Chris Miles: 0:13

What's up and welcome back to another episode of the Cables to Clouds podcast. My name is Chris Miles. I'll be your host for today as we're diving into the Cables to Clouds fortnightly news episode. So for this week. Typically what we do is we have a few news articles that we've kind of brought together over the last couple of weeks of news that has happened that we found interesting. We dive into each one of them one by one. Joining me today, as always, is my beloved co-host, my beloved co-host, friendly face, tim McConaughey at Carpe DMVPN, on Blue Sky as well. How are you doing, tim?

Tim McConnaughy: 0:52

Good man Just excited to do the news. I guess, as always, I didn't tell Tim ahead of time I was going to ask him how he was, so he was very blindsided by that.

Chris Miles: 1:02

Sorry, Tim. No one's ever asked me that before, so I really had to scramble. Fair enough, all right. Well, let's not waste any time, let's hop right in. So, first up, we have an article from Reuters which, to be honest, we could have kind of taken our pick about which news outlet we wanted to use to cover this. Um. So google has entered into an agreement, um, to buy the cloud security company whiz, um for 32 billion um, which is one of the biggest deals we've uh seen.

Tim McConnaughy: 1:35

yeah, with a billion, with a b, with a pinky to the mouth, you know, dr evil style.

Chris Miles: 1:41

Uh 32 billion, um, which is funny because this comes like not even a year later after whiz rejected a uh an offer. And you know we kind of speculated at the time in 2024, like, oh well, if they're rejecting this, you know what's it gonna? What would it cost for whiz, what are they expecting to make? And I think we've answered that and it's an extra nine billion uh so yeah, so last year's offer was about 23 billion.

Chris Miles: 2:05

This one comes in at 32 um. One thing very notable to say is that there is a um what's it called a breakup fee of 3.2 billion. So that means if, if for some reason, the deal does not get approved, does not go through, whiz still comes out three billion dollars richer at the end of the day. So, that right there tells me that Google is hedging their bets pretty hard that this is going to happen.

Chris Miles: 2:32

So, and probably, you know, compared to last year new administration. I'm sure that probably plays into it, although, you know, trump has said it's even noted in this article that they are going to kind of crack down on big tech in a way. I don't know if either of us technically believe that, but that is the claim that they've made and you know, I think it's also noted here that Google currently has about $23, $24 billion in cash and assets and things like that as of last year, so they're actually going to have to do some financing for this deal. Man, this one is crazy for a facet of reasons, at least from my perspective, like one is. I really hope this gets the level of scrutiny that the HPE Juniper deal is getting.

Tim McConnaughy: 3:22

Yeah, right Because.

Chris Miles: 3:23

I find this one to be a way bigger kind of competitive issue than that. One is because, you know, wiz is very integrated into a multi-cloud capacity, right? So they're basically a CNAP platform is kind of what they're pushing very hard right now. A cloud-native application oh my gosh.

Tim McConnaughy: 3:45

Protection platform.

Chris Miles: 3:46

Protection platform, right, um, so that's kind of what they're they're banking on, but obviously very strong integrations into AWS, azure, who are their major competitors in this space, and you know it. I think we can make the pretty obvious argument there that Google, having access to all this information, this Intel, about what's running in these other cloud providers, is, uh, that could be a problem. Uh, that's um, they've, they've, they've said that you know they are going to maintain that multi-cloud um product. You know it's still going to be strong integrations in AWS and Azure. I question how long that's going to continue with AWS and Azure beyond this deal, but yeah, so, yeah, how do you feel, tim?

Tim McConnaughy: 4:32

So, this gives me like the same kind of feeling as like the Splunk acquisition by Cisco, which is to say, I think we're seeing more and more companies that are being acquired, that have a strong product, but you think that there's more to the acquisition than the product itself. Right, there's a lot of data, as the article, as you pointed out, that comes over as part of this. I mean, honestly, if Google did this so they could pull in all of the data about their competitors, that would be a page right out of the AWS playbook, actually, that would actually be right in line, you know.

