Techstrong Gang – May 20, 2024

Hey, everyone. Happy Monday. I'm here to tell you infrastructure matters.

You're watching Textron Gang. Hey everyone, it's me, Alan Shimel, CEO founder here at Techron. We've got a really special tech, strong gang for you today.

We're going to introduce some new gang members, and we're doing a bit of a mashup. You know, as, as, as you probably have heard, Textron Gang is, is joining up with the Futurum Group, and we're so excited to have just a wow, a murderers row lineup of analysts to help to join us in, in, you know, producing content and getting information out to you about what we're doing today. We're gonna do something we haven't done before.

I hope it works. You'll be the judge. But we've invited the, uh, the group from the Infrastructure Matters podcast to mash up and join us on Deck Strong gang today, and do a joint session, if you will, a joint broadcast covering what Infrastructure matters, talks about, which is a lot of cloud and infrastructure, as well as the usual Textron gang, what's new in, in the world of tech today.

So, we're real excited, but we're doing this kind of without a net on a high wire. So forgive us if we maybe fall here and there, or hold on tight, but I think it's gonna be a lot of fun. Let me introduce you to our gang and the Infrastructure Matters gang today here as well.

First of all, he's actually been with us. He was on our tech strung gang show earlier, or last week, is the, I guess, one of the head dudes over at Infrastructure Matters. It's Steven Dickens.

Hi, Steven. Welcome. Hey, Alan.

I, I'm feeling like a gang member proper now. I, the bandana has not come through in the post yet. The the is coming.

It's coming. Just, you can't wear it on the street, Steve. I Know, I know.

So, just to get the listeners and viewers orientated here, infrastructure Matters is a podcast that Kimberly and Krista and I do every week. What are we up to now? Episode 41 is the latest one that's in the can.

So we've been doing this a while, and we cover everything from an infrastructure and security perspective, really for that C-I-O-C-T-O lens, whether that's cloud infrastructure on-prem infrastructure. Kimberly does a great job as every week bringing us what's going on in the world of storage and data. Krista brings a fantastic perspective.

She was at A RSA recently, but gives us that fantastic perspective, how we should be thinking about things like data protection and security. I tend to stumble through talking about the news around what's going on with cloud. So, I mean, Kimberly and Krista, anything you, you would add and sort of introduce yourselves there.

Uh, I think you got it covered, Steven, but it's been, um, actually it's been a lot of fun. Um, we kind of like cut it up a bit on the, on the podcast so it's not all serious and, and, and dry. And we try to bring some light to actually what's happening in the market with infrastructure, because, you know, our guys that do servers, storage, security, and cloud and all that kind of stuff, they really matter.

Yeah, For sure. Absolutely. So, Kimberly, by the way, it's Camberley Bates, Kimberly joins us.

I from Boulder or or near Boulder, Colorado. Boulder. Boulder.

Right now I'm sitting in California, so there you go. Oh, okay. She's not here.

Okay. But Kimberly, we, um, you know, this is your first time on the gang of our audience may not be familiar beyond doing this podcast. What else do you do over at futurum?

Over at Futurum? Yeah. Um, well, so beyond Casa, I'm an an analyst.

I'm considered an analyst. I run the data infrastructure group that is at, um, we work there. Um, very involved also with the Futurum lab at Futurum Labs, which is actually called now Signal six five.

That team, because that team, um, before they brought us on board and my, my company like yours, um, Alan, uh, we had a great lab that was doing data center, a lot of data center testing, et cetera, and Boulder, Colorado. So that team, I'm very, very much so involved with as well. So, anything to do with data, data pipeline now that's hyped up with ai.

Yes, we talk AI all the time. We forgot about that, Steven. Um, that's what I'm involved in.

We, we went five minutes without talking about ai. Oh, yeah. Oh my god.

Kimberly gets the, this prize. She's the first AI person this week. Five minutes in, we've done better.

But Kimberly, thank you for joining us and we look forward to having you continue participation here as a Textron gang member. Uh, Steven, you mentioned Krista Macomber. We've worked with Krista, actually, she was out in San Francisco at RSA with us, but she's home now in New Hampshire.

Mm-Hmm. Krista, welcome. And, and why don't you give people a little bit of your background as well.

Yeah, thanks all, and I'm very excited to be, uh, to be here today. So I came into future, I'm actually part of Kimberly's team, um, at the beginning part of 2023 through the acquisition of the Evaluator group. Um, I was our point on anything and everything, data protection.

Um, so that is still very near and dear to my heart. Um, and sort of, you know, what I would really consider my wheelhouse. But, um, lately I've really had this exciting opportunity to, um, kind of become our point on from a kind of a research advisory and an intelligence standpoint on anything and everything related to cybersecurity.

Um, so obviously as we've been talking about data security, um, is certainly kind of a big part of that. Um, but I'm really looking into other areas like identity and access management, um, even security of, you know, applications and kind of software code and really, um, kind of the security operations center. I know, um, a little preview.

