Clicky

All is Well at Honeywell – The Six Five Webcast
by Daniel Newman | March 12, 2021

On this episode of The Six Five Webcast host Patrick Moorhead and Daniel Newman discuss the tech new stories that made headlines this week. The six handpicked topics for this week are:

  1. A recap of HPE GreenLake Day
  2. Honeywell Innovation Award and quantum computing update
  3. Oracle’s latest earnings report
  4. IBM Cloud Satellites announcement
  5. Cloudera’s Q4 earnings report
  6. Amazon’s Elastic File System expansion with One Zone

For a deeper diver into each topic, please click on the links above. Be sure to subscribe to The Six Five Webcast so you never miss an episode.

Watch the episode here:

Listen to the episode on your favorite streaming platform:

Disclaimer: The Six Five Insiders Webcast is for information and entertainment purposes only. Over the course of this podcast, we may talk about companies that are publicly traded and we may even reference that fact and their equity share price, but please do not take anything that we say as a recommendation about what you should do with your investment dollars. We are not investment advisors and we do not ask that you treat us as such.

Transcript:

Patrick Moorhead: Hi, this is Pat Moorhead with Moor Insights and Strategy, and we are here for another Six Five live show. I’m here with my awesome cohost and friend and partner in industry analyst crime, Daniel Newman. How you doing my friend?

Daniel Newman: Patrick Moorhead, I’m doing good. And welcome, of course, as he said to the Six Five podcast, webcast, live stream, however you’re consuming us. We don’t care. We just appreciate that you show up. And Pat, I’m thrilled. It’s Thursday, which is a little bit early in the week for us, but I have to say, there’s no better way to wrap the week than to talk about all of what’s going on in tech with you. I mean, how much fun do we have?

Patrick Moorhead: Yeah, I agree. We have a ton of fun. And for all you knew these out there, the Six Five, we cover six topics, five minutes each, sometimes seven or eight minutes each, but please bear with us. And we know you can read the news. We’ll put a little bit of news out there for context but really get into the analysis of that. One note, this is for educational and informational purposes only. Don’t use this for investment advice. That would be crazy. And as I say, which Daniel repeats when he’s the host, just do the opposite. Actually, don’t take what anything that we say to the streets. So, Daniel, let’s dive in.

First topic here, HPE had GreenLake Day, and brought out, I would say, four major announcements. They went GA in a couple a of their services, but most importantly, they brought out three new services across VMs, containers, and bare metal, giving users more options. And they updated GreenLake central with the increased capability for selling, billing, and capacity planning. But I would say the most important thing that they did here is they added GreenLake as an option for 100,000 of their partners out there. And this was truly a partner event. This wasn’t a product event out there. And I think this is good movement forward because you don’t want to throw something out to distribution unless, distribution and channel, unless you have perfected the offering. And while I don’t think that it necessarily has to be perfect, and I don’t think HP GreenLake is perfect, but they have a bevy of services.

And when they started off and they announced it years ago, there was one of these blocks. I think it was a VM. And you can see, you’ve got some lower level infrastructure as a service offerings, but you also have some higher level ones, like all the stuff they could do in big data, even SAP HANA and high-performance computing. And I will guess that we will also see carrier in here, as well. So, this wasn’t a product announcement, more of a channel event, but I think it’s a really good progress along the way.

As Daniel and I have both said on this show, and we’ve written, hybrid cloud is a reality, and I like to use the milestone of Andy Jassy getting on stage and introducing AWS outposts. And now pretty much the entire industry is focused on the same thing, which is a hybrid cloud, multi-cloud edge to core, if I can use a HPE’s terminology here, and the cloud classic folks or cloud native guys are attacking it one way, going from the public cloud in. And then the traditional infrastructure folks who started with on-prem infrastructure and then went to hybrid, and then are moving in the same direction. So, I finally feel like we’ve got some real competition here. At least we’re not debating hybrid cloud.

