 Hey everyone, welcome to the Q-Pod. I'm John Furrier, Dave Vellante. This is episode 46. This is Super Bowl weekend, Super Bowl 58, Dave. I know exactly the number because every time the Super Bowl happens, it's my age, 58 years old, so. Oh, that's awesome. I've seen every Super Bowl. Actually, every Super Bowl since Super Bowl II, I've seen. I can't claim the same, so I don't remember. I might have, but I don't remember. I don't think Super Bowl I was on TV. Was it? I don't know, maybe. I'm not sure, but to get the Niners, obviously, Bay Area here in Silicon Valley, huge push. People have pumped, again, they haven't won since 1994, so they're hoping to bring back the glory. Jim Harbaugh was there. Kyle Shanahan, I think was that one. I think Jim Harbaugh was, Kyle Shanahan and then Jim Harbaugh made it to him, but it should be good. How are you guys feeling out there in Silicon Valley about the Niners' chances? Well, you know I'm a turncoat, so Patriots fan, given the NFC and AFC don't compete, I love the Patriots' first, Niners' second, but people are jazzed up. I think they think it's the better team, but they're always worried about the Holmes and Kelsey. If they show up, it changes the dynamics, and I think their line and their defense played well last week, so anything's possible, but I think last year I was in Philly with Paul Martino for the Eagles, and you know, Eagles look good, and they just, it was a last minute ending, weird ending, and they lost. So anything's possible with the Chiefs, and that's the feeling generally here, but people are pumped. You know, it's Super Bowl. And there's two types of pumped, right? There's the fans who actually want to watch the game, and then there's people who have parties who happen to have a game on. And so I tend to be hardcore on these Super Blores when I like the team, so I don't want to go to the parties where people want to talk to you, hey, how's it going with Silicon Angle like that? Say away, I want to watch the game. I hear you. Hey, what's going on? What's new? I don't want to talk. Can you just get another beer and watch football? Thank you. I like the Niners. I think they're going to win, but I bet a whopping $50 straight up on Kansas City because it was just better odds and Mahomes. I'm going with the home team. I'm kind of rooting for the Niners. Because you know why? It's weird, people around New England we have this weird thing, we don't want Mahomes to catch up to Brady. So we kind of always root against them, but you gotta be. I know it's weird, isn't it? But well, we got a great pot here, Dave. I'm psyched last week. We couldn't make it because I was at Pebble Beach with golf and opportunistic biz dev and, and content acquisitions and great stuff down there with sass, Cisco, a bunch of companies down there. So, um, but we got Sanjay Poonan coming on this podcast. So he'll come on, um, at, uh, in a few, in a few minutes as we get why, what's he been up to? Yeah, you know, he left the M wearer. He was doing all those M and a deals he did air wash. Remember his career. We've been following him since SAP. Good friend, yeah, um, took over Cohesity. I think at a time where he thought he had more meat in the bone, but as the market changed, Cohesity, I think my, my opinion, you have probably more data. Um, I know you do, but I've been seeing some of the results that the market's shifting, right? So Cohesity, you know, was doing okay, but not super great from what I was hearing. And again, the PR guy who was over there before was kind of cold silent on us and, and I think he then moved on. But the point is, is that they weren't really talking to us. And I felt they were kind of bunkering down. Sanjay was beavering away. My guess was he was organically trying to figure out the growth and then looking at M and a and or sale options. I've heard that there was, you know, looking for partnerships. I wrote on my post and then retracted it because I said that they were trying to sell it. Yeah. And why'd you retract it? I mean, there was, there was strong rumors that they were trying to sell the IBM. I heard they talked to Cisco. I heard they even talked to Ruber. Yeah. So that's true. I couldn't prove that they were in a selling process. So I rewrote, they're looking for a strategic partnership, which is, you know, you float the trial balloon by everyone knows how it works. Code is, if you're in a sales process, you're like, we're selling the company and that's what they're not, they're not doing that, but they were definitely floating it. Do we sell or do we merge? We're looking for strategic alternatives, right? I mean, they get to, to get to escape velocity. You got to have, it's going to be a billion dollars plus. I think that's what this is about. But I will ask now, I don't think it's, I think it's about the fact that they couldn't find a dance partner that was better than Veritas. So I think with Veritas, Veritas, you have the data. I thought the wrap stretch a about this and the research team about the spending velocity, their spending momentum wasn't that strong. So that's an understatement. They're spending velocity. Veritas was, was really crap. So they got this, they got, so you, but they got a huge install base. So Sanjay is an ultimate deal maker. So he goes, okay, they have hardware. At least he's got hardware Veritas doesn't. They got combined, combined together. It's a brilliant play. And, you know, it's all about if they can pull it off. Zeus's post was good, but he's also a skeptical. He's a skeptical of all deals. And we know that, but his analysis was good. Can they pull it off? But Sanjay's done this before. We've seen it at VMware airwatch. So, you know, when he comes on, we're going to pepper him with questions. Let's ask him the questions if they were selling or not. We all know how it works in Silicon Valley. Oh, I'm not for sale. Bullshit, you're selling. Well, I just think they were, I think they were looking for options and then they ended up, you know, with the one that got them to be a bigger company. I think they, and what is it? It's a $7 billion valuation, but a lot of debt they're taking on, right? Taking on a couple of billion dollars in debt. Well, the combination is an instant company. If you look at the cohesively, how big they're going to be overnight, Dave, this is a serious deal. I like the deal. I mean, I'm one of the, I think maybe the only ones that likes the deal. No, no, wait, they're going to triple in size, right? That's a, I think that's a good thing. Now, they got to manage that. They got to figure out what to do with the various roadmaps and the Veritas install base, which is pretty entrenched. Are they going to give net backup customers a path? What does that look like? We'll ask them. Cisco announced layoffs. Thousands of workers are being laid off. We talked with some folks that's plunked this morning. They're going to be part of that, probably layoff as well, but they didn't tell me that, but I'm guessing it. They're nervous in general. So we're going to see how Cisco evolves with Cisco Live coming up in North America. They just had Cisco Live in Europe, you know, just recently. Obviously, we're been covering them like a blanket. We'll see how that shakes out. But, you know, people are cutting the fat. Pure storage had a huge layoff. About 250 to 270 people in pure storage were laid off. And from my sources, what I'm hearing is, is that that layoff was to really, really good people, some solutions people, field people, flash blade, AI group people. So, and the story there is interesting. And, and the rumor, I got some validations, but I don't have three sources, but pretty much solid, that it's the classic case of, in order to get budget, you got to cut someone. And you see this in companies all the time, Dave. You know, we talk about it all the time for companies that are bootstrapping. Hey, if I want to get that extra head or fund that project, I got to get that money from somewhere. So I got to cut something. So that's what's going on in pure storage. They're got the moonshot. They want to be the SSD player. You know them very well. Well, yeah, I comment on, let me comment on the, on the layoffs, if I may. Yeah, please. It actually is working for earnings. Look at Amazon. Jassy cut, right? And boom, look at what the earnings were last week. Look at Metta. It was like last year was the year of austerity. Metta is kicking ass. Their, their valuation is now back up over a trillion. The only one that really hasn't, Microsoft hasn't had to as much, but Google really hasn't gone on an austerity program. I wonder what you make of that, John. It's like, you know, the street probably, the street loves when people do layoffs because it drops right to the bottom line and you got AI and you're, you're doing all this productivity. Google hasn't done it. So they continue to just like ignore the, the, the catcalls from the street and double down on technology. You wonder, is long term, is that like a really good play? Or do they maybe pull the trigger down the road? And then there's like a huge upside to Google. Or they just keep their head in the sand. No, I think Google doesn't operate that way. Google has natural churn. They kind of force people out and shut down projects. So it's not, what do you mean, what do you mean by that? Explain that it's not like a layoff. So what do they do? They have a lot of moon shots. They have a lot of stuff that's going on. So give me an example. Let's say they have a project that they're, you know, making self-driving sauce, flying saucers or drones. The packages don't have like hundreds of people working on that and they're like, okay, that's over. Okay. So they, and then they just cut it. And when they cut it, those people are gone and they have to find shots within the company. So it's not like a mass layoff. Like we're cutting like, like a Cisco's announcing that's broad stroke. And so that's that. And then people leave Google, if they're not happy. So Google's one of these places where if you want to sit there and, and, and twiddle your thumbs, you probably can get away with it. And most people, the people don't