(upbeat music)
>> Live from San Francisco,
it's theCUBE
covering Google Cloud Next 2018,
brought to you by Google Cloud,
and it's Ecosystem Partners.
>> Hello everyone, and welcome back theCUBE live coverage,
here in San Francisco, the Moscone South.
I'm John Furrier with the SiliconANGLE on theCube,
with my cohost Dave Vellante,
for next three days.
Day one, wrap up of Google Next here.
Google Cloud's premiere event.
This is a different Google.
It's a world changing event, in my opinion, of Google.
Dave, I want to analyze day one as we put it in the books.
Let's analyze and let's look at it,
and critique and observe the moves
that Google's making vis-à-vis the competition.
And Diane Greene, who's on theCUBE earlier, great guest.
Kind of in her comfort zone here on theCUBE
because she talks, she's an engineer, she's super smart.
She thinks free thoughts
but she really has a good chessboard view of the landscape.
My big walk away today is
that she's got full command of what she wants to do,
but she's in an uncomfortable position
that I think she's not used to.
And that is at VMworld, at VMware,
she didn't have competition.
First mover, changes the market.
Certainly, winning at all fronts when VMware was starting.
And they morphed over
and then you know the history of Vmware:
sold to EMC and then now the rest is history.
But they really changed the category.
They created a category.
And were very successful in IT with virtual machines.
She's got competition in Cloud.
She's playing from behind.
She's got the big guns.
She's going to bring out the howitzers, you know?
I mean she's got Spanner, BigQuery,
all the Scale, Kubernetes.
Which the internal name is Borg
which has been running on the Google infrastructure.
Provisioning services on all their applications
with billions and billions of users.
If she can translate that, that's key.
So that's one observation.
And the second one is
that Google is taking a data centric view.
Their competitive advantage is dealing with data.
And if you look at everything that they're doing
from TensorFlow for AI
and all the themes here.
They are positioning Google
as with a place to bring your data.
Okay, that is clear to me as a stake in the ground.
With the large scale technical infrastructure
they're going to roll out with SREs.
Those two things to me are the
front and center major power moves that they're making.
The rest wrapping around it is Kubernetes, Istio,
a service oriented architecture
managing services not products
and providing large scale value to their customers
that don't want to be Google.
They want to be like Google in the benefits of Scale,
which comes in automation.
And I think I head room for Google Cloud is IT operations.
So that's kind of like my take.
I think day one, the people we've had on from Google
sharp as nails, no enterprise tech.
Jennifer Lin, Deepti, Diane Greene.
The list goes on and on.
What's your take?
>> Well so, first of all with what's goin' on here
and Diane Greene, the game she's playing now.
Completely different obviously than VMware.
Where it was all about cutting costs.
Vmware, when you think about it,
sold for $635 million to EMC way back when.
So, it was just a little scratch
compared to what we're talkin' about now.
She didn't have the resources.
The IT business,
you remember Nick Carr's famous piece on HBR
'Does IT Matter?'
That was the sentiment back then.
IT, waste of time, undifferentiated.
Just cut costs.
Cut, cut, cut.
Perfect for Vmware.
The game they're playing now is totally different.
As you said they were late to the enterprise.
Ironically, late to the "enterprise cloud"
>> They got competition
>> They got competition.
Obviously the two big ones Microsoft
and, of course, AWS.
But so what might take away here is: the differentiation.
So they're not panicking.
They're obviously playing the open source card.
Kubernetes, TensorFlow, etc.
Giving back to the community.
Data, they're definitely going to lead in AI
and machine intelligence.
No question about it.
So they're going to play that card.
The database, we had the folks from Cloud Spanner on today.
Amazing technology.
Where as you think about it,
they're talkin' about a transaction-oriented database.
We heard a customer today,
talking about we replaced Oracle.
Right?
We got rid of Oracle, now--
>> When was the last time you heard that?
Not many times.
>> It's not often.
No, and they're only $120 million company.
But to her point was it's game changing for us.
It's a 10-X value proposition.
And we're getting the same quality
that we're getting out of our Oracle databases.
They're leading with apps on Google Cloud.
Twitter is there.
Spotify.
They obviously have a lot of history.
So that's part of it, part to focus.
We on SiliconANGLE.com,
there's a great article by Mark Albertson.
He talked about the--
he compared the partner Ecosystem.
Google's only about 13,000 partners.
Amazon 100,000.
Azure 70,000.
So a long way to go there.
Serverless, this is they're catching up on serverless.
But they're still behind.
Kind of still in Beta, right?
&But serverless, John, I'd love your take on this.
Can be as profound as virtualization was.
Last to developer love.
They've got juice with developers.
