 Live from Las Vegas, it's the Cube! Covering AWS re-invent 2019. Brought to you by Amazon Web Services and Intel, along with its ecosystem partners. Hello everyone, welcome back to the Cube's day three coverage of AWS re-invent in Las Vegas. It's the Cube's coverage. Want to thank Intel for being the headline sponsor for the Cube, two sets. Without Intel we wouldn't make it happen. We're here extracting the signal from the noise. As usual, wall-to-wall, silken angle, the Cube coverage. I'm John Furrier with Stu Miniman, doing a keynote analysis from Werner Vogel. Stu, you know, Werner, they always got this format. Jassy kicks it off, you get the partner thing on day two, and then they say Werner lasts, could nerd out on all the good stuff. Containers, Kubernetes, all under the hood stuff. So, let's jump in, keynote analysis. What's your take? What's Werner's posture this year? What's the vibe? What's the overall theme of the keynote? Well, first of all, John, to answer the question that everybody asks when Werner takes the stage, this year's t-shirt was Osdorp Posse. So, Werner usually either has a Seattle band or it's usually a Dutch DJ, something like that. So, he always delivers the geek crowd there, and really after sitting through Werner's keynote, I think everybody walks out with AWS certification because architecturally we dig into all these environments. So, right, you mentioned they started out with the master class on how Amazon built their hypervisor. Super important, Nitro underneath is the secret sauce. When they bought Anapurna Labs, we knew that those chips would be super important going forward, but this is what is going to be the driver for Outposts. It is the Outposts is the building block for many of the other services announced this week, and absolutely the number one thing I'm hearing in the ecosystem is around Outposts, but Fargate and Firecracker, micro databases and managing containers, they had some enterprises up on stage talking about transformation, picking up on the themes that Andy started with his three hour keynote just yesterday, but it's a lighter on the news. One of the bigger things out there is we will poke Amazon about how open and transparent they are about what they're doing, and one of the things they announced was the Amazon Builders Library. So it's not just getting up on stage and saying, hey, we've got really smart people and we architected these things and you need to use all of our tools, but hey, this is how we do things. Reminded me a little bit of just echoes of what I heard from GitLab, who of course is fully open source, fully transparent, but Amazon making progress. It's Adrian Cockroft and that team has moved on open source. The container group, I had a great interview yesterday with Deepak Singh and Abby Fuller. The container group actually has a roadmap up on containers there, so sharing a lot of deep knowledge and good customers, talking about how they're taking advantage, transforming their business into serverless. I mean, John, coming out of Andy's keynote, I was like, there wasn't a lot of security and there wasn't a lot of serverless, and while serverless has been something that we know is transforming Amazon underneath the covers, we finally got to hear a little bit more about not just Lambda, but yes, Lambda, but the rest of it as to how serverless is transforming underneath. You know, Jassy's got a long three hour keynote, 30 announcements, so he has to cut, save some minutes there. So, Werner, we were expecting to go in a little bit more deeper dive on this transformational architecture. What did you learn about what they're proposing, what they're saying, or continuing to say around how enterprises should be reborn in the cloud, because that's the conversation here. Again, we're the memes that are developing where take the T out of cloud native, it's cloud naive, if you're not doing it right, you're going to be pretty naive, and then reborn in the cloud is the theme. So, cloud native, born in the cloud, that's proven. Reborn in the cloud is kind of the theme we're hearing. Did he show anything? Did he talk about what that architecture is for transformation? He did, actually, it was funny. I mean, watching the social stream while things are going on, there was actually a CUBE alumni that I follow that we've interviewed at this show, and he's like, if we've heard one of these journeys transformation, haven't we heard them all? And I said, while the high level message may be similar, is I'm going to transform, I'm going to use data, when you looked at what they were doing, and this is a significant vanguard, the financial institutions, Dave Vellante commenting that, the big banks, John, we know Goldman Sachs, we know JPMorgan, these banks that they have huge IT budgets and very smart staffs there, years ago would have said, oh, we don't need to use those services, we'll do it ourselves. Well, vanguard talking about how they're transforming, re-architecting, my troop services, I love your term being reborn cloud native, because that is the architecture. Are you cloud native or, I used to call it, you're kind of cloud native or kind of a little bit faux, cloud naive is a great term too, so been digging in and it is resonating as to, look, transformation is hard. This is not trying to move the organizational faster than it will naturally happen, it's painful, there's skill sets, there's those organizational pieces, there are politics inside the company that can slow you down and the enterprise is not known for speed, the enterprises that will continue to exist going forward better have taken this methodology, they need to be more agile and move faster. Well, the thing about the cloud naive thing that I like, and first of all, I agree with reborn in the cloud, we coined the term in the queue, but that's kind of got this born again kind of vibe to it, which I think is what they're trying to say. But the cloud naive is some of the conversations we're hearing in the community and the customer base of these clouds, which is there are, and Jassy said in his keynote, there are now two types of developers and customers, the ones who want the low level building blocks and ones who want more custom or solution oriented packages. So if you look at Microsoft Azure and Oracle and other clouds, they're trying to appeal to the folks that are classic IT. Some are saying that that's a naive approach because it's a false sense of cloud, false sense of security, they got a little cloud, is it really true cloud, is it really true cloud