 Live from the Sands Convention Center in Las Vegas, Nevada, it's theCUBE at AWS re-invent 2014. Brought to you by headline sponsors Amazon and Trend Micro. Okay, welcome back everyone. We are here live in Las Vegas for Amazon Web Services, AWS re-invent conference. This is their big event every year. They have a lot of events all around the world, changing the game, creating the data set in the cloud. This is theCUBE, our flagship program. We go out to the events and expect a signal from the noise. I'm John Furrier. My next guest is CUBE alumni and great guy, Mark Lewis, chairman, CEO and co-founder of Formation Data Systems. You along with Andy Jenks, entrepreneurs, former head of EMC Ventures, which built from scratch. You built that whole Silicon Valley ecosystem out as part of EMC and did a lot of great investments. One of them was roping in VMware, one of the things. Legend in the industry, entrepreneur. Wait a minute, you're not under 30. You're not under 30. I'm an old guy, I'm an old guy. Wait a minute, you shouldn't be doing startups. Oh, it's enterprise. It's okay. Welcome back. It's fun. I did all my big companies, I guess when I was young and now I wanted my chance to do a startup. So, having a great time. If you're over 40, join the 40 Club that I'm putting together, go to At Furrier, all entrepreneurs, over 40, get it for free. Not that we haven't done anything yet, but you're in. So, tell us about Formation. So, Andy's always been stealth. Give us the update. You came out of stealth. You've kind of launched. You've had a lot of, not mega funding, but very allumio-like. You know, sizable investors, good quality. Give us the update. Yeah. So, you know, this is a great event to come and witness because in Formation, we're trying to do something we think is very different in the storage industry, and that is to build what we call a converged data platform. If you look at all of the issues you have today with storage, it's not that we have bad storage or anything, it's just that we have so much of it and we have so many ways to store data. And if you leave and look here at AWS, they talk about having to have a common data access later, and that being necessary to interact with all these different databases and whatnot. And so, what we want to build is a hybrid cloud data access later, one that can converge your data platforms such that you can have a single data management environment that can bridge your private cloud environments and even your public cloud environments in Amazon or Azure and give you a consistent way to manage data. And other approaches right now we're talking about gateways and movement and individual silos of information and we think that's making the problem worse. So, I want you to really step back and give me the motivation because you saw the conversion infrastructure stuff happening. So, you know, Stu and I always, Stu Miniman, co-host of theCUBE and Dave Vellante, Wikibon, you know Dave's employer, all went on. We're the first guys on this. And certainly EMC saw that strain coming, whether they can get out of that way or not or VBlock was certainly in there. But there's a more dynamics to it. What motivated you to go with formation because a lot of other stuff that kind of is outside of storage is happening. Right. We, and it was interesting in storage because we looked at it was not about just converging infrastructure but for storage it was doing it a different way. What I saw in EMC and what was happening was we were building point problems, you know, point solutions to solve problems. And I kind of call it like building my 10 car garage because every time I had a different need I just bought another car. And after a while your garage gets pretty big. You know, it starts getting kind of messy around the yard where you're taking up too much space. And that's storage, right. We have sands and we have NAS and we have all flash arrays and we have gateways and we have scale out NAS and we've got object storage and we've got all these things. And they're all good, but in aggregate it's too expensive and it's too complicated. And if you look at all of the new flares, I mean Google's infrastructure, AWS infrastructure, they're built around more singular platforms, modern software defined principles and they run on top of bare metal hardware. And so that's what we did with formation was start fresh and deliver that converged infrastructure. So talk about why you're here. Are you guys open for business? Are you doing business? Are you in beta? I mean, you're building out. So we're here to get a sense of the public private cloud marriage in the hybrid cloud. We have Alphas now out at three Fortune 100 companies. So we're talking to very large folks and these are folks that probably aren't the early adopters in AWS. But these are the folks that realize that their current systems are an order of magnitude too costly. What do you mean by that? Meaning that they're looking at AWS, they're looking at Google Enterprise, Azure and saying my classic infrastructure today in running applications is 10X too expensive. It's just not competitive. And