One of our topics today is gonna be discussing the acquisition of, um, IBM QRadar by Palo Alto Networks. Um, so that's really kind of beginning to fall square in my wheelhouse. Um, and kind of last week, RSA, it was really great to meet with, um, a whole bunch of companies across the security spectrum.

Um, and I, as you mentioned, I kind of got to film a couple videos, um, for Textron. Very cool. Welcome, welcome to Textron, Greg Gang.

It's great to have you on. Thanks so much. So, last but not least joining us, he's all, he, he is in Denver, well, he is in Colorado today, our CTO and, uh, tech strong research principal analyst, Mitch Ashley.

Hey, Mitch. Welcome. Always good to be here.

I feel like, um, if we had, uh, Krista and Kimberly and Colorado, we'd be, we'd have a quorum. Well, I think it would be the first Colorado majority gang show, but it would be. Yeah, we don't s soon.

We don't soon. Soon. We'll do that.

Absolutely. One day. All right, guys, let's jump into it though.

Our first topic is, you know, we're mixing a little bit of politics and cloud. Uh, we're calling it the Cold Cloud War, right? And the, it's apropos.

I think P Putin was in China this week, meeting with Z and making all plans for world domination or what have you. But at the same time, you know, this, I forget entanglement or decoupling or whatever you wanna call that's going on with the Chinese economies and the US and western economies to some extent, is having a ripple effect into the cloud. Um, you've got folks who, you know, were moving to China as part of a global cloud, uh, infrastructure rate teams are, are thinking maybe it's time to get out while they're getting as good, or, I don't want to be here if things don't go well politically.

I, I hate when politics gets in the way of our technology, but it's a fact of life. Guys, thoughts on thoughts on this? Yeah, I mean, the world's bifurcating, whatever you think of that from a political perspective, it's a reality.

I think from a cloud perspective, Alibaba and Tencent are huge local providers. It, they certainly rank in the top 20 global IT companies. I think very different political system over there, very different rules and regulations.

So those local providers have really grown, not really grown that internationally, Alibaba and Tencent, but have certainly grown to capture that market locally. Then you look at what we would from the west consider the, maybe the five big hyperscalers, obviously the AWS, the Microsofts, the Googles, the OCI and and IBM, less so in China. So I think we're starting to see sovereign clouds, and that's our next topic, uh, that we're gonna cover.

But I think no surprises for me that local providers are capturing that market and maybe Western based providers are thinking twice about whether they continue to invest, You know, but let's, you know, call, call it what it is. It's a huge market. This isn't Luxembourg we're talking about, right?

This is China where, you know, you've got six or 700 million cell phones, you got almost a billion and a half people. It's a huge market. And I have two, two views on it.

Having been in China a a number of times myself, it's too big to fail, right? In terms of a market for the world to it, it can't be just for Chinese companies. It's not right.

Unless you're gonna say China can't compete on any foreign companies outside of China then, right? So there, there's gotta be, we, we can't con, you know, I'm, I'm a globalist, I guess by, by nature, but that's a huge market, number one. Number two, we all lose when the internet gets bifurcated and segregated.

You wanna have different political systems, you wanna do whatever you're doing great. But the internet works best. I think as a global marketplace, we, we, we can't have, or a global network, we can't have many internets all over the place that don't cut somehow work together.

I mean, we can, and we may very well will as a result of, of politics, but we all lose as a result. I think we're there already, Aren. I mean, we're there already.

The great firewall of China is up, you know? Yes You can. Yeah, but you know what, yes, the great firewall's up.

But when you go to China and you hang out with, and I have, we, we had partners in China, uh, DevOps Institute, they pay, you know, they're all on VPNs and whatever they're on, they, they don't pay much attention to that firewall. Um, and yes, they, they did have that great firewall of China, and they still do, but there was always the illusion that the, the Western cloud providers could somehow compete there the same way Tesla makes cars there the same way BMW does too. You know, if it's not a two-way street, should there be any street?

It, it can't just be a one-way street, I guess is what I'm saying. You know? So if I A perspective, Go ahead.

Let Krista go ahead. I'm, I'm sorry, Kimberly. It, Kimberly.

Kimberly. So if you take it for Perspe perspective of maybe the other technologies that are out there, we, we see cli people like NetApp having relationships with other parties to move products into, um, China. We see, um, you know, at one point in time, Huawei's had relationships with all kinds of other people to, you know, co co bring products in.

I mean, today, and I track wa we track Huawei because they're very dominant, not dominant, but they're very, very strong player in the, um, in Europe, in our clients over in Europe and where they're blocked out from really doing anything here in the United States. They, they're trying to, but they can't get in. They're not going to, because of the security issues that our u the US has about Huawei's all of their technologies coming in here.

So I think that there are other ways that people go into, it's usually with some sort of co-relation of some sort. Some of those have worked, some of them have not worked. Um, so I think there's, you know, they're looking for different ways to go around here, but at the same time, they're also still concerned about ip.

