Techstrong Gang – July 31, 2024

Hey everyone. Happy Wednesday. It was VMware Feeling Vulnerable.

Is F five ready to slay the Cisco Dragon data hoarding the next Dead the eighth Deadly Said that. And more on Textron Gang. Hey everyone, it's Alan Shimel here for Text on Gang.

Welcome to our Wednesday edition. We've got a great gang line up for you today. Um, let me introduce them to you and then we'll jump into the great topics we wanna discuss.

First of all, joining us from out in San Francisco. Uh, it's our financial results and just technology reporter extraordinaire, Cory Johnson. Cory, welcome.

How are you? The fog is back. The fog is Well, we're in the middle of the summer.

Fog. Huh? Coldness Carl, that's when we have it.

Yeah. Yeah. Carl the fog, call him 20.

Spent as a summer In San Francisco. Exactly. That's what they say.

All right. But well, I'm glad you're here. It, at least in your room, the fog is cleared, so we are looking forward to having you headquarters.

See, It's cleared up here. It's unclear. Well, I will tell, um, joining us or joining Corey and and I myself today, we have our Colorado contingent in, uh, from Rum, Kimberly Bates and also FU CTA and Tech Truck, CTO, Mitchell, Ashley, Kimberly, how are you Doing?

Great. We've, again, we don't have the fog. I wish you'd sent it to us because we've got wildfires going on Here.

Hello man. How Are you? And you haven't read about that yet, but it is that time of year.

I'm sorry. Um, Mitchell, how about you? You're just back from a kinda mini trip.

Mini Trip to Minneapolis. This is good to be back before we head out to, uh, black hat just coming up. So It's good.

You see what I did there? Mini trip, like Minnesota Min. Oh, min.

Haha. That's very funny. You know, very funny.

Yes. Anyway, I'm Surprised you didn't go with Minneapolis, like as in my big Apple, Minneapolis. That's true.

Well, we could have done that one. I stole that Up for next time. I still You did, but no one out there knows.

But, um, anyway, Mitchell can Lee, thank you for joining us from Colorado. Joining me here local in our Booker Tone and headquarters studio, our chief content officer. He's ecstatic.

The Yankees are back at least last night. Um, Mike Ard. Hey, Mike.

Good to see you. And October is looking good. That's what my sons both said last night too.

Bring on the World Series, but, you know, one game against the Phillies doesn't really make it. Anyway, welcome. Um, so Yang, we got, we've got some meaty good stuff to talk about today.

The first one I want you to, first topic we're gonna touch on is, uh, an article that was recently up in tech strung ITSM around a survey of kind of looking into what people are thinking, feeling, doing around the VMware, you know, VMware, uh, license changes that Broadcom kind of is instigated since acquiring VMware. Uh, depending who you talk to, you know, the sky is falling and this will be the, the, the death nail of, of, uh, VMware. Others say it's gonna cut a lot of the dead wood out and we'll leave a, a leaner meaner better VMware out there.

I don't know, Mike. Well, the survey says that only 12% of the people are actually thinking about switching platforms. And it's interesting 'cause I'm getting inundated by, uh, rivals at VMware all talking about how, you know, they've got a alternative structure and it, there's a bit of a marketing war going on here.

No doubt. Um, Kimberly, I'd love to get your thoughts here, but it seems like everybody's mad, but not mad enough to leave the platform. What's going on?

The devil, you know, right? Is better than me, me, sometimes that you don't know. Um, I think what you need when we, I look into the market, and we've said this early on, but the, the changes in the, um, licensing, um, you need to bifurcate it by, um, division.

So the wave, I've looked at it and said, okay, the SMB guys, we're gonna see that move because that's an easy move. Um, the enterprise people have got some significant things they're facing, and the biggest one is not the technology, it's the people and processes and procedures that they have in place. And to do that lift and change over to something else is almost untenable because talk about technical debt, you're gonna take people off of the core of what's ever going on, whether it's AI or something else, and have them lift into another platform that's not as robust and big as A-A-V-C-F environment.

Don't think so. So probably what we're expecting to see is a couple of different changes. One, the enterprises will look at and say, can I move some of these VMs onto just vSphere that will cut my costs there and then have the other pieces on VCF.

That may be one. Strategy number two is to start all new development on containers as much as possible. But then I've got problems with my database systems that may not perform as well, and we got persistent data problems over there.

So that would be the other one is to say, I'm gonna establish a new, new platform for all my development, which is important because that's really the Kubernetes space is where we're seeing a lot of the AI develop here. Um, and with that, maybe just maybe I bring up a VM system on that particular container operation and I start maybe migrating a few over there. So that's kind of more what we're thinking about.

We also are seeing that there is some movement in the very, very large organizations and where they're negotiating. Um, they may be able to negotiate something temporarily for a couple years. Um, but, you know, suffice it to say by the end of that couple of years, you know, they're gonna go back to the regular licensing.

Um, I don't see the demise of VMware. Um, you look at how the mainframe group is just absolutely completely thriving. Um, you know, Greg Ko has done a phenomenal job over there with the ca work, and they are investing lots of engineering in that group.

