C2C Fortnightly News: What Do We Do With All This Money?! - NC2C004

Chris Miles: 0:00

There's just like you know, it's like 12 year olds making YouTube videos. Like this week on fortnight week, we Do the talk like four year olds. Now, dude, that's the thing that's in now. Bro. Yeah, I'm gonna talk. Welcome to the cables to clouds podcast. Cloud adoption is on the rise and many network infrastructure Professionals are being asked to adopt a hybrid approach as individuals who have already started this journey. We would like to empower those professionals with the tools and the knowledge to bridge the gap.

Tim McConnaughy: 0:44

Welcome back to the cables, to clouds. Fortnightly news the only news out there that is not about the popular video game fortnight, only one. I am your host this week Tim Conagé at Juan Gomez on Twitter. With me, of course, as always, is our my co-hosts, chris Miles at BGP main and Alex Perkins at bumps in the wire. So this, the past two weeks, definitely a lot has happened. I don't want to waste a lot of time, I just want to get right into it, because we got a lot. We got a lot to cover. So, chris, you want to kick us off sure.

Chris Miles: 1:19

So, first up, we have a couple articles here, from None of them VMware, which is now obviously everyone knows hot topic. Yeah, yeah, company now owned by Broadcom. So we have this article here talking about how Broadcom and Google have announced a License portability option for VMware cloud foundation on Google cloud VMware engine. Yeah, that's a mouthful.

Tim McConnaughy: 1:45

Oh my god.

Chris Miles: 1:47

Yeah, but so VMware cloud foundation to me at least, it just seems like that's the generic term for running VMware on a particular CSP, so there's a flavor of it that runs on AWS, azure, gcp, and they've talked, they've released this article talking about license portability For the Google cloud option. For that Not a huge surprise, I mean. I think that's that's all fine and dandy. One thing that I really wanted to pull out about this is there's a quote in here from a general manager for the VMware cloud foundation division.

Chris Miles: 2:22

Vmware about Broadcom is adding new levels of flexibility, investment protection and lower TCO for VMware cloud customers, vmware cloud foundation customers with support for license portability, and I just think that's very rich, given the reports we're seeing lately on on Twitter and things alike, where we're seeing people you know Get the renewal bills from Broadcom and it's like, oh, we jump from 8 million to a hundred million, like just astronomical Numbers here, where you know Broadcom is just hiking things up. That there's. It's scorched earth man. It's like they do not give a shit, kind of what people expected. I feel like people you mentioned this was coming. I just I didn't see it being this bad, but yeah, I wanted to quickly touch on that. I don't know if you guys want to provide some Some, some more firepower towards broadcom or not. Yes, we do.

Tim McConnaughy: 3:12

VMware brought to you by curls Jr. I Think of idiocracy when you said that. Man, it's the very first thing I thought of when you were like VMware by Broadcom. I just, I love that. That now needs to go in all of the press releases by Broadcom.

Chris Miles: 3:28

Welcome to Broadcom, we love you. Welcome to Broadcom, we love you.

Tim McConnaughy: 3:32

What do you think? Alex, I know you got some thoughts on this one.

Alex Perkins: 3:35

Yeah, I mean I some of the reports I've read are it seems like for smaller companies it's something like four times the TCO of their licensing and for some larger companies it's like ten times. So that quote about the lower TCO is just like where is there any data to back this up? Because it sure doesn't seem like it and I have to call this out and I'm sorry I don't know. This was in the packet pushers newsletter. They always have like a you know like a funny meme at the end. The one yesterday was perfect because it was. It's like basically someone talking about like what am I gonna do with all this money that I have? I just have so much money. And then it switches to executive and he's like so anyway, that's how I see our target audience.

Tim McConnaughy: 4:20

Yeah, that's our target, that's our ideal customer profile right there.

Alex Perkins: 4:24

Oh, and real quick, chris. So I think the VMware cloud foundation, or, like I think they just call it, vcf, that is the suite of overall tools. It's not just for the offering on the CSP, it's also what they call it when it's on-prem as well.

Tim McConnaughy: 4:38

So it's like total private cloud yeah exactly.

Chris Miles: 4:42

Yeah, that's true. There's an emphasis on hybrid cloud there, which obviously you're probably running it on-prem, which is why you're going to run it in the cloud in the first place the only reason to do it.

