Nikita Shamgunov: But think about it the following way - from the VC standpoint, there is a market; it’s called the database market. That market has players, and those players have share. And that share is on dollars, and on usage. And then there’s – you can also measure share in terms of mindshare. So if you look at share of usage, Postgres is going up and up and up. So that’s data point number one. And earlier, I said out of the top five databases, Postgres is the only one that’s growing share.

The second thing is, within the database market there’s an on-prem market, and there’s a cloud market. And the cloud market is the much faster-growing market. That market is dominated by the cloud hyperscalers - by Amazon, Google, and Microsoft. There is only one public database company that’s relatively modern and relatively recent, and that’s MongoDB. There isn’t a public relational database company, and developers are increasingly choosing Postgres over MongoDB.

Another data point is AWS Aurora is a $3 billion run rate business, going into potentially four and a half, growing 50% year-on-year into the next year. And that’s MySQL, Postgres, and MongoDB. MongoDB is kind of fake. It’s built on top of Postgres, because MongoDB’s license prevents them from running MongoDB compute.

So all of those data points highlight that there are a lot of dollars in the cloud database market. Postgres as a matter of fact, in a way, it’s kind of like Linux. So it’s not like you can – you can’t own Postgres. That ship sailed. But can you have the best in the world Postgres cloud service? I think that’s an open question, and that’s what we’re going after. That’s really the pitch, it was that simple.

Alex Gallego: So for those new in licensing, BSL turns into Apache 2 on a rolling four-year window. It means the code today, in four years from today, is going to be Apache 2. And so that’s one. The second clause that is interesting is that for us, frankly, we didn’t want the hybrid clouds and the most dominant cloud in the world to take our work, and then make money. We are a company, right? I have to pay my developers. It takes money to run a company. And you know, this is a totally personal decision. I don’t think there’s a right or wrong. I think the context matters. That context for us is that we wanted to build the company, we wanted to continue to innovate in the streaming space, and to me, it felt like the right balance. I was like “People use us without paying us”, and I’m talking about probably the largest company in the United States by market size. I’m talking about some of the largest other space exploration companies - some of them use us and they don’t pay us a penny… And I know, because some of my engineer friends work there. I know that we’re saving them like $10 million a year. I was like “Hey, you should probably pay us 100k.”

[58:05] Anyways, so there’s still a lot of sense with that, and that’s okay. What I want to do is I want to build a cloud business. And so the restriction is no one – or you can, but you would have to pay us license. No one can build a Redpanda cloud without paying Redpanda licenses. That’s fundamentally the restriction. Other than that, people can just use it as whatever it is.

And so that was, to me, for this project, for the context, for kind of like who I am as a person and the project I was trying to build, that seemed like the right balance. And so now the sort of following effect of that decision is that because we already have that protection, it allows us to make the best possible product. We don’t have to build peripheral systems that we need to monetize. We can simply build the best possible product that we know, as opposed to the way a lot of the open core companies are doing it, which is like there’s zero monetary value in the core, and then you have to build services around that, whether it’s a new database layer, or whether it’s like a schema registry layer, or something like that, that you can monetize so that you can actually thrive as a company.

So I actually empathize quite deeply with the struggle of companies that are based on that, in part because open source gives people the adoption. Like, it’s basically infinitely cheap; you have all of these developers, and you just call them whenever they’re in production and they need help. But the challenge with that is that then you have to build services around this that make the core value offering better. Because to embed that code in the core, then it would have zero monetary value.

And so anyways, with that, I just wanted to say that for me, the balance of expiring in four years to become Apache 2, with the clause that we are the only company allowed to build the Redpanda cloud, seemed like the right balance. And it’s worked out great. No real issues. In fact, I think people empathize with the way – and look, open source has evolved a lot since it was originally started, and there were the hybrid clouds trying to eat your lunch… Now it’s like a very different world today, and that’s where we are.

Ryan Worl: Yeah. They’re either not measuring it, or they’re measuring it in a weird and incorrect way. There’s a lot of different ways that that can happen, but typically, the way that we’ve experienced it is that if you ask an executive at the company that uses Kafka heavily, ask them “Is your application latency-sensitive?”, they’ll say “Of course. We’re an extremely high-performance organization. We love high-performance systems. Obviously, the end-to-end latency couldn’t be anything more than 50 milliseconds. That would be crazy if it were anything more than that.” And then you make it a little bit further down the chain in the organization, you ask the application developer or the SRE who’s actually on call for the thing, or wrote the code, you ask them and they’re like “I don’t know… I hope that it’s fast, but I’m not really sure.” Or you ask them and you get an explicit answer that’s very different than the answer that the executive gave you. And realistically, there are a few applications that we come across, that do need that little latency… And the primary example of that – I mean, there’s a lot of this kind of application out there, in different domains, but the good example that demonstrates it is credit card fraud detection.

There are people out in the real world using credit cards, and you want to make a determination about whether a [unintelligible 00:42:28.16] is fraudulent at the point of time that they’re swiping the card. So that is like necessarily a real-time thing.

There’s a user who’s waiting out in the real world, and if Kafka is in the critical path, especially multiple hops through Kafka in the critical path, then a system that has higher latency, like WarpStream, would be harder to adopt. And there are other applications that meet this criteria. But basically, if the user is in the critical path of the request, then WarpStream is harder to adopt, like, in the abstract. Obviously, some specific applications might be okay with higher latency than others, but that’s the one that we see from time to time. When you strip all those out though, the things that you have left are the more analytical type applications. Like the example I was talking about before, moving application logs around.

Developers are pretty used to some delay between the log print statement running inside their application and being searchable inside wherever they’re consuming their logs from. So the additional one-second of latency there is typically a non-issue. And the reason why that’s useful for us as a company at WarpStream is that those workloads are typically really high-volume, and they cost the user a lot of money.

So our solution being more cost-effective really resonates with them, because – usually, there’s also a curve of the more data you’re generating, the less valuable that data is per byte, so there’s budget pressure to get the efficiency to process that data. You want to increase the efficiency of processing that data, and Kafka sticks out like a sore thumb in terms of that processing cost.

[00:44:19.22] So we can come in and say “Hey, because of the way the cloud providers don’t charge you for bandwidth between VMs and object storage, and we store all the data in object storage, that means you’re going to save this many hundreds of thousands of dollars a year on sending the dumb application logs that you’re generating into the eventual downstream storage”, that makes a lot of sense to them.

