 On the globe, it's theCUBE with digital coverage of AWS re-invent 2020, sponsored by Intel, AWS and our community partners. Okay, welcome back everyone. This is theCUBE's live coverage here in Pellowelt, though, California. I'm John Furrier, your host with Dave Vellante in Boston, Massachusetts. We got a great panel here. Analysts just going to break it down. Keynote analysis day one. We got a long time web services expert analyst, Dion Hinchcliffe, principal researcher and VP at Constellation Research, but he goes way back. Diane, I remember 2001 timeframe, where you and I are reading. Last time you and I hung out was in Michael Errington's house back in the tech French days, right? Back when, you know, you were on time. This was web services. I mean, SOAs, servers or any architectures, they called it back then. This was the beginning. This really was the catalyst of cloud. If you think about virtualization and web services in that era, that really spawned where we are today. So, great to have you on. That's what Amazon got their start, saying that, you know, everyone can get whatever they want through an API now, right? All right, well, we've been riding this wave, certainly, and it's gotten now more clear for the mainstream America. And I quoted you in my story on Andy Jassy when I had my one-on-one with them, because I saw your talk with Sarbeat of the weekend, and the way you kicked it off was the pandemic was forced upon everybody, which is true. And that caught my attention because it was very notable because you talked to a lot of CIOs. Does Jassy's pitch resonate with them in your opinion? What's your take on that posture? Because we heard, hey, you know, get busy building or you're dying, right? So get busy building. That's what he's been saying. And I thought that was a good message, but I mean, and certainly I saw tweets that said, hey, he's just directly talking to the CIO, but if you ask me, he's still talking to the CTO, the technology opposite, who's got to build all this technology and bend it into the shape that it will serve the business. We talked to a CIO who wants to just try to get on the cloud. Their biggest challenge is, I need armies of people who know all these brand new services. You saw the development velocity of all the things that they announced and the things they re-emphasized. There was a lot of things that were bringing back again because they have so many things that they're offering to the public, but the developer skills are not there, the partner skills are not there. So you talked to CIO and says, all right, I buy in and I have had to transform overnight because of the pandemic. My customers have moved, my workers have moved and I have to like redirect all my IT overnight and cloud is the best way to do that. Where's all the skills for the training programs, the partner programs that allow me to get access to large amounts of talent. Those are the types of things that the CIO is concerned about from an operational perspective. We didn't hear anything about like a Salesforce type trailhead where we're going to democratize cloud skills to the very far ends of your organization. Yeah, and they just kind of scratched in the service. They did mention that, you know, Fargate's a way to get into serverless. I mean, this is ultimately the challenge, Dave. And Dianne, I get your thoughts on this because I was talking to a big time CTO and a big time CISO and the perspectives were interesting. And here's what I want you to react to. The C level say everything's got to be a service. Otherwise we're going to be extinct. Okay, that's true. I buy that narrative. Okay, make it as a service. Why not use it? And then they go to the CTO and they say, implement. They go, well, it's not that easy. So automation becomes a big thing. And then so there's this debate, automate, automate, automate. And then everything becomes a service. Is it the carp before the horse? So is automation the carp before the horse for everything as a service? What do you guys think about that? Well, I mean, it's like CIOs to Dianne's point are a highly risk averse and they like services and those services generally are highly customized. And I think the tell in the bevy of announcements, the buffet of announcers that we heard today was in the marketplace. I don't know what you guys thought of this or if you caught this, but there was a discussion about curated professional services that were tied to software. And they were classic PDIM services, but they were very tight. So sort of off the shelf professional services. And that's kind of how Amazon plays it. And they were designed to be either self-serve it to Dianne's point, the skill sets aren't necessarily there or third parties, not directly from Amazon. So that's a gap that Amazon's got to close. I mean, you talk about all the time without posts, installations, going on-prem, who's going to support and service those things. You know, that's a white space right now, I think, for AWS. I think we're still reading the tea leaves on the announcements, but there was one announcement that was I thought really important and that was this VMware cloud for AWS. It says, let's take your VMware skills, which you've honed and cultivated and built a talent base inside your organization to run VMs and let's make that work for AWS. So I thought the VMware cloud for AWS announcement was key. It was a sleeper, it didn't spend a lot of time on it, but the CIO's ears are going to perk up and say, wait, I can use native-born skills I already have to go out to the cloud. So I didn't think they did have one announcement I thought was compelling in that regard. And then the spending data shows that the VMware cloud on AWS is really gaining momentum. By the way, as you see in that open