We are still debating multi-cloud, even though we all have these Kubernetes control planes that everybody has, there still is a lot of challenge related to security, networking, and having a data fabric where you can leverage all your fabric, regardless of where your data is, on-prem in the big data center, in the public cloud, on the edge, in the deep edge, in something maybe in the middle like a AWS local zone. So, hats off to HPE. In a way they, probably unfair to say, they created a segment, but Antonio Neary CEO, certainly, was the first person on stage to plant that poll to say, “Hybrid is the future,” and hybrid is the future.

Daniel Newman: Absolutely. I mean, there’s a lot of how we do it. There’s a little bit of an understanding as to why. I mean, we really do have very complex data environments. Data is driving architecture, and HPE definitely understood that. What we’re doing in the [inaudible] are somewhat flexible, it’s fluid. I mean, you have the opportunity to buy it all yourself. I mean, there’s virtualization. You can go with a VMware, or you can work with an IBM or Red Hat or an OpenShift. But HPE said, “Hey, we’re going to raise our hand and say we’ve got a massive global deployment of prem. We also understand people like how the cloud functions from the standpoint of OPEX, they like subscription, they like consumption. Let’s give them a set of tools that they can build on and have that experience that’s very cloud-esque but that is developed and designed from the ground up to start on prem.” Which, by the way, is where most enterprises’ IT today started. Very few born on cloud companies actually exist.

And so, there is a lot of flexibility in this, too. It doesn’t forbid people who are already on AWS, already on Google, or on Azure. In fact, it embraces those things. So, overall, I thought it was a positive set of announcements. This builds on their everything is a service. But I believe was it next year? I mean, it’s coming up right now. It was a three year plan that Antonio Neary announced. The services have grown more holistic, Pat, and complete, and I think the company’s on a good trajectory. I mean, this is the bet. This is the bet.

Patrick Moorhead: Yes. And if you are a classic infrastructure company and you don’t have a play, you don’t have a future. So, that was great additional insights, Daniel. Let’s move on to a different subject here, and that is a Honeywell. We’re going to talk some quantum updates. But before I dive into the quantum, Daniel, didn’t Honeywell win some big award out there?

Daniel Newman: Yeah. So, I guess all is well at Honeywell. And you and I have had the benefit of [crosstalk] the analyst council, working around the quantum business, but over time, we’ve had the opportunity to become a little bit more familiar with the broader Honeywell. And this is a company at impasse. Very successful, large company, but tends to be more well-understood as an industrial company. Now, this is a company that does engineering that impacts jet engines, this is a company that builds healthcare equipment that saves lives, and this is also a company that builds N95 masks in scale, and a lot of other more, what I call, commoditized type of things.

So, people don’t really know what to make of it, which is kind of funny, Pat, by the way, because we figured out with Amazon that it’s a tech company, even though it sells everything on the planet, but for some reason, with a Honeywell, it’s been a little harder to “get the analyst community and the global investment community to say, Hey, this is a tech company.” And part of that probably also comes down to the speed of growth. Right? Amazon growth is exponential. Honeywell’s has been more of a stair-step. It’s good, but it’s not mind blowing.

Okay. Sideshow to the whole ordeal, but worth noting because it really sets up what happened here. Fast Company, which is a pub that I really do respect, tends to be very high on journalistic integrity, doesn’t have a ton of low quality inputs, spends a lot of time when it does pump out things like this particular report, which is world’s most innovative company. And among enterprises that it ranked, Honeywell came in in the top five most innovative enterprises on the planet, and this is from over 463 companies, 29 different countries. And so, it was not only about resilience, but it was about innovation. And so, that kind of sets, to what I was talking about, that Honeywell is quickly evolving to be more of a tech company than really just a goods and industrials company, which is sometimes what it is referred to as.

And as you mentioned, I will let you talk about some of the new quantum notes, but the one thing is, is this company is deeply embedding itself in things like high-tech building management systems, it’s developing things like UV wands that can be used on airplanes that can be scanned over trays and seat backs to quickly allow for people to get on and off of planes and kill bacteria and virus before people board planes. It’s building solutions that can use machine vision to have cameras flashover people inside of a building to make sure, not only fevers, we’ve seen that, but what about the quality of the air, so that filtration can be improved in real time so that people are able to have a better experience inside those. This is going to matter coming back from COVID, you’re going to need buildings to be safe. And of course, the whole SAS platform built around Forge. Its Forge solution is being cloud-compliant in a lot of ways, and then, of course, with quantum where it’s building stimulation with Azure.