So while we understand that we can’t hit every possible application in the market with the shape that WarpStream is today, we’re pretty happy with the set of use cases and workloads that we can target, because there are just so many of them out there, and they happen to align with the budget-sensitive ones.

Adam Stacoviak: How do you quantify, I suppose, the total addressable market, the TAM of this? Not that you’ll capture it all, but how do you address – I mean, obviously, any company is like the TAM, right? Anybody who ever has bought public cloud is in the TAM. Anybody who has ever done anything on prem, at any scale, is some version of TAM. But at some point, you look at who you can truly capture. What is the capturable in the next, I don’t know, year to five years, quantified in dollars, to some degree?

Daniel Whitenack: So there’s already really great hardware out there for smartphones, and I wonder if something like this is kind of a shock to the market. But in some ways, just as phones with external key buttons sort of morphed into smartphones with touchscreens, otherwise I could see smartphones that are primarily app-driven in the way that we interact with them now being pushed in a certain direction because of these interfaces. So smartphones won’t look the same in two years as they do now, and they won’t follow that same sort of app-driven trajectory like they are now, probably because of things that are rethought… And it might not be that we all have Rabbits in our pocket, but maybe smartphones become more like Rabbits over time. I’m not sure. I think that that’s very likely a thing that happened.

[00:43:37.20] It’s also interesting to me - it’s a little bit hard to parse out for me what’s the workload like between what’s happening on the device and what’s happening in the cloud, and what sort of connectivity is actually needed for full functionality with the device. Maybe that’s something, if you want to share your own findings on that, in our Slack community at Changelog.com/community, we’d love to hear about it.

My understanding is there is at least a good portion of the LAM and the LAM-powered routines that are operating in a centralized sort of platform and hardware. So there’s not this kind of huge large model running on a very low-power device that might suck away all the energy… But I think that’s also an interesting direction, is how far could we get, especially with local models getting so good recently, with fine-tuned, local, optimized, quantized models doing action-related things on edge devices in our pockets, that aren’t relying on stable and high-speed internet connections… Which also, of course, helps with the privacy-related issues as well.

Kenneth Auchenberg: You could say that, but … Taking a step back, we can look at like - I’m building an SDK, and I’m building a CLI; that’s for developers. Is that developer experience infrastructure? I would say it’s not, but it’s part of the recipe. Really, this is a similar perspective you can apply on cloud infrastructure, in the sense that we went from being 00 in our own data centers, we all had to buy the hardware and operate things, and now we’ve moved to a cloud-native world.

What I see around developer experience in our industry is that I’m kind of seeing the same, is that it has become so complicated - I wanna say complicated, but the market demands for you providing a great developer experience has become really… the bar has been set so high that you as a small company, or even a medium-sized company, cannot build those pieces anymore. So this is really a part of like the materialization of the market, that instead of you building everything in-house, now we reached that maturity point in the market where there’s actually a lot of table stakes solutions you can go buy off the shelf, and you can use to provide a part of your developer experience to your customers.

So in the sense that if I’m building – let’s say I have a weather company, and I want to have an API that provides weather data. Should you go out and build your own infrastructure, documentation, SDKs, all the aspects? In 2022, or 2023, as we look into the future, would you go out and buy some of those solutions from companies that’ve been specializing in that?

Jerod Santo: Salesforce EVP and Heroku’s General Manager, Bob Wise, writes: “Starting October 26, 2022, we will begin deleting inactive accounts and associated storage for accounts that have been inactive for over a year. Starting November 28, 2022, we plan to stop offering free product plans and plan to start shutting down free dynos and data services.”

Listener joerick commented on the story on Changelog.com, asking: “Has the hacker culture left Heroku? In the blog post, I see a lot of language focused on small / medium sized business, but none about celebrating the creativity of individuals and tiny teams. This is confusing to me, because I always felt that Heroku’s key strength was that as a single developer, you could focus entirely on your product, and outsource all the ops to the service. And it’s fantastic for that… So then the question is - if not the hackers, where are Heroku going to get new customers from? Because cloud ops is a hella crowded market.”

I agree, Joe, and as one of those solo developers, this change in direction makes me sad. The good news is, other players will step in to fill this gap Heroku is leaving in the market.

Dan Kohn: Every file of all 80,000 files or so are supposed to be owned by a specific SIG, but that mapping isn’t transparent, so the fact that we’re able to do all that in a more complex project really lets you dive in in a more detailed way.

I guess one other project I might mention - I referred to it before - is CNCF’s Interactive Cloud Native Landscape, and that’s at l.cncf.io. This was kind of a personal passion project; it partly came from getting so many complaints about that crazy static Landscape document with more than 500 boxes on it… But also, just as I tried to stay familiar with this space, for any given project that I’d hear about, I would always do kind of the same set of searches - look it up on GitHub, how many stars and contributors did it have, then look it up on Crunchbase, and say “Oh, well, the company behind it - how much funding did they get? When were they founded?” that kind of thing.

And so this is, again, a free open source project and service that does all that for you. One of the powerful aspects is just a lot of filtering and sorting that we built into it. For example, if you’re looking at it, and over on the left side under Example Filters, if you click Open Source by Age, since you’re kind of historians of open source, you’ve been following this space - it’s pretty interesting to see “Oh, here’s the project in the cloud native space”, and then if you click on Postgres, you can see “Oh, that was founded 22 years ago, and its latest commit was this week”, which is really such an extraordinary level of success and engagement.

[28:09] And then the next two are MariaDB and MySQL, and of course, they’re forks of each other, so they were both founded 18 years ago. And then going forward, you see things like Ceph, that’s 17 years ago, and NGINX, and MuleSoft, and Puppet, and others.

So that’s one view… But then another one that’s kind of fun is click on Open Source by Stars - okay, you can see Kubernetes is number one there, with 40,000, but things like Elastic and Ansible, Redis, Serverless, Grafana… And then another neat one is Offerings from China, so that you can see that we’re up to 55 products and projects that we’re tracking. We have a total of 18,000 stars, the companies behind them have a market cap of a trillion dollars, and have raised funding of 158 million dollars.

