>> Live from Seattle, Washington,
it's theCUBE, covering KubeCon
and Cloud Native Con North America 2018
brought to you by Red Hat,
the Cloud Native Computing Foundation
and it's ecosystem partners.
>> Hey welcome back everyone, we are live here in Seattle.
It's theCUBE's coverage of KubeCon,
Cloud Native Con, a part of CNCF,
Cloud Native Computing Foundation,
the rise of Kubernetes, this is what the show is all about.
Three days of wall to wall coverage.
We've been there from the beginning
covering this KubeCon effort from the beginning.
I'm John Furrier with Stu Miniman,
we're here to analyze and break down the event
with our guest analyst for the segment, Steve Herrod,
CUBE alumni, he was there the first day
we ever did theCUBE in 2010.
He's been a good friend of theCUBE.
Now he's a venture capitalist, managing director
at General Catalyst, a premiere VC in the industry.
Steve, great to see you. >> Good to be here.
>> Thanks for coming on. >> Feels like the early days
of some of the other conferences, too, doesn't it?
>> It feels like AWS, you know seven/eight years ago
where it tips over, there's a tipping point.
We see that doubling, so you know,
it's kind of that tipping point
where there's more demand for theCUBE
and we can fill it so there's great content
but it's a bigger picture, right?
And I want to break through that, I want
to get your thoughts and let's have a shared conversation
around what's really going on here.
You're talking about a disruption
in the industry of cloud computing.
You got Amazon, just a freight train
just taking all the beach, the waves coming in
and this is an opportunity, this is my opinion,
for the industry to kind of say,
hey, it's a multi cloud world so you're not
going to take all of it.
You got Google, you got Microsoft, you got start ups.
This is a way to create an opensource way to fill the gap.
Your thoughts? You agree? >> I totally agree
and I think what's interesting,
this conference does not have a corporate,
at least an explicit corporate sponsor.
It has four or five that are all trying
to have their play in it.
Microsoft's not one of them, which is sort of interesting.
But it was, I think, a very bold thing this year
to have this big of a venue and invite this many people
and then hope that you're going to get the sponsorships
and all the other stuff that follows.
>> In Seattle. >> In Seattle.
Yeah, our weather is a little bit--
>> It's very meta. (laughing) >> Interesting.
But, just to your point, I do think this
is really interesting because it is more open
than a lot of these conferences
where people are coming together.
Both open source but also so much focus on
how do you do functions in a way
that works across places, how do you service meshes.
Like everything is, it's both good and bad
because there's so many choices that people
are being seen right now.
>> You were the CTO of VMware, Stu you worked
in the CTO office at EMC back in the day,
you're seeing a systems kind of vibe going on in cloud
and you got application renaissance,
kind of almost like the app server days,
think WebSphere or whatever, that movement
in the 90's and 2000's, that kind of grew quickly,
all kind of being modernized.
So you have cloud scale. >> Mm-hmm.
>> AI has been around for a long time
but because of the cloud, there's a renaissance.
Video's been around for a long time
but because of the cloud, things like theCUBE is happening.
So the cloud is enabling a rebirth of a lot of things.
>> Mm-hmm. >> And enabling
a lot of new things, how do you guys view
that systems view, application renaissance?
Jassy talks about a reinvent as a new kind
of persona developing. >> Mm-hmm.
>> As a buyer and IT investments are changing,
you're making start up investments, it's crazy.
>> Yep. >> What do you think?
>> Yeah, so first of all John, I like what you're saying
about that systems view because too often
we would kind of focus on a specific tool.
So virtualization was great, but,
you know, big thing, I took a bunch of servers
and made it smaller servers
but I took the same old application
and I shoved it in there, and I left it running
for another five or 10 years
when I probably should have modernized it.
Today, you know we just had Cheryl on
talking about the ecosystem and customers
and what I want to focus on is how the users get value.
What are building on top of this?
>> Right. >> Not the next cool thing
to build, but how do I run my business?
How do I do cool things with genomics?
How do I improve healthcare?
And in many ways we're seeing some of these top down things.
I mean what's gotten me so excited
about things like serverless
and been really poking and teasing
at how that fits in with this ecosystem
is it's not just about a way to kind of turn the crank
on making things a little bit more efficient
or, you know, I can manage more machines
with fewer people, but you know it moves up things
and for someone like myself, a networking guy
with an infrastructure background?
>> Right. >> It's a little
out of my comfort zone and that's okay.
You know we talked to Lou Tucker, Lou's really excited
about where AI's going and what's there,
so I think we're in a real renaissance here
and it's a big inflection point.