do that. So that's kind of how, how they are. But Google's rich. They got great cash flow. The earnings, they got alphabet. They got Google Cloud. So Google's just a different animal, I think. So this is a different culture. It's interesting. So anyway, the, um, Speaking of Google News, Dave, you know, the big story is their new, their, their rebranding of Bard. Okay. So that, that's a great pivot that Google's Gemini project. So basically Bard was took duet. So they got duet, vertex duet, AI infrastructure products are branded as Gemini now. So they're going to charge for that, right? They're going to, they're going to pay for that now. You got to pay for Bard or Gemini, right? So, and it's also the branding, integrating everything. So first of all, the Bard thing is gone. That's that they're renaming. Right. So, so what are we paying for now? We're paying for chat, GPT, if you want, forward auto, you're paying for perplex, perplexity. We pay for perplexity, right? You got to pay for that. I don't, I don't, I use the free version. Is there a paid version though? There is a paid version. I haven't used it or tested it. So I don't, I don't know. And then I, and then you can pay, you can pay for Google now. So there's like three of them. And maybe there's more. I don't know. Yeah. I mean, they, they got their own LLMs and we'll see how it goes. So that's, that's big news there. That's going to dominate my opinion. Google next, which is coming up in April. So Google's working on that. So I expect that to be a big, big story. What else is going on this week? Sam Alton in news. We're going to get into that. Huge news. Huge news. So let's, let's get into it. So, so, and by the way, there's a lot of other stuff going on. Open AI, Meta, Meta, Spielberg, their 20th birthday. Got some great photos on my Facebook feed from people that were there when they were 30 employees. So all, all good. Let's get into Sam Altman and the chip. So there's a couple of stories here. Let's talk about the chipping away at the future here. You have, you got Sam Altman in the news. You got, you did just did a breaking analysis on, on Intel. Nvidia is forming a unit design and custom chips. It's funny, Dave. We talked about this at re-invent. It's a chip war. Okay. And everyone wants their own chips. And, and, and, and Nvidia is targeting very interesting thing. And, and we put a post up, actually Zs were to post, Zs Carvalho wrote a post about equinex and, and, and, and Nvidia, so Nvidia is getting traction with their DX cloud and, and, and rumor has it that Amazon and, and, and Nvidia are at odds a little bit there. So look at, look at Nvidia making their move. So that's Nvidia forming their own chip unit. You talked about Intel, their own foundry. And then the Wall Street Journal has an exclusive where they had, quote, sources, colon, Sam Altman talking about how to invest in such as the UAE governments to raise $5 trillion, $5 to $7 trillion for a project that would boost the world's AI chip building capacity. Okay. I have never seen a headline with the T in it ever in my life. Isn't that unbelievable? That is the first time I have ever seen the T in a freaking headline. I woke up this morning for that. I had a lot of my eyes go, what is it? $5 to $7 trillion? That's supposed to be $50 to $70 billion, but wow. Then, you know, I just, I just said Ben Barajan. Is that how you say his name? Ben Barajan, Ben Barajan on, and he's like knows the space. And I was asking him about a chip manufacturing capacity. He said they're, they're maxed out. It's absolutely like totally maxed out, which is good news for Intel, because that could help save them. But, but to the point, so I've been saying this, the chips act is $50 billion. It's just like a little tinkle in the pond. Right. And so, so Sam, I'll say it's $5 to $7 trillion. And so Intel's building like six new fabs. And Pat Gelsinger said a new advanced fab costs $30 billion to build. That's $180 billion. So he's going to get what, $10 billion from the US. He's going to get $10 billion from the EU. So he's got $20 billion. Where's he going to get the other $100 to $120 billion? It's not going to come out of cash flow. So that's why this really caught my attention. I mean, $5 trillion. And that's that's what this needs to to actually solve the problem. I mean, it's going to be it's going to it's not 50 billion is not going to do it. Yeah. And you know, I would never I'd never thought about this before. And in in saying it and saying it out loud, I thought about it in my head, but never thought I would utter it in public. Never mind on on a podcast or on on the queue is that, you know, you're talking about scarce resource at this point, you know, water, chips. You know, there's a real threat to the economy and the world. You know, we don't if we don't have enough chips when there's so much momentum, think about the pressure that's going to put on society if the appetite and the drive to drive more computing power. Water, electricity, power, chips. Man, it's unbelievable if you just this puts things into perspective. And for, you know, as as Kara Schwisher calls the Silicon Valley, the backwater of tech, you know, only these conversations were happening in the backwaters of the elite when people were talking about building fabs and building chip centers around five trillion dollars to have it out in the open like this really mainstream points to the societal change, Dave. And this is like why I think AI is so exciting on the one hand. And, you know, scary on the other. Where does this go? Does it slow things down? And what does the entrepreneurial equation look like? What's the future entrepreneur look like? What is the next, you know, you know, Bob Noyce look like? What is Gordon Moore, the future look like? These are the pioneers of semi-communist things. Well, Alvin seems like he wants to be one. And then the other angle there with his all he gets dinged all the time. He's not a techie, they say. He's more of a visionary. The visionary, but he but he's tapping the UAE, which is really interesting to me, because, you know, the oil things they want in on AI. You know, we know that from our sources who spend time over there. And, you know, they they're looking a hundred years out and saying, OK, you know, and they know semiconductors are the it's like the the main spring, right? That's like oil, you know, and semiconductors. You can control things. And so now the speculation was, well, maybe the US won't let them. But the US 50 50 billion, I mean, that's not going to do it. So I like the idea of the US kind of belling up to the UAE, figuring out how to fund this thing, getting manufacturing, you know, it's you know, 80, 90 percent now is Asia. And 90 plus percent of the leading edge manufacturing is in in, you know, Southeast Asia. Get that back to 50 50 50 percent outside of Southeast Asia. That's what Gelsinger wants to do. And I think I think it's going to take trillions to do it, maybe not five to seven, but, you know, one, two, three trillion. That's the way to think about this. So I threw a little troll or like a haymaker on Twitter recycling a clip from the cube where we pontificated the idea and put a question mark out there. And I think the conversation of will Intel go bankrupt? I got a lot of great response. Are you kidding me? So again, the point, I mean, we talked about this in the pot. Well, I don't people say you're kidding me. We're going to get $180 billion to build six factories. So I wanted to bring I wanted to bring that's not inconceivable. I wanted I wanted to bring that back up because Dave, we talked about this as a riff and we were speculating and talking, connecting dots on this point. What do you think? Is that still even possible or is that just still? It was interesting over the top. Then who knows this space? He's actually optimistic about their foundry chances and what he said was number one, they created separation between the manufacturing and an Intel's own design. So they created a Chinese wall to allow the foundry customers to have confidence that they wouldn't be taking their secrets and giving them over to Intel chip designers. The second thing is he said, look, they they're on their way, you know, four nodes in five years. That whole thing that Pat always talks about and they seem to be getting there, they're using this ribbon fetter technology and trying to leap frog. What, you know, TSM is doing. They're finally using EUV, but they're six to seven years behind. So anyway, he feels like they got a shot at being a reasonable number two. But my question to him was still like, OK, but how do they throw off enough cash to fund all the foundries? And he didn't really have his answer was they can't do it alone. But my point is the government, 50 billion and they're only going to get a piece of that and maybe 10 billion from the EU. There's no way that's going to fund and they're not going to throw enough cash off out of their their core X86 business. And foundry is not profitable. And the foundry is a really hard business to make money at even TSM. I mean, they they make money. I mean, I got it in front of me. TSM is like a sixty eight billion dollar company. You know, their growth rate is flat because they can't make any more. They got a 57 percent gross margin, which is good. They're free cash flow margins. Like, you know, you know, 10 percent on on on 70 billion. I mean, it's not like the greatest business in the world. And so how's that going to throw off enough cash for Intel to fund six new factories? I don't know where the money comes from other than massive debt and or subsidy governments. What US taxpayers? I mean, what 33 trillion in debt already. Well, let's talk about trillion. So let's get back to the trillion dollar baby here with an AI and Sam development. So seven trillion dollars. OK, that's like what Apple, Microsoft, Amazon combined in terms of market cap, maybe what, 20 percent of the GDP? I mean, Dave, this is incredible. You know, I know it's insane. But but but but it's it's telling, though, right? It underscores what this is going to take. There's no way the government could