shift, so you see in that hybrid zone really picking up. And we heard that from AWS today, John, you and I talked about it at the open. Hybrid is in. Yeah, Ty, and I want to double down on that point you made because I want to get your thoughts on this as the analyst because, you know, the VMware is also a tell sign to what I'm seeing as operating and developing DevOps as we call it back in the day, but you got to operate IT. If Jassy wants to go after this next tier of spend on premise and edge, he's got to win the global IT posture game. He's got to win hybrid. He's got to get there faster. To your point, you got to operate it. It's not just develop on it. So you have a development environment you have an operational environment. I think the VMware thing that's interesting because it's a nice clean hand and glove. VMware has got operators who operate IT and they're using Amazon to develop but they work together. There's no real conflict like everyone predicted. So is that the tell sign? Is the operational side, the challenge, the dev? How does Amazon get that global IT formula down? Is it the VMware partnership? I think part of it is they're finally learning to say the leverage that the vast pool of operational data they have, I mean, they're literally watching millions of organizations run all their different services. They should know a lot. And I say made this that point today, is that, well, people ask us all the time you must have all these insights about when things are going right or wrong. Can you just tell us? And so I thought the announcement around the DevOps guru was very significant also saying, you don't necessarily have to, again, teach all your staff every in and out about how to monitor every aspect of all these new services that are much more powerful for your business but you don't yet know how to manage, especially at scale. So the DevOps guru is going to basically give a dashboard that says based on everything that we've known in the past, we can give you insights, operational insights that you can act on right away. And so I think that is again, a tool that they can be put in place on the operational side, right? So VMware for cloud gives you migration ability of existing skills and workloads. And then the DevOps guru, if it turns out to be everything they say it is, could be a real panacea for unlocking the maturity curve that these operators have to climb. Well, AWS is in the business now of solving a lot of the problems that it sort of helped create. So you look at, for instance, you look at SageMaker data wrangler, trying to simplify data workloads. I mean, the data pipeline in the cloud is very, very complex. And so they can get paid for helping simplify that. So that's a wonderful, virtuous circle. We've seen it before. Yeah, I mean, you get a lot of real-time contact lens. You've got quick site. I mean, they have to kind of match the features. And I want to get your guys thoughts on hybrid because I think, you know, I'm still stuck on this. Okay, they won the IaaS pass and their innovation is great. The custom chips, I buy that. The machine learning, all awesome. So from the classic cloud, IaaS, infrastructure and platform as a service business, looking good. Now, if you're thinking global IT, I just don't, I'm just not connecting the dots there. See Outpost, what's real today for Amazon? Can you guys share? I mean, if you were watching this keynote, your head explodes because you got so many announcements. What's actually going on if you're looking at this as a CIO? So the challenge you have as a CIO is that you have 10, 20 or 30 or more years of legacy hardware, including mainframes, right? Like, so big insurance companies don't use mainframes because their claim systems have been developed and they're very risk-averse about changing them. So you have to make all of this work together. Like, you know, we see IBM and Red Hat are actually chasing that mainframe angle, which is going to die out. Where Amazon I think is smart is saying, look, we understand that container is going to be the model, container orchestration is going to be how IT goes forward. The CIO is now buying to that. Last year I was still saying, are we going to be able to understand Kubernetes is the regular average IT person, which are not, you know, Google or Facebook level engineers, are they going to be able to do containers? And so we see the open sourcing of AWS's Kubernetes server and we see plenty of container options. That's how organizations can build cloud-native internally. And when they're ready to go outside, you know, because they're going to move, they're going to move many times slower than a cloud-native company to go outside. Everything's ready there. I like what I'm seeing without posts. I like what I'm seeing with the hybrid options, the VMware for cloud. They're building a pathway that says, you can do real cloud. And I think the big announcement that ASSEI really spent time on, which is at ECS for everywhere, and saying, you're going to be able to put Amazon services, our compute services, anywhere you need it. I think that's a smart message and that allows people to say, I can eventually get to one model to get my arms around this over time. Dave, what does that mean for the numbers? I know you do a lot of research on spend, customer data. CIOs clearly know this is going to be, the world's never going to go back to the same way it was. They certainly will accelerate cloud to what level depends upon where they are and their truth, as Jassy says. But what does the numbers look like? Because you're looking at the data, you got Microsoft, you got Amazon. What's the customer spend look like? Where are they going to be spending? Well, so a couple of things. One is that when you strip out the