 Live from London, England, it's theCUBE. Covering AWS Summit London 2019. Brought to you by Amazon Web Services. Today we're here at the AWS Summit's live at the Excel Center in London. I'm Susanna Streeter and this is my co-host, Dave Vellante here today. Now we've talked a lot about the benefits of cloud and the opportunities and also the challenges sometimes for startups and other businesses, but also there has been massive growth of the use of cloud services by public sector organizations. And our next two guests here on theCUBE today, really, this is your area of business, isn't it? So we have Johnny Hughill, who's from Public, but also Max Peterson, VP of Worldwide Public Sector at AWS. Thank you very much for coming on to talk to us. Now it's really interesting, during the keynote speeches I was really taken by one of the speeches from the Chief Digital Information Officer at the Ministry of Justice, Tom Reed, and he says, we don't innovate for professional advantage, we do it to take care of people. And Johnny, this is what your business is about, isn't it? Trying to link up startups and public sector organizations to ensure that more people are taken care of. Yeah, I mean, that's exactly right. I think what we've seen in sort of almost every other sector you can think of is this big proliferation of startups, of new market entrants, of completely new companies really coming to dominate those markets. And we haven't quite seen as much of that as I would like to see in the public sector. So what we're trying to do is help tech startups, help innovative new companies to come in and ultimately to deliver better services for everyone. There is real concern, though, among traditional companies about this. For example, your local pharmacy concerned that a really big player is going to move in and take away what they do. How do you kind of bring them along and say, well, actually, if you work with a startup, it could improve the way you do business and keep you in business? Totally, I think pharmacy is a really interesting example because in the UK we've seen a bunch of new digital first pharmacies come in and completely transform how people can access their pharmacy. So Echo is one example of a UK startup, but now you can get door-to-door prescriptions instead of having to go to your pharmacy and make appointments, you know, it's waste loads of time queuing. My view is that these organizations really have to kind of get up to speed with how things work in the wider digital economy. So people have certain expectations for how services should be delivered, for how quickly they should be able to access things. I think government services are no different. That's pharmacies, that's schools, that's teaching, that's everything. We're here in London. How big is the UK in terms of the growth of your business? Well, the UK has been a leader for a long time. So from the time that they undertook the government digital services business through the G-Cloud, 11 iterations with big ministries like the UK MOJ that you heard with big nonprofits like Comic Relief and everything in between. Educational institutions, startups, we're very proud. We've partnered with public to help continue to encourage that kind of innovation in government technology. I think when we last talked, Max, you, John and I were, I think we were in DC. I think it was. And you were helping us understand, look, it's this public sector is not just about DC. And you've got a number of activities. We interviewed several of theCUBE yesterday at AWS headquarters. One of the things we talked about was GDPR. We were having a conversation with a privacy expert earlier today. He said, you know, the big players really haven't, really weren't ready for GDPR. You made a point in DC last year. You said, day one, you guys were ready. End-to-end encryption, a number of other services. So I want to circle back to you. And I said, okay, we got to peel the onion. I got to ask Max, put him on the spot. You guys really anticipated this. It's not like you were scrambling at the last minute. Is that fair to say? And I wonder if Johnny, if you could confirm or deny that. Well, I would tell you that at Amazon, we think security is job zero. If we are not making sure that we're continuously raising the bar to improve customer security, security for small businesses, then we need to do a better job. A couple of examples, GDPR was a good one where two months before GDPR came into a lawful requirement, Amazon announced that we were GDPR compliant. So people could confidently build on top of Amazon. In the UK, early on in 2016, we delivered one of our advanced security services called AWS Shield, which gives everybody using the AWS cloud in the UK. And in fact, around the world, automatic protection against DDoS. No additional cost. You get it by using the cloud. Those are the types of security services that Amazon delivers. And probably one of the most important these days when you're working with sensitive workloads is encryption. On Amazon, it's check the box easy to implement encryption for your data on the fly or when it's at rest. So I hear that a lot about encryption and how simple it is. You guys using encryption? You guys do that as part of your... So we work with technology companies we want to work with government. So many of the companies we back are using encryption. As I'd say, some of the sort of particularly in policing and defense and some of the more sensitive areas of the public sector, this stuff is really, really crucial. And you simply can't kind of get into government without being GDPR compliant and without having all the cybersecurity essentials. A lot of the companies we've backed have gone on are using AWS cloud, have gone on to win public sector business. So in that sense, I'm sure everything's in chairs. Are there any special considerations with regard to encryptions? Things like sort of out of scope requirements that I should think about as a customer or is it really as simple as Max is saying? Click a button and check a box and don't even worry about it. It's all taken care of. What's your advice to people in encryption? Is it just encrypt everything? Are there performance considerations? I mean, again, it totally depends on the scale of the contract of the requirements that you're kind of going after. But big major contracts with Ministry of Justice, Ministry of Defense, there are a number of different performance kind of requirements that you need to consider. But in general, I think, yeah, it's quite straightforward. Kind of a no-brainer. I think the answer is encrypt everything everywhere all the time. And that also means on-premise. It also means on your devices, right? I