 Live from San Francisco, it's theCUBE. Covering Google Cloud Next 2018. Brought to you by Google Cloud and its ecosystem partners. Hello everyone, welcome back to theCUBE. Live coverage here in San Francisco, Musconi South. I'm John Furrier with SiliconANGLE theCUBE. With my co-host Dave Vellante for the next three days, day one wrap up of Google Next here. Google Cloud's premiere event. This is a different Google. It's a world's changing event, in my opinion, of Google. Dave, I want to analyze day one as we put it in the books. Let's analyze and let's look at it and critique and observe the moves that Google's making vis-a-vis the competition. And Diane Green, who's won theCUBE earlier, great guest, kind of in her comfort zone here in theCUBE. She talks, she's an engineer, she's super smart. She thinks free thoughts, but she really has a good chessboard view of the landscape. My big walk away today is that she's got full command of what she wants to do, but she's in an uncomfortable position that I think she's not used to. And that is at VMware, she didn't have competition. First mover, changes the market. Certainly winning at all fronts when VMware was starting and they morphed over and then, you know, the history of VMware sold EMC and then now the rest is history. But they really changed the category, they created a category and we're very successful in IT with virtual machines. She's got competition in the cloud, she's playing from behind. She's got the big gun, she's got to bring out the howitzers, you know? I mean, she's got Spanner, BigQuery, all the scale, Kubernetes, which is the internal name is Borg, which has been running on the Google infrastructure, provisioning services on all their applications with billions and billions of users. If she can translate that, that's key. So that's one observation. The second one is that Google is taking a data-centric view. Their competitive advantage is dealing with data. And if you look at everything that they're doing from TensorFlow for AI and all the themes here, they are positioning Google as we're the place to bring your data. Okay, that is clear to me is the stake in the ground with the large-scale technical infrastructure that they're going to roll out with SREs. Those two things to me are the front and center, major power moves that they're making. The rest, wrapping around it, is Kubernetes, Istio, a service-oriented architecture, managing services, not products, and providing large-scale value to their customers that don't want to be Google. They want to be like Google in the benefits of scale, which comes in automation. And I think the headroom for Google Cloud is IT operations. So that's kind of like my take. I think day one, the people we've had on from Google, sharp as nails, no enterprise tech, Jennifer Lin, DeepD, Diane Greene, Lisk is on and on. What's your take? First of all, I mean, what's going on here, and Diane Greene, the game she's playing now, completely different, obviously, than VMware. It was all about cutting costs. VMware, when you think about it, sold for $635 million to EMC way back when, so it was a little scratch compared to what we're talking about now. She didn't have the resources. The IT business, you remember, Nick Carr's famous piece in the HBR. Does IT matter? That was the sentiment back then. IT, waste of time, undifferentiated. Just cut costs, cut, cut, cut. Perfect for VMware. The game they're playing now is totally different. As you said, they were late to the enterprise, ironically late to the enterprise cloud. Even though they got competition. Obviously, the two big ones, Microsoft and, and of course, AWS. But so what my takeaway here is the differentiation. So they're not panicking. They're obviously playing the open source card, Kubernetes, TensorFlow, et cetera, giving back to the community. Definitely got to lead in AI and machine intelligence. No question about it. So they're going to play that card. Database, we had the folks from Cloud Spanner on today. Amazing technology, whereas you think about it, they're talking about a transaction oriented database. We heard a customer today talking about, we replaced Oracle, right? We got rid of Oracle. It was the last time you heard that. Not many times. It's not often. No, they're only a $120 million company, but the hurt point was it's game changing for us. It's a 10x value proposition. And we're getting the same quality that we're getting out of our Oracle databases. They're leading with apps on Google Cloud, Twitter is there, Spotify. They obviously have a lot of Hadoop history. So that's part of it, partner focus. We on siliconangle.com is great article by Mark Albertson. He talked about the, he compared the partner ecosystem. Google's only about 13,000 partners. Amazon 100,000, Azure 70,000. So a long way to go there. Serverless, they're catching up in serverless, but still behind, kind of still in beta, right? But serverless, John, I'd love your take on this can be as profound as virtualization was. Last two, developer love. You know, they've got juice with developers and then the technology, massive scale. We heard things about Spanner, the relational