batch, you think about that. Then you think about it. It's not a bad idea. Batch, you store. Absolutely. You got to create indexes. So, search is a big part of that. And when we talked to the folks just last week at HP Discover, the big conversation is autonomy. Yeah. Right? So, what are you talking about? Search is everywhere. So, what's your perspective on that? I mean, you guys are positioned right there. What is the search business these days? So, when you look at the data about what the content looks like in the enterprise, 90% of it is unstructured or semi-structured. You couple that with machine-generated data. And now you have this huge mass of ever, you know, scalable and increasing set of content and information that you need to parse in order for it to be a value. Well, that's search. I mean, at the end of the day, it's that a capacity to do entity extraction, text extraction, parsing of information and be able to allow people to get access to it, you know, through keyword navigations or faceted navigations, whatever terminology you want to use. It is a pure and clear difference from a structured data. You know, a lot of people, I think, initially were thinking of Hadoop as sort of the data at warehouse 2.0, right? Put all your structure transactions in there then export it or map reduce jobs to a relational data structure, run SQL queries and now you're in a BI technology. And quite honestly, we think that is a dramatic undersell of the value and the opportunity that Hadoop represents. And so now that people are looking at search as a key component of this technology stack, we think it brings tremendous opportunity to the search, you know, market space, but we think for us specifically, we're pretty excited about it. Yeah, so you guys recently released into beta your big data platform, bringing together, you know, Lucene Solar and Hadoop. Talk a little bit about that offering, that beta program and exactly what is the goal? What is the, where do you see that going in terms of use cases? What is it, was it the sweet spot it's trying to hit? So thanks for the softball. So. They're going to get harder, don't worry. We start with the easy pitches, some hanging pairs and we throw the fatball. You know, we soften you up first and then we get you good later. All right, all right, then we get to the real news hard stuff. Okay. Yeah, no, we did. We released so at our Lucene Revolution Conference in the beginning of May, we announced the beta, our big data beta. And what we've done is we've built an application development platform on top of Hadoop that integrates pig, H-bay, zookeeper. We have Chef scripts in there. What it allows you to do, it allows you to, and they're all integrated. So it's a key difference that we've integrated all these technologies to expand the set of use cases that an enterprise now can use to develop big data applications. You know, a number of the other vendors, they certify that these products work together in the distribution, but then they leave it up to you in order to kind of put the pieces together to figure out how all this stuff actually works. What we've done is we've integrated it and we provide you, again, the API sets so now you can actually start to develop application. Again, back to my earlier comment. With the content being 90% semi-structured or unstructured in the enterprise, and again, add social information and machine-generated data, we now have the capacity to develop applications across a wide set of use cases and really test a wide variety of theories now that we have information at the transactional level. But if that wasn't good enough, what we've also done is launch it in the cloud. So it's up on Amazon right now and what we think is we think this is going to be a tremendous catalyst for enterprises because everywhere we go, we hear people are experimenting with Hadoop. They're trying to understand it, they're trying to get up the learning curve, understand how it works, how to use it. But an enterprise still has to provision the hardware, still have to get the resources, still have to hire or acquire the service expertise to deliver it and then they have to decide on the software that they're going to use to actually deliver value or build the applications. We give you the complete stack, we can have it up and running in a couple of days and so it allows you to bring a representative sample set of your data. We can load it easily and now it gives you the capacity to go ahead and focus on your business application. Develop your algorithms, develop your theories, test them out and then do that for whatever time makes sense and once you have user acceptance and once you understand and appreciate the value of the technology, you now get to either move it in-house and scale it out or scale it out on the cloud. So here's a question for you that's maybe a little bit harder than that one. Enterprise search. That's okay, I don't mind the easy one. Okay, we're going to mix it up a little bit. Body blow and the head shot. Enterprise search is changing. So you see what autonomy's done, obviously the evaluation is insane. They have a PPP. They all started out as simple indexes. Even Google had an appliance back in the name, they still have that, I've never explored that, but information governance and this whole big data has brought the information business model to a head. So what are you guys doing with that because the applications and or needs of the marketplace are not coming from IT or the tech geeks, they're coming from business. So how are you guys addressing that? Because you guys are a tech company, you're going to sell that directly, is there a channel, are you guys selling