 Live from Aluelto, California, it's theCUBE at Pier 2.0. Brought to you by the Pier 2.0 Foundations. Learn, connect, and grow. Now here are your hosts, John Furrier and Jeff Frick. Welcome back, everyone, here at Live in Silicon Valley. This is theCUBE, our flagship program. We go out to the events and extract the signal from the noise, I'm John Furrier, the founder of Silicon Angle. We're here at the Pier 2.0 event. It's an inaugural event of industry experts and gurus who get together to talk about the future of peering, networks, large networks, all for the betterment of the industry. Our next guest is Derek Gardnier, CEO of Layer 42 here. Affirm that we know we hosted one of our bosses there. Big, great success with Love Your Company. Thanks for joining. And Vinay Negpal, DuPont technology. Thanks for coming on as well, appreciate it. You guys were in a panel today here at the event. But before we get into some of the details, share with the folks out there what is the Pier 2.0 about? And why is it important? Why in this point in time is this inaugural event so important for the industry? I think Pier 2.0 is an educational event for the community. It's important because there's a lot of interest in the community about setting up alternate exchange points, having distributed exchanges set up. And the community has been asking for more information on what peering truly is, what its benefits are. So I think it's a great event being put together with the primary goal of educating the community on peering and its benefits. We look at it as a crossover between a purely technical show and a purely business show. We've seen consortiums and industry shows that bridged those two gaps in the past. None of them have done it with the participation level of the industry itself the same way. Most of these events are set up as information that's dictated by a group of people out to an audience. This one is much more interactive. So collaborative in nature, so to speak with the experts. I noticed a lot of gray hairs here and a lot of newbies kind of coming together. So the interesting mix of experience, practitioners, gurus, practitioners, and then kind of the young blood guys coming in through college or some guys from Berkeley here. So it's interesting transformation going on in the marketplace. Could you guys give some color to kind of what's happening at the industry? I mean, a lot of the guys who have been around the block and like my age in their 40s know the old days of stacking in rack and configuring networks. Now with the cloud, a whole new generation is kind of shifting. What's happening? What is this generational shift happening? Can you guys add some color to that? I think it's a re-vangelization of peering and interconnections. There's a lot of push around cloud services. And if you think of it from a data center perspective, cloud is so centric around the network. Network is in essence making the cloud happen. So hence there's a lot of interest in optimizing the network and having better peering set across North America. Derek, what are you seeing for the new blood coming in? The interesting thing is the cloud lives somewhere, right? It doesn't just live up in the sky. It actually lives in these buildings that DuPont Fabros, that Layer 42 and others offered to the industry. So our industry is changing in terms of the services and the applications that are being built on these cloud platforms. But the actual hosting as far as what Vinay and I do is very much the same. It's just that our customer base is morphing from the end user or the application provider into the cloud provider itself. And so what we're seeing with this varying degrees of age, the youth are trending toward the applications themselves. And so they're going to a lot of application centric companies that are marking their applications. The cloud platform is still being provided by what you called as the gray hairs. So I take a fence to that, but that's okay. I got some coming into there itself. Exactly. So we're still around in the industry and luckily the data center industry and the network industry that Vinay and I participate in is the plumbing of the house. It's hidden from everyone nowadays, but every house still needs it. And so what we're seeing is the beautiful drapes, the beautiful curtains, the lovely paint on the walls. That's the application. So it's all still there. It's just shifted and the age groups have shifted accordingly. Yeah, it's interesting. You mentioned the housing and the extraction away and the drapes and the app side. You know, I was talking with Pat Gelsinger who had a CUBE interview at the Mworld like two years ago and I said, so software to find data center really big deal. Software, I get. You need a data center to run software on. He's like, absolutely. So the whole point of this on-prem, off-premise discussion is interesting because the data center never goes away in concept ever, to your point. How is that software paradigm changing because that's an interesting nomenclature, software to find data center more of a marketing buzzword right now, but SDN has also gotten some traction. You're starting to see the virtualization piece into the network. How does that all play into the peering equation? Well, the software to find networks is definitely gaining some traction in the marketplace. And then on the data center side, there is DCIM. So there is more focus towards automation, but you're absolutely right. Cloud lives in the data center. So for us, we see a lot more adoption be it private clouds, public cloud and even hybrid clouds taking place in the facilities. So we at DuPont Fabros provide that underlying infrastructure of the resilience and power, cooling, physical security, and