semantics, BigQuery, Kubernetes, TensorFlow, they have this automate or die culture. You talked about this in your article that's a bottoms up engineering culture. Much different than the traditional enterprise top down. Go take that hill. You're going to get shot at, but take that hill by midnight. Different. Well, I mean, well, first of all, I think developers are in charge. I think one of the things that's happening is that's clear is that every company, whether you're a startup or a large enterprise, has to come to grips with whether they're going to be a software company. And that's easy to say, oh, that's easy, just hire some software developers. No, that's not that easy. One, there's software developers coming out, but the way IT was built and the way people were buying IT, it's just not compatible with what software developers want to do. They want to work in a company that's actually building software. They don't want to be servicing infrastructure. So saying that everyone's going to be a software company is one thing. That's true. And so that's the challenge. And I think Google has an opportunity just as AWS has been dominating with service oriented approach, managing services, by creating building blocks that will create large scale that allow people to write software easily. And I think that's the key word. How do I make things common interface? You asked Diane Greene about common primitives. They're going to do the foundational work needed. It might be slower, but at a core primitive, they'll do that work because it's going to make everything go faster. This is a different mind shift. So again, you also asked, what are the guests? I forgot who it was. IT moves at very slow speeds. It's like a caravan who said glacial. Well, that used to be, but they have to move faster. So the challenge is, how do you blend the speed of technology, specifically on how modern software is being written when you have cloud scale opportunities? Because this is not a cost cutting environment. People want to press the gas, not the break. So you have a flywheel developing in technology where if you are right on a business model observation where you can create differentiation for a business, this is now the cloud's customers. You're a bank, you're a financial institution, you're manufacturing, you're a media company. If you can see an opportunity to create competitive advantage, the cloud is going to get you there really fast. So I'm not too hung up on who's got the better server lists. I look at it like a car. I want to drive the car. I always want to make sure the engine doesn't fall out or tires don't break. But I mean, so you got to look at, this is a whole other world. If you're not in the cloud, you're basically on horse and buggy. So yeah, you're not going to have to buy, hey, you don't have to deal with horses and clean up all the horse crap on the street. I mean, all that goes away. So buying IT is like horse and buggy. Cloud is like the sports car. And the question is, do I need air conditioning? I need power windows? This is a whole new view. And people just want to get the job done. So this is about business, future of work, making money, and technology's going to facilitate that. So I think the cloud game is going to get different very fast. Well, I want to pick up on a couple things you said. Software, every company's becoming a software company. To Andreessen said, software's eating the world. If software's eating the world, data is eating software. So you've got to become a data company as well as a software company. And data has to be at the core of your business in order to compete. And data is not at the core of most companies' businesses. So how do they close that gap? You've talked about the innovation sandwich. Cloud, data, and AI. The cocktail that's going to drive innovation in the future. So if data is not at the core of your company, how are you going to close that AI gap? Well, the way you're going to close it is you're going to buy AI from companies like Google and Amazon and others. So that's one point. Yeah. If you don't have an innovation sandwich, if you don't have the data, it's a wish sandwich. You wish you had to meet. I wish you had it right. Wish I had to meet. The other thing is you mentioned this. Diane Greene in her keynote said, we provide consistency with a common core set of primitives. And I asked her about that because it's really different than what Amazon does. So Amazon, if you think about Amazon's data pipeline, and we know, because we're customers, we use DynamoDB, we use S3. You know, we use all these different services in the data pipeline. Well, each of those has a different API. And you've got to learn that world. What Google's doing, there's this simplifying that with a common set of primitives. Now, Diane mentioned, she said there's a trade-off. It takes us longer to get to market. The problem is, here's the problem. Multi-Cloud is a real dynamic. So even though they have a common set of primitives, if you go to Azure or AWS, you still have different primitives over there. So the world of Multi-Cloud isn't as simple as saying moving workloads yet. So although you're starting to see good