Um, huge profits coming out of there. So I, I just don't see VMware at all going away in this situation. So pass it back to you guys.

I'm sure Mitch has got a couple of thoughts on that as well. I can see I'm not, I've got a bunch of other issues, but I think that's enough of me talking. Well, you, you, you nailed it on the, you don't move from VMware to something else haphazardly.

Right? That's, that's like saying Windows today, Linux tomorrow. Let's just flip over and start using that instead.

You know, it's, it's a huge, huge process to move. And as you said, yes, it's technology, but it's the knowledge that you build up. It's the skills, it's the process that's tough.

So I, I think, I think kind of the bifurcation maybe of what you, you outlined is the two strategies of optimize wherever you can move things onto another platform, either via sphere or something else. Maybe you start looking at something different at the edge, you know, and OpenShift or something else, um, that, you know, you start diverging a little bit in terms of the platforms that you use, but you're not gonna move out the core platform. And unless somebody else comes up and says, you know, we'll whole scale move you onto our closely equivalent, maybe, maybe roughly equivalent, which just not gonna happen.

It's, it's a tough, it's tough spot to be in. It just reminds me of Microsoft when Microsoft would change their pricing and their pricing model. And it's like, what are you gonna do?

Right? Unless you've got a lot of clout with them, that's a pretty tough spot to be in. Corey, do you think that Broadcom calculated all of this out beforehand as they put this licensing model together?

Did they actually understand in the level of detail of just how much wiggle room they may have had to kind of recoup some of their investment costs in acquiring VM one? Yeah. And I wonder how much this also is about new customers and setting themselves up, what, for a better, uh, offering or cleaner offering to new customers, um, uh, as they as expand, uh, you know, bringing into the fold some people that weren't there.

Um, and I wonder how much that approaches matters for them here as a reorganized post merger. So I, I have some thoughts on this. What is surprise, you know, we're sitting here talking like everyone was loving VMware before this, VMware was a hot mess, right?

Has been a hot mess. And I, I think really the question of is this licensing change painful enough to move you off of VMware is closely linked to, what are your plans regarding transformation in moving to maybe a cloud native stack, a cloud native environment in moving, you know, into something new or else in, in terms of truly a transformation? I, I don't think it pays to just, you know, throw the baby out with the bath water to go from, let's say, one hypervisor to another hypervisor.

But if you were contemplating transformation, this could be the, the piece that, that pushes you over the edge. But regardless of whether you do it now and you do it because of the licensing, licensing change or something else, clearly VMware is older technology compared to what we're seeing in some of the newer stacks and newer compute out there. And I think over time it's, it was, it was eroding and will continue to erode.

I think the, the ace in the deck for, for, uh, Broadcom is does TANSU become viable or not? How, what percentage of VMware revenue is Zu related? Right?

And it's, it's minuscule now compared obviously, but that's where their growth is. I, I, I, otherwise, I think it's a diminishing asset. I think the other option to think about though is one of the things that they've done, or at least technically well, is that you can increasingly manage multiple distributions of Kubernetes from the VMware environment.

So they're not so heavily betting on Tanzi. They can kind of reposition the company a little bit to say, um, we are the management layer for the hybrid cloud. And I think that's part of where they're trying to get to.

And um, I'm sure they would like everything to shift it order to tan Zu, but I think they have a little wiggle room on that side. Kimberly, what do you think? Um, so on the tan zu side, tan zu when it first came out was quite not the system that it needed to be.

They updated it last fall, so it significantly came up to speed to be able to compete with SUSE and, um, red Hat OpenShift. So, and there is some viability for that offering, but today it's very, very little bit of it is being used. So the question is, can they, is there enough trust for the enterprise to invest in there?

Because if it doesn't pick up, um, htan will kill it and that will be killed. You know, give it, give it 18 months, two years to come up to snuff and make the speed, but he'll look at the profitability of that and say, do I wanna continue throwing the engineering in? So that's one consideration.

Um, the second thing is absolutely, we used to, in our lab here that we have, we used to always put our OpenShift environment or our SUSE rancher environment on a VM environment. It was easier to manage. OpenShift installed on bare metal was really super difficult three years ago.

It is no longer difficult. Um, they've done major items to it. I mean, it was so difficult that when we were trying to put it on bare metal, we kept calling, the tech team kept calling, um, for support.

And the support FI finally came back and said, oh, we just put it on VMs. It's like, please, please, sorry. Now I, I'm crazy.

Now we're doing it, you know, as, you know, bare metal. So I don't have to do it. And when I look at my staffing going into the enterprises, they are looking up, setting up separate clusters.

I've got a VM world and they focus on that and I have a container environment or my, my OpenShift or whatever, and that's a separate environment. They're definitely gonna look at that. If I'm a mid enterprise company, I don't have the resources to manage that.

So maybe I'll be looking at a different strategy there. So it depends upon the staffing. Interesting.

I think part of what went into the Broadcom math too was that they were also betting that if I have multiple platforms, my total cost of it actually goes up more than the licensing fees are. 'cause I gotta hire all the additional labor to manage that secondary platform. Um, so I think they calculated that into their thinking as well.