Patrick Moorhead: Yeah. A lot of kudos. It’s nice to be in company with Microsoft and Twilio when some people don’t consider you a tech company. And you talked a little bit about Forge, but the irony is that these folks have the industry-leading industrial EPM system out there. And unsurprisingly, they hired a bunch of ex-Oracle SAS folks to come and help build that. So, kind of cool because I think we can all agree that nobody has figured out industrial IOT yet, and there’s a lot of ways to go.

But hey, let’s jump in specifically to a big announcement that Honeywell made that Moor Insights and Strategy analyst Paul Smith Goodson wrote about. So, there was a couple of ways to measure performance, but there are really no benchmarks. So, the industry talks cubits, which is more like frequency in traditional compute, and then there’s this notion of quantum volume, which adds in things like cubit quality. And there’s only two companies, believe it or not, with enough guts… Oh, did I just say that? To come out and actually publish a quantum volume number. And this week, Honeywell introduced a quantum volume 512.

And we’re still at flexing around a lot of research and things like that, and nobody has really come in to the point where you would say, “Hey, I’m going to replace my traditional computer with a quantum computer.” We’re years away from that, but this is how you get there. I have personally seen the Honeywell H1 computer, or a version of it, and it is completely amazing. It’s near silent, more laser beams than Star Wars, but it’s something cool. Daniel, if you haven’t seen it yet, and I think you will, to check it out, it truly is incredible.

Daniel Newman: Yeah. The quantum discussion is evolving quickly. You get a lot of questions, “When are we going to see applications, real world applications, that are going to be applied?” Well, we’re starting to see that now through simulation. We recently heard about a partnership with Samsung where they’re using quantum to try to define ways to extend the life of batteries, which everybody is impacted by.

First it’s about what can be done, then it’s how can it be done faster? But I think the biggest thing for people that are just starting to pay attention to quantum is just remember, it’s going to be done in partnership with classical computing, not [crosstalk]. And so, you’ll hear more about this from us. It still is very scientific. It feels a little bit like going back to grad school when you’re learning about it and talking about it. But over time, that’s a lot how classical computing was. That’s how traditional node evolutions were, and now we talk about it like it’s a second language, but it wasn’t always that way.

Patrick Moorhead: Yeah. And it’s like the way we treat GPUs early on, where you can’t boot a GPU. Right? You use it as an accelerator. And when you’re writing an application, you have specific calls to that, or you’re using some kind of API or some type of IDE that abstracts that layer. But this is going to be the hallmark technology, the gift that keeps on giving. We’re going to be talking about this probably as long as you and I are in this business which, in a way, makes it exciting.

Daniel Newman: It is exciting.

Patrick Moorhead: Let’s get onto the next topic. This is Oracle earnings.

Daniel Newman: The company as a whole saw the stock sell off in a big way. Now, over the last 30 days, it had run up to its all time highs. In fact, heading right into earnings. Now, I’ve been tracking across tech earnings over the last few months, and we’re starting to see this trend of big tech getting a lot of momentum, buying on rumor, selling on news. Doesn’t matter if you made it, you’ve missed it, you were close, you blew it out. People are exiting. I saw it with Nvidia. We’ve seen it with Oracle. We’re seeing it with others. Making your number is not enough anymore to drive the stock up, but then again, you don’t always have to make it to get that run either.

Patrick Moorhead: My gosh, my favorite headlines have been recently, Daniel, where it’s like, “Company X Exceeds Expectations, Stock Goes Down.” It’s crazy.

Daniel Newman: And that’s what happened yesterday. I mean, somebody [inaudible] just slightly on revenue and came up ahead on earnings. And the guidance was consistent. It wasn’t, “Holy cow,” but they increased their dividend 33%. I think they approved a $40 billion buyback for stock in the next year. It was some massive number. I’ll have to look back to share. It was either 20 or 40, which are both big, but just to be clear, I don’t have that off the top of my head. But it was a huge buyback number. And of course, those are sort of artificial or synthetic ways to create resiliency in a stock price.

