Eric Hanselman

Welcome to Next In Tech, an S&P Global Market Intelligence podcast with the world of emerging tech lives. I'm your host, Eric Hanselman, Chief Analyst for Technology, Media and Telecom at S&P Global Market Intelligence. And today, we're going to be looking at another upcoming conference in the technology sphere.

It's the KubeCon Conference that will be happening, the spring version of this. And to discuss what's happening in a lot of the cloud native aspects that are associated with it are, two of the analyst team, Jean Atelsek and William Fellows. Welcome back to the podcast, you both.

Jean Atelsek

Thank you. Good to be here.

William Fellows

Great to be back. Thanks, Eric.

Eric Hanselman

And we are looking at the next in the cavalcade of conferences that have been going on this year. But this one specifically focused on cloud native technology. And I guess the full title, it's now this conglomeration of a bunch of different aspects, KubeCon and the Cloud Native Conference. This is really something that is bringing together a lot of different technologies. But I guess, before we dig into some of what's being covered, maybe a little background in terms of the conference itself.

This is something that's been going on for, jeez, quite a number of years, and we were just talking about underlying technology. Containerization is really getting up to its first full decade, so it's something we've been looking at for a while.

William Fellows

That's right, Eric. So it's interesting that Kubernetes, which is kind of the organizing principle for KubeCon and the Cloud Native Computing Foundation will celebrate its 10th birthday this year. And I can't think -- I've been in the industry a long time and I can't think of anything that's really taken such a strong hold in the enterprise in such a short space of time.

There are now tens of millions of Kubernetes developers out there and it has become the kind of accepted sort of substrate for enterprise infrastructure and applications moving forward. I think part of the reason for the event and the continued success is that having inserted itself into this industry has, obviously, spawned an awful lot of complexity and challenges in terms of how to actually wrangle the stuff into production use.

Because I think until the last year or so, that's really the stage we've been at, is sort of a largely sort of experimentation and so on. But I wanted to -- if I could just give a shout out for some of our data that we collect from cloud-native practitioners, they now tell us from our last survey from the end of last year that the majority of applications are going to be using cloud native technologies now in -- within a couple of years' time.

There's always been a longitudinal sort of increase in the amount of use of the individual tools and technologies, but there's now a pretty strong pipeline for adoption with about 2 in 5 surveyed organizations already using cloud-native technologies and a further 30% are planning to implement these within 2 years.

In other words, cloud native really now has -- is hitting the main stream as this kind of replatforming to cloud-native rolls its way through the industry in the same way that the replatforming to the Internet happened in the '90s and so on. It's a multiyear effort, and there's still a long way to go yet.

Eric Hanselman

Yes. But to your point, this really is a transformation of the foundational elements of the infrastructure in which we build all of these capabilities. There are supporting applications in their various forms with everything out to generative AI and all the other good things that are out there. And the fact that we've gone through, you're identifying the Internet transition. We then made that next shift to virtualization.

And if you think about what's happened in containerization and then container management, Kubernetes and some of that shift towards what is that cloud native ethos. This is a pretty significant transition. And I guess it's one of those things if we think about the conference itself, it is that point at which you've now got the CNCF behind this, you've now got a whole set of practitioners who are all working and collaborating together and actually capitalizing on a lot of what has been the foundational open source aspect to this.

And I don't know, I guess, I often wonder is, was that open source focus part of the catalyst or part of the energy that facilitated moving some of this forward. But I guess that's a lot of what we'll see at the conference.

Jean Atelsek

Yes. I would say that, obviously, open source powered the Kubernetes revolution. But one thing that is not on the agenda at KubeCon, but we'll probably be focus for me is the sort of the licensing changes that are happening and the stress that some of these open core vendors are under to monetize the work and the investment that they're making, I see that there's...

Eric Hanselman

This is -- well -- but this is -- I guess, well, for our listeners, so let me take a quick step back and just talk about the fact that there's the idea of open source and, for lack of a better term, free software and the transformation in this business that has really take -- has built a very large business out of free software, which is -- seems like that might be an interesting juxtaposition.

But in fact, there is a lot of business around the provisioning, developing, delivery and support of open source software that fundamentally, anyone could pick up and run for free. And what's behind some of this is that there has been a business model that, Jean, you are talking about, open core, which is the idea that the core parts of the software are part of the open source environment.

They are provided for free and yet -- and so extra support sometimes additional feature capabilities, scaling capabilities, management tools, a lot of wrappers beyond just the core capabilities are the things that people pay for. But the way in which they've been doing that is changing because you've now got this ever-increasing set of folks who realized that a very simple model of open core, in fact, isn't actually paying the bills.