But Mitch, is it getting any easier to manage multiple platforms these days? Or is it se essentially, are they still all separate stacks? Well, I think most organizations are forced into that scenario anyway through acquisitions, m and a kind of activities.

So you end up with a, you know, a real mixed bag of things. Maybe your core, I I, I almost wonder if if VMware becomes sort of the legacy environment, if you will, you're gonna run what you're running on VMware today, largely that'll stay where it is. The things like kind of really was talking about of the containerizing that you mentioned too, Alan Containerizing that maybe you look at OpenShift, you know, that's, that is a long history of its own barrel of monkeys too.

It's not, not as simple, not simple either, but it has gotten better. Um, you know, so there are other environments, other hypervisor environments. So I, I think truly to me, the thing that makes sense is if you don't need that on VMware, what is the alternative that you want to build around?

And yes, there's additional cost, but at some point, you know, this is the, do I want to behold beholden to a single vendor and who knows when the next price increase is gonna come, if there's gonna be more. That's always the challenge. Fair.

VMware is the new mainframe. Is that, does that kind of work for you? No, absolutely.

I I, I didn't say, I didn't say it that Mike. Ouch. You know, I, I think the mainframe, unlike VMware had it's proven, its metal day in and day out.

It, you know, it's still rocking. And ca traditionally had a, you know, I'm a Long Island boy and Hop Bog, which was kind of made for, actually it wasn't, it was originally Hot Bog. They carved out a town for ca and called it I Landia and nearly, I'm not kidding.

And the ca almost supported ca was like 85% of the tax roll for I landia. And you know, they, they had a killer mainframe business. They, a lot of it was acquired, right?

They, they acquired a bunch of companies, but they had a great mainframe and they were a great mainframe partner at IBM. They were always winning IBM's mainframe partner of the year kind of awards. And the mainframe business, I think is a lot more stable because it's less susceptible.

Look, VMware has been a redheaded stepchild almost since its inception, right? EMC didn't know what to do with it. Dell didn't know what to do with it over the whatever, 15, 20 years, it's been a company, it's actually been an independent company for a small sliver of that time.

There's a pattern here of, of just Vagabonding. Um, you know, and I don't know why. I mean, they, yeah, they certainly had great technology.

Ask Corey, do you have any insights into why VMware was never able to kind of go it alone and Oh, it was, look, it was always an attractive property. I mean, uh, it was a good sticky business at high margins. And, um, uh, lots of people want to have that kind of thing as a basis upon which to expand their operations or to build on top of what they've already got.

I think somebody should write the Harvard Business case study about why VMware never made it as a standalone company, despite having this huge sticking base in, uh, planning a revenue. I mean, I, I agree. I, I, you know, a lot of people have made a lot of money on it, don't get me wrong.

It's, it's like, it's like Ben Aflac, it's just always attached to something just Not always the right thing. Corey, they were quite profitable as a standalone company. Yeah.

So when you were saying that they didn't make it a loan, I'm not sure Corey, I, I, I remember them being a strong and profitable company before. Oh, absolutely. That was, that was the attract along.

It was more of an EMC looking to, because EMC at the time had picked up RSA Right? Which was an expansion into a new market. They had picked up, um, the docu Documentum, is that what they had?

The Document, Document management system. So they had built that out and then they picked up VMware. So it was more of a, for them it was more of a strategy of expanding what they were doing.

Oh, didn't they, didn't they? That Was a growth story. It was a growth story company that was growing, was growing a lot faster than EMC at the time, as I recall.

Didn't they own a huge chunk of VMware to begin with? Wasn't it originally spun out of VMC and they brought back in the Fold. I think that's right.

Right. You had something called VCE and that was the separate company that was built to bring up these stacks because you had a standard stack that was being installed everywhere. That was VMware, Cisco, and EMC.

And if I can put all that together, and I'm shipping those blocks, remember the V block kind of thing? Yep. That was set up as a separate company that did very well, especially since they told the salespeople that you had to sell a V block in order to go to club.

So that moved. So now you're looking and saying, okay, so this is much like when we had the nineties, you had a standard, you had, you had Sun, you had Veritas, you had All the good old place. Yeah.

The standard platform here that everybody was buying. And that's the same thing that was happening here. So it made sense at the time.

Today, it may not make that much sense, but at the time when the EMC picked him up, they were selling this VCE concept And part of it, what, what the initial spin out as I recall was, was that VMware was growing so much faster than EMC. That EMC didn't think they were getting the full valuation that they would get if people could just see VMware as its own company. So they let it spin out as its own company so people could see that world, But they still the only chunk of it.

Correct. So once that growth slowed down that did, that wasn't such an attractive notion. So we have seen historically that VMware is kind of like Jonah.

They get swallowed by the whale and spit out again. Mm-Hmm. Are they gonna get spit out one more time?

Or is this the final Arresting spot? That's a good question. I think they'd become, I mean, Broadcom where all the good things go to die.

Is that what you're saying? No, no. Well, not to Broadcom though, Kimberly, what was your thought?

I think they'd become, they're gonna be highly profitable and return on investment to Mr. Tan. And that's what Tan likes.