But the real news for the company was it’s having some success. Now, there’s going to be some success, but it’s getting lost a little bit inside of a bigger set of numbers. So, Oracle, as its true legacy business, its database business, its on-prem licensing business, services business, and that part of the business is all pretty flat, anywhere from a small loss to a growth of just a few percent. But it also makes up a huge chunk of the revenue. The company’s made this big bet, big pivot over to cloud. It’s cloud in two buckets, too. I’d say cloud in terms of infrastructure and platforms, and then cloud in terms of software as a service, which is it’s NetSuite and Fusion ERP solutions.

Its OCI business, the gen one was rough, the gen two is much better. This autonomous database is showing a lot of strength and resiliency. Its clouded customer, which is it’s Outposts. For those of you familiar with AWS, it’s their approach to the hybrid. Those are seeing 155 and 200% growth, respectively. But again, we don’t have any idea what that is of because that isn’t being disclosed right now. So, you’re hearing these huge growth trajectories in areas that are key to the company, but you’re not getting really great clarity as to where that’s coming from.

And on the other hand, you’re getting SAS growth. So, last week we talked about Salesforce. The company’s growing in the low 20s percentage, platform’s a little faster, legacy sales and service a little bit slower. Well, their Fusion ERP and their NetSuite, which is what competes in the SAS space with the likes of Salesforce… It’s a comprehensive suite, the CX suite, all of [inaudible]. They’re seeing growth in the 21% to 33% range. And I think this particular quarter was 24% for NetSuite ERP, 30% for Fusion ERP. In the cloud, SAS software. Company had a pretty long list of wins. In fact, go back and listen to the earnings call. you’ll get our introduction to this whole segment when I do that.

But a ton of wins for the company. Able to announce some real customer wins, everything, an ERP, HCM, gen two cloud, exit data, clouded customer. Very specific. Problem is 5% growth. 3% overall, 5% in the cloud segment. The company needs to up the transparency, Pat, is my big takeaway from this. It’s talking big growth, but people want to know what is that big growth from. Temporarily, it’s being propped up, 33% bigger div, offering a significant stock buyback, consistent but slow growth, but that ends up getting them compared to monolithic older tech companies. It doesn’t get them compared to hyper-growth SAS and cloud companies, which is where Larry and the team at Oracle want to play. However, they end up getting bucketed with the others because single digit growth gets you locked into that bucket. But overall, a pretty good quarter, encouraging. Buried in those numbers, Pat, is a better.

Patrick Moorhead: So, I know, Daniel, you said go listen to the podcast, but I just want to bring it out. Essentially, Larry Ellison spent 11 minutes talking about all the ERP customers he stole from SAP, and I don’t think he appreciated a comment the SAP CFO made out there about not losing any business. He was unaware of any business that was lost, and I’m not kidding you, I think it was 11 minutes… No, no, no, 15 minutes long of Larry Ellison going through a list of over 100 customers that he says he stole from SAP. So, I’ve never seen anything like it. And the only thing close were the old Jerry Sanders, founder of AMD, calls, that people would just show up just to see and listen to what Jerry would say. But fun stuff, Daniel. We have beaten this horse to death. Let’s move on to more cloud, because it’s all cloud, an IBM Satellite.

So, if you haven’t been paying attention to what Daniel I talk about when it comes to hybrid, we have always believed in the hybrid cloud, and we just got done saying a moment ago that pretty much everybody has headed that direction. Whether you’re public cloud first, hybrid second, or you were on-prem infrastructure and then hybrid, that’s where everybody’s going. And surprise, IBM is here, too, with IBM Satellite. And Satellite is essentially a control plane, the ability of using multi-cloud to manage workloads on any cloud, regardless of where it is. And IBM also has hardware, interestingly enough, Dell hardware, that you can have the same configuration that is in the IBM public cloud and have it on prem. Does it sound like Outposts? Yes, because it’s very, very similar. And each one of these satellites is connected by something called a cloud satellite link that provides the connection to the IBM control plane.