Stephen O’Grady: Yeah, so again, there’s a lot to unpack there. So looking at it from a commercial angle, it’s been interesting that a number of times people have argued that “Oh, hey, this cloud stuff is a brand new frontier, and people can pick this up and run with it.” It’s like, it’s happened kind of forever. Commercial entities… I mean, how the – was it the networking stack? I think Windows famously was BSD licensed, right? And so companies have been picking up the stuff forever, and sort of selling it. IBM, for example, picked up and replaced, and basically deprecated their own web server, because they’re like “No, the Apache one is just as good, if not better.”

So these models have been around for a long time, there’s nothing new about that. And from a cloud standpoint, really the argument that I always make is that there are two different ways to look at it. One which is, in the early days in particular - I can’t tell you how many conversations I had with particularly people in the database space. And I was like “Look at the growth here from a managed database standpoint. You have to spin up your own managed database, otherwise other companies are going to do it for you.” And it took some of them a lot longer than it should have. And sure enough, they’ve done that, and guess what - the businesses took off. So in Mongo’s case - I’ll get the numbers probably a little wrong, but it was about 10 years for them to hit a 100-million run rate for their on-prem business. They did it in like two and a half from a services standpoint. So option number one is spin up your own services business, and oh, by the way, you can differentiate your own software in the services business by releasing adjacent features, features that maybe don’t make it back to open source… You can differentiate pretty easily when you do that. So there are easily ways to compete on the cloud front.

And then the other piece of this is that – well, I had a conversation with somebody a while ago, which is “Hey, nobody wants to see their work picked up and just used and repurposed.” And you’re like “That’s what the licenses permit, right?” I mean, that’s just how this works. If you don’t want that, then great; don’t release under that license. It’s pretty straightforward.

[41:26] And the thing that a lot of the companies really don’t want to hear as well is that they want to exclusively monetize an asset… Which - again, you wrote it, you want to capture the maximum profits. But the interesting thing that we hear all the time is “All these companies can’t make money, because they’re competing with cloud.” It’s like, yeah, they’ve gone public; they’re multibillion-dollar companies in many cases, while competing.” When they change licenses, they’re already multibillion-dollar companies. And it’s like, okay, really, what are we talking about? No, they can make money, and in many cases, the de facto anointment of these companies as market leaders – so in other words, if you’re AWS and you pick one of these companies and you spin up your own instance, what you’re telling the market is that “Yeah, we’ve looked at all these databases, search, whatever it might be, we’ve looked at all of them, and we think this is the best and most popular one.” So on the one hand, that sucks if you’re the company that’s being competed with. On the other hand, it is a lot worse to be one of the competitors. Because you’re like “Oh, wait, so I’m not as popular? I’m not the kind of opportunity that AWS is even interested in?”

So that’s the thing, there are ancillary benefits to the cloud companies, competing with these companies. Anyway, you try to have these conversations with a lot of the vendors and they don’t really go that well… Perhaps not surprisingly. And if you talk to the investors, it goes even less well. Those are typically not terribly productive conversations.

Prashanth Rao: That’s an amazing point, yeah. I covered this in my blog post number one, in terms of the architectures of these databases. And you’re absolutely right, I think there is a lot of room for embedded databases to become the norm. I know DuckDB is making waves in the SQL market on this front. I think a lot of vendors are emulating what DuckDB has done in SQL. As you know, DuckDB is an embedded database, unlike Postgres, which is a client-server architecture database.

[42:08] So what happened in the SQL world is now translating into, we could say, the vector world. Two databases that are following this embedded approach, LanceDB, as I mentioned, and ChromaDB. These are the most – ChromaDB is quite well-known; people have been talking about it for a while… But between the two of these, I do think that LanceDB stands out more in the underlying technology, because Chroma, from what I understand right now, is it still building out its underlying layer. It was kind of wrapped around an existing underlying internal database itself. It did have its own purpose-built offering to begin with, but they’re kind of building that out as we speak. So I think between these two vendors, it’ll be interesting to see how each of them rolls out their own features, and kind of target a specific part of the market.

Going back to the point of cloud versus on-prem, that’s another big thing, I think, that’s going to come up. Honestly, Pinecone and services like that, that are completely on cloud, they could be real potential bottlenecks for companies to be okay with just sending all the data to some cloud… Even if Pinecone says they would deploy on your infrastructure, at the end of the day it is still a purely cloud-based solution. There’s a lot of infrastructure-related hurdles around that.

Self-hosted is, I think, as you say, going to become more and more common, and certain options, like [unintelligible 00:43:15.25] quadrant they offer self-hosted options in their licensing as well. So the question for me that remains unanswered is “Which model in vectors database, vector search, will dominate in the longer-term?” Embedded versus client server. We are so used to the model of client server; that’s been working for more than a decade right now. Pretty much every database we’ve used is based on the client server architecture, where the server sits remotely, and I don’t have to have the server running anywhere near where the application’s running. But I think embedded databases, especially with LLMs in the picture, it makes a lot of sense in terms of data privacy, and things like that. And the scalability of these have, I guess, not truly been tested. DuckDB is just three or four years old, LanceDB is less than a year old, Chrome as well… So it’d be interesting to see how embedded databases compete on that front, and how well adopted they are… Because I think industry generally tends to favor things that are tried and tested. At scale, for this sort of thing to catch on, it will have to offer real, real business value. And the way these databases monetize their offering, I think that’s gonna be interesting to see.

Adam Jacob: Yeah, we knew what the diligence was. Yeah, this introduced me to a bunch of new, interesting ideas. So one was that you could – and Jesse knew these things. Jesse had been studying the business of venture capital in a way that I hadn’t. I had been, but I was uncertain still, and Jesse was not uncertain. And so I learned that you should never pay a startup lawyer. That they take their money when you get funded, but they’ll do all the work for you for free, for example. I was like “That’s amazing.” And then he had lots of – he had helped start what would become Velocity, with Tim O’Reilly… And so he was sort of connected to that whole scene, which eventually became sort of the epicenter of how Web 2.0 evolved, and how that entire generation of cloud and all that stuff sort of happened. Those people were connected for the first time sort of through O’Reilly. And so those connections and the technology and the shape of the market at the time allowed us to sort of successfully raise capital. But we had a hard time raising. I think we pitched – Jesse would know the exact number, but like 15, 20 times, and got no’s… And we were all beaten down, and sort of convinced it wasn’t going to work. And we met Bill Bryant at a coffee shop in Seattle, which was near his house. He held court at this coffee shop. And we gave him our sad, dejected pitch… Because everybody told us to raise less money, basically. And so we had started out asking for two and a half, and we had gotten all the way down to “Please give us half a million dollars. We promise it’ll work out.” And he was like “Guys, this is a sad pitch. Is there a business you believe in hiding in here? Is there a way that we all get a billion dollars? Because if so, I want to hear that pitch.” And we were like “Well, f*** yeah.” And so then we gave him the billion-dollar version, and he was like “That’s a good pitch. That’s what we’re going to do.” And he’s like “And you’re going to ask for three. Ask me for three.” And we were like “Okay, three.” And he was like “Great!”

