Excellent Zoom video interview

Excellent Zoom video interview with Beth Kindig and Knox Ridley entitled The Cloud Shift and Zoom Video Are Still in Early Days. Interviewed by a value guy who tries to get comfortable with what they are saying and why, but has a tough time of it.
Saul

https://seekingalpha.com/article/4355130-cloud-and-zoom-shif…

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Beth not so positive comments on FSLY starts around 28:00
I had trouble hearing it all due to poor audio and old ears.

What I took from it: Beth was concerned that the market may not fully understand that FSLY (in her opinion) is primarily a CDN play (more streaming = more FSLY revenue) and not so much an Edge Computing play. (She notes there is currently price pressure on the CDNs). She mentioned that FSLY is aided by the increased streaming demand from Netflix, (a “pull forward” dynamic) associated with the COVID shutdown. Her point was that FSLY’s market attractiveness may wain once demand for CDN’s returns to “normal”, once the COVID effect stabilizes.

She challenged FSLY’s Edge Computing competitive position, in that, FSLY’s edge computing product is just in beta now and does not (yet) have a significant number of customers. She mentioned competitors that may have a better footing in the edge computing space include companies like Equinix, MSFT Azure, and AWS. She questioned whether FSLY can they remain competitive, in the long term, in the Edge Computing space.

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That was a really frustrating listen for me. Does Beth Kindig actually know the tech near as well as she claimes? It doesn’t appear that way to me:

  1. As bad as WebEx is, why do so many analysts like Beth think it is worse than it actually is?

You do NOT need to download anything to join a WebEx conference as a guest:
https://help.webex.com/en-us/9eed9t/Get-Started-Joining-a-Me…

The Cisco Webex web app lets you join meetings, events, and training sessions, using only your web browser. There’s nothing to download or install. The web app puts basic meeting, event, or training functionality at your fingertips, making it easy to view and interact with others.

Getting that kind of basic competitive analysis wrong makes me suspect most of whatever else she might say.

  1. When she says “You can’t me a major Tech company that hasn’t had security issues,” she’s missing the point, which is that until White Hats and the press waded in, Yuan and Zoom didn’t really care about their security issues. She points out that Android has security issues found every year, but what she didn’t say is that Google has a mature process for fixing, validating, and rolling out responses to issues that are found. OTOH, Zoom refused and/or delayed fixing some of their issues.

What really needed to be said is that Yuan changed his view of security and is now becoming more in line with what good companies do. This is a major, positive, change for Zoom.

  1. Beth really likes DataDog “migration to cloud infrastructure, especially the hybrid play.” Huh, what’s she talking about here?
    Datadog is a monitoring company. They help you monitor your private, public and hybrid clouds. For instance, see: https://www.datadoghq.com/hybrid-cloud-migration/

  2. Equinix, Amazon, MS are real edge compute. “Bring origin servers closer to the edge.”

Gobblygook. Sounds like Beth doesn’t even know what an origin server actually is, and what CDNs provide, which isn’t just lower latency but a reduction of the load on the origin server. If you’re going to some kind of distributed model, then you have to figure out how to keep everthing in sync. If someone lists an item on eBay on one “edge origin server” (Jeez), then how do you prevent two other edge servers from buying that item? She’s talking gobblygook here.

That she had her technical/momentum trader on the call was interesting. Maybe she picks companies that have good scuttlebutt and then relies on him? But, from what I can see, she doesn’t understand the tech near as much as she pretends.

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Hi Smorg,

I’m reasonably technical and didn’t find the issues that you did. Thought the interview was pretty reasonable in a general sort of way.

The concept of “bringing origin servers to the edge” seems reasonable. The concept of deploying your origin servers on various availability zones is an (early and big hammer) example of bringing origin servers closer to your edge. I think Beth is just saying that that trend will continue and more of the responsibilities of “true” origin servers will move closer to customers. There are obviously challenges with doing that as you highlight, but those are well understood distributed computing challenges and IMO aren’t insurmountable.

But she was simply saying re: compute@edge… not proven, might work, might not.

re: DDOG, my take was she likes DDOGs positioning as companies migrate to the cloud, “especially the hybrid play”. It just seemed that that was the big trend she was seeing (which there is) and she thought DDOG was well-positioned to ride that wave.

I also don’t have too many issues with ZMs security approach. Obviously their prior customers didn’t really either.