And that's a real big threat about having IP from the United States stolen by them. Um, they, they, they can be disrespectful on that, that front. Yeah, that's exactly the point I wanna tag on, um, because I was gonna mention, we, we've been ba battling this IP challenge, right?

There's theft of IP that's, that's gone on for decades now with China. It seems like IP plus the addition of ai, um, and investment in that maybe is one of the things that's the tipping point of saying, well, maybe we don't want, well want all of our Microsoft folks over there, or whatever folks from, uh, US kind of origin countries. So it seems like the war around AI is part of the deciding factor of pushing us apart as well.

Now these things tend to be pendulums, right? Yeah. We're, we're moving apart today.

Will we move back together to, to, um, Steven's Point and Alan, the dollar will bring us back together. 'cause the market's just too big there. Well, it's interesting that, I mean, my perspective, I think it's AI and data that access to data is crucial.

But Chris, I'm keen to get your perspective. You kind of track this from a cybersecurity per, I think a lot of this is, we've got nation states fighting with each other from a cybersecurity space. I know you are a kind of resident expert here.

What, what, I mean, I think that's gotta be part of the discussion, right? It really does. And I think that that's, um, probably one of the linchpins that's really kind of changing the conversation today in addition to what we've been discussing on the technology side, artificial intelligence and things like that.

Um, I mean, I remember I was at Huawei's Analyst Summit out in Shenzhen back in 2015, um, and was dealing with a lot of what we've been talking about. The great firewall could only really get on things like Google through my VPN and things of that nature. So it's something that has been, you know, in place for quite some time at this point.

But, um, you know, certainly as the nation state actors from a security perspective, um, you know, start to really kind of have this role and kind of increased tensions there. Um, I think that's one thing that is going to, you know, maybe cause you know, some new considerations around things like, you know, where are, is our cloud infrastructure and our data being hosted and things like that. So, I I I'm sorry, go ahead.

I think it's, I mean, for me, Christopher, it's really hard to get my head round. Would I be comfortable as a US company putting my infrastructure into a cloud provider who's then got strong choice and strong infrastructure deployments in China? I mean, whether you can firewall that off completely, whether they've got access to the network, you'd know this space better than I would.

Am I, am I thinking about that in the right way? Am those concerns Oh, absolutely, absolutely. I mean, we see that with the cloud in general, right?

There needs to be trust in terms of that cloud provider and kind of where the infrastructure and data are being hosted, how things are kind of segregated between tenants and things of that nature. We talk with practitioners all the time that say things like, you know, we can't go and move this application, this particular set of data to the cloud. Um, you know, because we need to kind of have that sovereign control over it and things like that.

So when you then add in what we've been talking about in terms of these, um, nation state actors and, you know, the political side of things as well, it, from my standpoint, I think it becomes just another, you know, potential roadblock. Mm-Hmm. So, I, I'm going to, I'm gonna be the contrary in here a little bit.

I think stealing of IP or theft of IP used to be a, the major inhibitor to doing things in China. And I, I think the firewall and, and nation state espionage cybersecurity activity is real. And, and we're not angels either, by the way, uh, here at the US or the west, let's be clear.

Um, but here's the real deal. We, you know, the, the term real politics, the real politics here is we are locked in a war for primacy of this world's economy. And the battlegrounds today are technology, ai, chip production software.

It's not a question of them copying what we got. We don't want to give them, allow them to have our latest chips that they can build on. We don't want to give them, if we can help it vidia GPUs or a Qualcomm chip so they could build a better phone than Apple designs and builds over there, right?

Or Google, or any of them. This is, this is flat out economic war, right? Within that, Alan, it's, they've, and I absolutely agree with what you're saying.

There's this, they have got the strength and the engineering and the smarts to do it. I mean, we Right. We have trained them in our colleges and we've shipped them back.

They're going back, right? And if you, and my, I, you know, I only have a small lens of this. I don't track all the technology, but what Huawei has done with their technology is very, very good, No Doubt.

And it's, it's solid. It's screaming stuff. And, and now they're talking About, and what's called what it is, Kimberly, it's a threat to us.

Yes, absolutely. It's so good that it's a threat to our primacy. And the latest thing they just announced was they're gonna get into the, you know, high bandwidth memory.

So that was the latest por portion that, you know, that's a key technology for ai, you know, so you expect them to do the same thing on the GPU side and the, and they're dev, they're, and they're developing some stuff on the DPU side, which is the data processing. So from my perspective on the infrastructure, they're going there and they're gonna build their own. Now, it may take them an extra year or two to get to as a good of a parity of what we develop, but it is a, it is a technology arms race, if you will.

Now, Kimberly, I think we've also done the same with security with cyber, right? We haven't talked about that. I would add that to your list, Alan, of that's been a threat, been a concern, uh, of course, not only with China, but also Russia and Eastern part of Europe, but really all over the, all over the world.

I think we're battling multiple fronts of this war, right? And cyber's important, not only just from hacking and getting access and controlling and bringing critical infrastructure down and things like that. I think it's also important for where cyber is built into the infrastructure and the software stack, uh, across what we operate, right?

