 Okay, hello everybody, this is SiliconANGLE, Wikibon's theCUBE, this is our flagship program. We go out to the advanced extract, they signal from the noise. I'm John Furrier, the founder of SiliconANGLE, join my co-host, Dave Vellante. Again here, he's the co-founder of Wikibon.org, free research. We are here live in Las Vegas for Amazon, web services, AWS re-invent conference. I'm super excited to be here, Dave, because this is really the beginning of a revolution. An extension of Amazon web services, cloud, public cloud efforts, which in the developer community is widely known and recognized as helping startups get off the ground. But what we're seeing now is a transfer to Amazon, to the enterprise, a hybrid cloud, a word that's not being used much here, and I have a story for that later on that, but hybrid IT, whatever you want to call it, Amazon is changing the game on infrastructure. Obviously, they're in the class of darlings of Google, Facebook, Amazon. I mean, you got a search engine that builds a data center, and you got a book retailer that builds one of the most impressive infrastructures of all time. If you went back to 1996 and said the future of computing was going to be a book retailer and a search engine, you probably would have said you're high as a kite, what are you smoking crack? Dave, so amazon.com, roots or retailer, they had to build their own stuff, sounds just like Facebook's, just like Google, now rolling out, continuously innovating on top of that to have essentially utility computing, whatever the hell you want to call it, it is massive infrastructure, it's cloud, it's on demand, and their rhetoric is so over the top here, they're talking about no data center in the future. So let's kick this off with a quick analysis for the folks out there. Your take of the current state of the industry, Amazon's position in it, these are being compared to the other leaders like IBM who's been in the computing business for many decades, and kind of what's happening here in Las Vegas. Well John, as you know, this is our first year at Reinvent. We were watching last year, we did not have theCUBE here last year, we did the AWS summit in June in Moscone, and essentially what we've been talking about for the last six to nine months is Amazon has completely changed the game, they've turned the data center into an API, and last year at Reinvent was really Amazon's coming out party for the enterprise, they essentially really drove hard, focused on bringing in enterprise customers. Obviously Amazon has done a great job with developers, and if you think through the various phases of cloud, John, when Amazon launched AWS in 2006, obviously very developer friendly. In 2008 and 2009 we said the economic downturn accelerated the move to the cloud by at least 18, maybe 24 months. Coming out of the downturn, we saw huge amounts of shadow IT going on within marketing organizations and lines of business, and we're now seeing the CIO crowd really get on board, figuring it out that their future is really as cloud brokers, and they want to make Amazon another arrow in the quiver of their opportunities to offer services and transform their organizations. So I expect John this week to hear more about pushing into the enterprise, more case studies. You're going to hear the typical Netflix and NASDAQ and other main companies and customers of Amazon, but I think the other thing you're going to hear is new services that really appeal to the enterprise customer, and we're going to be here covering it wall to wall. Okay, one of the things that's really exciting is one, this show has only 8,000 people, some early tweets by some of the folks here at Amazon and customers, 8,000 people here. Let's compare that to say Dreamforce, an older cloud company, salesforce.com, really the pioneer of cloud computing, kind of this modern era, is the old shoe now. Salesforce, the Scuttlebot is that they're currently rewriting code, patch working their cloud together, some acquisitions that might have done well, not so well, but what Amazon represents is the future of one, application developers, two, extending this consumerization IT trend, meaning Amazon's success with developers is so big and so massive, I don't think it's going to be hard for anyone, I think it's going to be very hard for people to come up and catch up to them, and where this is going is the data center, in the enterprise, you're going to see a massive shift to computing where these quote substations of data centers will move into the cloud at large scale, where computing resource will be ultimately infinite, to power things like Google Glass, internet of things, mobile devices, applications. So what you're seeing is a total intersection and collision between the consumer world and enterprises. Now personally, I think Amazon's a little bit wet on this idea that the data center is going to be obsolete, I still think they're going to see data center, if anything, I think it's going to change the game and highlight the value of the data center, but one thing is for certain Dave, software is a hard of the value proposition and the guys that are driving the software bus are developers, and I believe that you're going to see a lot of moves by other big players, IBM, HP, EMC's new company, Pivotal launched some stuff today, again, they're way behind the game on the developer front. They being, they being IBM, HP and Pivotal, Pivotal specifically, because they're the youngest, kind of, I mean, right out of the womb, not sure they'll grow into the right player, but HP and IBM are also there, so they're way behind on Amazon on the developer front. Where Amazon's behind is what I would call the hybrid opportunity in the cloud. They're behind on software defined data center, vision, they're behind on essentially what people already have in their enterprises, so full agreements, power and cooling, these are still huge issues and the Amazon, I don't think is going to get there in the near term, however, they're moving very, very fast. What's your take? Well, first of all, you're right. I mean, Amazon's betting that very few companies in the future are going to run their own data centers. I mean, that's a fundamental assumption that this company's making. Now, the second point, 8,000 people here are much smaller than some of the other conferences, but it's actually much larger than some of the other conferences. It's about the same size as HP Discover, you know, a much more mature company, and it's probably about four times larger than it was last year. Here's the thing, Amazon AWS is going to do about, we estimate at Wikibon about $4 billion this year in revenue. Amazon doesn't break out their revenue, but if you squint through the numbers and you look at the other category, it's growing very, very fast. And we think that Amazon will do $4 billion this year. The