 Welcome back everyone. Day two of CUBE live coverage here in San Francisco from RSA conference 2023. I'm John Furrier, host of the game with Dave Vellante extracting the civil noise with the events Dave. We're back at events now and you're seeing the full steady state was 2019, 2018 numbers. Picking back up, RSA again, continues on KubeCon. We were just out in Europe last week which has sold out waiting lists. Events are back, steady state, the CUBE is back. We'll do a lot more editorial events so just let everyone know it's really fun to be back. Now I'd say that shows aren't as many. People I think consolidated their main shows who didn't deserve to have their own conference. Typical big companies that think they got their own show. But the big shows are getting bigger. RSA, KubeCon, Linux, John Deaton, MWC, SuperCloud. Our show has got great traction. It's kind of like a business version of CNCFs. Super computing shows. Kubernetes show, KubeCon, Super Computing, Dell Tech World, HPE Discover, all back. So really great news. I mean, again, you and I try to get into the keynote. You have press credentials. It's full pass credentials. But still couldn't you get in and go to the overflow room? So RSA, pounding keynotes all week. The content is flowing. Day two, what's the big theme? What are you sensing is going to happen today? A lot of AI and generative AI, no surprise at this conference. But the one thing that's missing, John, is I've been poking and we talked to Cineal Padi who's representing, he's at Google, he's representing Mandiant. The recent acquisition. How much are the adversaries actually using AI? Are they finding, are they seeing signatures? You know they're doing it. They're talking about it on the dark web. They're talking about it like, okay, how do we use this? What's working? What's not working? But there's no clear evidence, at least that I've found yet. We have Wendy Whitmore coming on. Come on, Dave. You know it's happening. It's just no evidence. That means it's going on right now. No, of course. It's absolutely. I believe from what I heard it's happening. But it's just in terms of, it's absolutely happening. But in terms of getting companies that have visibility enough to talk about it, Wendy Whitmore is coming on later today from Unit 42. And they have threat surveillance, so they know. From CrowdStrike? Mandiant knows too. What's that? Palo Alto. And so, and she's pretty forthcoming. So I want to know, are you seeing signatures that are a GPT foundation model? They've probably been seeing them for years, but they're not really talking about it. Or maybe they don't have the hard evidence like the double hack that we just saw. I think it's going to definitely come out. From what I heard from the New York Times report who covers cyber, there's chat GBTs being used for zero day attacks. Looking for code in the software supply chain. That's why it's such a hot topic. So zero code, I mean, zero day is obviously a target. I know people are writing emails for spearfishing. Of course. That's coming up a lot, as you mentioned, in a double supply chain attack. So I know for a fact that there are people who are saying it's happening, we're worried about it. And I think it's just going to be discovered. And we're going to have kind of like that log four J moment where it's like, it's out there. And so Sunil Padi was interesting yesterday because Google of course has a lot at stake, right? I mean, they're so big, they're the big whale. They got a lot to lose if they screw it up. So what he said is their strategy is to really go after the low hanging fruit, the low risk, high reward type of stuff. So automating some of the prioritization, using AI to do that, that's some of the obvious stuff. I kind of try to push him on, okay, well, when do you get to the high risk, high reward stuff? Are you going to be a fast follower or you kind of hedge that, which I understand, they're not going to, I wouldn't think Google is going to be the pioneer. They're going to let someone like open AI do that. But then Microsoft's involved too. Do they have as much to lose? I mean, they got a big security business. Could Microsoft's move, their speed to market, could it potentially backfire on them? Well, I think it could backfire on. I'll give you an example. One of the things that's come up, it's not that's going to slow down AI so much. It's more the legal framework don't exist. There's no case law yet that's kind of looking at this large language model impact because large language model essentially strip mines the internet and strip mines also copyright potential, also intellectual properties. We talked about this on Qpod. You had a perspective on this. Yeah, I mean, yeah, we brought it up in context to licensing rights, but now it's even more complicated because if you look at what is intellectual property theft, and the question is, you brought up Google, you put up a website and thing and