 Live from Las Vegas, it's theCUBE. Covering VMworld 2017, brought to you by VMware and it's ecosystem partner. Welcome back everyone, we are live here in Las Vegas for VMworld 2017, I'm John Furrier, my co-host Dave Vellante, our eighth year with theCUBE. Proud to have two great guests, Josh Epstein, CMO of Camarino and Al David, CTO, Kevin Arrio. Thanks for coming on theCUBE, great to see you guys again. Likewise, great to be here. You guys had a great event in Boston recently. What's going on with you guys? Give the update on the company. Sure, I'll go first. Camarino's been around for a while, but we've been really, first of all, moved the headquarters over to East Coast US outside of Boston, need of Massachusetts. Opened up a great new office space there. Got a lot going on from a product perspective, a lot going on from a kind of go-to-market perspective. We see a lot happening in the all-flash space and the storage space in general and just really excited to kind of take it to the next step. We see a lot of things happening here. It's a pretty big week this week. We saw Scott Dietzen from Pure Storage, become the chairman and Gene Carlo, ex-Cisco M&A guy from Silver Lake come in to be the CEO. So Dave and I were speculating all-flash, a lot of, what's going on? A lot of people saying, whoa, what's going on? Is it growing? Still need for flash. What's the big hubbub about? So we differently see a change in the market and the emergence of two different models. The way people used to buy storage and the way next generation application, cloud-scale application, software as a service, e-commerce, online businesses need to buy storage. And their need for simplicity, performance and cost efficiency at scale is what is still driving the need for flash storage and we'll talk about this yet to come some more. And you guys see those as really distinct sort of opportunities. Is that right? Can we add some color to that, Josh? Yeah, I think that we see the flash space as made up of two basic markets. One is just this massive stocking function of traditional enterprise data centers making the move in mass to flash. And there you have obviously all the incumbent vendors with their flash solutions. That's a dogfight, there's a lot of competition there. There's this other market which we see growing more healthily, more organically, which is the growth of these cloud-scale applications. So the all-set flash provider or software as a service providers, e-commerce providers, FinTech, HealthTech, these large, highly scalable, database-driven cloud-scale applications that needs a different type of scale and so that's where we see less competition from the incumbents and more opportunity for them. What's different about that market? What's the requirement, what are they looking for that makes this a good engine for them? So one of the key requirements is agility and flexibility. One of the characteristics is they don't really know what is going to be the next workload, how their workload is going to change and scale over time. So they need an infrastructure that can chain and adapt to their needs. Still deliver the same level of performance, still deliver the same level of simplicity, but have that flexibility to address their changing needs and capacity and performance, to address growth in customers, changing in workload application without too much pre-planning. So I've got to ask the question to you guys, I get this all the time, so since you guys are the gurus in the area, I get this question a lot. What is a modern data center? With all the action on private cloud happening, true private cloud, as Wikibon's data clearly points out, people are retooling their data centers to operate like cloud, it's still on premise. That's going to the gateway to hyper cloud, very clear. Public cloud workloads, you know, bursting, all that stuff's great. What's a modern architecture? What's a modern data center? When I hear that term, what do you guys mean? That's a great question. So the modern data center, or even the next generation data center, is exactly that, one that allows enterprises to achieve the same levels of scalability efficiency as the hyper scale, as the hyper cloud, but on premise or in a hybrid fashion. What allows them to have that level of control against operational simplicity that's hard to come by, but on their own terms, adapting to their own needs. Without the need to build out a massive engineering team to actually build this from the ground up. So are the buyers different? Are those two worlds coming together? I wonder if you could address that. Yeah, I think that the buyers are in fact different. I think that's, you know, now I think you see a convergence over time as the classic enterprise data center starts to look more like a private cloud. But we see this growth in the large managed private cloud providers being really exciting and they come from different forms. You have the telcos getting into the business, you have the outsourcers getting into the business, you have the traditional channel getting into the business. We have a great partnership with Vion, a big federal reseller and using Common Arrow as