direct or what's the business model for you guys there? So let me maybe come back and then I'll do that directly. So you mentioned earlier on in terms of the evolution of the search market, right? The search market was right, it was purely like give me your document management system and we'll parse it and we'll give keyword search. But then the search market actually started to evolve to much more application specific. You know, whether it was customer support application, e-discovery, what have you. Now with big data, there's sort of this now, at least for our purposes, the value we see as being a horizontal play, we can now go in the enterprise and address a broad range of use cases. So autonomy really, their growth accelerated when they acquired Zantaz and Interwoven and they took what was a fundamental search platform and they went ahead and made it application specific. Now they're sort of retooling their messaging to say, oh no, wait a second, we're big data too. So they're trying to kind of shift once again and now go to a much more horizontal play using an integrated technology stack. Whereas an open source and the beauty of it and why people adopt it is because you can take that nugget and you can make it into whatever diamond you want. And that's the value and the opportunity. And so we're going to continue to be very horizontal, like for example, in the big data. So we've got an overwhelming response to that. We have companies that are very, very large, household names that you would recognize, we've got large systems integration firms that have come to us, we've got startup companies, they're in the areas of healthcare, insurance, customer support, telecommunications, genetic research. So we have such a broad range of application use cases right now just within the beta customers that have come to us that it's going to give us tremendous opportunity to really understand where the real value proposition is and then to deliver that value across a wide range of different horizontal markets. I mean, this is great. It really is going to turn out to be just a great opportunity for us. So as the applications develop, what do you see? We're seeing like for autonomy, for example, just to bring HP back into it. We've seen a complete transformation and when I was very skeptical about HP and how they were going to handle it and now with Mike Lynch leaving the head guy, but it was interesting. Autonomy has changed the mindset of the folks within HP to the point where the printer division is going to create a front end with the printer and have a back end operation, which is basically the Xerox business model. Managing all the work flow, there's a transactional side, they're creating a SaaS model on the cloud. So with autonomy, this creates more head room on the business side. Are you seeing similar things in your customer base where you guys are coming in and changing the business model expansion of their clients? Well, I mean, open source again has been deployed so broadly. When you look at the biggest websites in the world, Facebook, Twitter, Groupon, et cetera, Shopszilla, they all use open source technology. So you see it very much in the web. When you look at devices, you know, and search becomes a natural part of either an OEM-able application or a device. Again, it's embedded in there, so it provides more margin and more opportunity for the business case to say, look, we can provide a contiguous set of capabilities and lock in a customer and provide a much broader set of capabilities because we're now able to manage vast amounts of data. So I don't think this is unique in any sense, it's just a way of HP, as you say, sort of taking a much broader perspective as to how search technology can now enable and allow their customers to take a better advantage of the data. I think that's going to be the big trend. So we're going to keep watching that because I think that's going to be a bellwether to some of the app side and changing business models of some of the existing businesses. And it works in that hybrid environment, which is also pretty cool. You know, with a lot of applications going to the cloud, now you have the ability to have an on-premise device talking to like a car. You know, a car is just a driving, digital manufacturing machine. Right? I mean, look at how much information gets produced out of your iPhone or out of your automobile that connects to a cloud that now has to get stored that provides tremendous information. Actually yesterday, we were in New York for the Open Center, Gaze Center, launched by Intel, and the conversation was about cloud and there's a cloud expo, and the bottom line is that the uptake on the cloud relative to business model revolution, not happening. It's an extension of existing data centers. Because the buyers are like, hey, I've been serving consolidation, I'm doing all this work, the search, et cetera, et cetera. And now it's like cloud. Okay, but it's an element. So what we got out of that conversation was something that we could put our finger on now and that the cloud is a business model opportunity. And so the element of the cloud, you talk about your stuff in the business model, allows your customers to come out and play there to get a feel for it, to develop in it. So they don't have to jump in and port 5,000 apps over. Do you agree with that and can you share more light in that? And where we started was, so we just announced, I think a week or so ago, where we ported our cloud searches of service to Azure. So we were part of a big Microsoft announcement in San Francisco where they talked about these big upgrades to the Azure platform. And we were part of that announcement because