so how do I really bridge that or create a leap that really changes the entire cost structure for them? And it's not going to be done by incrementalism and it's not going to be done by single ads. We think it'll be done by a real revolutionary change to cloud-like service-oriented infrastructures. And what about the software-defined data center? Where does that fit in? So if you had to describe software-defined data center, how would you describe that? I think the term software-defined is a great, it's a great admirable term. It gets abused a little bit in terms of some vendors and what people consider software-defined. When you consider software-defined is about a software layer running on top of open hardware that can provide an API-connected construct to apply data services, it's great. It kind of gets permutated into these things of take your classic systems and put another management layer on top and then call that software-defined. And the only problem I have with that is that it may be software-defined but it has all that same stuff underneath. So you're not really able to have a transformational effect on your economics. All right, so I got to ask you this. The entrepreneur and experienced veteran that you are, what did you learn? What's the new vibe? Because the market's kind of crazy. You've got A rounds or now C rounds, B rounds or now A rounds so that's when the climate is really dynamic. You've got a lot of private equity money coming in. Did you have that problem with turning down a lot of extra dry powder early? How did you deal with that? We've had a little of good and bad. We've had our share of tough times. I will tell you my one story I will say is we had a harder time in the beginning because I still believe formation is doing something that none of the other 100 or so storage startups are really trying to do. And that can be a bad thing because as you look for venture money they like to say are you a flash company? Are you a scale out NAS company? Are you a VMware based company? And they group you and so we didn't have a group and we still don't kind of have a group of what we call ourselves. What would you call it? We call ourselves a Converged Data Platform and the difference being you have the Nutanix and the SimpliVities that are doing the hyperconverged approach is great and I think it's going to be very successful. But they want to bring everything together. Compute network storage into that single box. We're about converging the data platform. We're looking for the larger scale implementations where it doesn't really make sense to converge all three but it makes sense to converge your block, your file, your object, your backup, your archive and all of those various platforms together. So in a way, you're it's a real data management layer. It's that data access layer and we want to do that ubiquitously across AWS and Azure so you can really run your applications and manage your data in a true hybrid cloud environment. And to make it really available. That's your key goal, right? Real time? And it's about having all the attributes of an array, all the attributes and reliability but a data management and governance layer so you can say okay, I can replicate this over to another site. I can make sure that data is backed up or copied. Alright, how much did you guys raise? Give us the details. Can you share the numbers? Sure, sure, happy to. We've raised a little over 24 million 24.2 million. Our lead seed investor was Third Point Ventures which is led by Dan Loeb who and Rob Schwartz is our VC partner there. Great guy. It was really the guy who saw and had faith in us when everybody else was thinking we're doing something different. And then Carl Ledbetter from Pelion Ventures who is one of the most successful VCs around, led the A round. So we have a great group of investors, great team and we're just rocking and rolling. You certainly got a great perspective. One of the things about EMC Ventures that I really admired that you did was you built really the Silicon Valley EMC presence in the territory which is very difficult because EMC didn't have the Federation mojo going. I mean you were part of that Federation fabric. You had VMware the EMC Ventures. So you had a good visibility of the just transformation from storage. I mean Flash, Fusion IO hit the scene. You know, they were private companies in early cube days, right? So like... And I saw where the problem that was building, storage well, if you look and ask an enterprise customer how many networks do you have? We'll say we have one network. Ask them how many storage platforms they have. Storage did not evolve as computing and networking have actually synergized. Storage is refragmented and that's kind of become our issue. And so if you look at why all of the new companies, all these startups out here, none of them buy from the existing vendors. Who are you disrupting? That's the question. Ultimately, we disrupt everybody in legacy storage building hardware based arrays. File, block, both? It ultimately becomes everything because the difference between file block and object is