SaaS portion of both Google and Azure, as we know, I ask and pass, AWS is the leader, but there's no question that Microsoft is catching up. As I said, we were talking about earlier, it's the law of large numbers. Just to give you a sense, Amazon this year will add, Q4 is not done yet, but they'll add 10 billion over last year and Jassy sort of alluded to that and they'll do that in 12 months. Azure will add close to nine billion this year of incremental revenue. Google much, much smaller. And so that's just seeing Azure really catch up there for sure, closing that gap, but still Amazon's got the lead. The other thing I would say is, and Diane, you and I were talking about this, is that Google is starting to do a little bit better. People love their analytics. They love the built in machine learning to things like BigQuery. And even though they're much, much smaller, they're another hedge. People don't necessarily want to go to Microsoft unless they're a Microsoft shop. Google gives them that alternative and that's been a bit of a tailwind for Google. Although I would say, again, looking at the numbers, if I look back at where Azure and AWS were at this point in where Google is with a few billion dollars in cloud, the growth rates, I'd like to see Google growing a little faster. Maybe there's a COVID factor there. Diane, I want to get your thoughts on this transition, Microsoft, Oracle, competition. Jassy knows he's got to deal with the elite sales forces out there, Oracle and Microsoft. Microsoft used to be the innovator. They had the phrase embrace and extend back in the day. Now Amazon's embracing and extending, but they got to go through Oracle and Microsoft if they want to win the enterprise on-premise business and everybody else. So welcome to the party, Amazon. What's your take on them versus Microsoft? Calling them out on SQL Server, licensing practices almost thrown them under the bus big time. Well, I think that's, we saw the evidence today that they're actually taking aim at Microsoft now. So Babelfish, which allows you to run Microsoft SQL Server workloads directly on Aurora. That is what I call the escape pod. That gives organizations an easy way that doesn't require them to redesign and re-architect their applications to say, just come over to AWS, right? And we'll give you a better deal. But I think we've got to see Amazon have a more comprehensive sales plan to go into the CIOs and go after the big deals and say, we want to save the whole cloud suite. We have a stack that's unbeatable. You see our velocities, best in class, arguably against Microsoft is the big challenger, but we'll beat you on total cost of ownership. Your final bill at the end of the day, we commit to it being less than our competitor. Things like that, we'll get the attention. But Amazon is not known for cutting customized deals. Actually, even frankly, I'm hearing from very CIOs of very large, like Fortune 20 companies, they have very little wiggle room with Microsoft. Anybody who's willing to go to the big enterprise and create custom deals, if you build a sales team that can do that, you have a real shot at saying, getting into the CIO's office and saying, we want to move all the IT over. And I'm seeing Microsoft getting wins like that. I'm not yet seeing Amazon and they're just going to have to build a specialized sales team that go up against those guys and migration tools like we saw with Babelfish that says, if you want to come, we can get you over here pretty quick. I want to chime in on Oracle too, John. I think this is a blind spot somewhat for AWS. I mean, Oracle and mainframes. When Jassy talks, it talks like, oh yeah, these people want, they want to get off there. And there's no question. There are a number of folks that are unhappy, certainly with Oracle's licensing practices, but I talked to a lot of Oracle customers that are running their shops on Oracle database. And it's really good technology. It is world-class for mission critical transaction workloads. And transaction workloads tend to be much, much smaller data set sizes. And Oracle's got decades built up. And so their customers are locked in and they're actually reasonably happy with the service levels they're getting out of Oracle. So yes, licensing is one thing, but there's more to the story. And again, CIOs are risk averse. To Diane's point, you're not just going to chuck away your claim system. It's just a lot of custom code and it's just the business case isn't there to move. Well, I mean, I would argue that, well, first of all, I see where you're coming from, but I would also argue that one of the things that Jassy laid out today that I thought was kind of a nuanced point was during the vertical section, I think it was under the manufacturing, he really laid out the case that I saw for startups and or innovation formula, that horizontal integration around the data, but then being vertically focused with the modern app with same machine learning. So what he was saying, and I don't think he did a good job doing it was, you can disrupt horizontally in any industry. And that's a disruption formula. But you still can have that scale and that's cloud, horizontally scalability cloud, but the data gives you the ability to do both. I think bringing data together across multiple silos is critical, but having that machine learning in the vertical is a way you can differentiate. So horizontally scalable, the vertical specialization for the modern app, I think is a killer formula. And I think that's a really strong point, John. And you're seeing it in industries like for instance, Amazon getting into grocery and that's a data play, but I do like to follow up on your point, the contact center solutions, I like the solutions play there and some of the stuff they're