And then the technology.
Massive scale.
We heard things about Spanner, the relational semantics.
BigQuery, Kubernetes, TensorFlow.
They have this automate or die culture.
You talked about this in your article.
That's a bottoms-up engineering culture.
Much different than the traditional enterprise top-down
"Go take that hill!
"You're going to get shot at but take that hill by midnight"
>> It's true.
Well I mean, first of all,
I think developers are in charge.
I think one of the things that's happening
is that it's clear is that every company,
whether you're a start up or large enterprise,
has to come to grips
with if they're going to be a software company.
And that's easy to say
"Oh, that's easy. You just hire some software developers"
No, it's not that easy.
One, there's software developers coming out.
But the way IT was built
and the way people were buying IT,
it's just not compatible
with what software developers want to do.
They want to work in a company
that's actually building software.
They don't want to be servicing infrastructure.
So, saying that everyone's going to be a software company
is one thing.
That's true.
And so that's the challenge.
And I think Google has an opportunity.
Just like Oedipus has been dominating
with service-oriented approach managing services.
By creating building blocks that create large Scale
that allow people to write software easily.
And I think that's the keyword.
How do I make things common interface.
You asked Diane Greene about common primitives.
They're going to do the foundational work needed.
It might be slower.
But at a core primitive, they'll do that work.
Because it'll make everything a faster.
This is a different mind shift.
So again, you also asked one of the guests,
I forget who it was,
IT moves at a very slow speeds.
It's like a caravan--
>> You said glacial
>> But yeah, well that used to be.
But they have to move faster.
So the challenge is:
how do you blend the speed of technology,
specifically on how modern software is being written,
when you have Cloud Scale opportunities?
Because this is not a cost cutting environment.
People want to press the gas, not the brake.
So you have a flywheel developing in technology,
where if you are right on a business model observation,
where you can create differentiation for a business,
this is now the Cloud's customers.
You know, you're a bank, you're a financial institution,
you're manufacturing, you're a media company.
If you can see an opportunity
to create a competitive advantage,
the Cloud is going to get you there really fast.
So, I'm not too hung up on who has the better serverless.
I look at it like a car.
I want to drive the car.
I always want to make sure the engine doesn't fall out
or tires don't break.
But so you got to look at it,
this is a whole 'nother world.
If you're not in the Cloud,
you're basically on horse and buggy.
So yeah, you're not going to have to buy hay.
You don't have to deal with horses
and clean up all the horse crap on the street.
I mean all of that goes away.
So IT, buying IT, is like horse and buggy.
Cloud is like the sports car.
And the question is
'Do I need air-conditioning?'
'Do I need power windows?'
This is a whole new view.
And people just want to get the job done.
So this is about business.
Future work.
Making money.
>> So--
>> And technology is going to facilitate that.
So I think the Cloud game
is going to get different very fast.
>> Well I want to pick up on a couple things you said.
Software, every company's becoming a software company.
Take Andreessen, said 'Software is eating the world'
If software's eating the world, data is eating software.
So you've got to become a data company,
as well as, a software company.
And data has to be at the core of your business
in order to compete.
And data is not at the core of most company's businesses.
So how do they close that gap?
>> Yeah
>> You've talked about the innovation sandwich.
Cloud, data, and AI are sort of the cocktail
that's going to drive innovation in the future.
So if data is not at the core of your company,
how are you going to close that AI gap?
Well the way you're going to close
is you're going to buy AI
from companies like Google and Amazon and others.
So that's one point.
>> Yeah, and if you don't have an innovation sandwich,
if you don't have the data, it's a wish sandwich.
You wish you had some meat.
>> You wish you had it right
(Laughing)
Wish I had some meat.
You know the other thing is,
you mentioned Diane Greene in her keynotes said
"We provide consistency
"with a common core set of primitives"
And I asked her about that
because it's really different than what Amazon does.
So Amazon, if you think about Amazon data pipeline,
and we know because were customers.
We use DynamoDB, we use S3,
we use all these different services in the data pipeline.
Well, each of those has a different API.
And you got to learn that world.
What Google's doing, they're just simplifying
that with a common set of primitives.
Now, Diane mentioned, she said there's a trade off.
It takes us longer to get to market if--
>> Yeah, but the problem is, here's the problem.
Multicloud is a real dynamic.
So even though they have a common set of primitives,
if you go to Azure or AWS
you still have different primitives over there.
So the world of Multicloud isn't as simple as saying
'moving workloads' yet.
So although you're startin' to see good signs within Google
to say 'Oh, that's on prim, that's in the Cloud'
'Okay that's hybrid' within Google.