Tim McConnaughy: 5:12

And so what I find interesting is you know, google offered $23 billion last year. We said no. They said basically, we're a rocket ship and we don't have to settle. We're a rocket ship and we don't have to settle, you know, for 23 billion. A year later, they're settling for 32 billion, which you know like. You says $9 billion more, but that's like a third of the that's like. You know. That's a third more, if you will, or 9 billion over right. They offered 23 before, so it's like 30% more. I don't know how you do that math. Uh, it's, it's late here, um, but yeah, I think it's more, or at least as much about the data they're going to pull in, I say I I don't think that. I think it's actually unlikely that google will pull back on the multi-club thing. I think it makes a lot. I think they're going to try to keep wiz wherever they can have it. You, you know, to keep that data accessible.

Chris Miles: 6:05

Oh yeah, I agree, I don't. I don't think, if there's any pullback, I don't think it's going to be Google's choosing. Yeah, I think it would be.

Tim McConnaughy: 6:12

Oh right, people that are, that are running it now, that are like Google competitors or or that don't essentially, like you know, are concerned about Google having access to this data, might rip them out. That's a very good point, actually. Yeah, I'm very curious to see what happens there, like if that happens. But yeah, no, this is probably the biggest story for these last two weeks and we're going to have to, like I said, with a lot of this stuff. We're just going to have to wait and see. I agree with you that I think it's going to get. I don't see them saying no, I, because the administration is the administration and even though they are cracking down or saying they're going to crack down on big tech, it seemed that seems more punitive than anything right, like, like trump is very punitive a lot of you know so. So it's elon but, um, it's a very punitive thing, but I think there's this kind of money on the table. I don't think they'll push back on it. I guess we'll see.

Chris Miles: 7:12

I think probably what's going to happen is I think currently the DOJ is pushing for Google to sell off Chrome as well.

Tim McConnaughy: 7:22

Oh, yeah, yeah, yeah so.

Chris Miles: 7:24

I'm imagining that there will probably be some type of agreement in place, a nonverbal agreement probably, like look, if you want this, you got to get rid of Chrome and you know, maybe they'll get to make a trade off there, but I don't know. Yeah, we'll definitely have to see how this one shakes down. Yeah, good point.

Tim McConnaughy: 7:43

Okay, so the next article. This one's pretty interesting. So Cisco and NVIDIA are teaming up to build the Cisco NVIDIA AI factory. I think is what it's called. Hold on, I wanted to bring up the actual article, so I got the name right.

Chris Miles: 8:00

Yeah, the Cisco.

Tim McConnaughy: 8:01

Secure AI Factory with NVIDIA. So this is really interesting. It actually reminds me a lot of the Vblock thing that they did years ago when they tried to build a ready-made rack of here's Cisco equipment, here's EMC storage. Like I forget what the third player in that one was. Was it vmware? It might have been vmware, uh, for compute, um, but this idea of a kind of a ready-made off-the-shelf box solution that they could sell to enterprises.

Tim McConnaughy: 8:34

So the cisco secure ai factory is essentially Cisco compute, cisco hardware. It says here Cisco 6,000, nexus 6,000, or Nexus 9,000 switches and UCS compute. Of course, and under the hood of course, the whole thing is being powered by the new NVIDIA chipsets. So that's the partnership angle there, the new NVIDIA chipsets. So that's the partnership angle there, and the goal here is that Cisco can wrap this thing up with a bow and sell it to enterprises that are looking to create an AI data center, basically like an AI workload environment. So how many times? You know we've talked to Peter a few times, peter Jones a few times. You know we've talked to Peter a few times, Peter Jones a few times and some others, and the question has always been you know, how are enterprises going to build their own AI data centers out and Cisco, basically, is showing up with NVIDIA under the hood and saying you know, here's how we'll just, you know, buy our SKU, essentially, and get every get as a, as a, a block if you will, a rack full of gear that is built to do this. So really interesting, not not an unusual play for Cisco.

Tim McConnaughy: 9:47

Like I said, I will point out that what V block kind of failing as a, as a partnership, because of EMC getting got by Dell and some other stuff and there was always the worst part about that whole thing was that there was always a, an issue of who was responsible for what. So when you have three vendors packaging hardware together and then selling one solution, there's always a who do you call when the shit breaks thing. That was never really figured out. So, yeah, I don't know that that's the case here. It looks like here it's really going to be Cisco, just with the NVIDIA chipsets, you know, kind of under the hood powering the thing. So probably won't run into that.