doing at the edge with IoT, the equipment optimization, the predictive maintenance, those are specialized solutions. I really like the solutions focus which several years ago, Amazon really didn't talk solutions. So that's a positive sign. Diane, what do you think about the contact center? I think that was just such low-hanging fruit for Amazon, why not do it? You got the cloud scale, you got the Alexa knowledge, you know, got machine learning. Alexa gives them that natural language processing maturity to allow them to actually monitor that contact lens real time, allows supervisors to intervene in conversations before they go completely south, right? So allowing people to get inside decision windows they couldn't before. I think that's a really important capability and that's a challenge with analytics in general, is it generates four more insights than people know how to deal with and solutions like contact lens real time that says let's make these insights actionable before it's broken, let's give you the data and go and fix it before it even finishes breaking. And this is the whole predictive model, it's very powerful. All right guys, we have four minutes left. I want to segue and finish up with what was said in the keynote that was a tell sign that gives us some direction of where the dots will connect in the future. There's a lot of stuff that was talked about that was, you know, follow on, that was meet on the bone from previous announcements. Where did Jassy lay out what I would call the directional shift? Did you see anything particular that you said, okay, that is solid. I mean, the zones is one I can see what clearly is an edge piece. Where did you guys see some really good directional signaling from Jassy in terms of where they really go with dealing with start? I mean, I felt, I felt like Jassy basically said, hey, we invented cloud, he didn't use these words. We invented cloud and we're going to define what hybrid looks like. We're going to bring our cloud model to the edge and the data center just happens to be another edge point. And I thought he laid down the gauntlet. I think it's a very powerful message. Daniel, what do you think Jassy's been saying that he laid out here? That's- He laid out a very clear path to the edge, that the Amazon's marching to the edge. That's the next big frontier in the cloud. It isn't well-defined and that, you know, just like they define cloud in the early days, if they don't get out there and be the definitive leader in that space, then they're going to be the follower. I think so we saw announcement after announcement around that, you know, from the zones to the different options for outposts and the 5G announcement, the wavelength, all of those things says we're going to go out to the very tippy edge is what I heard, right out to your mobile devices, right out to the most obscure field applications imaginable. We're going to have an appliance or we're going to have a service that lets you put Amazon everywhere. And so I think the overarching message was this is AWS everywhere. It's going to go after 100% of IT eventually and so you can move to that, you know, this one-stop shop. And, you know, we saw more discussions about multi-cloud but it was interesting how they stayed away from that and this is what I think one area that they're going to continue to avoid. So, you know, it was interesting. John, I think the edge is won by developers and that's good news for Amazon and good news for Microsoft. Well, we'll see the facilities is going to be going. For me, I think guys, the big takeaway, you guys nailed two of them there, but I think that another one was, I think he's trying to speak to this new generation in a very professorial way. Talk about Clay Christensen was a professor at his business school at Harvard. We all know the book. But there was this posture of speaking to the younger generation, like, hey, the old guy, the old that was running the mainframe or wherever the old guys there, you could take over and run this. So it was kind of like more of a leadership preach of preaching like, hey, it's okay to be cool and innovative. Now's the time to get in cloud and the people who are blocking you are either holding on to what they built or too afraid to shift. So I think, you know, we, as we've seen through waves of innovation, you always have those people, you know, who are going to stop that innovation. So it was very interesting. You mentioned that with serverless too. It's the next generation compute. So he had that kind of posture. Interesting point. You know, just very, very preachy. And I think he's talking to a group of people who also went through the, through 2020 and they might be very risk averse and not bold anymore. And so, you know, I think that may have helped address that as well. All right, gentlemen, great stuff. Final word in the nutshell, Kena, what'd you think about it in general? What was the takeaway? You know, I think we saw the continued product development intensity that Amazon's going to use to try and thrash the competition. The big vision, you know, at the real focus on developers first, and I think IT and CIO is second. I think, before you had said it, they didn't really think about them too much at all. But now it's a close second. And you know, I really liked what I saw. And I think it's the right move. I'd like to see more on hybrid and cloud migration than we saw though. All right. I'd leave it there. Diane, thanks for coming on from this guest analyst segment. Appreciate you jumping in. Cube Live, thank you. Thanks guys, I appreciate it. All right, we're the Cube Virtual. I'm your host, John Furrier, Dave Vellante. Here, covering AWS Live, covering the keynote in real time. Stay more for more coverage after this break.