So if we're running all a bunch of things in, in, uh, China controlled environments with people from that nation state, there's always a concern about what is the influence that's happening from a cyber perspective, governmental, et cetera, or maybe even competitive from that standpoint. So to me, that is as much about supremacy, because that can bring it all down if we aren't strong there. I, I'll add on the cyber front.

Don't forget North Korea, you know, 25% of North Korea's, GDP may in fact be coming from, uh, cybersecurity activities and ransomware and so forth. Mm-Hmm. And China kinda looks the other way there.

Well, it was 25% before they started selling all their arms to the Russians, right? God knows how much they're making on that, but certainly cyber's in there. Let me end this block though, on a positive note, guys, right?

I'm a big fan of Thomas Friedman and Flat Earth, and a hot, flat earth and all of that. The reason that great firewall exists is at the core of things, the Chinese Communist Party is afraid to let their people live like Americans. Because the fact of the matter is, people in a lot of this world wanna live like Americans.

Not that they wanna wrap themselves in red, white, and blue, or wear mag hats, right? That that's not necessarily living like an American, but to have the consumption, the lifestyle that Americans and most of the West right now know it now, enjoy. They're afraid to let their people do that, because they're not at the point where they can have 750 million middle class people living like Americans consuming like Americans.

And if they did, they're not gonna want to give that up once, once people have a taste of that, they don't like to give it up. You're seeing it now with the real estate market there starting to implode, right? And they're gonna have a real problem on their hands when these people, they don't want to go back to rice fields and, and, you know, mouse suits and stuff like this.

And so they've gotta keep it clamped down, but that's, once that genie's out of the bottle, you can't put it back. And that's gonna force them to do some sort of rep approach and some sort of reconciliation with the West and with the us assuming we had political leadership that wanted to do it as well, because humans are humans, whether they live in China or Washington, DC or Moscow, or Tel Aviv or, or London. Humans are humans, and they, they like to consume things.

They like a good life. So anyway, let's hope for the best and that this Cold War just stays cold and not hot, and we can't have one internet that rules the world. We're gonna take a break here on Text Drug Gang.

We'll be back in a minute. Hey, we're back here on Textron Gang. You know, our next block is gonna be dedicated to Sovereign Clouds, mad managed hosting, but really the whole sovereign cloud issue.

Camberley Bates, we're gonna, I'm gonna ask you, Kimberly, if you don't mind, kick it off. This is kind of an area in your wheelhouse. Yeah.

And I'm gonna kind of reflect back to a conversation I had, I believe it was three years ago, with a major financial institution and, um, chief strategist at that company. And I was chatting with him about cloud and where we were going with this and data sovereignty. And what the person was talking about is that they'd had a, had centralized all of their analysis and work, and, um, you know, they're an international company in terms of the financial work that they were doing.

They centralized all of the work, particularly because they wanna centralize a lot of the data security analysis and the web traffic, et cetera. And now what he was having to do is unwrap this and put, begin to put the data in the countries where they, where they, um, was existing, where they, they, what data was created because of anticipating what these countries were gonna start saying is that we want the data in our country, and you cannot expatriate that to another country. Um, or if you do, you have to mask all that data and bring it in.

So a brand new architecture. And then what he talked about was the difficulties of unraveling this. And it wasn't just the difficulties of the technology, that that was the easy piece of it, even though there was some real challenges of how to move the data around and, you know, all the problems we have.

But that movement, the bigger problem was the, was the staff and having the skills, et cetera, that they would have in each one of these places. So that was three, maybe four years ago that I had that conversation, um, that they were unraveling. And now, you know, a lot has happened in these last, you know, three, four years.

And so it is not, you know, there's no question that this is moving ahead. And if the cloud providers really wanna provide, um, the cloud, they can't just centralize, take economies of scale and have it, you know, just there in Berlin or there in uk. They're gonna have to put in every one of those little countries that they wanna exist in.

And it seems like the smaller the country, the more they're gonna lock down the data, the more they're gonna lock the, and protect the information that is over there. So, back to you, Alan, or maybe, actually, I'm gonna pass it over to Steve, because Steve's been really hyping on this quite a bit. So Yeah, I mean, I've been tracking this since January.

AWS has invested in Japan. Oracle's invested in Japan, Google's invested in Japan, IBM's invested in Canada. All of these are multi-billion dollar investments to put infrastructure into locations to go exactly.

Back to what you were just saying, data residency. Yes, we've got this, you know, it's in the cloud is no longer enough. The other piece I'm tracking really closely is a piece of regulation in Europe called dora, the Digital Operation Operational Resiliency Act.

Easy for me to say, um, and what this is doing is going that next level down. So particularly the UK financial Services regulator looked at this type of stuff closely and said, all of the banks in the UK are moving to the cloud, putting workloads in the cloud. What does that mean?