the network resiliency and connectivity to our customers to be able to run their cloud-based applications. We have a little slide flying around the cube here, but I want to just drill into the panel here you guys had. Again, some of the talks were taped, they weren't live, so they'll be on demand. So look to the Peer2O site for some of the video later, but we'll get your quick take on the panel. You guys had a panel called Open at IX Panel, past, present, and future. Derek, you were chairing that. Clint was on there and then you were on there. What was the guys talking about? What was the content of the panel? Give us the quick reader's digest in a short sound bite. What was the focus of the panel and what did you guys get out of that in terms of presenting for the audience? The panel itself was completely about Open IX. And Open IX is a standards body that is community focused. It's built by members of the community and these are all the network engineering primarily, but it also has several business people involved as well. And the idea behind Open IX is to set standards for interconnect facilities, standards that they should have in terms of their space, their power, and what not on the data center side, but also how the IXPs function, which are the internet exchange providers themselves. So the panel itself in getting the word out about the panel and what we're doing is saying that there's a new standards body, the standards body is community focused, everyone can participate in that panel, in that standards body, and letting them know how they can do it. You know, it's funny to see all these people talking about community and certainly open source is growing so fast. It's tier one citizen now, which is great for us to see, see how it kind of grew out, but now it's all been part of that. The tech community that you guys have been part of has been community based from day one. Look at the internet, it was all run by basically volunteers at first and then obviously the industry grew. What is the new role of community, specifically this organization? Because some are complaining about other industry organizations. Oh, it's like a halfway house of marketing programs and just people picking each other's stuff up and vendor puke. That's some of the things that we were talking about. What's different about this specifically? Yeah, so OpenIX is a community run organization and as Derek talked about, there are two standards that are set, OIX1 and OIX2. OIX1 is primarily for internet exchange points, which is exchanges that own and operate a physical network infrastructure for exchanging of IP traffic between different ASS, autonomous systems, and OIX2 is a standard for building owners and operators, for meet me room operators, and for data center providers. So the goal there is to have the, as we have established these standards to have IXPs and data centers certified to bring them together for establishing distributed internet exchange points in various metros in the US. So it's legitimate specifications. It's not like you guys just like talking to each other. It's real meat on the bone. It's absolutely legitimate. And the specifications are actually put together by the industry consortium, right? So it's a member run organization. We have our next annual general meeting coming up on September 5th, and some of the board seats are up for re-election. So it's a welcome invitation to anyone from the community who is an OpenIX member or wants to become a member to take part in it and contribute because the standards are set for the community and it's by the community. So it's a very much legitimate and open organization. Derek, talk about some of the enablement from this. So obviously the group, good community, they're doing some real work. What's the outcome here? New business models, new participants playing, new companies, existing companies, all working together to describe some of the outcomes. There's a little bit of all of the above. So what's happening right now is it's very much in the early stages for OpenIX right now. The idea of alternate exchanges, the idea of having this European model versus the US model, that's been underway for quite a while. We first started working with May East and May West back in the early 90s. So this is not anything that's brand new and overnight. The OpenIX movement itself is fairly new. It's only effectively a couple years old from the first draft. And what's happening is the approach of OpenIX is very different. They're looking at saying rather than having one entity have control over not just the exchange points but the business acumen of it, why don't we take a look at how we do some sort of distribution, equitable distribution, more people participate and build up the community itself a lot better. Now the community is not just a provider. That's where this is a little different from a regular business model. It will spawn new businesses and what we're seeing already is the idea of remote peering ports, people who provide network transport into these various internet exchange points. But we're also seeing this idea that participation can happen for the betterment of a whole as opposed to the betterment of a few. Is this the same wine and a new bottle? No. Are we back to like the old 90s? No, let me actually, let me talk to that real quick. First of all, I love the term vendor puke that you use. But I do take offense at the marketing thing because I like marketing. No, it's got something in the market that's called marketing, but you know. The deal is that a lot of, whether it's a product or service or a movement in the past has been set up to benefit a small group of folks and they figured out a way to say we have something of interest at this point