bigger piece of this is Amazon is going after a $1 billion TAM. You and I heard that when we had our one-on-one with Andy Jassy, we went deep with him. $1 billion TAM, John, growing very, very fast. Amazon is the disruptor, and did the gorilla in the marketplace. We've seen that they've got three quarters of the space. You want to say something? Yeah, no, I want to interrupt you because I think the gorilla position is key, and I want to ask you, we were just in the analyst briefing. I want to get your take on this. They are the gorilla in the public cloud. No doubt about it. We had a debate on theCUBE. We had a debate on our crowd chat with Randy Bias of Cloud Scaling. OpenStack is fast coming up the track. We had a crowd chat this morning. Go to crowdchat.net slash reinvent, where the debate was simply centered around one premise. The iPhone model versus Android, they used a mobile metaphor. Is Amazon the iPhone of the cloud? And is OpenStack Android, meaning Amazon's success is so big with developers. If they can keep an open marketplace of applications, some will argue that that closed lock-in that everyone's throwing around, actually is what people want. They don't mind if it's open. So that means that Amazon would be the iPhone Apple model, and OpenStack, the open would be like Android. Both different approaches, different ecosystems. So that debate was out there. Yeah, so let's define open, right? So what does open mean? So you take OpenStack, right? The vision of OpenStack is all these clouds will be interoperable. Maybe so, although there's a lot of propriety built in to potentially some of those OpenStack clouds. But if OpenStack certifies various clouds, that interoperability could happen. My question is, John, does that matter, right? Now, Amazon, I think you're right, is essentially the iPhone of the enterprise. It's got an open interface, right? It's transparent about how to write to the API. I mean, it publishes that specification, right? And so, in a sense, it's open. You talk to developers, they absolutely love it. I mean, the openness is, to me, lock-in means one thing, no agility to move. Move your data, move, what happens if you want to move your workload out of the vendor? But to me, Apple is a lock-in. I mean, iTunes. That's so is Amazon, but so, yeah. I mean, iTunes is a lock-in, but you know what? People like it. The product is good, it's functional, and the applications are open. Meaning, they're available on the platform. Let's talk about lock-in for a second. There's always been lock-in in this business. You have to have lock-in to make money. You know who doesn't have lock-in? It's canonical. That's why they're not making any money. But they're disrupting. So open source, you know, this whole lock-in discussion, you've got to have lock-in to make money, period. So does Amazon have a lock-in? Yes, does VMware have lock-in? Yes, Joe Tucci stands up and says, we will not lock you in. Well, the fact is, there's always got to be some degree of lock-in, some moat, as it's called. So here's the thing that I brought up in the analyst meeting that not many people would get, maybe some of the Amazon guys would. I asked a specific question to the customer panel that was the success stories. I asked a hard question. Are you mindful of the software stack that Amazon has? Meaning, if you're an app builder, the beautiful thing about DevOps is that you push code, it trickles down into the integrated stack and everything gets updated. But here's the issue. If Amazon is controlling the upgrades, let's use Node.js as an example. If you've got a Node.js implementation and you're running an Amazon application and you want to push that through the stack, you've got to assume that Amazon has updated the latest code of Node. So as a developer, you've got to have a real visibility into levels of version control, those kinds of things, at least from where the bugs are coming from. So if you're pushing the envelope on application developers, you've got to have the integrated stack. It is a benefit, but it also can be a double-edged sword. So one of the things that Enterprise has got to be careful of is that double-edged sword. Making sure that the software stack is integrated and Amazon is moving fast enough on the versions of the software, not the hardware. They got that nailed down. The infrastructure as a service is kick-ass. No doubt about it, Amazon's market share is about 36% in infrastructure as a service. That leaves about 64 to 70% give or take your argument of between 29 other players on the cloud. They're dominating the infrastructure as a service. It's the platform that becomes the question. In platform, you got to have software version control. That's what we're going to be watching very closely. And depending on how you find it, it could be a lot higher. If you just go pure infrastructure as a service, I would say its market share is closer to 70%. But again, it depends what you throw in there. Now again, as I said, the theme that we're talking about all week is Amazon and the Enterprise. The other thing we're going to talk about this week is the government cloud, the whole CIA deal that went down. On November 8th, Judge Wheeler published his opinion on the whole IBM, Amazon, CIA, GAO, Brujaha. So we're going to be unpacking that. We've read through that documentation. People at SiliconANGLE and Wikibon have parsed that. We got a lot of good information that we'll be talking about a week. The bottom line of that is essentially the judge ruled that Amazon had a superior offering. Now remember, this is pre-soft layer. This one all went down. So IBM has thrown down the gauntlet. They know how to play this game. So we're going to be talking about that all week amongst ourselves with customers, with partners, with analysts. We're here. So we're going to be back live. We're going to take a break, but we're going to have two days of wall-to-wall coverage. This is kickoff day one, and we're going to bring on some new guests. And we're going to break down tonight. Really talk about the analysis. We're going to bring on some key partners here. We're going to also talk to some other analysts. We're going to talk about some real success stories here early on. And then tomorrow it's all full day. Full day Wednesday and Thursday here live, SiliconANGLE.com. And remember, go to crowdchat.net. We're going to be having tomorrow all day crowd chats. That's a group chat on Twitter. New feature, great feature on top of Twitter and LinkedIn. Sign in, be part of the conversation. We are going to extend theCUBE to the social networks. Go to crowdchat.net slash reinvent. Go to SiliconANGLE.tv for coverage. SiliconANGLE.com for blogging. You can go to wikibon.org for the free research. We'll be right back with our first guest here at Amazon Reinvent live in Las Vegas after the short break.