And then, as we’ve seen with other companies, they’re building out their catalog of applications. Right? Their catalog of capabilities. I flashed up what HP was doing out there, and IBM has their version as well. And one thing is, it’s funny, IBM is one of the last traditional vendors to get into this game, but listen, there are 100 innings, it’s still the second or third inning, that they are the last relevant person to deliver that. But I don’t think that’s some big black eye here. And oh, by the way, a plug for my blog on Forbes if you want to read more. We’ve had 18,000 people view it so far. Go give it a look.

Daniel Newman: Yeah. I would say go be 18,001. This was a great rundown, Pat. I hope you don’t let my compliment go to your head. Next time, you’ll just be like, “You suck,” and I’ll be like, “All right, that’s fine.”

Patrick Moorhead: No, this is good. No, I like when you get passionate. We kind of do that to each other. We get excited about a topic and just like hoover up every last ounce of insights out there.

Daniel Newman: I spent a lot of time on Oracle doing the squawk alley earlier, and I just got that… Numbers all run off in my head. But this Satellite thing, I just want to make one quick comment. IBM is doing some really smart things here, and IBM is being very considerate of the broader services required for true hybrid multi-deployment. The company is owning up to the fact that IBM cloud is likely not going to be the number one destination for a lot of workloads, and that was a big part of the Red Hat acquisition, was coming to understand playing hybrid is the game the company wants to play. Having said that, the challenge I see for IBM going forward is the satellites requires companies to run its cloud. Basically, to get the benefit, you really want to be using IBM’s cloud control plane. That’s what Satellite benefits.

And it does not care if your workloads are in AWS, it does not care if you’re an Azure, but that is going to be both the challenge and opportunity. So, IBM could see scale, it could definitely help OpenShift grow. The services are comprehensive. The things like machine learning and Kubernetes and other critical services that people are looking for have been developed without any customization. They’re going to be able to plug it through the cloud packs that are being offered and developed by IBM. But it is going to be a challenge. You are going to have to get people to migrate off of VMware, to migrate off of AWS, to migrate off Azure, and that is the challenge, that as an analyst is what I’m looking to hear in future earnings calls, in future briefings, is can IBM show big wins with Satellite getting customers that didn’t start on IBM to move to IBM Satellite as they scale their multi-cloud deployments?

Patrick Moorhead: Good point Daniel. One final thing I wanted to mention is IBM does have an advantage here. It has its own public cloud. And whether you hate it or love it, it does, just like Oracle, and I do think that is an advantage from a simplicity point of view. And yeah, they’ll connect to AWS, GCP, and Azure, but they have their own public cloud, and I think that’s important. I also think that IBM will, I believe, they are competitive around workloads and industries that need the highest level of security and have the highest degree of regulatory scrutiny. So, let’s move on to Cloudera earnings. More cloud. That’s all we’ve talked about here is cloud, cloud, cloud. We’ve got more cloud.

Daniel Newman: Doesn’t it all eventually end up in the cloud?

Patrick Moorhead: Pretty much. And then what the heck are we going to talk about?

Daniel Newman: The mainframe ends up in the cloud. It all ends up in the cloud. I mean the mobile, we do something on our device, where does it end up? In the cloud.

Patrick Moorhead: And by the way, the cloud can be on the edge. The cloud can be anywhere now.

Daniel Newman: I’m putting my hat on being the numbers guy. Let me have an old man, financial guy sip a coffee here, and I’m going to start talking about it.

Patrick Moorhead: You’re a heck of a lot more interesting to folks I watch on TV, who… By the way, plug for Daniel, he was on CNBC today talking about Oracle learnings. We tried to get the video, but we just ran out of time. Sorry.

Daniel Newman: Yeah. We’ll play it for everybody that hangs on the line at the end. But anyway… If you’re listening and you didn’t see my face, you’ll know I was joking. So, Cloudera also had earnings yesterday, and Cloudera, it’s quieter, it doesn’t always draw the same media attention, but it is a really important company. Those are you familiar with Hadoop, Cloudera and Hortonworks, two of the originals, really all about prem based, big data workloads, and open source. And they’re like everyone else in the process of taking all that data and migrating it through hybrid integrations and infrastructure to clouds like AWS and Azure. [inaudible] did well, showed a growth of its subscription revenue of about 14% to 207 million and had about 226 million overall, about 7% growth. So in the big data space and in the size category, the growth numbers were good, not great. Nobody’s going to jump for seven to 17%. It’s an encouraging amount of growth for this company.