subsidize that again. And by the way, he calls it networks, a network of fab factories, not just one. So it's like a series of ways to build chips. We'll dig into it more. But this is just a sign of the times. And again, back to the resource piece, you know, to me, you know, there's like energy involves, of course, you know, people trying to get out of the oil business or trying to get into the if you're in the oil business, what's the next oil? It's AI, but it's also chips. John, the department of the US Department of Defense's budget is less than a trillion. OK, but think about that for a second. You know, the military can't fund what's necessary, right? The US government's got thirty three trillion dollars in debt. Well, maybe the DOD should shift their focus to chips because it's an it is a national security challenge. And hey, look what comes out of funding. The whole Cold War funding pretty much funded DARPA. You know, all that our research grants helps funds innovation. So, you know, maybe shift it a little bit over. OK, so maybe they can kick in, I don't know, a hundred billion. It's still it's mice nuts in terms of that's what that's what Altman's gambit here tells me is that that's the kind of thinking. And so he's looking ahead saying, wow, we just don't have enough chips to power the AI era to get to AGI. Of course, he's got to Jones to get to AGI. I'm not sure I want to get there that fast. The chatbot markets may be more valuable than we thought, Dave, to run chatbots. Well, I mean, only kidding, obviously, I get. Well, no, I was going to say, well, Microsoft's valuation went up a trillion dollars last 12 months. And their revenue grew 23 billion. You know, they they trade at 10 times revenue. So that's 200 billion. Rough numbers. So that's eight hundred billion dollars of value associated with AI. I mean, I think I think the innovation, this is crazy times. And when I look at this, I brought up earlier, the entrepreneurial equation, because the entrepreneurs are the ones going to solve these problems. I'll give you an example. Remember back in the day when memory was like 8K, 16K, you that had to swap the disk. I think there's a lot of aging and yeah. All kind of so I think the constraints always shift. And here the constraints are power and certainly for the power and the chips themselves and the supply of the chips. So what you're seeing in open source right now with the LLMs and the foundation models is a great use case. All the big guys with the proprietary was open AI and property everyone else. They were proprietary dedicated LLMs. Open source is now almost caught up to that. And that's why I think the the law and what Meta is doing is interesting. So the question is, is this real and can that be solved? So I think the entrepreneurs out there will invent something that will solve this. And I think that's where the geeks are going to work on. Because the market's too big. The fact that they even thrown out the numbers means that the TAN is pretty strong to go after this. And if you look at the data, I mean, I'm seeing an article here just hit from Financial Times, Open AI's annual revenue hit 2 billion in December up from 1.3 in October. And they're looking at aiming to double that figure in 2025. So, you know, in one year, it's a two billion dollar business. Talk about off the shelf spending, I mean, off the charts, spending data. Open AI hit the scene out of nowhere. And it's it's it had it blew past anything I've ever seen, even snowflake, which when it came out, it was off the charts and it's sustaining. It's lead is so far ahead. All those other names when you see the spending data, Cohere, Anthropic, Lama twos coming in. But Open AI has just got this huge lead, which, of course, I said was not sustainable. That prediction is not looking too good. I'm really happy. I'm looking good on my prediction on that one. I got that one right. I get a lot of predictions wrong. Folks, don't don't go to don't go to the bank on my predictions. OK, I mean, they get a lot right, too. But I definitely I definitely get most of mine right. So whatever I say, well, probably will happen. So I would bank on those and put all your life. Oh, what's the disclosure? Don't this is a show. Not a financial advice. Right. Be careful and listen to us. We we we make no, we're being humble. We're pretty good. We make pretty good predictions. Let's face it. We're not. We like to do it. We like to pat ourselves in the back. We're pretty much better than anyone else out there on that front. Oh, relatively speaking, John, I mean, I was just talking about, you know, trying to be honest on our binary. Actually, I did OK on my product. I get a consistent B plus on my predictions. I can't I can't crack the A. Well, well, you will you go narrow. I mean, the thing about the predictions is if you try to specifically predict something to have you specifically, which you do, it's hard to get those right. And to me, what we've been focused on you and I since 13 years, we're going to get to look and hang on the cube is we get the trends right. Because the way is almost to me, it's about the ways and then how you ride those waves. I was joking with the founder of Kong came in the studio and he's like, yeah, we were in the right way, but we didn't have the wrong surfboard was his analogy. And he said, once our team realized we were on the right wave, that was a success for the startup. Then they just realized they had to get a bigger board and they manufacture that they did that. It's called API proxy API server. And so that's what this is what we do. And I think a lot of companies and startups, they get caught into the mechanisms that they're building. They don't realize, am I in the right market, the right wave? And is it a good wave? And what do I need to ride the wave to survive and then keep getting bored better and adjusting? So the AI wave is massive. The infrastructure side is massive. We're covering it, seeing all the data point to it from the changing landscape of media, the layoffs. I think last podcast we were on, you and I talked about John Chambers, his famous quote about transitions. And I think, you know, it's guys like Sanjay Poonan, for example, we're going to have on shortly, who is an M&A king. He's so strong at M&A because he can see product holes and he can make decisions around organic versus non-organic growth and knows how to fill that void. He's an impressive guy. I'm psyched that we're getting them on. I love Sanjay, but it's such energy and clarity. He's a media hound, too. He likes to come on camera. Totally. That's why we love him, cube. We are, too. So, yeah, earnings earnings are out there. What's your general consensus? I know you've had a big Amazon analysis. We had ARM came in this week. Cisco's coming next week. What are you seeing for earnings? You know, what's happening? I love Amazon right now. I think, you know, people were calling for Jassy's head several quarters ago. And you, of course, you and I laughed at that. I mean, we knew he was going to get his arms around this thing. So, he's got, you know, he's got a pumping on a couple of cylinders. Obviously, the retail business is going really well. He's got that advertising is starting to crank up. Have you, have you been hit up for your Amazon Prime ad free? Yeah. No, I didn't click on it yet. Will you do it, you think? I'm not sure. I kind of, I'm off put by that, to be honest with you. I know, but I bet you we end up doing it. If the ads get too annoying, you're going to do it, I bet. The streaming services, in my opinion, generally suck, OK? Compared to broadcast television, there's all kinds of buffer loading errors. It's just like bad PC management. But, you know, streaming, you know, it is what it is. I'm not a big fan of the tech. I think the guides to be better is a lot of cross API credentials sharing that's different, different plans. So I'm not a big fan of the streaming as a cohesive user experience. I love the direction. Don't get me wrong, but not a big. So, so Amazon, I'm excited about. I think they're they're back in a couple of things. Jesse said that cloud optimization has attenuated. I love that word. And I tweeted out the data shows that in January, 2023, 19 percent of the customers that we surveyed with ETR said that cloud optimization was the primary way in which they were going to moderate costs, and that's down to 7 percent a year later. So that's clear evidence that it's it's waning. It's still there, but it's but it's lessened. And so now the other thing we see is when when Bedrock went GA in Septemberish timeframe, October, we're seeing a tailwind from that. And so Amazon's got, I think, look, I mean, you can say what you want about Titan. Maybe it's not like the leading edge, large language model. So what doesn't have to be Amazon can offer a lot of different language models. And the surrounding tools and capabilities are going to give them a lift. So I really like Amazon right now, Microsoft's Microsoft. You know, they kind of came in where everybody expected, which was awesome. And they did that. Google was a little somewhat disappointing in this, just like, OK, you're the AI leader. You know, where's the AI boost? And everybody's freaking out. I listened to the call the other day. I wasn't on it, but I listened to it and replay all the analysts cared about. All they wanted to talk about was how advertising was going to get impacted by the perplexities and the chat GPT's. I mean, that was their focus. I mean, they were just hounding Sundar with those questions. They didn't even hardly talk about GCP and GCP's growth is it's mad. They're like a distant third still. So it's hard to get too excited about Google. But if they cut costs like we're saying before, that could be pretty interesting. And in ARM this week, ARM absolutely crushed it. You know, ARM is a company with nearly 100 percent gross margins because they don't they don't make anything. They just they create an architecture and license it. And so ARM's valuation shot up. I got I got it right here. I was I was shocked when I looked at it. I was like, holy cow, their their valuation is now as of