Jean Atelsek

Precisely. And one thing that I'll note is that one of the day 0 events is called OpenTofu Day. And that is open tofu is sort of...

Eric Hanselman

Not having to do with being curd.

Jean Atelsek

That is basically sort of the renegade open source version of Terraform that was started when HashiCorp elected to came to the licensing terms for its software, which includes Terraform. And so there's some companies that had sort of built their business on the open source version of that, have started a new porch of that code, and they're having their own sort of coming out party at KubeCon in Europe. Yes.

Eric Hanselman

Well, it creates -- I mean, again, for a little bit of background, Terraform is this orchestration tool that has gotten widespread use. It's become what is a very standardized platform, but HashiCorp folks who actually put it together, have realized that, in fact, there were a lot of people who are taking that open core and building their own products with it, and aren't generating any revenue for HashiCorp.

Even though HashiCorp is still the one that is doing all the maintenance work or doing a large percentage of the maintenance work and actually providing it to the community, and they've changed licensing. They're not the only ones who are doing this. There are others that have made these transitions in terms of what their licensing is.

And I guess maybe a realization that being fully open leaves the door open to a lot of folks to capitalize on efforts that don't actually wind up feeding back into the folks who've really done a lot of the original work in these projects.

William Fellows

That's right, Eric. But I think we shouldn't lose sight of the fact that open source is now embedded in the enterprise IT culture and really these are the collateral kind of business dynamics, which affect companies, which want to be in this universe. I mean you only have to think of Docker, which was arguably the kind of route, if you like, of containerization, and where that thing has ended up. In other words, I think the jury is still out on to what extent or where the business models are going to work or not.

But nonetheless, the community aspects and the open source potential in terms of innovation opportunities is now part of the permanent piece, and that's not going to go away. There has been some sort of the -- of stress in terms of the community and indeed the foundation in terms of the breadth and the scope and the number of projects that are out there and the ability for the community to be able to develop those sufficiently. They gather the required sort of escape velocity to make their way into deployments.

But I think there are things that HashiCorp and Buoyant, and indeed, we see VMware going through with the license changes are also a consequence of the way that the sort of the cloud model, consumption-based, service-driven retail model discipline is really inserted itself into the industry. And we're seeing all kinds of companies now having to pivot and take on board those kind of fundamentals as well.

Eric Hanselman

Yes. And it really is something where if we think about the way in which software gets developed, infrastructure gets stood up, there really has been a dramatic transition in terms of what this shift looks like. And one, clearly, from which there is no return, where we're well down the road with it. And if you look at what the cognitive computing foundation is really doing and what the conference is really the one focus points around.

It is the fact that we do have -- the open source environment is something where you have a set of folks who can develop and take things in directions wherever they want to go with this. There is sort of a collective that's managing it, but that there are these challenges in terms of how do you ensure that these projects are aligned, how do you ensure that what's -- there -- all the various projects are going to play together well.

How do you ensure that they're going in directions that the broader market than most of the consumers were heading towards and not just the developers who work on the project? And of course, how do you manage the quality of that when you start getting to the scale? And now if you look at what's there at CNCF, we're talking about massive numbers of projects. As you're pointing out, there is a certain amount of sprawl that happens in this.

And somebody's got to at least sort of part out who -- which projects take on which types of functionality, who does what stuff? And the CNCF has really now become this organization that is really riding herd over it, a wild environment. But it's one in which they're actually looking to impose at least a little structure, and they're doing things like paying for security validations of software, code tests.

We're now starting to do more sophisticated testing because, of course, security is always a concern with my security HANA. There's a lot that they're managing to try and direct what is this large and very complex environment.

William Fellows

Yes. To take your gating point here is the absence for example, of a day 0 event dedicated to telecoms and the sort of cloudification or the cloud-native makeover of the telecoms industry. And given that the -- I suppose, the success of 5G and Edge is going to be driven by these telco vendors and CSPs.

We indeed their customers kind of mastering these cloud-native technologies and practices, the cloudification of this sector really has been -- the progression has sort of been painfully slow, I suppose. And actually, so what's happened now is that the Linux Foundation, which is actually the owner of CNCF has taken the telco assets from CNCF and merge them with its Linux networking fund.

In other words, to try and reduce the number of moving parts and the bigger picture here is that by carving this out into a separate asset, they hope to be able to drive a new sort of set of momentum and other inputs into this effort. And I wonder because Eric, the Mobile World Congress literally just finished the week before recording this, which you were at. And I wonder, was there a sense in which there was the cloud-native makeover of that industry was a subject of interest discussion, progression there?