Well, they've got some of it in AWS, they've got some of it in Google, they've got some of it in Microsoft. Oh, that's great. They're all in multi-cloud environments.

That reduces the risk. When the regulator went looking, it was really in two data centers in London, and it was three cloud providers in and multiple hosting companies all in two data centers on the outskirts in London. So from a concentration risk, yes, they had a hybrid multi-cloud story.

Yes. Some of it's in an MSP, some of it's in Azure, some of it's in OCI, some of it's in a WS reality. It was in a couple of e Equinix data centers.

So the regulators start to look at this and they go, what happens if something goes wrong with one of those data centers? The UK banking sector is kind of operational risk, geo risk for the, for the UK economy. So I think what we're starting to see, where, what are we 18 years into the public cloud now we're starting to see this next evolution come along, which is we need to have data in particular countries.

It goes back to the geopolitical conversation we were having just before the break. The world is kind of bifurcating and, and isolating countries are saying this stuff is crucial, not only just to kind of how we run the country, but also crucial to the economy. Let's get some regulat and the regulators are catching up, and that's why we're seeing the cloud providers have to invest because they see the trajectory.

Where I think we're seeing a whole nother kinda layer of this too, Steven, which is, uh, what, what refer to as now as sovereign ai Mm-Hmm. Right. The infrastructure that you mentioned, the data earlier, you know, people, workforce, business, et cetera.

Just like data, where does our data live in the world and what do the sovereign, you know, between different, uh, nation states and, and regulatory bodies, uh, that want to control that AI is on the next front. It's already being, you know, discussed in those kinds of regulations. Um, and we will see more and more of that too.

So that's now a big factor because hardware and AI are tied together, um, not just software and data along with data as part of our AI model. So I think that's a big part of our conversation increasing. I just, I just see more and more investment on a local level.

I see, you know, what have I tracked? I think five or six different press releases so far this year. I'd just expect that trend to continue.

Mm-Hmm. Look, you know, the US is not, we started this, right? The whole remember, you know, GovCloud, right?

You couldn't do, you couldn't do fed business if you were storing it on just the regular cloud. They wanted their own cloud and, and there was sovereign, you know, issues. And, and I don't gov cloud's gotta be 10 years old now or more, right?

Mm-Hmm. We've had interim certifications. Yeah.

Well, FedRAMP up to go up to the GovCloud. Exactly. Right.

So, I mean, why, why should we be surprised that other countries want to do this too? Yeah. Well, and then it gets down to a even a more, you know, smaller space, which is what we're seeing right now with the AI cra AI craze and training.

And the enterprises really don't wanna move the data off because once they move to the cloud, there's concern about moving to cloud. So they're establishing, um, and this is why we're seeing the earnings coming out of HPE and, um, and Dell and probably IBM so strong. It's because they're establishing these, um, systems, the infrastructure systems in-house, um, that they own.

And, uh, because they're not trusting the sovereignty of their data moving into a cloud that it would not kind of leak into possibly somebody else's LLM and escape. So there's, there's a lot of protection that's going on in that space. So it's even getting more, you know, granular than just, Are we gonna go back to talking about repatriation again?

No, no, no, no, no, no. No. Repatriation today.

Alan, you, you're picking up a topic that's been bubbling on infrastructure matters. Isn't, now we Can tell I see that. I see that Last six months.

Clearly it's some rot red buttons. No. So let me ask you, do we call those private clouds anymore?

Is that, is that I think old, old man thing? No, it's private. Yeah.

Yeah. I mean, there's, so we just did a piece of research and we're talking about a AI chips, and one of the pieces, one of the sort of questions was how do you deploy this stuff? And it took me and a couple of the other analyst, about three or four meetings to work out all the various different deployment models.

Is it a private cloud? If it's in an Equinix data center or a serious one, or a, a digital realty data center? Is it private cloud?

If it's in your data center, what happens if who's managing it? Mm-Hmm. What happens if it's a consumption model, like a, a true scale or a apex or a GreenLake?

What happens if that Green Lake's in a Equinix data center? What happens if it's in the public cloud? What happens if it's a outpost that's in your data center?

But that's the control plane is connected. I think some of these, well, we came, we, we li it took us, as I say, about three or or four meetings to make sure we listed all the different deployment models. It's complicated like a sort of relationship status used to be on Facebook.

It's complicated. I think the lines of blurred and then of what is public, private, and hybrid, I think really, I just call it hybrid cloud, because if AWS will sell you an outpost that'll sit in your data center, we are very definitely at the point where the, it's kind of the lines of blur. AWS wouldn't mention hybrid for the first probably 15 years of their existence now selling out posts and a lot of them.

So the world's got complicated. Yeah, I, you know, I I I think another factor that we don't mention is, is, as, you know, having a influence here was, was the whole c supply chain thing. Mm-Hmm.

Right. I, I think a lesson from the Covid pandemic was, you gotta shorten, you know, it's the logistics stuff. You gotta shorten your supply chains, and there's something to be said for having the data center local Mm-Hmm.