put it in this frame. That's just navigating. Aggregating, curating, okay. Curating and you don't see it the same way. I see it this way and this is what experts are saying. They're saying that if you could, the test is, can I, based upon the information that chat GBT gave me, where do I buy the product? Or where do I buy the content? So what's behind the copyright? And the answer with Google was, if you have a directory of links and navigation and search engine, there's the click. I can go consume your site for free. I'm not paying for it, but I'm consuming it via the link. You can say pay for the subscription. So you can buy the content they're representing you in a redirect. That's distribution. A chat GBT is actually giving you content that someone else did. And they're also blending what that is and what it becomes. And so you can take something that has intellectual property rights to it and make it look completely different. That's plagiarism. That's fever. So should they be paying for that? How do you dejudicate that? How do you determine that they should, what should they pay? The big fight that happened in the internet days for the folks watching, even our young crew here understands fever, because they were part of the line wire generation. Music, yeah. They understand how to steal music. That's obviously the, you know, music went through this. That doesn't happen anymore with movies, does it? Yeah. We used to watch all the football games on that. But you know, that, they clamped down on that. No, but music probably was, is probably the one instance in our generation where the case law went into it, litigating the label, the record labels when MP3s are being shared, Napster, and then line wire, that was viewed as theft. But you know what's funny, John? And then iPhone came out with jobs, Steve Jobs, and they said, let's commercialize it, complete refactored. So again, they ended up, did change the business. Of course, what did we do when we were kids? We were making tapes, cassette tapes, writing them albums, right? And nobody would have said a thing, but it was happening. Were you one of those guys that went to the movie theaters and filmed it and then sold it in New York City? No, not I. No, but I would make a lot of tapes, you know? A lot of DJ tapes. Of course that was not a problem, right? We would share tapes and that actually, that actually helped the music industry. I used to steal source code and distribute it. And then do software you had to pay for it, like Unix, AT&T. That was before, I mean literally, the younger generation here doesn't understand that back in the 80s, you had to pay for software. It wasn't free. Berkeley Unix was free, right? That was AT&T, reverse engineered. And so I think we're living in a whole other generation. I think law will come in on this. So if it takes the form of like the MP3 music battle, that's the closest case law that I can think of, Dave, that matches kind of what's happening here with the LLMs because it is being stolen content. If you have great content of breaking analysis that's paid for and the subscription or you own it with a copyright, that's legally yours. And if they take your content and reshape it into another product, that's a derivative work. Let me pose an analogy for you. You live in California. In California, there's no non-competes. Okay, let's say you work for a company. Say you work for Google and you work on some kick-ass project. Okay, and you have information in your head. Now, you see this all the time. Okay, you see a company is formed from a bunch of Google or Facebook engineers with information that's in their head. Okay, so is that copyright infringement or is that intellectual property theft? No, because it's all in your head. How are they going to determine what is copyright material and what the source of this material is? That's why I love this trend so much because it's very revolutionary. It's disruptive. It's a disruptive enabler. It's going to disrupt but yet enable opportunities. And I think that's the key to this business. Just look at the security business. We're here at RSA. This is probably one of the most oldest shows. Supercomputing I think is older. It goes back to 1988. This is just right for disruption. I mean, look around. I mean, you mentioned it on your post. They're still talking about the same stuff they were talking about 15 years ago. Same thing, right? It's back to the future, right? I mean, it's the same old, same old. You know, it's patching. It's identity. I mean, it's the same problem. The security industry. Merit Bayard, RS AWS mentioned it yesterday, is right for destruction. And the games that are being played and she used a Marvel superhero example is there's a lot of bad guys out there, multiple forms. So we need a clash of the Titans moment here where it's like you get the good guys and you get the bad guys and the game has changed and the game has to be changed