My take was she actually had a really good understanding of the big trends, and company’s capabilities and positions.

cheers
Greg

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But she was simply saying re: compute@edge… not proven, might work, might not.

re: DDOG, my take was she likes DDOGs positioning as companies migrate to the cloud, “especially the hybrid play”. It just seemed that that was the big trend she was seeing (which there is) and she thought DDOG was well-positioned to ride that wave.

I also don’t have too many issues with ZMs security approach. Obviously their prior customers didn’t really either.

My take was she actually had a really good understanding of the big trends, and company’s capabilities and positions.

Greg

Thank you for your concise summary. I came away with similar conclusions but I was beginning to doubt I had heard correctly after reading some of the critical comments.

I am long FAST primarily based on the reports in the last earnings call concerning favorable customer reaction to the beta of “compute at edge” in addition to the favorable quarterly results. There was also emphasis in the call and in other articles about the advantages offerred by Fastly to developpers who could use the system taking advantage of low latency among other features.

Although I’m not technically expert it sounded to me like Fastly was offering unique features, were setting up to tailor services to clients and were getting excellent feedback on a product with enormous market potential. This seemed consistent with what was in the two recent analyses on Software stack investing. Fastly seems prime to take advantage of a major trend relating to

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But she was simply saying re: compute@edge… not proven, might work, might not.

re: DDOG, my take was she likes DDOGs positioning as companies migrate to the cloud, “especially the hybrid play”. It just seemed that that was the big trend she was seeing (which there is) and she thought DDOG was well-positioned to ride that wave.

I also don’t have too many issues with ZMs security approach. Obviously their prior customers didn’t really either.

My take was she actually had a really good understanding of the big trends, and company’s capabilities and positions.

Greg

Thank you for your concise summary. I came away with similar conclusions but I was beginning to doubt I had heard correctly after reading some of the critical comments.

I am long FAST primarily based on the reports in the last earnings call concerning favorable customer reaction to the beta of “compute at edge” in addition to the favorable quarterly results. There was also emphasis in the call and in other articles about the advantages offered by Fastly to developers who could use the system to taking advantage of low latency and other features.

Although I’m not technically expert it sounded to me like Fastly was offering unique features, were setting up to tailor services to its clients and were getting excellent feedback on a product with enormous market potential. This seemed consistent with what was in the two recent analyses published by Software stack investing. Fastly seems primed to take advantage of a major new trend and is ready to take the lead in low latency services.

Did I misjudge the information?

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I communicated directly with Beth and GaryMF2020’s synopsis is spot on…it is as if GaryMF2020 received the same email from Beth that I did.

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I also don’t have too many issues with ZMs security approach. Obviously their prior customers didn’t really either.

Not to belabor the point, but some prior Zoom customers absolutely did - certainly you recall all the companies and organizations that literally banned/dropped Zoom usage. Clearly part of Yuan’s wake-up call on security.

Kindig’s excuse that others have security issues as well misses that wake-up call. It’s an Orwellian rewrite for her to say that Zoom’s security approach has always been good. It wasn’t.

Perhaps worse of all, Kindig didn’t point out that Zoom is going to be the only major video conferencing solution that offers end to end encryption for free! Considering the incorrect things she said about the competition, she probably doesn’t even realize that.

The concept of “bringing origin servers to the edge” seems reasonable.

No, it doesn’t. Kindig is mixing her terminology and after listening to her, I’m convinced she’s just throwing out buzzwords with a barely superficial understanding of what they mean. “Origin Servers” is CDN nomenclature for the singular data source of what’s getting replicated (eg, a NY Times article). No-one in the Edge Computing space talks about “origin servers” because this is edge computing, not content hosting. NetFlix uses a CDN, your Ring doorbell camera uses edge computing.

For instance, if you’re running analytics at the edge, then you’re not sourcing data from some central origin, you’re typically sourcing data from your endpoints (ie, IoT devices, cameras, automobiles, heart monitors, smart watches, etc.) and running the analytic calculations on the edge because you want a faster turn-around time to get that calculated data back to those (and perhaps other) devices, or because you want to reduce the amount of data being transmitted. In Edge Computing, the data primarily comes from the endpoint devices, not from an origin server.

Sure, there may be some centrally stored data that needs to be available at the Edge Compute location, but that’s typically not real-time data and so you don’t need your origin server at the edge - you need compute capability at the edge. And you can use a CDN as well to have any central data cached at the Edge. This is why it makes logical sense for CDN companies to expand into Edge Computing use cases.