Chris Miles: 4:52

Yeah, we had a riff about this, whereas I wasn't fully seeing the benefit of running VMware on cloud in the first place, because it seems like an abstraction on top of an abstraction, nested virtualization, things like that. But I think there is probably some merit to the portability, the familiarity, especially in these multi-cloud environments, which we obviously preach about quite a bit. But the Broadcom is really making this look shittier and shittier by the moment. I don't know why people would opt into this at any, especially at this point, because it seems like the licensing that they're coming up with is like look, if you're whole hog in VMware and you're buying everything, then you're good, You're probably coming out a little bit close. But if you're just doing this kind of like bit and piece, just buying exactly what you need, which I would say most of the customers are doing it's like no, to screw you. That's where these, these high multipliers are coming in for the renewals and things like that. It's just nuts.

Alex Perkins: 5:53

Yeah, I think you were touching on the idea is great, I think, having a common overlay platform across on-prem and all the different clouds it's a great idea. I feel like we've yet to see a company that's really doing it well, and that's the problem with all these solutions is this one has just gone off the rails.

Chris Miles: 6:15

I don't know. And on the heels of that, one other thing we included in here they have finally announced I think we all knew it was coming, but they finally announced the end of the free vSphere hypervisor ESXIs. That everyone's probably familiar with I think we've all been laughing with it for years and years and that's an end of an era, man. I guess Broadcom's just like fuck off, find a different way to do it or pay us for it. But yeah, it's sad to see it go.

Tim McConnaughy: 6:46

And, as we just covered, of course, your average person's labbing is not going to be able to fork over any kind of money to actually make that happen, right? Not that it's going to make any sense. I feel like Broadcom is very much focusing on the top 5% of customers spending the most money because they just don't administratively see the value in dealing with smaller customers from just taking care of them perspective. So it falls right in line with that right. So not surprised, but it is sad to see.

Alex Perkins: 7:21

Yeah, I mean, I've read a lot of articles and blogs on this and I think there was even a thread on Twitter that mentioned one of the guys who was kind of instrumental in opening up this model and allowing people to use it for free and just how that led to such wide adoption. Right, If you have this in your home lab, of course you're going to use it at work or you're going to recommend it because you're already familiar.

Alex Perkins: 7:45

Right, absolutely so. How are people going to get recommended this in the future? No one knew is going to want to take this over. When you got other alternatives, what Proxmox and Tanix, probably sitting pretty right now.

Chris Miles: 8:01

Their eyes are just lit up, bro. They got dollar signs and whether eyes should be right, yeah, but I mean that's to your point, Alex. That's a great point. This has been the free tool for people to learn virtualization for years on end.

Alex Perkins: 8:14

That's the first thing you're recommended, and if we've already talked about.

Chris Miles: 8:17

Like the only reason that we really see customers using VMware on top of CSPs is because of the familiarity piece. If you cut that out, where does that?

Tim McConnaughy: 8:26

come in.

Chris Miles: 8:27

You know what I'm saying. There's still going to be some of it, but that's probably one of the major factors that feeds into it.

Alex Perkins: 8:33

But it'll for a while, because that skill set is still out there, right yeah? There'll be many years before that skill set kind of goes away. And this is admin realm, but yeah Well.

Tim McConnaughy: 8:43

I mean, if it costs $100 million when it costs $8 million last year, I imagine a lot of enterprises are going to find a way to make it work right.

Tim McConnaughy: 8:51

To go a different way if at all possible. So, yeah, I mean, it's really just kind of shooting yourself in the foot. And don't get me wrong, the average person who was labbing with the free version of ESXi was probably never going to hand VMware money, like go into their wallet and hand VMware money for that thing. But, just like you said, just like all certification, things are marketing things right, because when people know your stuff, they're going to use it, they're going to recommend it, they're going to want, they're going to know it, they're going to want to use it. So anyway, yeah, all right, let's move on. I've so, let's see. So I've got a couple from here. I'm covering the Cisco news this week, so we have a couple, a couple articles here. One is from Reuters. Now, this one's actually a little late now by the time we're covering it, because this one specifically says Cisco to cut 4,000 jobs. So we, by this point, of course, cisco's now done that.