Yep. And that's what he likes. So if you look at his other, other companies that you've had, you know, they're going to find out what really works.

What are people investing? VMware is a huge long tail. So if you look at, you know, any kind of lifecycle of a product, he loves that mature lifecycle, because I've just kind of grabbed the, the margins that comes off of it and keep investing in there so people stick Yep.

And kill what doesn't. And and that may be wind up being the fate of tan zu. We're gonna take a break.

I think it's time for a quick break here. Odd text gang. We're gonna come back and, uh, as I mentioned in the top is, is F five really ready to go toe to toe with Cisco?

Now we're kidding ourselves. We'll be back in a moment. All right, folks, we're back.

And we're talking about F five, which posted some results this week that some folks on Wall Street got excited about. The stock was up for, uh, probably the biggest jump I've seen in a while. I, it kind of brought back this whole conversation about, well, is F five and all those networking companies out there able to fight the fight against Cisco?

We've been talking about this debate now for 10 years, and Corey, I know you're following this. Are things changing? You know, are, is Cisco more vulnerable all of a sudden?

Or are these guys getting better? Uh, these guys have changed to be sure. Um, we did a drill down earnings report on f five's numbers, and the yes, the market, like the stock like crazy say, was up, uh, 15% on after hours trading, um, basically doubling the annual return of the stock in, in a day.

Uh, but, uh, even though it was a negative quarter, revenues were down 1% on a year over year basis. But it was the smallest decline we've seen lately. And there was a suggestion that the worm has turned there.

Um, but a couple of interesting things. So, you know, their operating costs seem to have, they, they've really restructured enough that they've got their operating costs down and their margins have been really strong throughout this downturn. But the company has really changed away from selling stuff.

Their systems business was less than 20% of sales. Um, and they really are focused on, uh, they're focused on software, which drivers the majority of the revenues, which is on services. So I think when we think about it as a Cisco, a hardware vendor that's not the F five of today, it is a recurring revenue.

77% of revenues are recurring, uh, focused on software and software, um, uh, as a service as opposed to licensed software. Their software as a service business is also growing really fast. Um, and it's, it's a, you know, their, their system sales were down 30%, their software sales were up 20%, and the result was a, a basically flat quarter.

And they told us on a conference call that this is only gonna continue, uh, as the systems, uh, sales start to re recover here as well. You know, Kimberly, to your point earlier, you were talking about, you know, my heyday in the data center business, uh, during the dot coms, right? And you talk about F five big IP and those big load balancers that they really kind of made their name with, made their bones on it.

Um, and you're right, it's not, it's not those big honking boxes anymore that sit in your data center. Um, and Gen X has been an amazing, uh, acquisition for them and has kind of, I think, led the way into their software. Uh, Renaissance, uh, security is, has also been, oops.

They were always a security play. Mm-Hmm. But it was hardware.

Now, you know, it's clearly software and services. They are, they're a different company. But to be fair, so is Cisco True that, right?

Yeah. I mean, Cisco's percentage of business, uh, in, in hardware is, is not what it was either. And, and so, you know, if you can't beat 'em, join them.

And I think that's what f five's doing here. Corey, it seems like Cisco with the Splunk deal is rolling up a lot of companies in their own right. And if you go listen to them, you know, they've become a consolidation play and they're saying you can get everything from AppDynamics and Thousand Eyes and all this stuff in one kind of massive subscription.

Are we seeing a wave of consolidation that Cisco's helping to drive, or, you know, what do you think they're Yeah. Well, it looks like, With apologies to our friend or aforementioned Tam, no company in the history of technology has been as successful as Cisco at rolling up other companies. Roll-ups, uh, from a stock market pers perspective, heck, from a short selling perspective, uh, roll-ups are, are disasters.

And, um, for all kinds of important reasons, not least of which, uh, quite often the different divisions have every reason to overstate what they're bringing to the table and, um, uh, and keep the, the plates spinning as they earn out their acquisition, then head for the exits, uh, and leaving things to crash, uh, when, as soon as they get paid out. Um, and we see there was, whenever there's a roll up, I mean, you know, uh, with some rare exceptions, we see this happen over and over and over again except for Cisco. They are so successful at m and a and bringing things in so that whatever their customers ask for, they'll do a big acquisition and bring those companies in.

Uh, but their expertise, uh, ultimately is an m and a and sales not innovation. Kimberly, to that point, and comparing to the Broadcom, VMware thing, right? So every time Cisco does buy something, you know what happens?

They do raise the price of that thing. I mean, it's just how they pay for the acquisitions. And yet with Broadcom does it, we scream, and when Cisco does it, everybody kind of says it's just business as usual.

So what's going on here? Uh, I'm not sure if I can really super comment on the pricing, because I don't watch that closely. But I think what we're talking about Cisco, Cisco and I, you're using the freight, the terminology rollup, which I would think this meaning is I'm adding more pieces to a core technology that I'm bringing to the market in saying I wanna leverage my standard sales effort going into that client to buy one more of the, of the items that I have.

That's not what Htan does. Htan buys companies that are on their, their older companies, they have got a long tail, they're very established within the companies that have bought them. And he's looking at saying, how do I bring profitability to that company?

