Breaking Analysis with Dave Vellante

Originally published on May 21, 2022Last year we noted in a Breaking Analysis that the cloud ecosystem is innovating beyond the notion of multicloud. We’ve said for years that multicloud is really not a strategy but rather a symptom of multivendor. We used the term supercloud to describe an abstraction layer that resides above and across hyperscale infrastructure, connects on premises workloads and eventually stretches to the edge. Our premise is that supercloud goes beyond running services in native mode on each individual cloud. Rather supercloud hides the underlying primitives and APIs of the respective cloud vendors and creates a new connection layer across locations. Since our initial post, we’ve found many examples within the ecosystem of technology companies working on so-called supercloud in various forms. Including some examples that actually do not try to hide cloud primitives but rather are focused on creating a consistent experience for developers across the devsecops tool chain, while preserving access to low level cloud services. In this Breaking Analysis we share some recent examples of supercloud that we’ve uncovered. We also tap theCUBE network to access direct quotes about supercloud from the many CUBE guests we’ve recently had on the program. Here we test the concept’s technical and business feasibility. We’ll also post some recent ETR data to put into context some of the players we think are going after this opportunity and where they’re at in their supercloud buildout. 

Earnings season has shown a conflicting mix of signals for software companies. Most firms are expressing caution over macro headwinds citing a combination of Ukraine, inflation, interest rates, EMEA softness, currency, supply chain and general demand for technology. But MongoDB, along with a few other names appeared more sanguine, thanks to a beat in the recent quarter and a cautious but upbeat outlook for the near term. In this Breaking Analysis, ahead of MongoDB World 2022, we drill into the company’s business and what ETR survey data tells us in the context of overall demand and the patterns from other software companies.  

When Frank Slootman took ServiceNow public, many people undervalued the company, positioning it as just a better help desk tool. It turns out the firm actually had a massive TAM expansion opportunity in ITSM, HR, logistics, security, marketing and customer service management. NOW’s stock price followed the stellar execution under Slootman and CFO Mike Scarpelli’s leadership. When they took the reins at Snowflake, expectations were already set that they’d repeat the feat but this time, if anything, the company was overvalued out of the gate. It can be argued that most people didn’t really understand the market opportunity any better this time around. Other than that it was a bet on Slootman’s track record of execution…and data. Good bets; but folks really didn’t appreciate that Snowflake wasn’t just a better data warehouse. That it was building what the company calls a data cloud…and we’ve termed a data supercloud. In this Breaking Analysis and ahead of Snowflake Summit, we’ll do four things: 1) Review the recent narrative and concerns about Snowflake and its value; 2) Share survey data from ETR that will confirm almost precisely what the company’s CFO has been telling anyone who will listen; 3) Share our view of what Snowflake is building – i.e. trying to become the de facto standard data platform; and 4) Convey our expectations for the upcoming Snowflake Summit next week at Caesar’s Palace in Las Vegas.

In the words of  CUBE analyst and former CTO David Nicholson, Broadcom buys old cars. Not to restore them to their original beauty…nope…they buy classic cars to extract the platinum that’s inside the catalytic converter. Broadcom’s planned $61B acquisition of VMware will mark yet another new era for the virtualization leader, a mere seven months after finally getting spun out as a fully independent company by Dell. For VMware this means a dramatically different operating model, with financial performance and shareholder value creation as the dominant and perhaps sole agenda. For customers it will mean a more focused portfolio, less aspirational vision pitches and most certainly higher prices. In this Breaking Analysis we’ll share data, opinions and customer insights about this blockbuster deal and forecast the future of VMware, Broadcom and the broader ecosystem. 

Cybersecurity stocks have been sending mixed signals as of late…Mostly negative like much of tech. But some, such as Palo Alto Networks, despite a tough go of it recently, have held up better than most tech names. Others like CrowdStrike had been outperforming broader tech in March but then flipped in May. Okta’s performance was somewhat tracking along with CrowdStrike for most of the past several months but then the Okta hack changed the trajectory of that name. Zscaler has crossed the critical $1B ARR revenue milestone and sees a path to $5B, but the company’s stock fell sharply after its last earnings report and has been on a downtrend since last November…Meanwhile CyberArk’s recent beat and raise was encouraging and the stock acted well after its last report. Security remains the #1 initiative priority amongst IT organizations and the spending momentum for many high flying cyber names remains strong. So what gives in cybersecurity? In this Breaking Analysis we focus on security and will update you on the latest data from ETR to try and make sense out of the market and read into what this all means in both the near and long term for some of our favorite names in the sector.

