 The CUBE's coverage of Red Hat Summit 2022, the CUBE has been covering Red Hat Summit for a number of years. Of course, the last two years were virtual coverage. Now the Red Hat Summit is one of the industry's most premier events and typically Red Hat Summits are many thousands of people. I think the last one I went to was 8,000 or 9,000 people. Very heavy developer conference. This year Red Hat has taken a different approach. It's a hybrid event. It's kind of a VIP event at the Weston in Boston with a lot more executives here than we would normally expect versus developers but a huge virtual audience. My name is Dave Vellante. I'm here with my co-host, Paul Gillon. Paul, this is a location that you and I have broadcast from many times. And of course, 2019, the summer of 2019, IBM acquired Red Hat. And of course we did Red Hat Summit that year but now we're seeing a completely new Red Hat and a new IBM. And you wouldn't know IBM owned Red Hat for what they've been talking about at this conference. We just came out of the keynote where in the hour-long keynote, IBM was not mentioned once and only appeared, the logo only appeared once on the screen in fact. So this is very much Red Hat being Red Hat, not being a subsidiary at IBM and perhaps that's justified given that IBM's track record with acquisitions is that they gradually envelop the acquired company and it becomes part of the IBM board. Yeah, they blue washed the whole thing, right? It's ironic because IBM think is going on right across the street. Arvind Krishna is here but no presence here and I think that's by design. I mean, it reminds me of when EMC owned VMware. The VMware team didn't want to publicize that. They had an ecosystem of partners that they wanted to cater to and they wanted to treat everybody equally even though perhaps behind the scenes they were forced to do certain things that they might not have necessarily wanted to because they were owned by another company. And I think that certainly IBM's done a good job of weaving the brand separate but when they talk about the conference calls, IBM's earnings calls, you certainly get a heavy dose of Red Hat. When Red Hat was acquired by IBM it was just north of $3 billion in revenue. Obviously, IBM paid $34 billion for the company. Actually by today's valuations probably a bargain despite the market sell-off in the last several months. But now we've heard public statements from Arvin Krishna that Red Hat is a $5 billion plus revenue company. It's a little unclear what's in there. Of course, when you listen to IBM earnings, consulting is their big business. Red Hat's growing at 21% but remember, Paul, when Red Hat was acquired Stu Miniman and I did a session and I said, this is not about cloud. This is about consulting and modernizing applications. And sure, there's some cloud in there with OpenShift but from a financial standpoint, IBM was able to take Red Hat and jam it right into its application modernization initiatives. So it's hard to tell how much of that $5 billion is actually legacy Red Hat but I guess it doesn't matter anymore. It's working. IBM Mathematics is notoriously opaque. If the business isn't going well it'll tend to be absorbed into another number in the earnings report that does show some growth. So we've heard, certainly, IBM talks a lot about Red Hat on its earnings calls. It's very clear that Red Hat is the growth engine within IBM. I'd say it's a bit of the tail wagging the dog right now where Red Hat really is dictating where IBM goes with its hybrid cloud strategy which is the foundation, not only of its technology portfolio but of its consulting business. And so Red Hat is really in the driver's seat of hybrid cloud and that's the future for IBM. And you see that very much at this conference where Red Hat is putting out its series of announcements today about improvements to its hybrid cloud, the new release of Route 9, Red Hat Enterprise Linux 9, improvements to its hybrid cloud portfolio. It very much is going its own way with that and I sense that IBM is going to go along with wherever Red Hat chooses to go. Yeah, I think, yeah, absolutely right. By the way, if you go to siliconangle.com Paul just published a piece on Red Hat. Red Hats, their rollout, their parade which of course as you pointed out led by Enterprise Linux. But to your point about hybrid cloud is the linchpin of certainly IBM's strategy but many companies hybrid cloud strategies. If you think about it, OpenShift in particular, it's the modern application development environment for Kubernetes. You can get Kubernetes, you can buy EKS, you can get that for free in a lot of places but you have to do dozens and dozens of things and acquire dozens of services to do what OpenShift does to get the reliability, the recoverability, the security and that's really Red Hat's play. And the thing about Red Hat, combining with Linux, their Linux heritage, they're doing that everywhere. It's going to OpenShift everywhere, Red Hat everywhere, whether it's on-prem, in AWS, Azure, Google, out to the edge. You heard Paul Cormier today saying, he expects that in the next several years, hardware is going to become one of the most important factors, I agree. I think we're going to enter a hardware renaissance. You've seen the work that we've done on ARM. I think 2017 was when Red Hat and ARM announced kind of their initial collaboration. Could have been before that. Today we're hearing a lot about Intel and NVIDIA and so affinity with all of these alternative processes, I think they did throw in today in the keynote power and see, I think I heard that, that was the other IBM branding, they sort of tucked that in there. But the point is Red Hat runs everywhere so it's fundamental to building out hybrid cloud and that is fundamental to a lot of company strategies. And Red Hat has been all over Kubernetes with OpenShift. It's a drumbeat here. The OpenShift strategy is what really makes hybrid cloud possible because Kubernetes is what makes it possible to shift workloads seamlessly from platform to platform. You make an interesting point about hardware. We have seen kind of a renaissance in hardware these last couple of years as these specific chipsets and even full-scale processors have come to market. We're seeing several in the AI area right now where startups are developing full-blown chipsets and systems just for AI processing. And NVIDIA, of course, that's really kind of their stock in trade these days. So a company that can run across all of those different platforms, a platform like REL, which can run all across those different platforms, is going to have a leg up on anybody else. And the implications for application development are considerable when you think about, we talk about a lot about these alternative processes. When Flash replaced the spinning disk, that had a huge impact on how applications are developed. Developers now didn't have to wait for that disk to spin, even though it's spinning very