Don’t take my word for it. Here’s Cloudflare’s take:
edge computing means running fewer processes in the cloud and moving those processes to local places, such as on a user’s computer, an IoT device, or an edge server. … The edge is a bit of a fuzzy term; for example a user’s computer or the processor inside of an IoT camera can be considered the network edge, but the user’s router, ISP, or local edge server are also considered the edge. The important takeaway is that the edge of the network is geographically close to the device, unlike origin servers and cloud servers, which can be very far from the devices they communicate with.

(https://www.cloudflare.com/learning/serverless/glossary/what… )

You’ll also note that the examples Cloudflare gives of: 1) Cameras sending video data to a cloud server considers the cameras themselves as the edge, with on-board processing for motion detection so that only images with motion are sent up to the cloud, and 2) Internal remote-office company IM not having to send chat messages to some central server on the other side of the globe and back, BOTH do not have data on origin servers. Their data comes from the endpoints. The Edge itself can either be in those endpoints (cameras) or a local compute server (IM application).

The concept of deploying your origin servers on various availability zones is an (early and big hammer) example of bringing origin servers closer to your edge.

I don’t understand why you’re bringing availability zones into this discussion. Availability zones are for failure recovery within a Region. As Amazon says: Availability Zones are distinct locations within an AWS Region that are engineered to be isolated from failures in other Availability Zones. https://docs.aws.amazon.com/AmazonElastiCache/latest/mem-ug/… Worse yet, Each region is designed to be completely isolated from the other regions.

A truly world-wide distributed cloud model is a tricky thing to implement. I don’t know of any database, for instance, in which someone in Singapore can be adding records locally while someone in California can be deleting records and everything staying instantly in sync. It seems impossible - those two “edge” locations would have to coordinate with each other, and there goes your network latency.

When Kindig talks about Amazon and Microsoft bringing origin servers to the edge - even if we let the nomenclature misuse slide, what is she talking about? Is this some future capability on which she has the inside scoop? Does she actually realize what those companies already provide?

For instance, Amazon already supports Edge Computing via their Lamda and Greengrass offerings. Lambda is Amazon’s serverless computing architecture/API, which effectively means that your applications can just make an API call to AWS to get something done without the hassle of spinning up a cloud instance. Greengrass is code that Amazon gives you which lets you run Lamda functions locally on your endpoints. With AWS IoT Greengrass, connected devices can run AWS Lambda functions, Docker containers, or both, execute predictions based on machine learning models, keep device data in sync, and communicate with other devices securely – even when not connected to the Internet.

See https://aws.amazon.com/iot/solutions/iot-edge/ and https://aws.amazon.com/greengrass/

So, you can take Lamda code you’ve written for the cloud and easily move it to your edge. But, this isn’t new. Why isn’t Amazon taking over the world with this?

Now, Kindig did mention Equinix in the same sentence as Amazon and Microsoft. I don’t get that - Equinix is a pure edge computing play and completely unlike AWS or Azure. Am I going to put words into her mouth to get her to say something reasonable like: “Amazon and Microsoft will expand their offerings to reduce latency and bandwidth requirements so some companies won’t need to turn to Edge Computing architectures. And for those that do, a pure-play Edge Computing company like Equinix looks more promising to me than CDNs expanding into that space.”

That would have been a totally reasonable thing to say. But, she didn’t say that. If you didn’t already know the offerings of those companies and how they differed you wouldn’t have been able to construe that from what she said.

Also, she’s wrong to think that the CDN players like Fastly don’t have a leg up on Edge Computing. One of the most demanding edge computing use cases is online gaming. And, as I posted a little while ago, Riot Games (maker of the dominant online game, League of Legions) actually built their own internet backbone based on architectures that Fastly developed and published! So, when she doesn’t think CDNs can play in the Edge Computing space, I believe that she doesn’t actually understand Fastly’s architecture differentiation from other CDNs and how Fastly is better set up to move into Edge Computing than the legacy “lots of POPs” CDNs like Stackpath, Akamai, etc.

BTW, if you’re interested in Edge Computing, here’s a good document from Equinix on not only their services, but about the underlying architectures: https://equinix.box.com/shared/static/ftumr3bnqq455zfnb0c3lm… In particular, it’s got some network topological diagrams that really assist in understanding what’s going on. Too bad TMF’s board software is still stuck in the 1990’s and we can’t even embed an image.

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Not to belabor the point, but

You have belabored this point and a few others, in this massive diatribe of a post, in probably dozens or more posts in the past. There are other tools in the toolbox besides a sledgehammer. Yes, I admit that a sledgehammer is too large to actually fit in most toolboxes so we do not need to go down that path.