In the pre-cloud era, hardware companies would run benchmarks showing how database and application performance ran best on their systems relative to competitors and previous generation boxes. They would make a big deal out of it and the independent software vendors would do a “golf clap” in the form of a joint press release. It was a game of leapfrog amongst hardware competitors that became pretty commonplace over the years. The Dell-Snowflake deal underscores that the value prop between hardware companies and ISVs is changing and has much more to do with distribution channels and the amount of data that lives on-prem in various storage platforms. For cloud-native ISVs like Snowflake, they are realizing that despite their cloud-only dogma, they have to grit their teeth and deal with on-premises data or risk getting shut out of evolving data architectures. In this Breaking Analysis we unpack what little is known about the Snowflake announcement from Dell Technologies World… and discuss the implications of a changing cloud ecosystem landscape. We’ll also share some new ETR data for cloud and database platforms that shows Snowflake has actually entered the earth’s orbit when it comes to spending momentum on its platform. 

Despite a mixed bag of earnings reports from tech companies, negative GDP growth this past quarter and rising inflation…the cloud continues its relentless expansion on the IT landscape. AWS, Microsoft and Alphabet have all reported earnings and, when you include Alibaba’s cloud in the mix, the big 4 hyperscalers are on track to generate $167B in revenue this year based on our projections. But as we’ve said many times the definition of cloud is expanding. And hybrid environments are becoming the norm at major organizations. We’re seeing the largest enterprise tech companies focus on solving for hybrid and every public cloud company now has a strategy to bring their environments closer to where customers’ workloads live – in data centers and the edge. Hello and welcome to this week’s Wikibon CUBE Insights, Powered by ETR. In this Breaking Analysis we’ll update you on our latest cloud projections and outlook. We’ll share the latest ETR data and some commentary on what’s happening in the “hybrid zone” of cloud.

The ascendancy of cloud and SaaS has shone new light on how organizations think about, pay for, and value hardware. Once-sought-after skills for practitioners with expertise in hardware troubleshooting, configuring ports, tuning storage arrays and maximizing server utilization have been superseded by demand for cloud architects, DevOps pros and developers with expertise in microservices, container app development and similar skills. Even a company like Dell, the largest hardware company in enterprise tech, touts that it has more software engineers than those working in hardware. It begs the question: Is hardware going the way of COBOL? Well, not likely — software has to run on something. But the labor and skills needed to deploy, troubleshoot and manage hardware infrastructure is shifting quite dramatically. At the same time we’ve seen the value flow also changing in hardware. Once a world dominated by x86 processors, value is flowing to alternatives like Nvidia and Arm-based designs. Moreover, other components like NICs, accelerators and storage controllers are becoming more advanced, integrated and increasingly important. The question is: Does it matter? If so, why does it matter and to whom? What does it mean to customers, workloads, OEMs and the broader society? In this Breaking Analysis we try to answer these questions and to do so we’ve organized a special CUBE Power Panel of industry analysts and experts to address the question: Does Hardware (Still) Matter?

The introduction and socialization of data mesh has caused practitioners, business technology executives and technologists to pause and ask some probing questions about the organization of their data teams, their data strategies, future investments and their current architectural approaches. Some in the technology community have embraced the concept, others have twisted the definition while still others remain oblivious to the momentum building around data mesh. We are in the early days of data mesh adoption. Organizations that have taken the plunge will tell you aligning stakeholders is a non-trivial effort. But one that is necessary to break through the limitations that monolithic data architectures and highly specialized teams have imposed over frustrated business and domain leaders. However, practical data mesh examples often lie in the eyes of the implementer and may not strictly adhere to the principles of data mesh. Part of the problem is the lack of open technologies and standards that can accelerate adoption and reduce friction.This is the topic of today’s Breaking Analysis where we investigate some of the key technology and architectural questions around data mesh. To do so, we welcome back the founder of data mesh and Director of Emerging Technologies at ThoughtWorks, Zhamak Dehghani. 

The recent security breach of an Okta third party supplier has been widely reported. The criticisms of Okta’s response have been harsh and the impact on Okta’s value has been obvious. Investors shaved about $6B off the company’s market cap during the week the hack was made public. We believe Okta’s claim that the customer technical impact was “near zero,” may be semantically correct. However, based on customer data, we feel Okta has a blind spot. There are customer ripple effects that require clear action, which are missed in Okta’s public statements. Okta’s product portfolio remains solid. It is a clear leader in the identity space. But in our view, one part of the long journey back to credibility requires Okta to fully understand and recognize the true scope of this breach on its customers. In this week’s Breaking Analysis we welcome our ETR colleague Erik Bradley to share new data from the community. In addition, we’ll analyze some of the statements made by Okta CEO Todd McKinnon in an interview with Emily Chang on Bloomberg to see how they align with what customers tell us.