Tim McConnaughy: 9:45

Cisco's has gone through the layoff process and I have to say, you know, I used to work at Cisco, cisco for five years and this is the first time I've seen a layoff that was like a just straight up, a layoff, right, like there's always been limited restructuring. There's always been refocusing like, hey, this business, this part of the business, is not doing well, we're going to sunset this product, we're going to lay off this team and then maybe they can find another job with Cisco, maybe they can't, whatever. But it was a. It was a strategic refocusing. This is the first one I've seen and I'm sure you know, maybe back in the early 2000s or more. Right, I only worked there for five years, but it was just a straight up layoff, like I mean, just across the board, no indicator that they paid attention to strategic value of the people they were letting go. So, full disclosure. I you know, since I worked for Cisco for five years, I know a lot of the people at Cisco and I know some of their. You know very high performers and there were people on that list that were let go. That I just like I'm still shaking my head. I'm like, do you?

Tim McConnaughy: 10:50

We covered this on our episode with Joe Onisic about layoffs. You know you have no idea the tribal knowledge that you are gutting, that you're hollowing out the core of your company. You have no idea what's walking out that door. So this one was this is the strangest layoff I've seen for Cisco because of its complete lack of it was. It was really like somebody looked at a budget sheet and just said just cut this much and I don't want, you know, just go across. You know, like strange, very strange.

Chris Miles: 11:21

It was funny because, like I will admit that I kind of have, you know this, this I don't know if it's at this point just social media brain where I, you know, I would think of things and then I immediately forget them, probably a month later and then and they're completely gone. This seems like the first layoff I've seen in in a quite a long time where I was, I remember, the day after it happened. You know, obviously, our thoughts and supporters with everyone that was affected by these layoffs or anyway, we can help, let us know. But, in addition, this was one of the first ones where I was on LinkedIn, like the day the next, like three days after this happened. There was so many diverse people that I knew at Cisco, like reposting other people's, you know, announcements that they've been laid off and just like such great accolades for the person, like this person is an absolute rock star, blah, blah, blah.

Chris Miles: 12:12

This I saw that like all over my feet as I was like man. This usually you see, like a few, whereas, like obviously you know, layoffs sometimes affect really good people. This seems like it affected a lot of really good people, which was just. This seems like the first time I've seen it at this scale. So that kind of echoes home what you were saying, tim, where it seems like a lot of top tier talent was lost in this one and it doesn't make a lot of sense. Yeah, just really, really troubling.

Alex Perkins: 12:41

I mean just to add to that, like it was a lot of people that are still there. I've never seen people so vocal about layoffs that are still working there and we're like this sucks, like you said, just pointing out the good that all these people have done. I do have a question for you, tim, when they did the restructures or whatever you called them in the past. There's a lot around this time about how it's like a strategic. Is there anything that they posted? I haven't seen anything about what that actually means and I don't know if they do that in the past, but I don't see it this time.

Tim McConnaughy: 13:16

So what you have to do is go look at the SEC filings and I'll actually cover that in the next one, the next story but usually the SEC filings, because that of course. Of course is a publicly traded company, right? They have to basically more or less justify themselves to the street, if you will, and so a lot of times when there's a limited restructure, it's usually tied around hey, our service provider business is down 5% and this product is not doing well, and so we're going to refocus on a different product. If you go back to the prior SEC filings, you see that this time it really is just like shit sucks and the industry is in bad shape and we're down, and so we just have to cut costs. Yeah, and, like I said, I'll get into this. I don't want to put the cart before the hose on the next one, because if this one was even a bigger bombshell, then not a bigger bombshell, just like as big, equally as big bombshell. So actually, you know what? Just roll into it. So we could talk about that, because I think it lines up really well together.

Tim McConnaughy: 14:22

So this is an article from CRN and there's multiple ones out there, but this is just the one that I picked that points out that the COO, maria Martinez, who prior to this was she ran the Global CX organization at Cisco was an EVP so she's the COO, chief Operating Officer at Cisco has been let go. They fired her and that's very troubling, right. So for those that don't understand C-suite levels, if you will, the Chief Operating Officer is pretty much second only to the CEO, and in some places I just practically appear with the CEO almost. So that's a big position to actually let go, to let that person go, to fire them, to lay them off, however you want to call it. And not only that, but they're salting the earth behind her. They're actually dissolving the COO position which is absolutely unheard of.