in time and here's what we're going to do to capitalize on it. And because of competition, we're a capitalist society, what we're going to do is we're going to make sure that on one side that we block our competitors, but on the other side that we bolster our own position. That happens on a micro level within all of our organizations. At some level, to pump fabrics and layer 42 compete, but what we do is we keep that away from these community discussions. We say we're going to try and go after certain clients and thankfully we don't really overlap because they're more wholesale and more retail, but we say how do we better the society? How do we better the community? And let's keep these individual compartmentalization to a minimum. Vinay, talk about the role, as you mentioned the competition is wholesale retail, also it's private, you're public, right? So a little bit different sizes and also filings that you have to do on your end. Does that change, being a public company, does that change things at all? Does it make you bigger and more stronger? What does that mean? I think for us, we have been an early supporter and an early adopter of OpenIX exchanges. We have been fortunate to have two OpenIX certified exchanges in our facilities. We've got the London Internet Exchange links in Ashburn in our ACC5 facility and we have the Amsterdam Internet Exchange or AMSEX in our Piscataway facility in New Jersey. From a business model perspective, what that has enabled us is, Derek is absolutely right. You know, our traditional model is wholesale. So we provide wholesale wide space. Typically in denomination of two megawatts, we can do smaller footprints of one megawatt and in some cases half a megawatt as well. But obviously to support the exchanges, we need to have the ability to sustain the smaller denomination of customers who are coming in to take membership and connect to the exchange. So what we have done is, we have taken half a megawatt pod in our Ashburn ACC5 facility and a quarter megawatt pod in our Piscataway New Jersey facility and converted that into a co-location space for enabling members to come in and take easily half a cabinet which is 29 rack units with two kilowatts of power space, power from us and do a simple cross-connect to connect to the exchanges. So that has, for us, that has enabled us to embrace a little bit new business model. And to Derek's point, these exchanges are set up as distributed exchanges. So it's about co-opetition. So in Ashburn, for example, our exchange in ACC5 facility in Ashburn is connected to Manassas at EvoSwitch which is a facility owned by Corporate Office and Property Trust. And the third location is in Reston at CoreSight. So the three locations are interconnected via a diverse dark fiber that's owned and operated by links. So these exchanges are not tied to a specific data center operator. They're open exchanges and they're set up in a distributed manner so that once you connect to the exchange from one location, you seamlessly have the ability to access the other members and other sites. So basically you're saying is it more open? Is that the goal? Is that the end game here, openness? Or is it more pricing? Is it cost? What's everything? It's not pricing. And actually that needs to be taken off the table. So every company is free to charge whatever they want. That's part of our society, right? That's free to charge. Or you lose customers. Or show the value add of why you can actually charge more. So that doesn't change what's up. The idea behind OpenIX and any of the alternate exchange platforms is that you look at things like risk mitigation. You look at saying, do we actually need more points within a metro or are there unserved markets such as you're out in the, we'll call them the boonies and how do those people get the value of an exchange? Do you backhaul them? Do you build something out in that local area? So it's more options, more offerings, risk mitigation, while it's enhancing the overall experience of the exchange. And increasing competition as well, right? It does. So that's also going to increase pricing in a way. It's more competition, more access. Absolutely. I think one of the reasons Derek was saying that it's not there for to set the pricing standard is because we talk about having transparency in interconnect pricing. But the mandate of OpenIX is not to set pricing. It's not to dictate what the pricing should be. But what we ensure is that for a data center operator to be certified as OIX 2, gain the OIX 2 certification, they have to publish on a publicly accessible website what their interconnect costs are. So we want to ensure that the interconnects that are happening, the members who connect to the exchange have full visibility on what that pricing structure, what that pricing structure will be. And for us as well at DFT to gain those certifications, we put a cross-connect model in place. We deployed our own dark fiber in the two facilities in ACC 5N in New Jersey at NJ1. And we publish what the pricing will be. And the footprint that we have put in place for colocation just so you know is for us it's less than 0.5% of our total portfolio. So as of now we have 240 megawatts of operating of total data center capacity in 11 data centers in four markets in the US. If you guys get the magic wand out and develop the ideal marketing program, what would be the objective for our country in the US in terms of broadband? Broadband penetration, connectivity, peering. What's the wish list? What's the moonshot? What's the ideal architecture? If you guys could kind of put the pixie dozen out there right now, what would be your solution to increase access to the internet, access to great peering? I'll take this one because I'm