 Live from the Moscone Center in San Francisco, California, it's theCUBE at AWS Summit 2015. Welcome back everyone, you are watching theCUBE SiliconANGLE's flagship program. We go out to the events and extract the signal noise. I'm John Furrier. We are here live in Moscone North in San Francisco for Amazon Web Services Summit. My co-host, Mark Farley here, author, blogger, cloud expert, storage expert. And we're getting all the action for Amazon Web Services. They're just rolling out a lot of stuff, more and more cloud goodness. Big, big emphasis on the enterprise and we're going to break it down for you. Our next guest is Phil Brotherton, VP of Cloud Solutions with NetApp. Welcome back to theCUBE. Thanks. Good to see you. It's great to be here, John. Phil, so NetApp obviously is in the storage business. Amazon launching the Elastic File System, that's what they call it. Customers are moving to the cloud. Hybrid is a big part of that conversation. You guys are right in the middle of all the action. So as someone who's innovating, you're a classic case of innovators dilemma but happening in a good way. NetApp is executing their base business but yet investing in the cloud. And Tom George has told me straight up in an interview once, hey, you know what? Our customers are asking for it. We go where our customers go and that's Amazon, that's cloud. So talk about that bridge. You guys are now intersecting essentially what Amazon is talking about. Totally, totally. I mean, what we've just continued to see and what Tom would have been talking to you about is our customers are doing a lot of work on-prem, they're doing a lot of work on the cloud. Amazon's the big kahuna of the cloud, no question. And so we've been working on a number of projects to basically, I like the Southwest Airlines set, you know, set yourself free. That's what we're trying to set the data free basically. Make it available. You use it where you need to use it. And sometimes that's literally on the cloud, full on at $1.50 an hour type thing. Sometimes it's, we do a lot of systems near the cloud where we connect to EC2. We use them a lot for backup and archiving. So our family of products has gotten bigger and bigger connected to Amazon. And you know, when we go back to our customers, it's all about the enterprise guys want to be able to take advantage of what like Andy Jassy talks about, the innovation capabilities. What is the story? What is the NetApp story in the cloud with Amazon specifically? Is there a specific point products? Is it a platform? Is it a solution? We talk about a data fabric. So what we think is happening, and it's absolutely going to happen, is you get more software defined in storage. And so it's more about data management than storage when you get right down to it. And then you look and you say an enterprise has to manage their data across their cloud. And their cloud has some on-prem and it has a lot of Amazon, a lot of off-prem. And you're going to need to be able to move and manage your data kind of in the notion of a fabric. And we're doing things now. We've got the product portfolio basically set now that does the right pieces of the movement. We have a little more work to do on our formats. And our fabric is in place and we just start adding services on top. So we banked the company on this direction, man. It is where Tom and the rest of us are going. Yeah, you're banking on it. A lot of people are as well. They see the cloud. I see VMware's moving really fast to try to have something there. They talk about software defined to others. What is the areas you guys work on? I see block and object. You saw that today on stage. But Amazon's got this Lego block philosophy. It's almost like web services in the 10 years ago kind of playing out. So what is your fabric's capability? Is it monolithic? Is it plug and play? Is it Lego block like? I mean, help dissect that out with us. I mean, you've known NetApp for a long time. And it's not that different than what we've been doing for a long time in the on-prem, just in the on-prem world, is it's always been important from a data point of view that you can support, give people a lot of flexibility on the operating systems they work on. Then it was the virtualization platforms, various protocols. Those things are all flexibility to getting your data where you want it. That's, you know, this is what ONTAP does for you. Extending that to the clouds is where we're going. So we want people to be able to use the cloud they want to use, have choice of clouds, have choice of on-prem. And you really have to have a lot of data. If you kind of think where the world's going, most enterprises are going to manage applications and data. And that's about it. The infrastructure is increasingly standardized in commodity. So this data fabric is how do I get control and the choices that I need? Mostly what I see going on is in the industry, I think it's a little, this is the innovator's dilemma concept is, I think when things are being changed as much as they are now in our industry, you have to look at customers. You don't try to defend your shrinking iceberg or any of those ideas. And so we've been focusing our customers going, they want choice of clouds. They want to be able to run on off how they want. Give them those choices. Everybody else is kind of in the use my point solution. And it really doesn't look that customer friendly to us. So we're trying to really keep go to the customer. So how does this thinking of, how does this thinking making a business model have changed all the time right now? Cloud stuff tends to be services more than products. So if you're looking at satisfying customers that want to do more in the cloud, are you developing services? Are there services that you've got? Can you talk about that some? Yeah, give an example. Probably the biggest example is Cloud Ontap. This product, we launched Cloud Ontap last November. And if you think about the history of NetApp, it's actually a lot like what Amazon just announced today in their elastic file service. 