 from the Sands Convention Center, Las Vegas, Nevada. Extracting the signal from the noise. It's theCUBE, covering AWS re-invent 2015. Now your host, John Furrier. Okay, hello everyone, welcome to theCUBE. This is SiliconANGLE's flagship program. We go out to the events and extract the signal from the noise. We are live in Las Vegas for Amazon Web Services. AWS has re-invented 2015. The third year theCUBE has been on the ground, live with wall-to-wall coverage. We will be broadcasting all night tonight, up until about eight o'clock, and then all day tomorrow, Wednesday and Thursday, we'll be covering all the keynotes, all the analysis, all the critical analysis, all the news, all the action here, live in theCUBE. Stay watching us at SiliconANGLE.tv. I'm John Furrier, my co-host for this week is Stu Miniman, the analyst at Wikibon, and Brian Grace, the contributing analyst at Wikibon.com. Guys, welcome to theCUBE. Great to see you guys again. Yeah, excited to be here. Great show. So this is one of my favorite shows because, one, it's really an industry show combined with an Amazon show because they've just been destroying it in terms of performance, going back, winning the developer community. Now the public cloud is totally won. Now they're going into the enterprise. Whole new ball game for Amazon. We're expecting to hear a slew of news. So let's just jump right into it. Stu, Brian, what do you guys think is going to happen this week? What are you expecting? Certainly you've been briefed as analysts under NDAC. We really can't share the news. Tomorrow, Andy Jassy's keynote and on 30 Burners Vocals we'll be presenting. I got a little bit of sneak peek of the internet of things, but in general, what's the high level theme going to be? Guys, what are you expecting to hear? Yeah, John, so first of all, I mean, this show's grown so much. 18,500 is kind of the official number that they're talking about. And every year, Amazon comes in here and talks about all the new features they've added. The portfolio is so broad and they've got such a huge ecosystem. I mean, you look at the size of this Expo hall here and it just boggles the mind, John. It's our third year here at the show. Think where it's just come in a couple of short years. But from an announcement standpoint, they have so many announcements that they actually started like last week. So they announced the S3IA, which is the Infrequently Access. They started leaking out. Jeff Bahr already put out a couple of blog posts, talked about some firewall services they've got, talked about dedicated hosts. I mean, these are just some of the teasers that they're getting out there. You said IoT, been a lot of buzz leading up to it. Brian and I did a preview crowd chat video last week. We expect IoT analytics as well as kind of, both incremental and additions to everything from storage, compute, all the various pieces that they're putting onto it. Amazon is just, as Dave Vellante has always said, not only are they the 800 pound grill in this space, but they are the cheetah, they are moving fast, they keep adding on, and it is impressive to see how much they're doing. So, you're right, we got really more than a day's worth of deep dives in the analyst sessions, and Amazon is just very impressive as to how they lay out their pieces, they know where they're going, they know where they're taking this industry. And John, as you said, I mean, this is the biggest cloud show of the year and just super excited to be here again. A lot of data, Brian, you've been covering the cloud now with the Wikibon team. Market share numbers are there. I mean, what's the status? I mean, Amazon, I always said, they're destroying everybody in the competition. I always said, every year, they're the tsunami that's going to take more beach. And the question is, what's going to be the seawall? What's going to stop this wave of Amazon in the enterprise? I mean, let's put it in perspective. This is a $7 billion company growing at 80% year over year. I mean, we're talking about Microsoft in the 80s and 90s level growth. Right now, we just came out with our public cloud to market share. They're just behind Microsoft. Depends on how you count things. You start counting the O365 business. I mean, they're absolutely dominating. They're scaring basically everybody in the internet. Everybody in the industry is reshaping their strategy around what's Amazon going to do? How am I going to compete with Amazon? How am I going to, do I partner with them? Do I compete with them? Are they taking out my business? It's an insane pace of growth. And the thing about it is, it doesn't stop. They haven't hit that wall yet where most large companies do where you go. I've had so much growth. I've got so much installed base and now my customers are wanting old legacy features. They continue to grow. They can hundreds of features every year. I mean, 80% year over year growth. It's really hard to wrap your head around how fast they're growing these days. Yeah, and John actually, there was a line that Andy Jassy said to us that he said, the way that Jeff Bezos looks at it, we are still at day one. And we did a video, the three of us with Dave about a month or so ago talking about cloud and where are we? What inning are we in? Mark Lewis actually said it's a doubleheader. The first one's over. But right, to hear Amazon say, we really think about it as day one. The way that they add new features, they expand their small teams adding features. It's really impressive. They have started to augment teams with acquisitions. So you're really seeing Amazon coming on their own. We don't think that the innovation or the growth is