 Live, from the Mission Bay Conference Center in San Francisco, California, it's The Cube at Google Cloud Platform Live. Here is your host, John Furrier. Okay, welcome back everyone. We are broadcasting live in San Francisco. This is The Cube, our flagship program. We go out to the events and extract the signal from the noise. I'm John Furrier, the founder of Silicon Angle, and I'm psyched to have two analysts here in the industry from Forrester Research to break it down, to really talk about the horses on the track and really assess, commentate, analyze Google's moves in context to the industry players, leaders, and people trying to get into the business. So our guests are John Reimer, Vice President and Principal Analyst, and Dave Bartoletti, Principal Analyst at Forrester. Guys, welcome to The Cube. Thank you. Thank you. So we usually do this with Dave, and we just kind of go into one big circle. We're just talking all day long, but it's psyched that you guys are on. You guys have a really premier report in the wave coming out of the platform, and you guys have been following these horses for a while. But now we're in a new era. The mainframe, client server, PC, and everywhere in between there's been this desegregation of skills in IT. I mean, almost like, you know, mainframe days, the glory years, toga parties, fruit off the trees, developers in-house, big money, big budgets, big iron, glass house, and then client server, income, the big six consulting firms, income, shrink-wrapped software, incomes, the internet, and then SaaS. IT's been shrunk down from a poor company standpoint, and then all of a sudden- Well, I take issue with one of those. And now- The virtualization wave was slightly different. Okay, so now, conversion infrastructure, a little bit of lift, but now developers, go build me this mobile stuff, guys. Yep. So what's your take on all this, guys? Is this force coming from the cloud? Is it coming from mobile? Is it the infrastructure? Force is actually- Coming from the customers. Coming from the customer. It's buyers. And what are they saying? Do I do it? I can do it. Go ahead and jump in. Now, when we say it's coming from the customer, it's coming from the demand side, the requirements. The bottom line here is that people are using software now to engage customers, to find them, to engage with them, to support them, and it is a new golden age. It happens to be cloud-based. It happens to be cloud-fueled because if you're going to interact with customers through software, you've got to create it way faster than you ever did. And you've got to rev it way faster than you ever did. And the old platform generations just don't support that. So the last ten years were not about moving faster in IT. They were about efficiency and consolidation and driving every last dollar out of the data center. And what cloud means to traditional IT teams is they suddenly have to pivot on a dime and react to speed. And it hasn't been about. So what you're saying is squeeze the efficiency and dollars out of it. Do more with less. Absolutely. Run. Now run with bare feet in the winter. That's right. With knives and scissors and everything else. That's right. So IT had a great run for 12 years, right? And folks like you're saying might have felt that they were being pressured in IT, they came up with this virtualization solution and not just compute, but storage and network to radically consolidate what they're doing. They saved money. They made the data center a little bit more agile. What they didn't necessarily do is get to market with better software faster. So you're saying virtualization, clean house a bit, gave a little new blood in there. Some slack for more cash and investment. Kind of set the table. And then converged infrastructure kind of came in behind it. That was the bedrock to build on. And developers are still knocking on the door. Let me in, provision me in the next six months please. And it just didn't work. So that's what, there was like a shift to the cloud, particularly for the customer facing applications, not for the traditional back office yet, because of speed, speed of delivery and responsiveness. So I want to get your take on the buyers, mission buyers. So that's obviously the end of the day. Money fuels business. Business needs to make money. IT's supposed to service the business, all that stuff, right? But now buyers are going to spend money. They were buying it from vendors, monolithic software, big license deals, Oracle comes to mind when I think of things like that. And then VMware ultimately had license, but even IBM and others. Who bought those licenses? IT, on behalf of the business. So the business was out of the picture. So emerged shadow IT. Was that the beginning of the major punch to IT? Was at the beginning of shadow IT being user credit cards, circumvent the process, go directly to the resource? It's shadow IT's always been there. So it's really nothing new. I think it's more that, I think it's more that it's more embedded IT that really started the movement big time. And it was marketing, sales and support, which had their own budgets and could circumvent IT when they needed to. And it was off to the races. Where did salesforce.com come from? Right? It was all sales and marketing groups. Sales and support groups initially then marketing groups spending outside of IT. Well, I'll tell you what I think from an IT standpoint, infrastructure and operations folks, 10 years ago no developer in any enterprise could go out and spin up a server in someone else's data center and start writing code there. There was no option to do that. So IT has never had anything come up close to real competition. It's not that it was subterfuge, it's that suddenly something was available. So Dell has got Dell World, Dave, a lot of things down there with our team setting up for you with Dell World. We're going to touch around a little bit. Talk about Dell. I mean, they made their money on being mail order, build order, which