midday today. It was one hundred and fifteen billion, thirty eight times their three billion dollar revenue. I mean, they're they're closing in on Intel. It tells got a hundred and eighty three billion dollar valuation. TSM, 690, Nvidia, one point eight trillion AMD's got a two hundred and seventy eight billion dollar valuation, you know, way higher than Intel's. And they're like half the revenue, less than half the revenue. Yeah, so really pretty interesting what's going on there. And META had a big announcement there. Their earnings were all through the roof. I had crushed it. Then they're now one point two trillion dollar valuation. Zuckerberg's wealth reached one hundred and sixty five billion. Personal record due to the stock's rise of twenty two percent. Every time META gets crushed, I look at it and say two billion active users. How do you compete with that? They'll always find a way. And I think it's interesting to see with a metaverse, just all the Apple Vision Pro talk this past week was was was hot. But, you know, META is there, too. I don't know. I'm not a big vision pro guy. Kind of not into the meta. META is a money machine. I remember a friend asked me, I won't say his name, but should I buy META stock? I was bottoming. I said, definitely buy it. And I said, well, he goes, why, they're getting killed. Oh, yeah, yeah, yeah, it's a money machine to get Instagram. I connect it all together. He did. He's happy. Now you remember, do you remember we were at Oracle Open World years ago in the little mini Q logic cube? Remember that we used to sit like this in a little 10 by 10 space. And Facebook got crushed and we interviewed Benioff. You did. It was amazing. And then we went back and forth from the studio or the Q logic studio on the floor. And I remember Facebook stock got crushed that week. And you and I were talking about it and you were like screaming by. Yeah. Well, that was 2011, 2012. Yeah, if you bought that stock, you're rich now. But the thing that's even more impressive about this earnings is they had their first ever dividends. So now they're going to have dividends, Dave. So this is going to be a great stock to have for people if they want to have that blue chip dividend. So smart move by Metta, you know, just, you know, you want to win. You want to win Wall Street over? That's the other thing. Spread the well. That's the other thing. Google doesn't pay a dividend and they got more cash than anybody. You know who pays a dividend, a really nice dividend and does really aggressive stock buybacks is Dell. You see Dell stock. I mean, Dell stock. Does Amazon pay a dividend? No, I think no, I don't think so. No, they don't, they don't, they don't, they don't, they don't. They don't have a prioritized expansion over distribution profits. Well, but it's not only that, it's not only that. They haven't had the liquidity to pay a dividend, but they do now. So it's going to be interesting to see whether or not they do. In March of 2023, Dell stock was at 36. And today it's at 86. And the reason why is, I mean, wow, its market cap is now 60 billion. So they're getting close to one X revenue. They're getting there, but they basically said, hey, you buy our stock. We're going to pay you a fat dividend and we're going to do aggressive buybacks. And of course, Michael Dell is the biggest owner. So people say, well, that benefits you. And he's like, yeah, and I'm going to give a lot of dough to charity. So that I think is pretty awesome. So that's turned out well for, you know, Michael Dell is like the scene in Godfather. You know, I make my investors, my partners make money. It's true. Play hard and play clean as he says. Michael Dell makes people money. Play to win and play hard, but play to win. What's the slogan? Play clean. Play nice, play nice, but win. Play nice, but win. I like that. Play hard and play clean is my philosophy. That's what people with integrity do, John. They play fair, play nice and they win. The Michael Dell culture of play nice and win. Or as we say, you know, play hard, play clean is really great philosophy. And I think Dell executives should look at their suppliers and and and take that. People who play dirty and other people who do that and any executive should look at that and say, hey, you know, who's playing clean, who's playing dirty. And that's that's a direct, you know, mandate, I think, for all businesses, especially now in communities and word of mouth is so so efficient. Can't fake it till you make it. And I think that's important. But today, I want to get back to this dividend thing, because you look at your point about the time of the times, Amazon doesn't pay dividends. They give priority of expansion over over sharing profits with shareholders. Meanwhile, Apple, Microsoft do give dividends. Now you got Meta, so, you know, back to not to bring up the old monopoly game, but utilities, right? You know, everyone wants to have a utility. So the question is, if you look at what's happening in the market today, the big conversation is, what are these big whales doing? The big hyperscalers that they produce is so much cash. And what do they give back now? Related to this is a trend going on in the VC market. We reported on the Q pod what four or five pods ago that app of the combination of Facebook and video and Amazon are combined more in percentage of investing into startups than the all the VC market combined. OK, so this idea of doing that is interesting. And then you pointed out right in the fight, rightfully so that that's a credits, mostly credits, not cash. So here you got the big clouds like Amazon and Nvidia giving equity stakes because the cost for startups to run on the cloud is so high. When they cross over and become successful with product market fit, they become customers. So it's like, here, the first hit of crack is free here. Shoot this heroin up, take it and then they come to the cloud. So this points to what's a business model strategy, but it points to the fact that they're like utilities, Dave. Hyperscales and large tech firms are investing using credits, not cash in startups in exchange for equity. That is a dynamic that's going on. So this is an interesting thing. Now, is that considered. Cost of goods sold or customer acquisition costs? Because if you're a startup, you know, you got you want to be relying on one platform. So that's why you see coherent public all with these deals. And that's that that's what's happening. The credit investment, is it a credit investment or CAC? So this is interesting. This is a very interesting power dynamic. So you got these big whales, Apple, Meta, providing dividends. Are they utilities, Dave? That's the question. Are they, you know, they're they're more than utilities. They have that utility like dynamic, but they're still like innovative tech companies. I mean, Meta's innovating. Certainly Google's innovating, Amazon's innovating. Apple, everybody says, you know, was waiting for them to come out with their next innovation. You know, Vision Pro is kind of innovative. I mean, I would say Apple's still innovating. So there because utilities don't innovate, they just extract rent. So these guys are utility like in that they just consistently throw off cash. Like cash flow machines, ATMs, but they innovate. So that's why their evaluations are so high. Well, when you have utilities, they're usually regulated. Well, that's probably coming for tech and that'll screw up everything. Now, just let Lena Kahn get in on it. I listened to a, can I do a quick side rant? Yes, definitely. I listened to a interview that she was doing. I don't know, with Sorkin or somebody a couple of weeks ago. And she was just doing the same old, same old, you know, talking about extolling how in the past they have been so successful. The the FTC and and the DOJ at moderating these big monopolies. And she yet again, she rewrites history. She uses AT&T as the example. I mean, we were there. We saw the AT&T breakup and they went into all these little baby bells and these little baby bells were they went from big, fat, regulated, slow AT&T monopoly to a little smaller, fat, slow monopolies that were largely unsuccessful, got scooped up by all these big cable companies, Comcast and etc. And what happened to a jewel of American innovation, Bell Labs, when that all got broken apart and regulated? Well, what happened was that it ended up at Nokia. Nokia now owns Bell Labs. So it was like Xerox Park. Bell Labs just went away. And so her point was why we created so much competition. The US, don't you remember how bad the US telecommunication system was after the AT&T breakup, how non-competitive it was? Essentially, until iPhone came out. I mean, that was what changed the game. Anyway, there you go. There's my rant for the day. Well, if you're listening to this podcast and you want to send in a note, we'll read it on the cube pod. So send me or Dave a direct message. You want to comment on Dave's rant. You believe it, believe it, or you want to disagree with it or send us a note. Dave, we'll read it on the on the cube pod. I got an email from someone I'll read here today. They wanted their name to be anonymous, but they said, love what you guys are doing. What do you think about IBM? John, I heard your rant with Dave about IBM. I think IBM is the winning hand. But I think they're light on tech, more professional services. What do you think and what does Dave think? Yes. What's the question again? Tell me the question again. The question was, I heard your love your debate between you and Dave on IBM. Remember when we talked about the IBM earnings? Yeah. And and I said, well, you know, I wasn't as bullish on Watson as you were. Watson X, I haven't seen it. And I said, and I said, and then this. So the reader says, I saw your rant with your debate with you and Dave. Love your takes on each side of that. I think IBM is around for the long term with AIs a tailwind, but not sure about the tech, but but I like the professional services angle. What do you think and what is? Yeah, so I definitely I mean, regional services, their consulting division is a is a is a mainstay. It's a foundational division