mean, it needs to be just the standard approach that people take to data protection these days. And unfortunately, for many organizations, internally it's hard. And so that's why people are moving to Amazon so that they get that security built in. It actually is the number one reason why people are moving to AWS today. They want the built-in security and then after that, they want speed and innovation. And there was a really interesting statistic today at the keynote. Did you hear that LSE, London School for Economics, just completed a study and they showed that 95% of all startups that happen today would not happen if they had to depend on legacy infrastructure because it was hard and expensive. And that's candidly why being a startup in today's cloud-based world is a much better value proposition. You can focus on the problem rather than all of these important but complicated factors like encryption. The other thing there, the London School of Economics study showed is the productivity gains for those companies that use cloud. Now there haven't been obvious productivity gains in that as a result of technology across the board. We're starting to finally see the uptick. Remember back in the PC days, you can see productivity, you can see upticks everywhere except in productivity. And all of a sudden it showed up and we've been predicting for a couple of years now you're going to start to see it, cloud being one of the reasons, other new technologies. And so that was another key finding of that study that I find interesting. Well, Sainsbury was up on the stage today again. And what they have now found, right, was they have found a 60 to 70% improvement in productivity. That was their number up on the stage. Interesting, you're talking about kind of legacy companies. We've got the Ministry of Justice, in fact, there was a bit of a battle wasn't there? Yeah, well we've been battling since 1170. That was hilarious, wasn't it? Yeah, Sainsbury is only 150 years old. And MOJ got up and said, well, in this battle of historical significance, we are mission started in 1178. But it's interesting to talk about those, but really your bread and butter, Johnny, Kugel is the start-ups, isn't it? Trying to, you know, stop talent out there and think, who could I partner these guys up with? Yeah, totally right. A really important thing that any organization that is trying to innovate today can do is to market horizon scanning, you know, really understand what is out there, what the art of the possible look like, what the new technologies that are going to change the game look like, what these companies are actually really capable of. And they might not know that themselves. But it's a really difficult thing to know, especially if you think about what the kind of day-to-day job of government is, which is really running the country, right? It's pretty difficult to ask them, by the way guys, you also need to really understand what the prospects for AI start-ups are looking like across the country or across the world. You need to understand who the kind of blockchain innovators are. It's a big challenge and it's something that we are really kind of trying to help them along the way. As you said, a lot of that is partnering with bigger companies and kind of forming the right ecosystems of smaller companies, large companies that can help them scale and kind of taking government on that journey along with it. Well, and the pace of change is another challenge. I mean, six months in this business now is an eternity, it seems like. I remember the crypto was so hot a year ago, not that I'm a fan of a lot of the underlying technologies. It was interesting to see how Amazon dealt with that. You asked a lot of questions, like what do you really need to do this? You guys came up with a couple of solutions here, but keeping up with the pace of change is one of the, I would think, one of the key values that you provide. It's really a challenge. And I think now in the UK, 15% in FinTech, 15% of the financial revenue in the UK has come from startups founded in the last five years, right? So a big legacy market is important as financial services has just been completely turned on its head by Revolute, by Monzo, by all these new guys. And in government, we are going to see the same thing at some point, because the new- It's difficult- I'd observe, in financial services, those are good examples, but the industry still hasn't been disrupted yet. Healthcare still hasn't been disrupted. They're both ripe for disruptions and it's happening. But I think if you look at those, that's part of what Johnny was saying. Some of these early industries like finance have maybe been the initial disruptors, but I do believe that there is a wave of opportunity and disruption coming in this whole GovTech space. One of them recently was Adzuna, right? Adzuna came in and acquired a contract with the UK government that completely upended an old way of doing job search. They had a better mousetrap. And fortunately, in this case, right government recognized it and they used them. Yeah, I mean, I would say that was a really momentous thing. The most used website in the entire of the UK government, which is the kind of find-a-job search site. Adzuna came along, replaced an incumbent supplier who'd been doing it for years, probably quite badly. Came along with their new AI-driven platform using AWS Cloud and are now just delivering a service that everyone prefers. Well, I saw NHS has announced what, a half a billion pound almost, transformation, project modernization. And when you peel the onion, you see a lot of startups. Behind the startups, you see a lot of cloud going on because the cloud attracts startups, startups are where the innovation is. And if you're going to modernize and spend a half a billion pounds, you better look to the innovation engine. Yeah, one of the things about the cloud computing and one of the things about government policy that's critical is that it actually encourages that kind of innovation because a lot of small companies are the source of new ideas, but procurement sometimes gets in the way. One of the things that we think is fact that's worked well is the UK G-Cloud contract, where on the UK G-Cloud, over 90% of the suppliers on the G-Cloud contract are in fact small and medium enterprises and where 45% of the sales since inception on G-Cloud have actually gone to SMEs. So it's really transformative. Well, thank you very much for talking to us about this really fast-moving space. I really appreciate it. Max Peterson and Johnny Hugo, thank you for joining us. Thank you so much. Great to talk. Great to talk. That's all from us for now from the Excel Center AWS Summit here in London.