became the reseller play outside of mail order and the innovative supply chain. That whole thing was about cutting the middleman out. Now with cloud, what, I don't know who buys servers anymore. They still got to buy servers, but they didn't buy them in Ractum like the old, they're buying them now workload based. That's right. You see in the Facebook like, you know, Netflix, I have an app and this is my container, whatever, my truck loan. They're buying consolidated appliances. So you're seeing Dell do a lot of partnerships with software companies to build converged cloud appliances. Dell wisely said we're not going to build our own cloud because we're not going to chase that down to the bottom. We want to supply white box infrastructure as much as possible. So what Dell's focusing on, which I think is smart, is this brokerage model. Dell wants to be the best shopping experience for cloud resources. They're just starting to roll that out. And that's catalog based services, if you will. So try to milk the cow as much as you can in the cloud appliance as Amazon and others start to build their own open compute and others. I mean, that's a threat. I mean, so Dell will be services based, do you think? I mean, does that tell, I mean, I'm trying to figure out like, where does Dell make their money if their core competency was supply chain and going direct. Well, they think there's going to be a supply chain for cloud and they want to be in the middle of it. And they're also buying up a lot of software. That's right. We'll provide services and that's where the money is. I mean, everybody's a service provider. Everybody's a software company. Everybody's a software company. So you think Dell will overlay on top of existing clouds and be a front end to resources? That's what they want to do. Sounds like a PC. It's a smart move. It sounds like a PC. The cloud is a big PC. They're going to put a wrapper around it. So the challenge is going to be what value do they add than just a low cost marketplace. So I got to ask the platform question because you've got a platform report. I'm sure you have other reports, but I don't have access to the firewall. And we won't give it to you. You can tell me the PDF I'm sharing. If you look at the old days, lock in the Microsofts, the Oracles, win the platform, lock the customer in and never let them leave. And then tooling was like, if you got lucky, you got extra tools every 10 years, new tools. Now it's the way around. You win the platform, you can go to zero and you tool up and win on the packaging like Amazon. Whether it's retailer cloud, that seems to be the tooling being services where the land and expand strategy is pretty much playbook in SaaS. For any company, startup, Splunk, Tableau, you name the list. They got to give a little bit, buy as you go, and then once you're in, you get all on the tooling side. So that flips the notion of platforms. Do you guys see it that way? And how do companies compete have never operated that? It comes like HP, IBM. Google, in a way, gives away that search engine and Gmail, that's a free platform. They're used to that. But the HP is in the IBMs. So some of the competition, I think, is the same in that the game is to get people committed to your platform. So even platforms that are open, like Amazon's basic platform, it's just VM. So nominally it's open. You can move things in or move things out. But what they're trying to do now is get you to use all those higher level services. You get locked in on those APIs. You're likely to stay. Same with Microsoft, same with Google, et cetera. So in that way, it's nothing new. But certainly the delivery model is very, very different in that services is now what you have to provide. So HP has to be more like a telephone company. Like a telecommunications company. Very, very big change for them. This is why I think the big vendors are struggling so much. IBM just announced a deal with Twitter. So no one put Twitter and IBM in the same sentence except in our crowd chats where they've been a big user of social business. And they were also telegraphed to give IBM credit to e-business, which we don't use that term anymore. But social business really means what you guys said on the intro. Using software to do business with customers' customers. So analytics is a big differential. IBM seems to be going all in with Watson and saying, okay, we'll do cloud with Bluemix, which is cloud foundry. They're betting the ranch on cloud foundry and software. And integration. And integration. They've always been an integrator. Analytics and integration. I think it still makes some money on that. That's good business. Absolutely. They have the feet on the streets, too. Twitter can collect the data. Somebody's got to do something with it. And IBM's got amazing analytics tools to bring to the table. Watson's pretty impressive. I was going to say I'm pretty impressed. So I think IBM's strategy hangs together. I think the point that you made about disruption in the cloud that John alluded to, the important thing to remember is Amazon did not disrupt because they were cheaper. They disrupted because of their pace of innovation. They kept people there by releasing new services every few months that just worked. The developers started locking into it. That's the challenge for HP and IBM and any large player who's coming from a background where you lock people into a platform and what kept them there was not your pace of innovation, but the cost of switching. I think you've got a great point there. I really like what you just said. I think that's the iteration of new services is the new bar that gets leveled. I call Amazon the tsunami. How much beach they take in the enterprise will be a subject of the seawall. The other thing is going to put up to protect themselves because at this pace, they're running away. They're the secretariat of the horse race. It's been a sustained pace of innovation. They've also been very good at not releasing stuff until it's