 From Boston, Massachusetts, it's theCUBE. Covering Actifio 2019 Data Driven. Brought to you by Actifio. Welcome back to Boston, everybody. We're here at the Intercontinental Hotel at Actifio's Data Driven conference day one. You're watching theCUBE, the leader in on the ground tech coverage. My name is Dave Vellante. Stu Miniman is here. So is John Furrier. My friend Frank Jensen is here. He's the Senior Vice President and Chief Analyst at IDC and Head Dot Connector. Frank, welcome to theCUBE. Well, thank you, Dave. First time. Newbie, you're going to crush it, I know. Be gentle. You're awesome. I've watched you over the many years. Of course, IDC, we get competitive and it's like, who gets the best rating? Frank always had the best ratings at the directions conference. I could, he's blushing, but I could never. I know if that's true. I could never beat him. No matter how hard I tried, but you're a phenomenal speaker and you gave a great conversation this morning. I'm sure you drew a lot from your directions talk, but every year you lay down this mini manifesto. You describe it as you connect the dots, IDC, thousands of analysts, and it's your job to say, okay, what does this all mean? Not in the micro, but let's up level a little bit. So what's happening? You talk today, you gave your version of the wave slides. So where are we in the waves? We're entering, sort of exiting what you call the experimentation phase and coming in to a new phase to multiplied innovation. I saw AI on there, blockchain, some other technologies. Where are we today? Yeah, well, I think having mental models of the industry or any complex system is pretty important. I mean, I've made a career dumbing down a complex industry and it's something simple enough that I can understand. So we've done it again now with, and IDC was what we call the third platform. So 10 years ago, seeing that a whole raft of new technologies at the time were coming that would become the foundation for the next 30 years of tech. So that's an old story now, cloud, mobile, social, big data. Obviously IoT technology's coming in, a blockchain and so forth. So we call this general era the third platform, but we noticed a few years ago, well, we're at the threshold of kind of a major scale-up of innovation in this third platform ever that's very different from the last 10 or 12 years, which we call the experimentation stage, where people were using this stuff, using the cloud, using mobile, big data to create cool things, but they were doing it in a kind of isolated way, kind of traditional, well, I'm going to invent something, I may have a few friends help me, whereas the promise that the cloud has been, well, if you have a lot of developers out on the cloud that form a community and ecosystem, think of GitHub or any of the big code repositories or the ability to have shared services off an Amazon cloud or an IBM or Google or Microsoft, the promise is there to actually bring to life what Bill Joy said in the 90s, which was no matter how smart you are, most of the smart people in the world worked for someone else. So the question's always been, how do I tap into all those other smart people who don't work for me? So we kind of feel that where we are in the industry right now is that the business model of multiplied innovation, or if you prefer networked or collaborative innovation, being able to build something interesting quickly using a lot of innovation from other people and then adding your special sauce, that that's going to take the scale of innovation just up a couple of orders of magnitude. And the pace of course that goes with that is people are innovating in a much more rapid clip now. Really, so really the full promise of a cloud native innovation model. So we kind of feel like we're right here, which means there are lots of big changes around the technologies, around kind of the world of developers and apps, AI is changing, and of course the industry structure itself. The power positions, a lot of vendors have spent a lot of energy trying to protect the power positions of the last 30 years. So we'll get into some of that. So everybody talks about digital transformation and they kind of roll their eyes, like it's a big buzzword, but it's real. It's data, we're here at the data-driven conference. And data being at the heart of businesses means that you're seeing businesses transition industries or traverse industries, Amazon getting into groceries, Apple getting into content, Amazon as well, et cetera, et cetera, et cetera. So my question is, what's a tech company? I mean, you know, Benioff says that every company's a SaaS company and you're certainly seeing that. I mean, it's going to be great for your business. You know, IDC, quantifying all those markets, but I mean, the market that you quantify is just, it's every company now, banks, insurance companies, grocers. Everybody's a tech company. I think, yeah, that's 100% right, is that this is the biggest revolution in the economy for many, many decades, or you might say centuries even, is yeah, whoever put it was it, Mark Andreessen, or whoever's talked about software hitting the world, we're in the middle of that. Only software now is being delivered in the form of digital or cloud services. So, you know, every company is a tech company. And of course, it really raises the question, well, what are tech companies? They need to kind of think back about, well, where's our value at? But it is great. It's when we look at the world of clouds, one of the first things we observed in 2007, 2008 was, clouds wasn't just about S3 storage clouds or salesforce.com software as a service, it's a model that can be applied to any industry, any company, any offering. And of course, we've seen all these startups, whether it's Uber or Netflix or whoever it is, basically digital innovation in every single industry transforming that