Big Awards SYNC with @dinCloud CTO Mike Chase on Trends in the #cloud

SYNC Interview with dinCloud's Mike L. Chase

Executive Vice President & Chief Technology Officer (CTO)


As co-founder, EVP and CTO of dinCloud, Mike established one of the first Cloud Service providers to offer hosted virtual desktops, servers, storage, and other cloud services worldwide. dinCloud has been rated #1 by Network World Magazine in their desktop-as-a-service ("DaaS") shootout article of May 21, 2012, Voted VDI Solution of 2012 by the UP Cloud Computing Conference and named 1 of 10 Hot Cloud Startups 2013 by CIO Magazine, Voted Best VDI Solution (beat our VMware, Citrix, Oracle & others) at the UP Cloud Computing Conference 2012 etc. Mike gained his experience with numerous service providers, multi-national corporations, and cloud companies such as Airespring, Equant, Broadcom, Wells Fargo, Experian, tamCloud and others. He is also an advisor to www.drivenbi.com which is a pioneer in cloud based business analytics.

Interview Transcript

Russ Fordyce: Good afternoon, everyone. This is Russ Fordyce with the Business Intelligence Group. Today, I've got Mike Chase who is the CTO of dinCloud on with us today. Appreciate Mike you joining us.

Mike Chase: Thank you. Glad to be here, Russ.

Russ Fordyce: dinCloud is an interesting player in the cloud. You guys are ... You specialize in hosted desktops. Why don't you give us just the elevator pitch of kind of what dinCloud does and who you're going after in the marketplace?

Mike Chase: Sure. Absolutely. Different cloud providers had different starting points. Some started with servers, some started with cloud storage. We started off with virtual desktops then kind of grew to have all of those products. The reason why we went after the virtual desktop was that we found that the software and the hardware, the whole infrastructure that you had to build for the virtual desktop was completely different than anything that was being recommended or being used at the time to virtualize servers.

It took a lot of R&D to get where we are, I'm glad that we did that because adding the other products later was actually much easier.

Russ Fordyce: You kind of go and top down, it sounds like.

Mike Chase: Yeah.

Russ Fordyce: Did you see that those initials trends of kind of a high end enterprise market to start with and now as you get into different types of products a little bit broader based?

Mike Chase: We have and it's interesting because people have asked us all the time, what is your market and really the market is anyone in the world particularly who's using the Windows. Because at the end of the day everybody kind of had to converge on the middle on the cloud no matter where you started.

Meaning that if you were a cloud storage solution, the day came when your customer called you and said "hey, I can't restore all that. Took two or three weeks to get into the cloud. I need it restored now. I don't have that kind of bandwidth. Can you turn it into a virtual server for me and get me connected."

Customers started with servers and then realized that the desktops have always been symbiotic, you need to live next to them. Whether you're one of the competitors that started with servers, you were us that started with desktops, eventually you hosted both and eventually all three products.

Russ Fordyce: You guys have been at this for a while, what ... Desktops are almost I would think the hardest to get somebody to kind of convert over to the cloud or to virtualize in general. What are some of the barriers that you guys have overcome in the market trying to pitch that out to your customers?

Mike Chase: Well, the first barrier was something that every VDI customer could sympathize with. Doing virtual desktops was a whole different adventure than virtualizing services. It was a tremendous amount of hype around it. It took a long time. We originally tried using VMware and Citrix like so many of our customers before we built our own solution.

We sold 65 major problems to get there. Everything from storage to the amount of bandwidth, to the type of network platform that it required. We use a lot of [inaudible 00:03:02] Infiniband, there's just different components. It was 100% opposite of what we would build to do servers.

We got really lucky in that sense because after years of R&D, we've been voted number one in the space by Network World Magazine, and users at conference when they vote on what solution they like best. That infrastructure allowed us to host servers and cloud storage as well. The desktops are very unique.

It was not just having the right software, it's also having the right hardware infrastructure and then for years, Gardner was predicting and mis-predicting, this is the year of the virtual desktop. Of course, VMware and Citrix were very much hoping that that would be the next wave for them.

Say this is year, this is the year. I can officially say that 2014 is the year because we're seeing the sales, we're seeing the adoption. I think part of that is just the marketing and getting the word out. I remember when we first started hosting servers and everybody has done this with virtual servers, people would ask that corny question, well, is it going to run in a virtual server?

Of course they would laugh at you. To this day, I get asked, will it run in a virtual desktop and we're finally at the point where that's now a laughable question too. This year, it's really taken off.

Russ Fordyce: What do you think is driving that? Is it ... Has it gotten that easy or people just think it's comfortable or the need really precipitated the demand?