for IBM. And it gets them into so many high level conversations and solving difficult problems. I happen to think that they've got it right with Watson X. When I look at what IBM is doing and shipping relative to some of the other leaders in the marketplace in analytics and data, whether it's Databricks or Snowflake or some of the other companies that are doing governance. Some of the smaller companies like an Elation or a Calibra. I see IBM as in a much, much stronger position than they were with Watson. One dot oh, I think the tech is matured. I think it's real. I think they've got a full stack. And I think they're going to be embedding that into a lot of different places in software ecosystems. I think they're way more partner friendly. IBM embraces open source. I think Red Hat was actually turning out to be a really good acquisition. I think Arvind's got them really focused. I think their hybrid cloud strategy is working. And that is a much more balanced equation now. It's not like everything's going into the cloud every day as it used to be. So I think IBM's in a really good position with some significant upside, in my opinion. Yeah, I mean, I take the position of I like this comment. It was from an IBMer, by the way. So I like the question because, one, I'm not really sold yet on the tech as IBM has a lot of tech. But OK, there's a whole different conversation. But I think the big trend that I see going on with this whole hybrid cloud and on premise momentum is not so much to do with the fact that the old guards catching up, it's the fact that companies like IBM, even some of the bigger companies, even like Amazon, has got a lot of cash. IBM's been around all these legacy companies that are still around. Or if they pivot properly, they have a lot of built in DNA and they serve customers that have been working with them to transform their computing architectures. Now, it's just happening a lot faster right now. And a lot of companies have this administrative overhead that's that's been growing faster than probably some of their lean meat. So there's a lot of fat to cut. That's why there's a lot of layoffs. So I think companies like IBM that have great professional service that know how to do transformational projects will do extremely well with just a good enough tool and that good enough tool gets them in the market and can iterate and grow faster. So I'm saying that I like the question because it's actually the professional services of IBM combined with the good enough Watson. It doesn't have to be open AI. Now, open AI is out there. I'm sure every customer will use it for some other alternative of proprietary open source. So IBM's in a pole position to use their resources that they're good at to help companies, their customers, do what they've been selling them for years to try to do. And so you have a robust market for every IBM customer. So I can see IBM doing well, plus they get red hat. So companies like IBM that have installed base, that's why I like this Cohesity deal we got with with Veritas. That's why I'm bullish on it because their customers are now in demand. Help us more faster. So IBM's customers and all these legacy customers are like, I got to move faster. So they know how to do that. And that's the key. And they just need the right tool for the job. And it doesn't have to be super great. It can be good enough to move the needle. And that that's what I think the AI is a pass of the mustard because they have all that DNA and trying to sell the old Watson. Well, so this is what's happening with IBM. So the old Watson is they're transitioning out and churning the base of old Watson and bringing and moving them to new Watson. And they're bringing on new Watson customers. If you look at the spending data, it's actually quite remarkable. You go back, you know, let's say about a year. There were far more customers, like huge number of customers, 20, 35 percent that were either spending less or churning. And then it was a big chunk, about 40 percent of the customers. And we're talking, you know, a decent size, you know, over 100 customers in the survey, a big chunk in the fat middle that was just flat spending sort of sitting on their hands. A very, very small percentage of new customers and, you know, decent percentage spending more, like 20 percent. And that was probably the new stuff. Those those numbers have started to do this. Those that are spending more and coming on new. It's now like 27, 37, it's almost 40 percent are either new customers are spending more and the churn is going down and the spending less is going down. So we measure this by a thing called net score. Their net score a year ago was like minus 7 percent. And today it's up to like 21 percent. So it's it's like a 30 percent swing in spending momentum. And it's just going in the right direction. So we'll see if that's a continued trend. It's one, two, three, four quarters now it's done this. So they're looking pretty good. This is just the Watson piece. And then, you know, if you look at if you look at Red Hat, that Red Hat's always been solid, always. And so, you know, outsourced IT, you know, that doesn't look so great. You know, it's like a flatter business and that's kind of the kindral business. But the consulting business, it's solid. Yeah, again, I think I think Arvin's got him in the right direction. He's not what he's doing is not just aspirational. It's very achievable, in my opinion. And they they made all those cuts. So they're dropping a bunch of money to the bottom line. So it's the first time in a long time. I've really been truly excited about IBM's prospects. I think they're back. Well, I think there's a lot of action going on. One of the things that I'd saw on on on on Twitter was and I'm still going to cover it is that, you know, there's a lot of funding happening, right? So you got the founder of Pivotal raised a bunch of cash. Rob, me, remember Rob, keep alumni. Yeah, he's raised 24 million to help companies ditch their mainframes for the cloud mechanical orchard, it's called. So Pivotal Labs, successful company, great culture. That was cool. Ninja one raised two hundred and thirty one million at a two billion dollar valuation. That's interesting. And of course, some Kubecon news, Kubernetes automation companies, startup company, we've worked shut down. So remember, we talked about Kubernetes being boring, Dave. And there's no Linux is standard and no one really has a conference around it. Kubernetes is becoming successful. And with that, it's like it runs. So there's no need. So there's no need for a managed service anymore. It's just it's Linux. You just install it. So I think you're starting to see people pivoting in to that. So again, this is why I like, this is why I like we're in a market transition and we're going to bring Sanji Poon on on soon. And he's when he comes on. OK, this is the questions I'm going to ask him. We're in a market transition. Is that people going to be on the wrong side of history? What's treated which side is treating you on the right side of the wrong side? As this wave hits, are you are you going to be drift? What are you going to surf the wave? That's going to be the key. And I think this is his opportunity on a more personal note. I'm going to ask him, was there any other alternative? Is this musical chairs and the music? Is it stopping when you just grab one? Don't know. These are all questions, Dave. I mean, what are you going to ask him? You know, I want to know sort of what the impetus was for the deal and how you take one plus one and make it more than two. And I want to think about, you know, Sanjay is all about innovation. He's not a this is this. He's not a consolidator, right? That's not his play. He's about investing and growing. So I want to understand how you take a company that's not growing and a company that is growing. So he said he's not growing. Sorry, Veritas not growing. Cohesity is growing. You put them together. How do you make that grow? And what do you do with the roadmaps on the different products? You know, like NetBackup or Veritas. I'm also interested, you know, a lot of Veritas software companies run on other people's platforms, like they run on Dell, like data domain. Are they going to continue to support that? Or because they're competitive, are they going to cut them off? I would imagine they're going to cut them off, but we'll see. But maybe not. You know, how are they going to migrate them into Cohesity? And what about the IPO? What are the IPO prospects? I want to understand that as well. OK, Dave, we've got Sanjay Poonan, who's the CEO of Cohesity, who announced a groundbreaking merger slash one company with Veritas combination of two great companies. One, I think Cohesity more relevant than Veritas, in my opinion. I wrote that on my LinkedIn. We'll get Sanjay's opinion. Sanjay Poonan, Cube alumni friend of the Cube. I got a lot of people saying I was too positive on my post. I thought I was kind of critical, but optimistic. Congratulations. Welcome to the Cube pod. First time on the Cube pod. I love this. I've not been the Cube pod. I've been on the Cube. I've been on video with you and you keep innovating new forms of media. It's always a pleasure to talk to two of the smartest people I know in enterprise tech, Dave and John. Always great to talk to you. Hey, Sanjay, thank you. Great to have you on. Just to set this up, you announced a merger with Veritas. Both comes to be followed closely. Data and security, storage, you know, the full transformational journey. You took over Cohesity. I think you told me privately you're going to dig in and look for some organic growth, but you're no stranger to inorganic. You did this at VMware. You had a stellar track record SAP and VMware where you brought in a lot of action, air watch. We covered all that news here. This is a smashing asset combination. And it's almost like it really is good fit. I mean, I commented on it. OK, you know, what's going on in this market? We're in a market transition. AI is coming. Everyone's building on infrastructure. It's not just storage, it's security, it's data. You have great founder over there