Adam Stacoviak: Welcome back everyone, this is The Changelog and I’m your host, Adam Stacoviak. This is episode 203, and today Jerod and I are joined by Sara Chipps, the creator of Jewelbots, a friendship bracelet for the Smartphone era. We’re also joined by George Stocker, the VP of Engineering and we talked about connected wearables for kids, keeping UX simple, Open Source and building your business around Open Source, influencing young girls to the possibilities of coding.

Our sponsors for today’s show are Linode and Rollbar.

Our first sponsor of the show is our friends at Linode, and we want to invite every single listener of the Changelog to try out Linode, one of the fastest, most efficient SSD cloud servers on the market. You can get a Linode cloud server up and running in seconds, you can get a choice of Linux distro, resources, node location. They’ve got eight data centers all across the world: North America, Europe, Asia-Pacific. Plans start at just $10/month. They’ve got hourly billing, and you get full root access for more control. They can run VMs, run containers or even a private Git server. Enjoy the native SSD cloud storage, Intel E5 processor, a 40Gbps network. Use the code ‘changelog20’ with unlimited uses to get $20 of credit in your account. Tell your friends, it expires later this year so you’ve got plenty of time to use it. Head to linode.com/changelog, tell them we sent you, and now onto the show.

Alright, we’re here today joined by Sara Chipps and George Stocker. Jerod, you know that I love kids, right?

James Moore: …which means in the law we have the purpose of having browser engines is to power web software applications. And that’s in the text. That’s going to be very hard for any gatekeeper to argue against. So that was a really big win. So that’s in the EU. In the UK, they’ve also opened an investigation called Browsers and Cloud Gaming, and that’s a market investigation reference. And the special thing about the market investigation reference is the UK, unlike most other jurisdictions, have very strong competition laws, which allow them to essentially impose conditions on gatekeepers if they open one of these references. It runs for about a year and a half, and at the end of it they can come along and they can just tell the gatekeepers what changes are required under the investigation.

Now, Apple had the entire case shut down, because they took the CMA to court, and some legal technicalities about when the investigation was started. And then the court agreed with Apple, and then they just closed the entire case down and froze it, which means obviously it was a big loss… But then the UK Competitions and Markets Authority appealed, and they won on appeal. So just on January 26th this year, that investigation started up again, but the clock resets, and then that investigation is ongoing. And then at the end of that investigation, they can impose conditions on Apple. And that’s in addition to whatever the DMCC bill enables the UK to do.

Bryan Cantrill: [27:56] Wow. Okay. So Steve, you know, [unintelligible 00:27:57.14] He’s gonna fund anything… They’re gonna find anything we put in front of them. Maybe we should solve the problem that we actually want to solve. And the ideas that we’d been kicking around were frankly small-ball; they were small problems that felt like startup-sized problems. But if we have got an opportunity to raise money for anything we wanted to go to, the problem that we actually wanted to go solve together was the one that we were suffering with every day inside of the walls of Troy, and then Samsung, which is the infrastructure that we were building a cloud on, out of commodity gear, Dell, HPE, Supermicro, had no end of problems; plagued by problems that we simply could not solve, because we did not control that layer of the stack. And if you look at what Google and Facebook, now Meta, Microsoft, Amazon have done for themselves, the machines that they were building for themselves looked nothing like the machines that we were trying to build the cloud on. And I’m like, “Steve, if we can actually get anything funded, we should go start a computer company.” And I just remember vividly in Steve’s office, being like, “Wow, do you think we could?” It was almost like, “Do we have permission to go do that? Because yeah, I mean - obviously, we should go do that.”

Steve had spent a decade – prior to his decade at Joyent had spent a decade at Dell. And so, you know, he and I – and coming up on the go-to market side. So we felt like, “Boy, if we can go do this, let’s go do it.”

The thing that’s really funny is that we – so we kind of started to formulate this, and started to reach out to VCs and talk about it. And what we learned pretty early is that this is wildly contrarian, but intriguing, the VCs. In some ways, this is like the worst possible thing for VCs, because VCs always want to know more… But it requires a boldness that can be hard for venture capital to summon. So it’s easy to have long conversations that lead to ultimately not getting across the finish line; but folks were intrigued, and… Great!

So the irony is that talking to a bunch of venture capitalists, getting a bunch of enthusiasm for it, and then finally went back to that VC that had sent the email, that honestly sent us down the path for Oxide… And I call him up, and I get like maybe a minute into kind of describing the problem that we were gonna solve. He’s like, “Wait a minute, Bryan. I’m gonna stop you. I see where this is going. Please tell me you’re not going to start a computer company.” I’m like, “No, that’s exactly what we’re gonna do.” He’s like, “No, absolutely not. No. I want nothing to do with this.” And I’m like, “You know, you sent me this email saying you’d fund “Literally anything I’d put in front of you.” He’s like, “No. No, I’m not doing that. Like no, definitely not.”

Joseph Jacks: [28:03] Yeah, and that’s a really big question. I’ll try my best to give you sort of a concise answer, maybe in the context of how we’re building out the firm… And maybe I’ll just constrain that first to functional portfolio partners that are focusing on two really core things that we believe are very fundamentally different in commercial open source software companies, as compared to proprietary closed source software companies.

If you look at legal, which is obviously Heather’s domain - she’s extremely knowledgeable and has just deep, deep experience for a couple decades, the legal side of open source in the business context is one of the most non-standardized, hairy, polarizing, complex and error-prone topics and areas in the industry. That’s probably the first functional part of a company that I can talk about where things are really fundamentally different.