Microsoft is trying to provide more application development tools to their customer base to allow them to develop more, as you say John, more hybrid type applications. One that can be developed or prototyped in the cloud and then ported in-house or expanded or managed behind the firewall. So I think that the numbers that originally that again were uncovered by the Gartner IDC or so that 80% of cloud deployments are hybrid environments I think is staying true. There's still this reluctance from IT to go ahead and put any kind of real valuable information in a public cloud format, but it does give them such extensibility and this sort of sandbox mentality where now again, if loose imagination can be the ubiquitous search as a service provider across all these different cloud platforms, it provides a great sort of entry point to use our technology and then scale all the way up to the big data product. All right, so here's another kind of interesting perspective of life that you'd share is when you look at the big guys like Cap Gemini, the biggest centers of the world, they're trying to grab the orchestration business in these big enterprises there. So how do you guys compete in that environment? Do you enable them? Do you want to compete directly with them? Oh no, we would never compete with them. So we're a technology provider. We need companies like that that help us go the last mile and either have the domain expertise, the vertical expertise or the customer relationship to take our technology. So you want indirect channel. You want to enable those guys and app developers to go direct. Absolutely, because when you look at the big data applications, it's not like you're developing a single solution or a departmental solution. You really are talking about massive amounts of content that if deployed and employed correctly will give you clear differentiation in your enterprise. And so what we don't have, we don't have that kind of scale. We're a smart, small startup venture-backed company. I'm sorry? How many people? 45 people. Yeah, so we're gonna grant it back to you guys and Shasta Ventures and Walden and Incutel. How much did you guys raise? So as of the last round at 22 million. So it's still, I mean, you're not going to run out of money, but it's not a lot. It's not a lot. You've got to keep it clean and mean, right? That's right, that's right. And we have a recurring license model. So we're taking a very long tail in terms of revenue recognition so that our future quarters are very predictable, very understandable. You don't want to gouge up front, take it on the back end of the business model where you get the recurring revenue with the values created. That's right. And that's the way customers are preferring to buy. I mean, they don't want to dispender lock-in that you hear consistently from large enterprises. They're just not interested in that anymore. Well, value creation, no one minds paying if they're creating more value. It's like, I don't count how much money the other guy makes as long as I'm making money, right? It's the only expression. But it's that consistent, developed the partnership, developed the relationship, and over time the financial rewards come. Share with the folks out there. Obviously, we have a lot of developers in our community that are just showing our little tool that we built using big data. We have a big developer community who also has some emerging C-level business executives as well. How much money is being made in this marketplace that you guys are enabling? So not your business. I mean, you guys have your own pro forma and how you see your revenue. But above you, right? You got to cap Geminis on the large scale, massive orchestration on the big city groups of the world. And then you got other channels to customer base. So you're talking about an autonomy level, e-discovery, search, just what's the order of magnitude of the dollars available that someone can go out there and get? So let me give you a couple of statistics. So as far as big search is concerned, the most recent data that I've seen says that in 2012 it'll be a $5 billion market. And the numbers of the range I've seen it will grow anywhere from 50% to about 70% compounded annual growth for the next five years. So by 2017 it should be over $50 billion. The split of that, the way it currently looks right now is 31% of it is hardware, 44% of it is services, and 25% of it is software. So depending on whether you're a cap Gemini, you're looking at that 44% pretty hard. If you're HP, you're probably looking to capture the whole 100% because you can provide the hardware through the, you know, through the autonomies with the services in between. So, you know, depending on, you know, how big of the elephant, you know, the bite you want to take, you can pretty much, you know. There's plenty of room in there for an application developer. There are $53 billion markets. You come in there and take a big, you know, take a crumb off the cake, or a big slice. If you look at other comparative markets, again, forgive me if I'm off by slightly by the numbers, but the business intelligence market, which everybody knows pretty well, is pretty mature, it's been around. The last time I saw those numbers before everybody had been acquired is about $15 billion, right? The search market was probably only in the somewhere between $2 to $5 billion market, you know, at most. And so, again, orders of magnitude towards the big data space and the opportunity that it represents is going to really drive, you know, the growth curve for a lot of companies for a long time. Absolutely, I mean, it really is, you know, applicable across industries. But, you know, to talk about