going to peter out anytime soon. Well, let's talk about what you guys heard from Andy Jassy. He's being humble. He's a very humble guy. I've interviewed him. He's always going to play it down. Well, you know, we're in the first inning. Really just kind of building services on top of that. Come on. He's a competitive strategy. He's a Harvard Business School guy. He sees the new model. He sees the winning formula. Brian, he has a winning formula with developers. Now a new class of developers are emerging. We saw a kid go to high school building a clock. Gets arrested in handcuffs. And then he's heralded as this like genius kid meets Obama, invited to all these talks at MIT, Google. This is the new generation of developers. IoT is a huge opportunity Amazon's expected to talk heavily about IoT. Are they poised for IoT? Can they do the things with ingestion? Can they do the things with the ecosystem? What's your take? Yeah, no, absolutely. I think a couple of key things, things that we took away from just the early stuff we heard. Number one, Andy made a comment. He said, look, we have a six or seven year head start on the competition. And the reality is you can't apply any compression algorithm to experience. So tons of experience. Their learning curve is off the chart compared to their competition. The other thing that strikes me is they have so much insight into what's going on in their platform. They've got so much data that comes out of their platform. In real time, they're able to determine what trends are hot. Where do they add new features? And you look at every other competitor, especially the traditional ones, they're so far away from their customers. They're so far away from what's going on. They've got the scale to be able to do IoT. They've got the scale to be able to do web scale. It's a little frightening if you're competing with them. But if you're a customer, you're looking at what they give you when you go, I really can kind of green field, clean slate, whiteboard. Anything I want to do from a business perspective, Amazon's got the scale to potentially help you to do that. So I'm writing this on CrowdChat. Join the conversation, crowdchat.net slash reinvent. That's our CrowdChat application. Join the conversation. Question I'm posing to the crowd is, what does ADBS need to do to win the enterprise? To build on their success in public cloud? Obviously, hybrid cloud, we're hearing unification with EVMware, IBM has got soft layer. That cloud looks completely different than what Amazon HP's kind of got a cloud play, Oracle. Of course, they got everything. Everyone is expected to say IoT. Everyone wants to have enterprise features. What does it take for Amazon to win the enterprise cloud? Yeah, we were talking to some of the folks that are in our IoT tonight. They're a little worried that IoT is a little frothy. But I think this is what the really important thing is. We heard Microsoft last week around Azure talked about a huge IoT platform play. Amazon, we believe, is going to talk a ton about IoT this week. Google has got a huge Android base, I mean, two billion Android devices. I think the real thing is every one of them has the scale to potentially do it. Every one of them is scared of missing essentially the next internet. And the question is, who's going to be the one that's going to inspire an enterprise or a startup to want to work with them more than anybody else? And the interesting thing you were talking about earlier, how open is the internet of things going to be? Yeah, actually, that was one of the questions I got to ask Andy Jassy was, when it comes to open source, is that something your customers and partners are asking about and why don't you contribute more? And what I liked is Andy actually said that not only are they using a lot of open source, but they are contributing. Now, they're not contributing in kind of big, broad ways like, see Google with Kubernetes, see Microsoft donating things to OCP or being part of it, but there are places that they're contributing and he thinks that they have a better story than probably what we give them credit for. We'll see, I still think if you laid out those things. You're using open source, not necessarily contributing to open source. Well, but Andy said that they are contributing to that. But he also said it's not, John, it's not one of the top 20 concerns that he's hearing from customers or partners, so it does not seem to be a major impediment to their growth. One other thing I want to point out, John, we're going to hear a little bit more about hybrid. There was a great line that Amazon used and said, talk to any customer that says they're using hybrid, Amazon's in the mix there. So it's not that they don't have a play and they're going to, I don't want to give away what's going to come in the keynote, but I'm looking forward to dissecting that because- Well, they've been an on ramp to the public cloud, but getting the data back on premise has always been an issue. We've talked about that in the other cube, Joe Tucci once called the public cloud, not necessarily naming Amazon, but the Roche Motel you can check in, but you can't check out with the data. Data is the critical currency right now. IoT is going to be there as well, whether it's application. The question is, what do they do to integrate? And that's going to come down to the ecosystem partners. And again, I'm going to see a lot of VCs do. Again, proxy for me for a successful show is a packed house behind me. You can see jam-packed exhibit floor. Day one's just kicking off. The sessions on the pre-day analyst sessions and partner sessions packed, but the VCs, they're quietly