If you consider a proprietary or a closed source software company approach to licensing, it’s pretty simple, it’s pretty straightforward. You flesh out what you want to build - a design doc, or an idea, or a napkin, or you go through whatever product development methodology that gets you to understanding what needs to be implemented, and then you go and build it, implement it… And then you work really hard to get early design customers or companies to agree to use your product and give you feedback, and you probably sign different agreements to make sure that confidentiality is maintained - it’s quite a costly process, from a sort of first highly valued customer, to the tenth and the twentieth and onwards. It requires lots of manual effort.

With the licensing side of that though, as it’s a proprietary company, you don’t really think through too many complexities in terms of the customization of a license, or the nuances of open source licensing. In fact, if you could actually look at one example where we have a huge number of startups getting created - in fact, mostly software companies - and look at how licensing is standardized there, it is actually in fact standardized, and I’ll pick on one really great organization, and I’m not gonna say anything bad, I think they’re doing amazing things… This is Y Combinator, the YC incubator program in Silicon Valley.

What Y Combinator has is a sort of set of standard legal documents that they have sort of distributed out to their incubator companies, companies that get enlisted in Y Combinator, and they actually do have one for a sort of standard subscription agreement for access to software, that their startups go and license and sell to customers. And it’s really valuable - it sort of short-circuits the cost and complexity of hiring a lawyer, and drafting a custom agreement, and figuring out exactly what terms you want to implement… Because all those things are pretty standardized, Y Combinator just says “Hey, use this template subscription SaaS software agreement”, whether it’s an actual SaaS offering delivered over an API, or whether it’s on a cloud provider, or you’re gonna ship a custom proprietary binary to someone… Whatever it is, just use this license. And it’s really helpful, it’s extremely useful for the companies in Y Combinator, because it just gets them going without any friction. There’s really no need to hire a lawyer, and you can often times just get customers to look at that, and it’s something that the industry has sufficiently agreed upon as terms that aren’t super-complex and onerous.

[32:04] So that’s one dimension. We have sort of the standardization of licensing for proprietary closed source companies that are building software-based products. Y Combinator produces something like – I think it’s on the order of 600 or so startups per year, so that’s quite a good reference point.

On the open source side of things though however, the complexities are astronomical. You first have to take into account when you open source a piece of software, which license you’re gonna choose. Do you choose Apache? Do you choose BSD? MIT? GPL? MPL? Affero? Which version of the GPL do you choose? What copyleft constraints are you interested in protecting? There’s a vast array of choices there. However, we’ve sort of standardized on the open source licensing aspect, quite a lot of industry agreements around Apache 2.0 being really valuable. The Cloud Native Computing Foundation actually encourages – I don’t believe it’s a hard requirement, but they strongly encourage new projects to use the Apache 2.0 license. We also have quite a lot of industry standardization around the MIT license, and around MPL 2.0, which is great, which Heather on our team helped write and was on the team that implemented the Mozilla Public License version two… And then we also have quite a lot of industry agreement on the trade-offs and the constraints and the reasons why say Apache 2.0 is a really good license to standardize on.

So let’s say you’re a startup and you say “Okay, great, we’ve got a new project, we’re going to release it as an Apache 2.0 licensed piece of code, we’re gonna open up the repo and call it a day”, and that’s a pretty fast decision. However, when you want to build a product around that commercial open source company, that sort of builds on that Apache 2.0-based project, you run into all kinds of complexities. It’s not a simple matter of saying “Okay, we’ve got 20,000 companies using this open source project, and we want to go and use the Y Combinator (I’m not picking on Y Combinator, but…), we’ll just bolt on the Y Combinator terms of service, and IP, and warranty, and indemnification, and trademarking, and all the sort of template terms - we’re gonna just bolt on that agreement to our open source license, and maybe hold back some code in a private repo and just distribute that to customers.” That would not work, for a myriad of reasons.

What we see with commercial open source licensing in these commercial open source companies, what we’ve observed - and Heather has been very close to this - is there are actual full-time legal teams, typically headed up by a general counsel, which is a similar role in proprietary software companies… But what they do is basically they spend a huge amount of energy and effort, case-by-case, relative to the project that a company is based on, and they write custom agreements from scratch. The cost and complexity of writing those custom agreements for the commercial proprietary bits on top of the open source project are very nuanced and tailored to what kind of product they’re building, and how they’re going to market, and what transaction volume looks like in terms of the size of the customer base, how large the deals are, how strategic customers are, what needs the customers have in terms of the indemnification side of things, and multiples, and the warranties… There’s just a huge [unintelligible 00:35:48.26] of legal customization that goes into those agreements. They’re often called Master Software License and Service Agreements (MSLSAs).

This is one of the things that we’re kind of scratching on and working on… You mentioned Commons Clause, which caused quite an uproar and a lot of excitement in the industry, which Heather did author…

Rahul Nair: Hey, thank you, Dan. This has been an incredible experience. Let me, before I even talk about the Advent of GenAI, two sentences… This was probably the biggest generative AI hackathon that our team has organized, and the submissions, all the different chats and things that we have seen - this has been really awesome. They got a lot of positive feedback and a lot of things that we need to improve for next time… So thank you for participating in the hackathon. We will be announcing the winners, so the final product development in a couple of hours. Before that, let me talk about Liftoff.

So Liftoff is an accelerator program, specifically a technical accelerator program for early-stage startups. So if you have an idea, you’re a seed startup, or till Series B, you want to scale, you want to build some cool things in AI or machine learning, please join the program. It’s free. I would categorize the benefits basically into three different pillars: world-class technical support and technical expertise. That’s me and Ryan here, we lead the engineering side of things, and we have an incredible engineering scale team. Some of the folks are here, like [unintelligible 00:03:55.09] Then you get access to technology, both Intel Software and Intel Developer Cloud. Intel Developer Cloud is a production-ready cloud, specifically designed for AI workloads. PredictionGuard is one of the startups that came to our program earlier this year, and they are running on Intel Developer Cloud now, using a Gaudi 2 accelerator. And I’m sure that many of you folks who have participated in the hackathon would have used PredictionGuard’s LLM APIs.

The third one is co-marketing, and bringing your – once you have built that product and deployed it, the next thing is to make some money, right? So we co-market your startup, your idea through all of Intel’s channels, and also we have a network of accelerators, a network of folks that’s beyond Intel, that we take the product you have built, the company you have built, and basically market it all over the world.