a flash as a service offering. And they start looking like a cloud provider and they're thinking like a cloud provider. It was a benefit to them because I was just looking at the GovCloud impact and we were just at the Amazon Public Sector Summit. Huge traction right now because it's so fast you can get into the GovCloud quickly. Why is that unique? Why is this as a service? And why are you guys really driving that? Well, I mean, it fits with our architecture perfectly, right? But I think from a customer standpoint, the ability to procure like you're procuring from the cloud but then also to get the kind of services, the kind of the, you know, as people start re-engineering applications, thinking about DevOps, thinking about cloud data type applications, sort of leveraging the same kind of utilities that they might get from an Amazon or an Azure, you know, from a managed private cloud provider becomes really important. And now FedRAMP is there. You get all the federal information stuff going on around it. So I wonder how you deal with this problem. It's a relatively small company. You're up against the big guys. You said, you know, it's like a rock fight but you have an affinity toward let's say SaaS players. They like your product and it fits better with their vision. But then you have this big whale saying, okay, I'm going to buy my HR software from, you know, some SaaS provider. I'm going to do something like whatever, 70,000 person deployment. But as a quick pro-co, you got to, you got to buy my all flash array. So you must see that all the time. When you peel back the covers inside that SaaS provider, what do you really see? Do you see in like, they fence off the sort of legacy vendor stuff and they really drive in their core business with your modern platform? Or is it sort of just a mishmash? No, I think we're seeing a shift. I think what we're seeing is some of the legacy architectures are running up against boundaries, running up with the boundaries in terms of complexity, running up in boundaries in terms of agility. Kamaneu was built to scale from the get go. It was built for performance and built for scale. And I think what we see is the main value to these SaaS providers as they're reaching scale is the ability to deliver consistent performance, consistent cost efficiency and really a predictability. The ability to sort of forecast in the future what the cost structure is going to look like in order to continue to deliver high performance to their end users. So that hypothetical example I gave, I'm sure you see it, but are you winning head to head in those environments and your piece is growing and that's sort of just a static one time deal? That's exactly what we're seeing. So our main growth, our main focus is on these software as a service companies or software as a service department within existing companies building these types of offerings to deliver this as a service consumption model. And you were asking about the back end. In the back end, these are often large scale databases driving mixed types of workloads, transactional processing, analytics, all at the same time. And the need to support these types of workloads requires an infrastructure that can deliver at scale consistent performance. And when we face off the legacy vendors in those environments, we win out. I mean, you have to be substantially better as a small company. You are, otherwise you're out of business. Absolutely. And so the interesting thing about the Flash market is a lot of the big guys realized right a while they got way behind and so they went out and bought a lot of startups. What happened? Did they sort of pollute them and sort of the integration? I think, I mean, the market share statistics are a little bit confusing. But what we see is the bulk of the legacy vendors pushing what we call retrofit Flash, basically taking their old legacy architectures, their scale-up or scale-out architectures and cramming Flash into it. And they basically, they don't bring the same kind of simplicity, same kind of agility, same kind of scalability as it built for Flash offering like coming around. What about you guys have some announcements this week? Yeah, we'll have to do that. Yeah, so we, two weeks ago, we announced our next generation platform, K2.N, which is based on a fully converged NVME over fabric back end. This is basically taking our core operating system, VisionOS, which is a mature and robust storage software stack with all the data services and enterprise features that enterprises need and deliver it on an NVME over fabric back end, which leverages the existing capability to disaggregate capacity and compute and take it to the next level, delivering a very scalable and agile storage cluster. It allows you to mix and match different types of resources to add and remove resources very dynamically and make your data center responsive within minutes and not hours or days or even months. I mean, you guys are familiar with our server sand research and we're very excited about NVME over fabric because we've been talking about it since probably, Floyer, maybe 2008, 2009, some type of ability to scale and communicate. And