Eric Hanselman

Very much so. And actually, there, our Mobile World Congress wrap up, actually, we talked a little bit about that. But it's -- because you mentioned, well, one thing first about the KubeCon, we do have this twice a year sort of swapping back and forth between continents. And there was a telco day at the U.S. version in the fall. And I wonder because of the proximity to Mobile World Congress, whether or not the European version, it's the one that's just happening now is -- maybe was -- there's a lot of overhang.

Because there was a lot of conversation about cloud-native capabilities at Mobile World Congress. But it is something where the telcos generally, they know they want to get towards cognitive capabilities. There are some that are moving along relatively rapidly.

But it is generally something that is a pretty large transition for it. Telcos traditionally have been fairly heavily automated in terms of their technology and operational automation capabilities. But it's always been very focused on a lot of the traditional equipment platforms. There's a big push to get towards cloud-native capabilities to use the containerized virtualized functions.

They're in that path of virtualizing what has been all of the telecom hardware that's traditionally been very specialized in moving towards virtualized versions of that. But the operators themselves are still relatively early days for them to really master the scale and velocity of cloud-native, especially when you contrast it with a lot of the things that we see at KubeCon.

William Fellows

For sure. So that will be interesting to see the pace of the clarification sort of picks up, but, ultimately, I think it's pretty clear which way the wind is blowing and the direction of travel. I think as in any technology cycle, the telcos because their routes are very embedded, those ships take a long time to turn.

That's for sure. I was going to -- also just sort of highlight the fact that last year's KubeCon Europe, which was in Amsterdam, largely teed up some of the next challenges, which the industry needs to address in order to really get cloud-native technologies into use. I mean while containers are kind of default and whatever the open source ecosystem is addressing gaps, there's still an awful lot of complexity involved in moving from or essentially the day 0 environments to now day 1 implementations.

And then day 2 actually operating and running these things. And one of the things that we'll be looking at, especially, is what role this new sort of concept of platform engineering is taking on in terms of being able to enable organizations to move forward by using essentially sort of curated sets of services as internal sort of development platforms.

Is it something that we've seen both from a practitioner point of view as being of interest in terms of dealing with all of these hundreds and thousands of other tools and things, and workflows and processes that they need to get done. And indeed, there's a swath of vendors now who are actively promoting the benefits of having a central way of sort of organizing that.

One of the questions has been the extent to which this is either something, which replaces supersedes or sort of lives alongside some of the existing practices, which are already in use, such as site reliability engineering and DevOps and so on. So we've been doing some work really to try and understand the relative interest and adoption of these things. And I think what we're seeing is that they really have different goals and benefits and that they're not mutually exclusive.

And really, there's now a sort of a trinity of methods that enterprises can access to better benefit from cloud-native computing architecture and application development because while DevOps sort of rapidly iterate and automates application code into production, SREs then it programmatically kind of automates scalable and reliable production infrastructure, while PE, platform engineering, kind of standardizes the IT tools as a sort of a self-service element, which all the IT teams need to improve productivity and efficiency.

So I think we think that these things are things that can be used together and indeed are converging quite nicely for organizations to take advantage and really push forward with their cloud native replatforming.

Eric Hanselman

Yes, I wonder if that's a sign of maturity. In that we're now getting this the whole generalized cloud-native operational mindset, now getting that extended further out into enterprises more broadly to a point at which we're -- yes, you can pick and choose the various odds and ends of projects and assemble all of your own individual pieces to build a system.

But now we're getting out into those consumers of the technology that are really looking for something that is -- something that's a bit more prescriptive that says, "All right, here are all the pieces. We're going to assemble them in ways in which we can understand and make them work." And we're going to constrain a little bit what -- how much of that [ sprawl ] looks like.

Jean Atelsek

I think it's the same function within the enterprise that you were describing the CNCF having over this ecosystem is that the tools need to play well together. They need to integrate and prescriptive is the perfect word. Just a curated set of tools that -- and I think it's a function not only of maturity but also of the size of the environments, the fact that more and more infrastructure is being run with Kubernetes and there's a much greater need to sort of lock certain things down in terms of the tools that are being used.

William Fellows

Something so that we've actually got an environment that is well flexible, well within the needs of the organization can actually manage. And the other thing I'll also identify is thing that I see as another sign of maturity is that a lot of the operational tools that are being developed around this and even disciplines around managing costs, we've seen the rise and it's something that both you and your teams have covered with the FinOps movement, being able to get your hands around cost management.