>> Well I think to your point, what's interesting,
whenever I do a teacher course to a college
or when I'm talking to start ups or even in the old days
it's really easy to forget that infrastructure
is not a thing in it's own right.
It's solely there to enable applications
and to enable other things
and so whenever you get really deep in the weeds
on this is a new security model
for this type of container or this,
it's important and you're thinking
about the best way to do it but,
really you're right, you have to abstract it out
to can I ship value faster?
Can I save customers money?
Can I do something safer?
You really have to think about it in that context.
And there's so much activity here
you have to really make sure you're thinking about
where it all fits together. >> And you know,
the computer science conversations changes, too.
The nature of what is computer science is evolving.
I want to get to that in the next kind of discussion point
but I want to just, Steve, ask you,
you were on the VMware side when VMware
kind of entered in with virtualization.
It was a desktop, it was an app, it was like you loaded it
on a machine and then that ended up transforming
a massive industry and so a lot of people compare
what VMware did in it's growth and it's impact
but saying the cloud has got certainly more orders
of magnitude,
you mentioned security. >> Mm-hmm.
>> Where's the VMware moment in this cloud
transformation impact?
Your thoughts there, just because you've been
on both sides, one as a driver, CTO at VMware
and now as an investor.
Where do you see cloud-- >> Yeah, I kind of
thought of it as two different angles.
One is, appealing to developers
and then that taking you all the way through operations
which is, I mean that is, dev ops
is sort of looking at that.
VMware's first product was a workstation product
that made developers have a bunch of environments
right in front of them and we always had a vision
for getting into the operations center
but we knew we had to kind of come up through that path
and I think likewise, a lot of this tooling
that we see here is developer first
and it's them saying, "I like this tool
"and I can make my job be more enjoyable this way."
But what you're really seeing, especially at this one is,
how do you start in the developer tools
and then not be detested by developers
but then actually be paid for it by the operations side.
So if you look at the type of vendors that are here?
You start having venture capitalists here.
You have a few people wearing suits here.
It is about making this more enterprisey,
more production ready and that's kind of
the natural progression of any major impact like this.
>> And Heptio, certainly Stu was reporting earlier,
the number has been better than the filing of VMware.
You know, a half a billion dollar acquisition
for talent and a position in the marketplace.
There's liquidity so there's investment opportunities.
We talked to Jerry Chan about this at AWS,
I want to get your thoughts, how is the investment thesis
going on because what are you investing in?
The notion of a stack, has kind of transformed
into Lego blocks and services. >> Yep.
>> So the notion of a stack is kind of changing
although I've heard people say the, "Kubernetes stack."
I'm like, well, what does that mean? (laughing)
>> Which one? Yeah. >> So there's a lot
of kind of stack derivatives. >> Mm-hmm.
>> But how do you invest in this?
What are you looking for?
Where is the value? >> Yep.
>> Where are sniffing out the deals?
Where's the white spaces?
And where should entrepreneurs go?
>> Yeah, and I have several companies presenting here
so I've certainly done some investments
around this space, but I focus
on a few things very specifically.
I've been around this a little while.
I really like to think about not tools
that go to the new, hot new companies.
I really try to think about what is more mainstream company
going to adopt?
And that usually means a few things.
It has to have enterprise capabilities.
It has to fit into the rest of the things.
But I look at like how are you going to digest this
with your other tools and the other processes
that you have in place?
If it's a security solution, I look at,
I don't want really something that only protects
the brave new world, I want it to fit in somehow
with security policies and other things
that are happening. >> So mainstream adoption?
IT kind of impact? >> Yeah, just like a tool
that actually works across environments
and lets you go from here to there.
You all have talked to Illumio several times?
>> Yeah. >> They're trying to do
micro segmentation for physical machines
all the way through containers.
The other thing I'm keeping a close eye on
is, this is chaos, in terms of the number of start ups
doing very specific point solutions
and you have to really think about
how does that grow into a big enough chunk
of a budget or a big enough problem.
So every single time I make an investment,
I ask how does this do something 10 times better
than something else and is that important to the company?
And that's really hard to answer sometimes.
>> Steve, and what's your take on the kind of opensource,
open core, business model today?
To be honest, I go around, I talked to some
of the founders there, and everybody wants
to contribute to opensource but maybe I don't want
to build a business around it,
because actually monetizing that is really tough.
Is it just, I look to get acquired
by one of the big players here?
Or can I actually build a business with opensource
at it's core? >> That's literally
the billion dollar question. >> Yeah.
>> But I do think, like on the positive side,
the number of exits or big things recently
with Magento, with Cloudera doing great,
with, obviously, Red Hat, but we've seen,
and Neilsoft, like a lot of big acquisitions
and some good IPOs.
But on the flip side, you definitely have
to think about it differently now.