industry. So, I mean, to me, that's the exciting part, is that that model of transforming industries through the use of software through digital technology in that kind of experimentation stage, it was mainly a startup story, all those unicorns. To me, the multiplied innovation chapter, it's about finally, you know, the cities, the proctoring gambles, the Walmart's, the John Deere's, they're finally saying, hey, this cloud platform and digital innovation, if we can do that in our industry. Yeah, so, entrepreneurship is actually starting there. So, for you and I, I've seen a lot of cycles. We watched the sort of main frame wave get crushed by the microprocessor-based revolution. I just see it at the time, we spent a lot of time vacuum tubes. Looking at that vacuum tube, right here. Water cooled, it's back. So, but the industry has marched to the cadence of Moore's Law forever. I mean, even Thomas Friedman when he talks about all his stuff, throws in Moore's Law. But no longer is Moore's Law the sort of engine of innovation. There's other factors. So, what's the innovation cocktail, looking forward over the next 10 years? You've talked about cloud, you know, we talked about AI, what's that, you know, sandwich, the innovation sandwich look like? Yeah, so to me, I think it is the harnessing of all this flood of technologies, again, that are mainly coming off the cloud, but, and that parade is not stopping. Quantum, you know, lots of other technologies are coming down the pike. But to me, the, you know, it is the mixture of number one, the cloud, public cloud stacks, being able to travel anywhere in the world. So take the cloud on the road. So it's even, I would say, not even just scale, I think of, that's almost like a amount of compute power, which could happen inside multiple hyperscale data centers. I'm also thinking about scale in terms of a horizontal. Bringing that model anywhere. Take me out to the edge. Wherever your data is. Take me to a carnival cruise ship, you know, take me to an, you know, an Apple powered, autonomous car, or take me to a hospital or a retail store. So the public cloud stacks, where all the innovation is basically happening in the industry, jail breaking that out so it can come, you know, through Amazon, AWS Outposts, or Azure Stack, or Google Anthos, this movement of the cloud guys to say we'll take public cloud innovation wherever you need it. That to me is a big part of the cocktail because that's, you know, basically the public clouds have been the epicenter of most tech innovation in the last three or four years. So that's very important. I think, you know, just quickly, the other piece of the puzzle is the revolution that's happening in the modularity of apps. So the microservices revolution. So the building of new apps and the refactoring of old apps using containers, using serverless technologies, you know, API, lifecycle management technologies, and of course, agile development methods, kind of getting to this kind of iterative sped up deployment model where people might have deployed new code four times a year, they're now deploying it four times a minute in a cloud native. So to me that's, and kind of aligned with that is what I was mentioning before that if you can apply that kind of rapid scale, massive volume innovation model and bring others into the party. So now you're part of a cloud connected community of innovators. And again, that could be around a GitHub or it could be around a Google or Amazon or it could be around, you know, Walmart in a retail world or an Amazon retail or it could be around a Procter and Gamble or around a Disney and digital entertainment where they're creating ecosystems of innovators. And so to me, bringing people, right? So it's not just these technologies that enable rapid, high volume modular innovation but it's then, okay, now plugging lots of people's brains together is just going to, I think that, here's the- And all the data that that throws off, obviously. Throws a ton of data, but to me the number we use that kind of is the punchline for where does multiplied innovation lead? A distributed cloud, this revolution and distributed modular massive scale development that we think the next five years we'll see as many new apps developed and deployed as we saw developed and deployed the last 40 years. So five years, the next five years versus the last 40 years. And so to me, that is the revolution because when that happens, that means we're going to start seeing that long tail of use cases that people can never get to, all the highly verticalized use cases are going to be filled. We're going to finally, a lot of white spaces that have been white for decades is going to start getting a lot of cool colors and a lot of solutions delivered to them. Let's talk about some of the macro stuff and I don't know the exact numbers, but IDC number is probably three trillion, maybe it's four trillion now, big market. You talked today about the markets growing 2x GDP. Yep. So the tech market, that is. Why is it that the tech market is able to grow at a rate faster than GDP? And is there a relationship between GDP and tech growth? Yeah, well, I think we are still, while we've been in tech, let's talk about those, the apps developed the last 40 years, we've both been there. And that includes the iPhone apps too. So that's actually a pretty impressive number. When you think about the last 10 years being included in that number. Absolutely, but if you think about it, we are still kind of teenagers. When you think about that Andreessen idea of software eating the world, we're just kind of on the early appetizer. The Sorbet is coming to clear our pallets before we go to the next course, but we're not even close to the main course. And so I think when you look at the percentage of companies and industry process that is digital, that has been highly digitized, we're