fast, it's mechanical compared to electrons, forget it. And the second big piece here is how memory is actually utilized. The traditional x86 memory, everything goes through that core processor, Intel for years, grab more and more function and you're seeing now that function become dispersed. In fact, a lot of people think we're moving from a processor-centric world to a connect-centric world, meaning connecting all these piece parts, alternative processors, memory controllers, storage controllers, IO, network interface cards, smartNICs and things like that, where the communication across those resources is now where a lot of the innovation is going. You're seeing a lot of that and now of course applications can take advantage of that, especially now at the edge, which is a whole new frontier. The edge certainly is part of that equation. When you look at machine learning, training machine learning models, the CPU actually does relatively little work. Most of it is happening in the GPUs in these parallel processes that are going on and the CPU is kind of acting as a traffic cop and you see that in the edge as well. It's the same model at the edge where more of the intelligence is going to be out in discrete devices spread across the network and the CPU is going to be less of an engine of intelligence. At the same time though, we've got 100 core CPUs are on the horizon and there are even 200 and 300 core CPUs that we may see in the next couple of years, so CPUs aren't standing still. They are evolving to become really kind of super traffic cops for all of these other processors out in the network and on the edge. So it's a very exciting time to be in hardware because so much innovation is happening really at the microprocessor level. Well, we saw this, you and I lived through the PC era and we saw a whole raft of applications come about as a result of the microprocessor, the shift to the microprocessor based economy. We're going to see, we are seeing something similar with mobile and the edge. Yeah, just think about some of the numbers. If you think about the traditional Moore's law doubling a number of transistors every, let's call it two years, 18 to 24 months. Pat Gelsinger at Intel promises that Intel is on that pace still. But if you look at the Apple M1 Ultra, they increased the transistor density, 6X, in the last 15 months. Okay, so, another data point is the historical Moore's law curve is 40%. It's moderating to somewhere down in the low 30s. If you look at the Apple A series, I mean, that thing is on average, increasing performance at 110% a year when you add up into the combinatorial factors of the CPU, the neural processing unit, the GPU, all the accelerators. So we are seeing a new era. The thing I wanted to bring up, Paul, is you mentioned AI. Much of the AI work that's done today is modeling that's done in the cloud. And when we talk about edge, we think that the future of AI is AI inferencing in real time at the edge. So you may not even be persisting that data, but you're going to create a lot of data. You're going to be operating on that data in streams. And it's going to require a whole new, new architectural thinking of hardware. Very low cost, very low power, very high performance to drive all that intelligence at the edge. And a lot of that data is going to stay at the edge. And we're going to talk about some of that today with some of the EV innovations and the vehicle innovations and the intelligence in these vehicles. Yeah, and in talking in its edge strategy, which it outlined today and in the announcements that it made today, Red Hat very much playing to the importance of being able to run Red Hat Enterprise Linux at the edge. The idea is you do these big machine learning models centrally and then you take what results from that and you move it out to smaller processors. It's the only way we can cope with it with the explosion of data that will be, that these sensors and other devices will be generating. So some of the themes we're hearing in the announcements today that you wrote about, Paul, obviously, REL9 is huge, Red Hat Enterprise Linux version nine, new capabilities, a lot of edge, a lot of security, new cross portfolio capabilities for the edge, security and the software supply chain. There's a big conversation, especially post solar winds. Managed Ansible, when you think about Red Hat, you really, I think anyway about three things. REL, which is Linux, it powers the internet, it powers everything. You think of OpenShift, which is application development, you think about Ansible, which is automation, so IT ops. So that's one of the announcements. Ansible on Azure and then a lot of hybrid cloud talk and you're going to hear a lot of talk this week about Red Hat's cloud services portfolio, packaging Red Hat as services, as managed services. That's a much more popular delivery mechanism with clients because they're trying to make it easy. This is complicated stuff and it gets more complicated. The more features they add and the more components of the Red Hat portfolio are available. It's going to be complex to build these hybrid clouds. So like many of these, so theCUBE started doing physical events last summer, by the way. And so this is new to a lot of people. They're here for the first time, people are really excited. We've definitely noticed a trend. People are excited to be back together. Paul Cormier talked about that. He talked about the new normal. You can define the new normal any way you want. So Paul Cormier gave the intro keynote. Ashesh Badani interviewed Amex, Stephanie Chiris interviewed Accenture. Both those firms are coming on. Stephanie's coming on with Accenture as well. Matt Hicks talked about product innovation. I loved his reference to Ada Lovelace. That was very cool. He talked about Srinivastur Raminajan, famous mathematician who nobody knew about when he was just a kid. These were ignored individuals in the 1800s for years and years and years in the case of Ada Lovelace for a century even. He asked the question, what if we had discovered them earlier and acted on them and been able to iterate on them earlier? And his point tied that to open source very brilliantly I thought. And keynotes, which I appreciate are much shorter. They did a keynote in the round this time, which I haven't seen before. There's maybe 1,000 people in there. So a much smaller group, much more intimate setting. Not a lot of back and forth, but there is a feeling of a more personal feel to this event than I've seen at past Red Hat summits. Yeah, and I think that's a trend that we're going to see more of where the live audience is kind of on the ground. It's kind of the VIP audience, but still catering to the virtual audience. You don't want to lose them. That's why the keynotes are a lot tighter. Okay, Paul, thank you for setting up Red Hat Summit 2022. You're watching theCUBE's coverage. We'll be right back, wall to wall coverage for two days right after this short break.