Lee

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Not to belabor the point, but some prior Zoom customers absolutely did - certainly you recall all the companies and organizations that literally banned/dropped Zoom usage.

From what I saw the appearance was that companies had gut level reactions to the publicity about security without the vast bulk of them actually having any actual problems with the security and/or any awareness of how Zoom’s security compared to anyone else.

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Hi Smorg, thanks for the reply and links, particularly Greengrass which I haven’t come across before. A few clarifications from my poorly worded previous message. I’ve never used the word “reasonable” so many times in so few sentences :slight_smile:

re: Zoom security, I meant prior to COVID. ZM were attracting lots of customers, and security was not much of a concern AFAIK. I assume Eric guided the company to what those customers were demanding, and security was good enough until every person and their dog started using ZM.

I made a mistake with “availability zones” when I meant “regions”. Sorry for the confusion.

Perhaps my definition of “origin server” is the main sticking point. To me, an “origin server” is something where my compute logic is executing, probably close to the “source of truth” database.

Beth is (I believe) thinking of the trend of cloud to move that processing from centralised datacenters to become more geographically granular, all the way out to the edge. Thats how I read CloudFlares definition too. I think future apps will distribute their processing at various different latencies from the user, not just user->CDN->origin, but user->edge->close server->more distant server->…->“true origin” server.

re: MSFT/AMZN, I think she was just spinning the possibility that those companies would provide those more granular servers which maybe they will. AWS Outposts might be the first step in that capability (for non-techies, Outposts lets you run ‘AWS’ on your on-premise servers. Maybe at some point you’ll be able to rent on-premise compute out to external users for “close to edge” compute).

Beth raised doubt about whether FSLY will have success with compute@edge in her foreseeable (6 months? 1 year?) future. It’s not clear to me if companies actually need FSLYs compute@edge capabilities yet, or within what timeframe.

Blockchain variants are the only truly global distributed database that I can think of. However, it’s clear that capability is not necessary for the vast majority of workloads.

In any case, I think it was all pretty solid for a general audience and an unscripted call, and worth listening to for me. No idea what the technical analysis guy was talking about however!

cheers
Greg

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Smorgas… thank you for taking time and explaining… this is a complex topic, has too many myths… and its important to understand Fastly real advantages…

nilvest
long FSLY…

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Hi Greg,

Thanks for the continued discussion.

I think future apps will distribute their processing at various different latencies from the user…

Yup, I think you’re spot on that computing is going to be distributed not just horizontally but also vertically, with different mixtures of central, network edge, and endpoint edge computing for different applications.

Also, thanks for the pointer to AWS Outposts (https://aws.amazon.com/outposts/ ), which I hadn’t seen before. BTW, it appears to be not just running AWS on your own servers, but it actually is Amazon hardware that you’re buying/leasing/renting in your own data centers. While back in the day Nutanix was talking about their hybrid solution with the eventual, non-realized goal of enabling customers to move their on-premise cloud apps to a public cloud (or vice-versa), it appears Amazon is completely blurring the line between on-prem and public cloud computing - a true hybrid environment. They appear to be just rolling this out this year, and the page promises more features coming later, but it does seem the intent is that you write your app for AWS and then can easily move it from Amazon’s public cloud to servers in your own datacenter, even including locate data storage.

I suspect the success of this will depend on costs. If Amazon makes the hardware cheap enough then I could see widespread adoption beyond companies who have specific security and compliance concerns and into a mainstream Edge Computing space, as you say. That would leave even a finished Nutanix product (which it isn’t) with its remaining advantage being cloud agnosticism. But, many have chosen to run on AWS, and knowing they don’t have to port over to run on-prem is a development cost-saving for them that might overcome any generic hardware cost savings companies like Nutanix provides.

You’re also right that Distributed Ledger technology (as used by Blockchain, for instance) is essentially a truly distributed database. But, my understanding is that it’s focused on public-view validation and security (eg, all nodes get to “vote” on any transaction being approved and then the consensus decision is adopted by all nodes) and so really wouldn’t be part of an Edge Compute workflow where low latency and low bandwidth use are primary drivers. Blockchain is cool because it eliminates any single server as a point of vulnerability, making “hacking the database” a herculean task (you have to hit almost all the servers involved at the same time), and because the database is open and public so anyone can query and know what’s going on. But, its performance would be slow because of all the communication across all the nodes, kind of working against the whole point of moving compute to the edge in the first place.

In any case, I think it was all pretty solid for a general audience and an unscripted call, and worth listening to for me.

I’ll give you that it sparked a good discussion from which I’ve learned a couple things.

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