Sand Hill Road to the heart of Silicon Valley it's the cute presenting the people first Network insights from entrepreneurs and tech leaders when I'm John Ferrari with the cube I'm the co-host also the founder of Silicon angle me we are here on Sand Hill Road at Mayfield for the people first conversations I'm John furry with the cube weird Allen being global CTO and IT of innovation at Procter & Gamble formerly the same position at coca-cola has done a lot of innovations over the years also a reference account back in the day for web methods when they call on the financing of that one of the most famous IPOs which set the groundwork for web services and has a lot of history going back to the 80s we were just talking about it welcome this conversation on people first network thank you for inviting me so the people first network is all about people and it's great to have these conversations you're old school you were doing some stuff back on the 80s talking about doing RPA 3270 you've been old school here yeah I go back to APL as my first programming language went through the the third generation languages and of course the old 30 to 70 emulation which is what we know today is our PA one of the cool things I was excited to hear some of your background around your history web methods you were a reference call for venture financing of web methods which was financed on the credit card for the two founders husband and wife probably one of the most successful I appeals but more importantly at the beginning of the massive wave that we now see with web services this is early days this was very early days when I was at DHL we were looking at what we're gonna do for the future and in fact we built one of the first object-oriented frameworks in C++ at the time because that was all that was available to us or the best was available we rejected Corbis and we said look if we're gonna go this direction and one of my developers found web methods found philip merrick it was literally at the time working out of his garage and had this technology that was going to allow us to start moving into this object-oriented approach and I remember the day Robin Vasan form a field called and said hey I'm thinking about investing in web methods what do you think about it and not only was it one of the first startups that I ever worked with but it's actually the first time I met anybody in the venture community way back in nineteen I think 1997 is what had happened and that was a computing time in computer science and then the rest is history and then XML became what it became lingua franca for the web web services now Amazon Web Services you see in cloud computing micro services kubernetes service meshes this is a new stack that's being developed in the cloud and this is the new generation you've seen many waves and at Procter & Gamble formerly coca-cola you're the same role you have to navigate this so what's different now what's different say 15 20 years ago how are you looking at this market how you implementing some of the IT and infrastructure and software development environments I think what's change is you know when we got into the the early 2000s Nicolas car came out and said IT doesn't matter and I think anybody that was an IT had this very objectionable response initially but when you step back and you looked at it what she realised was in many cases IT didn't matter and those were those areas that were non-competitive those things that could be commoditized and it was completely right the reality is IT has always mattered that technology does give you a competitive advantage in certain markets and certain capabilities for a company but back then we had to go out and we had to purchase equipment we had to configure the equipment there was a lot of heavy lifting in corporations just did not want to invest the capital so they outsource the stuff wholesale I think General Motors was the first one that just out sourced everything and was followed by other companies including Procter & Gamble the decision at that time was probably right but as we go forward and we see what's happened with corporations we see the valuations of corporations the amount of return on equity based on the on the capital that's being invested we can see that data is important we can see that agility flexibility is key to competing in the future and therefore what's changing is we are now moving into an age of away from ERP so we're moving into an age away from these outsource providers on a wholesale basis and using it selectively to drive down costs and allowing us to free up money in order to invest in those things that are most important to the company so you're saying is that the folks naturally the server consolidation they've bought all this gear all this software over you know 18-month rollouts before they even see the first implementation those are the glory days of gravy trains for the vendor's yeah not good for the practitioners but you're saying that the folks who reinvested are investing in IT as a core competency are seeing a competitive advantage they certainly are you know I think I made the statement front of a number of the vendors and a few years ago and people were not comfortable with it but what I said was like you gone are the ears of these 10 20 million dollar deals gone are the ears of the million two million dollar deals we're in the ear of throwaway technology I need to be able to use and invest in technology for a specific purpose for a specific period of time and be able to move on to the next one it's the perfect time for startups but startups shouldn't be looking at the big picture they should be looking at the tail on these investments let me try things let me get out in the market let me have a competitive advantage in marketing which is most important to me or in supply chain those are the areas that I can make a difference with my consumers and my customers and that's where the investments have to go so just in constant of throwaway technology and you know you'd also be said of you know being more agile though interesting to look at the cloud SAS business model if Amazon for us I think that's the gold standard where they actually lower prices on a per unit basis and increase more services and value but in the aggregate you're still paying more but you have