>> Live from Washington D.C.
It's theCUBE
covering AWS Public Sector Summit 2018
brought to you by Amazon web services
and its ecosystem partners.
>> Welcome back to Washington D.C. everybody
you're watching theCUBE, the leader in live tech coverage
I'm Dave Vellante, with John Furrier,
we're covering the AWS public sector summit
Barry Russell is here, the General Manager of
Worldwide Business Development and Operations
for the AWS marketplace and service catalog
and he's joined by Dmitri Alperovitch
who is the co-founder and CTO of CrowdStrike
a hot new company, just raised a boatload of dough
we're going to talk about that, but
welcome gentleman, thanks for coming on theCUBE.
Barry, let's start with you.
So we saw Teresa put up a slide,
I tried to count and it was over two hundred ISVs
and SAS providers for GovCloud,
the marketplace is booming.
What's going on from your perspective?
>> So we launched marketplace in the GovCloud
at New York summit last year, back in 2017
and we launched it in a little over four hundred
products that were available.
The team is more than double that now,
there's nine hundred and fifty or more products available.
But the exciting thing for us is that today
we're able to make SAS; SAS inscription, SAS contracts
available from partners such as CrowdStrike.
It just gives customers more flexibility and choice
in how they deploy software into a
region like GovCloud.
>> So Dmitri, we're going to get into
the funding and the news in a second.
But from your standpoint, marketplace,
why the attractiveness, no concerns,
it's all systems go, go hard in.
What's your perspective?
>> Absolutely. AWS has been a huge partner for us
since really the beginning of the company.
We've built our entire business on AWS,
we're cloud end point security vendors
so we have a little agent that lives
on every server, desktop, laptop,
both on premise and cloud environments.
But the back-end is all on AWS
where we process mass amounts of data
and the exciting thing in the last year or so
in partnering with AWS is being able to
offer that capability to their
customers through the marketplace
where every asset that you have on AWS
can now be protected by CrowdStrike
and we're very very excited about that
and actually today, we launched our
'Falcon' is the name of our product
on GovCloud, offering to target primarily
the Federal Government as well as the state and local
and other enterprises actually,
that are interested in that high level
of assurance that GovCloud provides.
>> What specifically- can you just drill down the product
I just want to make sure that we get that right.
So, you're on Amazon, you're protecting Amazon
end points within their cloud.
That's great for Amazon commercial enterprises,
repeat one more time the public sector piece,
how does that work?
Who's the customer?
Is it just the agency, or is it also
enterprises who work with that?
Talk about the dynamics.
>> So when you look at our customers
it's a mix of large enterprises,
about twenty percent of fortune 500 companies,
and various federal agencies.
Basically we install on every machine they have
that runs Windows, Mac or Linux systems
so servers, desktops, laptops, everything
within their environment
but there's no on-premise equipment.
So the agent connects to our cloud
which runs on AWS and we collect all
the execution activities that are taking place
and apply machine learning and artificial intelligence
to discover security threats.
So it's a big data problem and we collect
over a hundred billion events every single day
just to give you a sense of how much that is,
in two days we process the amount of data
that Twitter processes in a year.
So, really huge amounts of data.
>> So Barry, do you go out to partners,
do you even have to sell them on this concept,
are they beating down your door,
what's that dynamic like?
>> Yeah, we work with partners that,
well first of all, we have to
get them to architect for AWS.
So, before we even think about listing a product
in marketplace, Dmitri will tell you,
they have to first architect to run well on AWS
so that when the software is deployed
or the customer accesses that environment,
it's running optimally.
And the customer is protecting both assets
that they have running on AWS and On-Prem.
I think vendors have really warmed up to the idea
of marketplace as a sales channel for them.
And the reason for that is we really serve
two different types of customers.
One type of customer who can go to the public
marketplace website and subscribe to a product,
deploy that and immediately purchase it.
And then, for large enterprise and public sector
federal government customers,
we still have that feature of private offers,
which enables the customer and the vendor
to negotiate on price and terms
but still transact digitally through marketplace
and have it all seamlessly built by AWS.
Lots of flexibility for sales teams
that are in the field.
>> Okay, so they work out the financial arrangements
and you guys facilitate that experience?