dancing around here. They're not making any investments. I mean, Amazon's starting to make their own corporate development investments with their partner ecosystem. Interesting trend, but the VCs are here. That means it's start up central again. You get, what's your take guys? Exciting things, trends you're seeing. You're right, data is the currency. We talked to, Stu and I had a chance to talk to some folks who are in the, basically financial services data industry. They told us, we're a data business. We saw GE just a couple of weeks ago launch something called Predix. It's their industrial internet. People are figuring out the next stage of the internet, which is things, and whether that's fleets of trucks, whether that's robotics on a floor doing manufacturing, whether that's the device on your arm, that's the next big thing. That's the next couple of billion devices. Data is the key to that. Nobody wants to lose that platform. We're going to have, there was an old saying from the original founder of IBM. He said, the world's going to be five clouds or five computers, no more than that. We may have five gigantic clouds, but boy, those suckers are going to be full of data and everyone's going to be figuring out, how do I get the data in and how do I get the data out? So guys, I want to get your take on what you're hearing in the hallways. Also you've been briefed on some of the announcements. You guys are under NDA. So my job is to make you say things. So let's play a little game. First, I want to just share some breaking insights I have from meeting someone inside Amazon's Ivory Tower, someone very close to Andy Jassy, pulled me off the record, well, I guess on the record now, but told me, I said, what are we going to expect? And they told me the following, a ton of announcements, so many announcements that they can't even do the kind of go-to-market announcements. They're going to be leaking out in blog posts to look for the blog. Tons of announcements coming out all week. You're going to hear things like choices, flexibility, freedom, emphasis on the partner ecosystem, and Aurora upgrades, and security. So sources close to Andy Jassy are saying those, that's the key things, that's what I'm hearing. Guys, what are you hearing? Yeah, so it's interesting. That freedom word is one that holds a lot of weight because when Amazon talks about freedom, it's you're going to come to us and we need to constantly earn your business because you're going to be paying us by the hour, by the month, and sure you can get your data out of there, but once you've committed to Amazon, I get my processes in line, I train my people, I'm using my application. That migration cost is heavy. It's something that David Flauer talked a lot about is if I have some traditional application and I just want to replatform it, that's tough. What's much easier for customers is when they say, hey, we talked to a customer today that said, I was going to just completely replatform everything and build for scalable, cloud, global, mobile, and that's where you can just take huge advantage of things that I can do it so much faster than I could and with a lot more agility than if I built it myself. And what we heard, the message we're hearing from all the customers here, John, is that it's not cost isn't the number one reason that I'm doing things, it's that agility, it's that speed is number one, but there should be cost savings there. It's something that we're kind of trying to tease and then dig into because there are questions as to what is actually cheating. Stu and Brian, why is Amazon winning and how is that vis-a-vis the competition? You mentioned Azure, it's a two horse race. I would argue that IBM might have some value purposes in HP, but is Amazon winning on a thousand paper cuts? Are they chipping away at this entry level and now mid-range, getting that bulky developer that grows it up into the next Airbnb or are they just looking at the volume game and are they really winning tier one enterprises? Well, I think at the simplest level for what everybody understands, you can go to Amazon.com today and get one click and the friction between you and a transaction is nearly nothing. That's what they've done to IT, right? People talk about who's their competition. Their competition is fundamentally the infrastructure and the inertia of IT. They've figured out a way to go, I'm going to Mr. Customer, I'm going to show you so much of a better experience that, and we've talked to a lot of customers, a lot of them will go, look, we started trialing some stuff, we started doing dev and tests, we started doing some things, and we realized they kind of got addicted to the experience. They got addicted to how easy it was. Every one of them, to a team will tell us, look, we end up figuring out we saved 20, 25, 30%, but it's about going faster. It's about basically, we talk all the time about cloud native applications and people competing against Uber and competing against Airbnb. That's essentially the business saying, I've got an idea and I need to execute on that one right now. How fast can you do that? And the only way IT can keep up with that, if it is IT, if it's not the line of business, is I need an experience like Amazon. And what we've found is they can't build it themselves. They can't do it internally as fast. And that's ultimately what Amazon's doing. They've figured out how to create a better experience. It's still compute, it's still storage, it's still firewalls and load balancers. It's just so much faster. So Stu, I saw a tweet from you earlier. You mentioned the growth of AWS Brian as the Microsoft heydays. Stu, I saw a tweet