And that is a different way of looking at the acquisition than what Cisco is. So I wouldn't compare those two. I, I, I like Chuck Robbins, uh, the CEO of Cisco quite a bit.

Um, he's a fun guy to be around. But I, I was listening to an entrepreneur, I, I I, my office space here, a lot of startups around here in, in the ferry building. And I was listening to a, a, a semiconductor startup with some guys who would had worked at Cisco and they were describing the golf shirt, guys who would come in and tell 'em about their sales efforts, the golf shirt guys being the, uh, a derisive term for probably anyone over the age of 35.

Um, and, uh, I think Cisco's loaded with a golf shirt, guys who can take whatever they're selling and raise the price and sell more of it. Um, but, uh, it's, it's a different kind of company. And I, I also think that F five, you, you, you used the phrase redhead in stepchild earlier, uh, uh, a Alan, I think that, um, F five being based in Seattle, um, uh, not the heart of Silicon Valley, and maybe not in the heart of anyone sort of thoughts about the s and p 500, but, um, it's a company that gets overlooked.

And I think that as they've made really big changes, um, no one's really noticed in part because of where they are. And, and, uh, they, they don't get that attention that they might get otherwise. All right.

But we did see Juniper Networks now as part of HPE, right? Yeah. Mm-Hmm.

Um, will F five make it as a standalone or will they get rolled up? They're making it just fine so far. Yeah.

I so ju I don't think Juniper ever made the switch to software as well as that fact that, but let's be clear about Cisco for a second. You know, Kimberly, you said about a roll up. What Cisco has is an incredible, probably the one of the top two in the World channel pipelines.

Mm-Hmm. Them and Microsoft. Chuck Robbins used to run the channel.

Absolutely. 1% more, you know, on a deal. Versus the, another reseller especially, They're up against the carrier.

Yes. And so what they have is they have this great pipeline, they could literally take chopped liver and stuff it down that pipeline. Um, it's, it's just that good a pipeline.

And, and so that to me is kind of the, the heart of Cisco's success through it all. They never lost that channel pipeline F five, I mean, Cisco's channel is the envy of the industry other than maybe Microsoft F five doesn't have that For many years. F five could not spell channel the reminder.

No, they Have one. No. Well, because they, they sold, they sold big honking boxes.

They sold direct most of the time. Yeah. I think F five still tries to differentiate on its technology more so than a Cisco does.

And when you talk about FF five, you know about engine X and of course big IP and web application firewalls and all the things that they do, um, Cisco, you think of just Cisco and the products that they've offered, they've acquired or whatever. So I, I think seems to me, like you said, Alan, the the shift to software is the big change that, that, uh, F five really has made successfully reliant on hardware and doesn't have the massive portfolio of things that a Cisco, you know, has to sell to everybody and everywhere. And they can argue, argue, that's of course a source of a lot of revenue.

True. But it also, it brings, it kind of defocus you on what you do and what should do well, and F five is really, really focused heavily on security and In that vein. And so, Mitch, if I could ask a question maybe to, Mitch is in line looking at the networking world.

There is an adjacency for the security piece of it. I mean, you know, I'm a data person. There is kind of an adjacency for security, but not of the level of, you know, black hat kind of security kind of things that are going on.

And I, what we're, what I was observing from a not really knowing Cisco that well, is that they're bringing in those adjacencies like the Splunk, which services a lot of security kind of issues and bringing that together. Because there, as you were saying, Alan, there is a sales motion kind of capability there that I can go in and have talk to somebody that's similar to there that would be making that acquisition. Is that accurate?

But, but, but Kimberly, interestingly, if you speak to the Cisco people, they don't view Splunk as a security play. They, they view it more with AppDynamics and almost observability and monitoring and, and and so forth. Send 'em The day of the week.

Well, yeah, it does. Yeah. I don't, I was gonna say they bought 'em as a security play.

I, I haven't heard 'em change that. But I, I think to your question, Kimberly, yes, it's hand in hand networking and security, but it also extends up the stack now, right? It's now about platforms.

It's about application delivery. Yeah. Application security, API security.

So it's kind of grown up the software stack. Mm-Hmm. And is no longer just in the realm of, uh, you know, network security, if you will.

So it gets them into whole, whole other areas of, you know, what's happening with IT and operations and infrastructure. But data security has become its own thing as well. Yeah.

Mm-Hmm. Right. There's clearly a, a, a data security.

You know, we, we used to have DLP was kind of data security, but really wasn't. But now we, we truly do have data security place going on out there anyway, I'm Not convinced that F five is standalone forever. There's a little company down in Texas called Dell that's been playing around in this network for Forever.

Case, forever. Forever. Well, they resold F fund, they were the only ones.

So, uh, you know, keep an eye. You heard it here first. Now we are not touting stocks.

We don't give any investment advice. And I put no faith into what Mike Ard says about that stuff. I have s**t in either and I Have no money in The stock market.

Just, just a little disclaimer. Anyway, let's take a break on text sh gang, and let's come back and talk about hoarding. I used.

I love that reality show to hoards, but we're talking about data hoarding now. Gluttony data, hoarding all the rest. We'll be back.