>> That's right.
We handle the deployment, subscription and
billing for the customer.
>> So obviously, you know, the commercial
space SAS is exploding.
What are the drivers in federal,
are they similar, what are the differences?
>> For customers that are wanting to move
to SAS based applications,
I think it's pretty simple.
Customers have reached a point where
they don't necessarily want to manage
the underlying infrastructure or software itself.
So they're really looking to manufacturers like CrowdStrike
who have a fully managed SAS based environment
running on AWS.
All the customer wants is the outcome
the functionality of the software,
for it to be performant and do what the vendor
said that it was going to do.
Managing all of that infrastructure
and underlying technology,
that's the expertise of the manufacturer themselves
and the movement to SAS is all about
simplifying for customers.
>> How about CrowdStrike news
I want to get to the valuation question.
You guys are valued at over three billion dollars
just reported on siliconangle.com
and around the world you guys raised
two hundred million dollars in a round of funding.
Total capitalization is about four hundred million, roughly?
>> Yeah, over four hundred million.
>> OK. So you're feeling good today, right?
>> Very good.
More than anything else it's an indication of our growth,
we've doubled the company in terms
of revenue last year.
We had a year over year increase
of five hundred percent in terms
of one million dollar deals we've closed.
So it's really an indication that
we're separating ourselves from the rest
of the pretty crowded endpoint security marketplace
and establishing ourselves as a leader.
>> And what's the money going to be used for?
Mostly expansion, sales, marketing?
>> It's further expansion, our growth internationally
sales and marketing, engineering,
helping build out more of the platform capabilities.
>> I want to get your take on the cloud
because you guys built your business on day one.
We were commenting off-camera saying that
with our company we have never owned a data center.
Have you ever owned a data center?
>> We do a few things, small things,
but most of our stuff is on AWS.
>> So, for the people out there trying to do cloud
that don't have that clean sheet of paper
of a start-up like you guys were
seven years ago.
The key to success, to really
take advantage of the cloud,
not just migrate to it, but actually use it.
>> Well, you know, it's interesting
in security it's been an interesting journey
because when we started back in 2011,
doing security in the cloud was a heresy.
In fact, I remember meetings with major banks
back in those days when we were telling
them about our plans and how we're going
to do security in a very different way.
They said 'This sounds intriguing,
but we'll never be a customer because
we'll never do cloud."
Now, most of these guys are customers,
so the mindset has definitely changed a lot.
And what we're seeing now is actually
our competitors that for years have been
trying to compete with us by saying
'Well we're on-premise, CrowdStrike is cloud,
you can't trust cloud.'
Now they're desperately trying to move
to the cloud and of course,
unless you build it natively
in the cloud to begin with
it's very very hard to do.
You can't just put an appliance
in a data center and call it a cloud,
and that's what they're struggling with.
>> How do customers determine whether something-
How does it pass the smell test?
You know, you can say you do things,
what's the flaw in having that non-optimized
fully cloud-ready, or born in the cloud solution?
What's the test?
>> That's a great question.
So, one test is scalability.
We replace a lot of our competitors
because they just couldn't scale.
Because they used traditional sequel-based databases,
single appliances, not a multi-tenet environment,
they deploy it to two hundred thousand end points
and the thing just comes crashing down.
So that's one big thing
and then in terms of better security, unless
this is what the cloud really gives you in security,
unless you can aggregate all of this data,
and we process a hundred billion events per day
and do machine learning on that data
to try and discover new types of attacks,
you're not leveraging the benefits of the cloud
you're not delivering better protection.
>> We've had many interviews over the years, Dave and I,
around security with Amazon.
You took a lot of heat on it being not secure
turns out the cloud is actually becoming more secure,
you're an expert in security,
you've done a lot of thread analysis over the years
looking at your bio and you're successfully
leading a great company.
Hackers love to attack where the data is,
so the cloud's complexity, if you will,
or its distributive nature,
makes it less hackable, some say.
What's your take on that?
How do you view that opportunity?
So say, look at it, if I put everything in one spot,
I can brute-force it, or I'm going to get hacked.
What's your take on using the cloud
as an opportunity to have better security?