with MoHeap's been on the Cube. Why this merger? Explain what happened? How did this come about? What was the history of it? And how did you get here? And what is it? Thank you, John. Yeah, listen, I, you know, I guess the way I'm built, you know, my and only one gear, which is to go fast and to swing for the fences. We only want life to live and we have to work hard. And, you know, I think think bold. I think, you know, I think leaders as leaders, it's imperative on us to set a vision that's bold. It's creative. I've always said there's sort of two vectors that should drive any company product innovation and customer obsession. And we have the most innovative product in this category is very clear. More than the founders of the company had a Google less style. They were the first to invent hyperconvert, scale out architectures. Many others, good companies, some of whom you talk to copied architecture, but we were the first to do it. No, no doubt. And I give more to the team and enormous credit. And he took that idea from what he did in Nutanix, which was bringing that hyperconvert, scale out architecture, primary data. So when I got here, I had tremendous respect for the tech who was the best tech. We were also growing, go to market the fastest. But we kind of gone from number 25 in the space to number 15 in the space. I'm quoting IDC, market share numbers to number eight. And we probably crawled our way, you know, number one. And just because we were growing faster, but it takes a while to kind of there's some very sticky solutions that are good products, very test is a good product. Dell has a set of technologies, data demands, a good product. IBM had a product slightly auditively does its job, especially in mainframes. So, you know, I went around and I talked to, you know, I come in peace to all CEOs, even competitors of mine. And I talked to the entire industry and asked them, many of these folks I've known from SAP or BMR, they worked with me in those contexts. They're good CEOs. I respect them. I want to get a sense as to where the industry is going. And John Chambers told me something when he was at Cisco, he would talk regularly to all his competitors and he felt it was really good to get a sense of where the industry is going. And I respect him. People like Bill McDermott, John Thompson, these are people who are statesmen, they're diplomats and I that's why I view this industry. So as I talk to everybody in the space and to advisors of mine, probably one of the most interesting conversations was with Greg Hughes and with Patrick MacArthur, his chair. This was about 16 months ago, probably two or three months after I started, just to get a sense that no agenda. Where's your vision? Where's our vision? Where do you see it going? There's there was respect for each other. I mean, partly because I'd worked at Veritas 18 years ago and I respect Greg. He's been a friend of mine for 20 years. I'd known Patrick for a little less. They respected our tech. And I said, you know, are there ways we could think more together? And they said, well, you know, give me some specifics. And the first proposal I had fell flat in its face, which was, how about you OEM our product and you took this as a car life? And they didn't have hardware either. I don't think Veritas has hardware, do they? Backup appliance. A little bit. Everybody has an appliance. The idea I came up was when you OEM a product and you take a stake in us, you know, meaning we, Veritas OEM a product and Carl, I'll take a stake in us. And, you know, Patrick said, why would we do this? That when the moment we announced that no one's going to buy net backup? So that fell flat. I went left with my tail between the legs and then the advice is to us. The bankers came up with this structure, which is very creative. And that's where we are today. It's a very creative structure of a carve out, a debt exchange, an equity stake, a minority equity stake in us and a combination that puts us together in a number one spot there, number three, number eight. It's a very creative deal. Both boards asked me to lead the company, which I'm very honored and humble to do. And we're going to create an iconic company. I've talked about this. This is the way you need to think about it. We're going to create a snowflake meets Palo Alto type of company. It's data and security. So who's the one of the best modern data companies? Snowflake, maybe Databricks, too, but Snowflake's the best public company today in that space. What's the best security company to Palo Alto? And this combination will create a leader that's going to use AI and security to revolutionize, check this out, hundreds of exabytes. Many of our competitors deal in the single digits of exabytes. This is hundreds of exabytes of secondary data and then eventually primary data, the things we're doing in AI and security. In a very strong position in the Fortune 100, 96% of the Fortune 100. After 10 years, we've gotten to about 44% of the Fortune 100. Very small fraction, much smaller fraction of the global 500. Most companies of our size, including other peers of us, we struggle getting relevance internationally. It's hard to get relevance in Japan and Australia and Singapore and Germany and France and UK, where the who's who in those countries use you. So it's a combination, so it's a company, so it's a merger. OK, with an elaborate back end, I got that. So I'll get the mergers, I got that. But talk about the install base of Veritas, because one of the things that jumped out at me was, and we know they have a lot of IP, Dave's got some momentum data that he can share. But to me, what jumped out at me, Sanji, was the momentum you have. OK, and then you're kind of crawling along. Like I said, the market's weird right now. But with Veritas, your install base just you just become huge. I mean, it's like the change is cohesity from, I won't say small startup, but small growing startup to massive. But like literally overnight. Well, I think we are playing the order and install base. And it's a very profitable company. I mean, we were the fastest growing, so we had speed. They had profitability, they had scale. So let's talk a little bit about that base of customers. We have forty two hundred customers and about forty four percent of the fortune and we're an enterprise company. Many of our alternates play more in the mid market. We are much more an enterprise company. But we didn't have as much success, certainly not. Maybe it was 25 percent of the global 500. These are the biggest global 500, the 500 biggest global accounts. And Fortune 100, the biggest US accounts. So we had good success in the US. We're doing very well in North America, competing with Veritas and others. But it is hard to get success in those other countries. Those what I call the G 10 countries, Japan, Australia, UK, France, Germany and the federal sector because they're sticky. And when the product works, the product doesn't work again, but Veritas, the product works, they invented many of the things 30, 40 years ago. And they've Greg's done a very good job as a company, keeping the product, you know, growing, keeping the company profitable and many of those international customers happy. So this gives us a certainly, as you point out, a much faster customer acquisition speed and it lowers the customer acquisition costs. And we're both very both companies. Greg and I, if he was sitting here, he would say the same thing. We're very focused on customer satisfaction. So I can't wait when the transactions close to go to the top 100 customers of ours on the road show and tell them one simple thing. We're going to keep you happy. You know, Sanjay, so so this gives you a better profitability. We've got that I'm interested in how it's going to affect growth because you're taking a fast growing company, Cohesity. You've got Veritas is not a fast growing company. How do you make sure this is one plus one is three and it doesn't stunt your growth? One plus one will be equal 11. David, that's what I hope. My hope is sorry to underestimate you, Sanjay. I had to use that line that I pull out every now. But that's thinking big, for sure. Well, I think you have to think big. We want to create a 50 billion market cap company in this category, which has never been great. So, you know, the usually most of our company, look at the growth of many of our competitors, a single digit growth. Look at the IDC charts, right? So we think we can be in the teens, certainly. I mean, I'd like to get that even higher. It's all pro forma at this point in time when we've not even modeled revenue synergies as yet in the way we're thinking about it. It was very minimal. Take their growth, take our growth. I mean, if you look at the numbers that IDC had the first half of 2023, they had them growing a single digit had us growing, you know, kind of close to 20 and north of 20 percent. So we put that together. I think you'll get a profitable growth company. And today in the public markets value profitable growth companies. Look at the companies who went through the entire post-2021 idea cycle was teaching everybody a simple lesson. You want to go public, you got to get profit. Yeah, Sanjay, on that point, on that point about obvious synergies and probably more than you just illuminated to brings up a good question. How fast of this deal come together? Can you give us a sense of how fast this came together and to the order of magnitude of the new company combination? What's it look like in terms of skies and scope? So how fast Greg, Greg, Patrick and I and our boards are talking 15 months ago. It wasn't a it wasn't a short process because there was a lot of complexity. The lawyers who have been advising us, some of whom actually worked with me at VMware during the Dell VMware spin out and some of them actually worked. Even the VMware going public said this was the most complex but creative deal they've ever worked on. So because of all the pieces and parts of that exchange and equity raise, you know, there were many pieces to this and it took time. But we were going to do this this project well, not hastily. Now, in the private