ready, not holding it in these endless beta programs. Amazon gets criticized for their partnership. I've heard a lot of people say they're hard to partner with. Sure. When they partner with you, they'll try to kill you. Do you guys agree with that statement? I don't necessarily have data points on that, but Amazon just seems so positioned to really put an EMC out of business. I mean, I talk about this all the time and Dave disagrees with me, Dave Vellante. I say it's not about pure storage and nipping at EMC's heels. It's about Amazon can actually put EMC out of business. If you think about the concept of they continue this pace. If I'm EMC, I'm afraid of Amazon not pure storage. In terms of platform, they can build in storage. And if EMC loses VMware, where they're going to be? Well, but let's not go too far here. I'm not an analyst, so I can say I'll go very far. We're starting to go too far. I don't think EMC's going anywhere anytime soon. But the issue for the EMC's IBM HP is growth. The growth isn't there. You see it in their financial results. They're under a huge amount of pressure. Whereas Amazon, the growth is what? 30, 39% most recent report. And they're hiding the ball too. But I mean, the enterprise, another aspect of this is enterprise is different as you pointed out. Amazon didn't start out targeting the enterprise. Now they're trying to get more of those workloads. That's what IBM's after, pure and simple. Google, Microsoft, they all have to figure out a way. There's a graveyard of IT guys in between the enterprise that come in. Can you talk about why it's so hard for the folks out there? When I talk about all the time on Twitter, it's not easy whether you're a startup. It used to be in the old days, you could never get into it. If you were a startup, you could never get into an enterprise unless you had legacy and references. But even for these big whales, even Google, even Amazon, the bar of the enterprise is high. It's really high. It's like trip wires everywhere. Well, I think that for me, as far as I'm concerned, the issue with cloud is that to make the economics of cloud work, it's a standard service, as standard as possible. And enterprise is constantly throwing these weird requirements, these oddball requirements at you. Some of which are real because they come from people like the SEC, but some of which are just idiosyncratic. And how do you achieve that? Well, now you've got the data governance problem. Yeah. And that's what started to change is it's going to be very slow in the enterprise. The successful cloud providers have a small set of standardized services and their attitude is, this is what we've got, you come to us. You fit us. IT enterprise is built around whatever you want. I'll build you a special snowflake and I'll create a wonderful environment for you. And it's built around engineering complexity. So we're back to the beginning because we find enterprises, our clients, are now dropping that attitude of we're a special snowflake because they need to go fast. Yeah. They need to go fast. And they need to push the developers to the front lines where it used to be developers would get pulled into IT. Absolutely. Now the developers move to the front lines where there's creativity and they've got to be close to the action. Now they've got to go talk to customers themselves. Absolutely. So why don't you guys talk about that dynamic. And also specifically the consumption of the customer base, the buyers, how they're consuming these services. You mentioned that earlier. They want software to interact. So the consumption of how they're buying is changing. So I want you to talk about that trend. What specifically do you see the driving force of the consumption of the client on the cloud side? Is there going to be anything in particular that's the leading mega trend there? I mean obviously everyone says bye by the drink. But it's bigger than that. There's a whole consumption change going on in cloud from the customers on how they want to purchase that the old guys need to figure out. Well if a lot of the action is in customer-facing software and a lot of customer-facing software starts off with really, really squishy requirements. So a lot of the reason we see people moving away from big software contracts, they're not ready to commit. They don't even know what they're about. It's called try and learn. Learn and develop. That's why open source has such a huge impact in the cloud. It's easy to throw away if it doesn't work. Let's take the CIA. The CIA just went with Amazon over IBM and actually went to court and the judge ruled that it's actually a better product. That's the judge saying Amazon's a better product. So now the CIA is government. How does the government change their consumption pattern? I mean to me I find that amazing. So you mentioned FIP wires and IT nuances. The CIA is moving to Amazon on a fully consumed cloud basis. I mean that's... Because the government has been under such a microscope for all of its consumption habits. And talk about data centers where you could get whatever you wanted and you didn't even have to use it. That's been the government forever. I just got back from a long tour of a bunch of government agencies and they're changing much faster even than the enterprise has changed. Because they realize that they've got to change the relationship they have with their customers. You can't tell us you want 50 servers. You don't know what you're going to do with them. You want them forever. You're going to have to tell me what you want them for, how long you're going to use them, and where your budget's coming from next month. So cloud is actually good for the governments. Absolutely. What's the big driver there? Just compliance, showing reports, being audited, showing actual performance, are they above? Performing for citizens. So really it's the oversight. Meeting mandates. Absolutely. Look at the fiasco with healthcare.gov. I mean that was done the old style. It was done the old