>> You know, in this day and age
almost every single company that is not
concerned in moving to the cloud
is making a huge mistake because the reality is,
when you look at the security teams that Amazon has,
or other cloud providers have,
they are way ahead of virtually everyone in this market.
They're way ahead of the big banks
that have a lot of money,6
they're certainly way ahead of the federal government,
so you're getting the best of the best
and security technologies they have the same
level of scale that we do in terms of seeing all these
types of attacks and can react a lot faster.
So yes, while it may present itself
as a bigger target
the reality is that you'll be getting
a much higher level of protection
than you can ever do yourself.
>> So what's the inside scoop
on the tipping point?
You were talking before, years ago,
financial services, customers for example
said 'Never, we'll never go to the cloud'.
We've had many interviews, 'that's an evil word.'
>> That's right.
>> What was the tipping point?
Was it the realization that companies like Amazon
could do a better job?
Was it fear of missing out?
Was it economics?
Was it the losses that they were taking?
What was it?
>> I think it was a combination of everything.
It's funny because in those days we actually asked them,
'Well, how did you feel about virtualization
when it came out?
I bet you didn't like that either.'
'No, we didn't like that,
now we use the virtualization.'
'How do you feel about open source?'
'No, no. We hated it. Now we use it.'
Right, so it's a journey for a lot of companies.
Whenever something new comes out
that's a big paradigm shift.
But a few years in typically they realize the adoption.
What we're seeing now particularly in the public sector
is that realization that the commercial sector went through
probably three or four years ago.
And now we're seeing the big push and the
executive order from the present
that you have to adopt cloud,
that you have to move to modern IT infrastructure
and we're seeing a lot of success
and the federal government agencies are realizing
we need to do security in particular very differently
and the cloud is a huge differentiator.
>> How about, anything you can add to that Barry?
Your perspectives on it?
>> No, we're seeing enterprise customers
and not just in financial services
but across all industries.
On the public sector side,
you have organizations like GoodWill or City and Newport
and then on the enterprise side,
you have really large organizations like Siemens or 3M
that are not only leveraging AWS
but have also started leveraging solutions
that are available in the marketplace
and I think that in the past couple of years
we have seen a turn both in the enterprise
customer and in public sector customers that are
really starting to adopt cloud and move
to that as their primary mechanism.
>> And we have seen in the last year
huge adoption of the public sector across
many sensitive agencies they're starting
to adopt our solution on the GovCloud platform
because they're seeing the benefits of that security model.
>> It's a no-brainer, really, if you look at
the speed and scale that you can do things,
but you've got to check the boxes of the public sector,
a little bit different than the commercial enterprise.
So, talk about the public sector
we're here at the public sector summit,
it's like a reinvent in and of itself of that ecosystem.
What does the current landscape look like?
What's the orientation?
What's the posture of their technology strategies?
What's their appetite?
Can you guys just give us some color commentary
on the public sector customers?
>> Sure, go ahead?
>> Yeah. You know, one of the reasons that
GovCloud was built and stood out
was to give customers that needed
FedRAMP or ITAR compliancy, you know
and an opportunity to operate those
workloads that they were moving over.
Here's what I would say, you know,
it's not just traditional public sector customers,
like government agencies or the federal government
that are operating in GovCloud,
it's also enterprise customers that serve those needs.
So there's this cross-section of pollination
of customers and server team partners
that are serving the federal government and
government entities and large educational institutions
or state and local government.
But they want the same level of innovation,
scale, they want to free up their developers
to develop new applications and services
for the citizens that they serve.
They want all of the same things that the
enterprise customers that we've been talking about
have had for a number of years.
They want the exact same thing.
>> The paradigm shift, Dmitri,
we were talking off-camera about the public sectors
looking to the private sector because
there's leadership there.
No-one says, 'Hey, let's just do what the government does,
there's no real- the inefficiencies that use cases there.
You mention paradigm shift.
How has the paradigm of operating and servicing
and selling and delivering product
value to the public sector changed?
I mean, we still hear, the Oracle,
thing was in the news about the DOD JEDI project?
So the old way of selling and procuring is changing?