to win the game. So if you don't change your ability to play the game, you will lose because the bad guys are getting better, faster, smarter, cheaper. And they're doing new techniques. And Amazon and the hyperscalers and the super cloud players that we're highlighting, they have pattern recognition data. They have observational space, there's observability. They can look at things and do honeypaws, do all kinds of test devices put out there for hackers. They can start to see their moves. And this becomes a game of cat and mouse at a level that only large scale cloud could handle. So if you're not, to me, large scale data sets here, AI won't work. And it's just- But you know as well as I do. If you look back, are we better at security today than we were 10 years ago? Absolutely, no question about it. The problem is- Well, is that because of cloud or is it because the on-premise software is better? I think the industry is just way, way more sophisticated. Here's the problem. The API economy that the cloud brought about created so many seams and so much more complexity. So you have more tools, more complexity, less skills and as a result, we're no more safe. Okay, in fact, I would argue we're less safe because there's just more seams and we have more to lose now. We had the CTO sonotype on yesterday. He said on theCUBE, Kubernetes and microservices, that market, those clusters are on their securities off by default, okay? So they're already hampered and then- You mean you have to opt in for security? They don't even know what it is, it's no posture. It's born without security. Basically, you have to bend it. That's why Shift Left and Security shows a topic managed services in Kubernetes. We had Merit Bear on yesterday talking about the Amazon's encryption keys, their service, their key service. It's large scale, low latency. So again, the difference between moving slow and having scale is going to make the difference because if you're going to automate, you need the data and the data has to come from more data points, not siloed bespoke databases. You have to have observation space and access the data. And I think that's where I'll see solutions. I don't see anything out there right now that's closed. Well, and I don't see the public policy, the government actually being in a position to solve this problem. There's an adversarial relationship with technology companies generally and specifically there's a lot of finger wagging at companies, you got to do better. But now you take a look at the Coinbase situation. So Coinbase just sued the SEC because the SEC didn't respond to a petition for the SEC to actually give some guidelines. Okay, so take Coinbase. Brian, I'm strong. Well, they're forcing the SEC to respond, not. Did they sue them? To respond. To respond to the questions around. Hey, can you please apply SEC regulations to our industry, which is an innovative industry. Slow down, let's explain this really, because this is important. The suit is against the SEC to just do their job, basically. Well, they filed a petition to say, hey, we would like to be regulated. We recommend that you take the SEC's existing laws and apply them to our industry. SEC just didn't respond. Gensler has been negative on crypto. And Brian Armstrong is the CEO of Coinbase. He's done everything right over the years. Here's the quote I got from Brian from the Coinbase CEO. They sent the SEC a so-called petition for rulemaking. Yes. In July, asking the regulated propose and adopt rules for digital asset security. Give us guidance. It sought answers to 50 questions that would clarify certainty regarding regulatory treatment of digital asset security. And they got nothing back. Basically, like, we are booming. Get your shit together and do your job. Yeah, and they got nothing back. Set some rules of engagement. Because the government is, you know where the government is? They're back at Silk Road. Oh, this is using for ransomware. They don't know what they're doing. Drug trafficking and little do they know that there's companies out there that actually now, so you think about it, you can, the blockchain is public. You can identify what transactions have actually occurred on the blockchain. So every, all these bad guys, you can now go after them. So the industry has advanced so much. And the problem is- I'll take the other side. But wait, let's just let me finish. So the problem is that the US government is trying to crush crypto. You got guys like Warren Buffett say, oh, the crypto has no value. You got Janet Yellen saying the same thing. Gensler's trying to kill crypto. Why is the US government trying to kill such innovation and give it to the rest of the world? I don't understand it. They should be, there should be a public-private partnership. You're assuming that they're smart. No, I'm just basically saying that fundamentally there should be a public and private partnership that brings government and business