Mike Chase: It really ... It really was this hype somewhat from VMware about have your own private cloud. A lot of people were led to believe that cloud was just mere virtualization. That being the case, why wouldn't you do it on site. They didn't realize was the technologies that cloud and only cloud were bind, things like object storage with Razor coding and the types of high density servers.

Ultra [inaudible 00:04:50] other things that some of these products aren't even available for purchase in the enterprise. They kept banging their head, banging their head trying to do VMware view or Citrix XenDesktop. Running into a lot of barriers. Now you kind of had to wait for a couple of things to happen and it happened this year where they finally exasperated their efforts.

Then large companies jumped in like Amazon which certainly helped legitimize the market and get the word out. Once that happens, where now the cloud providers in general are marching toward desktop. Being the leader in that space, we just need a tremendous surge of business.

Russ Fordyce: Yeah. It seems like there are two leading markets in terms of people that were using desktops specifically. I know that the health care industry really went after that virtualized desktop. I know the busy executives moving from desk to desk and office to office, moving around the country or the world.

It's a great benefit to them. How are you guys seeing now kind of take advantage of those solutions. What are the overall trends in the marketplace that you're seeing of where you're getting penetration?

Mike Chase: Sure. Well, cost was always a good reason to move to the cloud but the security was the reason that people stayed out. From the beginning, our logo had a lock in it for that reason. Having recognized that. We have a lot of things where everything in our cloud is encrypted. What you're seeing more in clouds now is a focus on security.

Because in the past without having private connections like MPLS, if all you have was Internet, the regulators kind of went a little nuts. If you’re doing multi-tenant, you couldn't do dedicated infrastructure, sometimes that was a barrier. The cost structures had to be right but the security had to be in place as far as encrypting.

We encrypt everything in our cloud for example. Because of that and the other controls that we put in place now we have very large financials. I have an army of attorneys in our cloud which is great because if it didn't work, I guess I'd be getting sued like crazy. They love the cloud.

A lot of these guys, it's true story, they'll leave on a Friday from a big firm, 20 of them will bug out. Then they realized that nobody drag the IT guy with him, literally call us, we had a couple of friends who did this, called us on a Friday night, we had them up by Monday. As I realized, okay, guys, it's great we just started on law firm but we have no infrastructure.

We've got credit unions now that are in there and technology companies, some of them are $800 million a year and larger. It's everybody. Because of that we also launched to consumer play. Having watched Apple crawl back into the enterprise through things like iPad and so forth, we created a virtual desktop just for consumer.

I think you'll see us this year come out with some very exciting what we call the personal cloud pack with sponsors and partnerships with Google and Microsoft around some of their licensing and our virtual desktops.

Russ Fordyce: Very cool. Well outside of desktops. What are you guys seeing in terms of other trends in the cloud services space. We're seeing ... We're running ... We're in the midst of nominations for our Stratus Award. We're seeing a lot of unique applications and a lot of unique services. What are you guys seeing as other trends that you're in or that you might be looking at?

Mike Chase: Right now, just for a revenue split. Virtual desktops is about 40% of our revenue, servers is 40%, and cloud services is about 20%. They all play in symbiotic ways. One of the questions I get asked all the time too, how come you guys never created an offline desktop, what do you do when you're disconnected?

What we've actually seen is one of the trends is that people are using virtual desktop just like they use any desktop to create the content but they'll consume it on a mobile device. Thing like Google Drive or even dropbox which by the way is built completely on S3 storage. A lot of people don't know that.

Amazon has success with S3 and we've now gone to compete with them. Those are the trends that we're seeing. People are just and it's why I changed our logo this yeah. We changed it to What’s Your Cloud Story? Because when you start asking customers how the they use the cloud, it really shocks and amaze you.

We've got guys who will do a pool of desktops because they've got a $12,000 tool. There's a telco here in California that does about four billion phone calls through the network. Actually quality control listening to phone calls. When customers calling to say hey, this sounds terrible, to void phone call, what's going on.

The quality control using a virtual desktop, with his very expensive tool on it. With engineers that are in India and Los Angeles, all over the world. You alos run into some funny things. Funny [inaudible 00:09:25] it was like well, it's been running for five months without a reboot.

When's the last time you ever ran windows. Normally you're starting, you're shutting down. I guess what I call the Microsoft questions. Why can't you make a better, I'm like I'm not Bill Gates, I'm just hosting this stuff. I can't avoid the blue stream just because it's in the cloud. A lot faster provision, it's a lot faster recover.

The good thing is we snapshot everything, every four hours. Who backs up their desktop. In the cloud, you can gauarantee that if you screw it up, you can put it back together really quick.

Russ Fordyce: Yeah. That's definitely one advantages of snapshot in time. You've got, you had reeled off a bunch of players that are in the market. You're talking about some huge players. You've got Amazon. You've got Citrix. You've got all these guys that are out there competing with you in one layer or another. How do you really, you bought built your own kind of special sauce.