markets, it's easier to do that and prevent a leak. You know, we kept this this project. We kept a very tight circle of people under NDA and it kept confidential, John, for 15 months minus nine hours. I think you guys got a part of the leak before. I'm about to break a story. And then it but it was nine hours before we were ready. And that was that was pretty miraculous. You owe me on that one. You owe me on that one. Sanjay Sanjay, you owe me on that one. I could have brought it for many things, John. I got at least that I'll add that up. And well, no, you know, you know, we're not about the page use. If we were like, you know, page you click bait, we would have broke it. But we, you know, I mean, look, what's that going to do? It's going to screw up your launch. No, no, I got to I got to ask. I know, Sanjay, you're tight on time, but I got to ask some of the customer questions. I want you're an innovation guy. So I want to know how you're thinking about the innovation roadmap for Cohesities data protect at the same time, the net backup roadmap for Veritas. You have experience in managing complex portfolios and SAP VMware, way more complicated than you've got here. But how should we think about those? What learnings can you bring? David, you're absolutely right. This is not my first rodeo to a back position. SAP acquiring business objects. There was some overlap VMware buying airwatch. There was some overlap, you know, you have to deal with overlap. But here's how I think about it. There's certain use cases like a jigsaw puzzle. There's certain use cases we don't do today. Let's start with those Cohesities. Net backup is a great backup product on top of, for example, data domain. I'm told that about 60 percent of the Dell base that uses backup uses them. Yes, falls was to Michael Dell and his team, Jeff Clark, Arthur Lewis, that we will absolutely support net backup on top of data. We don't do that use case. We absolutely support it because customers want. It's called a disaggregated use case backup on top of somebody else's storage. Yeah, OK, we don't do things like backup to tape. There's some customers who still want backup tape. Backup, no worries. OK, guess what? Now let's go. That's on the far end of what one might consider. There's certain proprietary databases we haven't built like some customers want a retailer wants an informix database and other financial services. We want CyBase. They've got 500 adapters. Incredible. We want that. That's beautiful IP. They've got, I think, some order of 1500 or 2000 patents. We want that IP. They invented many things in backup 30 years ago. That's going to be very powerful in our IP portfolio. Then let's go to the forward thinking side of things. They acquired a company called Hubstore that does a lot of the SAS applications. They do Google Workspace. They do sales for us. We don't do that today. So some senses, you know, a cavalier approach might say, well, Coecedy did these, I'd say the core use cases better than everybody else. Yes, that is data protection of virtual machines, many databases, NAS files and M365. Those four use cases we do very well. And we win because of speed, scale and simplicity and security. So that we're going to do. And then some of the new things that we're doing AI, those are extremely complementary, so we're going to be talking a lot more about generative AI. And by the way, Microsoft, Google, Amazon and now Nvidia are super excited. You're going to hear more about that in coming weeks. Stay tuned on our generative AI capabilities for being able to search for data. See, most often people think about this space like a tape. In the old case, it was a tape. And now it's actually this, but it still feels like a tape because you compress and dedupe the data and put it there. We're going to make that tape look like a lake. And once you can search that secondary data, just like you could search snowflake and data breaks, it becomes gold. That's our vision. No one's cracked that the ability to manage, secure and provide insights and data. Now, as a leading player with the scale, we have 1.6 billion in revenue, 1.3 billion in ARR, hundreds of exabytes, 96 percent of the fortune, 180 percent of global 500, we're just getting started. So my last question for you. First of all, thank you for coming on our Q pod. We rarely have guests, but when we get great news, we'll bring our guests on. Our friend, joint friend, John Chambers once said, we talked about this on our last Q pod, Dave and I. Market transitions are critical for companies to make. You got to make the transition when the market transitions. And John was huge on transit market transitions. We're in one right now. I hear headlines like data protection, storage, describing you guys. What is the new combination? Cohesity, Veritas. What is the category? What do you guys call yourself? I saw security, I saw data. You said snowflake meets Palo Alto Networks. What category are you in? What category do you want to create? Or what is your vision for what you will be? What's the new bumper sticker for Cohesity with this combination as it unfolds? OK, I'll give it to you. Simple. The category is AI powered data security management. Data security management is the core category. AI powers how we differentiate. Here's our mission. OK, that's the category. Here's the mission of the company. We protect and secure the world's data. And allow companies to get insight into that data. The largest organizations in the world rely on us for their business resilience, not just cyber resilience, all resilience. So I think that that's you take that category and the mission. You can build a great company. Now, the question is when you come back to data, you think of it like an iceberg. Primary data is the top of the iceberg. Companies like Snowflake, Databricks, or unstructured data like emails in OneDrive or whatever have you. The moment that data ages, it goes to the bottom of the iceberg. That's called secondary data. Nobody has created a company that can manage, secure, and provide insights in that secondary and there's thousands of exabytes in the bottom of the iceberg. Final, final, final question. I have one more pop in my head. I've got one more, too, if I can keep going. I'm happy to do it before Cohesity before the merger was how big? And now with the combined nation, what is I mean, combined merger? What does it look like in terms of size of people under your management? Yeah, I mean, what does it turn into from this to that? We are about a combination is going to be about one point six billion. About a third of that comes from Cohesity and two thirds of that comes from Veritas, that's kind of to think about that as pro former, you know, revenue. Profitability comes almost significantly when we were approaching profitability cash flow, they were very profitable. Growth rate comes primarily from us. They weren't declining. I think some of it, not you, but some of the other reporters said they were declining and losing, they're growing, not as fast as us, but they were growing. So we will make sure that the combination is a rule of 40 company. That's what we're going to do. None of our competitors are rule of 40. This is going to be a rule of 40 company we'll go out, which is going to be great. Why stop at 40 and make it 80? That's a little tough for you, but okay, so you go. Hold on, hold on, hold on. I want more clarification. How many employees? Let Dave get in. All right, I want to get that. I want to get the data. So one point to get the data. I'm used to it, Sanjay. Employees, how many employees from Cohesity? Nearly over 5,000 employees, you know, you know, that's kind of roughly how we end up, but we're still working that through. Okay, so you go from a half a billion to now, let's call it one and a half, 1.6 billion, you said. Okay, 1.6. So that puts you into a new club. My question is the IPO question. Valuation around seven billion. Do I have that right? Is that something for this? But I mean, that's for the private round, right? So I mean, my view on the valuations we looked at that was valuations of pieces of paper in a private round. The most important valuation is what you get in the public markets. And I'd rather point this company towards a 15 billion dollar valuation would go out 20, 25 and then keep executing rather than be greedy in this private round. So all these guys who went and got overinflated valuations during the heyday, they're all going through down rounds now. You want to have a linear growth for your valuation so that people steadily, I'm not, I mean, I'm playing this for the long term. I want to create a 15 billion or 50 billion dollars as do all of our team. We want to create that. We then want to go from 50 to 100. So from my perspective, we were modest as to how we thought about valuation now because we were planning for the future. And then the IPO question, listen, our bankers tell us this year last year was a tough year, only three went out, Clavier, Instacart and Arm. And 2022 was a dry year. I think 2024 is going to be an uncertain, maybe a tepid year, very few that will go out and there may be one or two months to get out, maybe April and then July, August and then there's the election. So all the great companies like Databricks and Stripe, I think are all thinking next year after the election. So if we're going to wait, my view is why not bulk up and then go out? So that's kind of the way the calculus was if we're going to wait and 2024 is a dry to tepid year and nobody wants to be the first to go out, let's get bigger, let's bulk up, close this transaction. Hopefully by the end of the year. And then we'll be ready when the markets open up. And there's another factor until an IPO is our bankers told us there's about 800 companies that are between 50 and 500 million trying to go out public, 800. That's in the category we were. And some of our competitors are in that category too. Well, how many over a billion? Exactly. I'm going there. 