together to make the US more competitive. And the exact opposite is happening because a bunch of bureaucrats don't like crypto. It's ridiculous. I think- Go ahead, take the opposite side. I'm dying to hear this. Well, we should first lock that in for the rant section for the podcast. It's saved about 15 minutes there, Brendan, on that one. All right, let me take the opposite. Okay, so first of all, you're wrong. How am I wrong? I'm done. That's all right. Yeah, yeah, yeah, yeah. John, we're going wrong. No, no, I love the rant. First of all, you're assuming that they're smart. Okay, and you said, no, you're not. You are assuming that they don't have their shit together. Our government, I've been saying this. I'm on your side, banging the table. I've been going back to recovering the Jedi, snafu with Amazon and Microsoft and Oracle. The government doesn't know what the fuck they're doing on lawmaking. They don't know tech, and they don't know what's going on. So we need lawmakers that's going to understand that the growth of an industry, Coinbase saying we want to be a legit player, and we want to play by the rules of engagement that the government and the laws will allow us, and that's called an enablement strategy. And the issue at hand is, case in point is, the government's moving so slow, it's only been nine months. From the government standpoint, that's like, no big deal, it's only been nine months, but from a Coinbase standpoint, I know you have accounts in Coinbase, we have accounts in Coinbase. That's like an eternity, okay? So nine months is just not enough. That's way over the clock. They should have answers, at least, clarifying answers to the 50 questions in three months. If they don't have that done, given, it's not like it's just like an idea someone's proposing that we do crypto exchanges. It's actually, there's real Americans that have accounts. So I feel like Coinbase is a really good business. I think they've always tried to do the right thing. Yeah, you saw Binance try to do the reach around. Okay, well, I get that, but the bad apples shouldn't just kill the industry. The U.S. government has just got to get it together. They should, the U.S. government should look at Coinbase, like they looked at the DNS system when network solutions took it over as the government, and explained that. So back in the internet days, the SAIC, Department of Commerce, ran the domain name system. That's how it runs all the servers. And so in SAIC, it's like a government off balance sheet, north from, they do all the government contracts, they're like military shit. Now, but they ran the technology, and they do a lot of the OSS systems, a lot of the operation systems for the government. And so they're, hey, this internet thing, so someone's got to oversee the servers. That was SAIC. They ended up giving that the network solutions in Herndon, Virginia as a private company to run it. And the Department of Commerce had purview over that. And then ICANN took it over in 1998. And so that allowed the internet to grow, no one screwed with the DNS, they let it simmer, saute, it grew, and enabled the internet, and ultimately the worldwide web. HTTP, hypertext protocol, HTML, the internet, web was born. Here we are. We had FATI in a shot. If there was no government agency like that, we'd look like Facebook. The web would never exist. It would look like an AOL online. So that was a good thing. So here, they could do that with Coinbase, and say, hey, an American company, let's get this under control, let's have them note in the crypto network, let's get behind Coinbase, and let's say this is a sovereignty nationalist issue, and let the Americans compete in a crypto world against the other global power players. Why not? That is like sound logic. Absolutely, the sound logic. So what do they do? They get in. And then Fitsi over at Platform Robotics, Charles Fitzgerald, he had a great post this week on the arguments around taking down big companies. It's just, some people just feel like, oh, that's too big, big companies are evil. It's taking down, it's too big. Or, oh my God, that would be really bad if a company like Coinbase would be successful. Capitalism is bad. I mean, come on, it's terrible. So I think it's a strategic move that they should get behind Coinbase, foster more competition. Finance is not trustable. It puts out some guardrails. Coinbase, Brian Officer, has always said, we're happy to be regulated. Bring that on, and we'll follow whatever rules you put down. Look, if we get presidents like Joe Biden, who's going to be re-electing, if that guy can't be- You mean re-running. I mean, he's re-running. He's an house he's going to re-run again, isn't he? You got Trump, you got an indicted president, might run, and you got an old guy who can't read and speak, running. So, I mean, give us somebody else some, you know, it's like, what the heck? Well- I mean, I have another rant on this. I mean, I