fashioned way. So that's a tipping point. So I'm obviously just faster than the enterprise. That has actually proved the democratization piece of this. Doesn't it? Actually, and the other thing that's driving governments that's important is, you mentioned, do more with less. Because budgets in the government are going down across the world. And at the same time, there's a huge amount of data you're trying to improve service, you're trying to solve public health problems. All those issues don't go away. And you're trying to use technology to be more effective. You guys are awesome at getting the hook here. We haven't even talked about Google, or the Google show here, but we're really breaking down some of the nuances. So talk about Google real quick. Let's summarize this segment up. You guys are great forester guys here and bringing it down. Google is not new to this. They've been at four years now. They launched at IO four years ago, kind of quietly, almost like, who are those guys snapping lines out, surveying the landscape, those geeks out there with the spinning thing, Google Street View. I mean, they're mapping out cloud. It's almost as if now the parachute guys are dropping in. The army of Google with muscle is coming in. Do you guys see it that way? And what should people look for in their moves relative to the competitors? We've seen, we do a lot of developer surveying, and we've, for consistently, since we started years ago, Google has always been up there as a top three cloud provider. It's AWS, Microsoft, and Google in that order. It's been consistent forever. Google is... In that order. In that order. Yeah. It's been that way for a long, long time. Google, it seems, has really established a great position in consumer-oriented apps. We see that all the time. Android, you can ask, yeah. Yep. And it extended with Android. All the announcements here, it's all good stuff. It all builds out their position, gives the customer more flexibility, more performance, and more ability for compliance and hybrid and so forth. So it's all good stuff. Some of its catch-up, they have to build out their services to keep up with the range that Amazon has. There's some check-ups. These table stakes, right? Definitely. And they also don't come with a set of core enterprise developers that are locked into their community like Microsoft has, that have been working closely with Microsoft for a long time. I think taking the lead on containerization is a great thing to do, because it's such a hot topic with developers right now and what Google can bring to the table is they're running more containers than anybody else right now. They have a cool factor. Google has a cool factor. IBM, you know, look at IBM Bluemix, and you're a developer today. You're like, I want to be associated with Bluemix or Amazon or Google. I mean, Microsoft would be looking. So to them, Microsoft might be lower. The cool factor relative to IBM, but IBM is really struggling to get developers right now, because they're marketing the hell out of it, but people just aren't showing them. I've been looking at the surveys and I've been looking at the seats. You go to the sessions, you say the Bluemix session. You're right. But they're basically your own. Bluemix is really early. Softlayer different. Softlayer was a going business when they bought it, but Google's got how many years on IBM's cloud offering. And having people bang on it for years and years and years really matters a lot. What does IBM have to do? I'll also see in the horse race that traditional tech companies like IBM and HP and even VMware, they entered the cloud through the IT department. I thought that was going to be the buyer. Amazon, Microsoft entered cloud as a developer buyer. It was a new buyer and I think that puts the traditional tech players with their cloud platforms slightly behind the people who are currently the buyer. Yeah, and HP's trying to be cooler. You see IBM's trying to be cooler. That's kind of the shift. What are those guys? IBM and HP. VMware's looking pretty good right now. They have good market share. They have a hip factor going on. VMware's always packed, as you guys know. Very active community. So I think they're dialed in. I'm not worried about VMware too much. IBM and HP all in the other hand have huge muscle, but can they direct the punch into the market? So what do they have to do, guys? They have to make cloud relevant to their traditional workloads and their traditional customers. And they have to find a niche, essentially. It's odd to say that. They're big companies, but that's where they're at. They got to find a niche. It's probably in these... And fortify that position. Exactly. That's right. And work really well. IBM is obviously showing that they're willing to work with some of these other leaders as an integration point, which is very healthy. Right. That's what they ought to really be doing. Yeah. And I think IBM's got a great share. I think they're getting dinged right now. I think she inherited a lot of baggage. HP on this hand. They got to clean sheet of paper. I'm getting the hook here. Okay. Guys, we'd like to go along. These are the top analysts in the industry. Guys, really appreciate it coming on theCUBE. Thank you. Thanks very much. We're breaking it down here. Google Cloud Developer Forum here. Just the cloud platform live is Google Cloud Platform Live. GPC Live. G-C-P Live. That's the hashtag. Go to CrowdChat.net. Check it out. We're here at the Forester Analysts. We're doing all the survey in the landscape with customers and analyzing all the horses in the track and the business. Amazon, Google, Microsoft, HP, IBM, EMC, BM, we're all jockeying for that position. We're always bringing a NASCAR analogy with the whole brawl that went on. This week if you follow NASCAR. Certainly an exciting time, guys. Appreciate it. We'll be right back after this short break. This is theCUBE live in San Francisco at the Google conference. We'll be right back. Thank you. Thank you.