20 years ago, we came out with an appliance that was $35,000, NFS only. You could plug it in, have it running in 30 minutes. And I mean, John, you know some of these guys, Rob Salmon and the guys who used to sell boxes out of their jettas would go in and drop one off and ask five questions. And that was the state of the art 20 years ago. And a lot of that was the- Well, Pure Storage is playing that card right now. They're coming in with that same strategy. The box, some people are liking the box approach. The problem is that was good 20 years ago, but now we're talking hybrid cloud worlds and all those types of things. So it- Yeah, density, it's getting smaller. I mean, trying to get to your back, trying to cram hardware into data centers where guys are trying to shrink their data centers is a very, you might get a couple, I can see where you get a hundred million or something in revenue, but it's going to be pretty hard to get any real trajectory out of that kind of projects these days. What we see going on is people are moving more towards, we always call it consumption models as opposed to buying big multimillion dollar capital purchases. We put cloud on tap. Cloud on tap costs $1.50 an hour a commit. So what used to be $35,000 to get started 20 years ago is a $1.50 commit plus about another $3 of EBS and EC2 time, so $4.50 an hour. And you can try and run all the features on tap we've built over the last 20 years. And that's really just a stepping stone in the direction you're talking about. We expect to see more consumption pricing. I think you look at companies like Adobe that have been going through this longer than we have. Those are big changes that are coming for a lot of companies. And we're trying to go into this very aggressively, again, basically because customers are asking for it. It doesn't make sense to change just for the sake of change. Phil, talk about the customer out there. Share with the folks that are watching that are trying to understand the breakdown of what the cloud means. From a NetApp perspective, obviously you have a solution, and you have a green mark, you have a lot of existing customers, install base, like others like EMC and others. But share your view on what does this Amazon trend mean for the customer? And as they try to modernize, get agile, get nimble, what should be they looking at? What's the noise? Where's the signal? Where's the meat on the bone? Share from your perspective. How should they be looking at this right now? This whole cloud migration, this hybrid cloud shift from a storage perspective? I mean, you know, I'm becoming like, I'll tell you an old warrior story. I'm becoming like an old warrior in high tech, I think. I've been doing it literally, I'm not just making it up. I've been doing it 25 years now. And we've been talking about saving money and agility for 25 years, the marketing efficiency. If you go to the Computer History Museum, you'll see that I didn't start this either. It goes back a long before I joined the industry. And it's like, and you look at it and you're like, okay, really did we? I mean, I think every big enterprise is still trying to figure out how to use IT faster and to more business benefit. And most companies don't want to run IT. It's not their core business. And I think Andy, I really believe Andy has it. When Andy, yes, he stands up and says, innovation is what the cloud's about. I really agree with him. Is the ability to try and fail fast, which the startups do naturally and the big companies need to do more is really the fundamental change of the cloud is what the cloud is enabling. That's so important to all of us. So I want to put a quote I put from Jassy and I put it down on the crowd chat. Go to crowdchat.net slash aws summit for my live tweets from the keynote and get your thoughts are filling this. He said, and I'm paraphrasing, but I'm the quotas here, but he was kind of talking about why they're winning. That's my word, it's not his. Three things, quicker to build, easier to adapt and update in lower costs. That's the cloud innovation from Amazon's perspective. Be disruptive, but innovative. What's your comments on that thoughts? Do you agree? Any additional color you could add to what that is all about and impact the customers? You know, I think overall that's correct. The history of IT is we keep having to make it simpler and simpler to do bigger and bigger things. And the way Andy's going about enabling big things to be done at lower capital expenses, lower upfront costs. I mean, like the guys talked about as keynote, that's accurate. As you get into scale, you see consumption models and capital models start to become not as obvious on the cost point, to be honest, in what I see going on. So I think you're going to see a lot more hybrid than Andy talks about sometimes. But the truth of the matter is I don't think any of us know for sure where it's going. And we'll see, you know, ultimately economics and innovation drive our, this is why I keep, I love high tech, and we'll see where things land. NetApp's been kind of quietly, at least I want to get your take on this. NetApp has always been an innovator in the valley. I mean, since they were fund founded, just a great culture, but there's a lot of stuff going on around