tell my anti-Trump friends, look, is it really that hard to understand why people are so pissed off at the government, and a guy who's outspoken with a personality actually became president in 2016? And then I tell my friends that are pro-Trump, is it really that hard for you to believe that more than 50% of the population voted against Trump, and that women came out in force and voted against Trump? Is that really that hard? You have to chalk that up to voter fraud. Wasn't the voting system corrupt? Really? Is that- Wasn't the Dominion voting system the problem? You know, that's what the, so they claim, they can't fathom that somehow 50% of the population in this divided country. Anyway, I mean- It was a Dominion voting system. Just, what's that? It was Dominion's voting system, it was flawed. I read that, I heard that in Fox News. Oh, they got fired all of the time. Yeah, yeah, there you go. Well, there you go. Chuckers gone. Well, no, that's a big- Don Lemon's gone. Good segue, no, it's a good segue because that claim that the fraud was there just never happened, and they knew about it on the air. That's why they got a $780 million judgment against them. Okay, so Dan Rather gets skewered for putting out false information. Does Fox have to- He got fired too. Do they, yep, and do they have the same standard? Yes, it appears so. It's actually even worse. I mean, 700 plus million, $750 million. That's a big number, but I mean, it just speaks to the state of media today, John. 787.5. It just speaks to the state of media today, and- The tax deductible. But so what, it's an expense. I saw that narrative. I was like, please, people, it's a tax write-off. Do you even know what you're talking about? That it's a, it's expense-able. Yeah, but it's not like it doesn't cost them $780 million in cash. Who's used the write-off? No, it's expense, it's an expense, just like when you buy an airplane ticket, it's an expense. It's not a tax write-off, it's an expense. It's expense-able. That was such a dumb argument, but anyway. It has come off your revenue. The expense goes out the door. Well, it comes off your profit. Yeah, I mean, so it lowers your profit, so it lowers your tax write-off, tax exposure. Is it a tax write-off? To me, the story about Tucker Carlson and Fox is a classic Fox. They're number one star. He was, by far, the number one draw. Hey, he took over for Bill O'Reilly. And they don't care. Fox is the story. They are the star. They have the audience, so Bill O'Reilly got fired, he's Tucker's gone, Glenn Beck before him. They don't care. I mean, they don't value the talent. $780 million, I think they'd care. And there's more to come. You know that, there is? Yes, absolutely. There's other firms that are suing Fox, and they have the same evidence. You know this, so yeah, it's, again, it speaks to the state of media trust, right? So is it going to be, what do you think about that? Is there going to be a media renaissance? Is it going to be like, are we going to rise from the ashes like a phoenix with actually good reporting? I think there's going to be. Where bloggers and, you know, is it web 2.0 all over again? Well, I think open source, writers? Well, open source software, we're joking about the, you know, copying software and pirating software. I think you're going to see an open source movement around media. Where you're going to see proprietary models go away and you're going to see open collective intelligence networks form. The expression, the hive mind, people talk about Facebook. I think you're going to see people value reporting via subscription and or other community supported efforts. The hive mind becomes these community portals. They become a community networks where people participate. I think that's going to be all open. No proprietary, think about software. There is almost no proprietary software business model anymore. It's open source, mainly. Oracle's got a pretty good proprietary business model. Well, yeah, that's their mode, but it's not like they have a monopoly on databases. I think in an open source database, I don't need to buy Oracle unless I have a use case that requires hardened Oracle grade proprietary software. So the old model was because of proprietary software. Wait, wait, what's your point on that? You're saying that. Comedia is proprietary, would you agree? Yes. New York Times has their stuff. Sure. You can read it. You can read it. Yeah, okay. So that'll continue. Wall Street Journal, me, whatever. And that'll continue to get chipped away, just like, you know, the proprietary business. Yeah. They're the Oracles. Yeah, well, I'd rather have Oracle's business than the New York Times. Any day. Yeah, but Oracle's market share and databases is what? Compared to where it was. Well, in their little world, it's pretty good. I want to get something in here because as you know, John, we follow pretty closely what's happening in the marketplace. And I spend a lot of