Chris Miles: 15:21

Yeah, I was trying to think of another company that's this big, that has completely dissolved, that doesn't have a COO. I can't think of many, if any, but that seems that seems. I don't know if this is something to do with when the Splunk acquisition finalizes, if maybe they're going to slot something in there, or I don't know. It's a very strange move. Don't really know what to make of this.

Tim McConnaughy: 15:48

Yeah, I mean the Splunk acquisition was cited. I mean we know that's what $28 billion. This is close to layout, right? I mean that is not a small amount of money even for a company of Cisco size to lay out for anything. And not only that, but again, if you look at the SEC filings, pretty much everything's down at Cisco. Plus, there's the whole generative AI thing.

Tim McConnaughy: 16:08

I think Cisco's behind the eight ball on this one, like timing-wise. So, and this is probably a panic move to just cut costs as quickly as possible. Like I said, there's some very good talent at Cisco that was let go in a way that I've never seen done. And this itself is another thing. If there's a strategy here, I'd love someone to tell me what it is right. This says all the hallmarks of panic Some zero has to be rounded somewhere that we didn't think had to be rounded, or something I don't know. So yeah, all right. So, yeah, so we've got a few more. So that covers the Cisco stuff I wanted to cover. I mean, not that that's not enough, right? But, alex, I think you had the next stuff that we're going to cover, right.

Chris Miles: 16:54

Yep, I am the Nvidia guy this week, so it's like the same thing we have to be talking about. Yeah right, that's. Being the Nvidia guy is a nice title to have right now.

Alex Perkins: 17:04

I'll tell you what. Well, if I had Nvidia stock, then we'd be talking right, All right. So, yeah, this. I got three articles. This first one is from CNBC. Basically it's just, Nvidia passed Alphabet in Market Cap and is now the third most valuable US company. Holy crap.

Chris Miles: 17:22

Yeah, do we have to change the thing acronym now? Is that different now?

Alex Perkins: 17:27

Well, it's already different, right? Because Facebook rebranded Demetra.

Tim McConnaughy: 17:30

So I don't even know what it's called. So it's mang now. So it's mang. Mang Now it has to be mang. Well, when it was.

Alex Perkins: 17:38

Google. It's Alphabet, right?

Chris Miles: 17:40

I don't know, it's always been a weird acronym Manna D&D style bro, it's all good.

Alex Perkins: 17:46

Yeah, nvidia just is killing it. Man, they are just everywhere. They are growing at rates that we've just never seen before. So I assume we're just going to keep seeing this for a while. This AI boom is just not slowing down, yeah it can't match one Anywhere, it seems.

Alex Perkins: 18:04

Yeah, yeah. And then the other two, so I got one from the Verge. I think we mentioned this in a recent episode, but there's like a basically a AI chatbot that runs locally on your computer, called RTX, or chat with RTX. We mentioned this before about how we're going to start seeing AI get smaller and more personalized.

Tim McConnaughy: 18:27

Yeah well, you can assist them Just on smaller form factors.

Alex Perkins: 18:31

Right, exactly, so this isn't really unexpected at all. I've been hearing lots of good things about it too.

Tim McConnaughy: 18:39

So this is interesting because, as a content creator, they have had the RTX voice thing for a while, which is like the I don't know if you guys have seen this or not. It's that plug-in. Well, I say plug-in it's like an app that runs on your GPU that'll clean up your voice. So there's YouTube videos about it. From when it first came out, you can see somebody sitting next to a vacuum cleaner that's in their face and talking and you don't hear the vacuum cleaner, you can just hear them. So it's a natural progression. It's pretty cool.

Alex Perkins: 19:07

They also have ones that you don't even need a green screen. It just removes the background for you. I forget what it's called, but I know that's part of the whole story.

Tim McConnaughy: 19:15

Yeah, they got a bunch of that stuff. Nvidia has been leading into that. So this is to me, this is just another thing. There are RTX to do, right absolutely.

Alex Perkins: 19:24

And then last, this is from Reuters. It's Reuters, right? I would never know how to say this. Reuters. Again another one I think I'm not surprised by, but Microsoft is developing AI server gear to lessen reliance on Nvidia. This, I mean it's going to happen.