in your world, right? Storage is changing, draft movement, EMC shifting, you got pure with the flash, all flash arrays, this, that, but it's like so many moving parts. What's NetApp doing now? What are you guys up to? Is there a quiet combo for the storm? I mean, I sense this like almost like the stealth bomber run that's going to come out of the low level of the cloud and drop some NetApp newness coming out. What's going on? Anything? Yeah, you know, I mean, it's out there. I think a little bit of it's a buzz factor, but the, in the storage business, so I've been talking a lot in what I think is the cloud business. In the storage business, the big change is disks are going away, instead of, you know, in our business, metaphorically speaking, stuff goes away for like a long time. And flash is coming in, right? And flash wins on, and infrastructure is an economics game to a certain extent. Flash wins on dollars per IOP, but loses on capacity, cost per capacity, disks still win on capacity. And we're seeing now fragmentation of that market where disks are going slower. They're like becoming 33 RPM records. Nobody will ever remember those, but anyway, they're going slower and slower, but they're, yeah, okay, so anyway. He's here, he's here. You guys know what I mean, yeah. And flash is taking over more and more. You know, I like your question about innovators dilemma. I follow the innovators dilemma very closely. Adopting new technology changes like that within our own system is not a hard thing to do. So we have, I think, we have three different flash products right now that are in different parts of the flash market. The one that we're really excited about right now, we have a thing we call all flash fads, which is a pure flash system sitting under ONTAP in a complete ONTAP secure multi-tenant environment which can be moved and shifted to the cloud and all kinds of stuff that a pure could never contemplate doing. And that's all available today on just the storage market. Then you have the whole software defined conversation going on, which I think is very interesting and very important. It seems to have been downplayed in the investor community of storage to me, but it's being missed. Software defined, we have cloud ONTAP sitting on Amazon. We have a product called ONTAP Edge, which runs on VMware. We continue to extend our software defined family. Object storage, we have a very competitive object store product. And what, again, what I think the overall, one of the challenges we have is we're not a one product company anymore. We have to put this wrapper on top of it and explain to people what we're trying to do overall, which is what we call the net update of fabric. So talk about the challenges in the customers. Let's go back to the customers. I always like to go back to the customers. What are you guys telling your customers right now? I'm a customer, Phil, tell me. Hey, what's going on with NetApp? I got a lot of challenges. I got many rooms that are on fire. I got to buy more and more storage. I got to write some checks. What do I do? What are you guys up to? Tell me what's the NetApp thing and story? What should I be doing? All right, so you're going to love this answer. So I like to do triathlons, okay? And when things get difficult in a triathlon, there's a rule and it's quiet your mind. So you try to get calm and focused because everything's going crazy. You're hurting, things are bad, quiet your mind, usually stuff passes. So we tell our customers point one is if you're looking where this is going, everybody is going to use more cloud services. You're going to use more SaaS. Sometimes it was the same thing but you're going to use more SaaS and you better be virtualizing and automating your on-premise world. And I'd say that describes essentially, virtually 100% of the customer base. To do that, you need to pick a vendor. Data is a very central piece of this. Pick a vendor who's going to give you the choices you want is what we say. And then, and I really believe that NetApp is in this extremely differentiated position because we're the only guys who've gone and said data's what it's about. We're going to work on the cloud. We're going to be very aggressive on this. And then we tell customers, let's just look at our projects. And frequently that's a modernization on-prem right now. Sometimes it's a, we have hundreds of customers now attaching directly to Amazon with storage they put in like an Equinex Colo. But it depends on the project at that point. All right, so I'm a customer. I have three challenges. I want you to help me balance them out and tell me how to solve the problem, how to quiet my mind if you will, and what you guys are doing to address. Because you mentioned ONTAP. You guys have done a lot of stuff across the board, management, whatever. So three things, application agility. Okay, I need that right now. I need management automation like yesterday and I need a utility usage model. So that's my cloud three-legged stool. Which balance there? 