Versus in a, in a foreign country or, you know, somewhere where you have less control or what have you. Um, and, and so I think that kind of maybe factors into here too. The question is though, I mean, these are not small deals.

These are not, oh, I'm putting a couple hundred grand into building, or $2 million in a building a data center. These are multi-billion dollar deals. And, and that may be fine for Japan.

Japan has, you know, what is it the third or fourth largest economy in the world? Probably, um, I don't know if it plays well for Guiana or, you know, or name a country maybe that doesn't have an African country or something. Doesn't Have.

What's interesting, Alan, you mentioned that I was out with the team at Oracle the other week, what they're doing with Alloy, so that Oracle's got Cloud Cloud Act customer, and they've taken that same sort of model to really make small deployments for Sovereign Cloud with Alloy. So I think exactly as you say, you know, if you wanna stand up an AWS region or you wanna stand up a, a Google region or a a Microsoft region, those are massive investments. Oracle's looking at Sovereign Cloud a little differently and going, we need to have a sovereign cloud in Azerbaijan.

But the market, there's not huge, what's the smallest footprint we can put that's still connected and still manageable, and they're doing some good work there. So I think through their cloud, a customer sort of connected data type, um, nexa scale type stuff, they're really thinking about sovereign cloud. We don't give OCI enough credit, I don't think when we talk about cloud providers.

But I think OCI is thinking about Sovereign Cloud in a really interesting way for me Exactly. To link to what you are saying. Well, I, I think there's another piece to the other piece, and I mentioned this before, it's not just the technology that's going on, it's the people.

Mm-Hmm. And, um, so those tools, so Alan, to your point, when you look at, you know, Giana or something like a small country like that, um, and I'm gonna build it up, is whether or not you're gonna have the economies of scale to build that up. And that economies of scale is both the technology as well as the people.

So then the other piece that comes really important is that global management systems that go around. So if I look at how I deploy my staff to function at here, you know, things like AIOps, AIOps kind of items become really important. You know, how I can manage it possibly from a remote, you know, knock of some sort that I have.

Um, and then what kind of people do I need to have on-Prem to be able to, um, troubleshoot, take care of those areas. So all those pieces have got to be addressed here when we talk about sovereignty. Mm-Hmm.

Fair. Absolutely. Hey, guys, if, if no one has anything else on the Sovereign Clouds issue, I want to take a quick break.

We've got a very interesting development going on in the world of security with IBM and Palo Alto. We're gonna come to you, crystal, when we come back to discuss it. Okay.

You're watching Textron Gang and Infrastructure matters. We'll be back in a moment. Hey, everyone.

We're back here on Textron Gang. You know, I've heard it said that cybersecurity makes for strange bedfellows. I don't know how strange this hookup is, but it seems that IBM and Palo Alto are getting kind of chummy.

Let's run over to Krista Montgomery here and, and get to Scoop. Krista, what do we got? Sure.

Yeah, Alan. So definitely some, um, some huge news, um, yesterday, not only for IBM and Palo Alto themselves, but really for the security market as a whole. And building on your comment regarding kind of strange bedfellows, you could certainly look at it a little bit from that perspective.

Um, so the news is that Palo Alto Networks is going to acquire QRadar, um, and all of the ips that's associated with it, which when you take a step back and look at it effectively from a software standpoint, is IBM's security operations center business. So it's their SIM tools, for example. Um, it's their EDR.

It is also, um, kind of their soar in their threat intelligence, um, as well. So, um, but really from my perspective, what it is, is it's an ongoing move that we've seen in the Security Operations Center where some of these legacy sim tools we're starting to encounter some challenges with them. Um, so security analysts are trying to scale their teams as much as they can across this threat landscape that's dynamic.

It's, that's dynamic, excuse me. Um, you know, it's, it's changing all the time. And so what they need is they need intelligence that is, um, really supported by analytics and artificial intelligence and really helps them to kind of pinpoint the most critical vulnerabilities and also really kind of accelerates their ability to respond to the vulnerabilities and also to kind of investigate and to, um, triage incidents when they do occur.

Um, so that's sort of one side of the coin. Um, and then, um, another side of the coin as well is being able to have visibility, um, beyond kind of just your traditional log analytics. So looking at, um, kind of your cloud environment, um, you know, looking more broadly across the network to get more comprehensive visibility.

Um, because again, these threats are evolving, um, in terms of kind of how attackers are, um, getting into the network. So I bring all this up because, um, these SIM tools are starting to experience, um, some competition from, you have your XDR tools, your so tools. These are kind of two of the key general camps that we're seeing, kind of adds some pressure from these SIM tools.

So really what this is, is this is a move from, um, again, Palo Alto, which does provide XDR Instore capabilities, and they're going to take the QRadar, um, you know, kind of assets. Um, and really what they're gonna do is they're gonna work to kind of migrate that customer base onto the Palo Alto tools. So again, it's kind of from my perspective, really a reflection on where the market is heading.