Now, a couple of things that I really have been paying attention to have been, one is this company, and I talked about this with like Splunk a few weeks ago, paying attention to the ARR. So, this is going from a perpetual type of licensing and workload size agreements to now going to subscriptions. Companies trying to grow with a number of $100,000 customers that it works with. It’s trying to grow the million dollar customers that it’s gaining. Sounds a little bit like Zoom, by the way. It’s seeing double digit growth year-over-year on its annualized recurring. It’s seeing a double digit percentage of customers moving from legacy cloud era to its new CDP, which is the Cloudera data platform, not customer data platform, because we just like to keep everybody confused.

You saw increases in margin, you saw, by the way, a company doing its own buybacks. Its seeing that it’s CDP database is now integrating cleanly with Amazon web and Azure, which is super important, and you’re even seeing the company partnering with the likes of Nvidia to do process acceleration on large open-source data workloads. So, that was a couple of the things that happened in the quarter. Going into next year, because this was the end of the company’s year, was pretty conservative on year-over-year growth projections, which part of the reason this company also saw a pretty stark sell off inti the, even though it hit its earnings and hit its revenue, was you’re only talking about growth projection somewhere in the four to 7% for next year. That number, people are going to want to see grow it faster.

For the only reason is this, is that they’re in an area where every major hyperscale cloud players building solutions to try to either augment or displace. That’s the reality. Cloudera, for a long time, from an open-source standpoint, along with Hortonworks, had a marketable advantage. It was doing something others didn’t do. It was based on Hadoop, which was, sort of a standard, but you’re seeing new languages. You’re seeing new database solutions. You’re seeing everything from Google big query to Redshift, to Synapse and Azure. The big cloud players are competing, Pat, and then this is going to be Cloudera’s challenge if you want to be able to compete. And then, of course, you’ve got the snowflakes and you’ve got the companies coming up on pure SAS and cloud that are doing competitive data platforms. Overall, I’d say it was good. It was good.

I’ve been encouraged, the leadership team over there, Bob Bearden, is a very passionate guy, he’s got a great successful track record. He is growing the year. Hasn’t been easy. It isn’t a pure cloud solution, so that meant growth would be harder in 2020. What I’m hoping for, and I’ll leave it here, as I sucked all the oxygen on this one too, is that the growth comes in better. I say it needs to be 10% or more. That’s what I’d like to see, and I think that’s what the street’s going to want to see, as well.

Patrick Moorhead: Yeah. Even though they’re in a transition of moving to cloud, a lot of their install is on-prem, and like you said, on-prem software solutions had a really difficult time, but I was really happy to see that 15% of their customer base has gone to CDP. And the core value proposition with the company, I think, is really good. I think that they have done a good job so far getting out the message about them being a hybrid cloud solution. And sometimes that just takes time. But if you don’t want to get five different vendors for everything you do for your data, whether it’s ingest, all the way to data warehousing, Cloudera is a really good solution, and they have a tremendous amount of data under management all ready, and that thing called data gravity. Even Andy Jassy said 80% of workloads are still on-prem and 96% of the spend is on-prem. And sure, there’s a tremendous amount of native cloud, but Cloudera has a really unique opportunity out there.

Daniel Newman: By the way, three trillion or so is the whole cloud opportunity when you go edge to core with infrastructure, and I think it’s like 129 billion is the IaaS opportunity. And again, I don’t know if these years align, don’t quote me [inaudible] and that’s not data to use to buy any stock. I want to be clear about that. But my point is, you’re talking about like 300 times, Pat.