signs within Google to see, oh, that's on-prem, that's in the cloud. Okay, that's hybrid within Google. The question is, when I have, don't have to hire an IT staff to manage my deployments on Azure or my deployments on AWS, that's a whole different world. You still got to learn skill sets on those others. True, but as your pipeline, as your data pipeline grows and gets more and more complex, you've got to have skill sets that grow, and that's fine, but then it's really hard to predict where I should put data sometimes, and what, until you get the bill at the end of the month, they go, oh, I should have put that in S3 instead of Aurora, whatever it is. And so Google's trying to simplify that and solve that problem, just a different philosophy. Stu Miniman asked Andy Jassy about this and his answer on theCUBE was, look, we want to have fine-grained control of those primitives in case the market changes, we can make the change and it doesn't affect all the other APIs that we have. So that was the trade-off that they made. Number one, number two, he said, we can get the market faster. And Diane admitted, it slows us down, but it simplifies things. Different philosophy, which comes back to differentiation. If you're going to win in the enterprise, you have to believe. I get the sense that these guys believe. Well, I think there's a belief but there's architectural decisions. Amazon and Google are completely different animals. If you look at Amazon and you look at some of the decisions they make, their client base is significantly larger. They have been in business longer. The sets of services that they have dwarf Google, Google is like, on the bar charts, Andy Jassy puts up, it's like here and everyone else is kind of down here, Google's down there. And the customer references, I mean, it's just off the charts. So Google is doing, they're picking their spots to compete in, but they're doing it in a very smart engineering way. They can bring out the big guns and this is what I would do. I love this strategy. You got hardened, large scale technology that's been used internally and you're not trying to peddle that to customers. You're tweaking it and making it consumable. Big table, big query, a spanner. This is tech, Kubernetes. This is Google essentially being smart. Consuming the tech is not necessarily shoving it down someone's throat. Amazon, on the other hand, has more of a composability side. And some people will use some services in Amazon and not others. So I wouldn't judge that right now. It's too early to tell, but these are philosophy decisions. We'll see how the bet pans out. That's a little bit longer term. I want to ask you about the Cisco deal because it seems like a match made in heaven. And I want to talk specifically about some of the enterprise guys, particularly Dell, Cisco and HPE. You got Dell with VMware in bed with Amazon in a big way. We were just down at DC last month. We heard all about that and we're going to hear more about it in this fall at Reinvent. Cisco today does a deal with Google. Perfect match, right? Cisco needs a cloud. Google needs an enterprise partner. Boom. Where does that leave HPE? HPE's got no cloud, right? And are they trying to align? I guess Azure, right? They're tight with- Google's Ascension- Is that where they go? They fall to Azure? Well, that's what the habit is. That's the relationship, the wind tell. But back up for a minute, the HPE second. The Ascension of Google Cloud into the upper echelon of players will hurt a few people. One of them's obviously Oracle, right? And they mentioned Oracle, the Cloud Spanner thing. So I think Oracle will be flat footed by, if Google Cloud continues the Ascension. HPE has to rethink, and they kind of look bad on this because they should be partnering with Google Cloud because they have no cloud themselves. And the same with Dell. If I'm Dell and HPE, I got to get out of the IT ops decimation that's coming because IT operations and the manageability piece is going to absolutely be decimated in the next five years. If you're in the IT ops business or IT management, ITOM, ITIL, it's going to get crushed. It's going to absolutely decimate. It's going to get vaporized. The value is going to be shifted to another part of the stack. And if you're not looking at that, if you're HPE, you could essentially get flat footed and get crushed. So HPE's got to be thinking differently. But what Google and Amazon have in my opinion, and maybe you can even stretch it and say, Alibaba, if you want a gateway to China, is that the wind tell relationship of Windows and Intel back in the 80s and 90s? That created massive innovation. So I see a similar dynamic going on now where the cloud players, I'm calling them cloud native, Amazon and Google, for instance, are creating that new dynamic. I didn't mention Microsoft because I don't consider them yet in the formal position to be truly enabling the kind of value that Google and Amazon will value because of the tech. I think Amazon's more of a competitive, I mean, Microsoft's more of a compatibility mode. I run, I run Microsoft, I got my SQL server, I got Office, Azure's got good enough, I'm not looking for 