that's here today. Finally, can I, is it, how close are we to actually having a product in the field that I can actually deploy? So we'll be actually shipping this in Q1, the K2.N. There's another layer on top of that. We also announced a new software platform called Cominario Flex, which is a orchestration platform that rides on top of K2.N. It allows you to dynamically compose virtual arrays out of these NVME connected resources. So, we really think that looking ahead that the classic notion of a monolithic shared storage array is going to die over time. Well, here's the- You can see your numbers. I mean, it's dramatic. Go ahead. Well, no, I mean, this is the whole debate that we've been clearing up with the True Private Cloud Report. First of all, guys, no brainer, check as a service as the future, right? So, you're good there. The True Private Cloud Report, True Private shows that on-prem stuff is declining in general. That's sentiment for buying boxes and the old way of doing things. Labor's being automated away and shifted. That's pretty obvious. Check, enter your business model. Right. This is perfect for any cloud deal. Right. The question is, track record, bullet proof, reliability, security, table stakes all shift, data protection, all these details, that's what they carry. You guys check that box. So, the ability to take VisionOS and kind of take it to the next generation, technology is actually what allows us to do that. Whether it's in a hybrid cloud or going into a managed cloud provider that is becoming a very desired consumption model for a lot of the as-a-service vendors, allows them to build such a flexible architecture based on a mature software style. So, you guys really, from what I can see is your strategy is get this out there quickly from a tech standpoint. Software flex and integration with cloud, it's critical because you can offload a lot of that heavy lifting on those unique requirements to the cloud guys where the pre-existing tech exists. Did I get that right? Yeah, and I think what we see is these managed private cloud providers are going to want to have a say in it. They're going to want to actually be part of the evolution of the platform. They should, yeah, go ahead, fine, just stop. Don't think about service, more flash. Talk about your channel and you go to market and help us understand that a little bit better. Yeah, I think that it's all about focus for coming out for, I mean, let's face it, that the flash space is competitive, right? If we're going to go head to head with everyone and kind of pull one of these growth at all cost models and we see what the market values and the types of companies, right? So we've been really focused in two ways. One, SaaS providers, next-generation business. I mean, if we opportunistically find a VDI deal, okay, that's great, we have a great solution for VDI, but it's not something that we're going out and hunting day-to-day. The second is really focused on channel partners. We've got a channel-first model, really effectively 100% of our new business in 2017 will come through a channel partner. Most of those channel partners are looking at developing some type of managed services offering as well, so it's not just about the margin on the deal, it's about the long-term... Because they're trying to respond to the market trends. Exactly, so it's about focused on a relatively small number of channel partners that get it, that like our model, and again, it's trying to be... And you can make money from it, because that's all, at the end of the day, you got to get that leverage, because that's your David Goliath story. Exactly. And global footprint, I mean, is it primarily U.S. and Europe? Yeah, so it's been, we started in Israel. U.S. has been a big focus. Last year, we opened up the U.K. and France. End of the year, we opened up Korea. We're now in Singapore. We're moving into China through partners, and so yeah, this is a global story. Clearly, U.S. is the, in terms of adoption of these as-of-service infrastructures, U.S. is really the furthest ahead, but it's a global phenomenon. What do you make of the VMware momentum? Two years ago, VMware was like, the stock was sort of in the tank, and there was no growth, and now it's on fire, the data center's on fire, you can't get data center space. From our perspective, the fast adoption that VMware had for new technologies, for adopting containers, for adopting cloud paradigms, for adopting this new delivery model and enabling a fuller stack, aligns very well with the kind of demands of this next generation data center that we talked about, where the management plane, the orchestration plane, is becoming more and more important in optimizing the way infrastructure gets delivered. So that's, I believe, what is driving that forward. Josh, thank you so much for coming on, coming on, Aria, you guys, company to watch, love the business model, the tech comes home, you guys get that integration. Man, it's not a leverage there. Congratulations on your success. Great business model. It's theCUBE bringing you the, theCUBE is a service, all flash content here, back with more VMworld coverage after this short break.