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All right, we're back. And we're talking about data hoarding, which has quietly been going on for some time now, but in the age of ai, suddenly everybody was pulling in all the data they can get and figuring out that maybe it'll be useful someday in the future. But, um, Kimberly, let's get started.

I'm, I, oh, in your impression is the data management maturity of these organizations. 'cause frankly, I look at it and I just shake my head and go, man, there's just data everywhere. A lot of it's duplicate and a lot of it is just fundamentally bad.

Um, well we've been talking about this kind of concept for a very long time, um, in terms of data, data management sort of thing. Um, and something like ILM, which was coined by I think storage tech way back when, never took off. Um, the question is, will data management now take off in terms of the amount of data that we have?

Um, companies have supported data forever and they don't delete data for a lot. A bunch of reasons. One, the users, end users don't want you to delete.

I mean, do you wanna delete your data off your computer? Do you go and clean your PC of data? No.

Um, and that's because you have a personal tie that you may wanna pull that out. Well, the same thing plays out with all the business units. They don't want you taking my data.

And not only that, they don't want you to take it and move it anywhere either. So even doing that tiering kind of things, they tend to resist. Um, possibly it will let you do that when you present them with, uh, you know, what the cost is for managing it.

Um, the other thing I'll talk about on the data hoarding piece of it, we've seen a resurge of tape. Um, not a lot of people understand that glacier and Blob are sitting on tape. Uh, that's how they're managing that.

There's been some big, big designs of tape library systems that are specifically for the public cloud to manage that. We've seen IBM come in, um, with a new brand new library that's focused directly to those cloud providers. And so they're all anticipating that this is gonna continue to, you know, grow and, um, thrive, if you will, in terms of data hoarding.

So yeah, there'll be some data management, but, uh, it will be driven more by, um, and I'll stop after this. It's gonna be driven by number one, uh, data security. I need to know, know where my children are and you know, when the CIO or CEO looks down and say what data is exposed?

So that's one place it's going to have. And the second place is ai. I need to be able to have the metadata and the data management in order to do the AI training that I'm gonna have to have.

And that's gonna be drilled by the governance of those AI models and being able to tell people about where that, those answers came from. I will speak on behalf of end users and then ask Mitch his opinion. 'cause he probably will shake his head.

But, um, it's just too damn hard to delete data. So that's why we don't do it. And you don't make it easy enough.

And I got a feeling that a lot of the platforms out there don't want me to delete data anyway 'cause they're gonna bill me for it somehow or other. And it's part of some grand conspiracy. But, um, what's your thought, man?

Why can't we just more easily delete data? 'cause otherwise people would do it if, I think it didn't take them twice as long to delete it as it does to create new data. Well, data is akin to the furniture in boxes and all kinds of things.

I have in store storage. I say the same thing in my basement, Uh, that, that are my kids, right? That have moved out and are all around.

But they might want that someday. That kitchen table could be helpful if they get a new House. I'm saving that for the grandkids, right?

And I don't, And if they can't use it, the grandkids can use it. It it's one of those, it it's one of those that we think we might need it at some point, or there's no, the other side of it is, no, it's no consequence to keeping it other than maybe some costs. But if it's of course on your pc, you just get a bigger drive or, you know, more efficient one.

I, I, I think what's what's changed about data is we used to think of it as it's in a central place. It's in a location, in a data center, in a database, in a set of, you know, managed places. Um, but in today's, when, not to make it sound like it was always really clean and pristine, it wasn't.

But in today's world, what's changed is everything amids data. And we want to keep all of that information, whether it's data come out or DevOps pipeline data at the edge from Kubernetes running out there and what the applications are doing there. Every place in the cloud is generating, and in our data centers is generating data.

And the question is, are we keeping it just to keep it or can we use it in some helpful way? It's been sucked into the, the observability platforms, uh, to be useful in that capacity. Mm-Hmm.

But I think that's, now we're asking the question of, well, how do I make take more, will AI let me take better advantage of this data? And I think to your point, Kimberly, are we suddenly gonna be disciplined about managing our data? Um, as soon as I move some of that furniture out of my basement, we probably will.

So you are paying the bills for some of this furniture here. And video is an issue that we talk about here, and it's costly to store. There's more data types than ever.

And we seem to wanna store it all. At what point does the bang break? It broke.

No, good question. You know, we're deleting this as soon as we're done with it, pretty much. But still, I mean, Mitchell, you're dead on, right?

Data hoarding is no different than any other kind of hoarding. And, you know, we downsized. Uh, my kids aren't moving back to the house.

I finally came to that realization and, um, I instilled a rule. If we haven't opened the box in two years or used something in two years, it's out, done. Throw it away, get rid of it, give it away, donate it.

That being said, I do have an extra storage unit because I have my oldest son's cradle that my wife is saving, saving for what? He gets married and his baby can have it and he won't let me. Anyway.

Yeah. I I just open those boxes every two to three years. 'cause it's like Christmas all over.

Well, Yeah, you figure out what's in there. As you get older, it gets better. You can, you can do it like every month and it's brand new 51st dates.