And what better indicator is there that, in fact, there's a lot of adoption and a lot of consumption than to have people actually concerned about how much this is now costing because now they've got automated tool capabilities to be able to manage it. You've got -- you're consuming infrastructure at a scale that now the cost is having some level of material impact. Now we've got a set of tools to help manage what those costs look like and how you actually constrain them, allocate and manage them.

Jean Atelsek

Right. And I think one of the most interesting aspects of that in terms of Kubernetes has to do with the day to provisioning of infrastructure and configuration. Since Kubernetes is so complex, there are so many dials to turn and levers to push. And I'd like to kind of give a shout out to old-fashioned reinforcement learning, machine learning as opposed to generative AI.

A lot of the most advanced FinOps tools are basically continuously testing configurations as workloads are in production to optimize price versus performance depending on the need of the workload itself and the desires of the organization that's running them.

Eric Hanselman

Well, because that is one of those things that, I think, again, a good indicator of sort of where we are in all of this. Before we close out too much -- there are so many different things that are going on at KubeCon.

I wanted to touch base also on what our listeners can look at for some of the research that you've both been working on and some of the tie-ins around this. William, you mentioned a lot of voice to enterprise perspectives on sort of what enterprise aspects are. There's a lot that's happening though in terms of our overall research perspective, what are things that people should be aware of that are going to tie-in to the KubeCon that's coming up?

William Fellows

Sure. Well, just to riff-off the previous point you made, there will be an awful lot more companies who are grounding their capability to deliver Kubernetes in a cost-controlled way by using these various techniques. And there are literally hundreds of these vendors in the market. And in fact, we're producing at the moment, one of our supply side market monitor forecast for this sector in particular.

And we got at least over 100 independent vendors in there already quite apart from the incumbent folks. And because cloud and so on is now impacting bottom line, companies are referring to their cloud costs in their quarterly and annual reporting.

That's why FinOps is having such a moment. But it's not just about the technology piece in sort of being able to see what you spent and plan going forward, but it requires some organizational change in terms of, for example, in franchising developers and engineers in this sort of economic pipeline, if you like, in a way that they haven't been to date because otherwise, you're never going to get all these things under control.

So that's going to be interesting to see how the industry can address some of that because, of course, organizational change is one of the things that technology suppliers have less influence over.

But nonetheless, there are some fairly innovative things that are going on out there. Jean was careful and right to refer to machine learning as being kind of a substrate for this because it's easy to get carried away by the tidal wave of AI. And in fact, if we look at the program schedule for the KubeCon in Paris, upcoming, it really is AI, AI, AI everywhere. So it's going to be quite...

Eric Hanselman

Dominating everything.

William Fellows

A challenge to take that. Whereas this time last year, interesting enough, AI was not even in the program because all of the materials have been generated for that early 2023 event before ChatGPT had actually been released. So there was this kind of phony war kind of where there weren't sort of sessions on it, but everyone wanted to talk about it. So part of the challenge for us and I think for attendees and other interested parties is going to be to try and get under the hood a bit and get past the kind of AI that's going on there.

I think we're going to be looking at, obviously, observability and the extent to which that is going to converge with some of these other trends? Because they've been -- observability tools have had a fairly well-defined sort of swim lanes so far. But I think we're going to see perhaps some sort of more breakout moves of those organizations taking on some of these other challenges because they are the folks who are actually providing the telemetry to actually see and understand what's going on in these environments.

I've already spoken a little bit about the evolving role of platform engineering. And one of the other things that has been fairly front and center is, coming back to your point, Eric, this whole sort of security piece. And indeed, we saw last year, actually, the CNCF carving off a separate or aligned events, specifically to support the progress of security offerings in the space. And actually, Jean, you attended their inaugural event up in Seattle, right?

Jean Atelsek

Yes. And I understand that they're going to be doing it again in June, cloud native security con. And yes, it was similar to what AWS has done with their security conference basically taking that sort of big and important sector and carving out a separate event for it to focus on that topic.

Eric Hanselman

Yes, security is everywhere. Well, this has been great. I appreciate both of you back on, and we'll have to catch up afterwards and see what we saw when we're actually on the ground there in Paris. Thank you both for being on.

William Fellows

Thanks very much, Eric.

Jean Atelsek

Yes, thank you.

Eric Hanselman

And that is it for this episode of Next In Tech. Thanks to our audience for staying with us. And thanks to our production team, including Caroline Wright and Kaitlin Buckley on the Marketing and Events teams and our agency partner, the One Nine Nine.

I hope you'll do is for our next episode where we're going to be talking about an interesting intersection between automotive technology and the payments industry and where mobile payments is going, so you want to be buying from your car sometime soon. I hope you'll join us then because there is always something Next In Tech.