native? So there's an interesting confluence between what true cloud is from a cloud native standpoint, and yet all the big success stories are transformations, not transitions. And so to me, I'm watching this IT market which is going to have trillions of dollars in, are they just transitioning old IT with a new coat of paint or is it truly a skill, a truly an architectural transformation and does it impact the business model? That to me is the question. What's your reaction to that? Yeah, so John, I think actually the best example of that cloud native architecture is the thing we're actually all talking about this week but is misunderstood. AWS Outpost was announced last year, it is GA with the AWF native services this year first. The VMware version is going to come out early in 2020 but here's why I think it is super exciting but misunderstood. When Microsoft did Azure Stack, they said we're going to give you an availability zone basically in your data center. It wasn't giving you, it was trying to extend the operational model but it was a different stack, it was different hardware, they had to put these things together and really it's been a failure. The architectural design point of Outpost is different. It is the same stack. It is an extension of your availability zone so don't think of it as I've got the cloud in my data center, it's no, no, no. What I need for low latency and locality, it's here but starting off there's no S3 in it because we're like wait, what do you mean there's no S3 in it? I want to do all these services and everything. Oh yeah, your S3 bucket is in your local AZ. So why would you say it's sharing, if you're creating data and doing data, of course I want it in my S3 bucket. You know, that makes sense. Now they're going to add S3 next year but they are going to be very careful about what services do and don't go on. This is not, oh, Amazon announces lots of things, of course it's on Outpost. It has the security, it has the operational model, it fits into the whole framework, it can be disconnected some but it is very different. I actually think it's a little bit of a disservice. You can actually go see the rack. I took a selfie with it and put it out on Twitter and it's cool gear. We all love to see the rack and see the cables and things like that but my recommendation to Amazon would be just put a black curtain around it because paying no attention to what's here, Amazon manages it for you. And yes, it's Amazon gear with the nitro chip underneath there. So customers should not have to think about it. It's just when they're doing that architecture which from an application standpoint it's a hybrid architecture, John. Some services stay more local because of latency but others it's that transformation and it's moving. The cloud, the edge, my data center, things are much more mobile and can you to change and move over time? Well this brings you mentioned hybrid. I think to me the Outpost announcement in terms of unpacking that is all about validation of hybrid. VMware's got a smile on their face. Sanjay Poonan came in because Gelsinger kind of was pitching hybrid. We were challenging him then but truly this means cloud operations has come. This is now very clear, there's no debate and this is what multi-cloud ultimately will look like but hybrid cloud and public cloud is now the architecture of IT. There's no debate because Outpost is absolute verification that the cloud operating model with the cloud as the center of gravity for all the reasons, scale, lower costs, management but moving the cloud operations on premises or the edge proves hybrid is here to stay and that's where the money is. So John, there's a small nuance I'll say there because hybrid we often think of public and private as equal. The Amazon positioning is it's Outposts. It's an extension of what we're doing. The public cloud is the main piece. The edge and the Outposts are just extensions where we're reaching out as opposed to if I look at what VMware's doing, I've got my data center footprint. You look at the HCI solution out there. Outpost is not an HCI competitor and people looking at this misunderstand the fundamental architecture there. So absolutely hybrid is real, edge is important. Amazon is extending their reach but all I'm saying is that nuance is still Amazon has matured their thinking on hybrid or even multicloud when you talked to Andy he actually would talk about multicloud but still at the center of gravity is the public cloud and the Amazon services. It's not saying that oh yeah like let's wrap our rounds around all of your existing legacy. The reason why I like the cloud naive, take the T out of cloud native and it's cloud naive is because there is a lot of naivety around what cloud actually is. So don't forget Outposts, cloud itself. And if you look at Microsoft for instance, love Microsoft, I think they do an amazing work. They're catching up as fast as they can but and they play the card. Well we're large scale too but the difference between Amazon and Microsoft Azure is very clear. Microsoft's had these data centers for MSN, IE browsers, global infrastructure for around the world for themselves and literally overnight they have to serve other people. And if you look at Gardner's results their downtime has been pretty much at an all time high. So what you're seeing is the inefficiencies and the diseconomies of scale for Microsoft trying to copy Amazon because they now have to serve millions of customers anywhere. This is what Jassy was telling me in my one on one which is there's no compression algorithm for experience. What he's basically saying is when you try to take shortcuts there's diseconomies of scale. Amazon's got years of economies of scale they're launching new services so Jassy's bet is to make the capabilities. The problem is Microsoft sales force do is out there and AWS can't compete where they're not present and they go into their customers saying we got you covered. And frankly that's working like real well. Yeah so John, we had theCUBE at Microsoft Ignite I've done that show for the last two years and my takeaway at Microsoft this year was they build bridges. If you are mostly legacy, everything in my data center versus cloud native I'm going to build you bridge. They have five different developer groups to work with you where you are and they'll go there. Amazon is a little bit more aggressive with cloud native transformation. You need to change your mindset so Microsoft's a little bit more moderate and it is safer for companies to just say well I trust