But, but the, the cost of data and, and, and I recognize right, there's, there's more expensive and cheaper places to store your data. And depending on, you know, how often you're gonna access that data as a big, you know, uh, uh, outcome and where you're gonna store it. But I think there's another aspect here that we haven't hit on it.

And that is, if I'm storing my data, like you're talking about the videos here, right? If I'm storing my data where they're publicly available, and just a quick plug, every tech strong video we've ever done is available on Techstrong do tv and there's probably, I don't know, Mitchell, is there 7,000, 8,000 videos over 8,000 now? Yeah, we were 8,085.

There's 8,000 videos there. You know, who loves that data? That AI loves that data, right?

Yeah. And You don't, it's the, it's the data. You don't remember the, you don't know if it's valuable.

Now, the cost of getting rid of it might be greater later than the cost of keeping it. Mm-Hmm. And, and you know, it's, that's AI is, is living proof of that.

Um, keeping stuff laying around. You never know if you might have a video that, uh, or an audio recording of some crazy real estate developer is gonna run for president who says he's grab some by the, you know, where And suddenly that piece of data has great value and context that it didn't have before. 'cause the world has changed And AI is using it and they're making money from it.

Yeah. And it was your data. So, so Corey will, at the end of this whole AI boom, will it be the data storage companies that make all the money?

Uh, well, the cost of data, the cost of data is, is, is, you know, similar to the performance and cost of Moore's Law, right? Where it gets cheaper and cheaper to keep stuff. But the ability to sort through it is, is of course the, you know, the, the, the, the amazing things that che, that, uh, generative AI does is because the, the language models were in fact so large, um, but their functionality was limited by the recency of some of the data and that they didn't have some of the initial, uh, um, uh, chat GPD and so on didn't have more recent data.

'cause they couldn't figure out how to put that into those large language models initially. And so the value of the data may be the most recent data, but the, uh, facility to go through that data, I bears out with larger and larger language models. Um, I also think we, I know we're gonna see some small language models emerge, uh, that have used the learnings of the vectorization of the large language models on smaller data sets, uh, that are, that are more tailored for, uh, individual uses.

You, if you were, if you were repairing a, a, a Ford engine, you might want to see all of the uh, uh, engine repair mo uh, manuals in the history of automobiles. But you don't really need to have Shakespeare as part of that model in order to figure out the answer on how to fix your truck. You may just wanna have all of the Ford engineer, all the Ford engine info and not Chevy or, you know, GM or, And, and then you can have that AI compute on the edge because the, the model is so much smaller.

And I think that that's, uh, some we're gonna see emerge in the, in the very near future. I know I ask my truck to be or not to be quite often. So, you know, little Shakespeare never.

Well, the real question is, does it answer you? Yes. Alright.

So, so question for question from Kimberly. Do we need to like, send people to some sort of therapy session to get them to kind of not hoard? Or is hoarding actually a good thing?

I mean, where do we kind of sit on this extreme as we kinda listen in this conversation? Well, as I said, the hoarding is really going back to the business unit people. The people that own the data, the it guys don't care as much.

They would just assume go it out. So if you're into therapy, you're gonna have to go to the, the marketing people, the finance people, the legal people, et cetera. And they tend to say no.

So we had a, we had a project that we did or initially started on, I know, five years ago, this is pre AI stuff, and the IT people came to us and saying that they needed to do something with the stuff that was on tape. They wanted to cycle it out and all that kind of stuff. This was a big insurance company and um, life insurance kind of thing.

That was old line, a hundred years old, whatever. So we started embarking on this with them about how to do this and what the strategy would be. And then it came back, lawyers said, don't touch this stuff.

Project was off. Huh? So if you're gonna do therapy, you're gonna be doing therapy with the buss, and I don't think they're gonna sign up for it.

Corey, you said something. No. Why?

Why do the lawyers? Well, do the lawyers not want it touched? Because if you, if you migrated it, you'd have to be responsible for it.

Their life insurance business. Think about the data that they need to keep and manage for a actuarial tables as well as for legal purposes. Oh, that's, it's the secret sauce.

It's everything. Sure. So that's reason we saying we're not gonna do that.

Now if you're other, so other companies, you're saying you got that seven year life that you wanna get rid of some of that financial stuff, right? This was a different situation, different company, different situation. I'm reminded of two stories if I can really quickly.

Um, uh, at at at at Credit Suisse when they were a leading banker in Silicon Valley. And, um, there was a big legal case about this when the, the head of the business unit, Frank Quatro was notified that, uh, the, they were, uh, being investigated by the SEC or something of that sort, uh, an email went out reminding everyone about the data policy saying Get rid of everything. That's our policy, don't forget it.

Mm-Hmm. And that, that email was the subject of the trial saying, did you tell everyone to destroy evidence? And these, and the argument back was, uh, not necessarily Frank was, was, uh, no, that's just our policy.

We wanted to remind everybody about it. The timing, however, was right after he was notified of this investigation. Sounds Like the other one, Uh, the other one's more, uh, more personal, but I might as well.

Um, uh, my ex-wife watched an Oprah episode that said, if you haven't used it in a year or two years, throw it away. A few months later, I'm going through the files looking for their tax forms and financial records and they're all gone. Oh God.