Tim McConnaughy: 19:42

Oh, they're going to build their own silicon. They're going to start building their own AI gear competing.

Alex Perkins: 19:49

I read something they bought maybe a year ago. They bought a company called Fungible, which was created by one of the co-founders of Juniper, and it's like an AI chip company, right. So bringing all this in-house I mean, this is the same thing. Look at what AWS has done with their chips, their custom silicon. This is becoming a trend, and it'll be years before this actually eats into anything that Nvidia is doing.

Tim McConnaughy: 20:15

Oh yeah, I mean Nvidia. By the time they catch up, nvidia will have filled up every data center.

Chris Miles: 20:21

It's just, I mean it's just basically the instantiation of edge computing for AI, it really is. It's really all it is. It's get it closest to the user as you possibly can to the data really to the data as close to the data as

Tim McConnaughy: 20:39

possible can do. The computations feed up what matters, right, Yep so yeah, not surprised at all. That's a good one, and I think we have one more that you wanted to cover, chris, right To round us out.

Chris Miles: 20:51

Yeah, we had a couple articles here. Just just quick notes about that. Obviously, all this stuff will be in the actual news document that we published, so if you want to get any more of any of these articles, definitely check that out and you can have a look through them. We have one from Business Insider talking about where the CSPs have apparently kind of come to the forefront and saying that this focus on cloud cost optimization is waning and is not forecasted to have any impact on overall revenue in the in the upcoming year. So last year AWS grew 13% revenue, google 26 and Microsoft 30, which is pretty substantial obviously.

Chris Miles: 21:39

But yeah, they're saying that they don't see cost optimization being a huge factor here when it comes to profits, which was, it's crazy to me, because I feel like we just came off the heels of reinvent, where Werner's whole talk was about the Frugal engineer right, the Frugal architecture and focusing on cost. But like you said, Tim, before we hit the record button, that was two months ago. Nobody gives a shit anymore.

Tim McConnaughy: 22:05

It's time to make money. It's time to make money while the sun is shining make hay right, but full disclosure.

Chris Miles: 22:11

a lot of this is based on a report that was done by Aviatrix, which is my and Tim's employer, but I feel like it's very relevant because a lot of this it was based on a survey that we had done and a lot of the respondents were enterprise employees things like that, talking about how that cloud cost is a major barrier with all the decision making and working with customers day to day.

Chris Miles: 22:40

I can 100% tell you that is very much a factor Today, it will be a factor six months from now. It'll be a factor 12 months from now. Like I don't know where we're getting into that not being an effect. But yeah, I don't know how you feel.

Tim McConnaughy: 22:57

Yeah, the CSP is saying that cost optimization is not a problem and therefore their money is not going to be affected. Revenue is not going to be affected. It's like saying I just have, like a Fox now says the henhouse is safe, type of feeling about it, like it sounds ridiculous. Right, of course they're going to say that because you know Wall Street is listening like that's nuts.

Alex Perkins: 23:24

Yeah, it's like in defense of them, and I hate to even say this, but I try to look at it from both sides. But I'd like to know the context.

Chris Miles: 23:33

CSP sympathizer, oh man.

Alex Perkins: 23:36

I know.

Tim McConnaughy: 23:37

I've been Benedict Perkins over here.

Alex Perkins: 23:41

I'd like to know the context behind it, because are they saying that customers have like optimized their architectures, like you know? What I mean Is that the angle, like they're like they're all done.

Tim McConnaughy: 23:52

They're all done, but that's my point is like even if that's what they're saying, though, that's crazy.

Alex Perkins: 23:57

I just want to know the angle that they're coming at and saying cloud cost cutting is waning, like what evidence is there that it's waning?

Chris Miles: 24:03

It's still all anyone hears about is yeah, it's because money's going up. I guess, like I don't know if it's that, there's no way, it's that simple. But it's like oh, revenue's still going up, so there's no way people are concerned about cost.

Tim McConnaughy: 24:16

Like yeah, maybe it's like an in spite of thing, like you know, like we don't care about people cutting costs because we're already growing, so who cares? Right? Maybe that's the angle, I don't know. I just it sounds weird, right it?