Tim McConnaughy: 10:25

Having said that, you know, hey, if this ends up being the way that an enterprise can build out their own capacity, build out their own AI workloads and AI data centers without having to think about it as much. I think that's the goal. I'm curious to see when Arista, you know, or Juniper or somebody else, is going to, because this isn't like a revolutionary idea, right Like and I doubt, I don't know, but I doubt seriously, and this doesn't specifically say it in the article I doubt that NVIDIA has, you know, gone in, you know 100% with Cisco on this, where you know nobody else could do this. So, yeah, I'm curious. Yeah, what do you think about this as a solution?

Chris Miles: 11:06

Yeah, I agree. I think we've talked a lot about on the show how you know, the ROI moment for the AI hype has not happened yet Still hasn't happened, for the AI hype has not happened yet, Still hasn't happened. But at least one thing that's also been difficult is how to make it consumable from an enterprise perspective and if you can kind of prepackage these things and at least take care of the hardware side of the things, I'm sure that makes it much easier to see a path to where companies can use AI.

Chris Miles: 11:35

So, not a surprising offering to see this on the table. One of the first things that we're seeing, you know, use of Cisco's Hyperfabric AI with.

Chris Miles: 11:46

Nexus, which I believe is powered by HyperShield, which we've talked a lot about on the show. To your point, yeah, I don't think this is a very dangerous offering because we're seeing the top seller of uh, you know, network infrastructure and then the top seller of gpu is coming together, so it's I don't think anyone's going to get acquired here to kind of cause any roughage here. Uh, in in the integration, I do see that they are bringing in some additional offers for storage though, um, with like pure storage, net app, vast data, etc. So that that could be a thing. But I mean, at the end of the day, I feel like that's probably the easiest piece to be interchangeable here, right? So, yeah, very interesting offering. I don't know who's buying it just yet, especially with the kind of the. I'm sure all this stuff was pre-planned well before, you know, deepseek came to the table Right.

Chris Miles: 12:38

All this stuff was pre-planned well before you know. Deep seat came to the table right, um, so, uh, I'm curious who's? Who's pulling the trigger on this immediately?

Tim McConnaughy: 12:45

um, but you know, very interesting to say the least yeah, there was something in here I forgot to mention, which is, of course, though, like you said, the hypershield thing is is kind of uh part and parcel with this, and they're mentioning that this product I've only heard about and not seen any actual data for which is the AI defense. They're kind of building into this idea of defense for AI, which, again, I've only heard. I'd love to see some white papers. I'd love to see some details about what AI defense actually looks like. What does that actually do? But it's supposedly built into this along with HyperShield. The storage thing. I forgot about that as well. We were talking about third-party storage, but yeah, it's in the article. Here Again and I think that's what initially tickled my brain on the vBlock thing actually was this idea of having here we've got other partners bringing in storage, but who do we call when things break, and is that partnership going to continue? So could this be vBlock 2.0 with the AI? I don't know. I guess we'll have to wait and see.

Chris Miles: 13:48

Yeah, it's very defined in that it has two options. It looks like option one has a set storage vendor VAST is listed as the data storage option there and then the other option, which is looks like maybe higher grade switches, and, yeah, I think it's probably just the more expensive version. Right, the more expensive version. Basically, you have more customized custom custom ability or whatever. You I don't even know the word customizable uh storage options there. How about that? Um, but yeah, so we'll see what we'll see. Uh, like you said, I'd like to see some white papers on how they're doing this kind of like AI security piece with the with hypersheet built in. So, um, yeah, we'll have to take a look at that.

Tim McConnaughy: 14:28

All right.

Chris Miles: 14:28

Next up? Uh, we have an article from STX central um. Uh, yet in the news again we have HPE and Juniper. So basically, hpe, ahead of getting their court date from the DOJ to kind of plead their case about the acquisition of Juniper Networks, they are announcing that they are slashing about 5% of their workforce. So that's great. Over the next 18 months they plan to cut about 2,500 jobs, like I said, equating to about uh 25% of the workforce, which is a pretty sizable Um.