totally going to destroy this question. It depends on what you're trying to accomplish. So for me education is a primary focus and I wish the US would invest even more money than it already does in education. So when I look at things like broadband and whatnot, I look at it from a standpoint of what information is available to the people receiving. So I know that there's quite a number of rural broadband initiatives right now within the US and that has been for several years to bring this idea of network out into the far reaches. Now if what you're going to do is not educational in purpose, you might not get the same value out of that increasing your knowledge base, increasing your income at some point, increasing your ability and your capability and even the idea that there's more out in this world than what you see out in this rural area. So the perfect idea for me of what a network would look like within the US is something that allows more of a distributed and even playing field for those people that are using the networks themselves. The funny thing is that actually coincides with this movement, which is the idea of let's level the playing field somewhat and give everyone this access into the exchange points which lead out to everyone having access into these broadband or these regular networks. And in that great, great answer by the way, in the industry you crushed it. What would be the incentive result of that? So okay, assuming the playing field can be leveled, what incentive for the operators of that network, given the expansion, is it going to be more capacity, more revenue, more customers, do you see that incentive staying in place if that happened? I mean, how would you organize that one? Because that would be hard, right? If everyone leveled the playing field, were they giving up anything? The issue right now is we've got a system, and we're just talking on the exchange side. We've got a system where there's a number of providers we'll say on the data center side that do not offer exchanges of their own and they don't have exchanges within their facilities. We've got a number of exchanges that are either regionalized or they have no ability to move into other areas by these data center providers that want a diverse exchange within their facility. Once we start marrying those together, that actually will somewhat offer, I'll say a level playing field, but it will give us more opportunity. At that point, then what we can do is we can worry about who's going to make what money off of it, right? This is more along the ideas of let's just get started so that people have more choice. Now, if you already have an exchange within your facility, one of the things that you're going to look at is their revenue attrition by this model, right? And can I capitalize on this model or does this actually hurt? The internet as a whole changes consistently. We can quote Moore's law, we can do whatever we want, but even the idea of these exchanges or the interconnect facilities themselves, they're going to change because technology increases speed on a network, increased speed on a network may need fewer ports, less cross-connects and whatsoever. I always like to say there's a reason why the popular radio stations don't really play free bird anymore because that model of music has moved on. What we're seeing- Can't stay away to heaven. Well, they still play that, but that model's moved on, it's morphed. And what we're seeing is the exact same things. And no one regardless can just stay where they are and expect things to stay the same because technology by itself will force the change. All we're saying is let's get ahead of the curve and make sure that it's equitable for everyone. Yeah, and I think with that, to add to what Derek said, it's giving customers more choices. It's also having less density of interconnects in any one particular building. So the goal is to spread it out in a distributed architecture, increasing the overall resiliency of the infrastructure and offering better performance and latency benefits to the end customer. Okay, so obviously the peering thing now back to square one, this inaugural event, Pier 2.0, The Foundation, obviously grassroots movement, kind of community models that ties in some things that you guys were talking about. I heard Bill Norton talking about educational too, same thing. How inclusive and what things do you guys see happening with Pier 2.0 Community Foundation? How do you guys see this rolling out? What's your preferred future trajectory? You can also predict that out. What's your, in your mind's eye, what would you like to see happen with Pier 2.0 as it scales up a little bit? Is the first question, I guess, is do we have to call the next show Pier 2.1? It's a point release, maybe 2.01, maybe this gets better, you know, unless it's a full rev, I mean, a little bit upgrade. So Pier 2.0, my understanding, because we're actually not part of Pier 2.0 other than speaking here on the panels, but my understanding is it's a nonprofit organization. And so what I would imagine is, they're looking for community-based support to say how do we make this show better? So most likely the path that's going to happen and what I'd like to see is that this starts getting presented in different parts around the country. They start allocating time for topics that are of the discussion points that people want to hear. So say we won't have 30 minutes next time, we'll have 50 minutes or something like that. But the show itself will grow and evolve, but it won't grow and evolve in a bubble. It will be input by all the participants as well as what I find interesting is about 50% of the people that registered weren't able to make it. I want to reach out to them and say, why