Mitchell, any thoughts? Yeah. Um, to add on to Krista's perspective there.

Yeah. You know, when we think about acquisition of companies and, and in these spaces, this is a product, a customer acquisition, a pro a customer base acquisition, right? That Chris is describing.

So it's buying the business in exchange. We'll do these other things for IBM, um, and we'll cooperate on AI kind of in the future, you know, future statement to operate each. I think those to sort of add on, I think there's two pieces to this.

For me, there's the, and Crystal, and I wrote a research note on this this week. There's the QRadar business moving into Palo Alto, but there's an other side to this alliance. IBM's gonna train a thousand people in its consulting organization.

That's probably gonna mean that IBM consulting becomes probably the best place to go if you want to do a Palo Alto implementation. Yeah. Also means I IBM's gonna standardize on Palo Alto internally.

Exactly. So they're gonna have eaten their own dog food when it, I hate that phrase, but I can't think of a better one. But they're gonna have got that expertise with doing a huge migration to PA Palo Alto.

And then to be able to talk about that from a consulting point of view. And then the final piece is that Palo Alto is gonna standardize on IBM's large language models for some of the stuff that Krista was talking about from an AI perspective. So I think the headline piece is that QRadar and the installed base of QRadar is gonna move to Palo Alto, but I think there's some goodness in this.

For IBM, one thing that wasn't mentioned was how much money's changing hands. IBM's gonna have a HashiCorp debt to pay down once that acquisition closes. I got chance to ask Roger Primo to run strategy for IBM the question, should we be looking at this transfer as a further clarification of IBM strategy around hybrid cloud and ai?

He was emphatic in his answer of yes, because I think IBM was kind of a big clearing security, but it was hard for them to fit it with their str strategic focus on hybrid cloud and ai. That distraction's gone away now for sure. Well, that's part of the two way of thinking about this as a buying the business, right?

Because Palo Alto is buying the business of o operationally, uh, IBM using Palo Alto products. So there's revenue in that from them. And then as you were mentioning about AI, that, uh, uh, Palo Alto is using the Watson large Lang language model.

Mm-Hmm. Um, for what we don't know yet. But there, there's a lot of back and forth here, so you can kind of see, it's almost like an operational deal.

In some ways. This was a bd, uh, deal, especially for, um, Palo Alto to have all those number of people trained on their products as well. So it, it's not your typical, let's sign a contract between our companies.

This is kind of a two way street with multiple mm-Hmm. No, It's a business developer's, uh, dream, dream deal. It is.

Yeah. I'd love that. Steven.

Is it IBM consulting or, or is NDL involved in this as well? So those guys have been separate companies now for Two, oh, I know, Two years and a quarter. I, I think think Kyra's got a good relationship with Palo Alto on their own, but this is definitely what scope the announcement is IBM consulting.

So, so let me just a little perspective here. I knew the QRadar guys before IBM built bought them, right? I was never a huge SIM fan arcs, but ArcSight and QRadar were the best of the sims.

And of course, HP Board ArcSight and IBM bought QRadar for the last however many years it's been 10 years, whatever. Uh, QRadar has been the core of IBM security and though IBM may not be known as the leading security provider, make no mistake, they're a major, major enterprise security provider. Cisco as well, right.

Cisco and IBM maybe two of the biggest security, though they're not pure play. Two of the biggest security players out there, if you're an IBM security person right now, your, your resumes are out on the street Because, well, I, I don't whether there's a transfer of talent gonna happen as well to Palo Alto. There might be some, but Pa, PA Palo Alto didn't have a stellar quarter, right?

They, they stock was, they got hammered last quarter. They didn't, and they, you know, I don't see them hiring a whole bunch of people here. So on that, yeah.

One thing I'm per personally pretty interested in is, um, so the IBMX four threat intelligence team is good, from my understanding, is gonna be going over to Palo Alto. Really? Right now.

Palo Alto has their own threat research team, the code 42 or whatever it is. Yep, yep. So it'll be interesting to see how those teams sort of integrate.

Um, especially where, I mean, I know at least from the IBM standpoint, that team has so much longstanding expertise. I know they're, um, the X-Force threat intelligence report that comes out every year for, what, 15 years now or something like that? Longer than that, Yeah.

Yeah. Become almost a defactor standard in terms of understanding how threats were moving and evolving. So that kind of jumped out to me as I'm really, that is Huge.

I, I didn't realize, realize force was going, so X-Force actually came from the ISS acquisition, right? In like 2002 or 2004, something like that. And it's been there ever since.

And it is, it was X-Force back when it was ISS even was the, the model for these threat research teams. So Alan, here, Here's my question is where's observability on in all this? Is this, uh, moving around the deck chairs of Sims, um, in the security world?

Because that is also being attacked by like the Splunk acquisition by Cisco, right? Taking things. There's sim and then there's observability.

At least we talk about it that way in the Non. So for me, does that mean Dynatrace is on the, on the market? I think an acquisition for Palo Alto doesn't, Uh, they've, somebody's gotta respond to Cisco's move.