We also connect you with our sales teams to see if there’s a potential for selling the things that were built through Intel channels. It could be a service, an IDC, or it could be separate, that one of our customers of Intel is looking for. I would urge anyone who is looking to really bootstrap and accelerate your startup journey to join Intel Liftoff.

Zac Smith: Well, I think we’ll make meaningful progress on the distribution capabilities. I always like to tell people that Equinix metal is not a bare-metal cloud. We’re a hardware distribution platform, an operator for fundamental infrastructure… So we’ll enable more places where you can do that. We’ve been really fortunate to be able to invest heavily and put Equinix Metal in 18 markets around the world. I think we’ll expand that and go to more. I think though that what we’ll do is we’ll move this – my prediction is that we’ll move some of these things which are kind of loosey-goosey right now… Like, we’re going to do field trials of our pluggable liquid cooling. We’ve already been doing it for about a year in one of our data centers. We’re gonna move there with customers in the coming months, using some prototypes that we’ve been building…

Zac Smith: Yeah, so we’ve been going since 1998. Jay Adelson started the business as the “Equality in the internet exchange. Equinix.” And we were a neutral place for the internet at the time to meet, which was the content side and the telecom side. And we’ve kind of continued that, and now at this point we have I guess about 230 data centers, maybe 50 under construction right now. Globally, we’re in 64 markets around the world, the largest provider in every single region of the world at this point. Everywhere from Sao Paolo to Mexico City, to Warsaw, to Brisbane, to Osaka… It’s a pretty massive global platform, not only of data centers, but of interconnection. And that’s really the reason why people come to Equinix, is to interconnect.

We helped Amazon create Direct Connect, we operate the vast majority of cloud on-ramps, and over 400,000 interconnections between our customers, to allow them to move traffic cheaper and faster, more economically between each other.

So our whole business model is built around creating more of the network effect, so it’s a really, really interesting opportunity, a really interesting business. It sits in between all the clouds and all the things, and allows the kind of magic of our customers to happen in a neutral way. I think, like any business, we’ve had an incredible ride, it’s been going great, and I think you can look at our public side and it looks really good… But we too were undergoing some big shifts, as people wanna go to the data center less, and we’re gonna do more of that for them by automating. And as our OEM partners move to as-a-service businesses, as climate change becomes a central part of what we do… Every RFP that we field now, the number one thing now from large enterprise customers is “Help me meet my science targets.” Which is awesome. A year ago that wasn’t the case. Now it’s everywhere. It’s awesome.

Jaana Dogan: Yes. I was originally working for Google Cloud, and somehow bootstrapped all the cloud libraries, some sort of like good API design and idiomatic libraries, and everything around cloud products and how we can actually interact with the ecosystem so much better. I kind of like moved to another role to work on the mobile project. The scope of the mobile project was first making the runtime running both on iOS and Android, and then come up with some libraries that will work on those two platforms and providing some tooling similar to Go tool, that will allow me to build mobile applications rather than just the binary. I was involved in that.

[03:43] As a continuation of that work, last year I was working with the Android team. Android is going through some sort of reorganization when it comes to building some tools and some more structure to build custom Android kernels. The team also wanted to expose GPIO and other peripheral communication interfaces from Android, and wanted Android to work on popular Linux development ports, so I was involved in there, trying to figure out how we can make Go as a first-class citizen for Android, targeting on the embedded markets and what they are envisioning for the future.

Adam Stacoviak: It’s always been important, but more and more people are leveraging APIs, they’re building out this agentic world we keep hearing about… And I think you keep having more and more people program against brittle APIs, brittle latency of networks, databases etc. and you need that promise. I’m going to say that this is the year where the marketing problem that you have, that Jerod alluded to, is still there (I’m sorry), but it’s less. And I’ll tell you why it’s less. Because Render - I just talked to Anurag Goel, CEO/founder of Render. And this is on their radar. So they’re building an application for developers. We did a whole show on this… And during that conversation, he mentioned a brand - at least I think I did, actually… I mentioned a brand that sponsors us - not this show, but has been, and I think still is a sponsor into Q2, and maybe Q3… And that brand is Temporal. So I’m going to ask you to sort of help me understand the difference between Temporal, NATS, Synadia, Restate, your open source flavors in your cloud, what Render may be doing for application developers… It seems like this durable execution retry model doesn’t live in the language itself. It’s something you have to build every single time. That sucks. And it seems like more and more people are trying to solve it. So break down all those for me. Temporal, NATS, Synadia, yourself, what Render’s doing, and anything else that may be doing… I mean, Flink, but that’s a different world.

Dan Kohn: It definitely is, and my favorite counterexample on it is Open Tracing, which was the third project in CNCF, and was created largely by a guy named Ben Sigelman, who has a startup called LightStep. He proposed Open Tracing to CNCF over a year ago (14 months or something) and it went through the whole process and got acceptance of the TOC, and has been maturing and growing since then. And through that whole period, LightStep never had gotten around to becoming a member of CNCF, so I think it’s really a great example of how we’ve separated the technology decisions of what projects make sense in the cloud native landscape that we wanna host and promote, and the membership decisions, which is what provides the funding and some of the marketing behind what we do.

Kelsey Hightower: Well, here’s the thing… So one thing people don’t talk about when you retire with all these things is what are you afraid of? What are you afraid of? I’m not afraid of the job, I’m not afraid of a project failing… So what are you afraid of? What’s left to be afraid of? And now when you have a little bit more time to pay attention to what’s going on, all this stuff that you had, that like lets you retire… So what does it take to retire? Usually, for most people, it takes money to retire. So that means money still needs to be working. Money still needs to work in order for this to work. If we get hyperinflation, let’s just say, now the minimum wage is $200 million, I don’t care what your status is, you’re now back at a reset. McDonald’s starts saying $200 million an hour. [laughs] I don’t care how much money you have right now, it doesn’t matter, because the whole thing has gotten reset. So I have a fear of not just like societal collapse, but a reset that you can’t deal with. And as you get older, you may not be able to bounce back into that reset. So that always has me on edge of like “I need to pay attention.” I still have to keep my eye on the prize… And also, I actually care about how people are actually doing.