the, you know, application development in the big data world is, you know, something we've been talking about for a while here. Right. And we're waiting to see, you know, kind of the explosion of big data apps. So, talk about, you know, why we haven't yet seen that and what, you know, there's a balance between, you know, people don't want necessarily off the shelf big data applications. No. Because that's not going to give you a differentiation against your competitors. So, there's going to be a lot of custom work. Right. So, which is kind of where you guys play. So, but that also takes more work. That's, you know, a couple of vendors creating some applications and selling them out in the box. So, talk a little bit about that, you know, as we're seeing that develop, when are we going to see really that tsunami of big data apps really start to hit the scene? You know, I think you're probably at least three to five years out. If you think about the big data and the transformative capability that it represents in the enterprise and you parallel that to let's say the database market, right? Database market was like ramping through the 90s and it wasn't sort of later in the 1990s that you saw these applications now, you know, really start to take advantage of that infrastructure. I think you're going to see the same thing. We're starting with a fundamentally, you know, early stage technology. Let's face it. Hadoop still is not, a lot of people wouldn't consider it industrial strength. So, there's still a bunch of growth that has to go there. Like I said, we're trying to move the conversation up to the next level in terms of an application development platform. And then of course the next stage is once you start to get some verticalization, you'll then I think start to see companies sort of step in and start to develop the applications. But I think it's going to be a while. I mean, I talked to a number of our partners in this space and what they say is a lot of enterprises hire really smart guys and they just write PHP scripts, you know, or JavaScript applications on top of Hadoop and it helps them start to define and kind of extract some algorithms and then they just try and test that on larger and larger data sets. Well, that's nice, but it's certainly not scalable, right? So the fact that now we're coming to market with an application development platform that allows you a more scalable or more repeatable and allows you to get a further level of abstraction above the technology, I think again, we believe strongly that that coupled with the fact that, again, it's all integrated, it's ready to go. The APIs are available and it's in the cloud. We'll act as a real catalyst, you know, in terms of helping companies really discover the opportunity. Okay, we're getting the hook here because we got a deadline because we know they're going to start the party at five o'clock on the dot. All right. My final question is application frameworks has been the rage. Yeah. Spring source, the VMware. I know you have a guy on your board who has some experience there. Yeah. But in general, it's really a battle for the developers and value creation is this marketplace. Right. It's all about value creation. Absolutely. And money making. You know, money making is a result of- Well, that comes. You create value with customer satisfaction, yeah. I don't think there's a greed factor in this marketplace, but there's certainly a relevance around the association of success equals money. Yes. Not the other way around, which is good right now, healthy. Yeah. Given that perspective, what application frameworks are you trying to go for with your approach? I mean, you guys want to be out there as an development platform knowing what's happened in these different frameworks. And you got specialties, things on the provisioning side, like Puppet and Chef, you got Spring source that went to over here, you got the Ruby community. Is it going to be a general purpose framework in this market, or will there be pockets of little specialty frameworks? It'll be a generalized application framework. And really what our target is going to be is going to be the application developers. It's giving them the set of APIs that are very clear and well-documented where they can develop their own algorithms, they can introduce machine learning technologies, they can build recommendation engines, they can do associations of different content easily. They can run analytics on user experiences. So just think about an e-commerce site, right? Amazon is the quintessential one where all of your clicks in there get captured and then you're able then to feed that into the search relevancy so that people's experience actually gets better each time they come. All of that integrated technology allows you to develop very sophisticated applications, but now on top of Padoop, now you have a transaction platform, a file system now that really does give you such rich information, rich data, and now it's a matter of how do I put the pieces together to actually provide the best value for the enterprise? Paul, the president and CEO of Lucid Imagination inside theCUBE, want to say thank you. If it wasn't for your general support, we wouldn't be here with our great independent coverage of an analysis here. We allow, all that dollars allows us to expand our next studio. You see, you're going to move in the studio, be there, we're expanding. So thanks to generous support like you guys and Cloudera, MapR, and others. We want to appreciate it. So shout out to you. Thank you very much. It's a pleasure, appreciate it. Thanks for chatting with us. Appreciate the time. Okay, we'll be right back with more right at this break.