Chris Miles: 15:05

They in the in the article they cite um you know, kind of poor performance on um sales and things like that, and and um aggressive competition in the market, et cetera. Um, and yeah, it looks like they are entering into the um the court date with the DOJ around mid July. I think it was originally that they wanted to start earlier, dog wanted to start later Um, so they've kind of met in the middle um, I think to uh July. So still going to be a very long time before we probably see um any movement on this deal and uh, who knows what it would actually close if it gets pushed through Um. But yeah, so that's, that's the latest, not much really to add. Um, obviously we uh, if any of the listeners are out there hearing about this.

Chris Miles: 15:49

Uh, you, uh if we can help in any way. Let us know Um, hate to see these layoffs coming, especially when they're kind of planned and, you know, kind of enter into this panic state for a lot of people. So, um, you know, we, uh, we definitely sympathize with you and, um, yeah, what do you have to add to him?

Tim McConnaughy: 16:03

What I think is interesting about this article? There's a few things right. One is that, uh, the vendor reported a near record, 17% increase in overall revenue compared to the same quarter last year, and that it met growth expectations and the next like but no, that's fine, let's just cut five percent of the workforce anyway.

Tim McConnaughy: 16:21

Basically, I mean, that's that's how companies do it.

Tim McConnaughy: 16:24

Now, whenever you're you're ahead, you cut people so that you can be even more ahead, right, yeah, um, yeah.

Tim McConnaughy: 16:31

And and it mentioned something about server inventory and, uh, you know, basically having to cut prices on server inventory, because now, I guess, because everybody's trying to make shit for AI, there's plenty of inventory essentially, so they have to cut pricing on it, but they still again 17% near record increases in revenues, but whatever. Yeah, I don't know. I don't know if this is just seize the moment because we can cut people. We're going to cut people, this is just the new normal. Or if they're anticipating having to essentially pay for the court, like having to go to court, or the lost revenue from not being able to realize their acquisition, or something like that, and that's part of why they're thinking they have to cut jobs. But I mean honestly, like I said, any corporation that you know, know, all corporations are like well, I make 17 when we can make 25 by cutting exactly more people, uh, yeah, no, this is what I think is interesting is that the doj is still pushing forward this.

Tim McConnaughy: 17:37

I honestly truly expected this to kind of evaporate once the new administration really got underway, but I guess they're really really busy finding government waste and firing everybody in the government. Maybe that's a problem. Maybe the people that fired the people that would have actually stopped this lawsuit. So I don't know. I guess we're just gonna have to see how this one rolls out. But um, I do think it's interesting that there's a rider in the whole thing where Juniper is going to make money if HP can't close the deal by October. Yeah, and of course I guess that has nothing to do with. There's no clause in there about what if the DOJ sues you and stops it from happening. So HP might just lose money on this thing and not end up getting Juniper at all, so interesting.

Chris Miles: 18:27

Yeah, I mean, obviously they probably know much more than we do. Maybe they are strongly thinking that this might not happen. So maybe that's why the you know kind of culling of the workforce is happening. That's me, you know, glass half full kind of perspective, but I highly doubt that's the case. You know, um, I don't think they necessarily always operate with, uh, individuals um best interests.

Tim McConnaughy: 18:49

So yeah, it's unfortunate, yeah, yeah, all right. Uh, we got one more story this evening, uh, and it is. It's a article from info world and it's a little bit of a thought piece, but it's based on actual news, like something is actually happening. So the Chinese company, netease is and I didn't know they had this, but apparently they had a public cloud service as part of all the things that they do. So NetEase is like it's a Chinese company, I think, like ByteDance or one of those like social media type of companies.

Tim McConnaughy: 19:23

This one does a lot of netties, does a lot of games, like so, if anybody's seen the stuff or played marvel rivals recently, like that's a netty net to netty's published game. Um, they're a quote-unquote internet gaming giant. But I didn't know this. They had a public cloud service, but they have now announced they're going to close it and kind of focus on what they're good at, like you know, closing. So clients are being encouraged to migrate to other services. So what's interesting about this article is it kind of examines the kind of it, kind of does the what if, like you know, obviously AWS, gcp, azure not going on, oci not going out of business anytime soon, knock on wood, right, but there's a lot of smaller cloud providers out there and many of them have already gone out of business, and so it's kind of a think piece around. Well, what do you do as a customer if you're using the hosting for one of these services? And kind of what they suggest is don you know, don't put all your eggs in one basket. Rather than deal with an exit strategy, deal with a multi-cloud strategy where you take your eggs and distribute them among multiple baskets, and then that, of course, protects against this sort of behavior.