So she'd thrown 'em all away. That's not why she's your ex-wife though. No.

Well, years later during our divorce, her lawyers came to me and said, how can you prove you brought assets to the marriage? And I said, well, she threw 'em all away because of Oprah. The judge didn't hear, that's a new one.

So all the assets I brought to the divorce, uh, were considered joint property, uh, as a result of her throwing away all the records. So it goes back, mans policy. Is that causing Legal guys?

There you go. Absolutely. You know what you said, we don't get personal.

What's up Mitchell? Hey Alan. Um, one of thing is, I forgot to tell you, while you were on vacation, we started a new show called, called Data Hoarders.

Kimberly's gonna be hosting it. I was just thinking the same thing. What a great reality TV show.

This could be just kidding. Data hoarders. There You go.

Look, I found Cory's old tax forms. Yes. I found him out.

Think and finding guest for the show is gonna be hard. Oh, I, I don't think so. Anyway, wait, we're gonna, we're gonna date a hoarding right here.

Uh, we, uh, you know what though? Today is Wednesday and we have one of our special correspondent videos. It's our friend Ira Winkler of Cyber Fame in his, uh, you know, standalone Bite me segments and in, uh, IRA segment today.

It's why the CrowdStrike debacle reminds me of Y 2K. You know, IRA's never short of an opinion like right it right, wrong or indifferent. He always has his opinion.

His Ira ler on, uh, CrowdStrike debacle reminding him of Y 2K. Hi, this is Ira Winkler for this edition AB Bite Me. Now I am recording this about a week after the CrowdStrike debacle happened, and a lot of people would expect me to trash CrowdStrike.

No, I'm not gonna trash CrowdStrike. Um, it's not great. It's pretty bad.

But, um, I hate to say worse things have happened, but, and it's actually, I'm not really sure if they have happened. But let me talk about what my bigger concern is coming out of this, because fundamentally, I don't expect perfection on the part of any software developer. Let me say that.

Is this bad e it's not great, I'll put it that way. However, let me go back and say what's probably more critical, what's more critical are people who are now gonna second guess themselves for performing automatic updates. Fundamentally, yes, automatic updates can go wrong and they have gone wrong.

Not just with the CrowdStrike issue, but with other organizations in the past, whether it be Microsoft, whether it be other vendors where they didn't test it with all the software it's supposed to work with or whatever the case is. Yes, automatic updates can create problems, but you know what creates more problems than automatic updates? Not doing automatic updates.

Fundamentally, the biggest problem is that criminals are regularly exploiting unpatched software. And if all of a sudden people become afraid to patch their software because they think an automatic update's gonna create a problem, we are gonna suffer death by a thousand cuts. What happens in this case is, yes, this was bad and in some companies it was worse than others.

And I understand that I flew Delta, I love Delta, but they were really impacted by this. I don't know what went wrong there. That's gonna be the subject of their own hate congressional hearings and everything else.

That's a story. We gotta wait to find out more information about that. But fundamentally, people cannot be afraid to do automatic updates because of this one issue.

This one issue again, was bad, but if we don't have automatic updates, there are gonna be tens of thousands if not millions of systems hit on a regular basis. Automatic updates are fundamentally one of the most critical things an organization could do to support them. Now clearly, if you're in a large organization, you probably have the resources to test updates before you push them out.

And God bless you if you do. And fundamentally, if you have unlimited resources or you have a large number of resources, yes, it behooves you to do this. But unfortunately, the people who have that, those resources to test automatic updates proactively before they roll them out to people are not the majority of organizations.

Fundamentally, roughly, I'd say probably Fortune 200 and above may have this. So we're talking about what 1% if not less of the overall user population. We really gotta make sure that we don't lose sight of what's really important.

Yes, the software should have been better tested by the vendor before it was released, and that was acknowledged. But fundamentally, that's the smaller problem compared to what the automatic updates traditionally have solved because there's the, I remember Y 2K, everybody complained about Y 2K saying, look at all those resources we put in and nothing happened. The reason nothing happened, you morons, is because you put in all that work up front without people going ahead and looking at all software at the time and making sure it was fixed.

Lots and lots of stuff wouldn't happen. And the fact, nothing or nothing of significance happened was because of all the work done. Likewise, the reason that we're not seeing a lot of things, a lot of incidents is because of automatic updates and we can't lose sight of that.

So anyway, keep your automatic updates going. This is Ira Winkler for Bite Me. Gotta Love Ira Winkler.

He had some interesting comments on the Olympics, uh, opening ceremonies as well. They have good stuff. Anyway, that's gonna wrap up for Textron Gang today.

Corey, Kimberly, Mitch, thanks for joining us. Mike, it's always great to have you here. We'll be back tomorrow with another great Textron gang with some fresh gang members.

We also have a full day of Textron tv uh, uh, immediately following this. So stay tuned for that. There's some excellent, excellent content there.

And as we mentioned, you can catch all of these on Text Drunk TV or on our YouTube Text Drunk TV Channel. Um, until then though, this is Alan Shimmel for Text Strong. Be well be Safe.