So stock market is way up. If you own stocks, your world is fine. Like “Hey, everything is great.” But then what are you going to buy with that money if the people you’re buying it from are in good shape? Like, if your doctor is not in a happy place, that’s not good for you. If your neighbor is not in a happy place, that may not be good for you, because that neighbor may be your teacher, it may be the firefighter, it may be the person that works at the utility plant, keeping your water clean… Those people need to be in a good spot as well, for everything else to work.

So I think for me, I still respect the dependency I have on people that I’ve never met. And if those people are in a good spot, then I still have things to think about. Like, how do you solve that puzzle? So we just ignore it and hopefully it fixes itself? Or should we try to use the same type of brainpower we did to build apps, and cloud, to think about people and society?

David Cramer: The next time we fundraised, which was our series A, that question didn’t come up anymore, because we had proven them that there was no fear. And also, for what it’s worth, when they were asking why people would pay, we had revenue, and it was fine. But the next time around, the question was very different; it was “What stops Amazon from running this? Hosting this themselves and selling it? If you can make money here, why would Amazon or any of the big companies - why would they not capitalize on that? …as they’ve shown themselves to do in many ways.” And my response was “It’s not happening today. We’ll figure it out. I’m not worried about that.” I said that with conviction, and I believed in it because Sentry is a product, not an infrastructure piece. So it’s a little bit different than what their status quo is.

[unintelligible 00:27:15.29] I don’t know that much about how Elastic worked internally, and all these other things, but Amazon sells Elasticsearch, right? Elastic sells Elasticsearch. There’s competition there. But Elastic is just an infrastructure tool. It’s basically a database. That’s the way I’d reason about anything; it’s a database, or a web server, or something like that… And that’s what the cloud providers ultimately sell. Because a product is very different. You have to constantly build and change and evolve the product… And our bet was that Amazon isn’t gonna invest in that, because it’s a high-risk move. They could have chosen to try to run the open source thing and assumed that we would invest in it, but we just didn’t think that would happen. So we took that risk and we accepted it, as did our investors and everybody else.

[27:55] That question didn’t come up in the future after that, for what it’s worth. Nobody was concerned going forward. But we did always think about it, and we had many, many conversations, kind of just like riffing… Like “Well, what would we do if tomorrow Amazon’s like “Well, we’re selling Sentry.” And for many people, that’s a much scarier idea than us. I think we’re a little bit – I’m gonna call it confident; probably arrogant… But we’re very confident in our ability to win and execute in our space, and I think we’ve shown that really well, where we’re the market leader, and we’ve had a lot of stiff competition for many years.

So when we talked about this, other than like “Oh yeah, we’re confident we’ll win against Amazon”, our confidence was a little shaken… And the way we thought about it was like “Okay, what would we do if Amazon did this tomorrow? What would be our recourse?” And the idealistic approach is that the community would come to your calling and they would battle and rebel against Amazon, and even if that happened, it wouldn’t matter. Amazon would still just completely demolish anything, and it just wouldn’t matter. It’s like one of the biggest businesses in history at this point, right?

Jason McGee: Sure. Like many things in the industry today, there’s quite a lot of collaboration in technology. I run the platform as a service team for IBM Cloud, and as part of my role, we look at new technologies that we wanna bring to market… And a couple of years ago we were thinking about this space - how do we help with microservices, how do we help developers build and manage microservice applications? We have all these different components working together… And we started building a piece of technology – we actually open sourced a piece of technology called Amalgamate, which was kind of our viewpoint on how to do programmable routing and control between different services within a cloud architecture…And we’ve put that out there a couple years ago.

About two years ago at KubeCon I was talking with some of my counterparts at Google and came to realize that we were solving similar problems and we kind of viewed the microservice management space in a similar way.

[06:51] We got together, had some drinks and chatted about the space, and decided “You know, we actually see the world the same way… Maybe we should join forces and combine some of the work that we’re doing.”

At the time, Google was really focused more on security and telemetry, or kind of how do you get visibility of the traffic between different services… So we decided to join forces, we combined our technologies together and we created the Istio project. We kind of worked on it, you know, not in secret, but largely just the two of us, along with the guys at Lyft, who contributed one of the key technology components to Istio, until about May of last year, when we launched the project.

So it was really the coming together of like minds around how to solve one of the emerging problems in the cloud-native space.

Abdel Sghiouar: Well, I think that there are a few things that have been mentioned by the two of you. So let’s start from the last thing you said. I think debating Cloud Functions as a service versus Kubernetes is the wrong debate, because Kubernetes can do more than just functions, right? If you really think about it, it has APIs for functions, jobs, apps, static, stateless and stateful… It has pretty much an API for any sort of deployment that you would need… Which technically developers are in either of these three categories. You’re either writing a backend, an API, something like that, or a frontend, you’re writing a job, with pipeline and orchestration, or you’re doing functions… Which, in my head, functions are just a special type of backends, right?

So Kubernetes can do a lot of things. So the question then becomes, for you, Joe, for example, if you tomorrow need to go from writing Go functions that deploys on AWS Lambda, to glue a bunch of services together to write jobs, are you going to be able to use lambda for that? I would probably assume the answer is no, and you have to pick up another tool. And then we could argue there is also a learning curve for that next tool you have to learn. This is one thing.

The second thing, which I think is so important… And I’m not tooting on our own horn, but there is a person in my - he’s actually my director, Richard, and he wrote a very interesting article debating the… There is this movement called Shift Left, which essentially is what DevOps is all about, like making more developers more empowered, more responsible etc, etc. And his argument is “Instead of focusing on shifting left when you are doing modernization, you should focus on shifting down.” Essentially, shifting down means giving that complexity to the cloud provider; letting somebody else deal with all the complexity… Which, because we’re on the topic of Kubernetes - I mean, using a managed Kubernetes is pretty easy. Like, deploying your own Kubernetes is the problem. But using a managed version of Kubernetes is pretty easy.

And you said something very interesting, Joe, that is getting out of your marketing Manchester to work with international customers you realized a lot of people use Kubernetes. I think that that’s the unfortunate consequences of the DevOps and Shift Left movement. Because what’s happening right now in our industry is that we’re just expecting developers to know more. 10-15 years ago you’d go to work, you’d write code, you’d ship a binary and you’d go home. That’s it. That’s a Java developer. Probably you do some tests, or not… No one expected you to know how to SSH into a server. No one expected you to know how to set up an SSL certificate. That was not even an expectation.