just an API to us. Yeah, you guys are agnostic. Yes, it's a data access layer. It's about building a data access platform. So we don't look at those individualities. We believe, you know, there's flash media, there's disk media and there's block, file and object access. And we want to do that. You and Andy are very respected. Entrepreneur Andy Janks are co-founded, very respected in the industry. So I want you to kind of pretend for a minute, I'm a CIO. And Andy, pretend Andy is sitting here with us. And you can speak for him. Sure. You roll in and you see me, hey, I'm really interested. I really want to work with you. How do I engage with you? But what's in it for me? And what do you bring to the table? So what's your vision state? As I talk to CIOs one of the things I realized early on is when we gave our pitch the first thing they would ask is, well, we love what you're doing. Will you run on top of all of our old gear? That's what we really, we want you to run on top of. And we thought a lot about that. And we came up with our motto for our company from it, called Demand Incompatibility. And we finally had to tell that CIO, no, we will not run on top of legacy hardware and software. And we won't do it because we can't add value to that equation. The value we add is in transformational cost because we can use open commodity hardware. And we can't, if we're not doing that, that's not a game for us. So the way we explain to CIOs is we're not about competing with EMC. We're not about competing with NetApp. You have those products instantiated. They're there, they're great. You're not going to rip and replace. We don't want that. But you're probably looking at your economics and you need to get competitive with Google and Amazon and all of these scale, you know public cloud players in price of your infrastructure. You have to be competitive. In order to do that you need to make a big change. A change as significant as from mainframe to client server computing. So if you want to go with us on that journey in building out a green field area or a new data center that's where we want to partner. How much money is on the table? If you could quantify I mean don't give me exact numbers but like $100 billion. It's a serious amount of cash. Serious cash. The hardware, you know your forester numbers, right? Hardware software services, 2014 for storage, $100 billion. Dave Vellante and I were talking, he thinks Amazon's disruption opportunity is over a trillion. Absolutely. And it's enormous when you think about the entire ecosystem that's going to change over in this infrastructure and I think we all see it. It's going to happen. It's just, you know, how that happens especially with the enterprise. So final question. You having fun? I am having more fun than I've had in my entire career. You feel like, I mean being an entrepreneur again, I mean you're an entrepreneur hard as we say. Old dogs just do a little easier because we can work smarter but it's still hard work. Is it a heavy lift for you? Is it more smooth streamline? I have enjoyed every, you know I said I'm kind of an entrepreneur even if I'm in a big company but I've enjoyed, and I enjoyed that very much and I enjoyed my times you know compact and EMC, I thought it was great. But So are you born with entrepreneur your gene or you've learned it? I think you're born with it. I think you're born with it. I think there is a thing that you're never satisfied I know I'm a little bit get bored easily. Why Andy and I compliment each other is Andy really likes to keep the trains running on time. He and I work great together. He's a great guy. He's also very entrepreneurial as well. He's got good vision for an operating guy who's got great skills he's also got great vision and I find you guys are a good team. You also got some great skills. But again experience matters in the enterprise. I hope it does. I think you know just to point out that you know I like what Seth did within OpenStack but the shortcomings are that it's not an enterprise ready storage platform and it's not about being open source or not. It's there's attributes that you need to have. So we want to try to provide that sea change of modernization but still reflect that it's enterprise data and you need to protect it. And I just talked to Alumeo on here and they got to get their story right. I mean they got some good guys on there but they got Alan Cohen. He's in the industry when it comes to the enterprise. So like he's like, well he's going to make sure that he knows the enterprise and the enterprise is like there's a lot of little hidden landmines in the enterprise. You know and certainly with the cloud. So Mark Lewis, seasoned entrepreneur industry executive now running his own company with ADChanks formation data systems like the guys at Fusion IO that go on to the next venture congratulations. Great to have you. Great to see you. Good to see you. This is the Cube. We'll be right back live here in Las Vegas. This is the Cube, our flagship program. We'll go out to the advanced manufacturers. I'm John Furrier. We'll be right back after this short break.