Tim McConnaughy: 20:36

So I think most people that are using small cloud providers probably have a reason beyond. You know like normally, if an enterprise is going to go into the cloud, they're probably not looking at a small cloud provider unless there's a specific thing they're trying to do or a specific reason. You know, whatever that is like small cloud providers, like Linode, for example, before they got acquired is like small, small cloud providers, like Linode, for example, before they got acquired. You know there were, you have to.

Tim McConnaughy: 21:05

Why would you choose that over, say, I don't know, aws or Azure or whatever? There's gotta be, there's gotta be some reason that you're going with that, and it's gotta. It can't just be a price, but the the warning kind of this article is, you know, small. Any cloud provider really public, public or private, you know could go out of business, and so the suggestion here is basically take your stuff, put it in multiple clouds, um, uh to to, rather than having to worry about an exit strategy, about how do I get all my stuff out of this cloud when it's about to go out of business, you know. Then you can simply just spin down your operations in that cloud.

Chris Miles: 21:38

So yeah, I think um, I think one important piece in here that I liked from who wrote this article, David Linthicum. Yeah, so kind of like to your point, Tim. If you're going into one of these kind of, I'd say, cloud providers outside of the top four, you know, being AWS, Azure, Google, OCI there's got to be a reason. You say it can't just be price. I would probably make the argument that that might be the reason in a lot of these scenarios, or maybe localities is a good thing.

Tim McConnaughy: 22:12

It could be yeah.

Chris Miles: 22:13

So that makes sense. But he does call out that one of the things that enterprises need to do is stay informed about the cloud providers financial health, business focus and strategic priorities, cause I think that's ultimately going to decide whether or not they're going to succeed or struggle to succeed, um, and then you know you're going to be left holding the bag. If you know I mean he calls it out in here like cloud cloud providers are a business and businesses can fail um, so you need to be able to um do that and and if you uh, like you said, if you adopt a multi-cloud strategy and kind of think of that distribution of services and you know kind of using um, I'd say we've had the discussion on here about cloud native versus csp native things like that use as many kind of maybe like cloud native versus CSP native things like that Use as many kind of maybe like cloud native and portable services as possible. That's not always feasible with. You know the kind of where your workforce is.

Chris Miles: 23:09

You know I'll be honest with you, outside of the top four, I don't know what the Kubernetes offerings look like in a lot of these. You know third party cloud providers as well. So that might just, it might just not be possible, but I think that should also sway your decision about whether or not you adopt them. Obviously, we want this to be a free market. We don't want there to just be four cloud providers. But you know, I don't think we're far off from probably that being the case, like we've been talking about how OCI is going to be, you know, because they were just like what was it? Oci and Google were just like. They literally just started too late to where they can never be the top dog or even top two.

Tim McConnaughy: 23:51

But yeah, it's Not unless the ball's dropped right, Not unless. Aws and Azure completely dropped the ball somehow, exactly.

Chris Miles: 23:56

So, yeah, very interesting piece and yeah, I like the read. All right, and with that we'll wrap up for this week. So thanks for joining us on the Fortnightly Cables to Clouds news podcast. I've been Chris Miles with my host or my co-host, tim McConaughey. If you have not purchased our book, please go out and do that. If you are interested in taking the hold on, I have an if after this. It's it's not just a blanket by the book, it's if you're interested in learning more about AWS networking and specifically, if you're looking to take the AWS certified advanced networking specialty exam. I've gotten that down pat.

Tim McConnaughy: 24:36

That's a mouthful man. I've never been used to that one.

Chris Miles: 24:39

ANSC 01. How about that? So if you're interested in learning more about AWS networking or taking that exam, please check out the book for sale on Amazoncom. We'll put a link in the show notes and with that we'll take it away and we'll talk to you next week, Yep.

Tim McConnaughy: 24:54

Take care guys.

Chris Miles: 24:54

Bye.

Tim McConnaughy: 24:56

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 Cables to Clouds dot com. Thanks again for listening and see you next time.