>> It is, and the fact that customers can now
leveraging Amazon and buy through the marketplace,
all of these services directly from Amazon
without having to go do separate
contracting vehicles and separate prosumers,
but the other benefit you get is
the SAS deployment model in times of value.
Traditional security solutions as an example
take literally twelve to eighteen months to deploy.
We had an agency in the US government that
bought our solution recently and
deployed throughout the entire agency in two weeks.
So that ability to automatically get value
of the solution helps secure the enterprise
is something that you can only achieve
with a cloud-based solution.
>> I talk to a lot of people in D. C.,
we've been covering, opening up more coverage here
it's still hot-market for the cloud area
and certainly government as well.
And then, in an off-the-record conversation,
I won't say the name, but he says
'Look, I can't deny the Amazon solution,
this cloud-native stuff is amazing,
when have prices ever gone up?
They don't, they go down, but they take more
account-control because they get more penetration.
So the prices go down.
In the old way, prices went up!
So, again, this is the shift in the mindset
where you get more business,
but you're driving the prices down
at the element level.
Is this the key thing that you're hearing too?
>> Absolutely, and when you look at some of the
customers that, I don't want to speak for you, but
that Amazon has acquired in terms of
intelligence community and others that you
would never think would ever move to the cloud
given the sensitivity that they have,
and yet they've realized that to do things differently,
to accomplish their mission,
they have to use the cloud.
So we're absolutely seeing that paradigm shift
and the nice thing is that it's coming
both from the bottom-up with these agencies
realizing that they have to do things differently,
and there is support in the White House in terms
of IT modernization that we need to
adopt the cloud to be successful.
>> So do you feel like we'll finally start
turning the corner in security?
What I mean by that, is if you look at
some of the metrics about, OK,
a company gets infiltrated, they don't even realize it
for whatever, two hundred and seventy five days,
we spend more on security every year
but we feel less secure.
Is the cloud beginning to change that or are some
of those metrics or even subjective measurements,
I'm happy to spend more but I want to be more secure,
are we starting to see the fulfillment of that promise?
>> Absolutely, no question about it.
And I'll give you a very concrete example.
We actually launched, two weeks ago, a guarantee.
If you're a customer using our service
and you get breached on a system we protect,
we pay up to a million dollars of various costs
that you have because we believe that we
can actually secure you and we're willing
to put our money where our mouth is
and establish that guarantee
and there's no one in the industry
that is doing anything like that.
>> That's putting your money where your mouth is,
I mean that's fantastic,
usually these guarantees give a free month of service.
>> No, no, no. We will pay cash to reimburse
various expenses and set a response, legal fees,
everything else that comes into it.
>> Congratulations for taking that step.
I mean, others are going to have to follow.
>> That's good leadership.
One of the guys on the stage from the CIA,
Dave, you had the quote said that security--
>> Cloud security on its worst day-
Cloud security on its very worst day
is far better than my client's server systems.
(John laughs)
>> So there it is, to your point,
OK, let's get the plug in for you guys.
So you've got eight months of you starting to
work together in the marketplace.
>> We did.
>> Tell us about that relationship, how's it going?
What do you guys do?
You're selling products together?
Give a quick update on the relationship between that.
>> Okay, so our Falcon platform in the last
eight months has been on marketplace
where customers that are coming in,
and provisionary resources on EC2, on AWS
can immediately get Falcon to protect those resources
and that has been a fantastic growth area for us.
We've also been partnering on the new GuardDuty offering
that Amazon launched last year
we're the intelligence provider for that platform.
So it's been a great partnership
we're looking to do a lot more,
in particular with the GovCloud in the public sector.
>> Last word?
>> Well for us now, we're able to have a solution
we can recommend to customers
that's fully SAS-based, running on AWS
and proven in its capability so, you know,
it's great to partner with their sales and alliance
team on the commercial and public sector side.
We're going to look forward to seeing
what we can do for the rest of the year.
>> Well, Barry, thanks for coming back again
it's great to have you on theCUBE
and Dmitri, wonderful, and congratulations on the raise
and making some progress, really appreciate your insights.
>> Thank you so much.
>> You're welcome.
>> Alright, keep it right there buddy,
John Furrier and I will be back with Stu Miniman,
we're live from AWS Public Sector Summit.
You're watching theCUBE.