by you or Andy Jassy actually used the word operating system. So let's talk about Microsoft. Microsoft's competitive advantage was so damn good that the government had to break them up as a monopoly. They own the operating system, the system software, Windows and own the application suite at the time, which was Excel, Word and PowerPoint and the old expression in Redmond was job not done till Lotus doesn't run. So with that being said, is there an Amazon monopoly question at play here? If AWS is the operating system and Amazon is powering things like replenishing my dog food and my coffee maker, now my watch machine, are they a monopoly? Are they funding their retail business at the same time mopping up the computer industry? Rhetorical question maybe for you, Stu? Yeah, I'm going to stay away. Yeah, John, I lived on the vendor side for too long. Anytime you use that D word of dominant in a marketplace, you need to be really careful. We saw Microsoft go through that whole battle as to when they got too much power in the marketplace. Amazon's not there yet, but there's, definitely if we look at where they are and where they're going, it's a challenge. But you brought up operating system, one of the announcements that's been made already is dedicated hosts. And when you look at why they're having dedicated hosts, first of all, John, it's not bare metal, it's still a virtualized instance, but it's for, I think the way Andy Jassy said, is certain legacy companies, the way that they do their licensing. It's a little bit onerous and you really need to say, this license is tied to this actual machine. So basically he didn't say it, but we'll say it. It's Oracle and Microsoft are the two that have their licensing in a certain way. And John, you covered the Oracle Cloud Launch. We've talked a lot about how Microsoft's done real well. These licensing schemes need to change so that you don't have, why does Amazon have to play games so that customers can use their licenses properly? We need to change the way software licensing happens. It needs to be much more of a subscription model. And I think we've seen a big move that way, but John, your point, Amazon, for a company that's this year going to do maybe in the range of $8 billion, is very small in the overall marketplace, but we're talking so much about them because they've got great sway and we know where kind of that equilibrium point to where their growth is going to be is a lot higher than where it is today. Well, obviously I would say operating systems, Linux is probably the best operating system I would say in the cloud, but this brings up the dominant point. I would argue that Amazon is on a trajectory very similar to Microsoft's Brian's point. I'm not sure that was his point, but my takeaway is, hey, when you know that kind of level dominance, competitive advantage ultimately puts you in a position to have near monopoly. So the question is, it's a little bit different than Microsoft back in the PC revolution at Apple and Windows, but you've got VMware, you've got Google, you have Azure. So the question is, the trick is if Azure and VMware and Google and others, that's an opportunity for them. So interoperability choice, this is going to be the thing. What do customers make sense of this? So this is actually a good lead-in. It wasn't on purpose, but it's a good lead-in. We were talking to some folks one of the comments that came up was, as much as customers would like hybrid, as much as they would like to say, I want flexibility where my application runs, I want the ability to run in Cloud A and Cloud B and Cloud C, the reality is, and I would agree with this for the most part, the tools really aren't there. The ability to say, I can build a tool that's going to keep up with all the innovation that Amazon does, all the innovation that Azure does, all the innovation that Google does, and run that sort of consistently is very, very complicated. But what I am excited about, we've got Rodrigo Flores is coming on, Rodrigo runs the Accenture Cloud Platform, he's coming on later on today, and that's one of the things they do. He's a Cloud Eradi member. He's a Cloud Eradi member, he's a CUBE alumni. One of the things they do is they normalize Cloud across multiple platforms, across to Azure, across. So we'll find out from him how hard is that to do, and I know people talk about it, it's hard to figure out cost, it's hard to figure out how to do the features. So customers want it, in theory they want it, just like they want to be able to switch a cell phone provider or anything like that, but the reality is, switching's complicated, switching's expensive. I don't know if people really want to do that, but they want the option that that's out there. Well I think Amazon is really poised guys for the internet of things. Their ability to have an integrated stack to abstract away the complexities of devices. So you look at machines, whether it's a greenhouse, to an airplane, to manufacturing, supply chain, they have an opportunity to use the DevOps ethos and apply that to a whole new level of development. So it's going to be very interesting to watch. We're going to squint through the announcements, we'll unpack it here inside theCUBE. Again, we're going to bring you all the analysis of Amazon web services, reinvent 2015 here inside theCUBE, and check out our weekly QCAST on SiliconANGLE.tv, featuring our guests of the week. Every week we feature a CUBE alumni guest to SiliconANGLE.tv, and again, this is the number one show in event coverage, SiliconANGLE's theCUBE. We'll be right back with more wall-to-wall coverage, right now it's on re-event after this short break.