10x improvement. So I think a lot of Microsoft's success is just holding the line and the growth and stock has been a function of the operating model of cloud. And we'll see what they do with their show, but I think Microsoft's got to up their game a bit. Now they're not mailing it in, they're doing a good job, but I just think Google and Amazon are stronger cloud native players straight up on paper, right, and if you've got their capability. So the HPEs and the ecosystems have to figure out who's the new partner that's going to make the market and rising tide will float all both. So I mean, to me, if I'm at HPE, I'm thinking to myself, okay, I got managed services, I better get out in front of the next wave where I'm driftwood. Well, Oracle's an interesting case too. You mentioned Oracle, somebody said to me today, Oracle, they're really hurting. I'm like, most companies would love to be hurting that badly. Oracle's not hurting. Their strategy of, you know, same, same, but it's the same Oracle stack brought into the cloud. They're sending a message to the customers that like, look, you don't have to go to another cloud. Well, we got you covered. We're investing in R&D, which they do, by the way. But it was really interesting to hear from the cloud spanner customer today that they got a 10X value, 10X reduction in cost and a 10X capability of scaling relative to Oracle. That was powerful to hear that. There's no doubt in my mind, Oracle's not hurting. Oracle's got thousands and thousands of customers that do hundreds of millions of dollars in revenue and categories that people would love to have. The question on Oracle is the price pressure is an innovator's dilemma because there's no doubt that Oracle could just snap a few fingers and replicate the kind of deliverables that people are offering. The question is, can they get the premium that they're used to getting, one? Number two, if everyone's a software company, are they truly delivering the value that's expected to be a software company that would be competitive, not to make the lights run or to enable competitive advantage at a level, that's to me going to be the real test of how cloud morphs and I question that you got to be agile and you got to have real, real top line revenue numbers where you're using technology at a cost-benefit ratio that drives value. If Oracle can get there, then we'll see. The reason why they'll continue to win is because they move at the speed of the CIO, and they'll say all the right things, they'll say AI infused and blockchain and machine learning and all that stuff and the CIOs will eat it up because it's a safe bet. Well, I want to get your thoughts because I talked about this a couple of years ago, last year we started harping and we got more into the CUBE conversation around cloud being horizontally scalable, yet at the top of the stack you got vertical differentiation, that's great for data. Diane Green and her keynote said that the vertical focus with engineering resources tied to its key part of their strategy, highlighted healthcare was their first vertical, talked about National Institute of Health deal. Retail. NGOs, financial service, manufacturing, transportation, gaming and media. You got Fortnight on there now, all-book customer of both clouds, startups and retail. Vertical strategies, kind of an old enterprise playbook tape. Is that a viable one? Because now with the kind of data, if you get the data sandwich, maybe specialism and verticals can scale your thoughts. I'll tell you why it is. I'll tell you why it's viable, because of digital. So for years these vertical stacks have been hardened and the expertise and the business process and the knowledge within that vertical industry, retail, transportation, financial services, et cetera, has been hardened. But with digital, you're seeing it all over the place. Amazon getting into content, getting into Apple getting into content, Amazon getting into groceries, Google getting into healthcare. So digital allows you to not only disrupt horizontally at the technology layer, but also vertically within industries. I think it's a very powerful disruption agenda. Well, analytics seems to be the killer app. That's the theme here, data. If you take it the next step, that's where the specialism is, that's where the value is created. Why not have vertical specialty? It's a lot of sense. And it's a different spin. It's not the traditional stack. Higher a bunch of people with that knowledge in that stack. No, it's really innovate and change the game and change the business model. I love it. That was a great surprise to me. Dave, great kicking off day one here this morning, ending day one here with this wrap up. We've got three days of wall-to-wall coverage. Go to SiliconANGLE.com. We've got a great cloud, special Rob Hoef, editor-in-chief in the team, Mark Alberson and the rest of the crew. Put some great stories together and go to thecube.net and check out the video coverage there. That's where we're going to be live. Of course, wikibond.com for the analyst coverage from Peter Burris and his team. Check that out. Of course, theCUBE here. Day one, thanks for watching. See you tomorrow.