Alex Perkins: 24:28

does. It's a weird thing to say.

Chris Miles: 24:30

Yes, lastly, just a quick note on this one there's one also in here from Forbes saying that they could foresee that Microsoft overtakes AWS by 2026, I believe it is, which, if you've been watching anything on the news lately, probably surprises no one.

Tim McConnaughy: 24:52

Yeah, we called this one. We called this one like half a year ago, I think.

Alex Perkins: 24:57

This doesn't surprise me at all. I think like literally since I started learning about the cloud, I was like well, microsoft already does this, like that's their whole thing. Like Amazon got a head start, but eventually I just I think always it was going to be Microsoft's going to win out.

Tim McConnaughy: 25:12

They already have the people that buy their products. They can bundle it with just about everything. That's how they get in. That's how their whole ecosystem works, right? You already bought us for this. Go ahead and use this too right.

Chris Miles: 25:24

Yeah, no matter who you are, there's a good chance you're paying Microsoft already for something. So it's really like and I've said this before you don't have to go through a lot of layers of approval to pay Microsoft more money Exactly Anywhere you are, and especially if the licenses are transferable, which you know, obviously that's their whole ecosystem. They can do that, but I mean, not to mention, they're just making all the right moves.

Chris Miles: 25:45

They are, they're firing on all cylinders. I have some network architecture concerns with Azure sometimes, but other than that, things that pay the bills, they're doing great.

Tim McConnaughy: 25:58

I mean they have second mover advantage. Right, they were able to see all the mistakes that AWS made and what they did. I'm not saying that AWS is a bad cloud, I'm just saying that AWS had the first mover advantage of being first to market. But that comes with some baggage of not always making the right choices and being able to back out of them. Necessarily their second mover can look at it, say, see what was done right, what was done wrong, and they can make different choices, right?

Alex Perkins: 26:23

It's also interesting real quick, the way Azure accounts their customers. If you will, they've never broken out Office 365. So it's like even if you're not in Azure. If you're using Microsoft products that are hosted in their Cloud, they count that as Cloud revenue.

Tim McConnaughy: 26:40

That's a fair point too, though that's a very good point. I don't know, because you're right, they don't break it out, and so they count it all together. I still think, from the customers that I work with, and the more customers that I work with, that Azure is definitely growing at a very large pace comparatively.

Chris Miles: 27:01

Some people still seem reluctant. It seems like I've got quite a few handful of customers where they're like, yeah, I guess we're in Azure now. I don't know it just started happening and they didn't want to. I'm trying to tell them look, dude, it's not that bad actually. No, it's not. It's not a bad place to be.

Tim McConnaughy: 27:25

But as a network, or GCP is the one that I always have the most trouble with. But that says as a network or for what it's worth.

Chris Miles: 27:33

Which to the people that matter doesn't matter very much.

Tim McConnaughy: 27:39

Yeah, exactly, yeah, anyway, so we should probably go ahead and wrap this up. Any final thoughts about any of the stuff we covered today?

Chris Miles: 27:47

No, tim, I really liked your introduction. It makes me wonder how many actual news publishings there are out there that are about just Fortnite. I don't know if it's just like 12 year olds making YouTube videos this week on Fortnite weekly.

Tim McConnaughy: 28:06

Do they talk like four year olds now too?

Chris Miles: 28:08

Yeah, dude, that's the thing that's in now. Bro, Are you on TikTok?

Tim McConnaughy: 28:12

I'll show you some stuff. Okay, thanks. I get enough of those thirst traps every third TikTok because I'm a man between 18 and 60. All right, let's go ahead and wrap it up here. If you like what you saw, listen to go ahead and hit like on all the social media. Subscribe to us, buy our new coffee. That'll be out any day now. Yeah, we're going to totally make your coffee now, okay, and yeah, so that takes us out this week. See you guys later. Hi everyone, it's Tim and this has been the Cables to Clouds podcast. Thanks for tuning in today. If you enjoyed our show, please subscribe to us in your favorite podcast catcher, as well as subscribe and turn on notifications for our YouTube channel to be notified of all our new episodes. Follow us on socials at Cables to Clouds. You can also visit our website for all the show notes at CablesToCloudscom. Thanks again for listening and see you next time.