How do you go out and differentiate in the market? It seems like cloud is really getting hyper commoditized?

Mike Chase: It really is and it's interesting too because it's different as the services are. There are a lot of differentiators where everybody is carved down a niche. There's still a lot of commonalities in the background. A lot of us buy and design servers with the same manufacturer, we use object storage and there's a lot of other commonalities.

From there it gets very very different. For us we're kind of lucky because even in the cloud and the enterprise as well. It's all been about Vmware and Citrix. We don't use either one of those products, particularly in our virtual desktop.

Originally we had some collaboration around our first gem, our latest generation is actually a collaboration with Google. The reason we're doing that writing our desktop produces Windows to an app on a Chrome Book. It's written through HTML5. Getting to a virtual desktop using a browser is nothing new but doing it in pure HTML5 code as a plugin to Chrome and it's in the Chrome web store.

If you type webhpd, you see our app is different. The reason for that is what we see happening the cloud trend that kind of get back to your earlier question is web rtc, if you've heard of that. Where you have voice, and you have video and chat and presence and all this in a web browser, of course Chrome is all about the web browser.

People don't realize the depth of programming that's going into that. If you combine our virtual desktop plus web RTC and then you can skin how it appears and how it's laid out on your monitors and your screen. You can get to it from any end point including the really cheap Chrome books and Chrome boxes and things.

It really changes how you look at Windows, how you look at files, how you look at voice phone calls and everything that you do. You start to realize there's no limitations anymore. You don't have to carry a laptop. I was in a data center the other day, in fact where they have this kiosk that were really locked down.

All they had was Chrome and the had Windows Internet Explorer. Because they had Chrome, I was in my virtual desktop. The next thing I know these guys are walking by the kiosk. I thought we locked that down. This guy is over in using Office 2013, he surf in YouTube and it's like, woah, security violation.

I said calm down I'm in a virtual desktop. You still have a kiosk, it hasn't been violated and they're kind of chuckling, you really had me. There's some neat stuff coming.

Russ Fordyce: Yeah. That ... It does tend to blow people's mind. You start getting in virtualization. What's one area where you kind of, you didn't expect it to take off but it did, and it kind of shocked you.

Mike Chase: It's interesting because we started with virtual desktops. Amazon and other started with servers. I didn't really think about cloud storage a whole lot until we last year or so and we launched our S3 offering. It's funny because hindsight it really is 20/20. When you look back, everybody should have started with cloud storage.

I tell you because the easiest thing to get a customer to do is DR. They know that the data shouldn't just belong in their building. When you look at VMware and hype advisors, what is a virtual desktop or a server. What's a file on a disk. That's what's it's been virtualized too.

If you could get them to move all those files plus their loose fileshares and other stuff, you can spin up a server, you can spin up a desktop, that would have been the easiest way to do that. Once we had realized that, that's why right now we're number one in virtual desktops. We're number one in cloud migrations.

The other clouds were kind of we host this but the deal is you spin it up new and we don't really care how you move your data. We've made that kind of our niche market.

Russ Fordyce: On the flip side of that question what's one thing that you really thought was going to take off, like the Citrix and VMware talking about hosted desktop that didn't?

Mike Chase: Well for a while actually the desktops didn't. You thought that was going to take off and it was like year after year. Fortunately for us, our kind of claim to fame is we really were the first virtual desktop that could do YouTube in 1080p at full screen and people are blown away by that. Because they were so tied up and all of VDI and its latency and you can't do this, and you can't do that.

We're now the only virtual desktop in the world that can do NetFlix. For example, NetFlix is funny, they'll kick you out if you're on these other products because they want you thinking that the movie quality is bad when it's not, it's the virtual desktop. We do it just fine. For a while, I though this is going to take off. It's going to take off, now, not yet.

People are still screwing out with VDI. Finally this year, mostly because the marketing hype. I don't have the marketing dollars, Amazon does but once they jump in and people started doing their homework. Fortunately we've already been rated by Network World Magazine that came out number one. We beat [inaudible 00:15:08] in other companies.

People start digging around on Google and through Bing and other search engines and figured out that we're there and sales skyrocketed. I really thought it was going to skyrocket years ago.

I had hoped, I had prayed. Finally it's happening, you got to, your servers and your desktops are so symbiotic that you really have to have both in the cloud. If you have one, you have the other.

Russ Fordyce: I bet that you're ... all of your investors are pleased to hear you say that it's taken off.

Mike Chase: They are, they are, because it's cloud is not for the feinted heart. A lot of guys came out there. I remember when wireless came out, to make an analogy. Everybody thought they were going to be their own ISP. You found out that these products were not made to be multi-tenant.