Patrick Moorhead: Yeah. It’s crazy. And it’s funny, I never want people to ever think that I’m a cloud denier because I’m not. I think all you and I are saying is that there’s room for more, and the cloud now is everywhere. I mean, even AWS is saying that. Hey, more cloud, because we do need more cloud. Let’s finish this up with an Amazon AWS announcement called EFS One Zone. There’s a lot of different ways you can store stuff inside of AWS, and one of them is the elastic file system. Sure, you can dump a bunch of data out there, but it doesn’t have a file system, and you need to set up the file system and it’s a whole lot of work. Elastic file system is really focused on developers out there, and the value prop is simple. It’s simple and reliable. You don’t even need to get your IT folks engaged necessarily. It’s 99.99, does auto backups for you, high concurrent rates, 10,000.

But let me get to the meat of the presentation. They brought out a new option that is called EFS One Zone, and One Zone is 47% lower in cost than standard EFS storage classes, and these are for workloads that don’t necessarily require the durability that the standard cases is. So, you’re going from eight cents per gigabyte per month to, yes, believe it or not, 4.3 cents per gigabytes per month. By the way I cracked up, but when I saw that, I’ll admit it. But hey, every 10th of a cent matters. And these are use cases like development, data pipelines, like simulations, analytics, media transcoding, and even secondary data like backups and replicas and data. But just when you think Amazon has brought out, Amazon AWS, has brought out everything that you can even imagine, they bring out something different, something that’s not necessarily a part of an AZ or you don’t need it to be part of an AZ, and I think this makes them a lot more cost competitive with some of the other players here.

Daniel Newman: Yeah. Absolutely, Pat. I mean, look, the innovation continues to pour out of AWS. We talked about a lot of other cloud companies, but this is the gold standard. And it might hurt some feelings to say that, but from the onset of the product, we laugh because when we talk about how cloud is originally accounted for IaaS only, that was because that’s what Andy and AWS built. And then it determined all these other things that could be served up as it continued to scale the business. It’s cutting across everything from database, from edge, for telcos, for data visualization, for moving into places like software, AI acceleration. There’s not a lot more for me to wrap on about this particular announcement, but you really can’t have a cloud-induced episode and not [inaudible] the fact that Amazon is… They’re gold standard right now. It is the gold standard. There are other very compelling offerings.

Patrick Moorhead: Yeah. The irony of this, if you look at when AWS was formed, their first product was S3 and then EC2 was after it, and everybody was like, “Wait a second. You get no options here in terms of like VM size.” And then everybody said, “Oh, that’s to get costs low, and that’s the scale.” And that was the truth.

But now, AWS has a multitude of options for every type of enterprise, and in reality, that’s what enterprises want. The on-prem folks are an endless list of options, which makes them a little bit more expensive, but I find it ironic now that AWS is in a very similar place right now where they have all these different striations of compute. Networking, storage, and so many different flavors of that. And I love that they pulled that out of their hat, and I don’t think that they’re going to stop. And the reason they can afford to do that, Daniel, is because they have scale. You cannot have that many options if you have scales, because if you believe in availability zones, it’s like you’re just not going to offer that in one or two of your data centers in an AZ, you got to take that sucker into 36 AZs. Right? And that gets really, really expensive.

So, big cloud show, plus Honeywell, Daniel, it’s great to see you, and I cannot wait until you visit in a couple of weeks. I’ve had COVID. I will be COVID free for at least another two months, and I cannot wait to see you break some bread with you. And gosh, maybe we even do a Six Five live.

Daniel Newman: Who knows? Who knows what’s possible? You don’t see me eating any bread though. I’m keto, six months long and strong, loving it, feeling great, energetic. That’s probably why I got all this energy. But yeah, everybody out there, thanks a lot for tuning in. All is well at Honeywell, HPE, Oracle, IBM, Cloudera, and AWS. Hit that subscribe button. Join us. Follow Pat. Follow me. Follow us both. I really do not care. Just want you to listen and tune into the show. Share with your friends. Join us on YouTube. Provide us comments. Hit us up on Twitter. We are very approachable people. I respond to almost everybody that I like. Anyway, for this episode of the Six Five, though, I got to say goodbye. For me, for Patrick, for the show. We’ll see you later. Turn it off.

Patrick Moorhead: Bye, everybody.

 

Daniel Newman