still early days. So to me, I think that's why. That kind of the steady state of how much of an industry's kind of process and data flow is based on software. I'll just make up a number that we may be a third of the way to whatever the steady state is. We got two thirds of the way to go. So to me that supports growth of IT investment rising at double the rate of overall because it's sucking in and absorbing and transforming big pieces of the existing economy. So given the size of the market, given that all companies are tech companies, what are your thoughts on the narrative right now? You heard a lot of pressure from public policy to break up big tech. Do you think, and we saw, you and I were there when Microsoft was, and I would argue, they were breaking the law and okay, the Department of Justice did the right thing and they put a little handcuff on them. But they never really went after the whole break up scenario. When you're hearing a lot of that, a lot of it's vitriol. Do you think that makes sense to break up big tech and what would the result be? You don't think I'm going to step on those landmines, do you? I got an opinion. Yeah. All right, I'll give you a mine then. All right, since you've got one. I'll lay it out there. I just think if you break up big tech, the little techs are going to get bigger. It's going to be like AT&T all over again. And the other thing I would add is if you want to go after China for IP theft, okay, fine. But why would you attack the AI leaders? Now, if they're breaking the law, that should not be allowed. I'm not from monopolistic, illegal behavior. What are your thoughts? All right, you've convinced me to answer this question. We're having a conversation. Nothing like a little competitive juice cone, okay. You're totally wrong. Lay it out for me. No, I think, you know, but this has been a recurring pattern as you were saying. So it even goes back further to, you know, AT&T and people wanting to connect other people's, the carter phone and it goes to IBM, mainframes opening up to peripherals and this thing, right, it goes back to Rome, exactly. It goes back to the wheel, but it's, yeah, to me, it's a valid question to ask. And I think, you know, part of the story I was telling that multiplied innovation story is really, and the Bill Joy, Joy's law, is really about platforms, right. And so when you get aggregated portfolio of technical capabilities that allow innovation to happen, right, so the great thing is, you know, you typically see concentration and consolidation around those platforms, but of course they give life to a lot of competition and growth on top of them. So that to me is the, that's the conundrum because if you attack the platform, you may send us back into this kind of disaggregated, less creative. So that's the art is to take the scalpel and figure out, well, where are the appropriate boundaries for, you know, putting those walls where if you're in this part of the industry you can't be in this. So to me, I think one at least reasonable way to think about it is, so for example, if you are a major cloud platform player, right, you're providing all of the, you know, the AI services, the cloud services, the compute services, the blockchain services that a lot of the SaaS world is using that somebody could argue, well, if you get too strong in the SaaS world you are then could be in the position to give yourself favorable position from the platform because everyone in the SaaS world is depending on the platform. So somebody might say, well, you can't be in. You know, if you're in the SaaS business you have to separate that from the platform business. And, but I think to me, so that's a logical way to do it but I think you also have to ask, well, are people actually abusing? Right, so I'm not sure. I mean, I think that's a really good question. I don't think it's fair to just say, well, theoretically it could be abused. If the abuse is not happening I don't think it's appropriate to kind of prophylactically, you know, it's like go after a crime before it's committed. So I think, and then I think the other thing that's happening is often these monopolies or power positions have been about economic power, pricing power. I think there's another dynamic happening because consumer data, people's data, the Facebook phenomenon and Twitter and the rest, there's a lot of stuff that's not necessarily about pricing but that's about kind of social norms and privacy that I think are at work in that that we haven't really seen as big a factor. I mean, obviously we've had privacy regulation in Europe with GDPR and the rest obviously in tech but part of that's because of these social platforms but so that's another factor that is coming in. Well, you'd like to see the government, you know, actually say, okay, this is the framework or this is what we think the law should be. I mean, part of it is, okay, Facebook, they have incentives to appropriate our data and make it, okay, and maybe they're not taking enough responsibility for it but I to date have not seen the evidence as we did with Microsoft wiping out Lotus and Novell and Word Perfect through bundling and what it did to Netscape with bundling the browser and the price practices. I don't see that, maybe I'm just missing it. Yeah, I think that's going to be all around online advertising and all that stuff. To me, that's kind of the market thing. Yeah, so Google, some of the Google stuff, that's probably legit and that's fine, they should stop that. But to me the bigger issue is more around privacy. Yeah, no doubt. It's the social norms, societal, it's not an economic factor, I think around Facebook and the social platforms and I think, I don't know what the right answer is but I think certainly government, it's legitimate for those questions to be asked. Well maybe GDPR becomes that framework. So they're trying to give us the hook