didn't you make it, right? Did something come up within your work or was it something where you didn't see the show as germane to help you in your business or your company, et cetera? And find out from that so that the show can morph into something that will draw those people back in and then get them to start participating. Yeah, I agree with Derek on that. I think if anything, it has to be more community-driven as the initial event has been. There's got to be more input from people as to what they've found valuable in it and what they like to see change and are going to more granular details of certain things. For example, I mean, it's been a two-day event and I think there have been some great technical sessions and as the peering evolves in North America with the dynamic that's underway, I would imagine that Peer 2.0 would embrace that and adapt to the topics that are of relevance to the community. You know, one of the things I'm impressed by this event is why we were attracted to cover it was the people involved in the initial build-out of the internet going back to the history and look at the advances just over the past 15 years. Really it was a lot of brute force, right? You can, your business right now is testament to that. You get all the bare metal and all that infrastructure is in place. Now a whole nother level of scales hitting with cloud, mobile, social, it's new generations a year. And a lot of the young guys coming in haven't fought the battles. Don't know the policy game. And one of the things I'm always watching is the policy, the lack of policy savvy. We've seen a little bit more now Google's getting more mojo there and forcing a little people's hands. But in Washington DC there's not a lot of tech muscle around some of the policy stuff. And we saw that with the C-Lex back in the early days and we saw what happened with that. So I'm a big believer in tech policy around the freedom side of it. So as the young guys come in, there's a huge technical curiosity for how this stuff got built. Yet they have no experience with the old. So this event has got the pros. The guys who have been there rolled up their sleeves, got dirty, building their businesses and networks. But the new young guns were just like, oh what, I've never loaded my things before, what? I just throw it on the cloud. So they're looking for more dev ops like mindset. So this dev ops revolution is very interesting. What's your guys' perspective of the dev ops revolution? There's a serious danger to us old people sitting around and talking around at the table. And that is- 40's the new 50, no, 40's the new 20, right? That's the new thing, right? Thank God, I mean I guess that makes me 25. But there's a huge danger with that and that is that you're gonna go reminisce about the old days which has nothing to do with the people that are coming into the workforce right now. You're pointing that out saying, well they really don't know about it but a lot of them don't care. A lot of them don't need to know about it. When we take a look at infrastructure, so that's what we're both involved with it which is infrastructure. Off a lot of the people coming in just expect that it's gonna work. How hard it was to build it is irrelevant. The fact that it has to work is all that matters and then we start looking at things like we're talking about application and programming and cloud. That happens at such a higher level than what we're doing that if we start talking about the way that the underpinnings work, the routers work and whatnot, if they're application people, again it may not be germane to what they do. Now people that are coming in that are younger on the infrastructure side which is a lot fewer than it used to be which I believe what we're talking about. Those folks do need to know someone of the history but I try and limit it to about 10% of my discussion with them. I try and take a look at where the technology is going to move, how that's gonna impact their life because again there's all these sayings that say that 90% of the jobs that will be available in 10 to 15 years haven't been invented yet. Well infrastructure is fairly constant but the technology is still gonna evolve. So always looking toward the future and how that's gonna impact the next generation is important. On the side of the government itself and how the government ties into this and regulation and whatnot, that is a can of worms and unfortunately I think it catches a lot of the government policy makers off guard. It would be wonderful if the voice of the community could be tied more into the political voice but then all of a sudden this whole idea of open community, now you're working with people who are passing laws and does that conflict with this idea of the open community. So it's a horrible can of worms. It's a conflict but the opportunity is great. Guys we have to break but I want to think it's coming on. Give you the final word. Sum up for the folks here, the show. Just give them a sound bite. What's the vibe? What's the outcome? What's happening here? I think it's been a very well run event. We've got some good attendance for it being the first time held and I think it's a good thing that the focus is on education around peering and I hope that the show continues and evolves further. Pier 2.0 is exactly what everyone's going to make of it. So if you want a better show, come out and help. Great Derek, thanks for coming on. Great success at Layer 42. Love your company here with great success in Mountain View. Folks check out Layer 42. Good name, great to meet you. Thanks for your commentary. The pros here at Pier 2.0 we're live in Silicon Valley, it's theCUBE. I'm John Furrier, we'll be right back with our next guest after this short break.