So clearly it's not gonna be IBM, at least not. No. Look, IIBM seems to be divesting security, right?

As, as a, as a practice there. I'm just surprised they didn't sell it to HCL. No, just a little joke.

Little joke. I see, I see what you did. Little joke.

So they're, they're divesting security, but they're not divesting data security. Mm. Yeah.

That's a good, so I'm just gonna say that's good. From an infrastructure matters standpoint, you know, the, the Z is probably one of, is the most advanced system in the world. Um, they have led the effort on all the data security items in terms of their, their top line DS 8,000 and their flash system in terms of the delivery.

Um, they're working to harden up their, the rest of the, the, you know, the recoverability and all that kind of thing that's going on. But there, so this is, this is quite curious because a lot of that work came out of IBM research Yeah. And how those groups kind of mesh together.

I am not clear, maybe Ms. Krista has more understanding of that space, but there's, you know, there's two sides to this pieces of it that's going to be, and I'd be very curious to see what's going on with IBM research because that they've had a huge impact on button buttoning down things, um, in terms of the, the cybersecurity attacks. Yeah, It's a great point, Kimberly.

And, um, at this point, it's not clear, you know, kind of any delineations on the research side. Um, you know, aside from Kadi, what I mentioned regarding X-Force for threat intelligence. But what I will add is, you know, you kind of talk about, you know, the Z and you talk about everything that IBM is doing in terms of hardening their system.

Certainly we see that on the flash system as well, for example, but also the investment that they've made, for example, with Cohesity for IBM storage defender on more of the resiliency and the recovery side of things. So certainly far to from saying that IBM is exiting all of security, um, obviously that's certainly not the case. Um, they're still going to have those components in those plays.

What it appears to me is that they're kind of moving away from the soc away from the security operations center. You know, interestingly, Mitchell, you spoke about the Cisco move while we were at RSA, I had a quick chance to catch up, I forget her name right now, but she's the at t cybersecurity division got spun out with a new name and everything, and I think they took in some private money. Um, are we seeing the bloom off the roads in cybersecurity and these large enterprises that don't do cyber for a living or looking to kind of insulate, isolate away from it?

Steven, you're shaking your head. Yeah. I mean, Play, Yeah, that's, yeah.

I mean, Krista, I'll come to you after, 'cause I'm keen to get your perspective, but you're gonna see Palo Alto, you're gonna see CrowdStrike, you're gonna see Fortinet, these big players that are well funded, Cisco, you are gonna see these big platform plays. I think what we've seen, and Chris, I want to come to you. mm-hmm.

RSA is just hundreds and hundreds of small vendors. Oh yeah. Doing one thing really well, and it, and CISO teams just can't work with that many vendors.

I mean, what you, you were out there at RSA, what did, did you pick up the same? That's exactly what I was gonna say, Steven. You know, from a customer perspective, um, I mean, in a given enterprise, you're gonna have dozens of security tools that are in use, and it's just becoming practically impossible, right?

For security analysts and SOC teams to work with. So we're looking at trying to consolidate amongst vendors, but also to the point in the platform play the number of tools that they're working with within a given vendor. Um, so one company that I met with comes to mind is a company called Fort.

They've been around, I think they said, you know, over 20 years, um, even longer than that actually, I think if my memory serves me correctly. But they had sort of point plays across, you know, managed detection and response, for example. And their big announcement at RSA was, we now have a platform play where if you wanna buy piecemeal, you still can, but now we have a way to deliver to you a more comprehensive platform approach to address just, um, you know, the complexity of that tool chain.

I guys, we're, we're over time, we're gonna end up here in a second, but I, I'll tell you this, in 25 years in security, you know what I learned, r and d happens in those small companies, and they're there at RSA, they're, they're, they're flirt, you know, flirting their stuff as much for end users, customers as they are to the IBMs and Ciscos and, and big acquirers of the world, because that's where those large companies go to buy innovation. Fair point. Very Fair.

And that's where they come from. Anyway, guys, we're over time. I've gotta run into our, we're in Studio A here.

I gotta run into studio B and do another video. But man, what a great first time we've had here doing infrastructure matters, meet texture and gang. I feel like I've had chocolate with my peanut butter.

Um, Krister, Kimberly, Steven, thank you so much for joining us. Let's, we'll do this again soon, but we'll also have each of you on gang and other text, drunk tv, uh, activities going forward. Thanks a bunch, Mitchell.

Always good to have you on, my friend. It has been great to have that. It was, this was a great discussion.

We were a little bit all over the world. We went, you know, spanning the globe, as they say. Um, anyway, I hope you've enjoyed this.

We'll be back tomorrow with another Te Fresh Text Drunk Gang, immediately following this though, we've probably got another three or four hours of text Drunk TV for you to watch. So don't miss that. But until next time, this is Alan Shimel from Mitch Ashley, uh, Krista Macomber, Camberley Bates, and Steven Dickens, you've just watched.

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