but I'm having too much fun so I'm still got, I don't know how closely you follow Facebook, I mean they're obviously big techs. Facebook has this big crypto play, seems like they're using it for driving an ecosystem and making money as opposed to dealing with the privacy issue. I'd like to see more in the latter than the former perhaps. Any thoughts on Facebook and what's going on there with their crypto play? Yeah, I don't study them all that much so I am fascinated when Mark Zuckerberg is saying, well now our key business now is about privacy and which I find interesting. It doesn't feel that way necessarily as a consumer and as an observer but. Well you're on Facebook, I'm on Facebook. Okay so how about big IPOs? We're in the 10th year now of this huge tailwind for tech. Obviously you got guys like Uber and Lyft going IPO, losing tons of money. Stocks actually haven't done that well which is kind of interesting. You saw Zoom go public doing very well. Slack is about to go public so there's really rushed to IPOs. Your thoughts on that? Is this sustainable or are we kind of coming to the end here? Yeah so I think in part predicting the stock market waves is a very tough thing to do but I think one kind of secular trend that is going to be relevant for these tech IPOs is what I was mentioning earlier is that we've now had a 10, 12 year run of basically startups coming in and reinventing industries while the incumbents in the industries are basically sitting on their hands or sleeping. And so to me the next 10 years, those startups are going to, not that, I mean we've seen that large companies waking up doesn't necessarily always lead to success but it feels to me it's going to be a more competitive environment for all those startups because the incumbents, not all of them and maybe not even most of them but some decent portion of them are going to wind up becoming digital giants in their own industry. So to me I think that's a, it's a different world the next 10 years than the last 10. I do think one important thing and I think around acquisitions M&A and we saw it just the last few weeks with Google and Looker and we saw Tableau with Salesforce is that we're the mega cloud world of Microsoft, Azure and Amazon, Google. That world is clearly consolidating. There's room for three or four global players and that game's almost over but there's another power position on top of that which is around where do all the app, business app guys, all the sweet guys, I'd say PU Oracle, Salesforce, Adobe, Microsoft, you name it, where do they go? And so we see- Service now, now kind of getting big. Absolutely, so we are entering an intensive period and I think again the Tableau and Looker is just an example where those companies are all stepping on the gas to become better platforms. So apps as platforms or app portfolio as platforms, so much more of a data play, analytics play, buying other pieces of the app portfolio that they may not have and basically scaling up to become the business process platforms and ecosystems there. So I think we are just at the beginning of that. So look for a lot of SaaS companies to go. And I wonder if Amazon can become a platform for developers to actually disrupt those traditional SaaS guys because it's not obvious to me how those guys get disrupted and I'm thinking everybody says, oh, is Amazon going to get into the app space? Maybe someday if they have to do a cam expansion but it seems to me that they become a platform for new apps. You know your apps are exposed at the edge, obviously. Well, there's no question. I think those app-centric apps is what I'd call that competition up there versus it's kind of the mega-clouds. There's no question the mega-cloud guys, they've already started launching like call center, contact center software. They're creeping up into that world of business apps. And so I don't think they're going to stop. And so I think that that is a reasonable place to look is will they just start trying to create and affect suites and platforms around SaaS of their own? Startups, ecosystems like you were saying. All right, I got to give you some rapid-fire questions here. So when do you think or do you think? No, I'm going to say when do you think that owning and driving your own car will become the exception rather than the normal? Buy into the autonomous vehicles? I think to me that's a 10-year type of horizon. Okay, 10 plus, all right. When will machines be able to make better diagnoses than doctors? Well, you could argue that in some fields we're almost there. We're there. So it's all about the scope of the issue, right? So if it's reading a radiology film or image to look for something, we're almost there. But more complex cancers or whatever, that's going to take longer. A couple of dock connector questions. Yeah, yeah. So do you think large retail stores will essentially disappear? Oh boy, they certainly won't disappear but I think that and so the witness Apple and the Amazon even trying to come. So it feels that the mix is certainly shifting, right? So it feels to me that the model of retail presence, I think that will still be important. Touch, feel, look, socialize. But it feels like the days of 10,000 or 5,000 store chains feels like that's declining in a big way. How about big banks? You think they'll lose control of the payment systems? I think they're already starting to. Yeah, so I would say that that is, and they're trying to get in and compete. So I think that is on its way. No question. I think that forces out of the barn. So cloud, AI, new apps, new innovation cocktail, software eating the world, everybody's a tech company. Frank Chen's great to have you. Dave, always great to see you. Appreciate your time. Yeah, thanks. All right, keep it right there, buddy. You're watching theCUBE from Actifio Data Driven 19. We'll be right back right after this short break.