The question is when I don't have to hire
an IT staff to manage my deployments
on Azure or my deployments on AWS.
That's a whole different world.
You still got to learn skill sets on those other--
>> That's true >> On other Clouds
>> But as your pipeline,
as your data pipeline grows and gets more and more complex,
you've got to have skill sets that grow.
And that's fine.
But then it's really hard to predict
where I should put data sometimes and what.
Until you get the bill at the end of the month
and you go "Oh I should've put that in S3 instead of Aurora"
Or whatever it is.
And so Google is trying to simplify that
and solve that problem.
Just a different philosophy.
Stu Miniman asked Andy Jassy about this,
and his answer on theCUBE was
'Look we want to have fine grain control
over those primitives in case the market changes.
We can make the change
and it doesn't affect all the other APIs we have'
So that was the trade off that they made.
Number one.
Number two is that we can get to market faster.
And Diane admitted it slows us down
but it simplifies things.
Different philosophy.
Which comes back to differentiation.
If you're going to win in the enterprise
you have to believe.
I get the sense that these guys believe.
>> Well and I think there's a belief
but as an architectural decision,
Amazon and Google are completely different animals.
If you look at Amazon
and you look at some of the decisions they make.
Their client base is significantly larger.
They've been in business longer.
The sets of services they have dwarf Google.
Google is like on the bar chart Andy Jassy puts up,
it's like here, and then everyone else is down here,
and Google's down here.
>> Yeah and the customer references,
I mean, it's just off the charts
>> So Google is doing,
they're picking their spots to compete in.
But they're doing it in a very smart engineering way.
They can bring out the big guns.
And this is what I would do.
I love this strategy.
You got hardened large scale technology
that's been used internally
and you're not trying to peddle that to customers.
You're tweaking it and making it consumable.
Bigtable, BigQuery, Spanner.
This is tech.
Kubernetes.
This is Google essentially being smart.
Consuming the tech
is not necessarily shoving it down someone's throat.
Amazon, on the other hand,
has more of a composability side.
And some people will use some services on Amazon
and not others.
I wouldn't judge that right now.
It's too early to tell.
But these are philosophy decisions.
We'll see how the bet pans out.
That's a little bit longer term.
>> I want to ask you about the Cisco deal.
It seems like a match made in heaven.
And I want to talk specifically
about some of the enterprise guys,
particularly Dell, Cisco, and HPE.
So you got Dell, with VMware,
in bed with Amazon in a big way.
We were just down at DC last month,
we heard all about that.
And we're going to hear more about it this fall at re:Invent.
Cisco today does a deal with Google.
Perfect match, right?
Cisco needs a cloud, Google needs an enterprise partner.
Boom.
Where's that leave HP?
HP's got no cloud.
All right, and are they trying to align?
I guess Azure, right?
>> Google's ascension--
>> Is that where they go?
They fall to Azure?
>> Well that's what habit is.
That's the relationship.
The Wintel.
>> Right
>> But back up with HP for a second.
The ascension of Google Cloud
into the upper echelon of players will hurt a few people.
One of them's obviously Oracle, right?
And they've mentioned Oracle and the Cloud Spanner thing.
So I think Oracle will be flat-footed by,
if Google Cloud continues the ascension.
HPE has to rethink, and they kind of look bad on this,
because they should be partnering with Google Cloud
because they have no Cloud themselves.
And the same with Dell.
If I'm Dell and HP,
I got to get out of the ITOps decimation that's coming.
Because IT operations and the manageability piece
is going to absolutely be decimated in the next five years.
If you're in the ITOps business or IT management,
ITOM, ITIL, it's going to get crushed.
It's going to get absolutely decimated.
It's going to get vaporized.
The value is going to be shifted to another part of the stack.
And if you're not looking at that if your HPE,
you could essentially get flat-footed and get crushed.
So HP's got to be thinking differently.
But what Google and Amazon have, in my opinion,
and you could even stretch and say Alibaba
if you want a gateway to China,
is that what the Wintel relationship
of Windows and Intel back in the 80s and 90s
that created massive innovations
So I see a similar dynamic going on now,
where the Cloud players,
we call them Cloud native,
Amazon and Google for instance,
are creating that new dynamic.
I didn't mention Microsoft
because I don't consider them yet in the formal position
to be truly enabling the kind of value
that Google and Amazon will value because--
>> Really? Why not?
>> Because of the tech.
Well and I think Amazon is more,
I mean Microsoft is more of a compatibility mode
(Talking over each Other)
I run Microsoft.
I've got a single server.
I've got Office.
Azure's got good enough,
I'm not really looking for 10-X improvement.
So I think a lot of Microsoft's success
is just holding the line.