Cloud was the same way, everbody went in and jumped in, so I might be a cloud provider. I'm going to use all the enterprise gear from emc and Vmware and netapp and all these guys. It went broke really fast. They're scratching their head like my god, how do these cloud guys sell storage. Once cent, a gig per month and $0.03. We do that, it's in the herd.

I got to admit, I chuckle with it, it's intentional. When you see south of $0.03, just know it's subsidized by the way. At the end of the day, there's some really exciting staff coming in the cloud and we're just happy to be here.

Russ Fordyce: That's a great segue into, what are you seeing that's next, what's leading edge, what's going to be the next big trend, after hosted desktops?

Mike Chase: I see five. I see five things. I see virtual desktop and the web RTC stuff coming together on really cheap platforms like the Chrome box which are $349, only down to $199.

Russ Fordyce: I'm on one now.

Mike Chase: There you go. I see a lot of that happening where everything really does come in to the browser. I think people laughed a little bit when Google was ... They opened up Chrome book. They thought oh, that's all it is. If you actually read like the Wikipedia articles and web rtc and HTML5. You're blown away by how much is being hit from a code standpoint in there.

I also see some interesting things happening. Some technologies coming together like objective oriented storage and any cast networking. What this means is it basically you'll store something locally in Los Angeles in a cloud. That data will be protected and it will be available on London, Hong Kong, and Sidney.

You'll always have the most local copy of the data, that also gives you two things. It gives you a geographic QoS, meaning that you're getting really good quality and access to it no matter where you are. The other thing is that you've now become totally impervious to denial-of-service attacks, hackers, natural disasters, come what may.

Other things that I see happening in the cloud is I kind of made that list here. Where did I put it. I think that security will increase, it kind of has to, people are very irritated about governments looking into their data. We get request for S3 storage that will only be in the United States.

Where I get the Europeans are like anywhere but the United States. Asians are like I don't want it anywhere over there. I want it in Asia. We're able to accommodate that. I also see that analytics engines are going to become increasingly important. If you remember Star Trek back in the day, Kirk was always talking to the computer, and it was giving him answers.

All the data that's being kept in the cloud now, that's already being done, simple things like when you go surf for music. It's recommending things to you. Even with red box and NetFlix the same thing. I see that continuing. We actually partnered with the company called [inaudible 00:18:41] to do business analytics in the cloud.

It will replace spreadsheets as my prediction because what it's able to do is go get the data from different data sources, crunch it and actually report back to you, just as if you're Captain Kirk asking that computer, what this all lose data mean. It'll tell you or it might give you the Monty Phython computer answer. I don't know.

That's where we see it going at least. Then last but not least, the comments about HTML5. I think there's a lot there. That's where cloud is going. Anytime, anywhere, 365 days a year with some more smart intelligence to it.

Russ Fordyce: Yeah. Let's just, let's hope that the access providers can keep up with demand, with the bandwidth demand.

Mike Chase: Yeah. Actually that's something that we conquered this year with 15 carriers. We do offer one gig circuits now throughout North America and Europe for as little as $1500 a month. The largest customer data move that we did was with the one gig circuit like that and it was 500 terabytes, it was half of the petabyte it took six weeks.

Russ Fordyce: Wow.

Mike Chase: Previously that was one of the problems with S3 storage. People wanted it, encrypted, the regulator wouldn't let them use it, they didn't want data transfer fees. They needed bigger pipes. They needed software support from companies like [inaudible 00:19:58] Symantec and others.

All those barriers are gone at least with our offering and you can put big data in the cloud. That's pretty exciting.

Russ Fordyce: Mike, you obviously spent a few hours there at dinCloud, what do you, when you get the hour free ... What are you doing?

Mike Chase: I try to get as far away from technologies. I can up and go to forest but unfortunately, I have a satellite phones on. I'm still connected. If I fall off the tree, I do want to be rescued. I think me and the cloud always be tethered, here at dinCloud we have a slogan for the last three or four years that we've been running the company.

Cloud never sleeps and it's quite true. I get emails from our CEO and Ali and other guys three or four in the morning, there's somebody always awake and we've got staff around the world so it's pretty exciting.

Russ Fordyce: Yeah. Well, I appreciate you guys taking the time to chat with us today. I really do appreciate kind of the insights on the cloud and hopefully we'll see you in the Stratus rewards as well.

Mike Chase: Thank you. I appreciate the opportunity and hopefully I'll see all the rest of you guys in the cloud soon.

Russ Fordyce: Yes. This has been Russ Fordyce with the Business Intelligence Group talking to Mike Chase, who's the CTO of dinCloud, you can look them up at dincloud.com. Thanks a lot Mike.

Mike Chase: Thank you, Russ, appreciate it.