[16:23] But now, I think you’re all aware there was this massive thing called full-stack engineering, where we suddenly expect engineers to do everything: frontend, backend, security, storage, databases… Like, when was the last time you heard of a DBA? It was maybe like 15 years ago. They probably still exist, but we don’t hear about them that much.

And I think this is the core of probably the – I wouldn’t call it the problem, but the debate… It’s like, why do you as a developer feel you need to learn all of Kubernetes? So the core of the problem is, if you think it’s complex because you have to learn it, then the question is “Why do you have to learn it?” Are you in the right setup? And what I mean by the right setup, I mean the company, the organization, the team, the way you are structured, that is trying to utilize your time to the maximum, instead of having you waste time doing things you don’t need to do.

I’m going a little bit philosophical here, but I think that the whole question then is, if you don’t need to learn Kubernetes, then just don’t. It’s not really that big of a deal. And if you feel the need to learn it, then probably the question is, “Are you organized in the right way, the most efficient way, or not?” I don’t know if what I’m saying makes sense…

Marcus Edwards: Sure. I suspect that you may know this, but in 2010 Lockheed Martin actually became the first customer of one of the first companies providing commercially-available quantum computing devices. The company I’m talking about is D-Wave, and they don’t provide quantum computers per se, not universal quantum computing, but computational devices that make use of quantum physics, for sure.

That was really exciting, because Lockheed Martin was able to demonstrate one of the first practical uses of what’s called a quantum annealing machine - which is what D-Wave provides - debugging a chunk of 30-year-old code from an F-16 aircraft. It was just a cool story, and I thought it was a cool connection. So that’s one example. There are these sort of almost application-specific quantum devices that are actually now available, though there aren’t too many in the world… And we also see other companies like IBM, Google, Intel, all working on their own quantum computing projects. Microsoft actually has one, too. These are all at varying levels, and focusing on different technologies, because there are many different formulations and approaches to implementing quantum computing.

One of the most notable ones, just because of how far they’ve come and how well they’re doing with marketing and getting researchers on board, is IBM. IBM announced this year their system called IBM Quantum One. What it is - it’s a 20 qubit quantum computer, and it is that sort of universal quantum computer which application-specific devices like D-Waves are not. It’s exciting, because it’s commercially available; it’s also available to research… Researchers like myself use it for just asking interesting questions about physics and seeing what actually happens, and if it matches our expectations. It’s kind of like a lab that you can access through the cloud. It’s cool.

[15:55] Now, these computers, though you may suspect, aren’t changing the world yet. These are at this point sort of toy machines, and they’re really expensive toys. They’re several million dollars of parts and work going into each one… But they’re still at the point where even if they have a large number of qubits, like 20, that’s not really enough to get us to the point where we’re doing any sort of large-scale optimization problems, or really enhancing machine learning yet, largely due to just the challenges in engineering that come along with it. Once you’re trying to maintain a large quantum system, that becomes very difficult.

Kevin Ball: I’m playing the numbers game a little bit… But then the other one is we have been in a bear market on crypto and other stuff. There was huge amounts of hype last year, late into the last year, but pretty much this whole year it’s been going the wrong direction. So if these are likely to be relatively recent, I like my odds for this being a lie.

Jerod Santo: So, since Bitcoin is back in its bull run… It’s just been a few years in a bear market and then came roaring back from something like $4,000 a year ago, to 60k per coin, and around there today… People are interested once again in this crazy world of cryptocurrencies, and so we thought it’d be fun to explain Bitcoin like you’re five, because it is a difficult thing to explain, difficult to talk about, a lot of ins, a lot of outs, a lot of what-have-yous…

[19:57] The first way I would like to explain this is by stealing a tweet from Theophite on Twitter, which I thought that was a hilarious way to explain Bitcoin… Somebody tweeted out “I still don’t get Bitcoin”, and Theophite replied “Imagine if keeping your [unintelligible 00:20:13.18] for 24/7 produced solved Sudokus you could trade in for heroin.” [laughter] That’s pretty classic, right?

So of course, there’s your bear explanation, and there are lots of downsides with Bitcoin specifically around energy use and whatnot… But there is also some real value to the network. And I’m not gonna explain how Bitcoin works like we’re five, but I thought maybe I’d try to explain why some people think it’s valuable like you’re five… So here we go.

Imagine that you’re playing Monopoly with some friends… And one person decides - maybe they’re the homeowner. Usually house rules… They decide that they’re gonna be both the banker and the rule enforcer. Pretty typical. Everything starts off okay, but then the banker starts doing some things that you don’t appreciate as someone who plays the game. For example, they start injecting new money into the game, but not equally to everyone. Just to themselves and some of their friends.

They change the rules about how much money you get for passing Go, what you can go to jail for and for how long, they create over-the-top transfer fees and laws about who can trade with whom, etc.

Eventually, you and a few other people in the game decide that you want to transact without the banker’s rules, permissions, fees and so on. But you can’t use the Monopoly bucks, because the banker runs that whole system of things. So instead, you start a grouptext on your phones. And each time you wanna transfer money to and from each other, you put that in a text. Maybe you text “I’ll send five Schrute Bucks to Kball.” And then you text that out.

Everyone involved in this new way of sending money is in the grouptext, so that’s how you keep each other honest. Bitcoin is the grouptext. The end. What do you think?

Jerod Santo: The other thing to put in there, and I agree that there’s either like FOMO or a JOMO (the joy of missing out), there’s a stigma on the crypto markets, depending on whether they’re bulls or bears; we’re in a major bear market, so it’s like “Oh, that thing…” But just like the Brave team didn’t need to speculate - they ICO-ed, they got a bunch of Ether and then they sold that Ether immediately (most of it) for cash, for fiat money, you can do the same thing as a Brave publisher. Every time BAT comes into your account, whether it’s worth two cents or two bucks, you can just take the two cents or two bucks today. You don’t have to ride the wave.

Daniel Whitenack: So Moses, as I’m listening to Alon talk about his story and as we’re doing this, I’m thinking back to starting with these cutting edge MLOps… When you’re looking at the landscape on your side, as someone who’s bringing this technology to bear in the marketplace, how are you evaluating different opportunities in industry? I mean, is it just that everything is open? Do you have a way of looking and saying, “I see an opportunity where this technology in a particular industry is going to be very useful”? How do you make those kind of judgment calls on how to engage?