And the growth and the stock
has been a function of the operating model of Cloud.
And we'll see what they do at their show.
But I think Microsoft has got to up their game a bit.
Now they're not mailing it in.
They're doing a good job.
But I just think that Google and Amazon
are stronger Cloud native players
straight up on paper, right?
And if you look up their capability.
So the HPEs and the Ecosystems
have to figure out who's the new partner
that's going to make the market.
And rising tide will float all boats.
So to me, if I am at HP I'm thinking to myself
"Okay, I got to manage services.
"I better get out in front of the next wave
"or I'm driftwood"
>> Well Oracle is an interesting case too.
You mentioned Oracle.
And somebody said to me today
'Oracle they're really hurting'
And I'm like most companies would
love to be hurting that badly but--
>> Oracles not hurting
>> Their strategy of same-same
but it's the same Oracle stack brought into the Cloud.
They're sending a message to the customers
'Look you don't have to go to another Cloud.
'We've got you covered. We're investing in R&D',
which they do by the way.
But it was really interesting to hear
from the Cloud Spanner customer today
that they got a 10-X value, 10-X reduction in costs,
and a 10-X capability of scaling relative to Oracle
that was powerful to hear that.
>> There's no doubt in my mind.
Oracle's not hurting.
Oracle's got thousands and thousands of customers
that do hundreds of millions of dollars in revenue.
And categories that people would love to have.
The question on Oracle is the price pressure
is an innovator's dilemma
because there's no doubt that Oracle
could just snap a few fingers
and replicate the kind of deliverables
that people are offering.
The question is can they get the premium
that they're used to getting.
One.
Number two, if everyone's a software company,
are they truly delivering the value that's expected.
To be a software company, to be competitive,
not to make the lights run--
>> To enable
>> To enable competitive--
(Talking over each other)
Competitive advantage at a level,
that's to me, going to be the real test of how Cloud morphs.
And I question that you got to be agile
and have a real top line revenue numbers
where using technology at a cost benefit ratio
that drives value--
>> But with Oracle--
>> If Oracle can get there then that's what we'll see
>> The reason why they'll continue to win is
because they move at the speed of the CIO.
The CIO, and they'll say all the right things:
AI-infused, block chain, and machine learning,
and all that stuff.
And the CIOs will eat it up because it's a safe bet.
>> Well, I want to get your thoughts
because I talked about this a couple years ago.
Last year we started harping on it.
We got it more into theCUBE conversation
around Cloud being horizontally scalable
yet at the top of the stack
you've got vertical differentiation.
That's great for data.
Diane Greene in her key notes said
that the vertical focus with engineering resources
tied to it it's a key part of their strategy.
Highlighted healthcare was their first vertical.
Talked about National Institute of Health deal--
>> Retail
>> NGOs, financial service, manufacturing,
transportation, gaming and media.
You got Fortnight on there, a customer in both Clouds.
Start ups and retail.
>> Yeah he had the target cities
>> Vertical strategy
is kind of an old enterprise play book TABE.
Is that a viable one?
Because now with the kind of data,
if you got the data sandwich,
maybe specialism and verticals can Scale.
Your thoughts?
>> I'll tell you why it is.
I'll tell you why it's viable.
Because of digital.
So for years, these vertical stacks have been hardened.
And the expertise and the business process
and the knowledge within that vertical industry,
retail, transportation, financial services, etc.,
has been hardened.
But with digital, you're seeing it all over the place.
Amazon getting into content.
Apple getting into content.
Amazon getting into groceries.
Google getting into healthcare.
So digital allows you to not only disrupt horizontally
at the technology layer,
but also vertically within industries.
I think it's a very powerful disruption agenda.
>> Analytics seems to be the killer app.
That's the theme here: data.
Maybe take it to the next step.
That's where the specialism is.
That's where the value's created.
Why not have vertical specialty?
>> No and
>> Makes a lot of sense
>> And it's a different spin. It's not the traditional--
>> Stack
>> Sort of hire a bunch of people
with that knowledge in that stack.
No, it's really innovate and change the game
and change the business model.
I love it.
>> That was a great surprise to me.
Dave, great kicking off day one here this morning.
Ending day one here with this wrap up.
We got three days of wall-to-wall coverage.
Go to siliconANGLE.com.
We've got a great Cloud special Rob Hof,
veteran chief of the team.
Mark Albertson, and the rest of the crew,
put some great stories together.
Go to theCUBE.net and check out the video coverage there.
That's where we're going to be live.
And of course WIKIBAN.com for the analyst coverage
from Peter Burris and his team.
Check that out.
Of course theCUBE here.
Day one.
Thanks for watching. See you tomorrow