There's a growing license that is very careful
about allowing clouds to host your opensource project
without contributing back.
Hopefully that'll allow this hosted model to play out.
I personally, I certainly look to opensource.
You can see what's going on from traction
but when you see it as a great lead generation engine
which it often is for folks,
I think that's a really healthy way
to avoid spending a bunch of marketing money.
>> Yeah, it's been fun.
A lot of different shows we go to.
Love your analysis, thanks for coming on, appreciate it.
Just in general, as not a VC, but as a tech person
and in the industry, I want to ask you and Stu
what wave are we on?
Obviously Kubernetes is now kind of front and center
but we've still got cloud native.
Is it the cloud?
You got IoT and Amazon ARM, but we saw a lot
of conversations around Edge.
They had some interesting announcements
around satellite telemetry coming in to regions.
So you got Google, you got Microsoft,
you got the big players.
Is it the rich get richer?
Is there going to be a new second tier?
Cloud service provider?
Where is this going?
How is it going to reshape the industry?
I mean, just big picture, what's your thoughts?
>> Well, this is literally what I get paid to do
is figure out where things are headed.
I'd say, just at a top level, this is a super fun time
to be in this lower level of the stack.
You mentioned already AI gets,
sort of AI washing goes on a lot right now
but the very core of it is literally changing
every application in interesting ways.
And for me, I was a former hardware designer.
The fact that you can now build
and have really cool new hardware
that's accelerating this stuff is really exciting.
You saw Amazon's announcements,
not only an ARM based server but Inferentia chips.
Google has been doing this with TPUs--
>> Hundred gig networking in there, like, you know,
high speed-- >> It is impressive.
>> Cluster configurations, it's amazing stuff.
>> So I love the fact that we can actually have
very big innovation at each stage of the stack
and it's because the combination of every company
becoming an app, digital company
coupled with the power of AI to transform things
means you need dev ops to faster,
you need these platforms that let you do more self service.
And then I sprinkle on top of that
is just the ridiculous demand for high quality engineers
and if you don't give them an environment
where they feel productive, they're just not going to stay
at your company.
And so all the mix comes together.
I don't think they're going to be,
there'll be some giant companies that already are,
but I think the ability to create a new company
that becomes large quickly
or becomes small quickly if you screw up
is bigger than ever. >> Yeah,
I think it's total acceleration.
>> Everything's faster. >> Values accelerated
but it's also failure, too, right?
>> Exactly, everything is accelerated.
>> You have an option to abandon in you NPV calculations
and IRRS (laughing)
in your portfolio. >> Exactly, no it's--
>> The word pivot comes to mind.
>> Everything is faster, that's the right way
to think about it. >> Stu what's your take
on this? >> Yeah, so we're at
an interesting point in the industry.
It's a bit of a paradox.
On the one hand, the challenge of our time,
we've been talking on theCUBE since the early days, John,
is it's about distributed architectures
and we're decomposing all of the pieces.
Even Kubernetes itself, we're going to talk about
how it's decomposing.
On the other hand, everything is consolidating.
>> That's right. >> I've seen more
vertical stack integration from the chip and hardware level
all the way through.
You see Apple, Microsoft, Google--
>> That's right. >> And Amazon,
all have chips companies
and are going really interesting stuff there but
it is such a complex individual.
>> It is. >> That no one company
can do it all, so there is opportunity for people
to build on top of that.
We have new marketplaces, we have new ways of doing it
so it's, yes, there's going to be some really big winners
and we have seen changes
but there are still opportunities and yeah,
John, keeps us busy always. >> Well here's my take on it,
I want to get you guys' reaction to my view on this.
So obviously we're in the media business,
we're disrupting media with theCUBE
so we look at the market and it's kind of matched
the music industry.
The power curve, the power law is very flat and straight
and then a very long tail,
with the head of the power law is the big players.
But then when media came out, it kind of created
a fatter tail and a bigger torso.
I think that I see in the cloud,
I see the rich getting richer.
Amazon, Google, Microsoft, Alibaba,
and maybe a couple players underneath there,
IBM, Oracle, those big guys.
And then it's going to be a second tier
of cloud service providers.
Someone who's going to package all these awesome
sets of features in the long tail
so you're going to start to see a growth
because the big guys cannot be winning
all the mid range business.
I think, you're right, I think there's going to be
a lot of solutions that are just exceptional.
>> Mm-hmm. >> And I think the scale
of the cloud is going to create an opportunity
for new kinds of service providers.
Someone who says, hey, you know what?
I'm going to package this differently.
I'm going to assemble-- >> I think so.
>> A cloud solution, on either one of all of the clouds.