50-50, 25-25, 25. Of what you do? I mean you should probably be chasing all those at once right now. Application agility, that actually becomes an interesting conversation of on-prem and off-prem too. But I mean we've engineered our systems for a long time to be incredibly quick at doing virtual cloning and things like that that help with application agility. Capital spending's an interesting, or how to shift the capital piece is an interesting one because the way our business model is basically that you can buy our gear through service providers in all kinds of different capital purchasing but that becomes more of a which partner are you using? Part of our strategy primarily. Actually, I'm sorry, John, I forgot the third part of your, the third leg of your deal. Utility usage model, management automation. Oh, management automation, yeah. That's a big part of it. It's a big part of it. On-command, right? On-command's a big part of it. Well, we have a lot of tools, but we have an on-command suite of management tools but that suite's focused on giving you control of data. Yeah. And then the next step of those, what most people are trying to do is automation up through the network and the compute tier. And at that tier is where we do a lot of work with VMware. We do a lot of work with Windows server actually and then the thing that's the hottest is work on OpenStack at the moment. And so a lot of plug-ins and a lot of how we make OpenStack easy to use with our equipment is a huge topic in that. You mentioned virtualization is going to get that, connected to the dots. Next question, because here I can get sucked into the intoxication of the Kool-Aid injection from Andy Jazz. He means awesome. Love Andy. Andy, you're great. We're a big fan, of course. But virtualization is present in the enterprise heavily. And it's been a big part of a lot of the innovation. That's a big part of the piece here we're talking about in storage and cloud is virtualization. Where's that playing into the dynamics? Because you're not hearing a lot of virtualization. Is that commoditized now? What's the take on where virtualization fits in all this? It's critical. The way I think of it, it's actually the way I got my job at NetApp is I started NetApp. I always work on where our storage talks to these servers. And so in the pre-virtualization days, I worked on Linux Grid computing. If nobody, I don't even know anybody. That's like my 33 RPM LP story. But Linux Grids, we were operating it like the 20, I mean a scaled up NetApp customer in Linux Grid world had 20,000 servers attached to our equipment. And so we're kind of working in those types of scales. When virtualization came in, it was a real natural fit for us. That was my next job. And we spent a lot of time going to like the 50,000, 100,000 server attached. So it's a scale thing. And that's really the underlying technology that lets you move to the cloud. Because it's so much easier if you're containerized like that it's so much easier to use cloud computing. For software to find storage. Virtualization is critical. The whole thing, all of that is all wrapped. If you kind of think about it, the technology underpinnings of the cloud are a lot of virtualization at the various layers of the infrastructure. And then the business model, the consumption business models, the radical change. But virtualization, what happened in our customer base was over say, probably until about two or three years ago, people were bringing, bringing, bringing in virtualization. Most people will tell you now they're about 80% virtualized, if you ask them. And 80%, the reason it's not 100 is because there's always this sort of tail that's not very friendly to virtualization. So now the conversation shifted to I've got myself virtualized on prem. How do I automate? The question you asked earlier, automate and orchestrate is a big topic. And then some people are saying, Ann, how do I use the cloud? Those are the two threads that are going on all the time. And I'm working with my customers to go both ways because I think they're both very important trends. I mean, yeah, we got to get the hook here. We should have more time. I'd like to drill down. Great, great to have your insights here. And you know, one of the things that we've been saying on theCUBE is there's interesting world going on right now. You got your nimble agile workload cloud with like a Amazon on one end of the spectrum. Then you actually have your hardcore engineered system. So like there is an engineering discussion that needs to be had around the workload pieces. You can't just slap some cloud at it. So, I mean- Basic stuff like, yeah, it's so true. Oracle's engineered systems, if we were poo-pooing that, but if sales are up, I mean, people just want functionality. They don't want lock-in. They want choice. I mean, we invented, you know us, John, we invented the appliance market because of this. Yeah, never in appliance. People want to buy stuff and make it easy. Yeah. And so if you will, appliances or a conversion infrastructure, whatever you like to call it, it's not going to go away because convenience is good. Yeah, and we moved from a Hadoop H-Base on our CrowdChat platform to Amazon, mainly because I want the cloud appliance, if you will. I didn't want to hire all these people to manage Hadoop cluster. I go to Amazon, I got full stack developers provisioning infrastructure. Just for an interesting- I love that. And I know you guys got to wrap up, but an interesting thing is, so we did, we invented Flexpods with Cisco a number of years ago. You can now launch a Soft FlexPod, something we're showing today. You can launch a Soft FlexPod out of test drive in 40 minutes. And so the exact concepts that we're doing on-prem, we're replicating on the cloud. It's super cool. Same wine, different bottle, right? Is that old expression? I guess, you know, I've heard that in our champagne, if you're like, if you're SAP, that's where I got the quote from. It's not the only thing that's going on, but it's an interesting part of the story. Phil, thanks so much for sharing, MVP of Cloud Solution. Phil Brother, Tim, I see an engineering background, brings the perspective here inside theCUBE, here at Amazon, web services summit, it's theCUBE. We'll be right back after this short break.