40 companies that are over 1.5 billion that want to go up. It's a much more rare air. And then you take inside those 40 who are rule of 40. So we get to be a much different company as we go on. That's the calculus like if you're going to wait, if it's a rainy day, you stay inside, fix your house and then wait for a sunny day before you sell the house. So let me say I got this. So I love what you said. You had $7 billion valuation. You want to go out at, let's say, 15 to 20. So your your your private investors get a nice bump up. And then you want to take it to up north of 20 to 50 billion. So the guys that get in on IPO, the little guys are actually going to make some money. So I like the way you think, Sanjay. I hope all investors, listen, this is what are we doing this primarily for our employees and our customers? Shareholder is important. Our employees, but we're doing this company for our employees and our customers. They never lose track of that. Our employees innovate every day. They work hard serving customers and our customers show faith in us. I always start a shareholder is important. And by their employees are all shareholders. But I never I go back. Who do I serve every day? My employees. I'm a servant leader who wants my every employee to know that the CEOs are at the bottom of the pyramid, it's not the top down. But then we also serve our customers. And we have that mindset. I mean, these are just numbers we're throwing around now, like 15, 50. These are aspirational. I hope we get there. But that's how you look at you've talked indication or like what he's done in Palo Alto, I mean, he's taking the company is probably 20 to 30 billion. It's not north of 100. You know, look at what Frank Slutman has done. Now he is more recently took it. He's taken it to 75. So he's a great CEO, as I respect. And that's why you should think about this as a snowflake. Yeah, it's Palo Alto. George Kurtz crowd strike. Another is 75 billion right now. So you could you could say maybe it's a crowd strike mix. No, a crowd street mix. There you go. Right. You can pick any and now it gets data and security. And you think of your largest data company, snowflake or data bricks. Think of your largest security companies, Palo Alto or crowd strike. That's who we're creating here. Well, your integration comes down execution, right? Good, good combination. Great. Well, you want to stay humble and hungry. And let me tell you just one quick lesson on that before you wrap up. You know why most M&A's feel people, not all these product things that you discuss will will figure out. Somebody decides I don't want to stay this company. They have an ego or something and that's my job. I got to make sure the best talent among those 5,000 people. I'll work hard for them. I want to make sure this team has the best. And we don't have the best people going to recruit. We'll recruit from our competitors. We're getting emails from competitors who want now to join us because they're saying, I want to be part of the top company in the space. I'm working at number four, five, six or seven. I want to be number one. Great. Join up. We've got customers of our competitors reaching us saying, please give us a briefing. We'd like to know what you're doing. So I just we just need to stay humble and hungry. And remember, serve your employees, serve your customers. You build a great company. Well, we're in a markets transition looking good in that rarefied air. The 800 to 40 companies above 1.5 million about to go public. Great combination. We're a big fan of what Veritas's legacy was and is coming becoming. And obviously we've been following you. Great transaction. We're looking forward to hearing more about what's valuations, whether those synergies that you're that will probably pop out of nowhere. I'm sure you bump into a bunch. And as you always do, Sanjay, thank you so much for coming on the Cube pod. Great to see you Sanjay and our weekly podcast where we extract the scene from the noise, me and Dave, riff a little bit more casual, but appreciate breaking news here from your company. Congratulations to you and the entire team. Thank you, John. They've always a pleasure to to smart, very smart journalists in the industry. Hey, best of luck, Sanjay. Thank you guys, all of us. Dave, Sanjay Poonan, what a Cube friend. We were nice to him. I thought we were pretty strong. A little bit at the beginning, but you know, really good data, Dave, you know, 1.6 billion, we got some numbers out of them. We got I love the stats from the bankers around the public that gives us some good puzzle pieces for our analysis. But look at I mean, this is a transition market. You mentioned John Chambers, really, really laying down the vision. I mean, he Snowflake and Palo Alto Network is kind of two Silicon Valley companies. Obviously, he's using them as stocking horses for valuation and vision. Interesting perspective. I mean, if you look at CrowdStrike and Palo Alto's valuations, Dave, they're through the roof. I mean, it's incredible execution. So again, it's going to come back down to integration as he says people. But really interesting perspective from Sanjay sounds super excited. And, you know, I mean, 1.6, I mean, it's not huge numbers, but better than where they were probably with Cohesity and over 5,000 employees now. I mean, Cohesity had it was a tiny company. European Asia Pacific presence, instant global player. So what's going to be interesting is does the tech translate? That's going to be does the tech translate? Can they can they mine the install base? Can they drive this through the install base? Can they keep the people from leaving or motivating them to stay and show they got some complicated stock option grants and some sort of equity and bonus incentives for management? But yeah, I mean, I kind of like this on paper. I think it's got a lot of headroom. And it sounds like they didn't really dig into the synergies from what he was saying. Fifteen months, kind of a short time period, mostly back end structure. What I liked was what he said about the customer view that that the veritas products, they're going to continue to support them on things like data domain, which is owned by Dell. That says to me they're doing the right thing because there's a good business there and you don't want to disrupt that. So it seems it sounds like and he's right about. I forgot about what he said about veritas. They got like one of everything because they've been around for so long. You remember veritas used to be the gold standard of storage software. And then they went private equity. They kind of disappeared for a while. They made some investments. And then, you know, they say they went sort of dark. He didn't really hear much from them from a marketing standpoint. So it's interesting. I mean, said this was going on for 15 months. So who knows? Maybe those other rumors about Cisco and IBM and Rubrik were all bullshit. And just maybe, but who knows? But they smoke this fire. So, but anyway, it doesn't matter is what they're doing. He says the other thing is that taking on some debt, they probably got a couple billion dollars in debt, which is, you know, two billion on a 1.6 billion. That's a hundred and 25 percent. But Sanchez Sanchez revenue and we trust it. I mean, like he knows, he brought up the scoop. I had to scoop it. You know, 24,000 in chance. I could have dropped that. But my only point there is they got to they got to chop down that debt a little bit before they go public. I would think, you know, and I think he was signaling they need time to do that. I know a lot of people are excited about IPOs this year, but it sounds like he's going to wait. You know, you think about companies like Databricks, Arctic Wolfs, another one that we've been predicting is going to go public for a while. So we'll see. I mean, maybe 2024 will be a quiet year. But who knows? Second half could be gangbusters with all this AI hype. People might want to jump in if they're ready. Yeah, I do. I love it. I think it's going to be one of those things where, you know, he's going to be classic candidate for IPO. Can they get the numbers up? I've always liked Veritas as the company. They've got a very loyal basis like I was coming about IBM earlier. You know, they have customers that are they've been serving. Now you just introduce a new element called AI enabled. As Sanjay put it, every company is transitioning and it's an opportunity for whoever's got who's got the bold vision and the ability to execute, OK, to get in there and get it done. So we'll see. Sanjay's got the chops. Can he mobilize the crew is obviously telling us to people? I'm at the bottom of the pyramid. It's all about execution. He's on the wave. We'll be watching. We'll be watching Dave again. Great, great part of bringing the guests. I love bringing in guests just, you know, as we wrap up, I'm reading some of the news here from the Wall Street Journal on my online version. Exclusive Amazon Prime Video gets exclusive NFL playoff game next season. I don't think it hit my paper yet. I read it online, too. You know, Dave, that's that's that's today's news, not yesterday's news. You see, you're reading yesterday's news. No, I read online, too. That's from yesterday. Save the trees, Dave. Save the trees. It must be at East Coast thing. So so NFL have a great weekend. We'll party. Yeah, joy listening. Hit us up. It will if you want to get a question, you want to ask me and Dave, send us an email or DM us, WhatsApp us, we'll read it on the pod. And if you want your name to be read, say I want my name to be read. If not, no big deal. You want to go anonymous? We will read it. It's been one of the most requested things I've been getting is, hey, can I comment? There's no comments on pods. Well, here is your chance. Let us know if you have any questions. We will read it in the air. If it's good, it sucks, we won't. So ask good questions. Feel free to chime in. Dave, we'll see you next time. Have a great weekend. Thanks, everybody. It's episode 46. Go to silkenangle.com, cube.net. Check out the cube.ai.com. We're adding more and more stuff every day, multimodal search results of cube conversations, every single word of the cube. Cube pod is now indexed into the AI and soon it will be a bot for you to use. Check it out. Have a great weekend.