Why wouldn't I use the accelerated Amazon,
or the power of Google?
>> I think that's well thought
and I do think, we've talked about this for a while too,
but I do believe there's going to be specialization
by industry where you have certain algorithms and data
that's unique to it, by geography.
There's still going to be sovereignty issues.
Even by just what type of things am I trying to build.
So I do think simultaneously there's commonality
on the platform but that allows you
to do specialization and to really serve
a specific industry quite well.
>> And machine learning is a great specialty thing.
The metadata to power machine learning.
>> So Steve, do you have final questions you want to ask us
before we run out of time? >> Well I would just say,
you see a lot of these conferences.
I actually like to show up at these
and say, what in point time does this look like
the AWS reinvent.
For me, what point in time does this look
like maybe the VMware event in my case,
but I don't know, it just feels to me
like we've jumped over, we're sort of at that point
where this is going to keep going and growing.
>> Yeah, how do we make sure
we've hit the inflection point
but not jumped the charts? >> Yeah, I mean,
do you think we are here?
And how does this feel versus some of the other events
that you spend time on? >> Yeah, I mean,
John you want me to? >> I mean, you know.
>> So my take, first of all, is there's a little worry
and there's some concern of us
that have been through this before,
is like, wait, did we just create another OpenStack?
>> Yeah. >> And my resounding answer
so far, is no.
While there might be 35 main projects here
each one of those was started for a reason.
They stand on their alone, they have,
you know we've got Matt Klein on from Lyft,
as our next guest here. >> Yeah.
>> You know, Envoy, if Kubernetes didn't exist,
Envoy would probably still exist.
So there's a lot of these pieces that are good
but it is complicated. >> It is very complicated.
>> And there's all these pieces
but that's a real opportunity for a lot of companies.
The SIs, the big platforms, to be able
to help put this together. >> Yeah.
>> And the customers are thrilled with what is going on.
>> That's well stated, yeah.
>> There's interesting things there.
Right, this ecosystem, the only ecosystem
I've seen probably grow faster is the Amazon one
so it is doing well and we've been looking for years
as to like a nice, vendor independent ecosystem.
>> Right. >> To grow because,
you know, there's some of the ones in the storage industry
and things like that. >> Yeah.
>> All died. >> That's right.
>> So there are vendor shows and this,
you know the Lennox Foundation's done a nice job.
>> Right, I agree. >> With it and it's been--
>> That's the unique part here for me.
>> We bet early on it, so. >> Well we bet early on it,
it was a good bet, but here's the challenge that they have;
they have lightning in a bottle
and it's definitely arrived
so there's a little bit of jump to shark moment.
You got some things happening that's kind of glam oriented
but absolutely it's arrived.
I think the challenge that they have
is opensource community is a core constituency
of this event, and the Lennox Foundation
is structured to be kind of a very tight top,
thin at the top period of management
and the scale of this event and this movement
is too big for them, I think, to handle.
I think they either have to have sub brand
or start segmenting out because
if they lose the opensource community,
the they're going to lose the vibe of the event
and that's the core of what it is.
>> Right. >> The downstream benefits,
kind of a an opensource parlance, is the IT impact
and the developer impact.
And inherent in that is business benefits
so you're going to start to see more suits coming in
and you're going to start to have a melting pot
and that is a risky proposition
if they don't get out front on that.
So yes, it's arrived, but there's so much time
they're going to be doing it just to the projects.
>> Right. >> Just to the innovation.
>> You're going to have to wear these next time
that you see them. >> There's a money making
aspect of it, yes. >> Right.
>> The money making aspect of this is huge.
>> Yeah. >> And I think
that's what we're watching. >> Yep.
>> As the business people come in and say,
look at this, this is billions and billions of dollars.
>> Yeah. >> This is--
>> Maybe just one more thought on that.
The notion is really important,
this is a distributed, not really owned by one person,
one company, and there's the chaos that comes with that
and so how do you do the balance
between these two things? >> Yeah, yeah.
>> Its like when, I know, when Amazon announced
their Blockchain thing, it's like,
Blockchain's supposed to be distributed.
Now we have a company running it in one cloud.
It's like that balance between the push and pull
of centralization that we're going to see.
>> Well have to put some computer science architecture
together and put an operating system around it.
>> There ya go. >> We'll have some dev ops.
Steve, thanks for coming on theCUBE, great to have you on.
>> Good to see you guys. >> Well it's great to see you.
A legend in the industry, Steve Herrod, CUBE alumni
from 2010, been on every year.
Now a venture capitalist, former CTO of VMware.
With Stu Miniman, I'm John Furrier,
analyst of KubeCon, stay with us for more coverage
after this short break.
(upbeat techno music)