time reporting on this with breaking analysis and our friends at ETR. And I'll tell you, it's just such mixed signals right now. I was just writing down this morning. So banks are down, J&J had a strong quarter. Autos are up, GM had a great quarter. They guide it up. Consumer staples are really strong. Things like toothpaste and diapers, McDonald's, Coca-Cola, they have pricing power. Housing soft, advertising is down, right? Google and then tech and cloud. Now people are talking that it's a big week for tech earnings. Amazon, Google or Alphabet and Microsoft all announced this week. And there's talk that we're not even so much worried about Q1, because that's what they're reporting on now. It's really, it's going to be what's happening in Q2. People are saying that AWS is going to be only 10% growth in Q2. So people are like, oh my God, AWS, the cloud must be repatriation. No, here's what my sources are telling me. What Amazon is doing is they're locking in longer-term contracts. So they're being very proactive. So people are saying, the narrative is, oh, Amazon's losing market share. Oh, they must be going back on-prem. That's not what's happening. Amazon's being really smart. They're going for the long game. They're going to customers and being proactive and say, let's lock into a better deal for you. Okay, so they are locking in market share in my opinion. It's going to be really interesting to see. And how a lot of the networks is doing the same thing. They've got a three-year deal. You've got the one-year free. That's causing a lot of people shaking their heads at this new model, locking in people for the long-term. I think it's smart. Is it a recession gap player? Is it just, they're going to amortize that over three years and change the pricing? I think, well, no. I think they've recognized the current conditions. I'd say that our customers need help. Let's go help them. Let's help them lower their bill and build loyalty. I think it's really smart. And I think- I like that approach. I think the cloud is going to come roaring back when the tech market roars back. I think there's no question about it. Yeah, and I think also, as we pointed out on our post when we interviewed Andy Adam Sileski, was this next gen cloud's here. There's a super cloud component, there's super apps. You have this horizontal scalable data layer emerging. You have now open tool chains for coding AI. I just think there's going to be a massive renaissance on big data that will end up fueling and accelerating this next generation cloud architecture, which will create more ecosystem-like play. Think about it, Snowflake. They're a data warehouse in the cloud, or data cloud as they call it. But they're a data warehouse. They have an ecosystem. They have a venture fund. They fund companies to build on top of Snowflake. That they're not an ISV. They are a platform. They started as a simpler data warehouse. That's how they got into the market. And now they are truly building data clouds. Same exact thing. These are companies that were once viewed as ISVs as part of a SaaS play, are building on top of the hyperscale clouds, and they are getting their customers to build on top of them. That's a platform, that's an ecosystem. That's this next gen cloud. And then we start connecting environments together, not just clouds, but data sets. Edge, you have now a completely new distributed computing paradigm. We call that super cloud. Sometimes we take a lot of heat for that, but there's a clear trend where to your point that underscores that, they're not ISVs, they're not just software players, they're platform players. And that's the big change in the coming decade, that we're seeing it right before our eyes. Well, we have a lot of fodder for our podcast on Friday coming out. So, check out our podcast. Dave has a breaking analysis podcast that's getting a lot of traction over multiple years now. It is a must subscribe if you are in the business of cloud, AI, data, checking out the latest buying trends. It's got a great source of data with ETR, combined with our observational data. So that analysis, it's free. I mean, IDC and Carter should be charging at least 50 grand an episode, in my opinion, but it's free. The Q-Pod that we're doing, that's an eighth episode. That's just us riffing. We're going to start sharing some of the things that we talk about in private, publicly with you. We're going to bring on gets from the Q. We're just getting going. So check out the Q-Podcast, that's episode eight. You can go to silkenangle.com, the cube.net, check it out. And again, we're going to continue to make content free and open and build that community out, Dave. That's, again, loyalty from our fan base and customer base, very critical. So, again, more coverage. Four days of wall-to-wall coverage here at RSA. Top publications are here at Broadcast Alley. The Cube, Silken Angles and the live coverage continues after this short break.