Microsoft and I've worked with Microsoft and I've got an enterprise license agreement so I'll slowly make change but here's the challenge John. We know if you really want to change your business you can't get there incrementally. Transformation's important for innovation so the battle is amazing. You can't be wrong for betting on either Microsoft or Amazon these days. Architecturally I think Amazon has clear the broadest and deepest out there. They keep proving some of their environments and it has been impressive to watch this. Well the economies of scale versus disadvantage scale discussion is huge because ultimately if Microsoft stays on that path of just we got it too and they continue down that path they could be on the wrong side of the history and I'll tell you why I see that and why I'm evaluating Microsoft. One they have the data center so can they retool fast enough? Can they eliminate that technical debt? Because ultimately they're making a bet and the true bet is if they become just an IT transition in my opinion will lose in the long run. Microsoft's going all in on nope we're not the old guard, we're the new guard. So there's an interesting line being formed Stu and if Microsoft doesn't get cloud native and doesn't bring true scale, true reliability at the capabilities of Amazon then it's just going to be just another IT solution and that could fall right on their face on that one. And John when we first came to the show in 2013 it was very developer centric and could Amazon be successful in wooing the enterprise? You look around the show, the answer is a resounding yes. Amazon is there, they have not lost the developers they're doing the enterprise. When you talk to Andy you talked about the bottoms up and the top down leadership and working there and across the board as opposed to Google. Google has been trying and not making great progress moving to the enterprise and that has been challenging. Oh, I got to tell you Stu, last night I was out and I got some really good information on Jedi and I was networking around and kind of going incognito mode doing the normal reporting and I found someone who was sharing some really critical information around Jedi. Here's what I learned and this is around Microsoft. Microsoft won that Jedi deal without the capabilities to deliver on the contract. This was a direct quote from someone inside the DOD and inside the intelligence community who I got some clear information and I said to him, I go, how is that possible? He says, Microsoft won on the fact that they say they could do it. They have not yet proven any capabilities for Jedi and he even said, quote, they don't even have the data centers to support the deal. So here you have the dynamic. We say we can do it, Amazon is doing it. This is ultimately the true test of cloud naive versus cloud native. Ask the clouds, show me the proof that you could do it and I'll go with you. You've done great reporting on the Jedi. It has been a bit of a train wreck to watch what's going on in the industry with that because we know Microsoft needs to get a certain certification. They've got less than a year the clock is ticking to be able to support some of those environments. Amazon could support that today. So we knew when this started, this was Amazon's business and that there was the executive office going in and basically making sure that Amazon did not win it. So we said, there's a lot of business out there. We know Amazon's doing well in the government deals. Pat Gelsinger was on record from VMware talking about lots of government deals. Here's the thing. I also talked to someone inside the CIA community who told me that the spending in the CIA is flat. And the flatness of the spending is flat, but the demand for mission support is going exponential. So the cloud fits that bill. On the Jedi side, what we're hearing is the DOD folks love this architecture. It was not jury rig for Amazon, it was jury rig for the workload so that they're all worried that it's going to get scuttled and they don't want that project to fail. There's huge support and I think the Jedi supports the workload transformational thinking because it's completely different and that's why everyone was running scared because the old guard was getting crushed by it. But no one wants that deal to fail. They want it to go forward. So it's going to be very interesting dynamics do. If Microsoft can't deliver the goods, Amazon's back in the driver seat on that deal. And John, I guess my final takeaway, we talked a bunch about outposts, but that is a building block. AWS local zones starting first in LA for the telco media group. AWS wavelength working with the 5G providers. We had Verizon on the program here. Amazon is becoming the everywhere cloud and they really, as Dave said in your opening keynote there, shock and awe, Amazon delivers year after year. Maybe the slogan should be everything everywhere because they got a lot of capabilities. You said that everything cloud, they got everything in the store. Stu, great stuff, great analysis on the keynote from Werner Vogels. Again, more technology. I'm super excited around the momentum around Kubernetes. You know we love that. The thing cloud native is going to be absolutely legit and continue to be on a tear in 2020 and beyond. I think the 5G wavelength is going to change the network constructs because that's going to introduce new levels of kinds of policy. Managing data and compute at the edge will create new opportunities at the networking layer, which for us, you know, we love that. So I think the IoT edge is going to be a super, super valuable. We even had BlackBerry on their car group talking about the software inside the car. I mean, that's a moving mobile device of industrial strength. It's industrial IoT. So industrial IoT, IoT edge, outpost hybrid. Dude, we called this, what year? We called it 2013. And John, it's great to help our audience get a little bit more cloud native on their education and make sure that we're not as naive anymore. Stu, you're not naive. You're certainly cloud native. Born in the clouds, Stu. It's us born here, our seventh year here at Amazon Web Services. I want to thank Intel for being our headline sponsor. Without Intel support, we would not have the two stages and bringing all the wall to wall coverage. Thanks for supporting our mission, Intel. We really appreciate it. Give them a shout out. We got Andy Jassy coming on for exclusive at three o'clock, day three. Stay with us for more coverage live in Vegas for Reinvent 2019. Be right back.