more flexibility and that's kind of a good tell sign so that you're seeing that ability to reuse either the infrastructure that's commoditized to shift the value this is are people having a hard time understanding this so I want to get your reaction to how should I tea leaders understand that the wave of cloud the wave of machine learning what a I can bring to the table these new trends how how should leaders figure this out is there a playbook as there are things that you've learned that you could share you know that there's really a playbook it's still early on everyone's looking for one cloud fits all the reality is whether it's Google whether it's Amazon whether it's Microsoft whether it's IBM all clouds are different all clouds have our special are purpose-built for different solutions and I think as an IT leader you have to understand you're not going to take everything and lift and shift that's what we used to do we're now in the position where we have to deconstruct our business we have to understand the services the capabilities that we want to bring to market and not lock ourselves in its building blocks its Legos we're in the period of Legos putting these things together in different manners in order to create new solutions if we try to lock ourselves in the past of how we've always financed things how we've always built things then we're not going to be any better off in the new world than we were in the old alan i want to get your reaction to to two words our PA and containers well as i said earlier our PA is 3270 emulation from the 1980s and for those of us that are old enough to remember that i I still remember scraping the the old green screens and and putting a little process around it it what's nice though is that we have moved forward machine learning and AI and other other capabilities are now present so that we can do this I actually played around with neural nets probably back in 1985 with an Apollo computer so that tells you how far back I go but technologies change processing speeds change everything the technology trends are allowing us to now to do these things the question that we have is also a moral dilemma is are we trying to replace people or are we trying to make improvements and I think that you don't look at our PA as a way simply to replace work it's a way to enhance what we're doing in order to create new value for the customer or for the consumer in our case I think in the in the area of containers you know again been around for a while been around for a while it's just another another approach that we're not we don't want lock in we don't want to be dependent on specific vendors we want the portability we want the flexibility and I think as we start moving containers out to the edge that's where we're gonna start seeing more value as the business processes and the capabilities are spread out again the idea of centralized cloud computing is very good however it doesn't need to be distributed what's interesting I find about the conversation here is that you mentioned a couple things earlier you mentioned the vendors locking you in and saying here's the ERP buy this and with this you have to have a certain process because this is our technology you got to use it this way and you were slave to their their tech on your process serve their tech with containers and say orchestration you now the ability to manage workloads differently and so an interesting time there's that does that change the notion of rip and replace lift and shift because if I a container I could just put a container around it and not have to worry about killing the old to bring in the new this is on the fundamental kind of debate going on do you have to kill the old to bring in the new well you need to kill the old sometimes just because it's old it's time to go other times you do need to repackage it and other times I hate to say it you do need to lift and shift if you're a legacy organization they have a long history such as most of the manufacturing companies in the world today we can't get rid of old things that quickly we can't afford to a lot of the processes are still valid as we're looking to the future we certainly are breaking these things down into services we're looking to containerize these things we're looking to move them into areas where we can compute where we want to when we want to at the right price we're just at the beginning of that journey in the industry I still think there's about five to seven years to go to get there now I'll talk about the role of the edge role of cloud computing as it increases the surface area of IT potentially combined with the fact that IT is a competitive advantage bring those two notions together what's the role of the people because you used to have people that would just manage the rack and stack I'm provisioning some storage I'm doing this as those stovepipes start to be broken down when the service area of IT is bigger how does that change the relationship of the people involved you know you win with people at the end of the day you don't win with technology you know a company of such as Proctor and Gamble and I think what's happened if you look at historically the ERP vendors came out probably 99 2000 and it used to be and remember these I'm old to be honest with you but I remember that we used to have to worry about the amount of memory we were managing we had to be able to tune databases in all of this and the vendors went ahead and they started automating all those processes with the idea that we can do it better than a human and a lot of people a lot of the technology talent then started leaving the organizations and organizations were left with people that we're focusing on process and people a process excuse me process and the the the business which is very good because you need the subject matter experts going forward we have to reinvest in people our people have the subject matter expertise they have some technology skills that they've developed over the years and they've enhanced it on their own but we're in this huge change right now where we have to think different we have to act different and we have to behave differently so doubling down on people is the best thing that you can do and the old outsource model of outsourcing everything kind of reduces the core competency of the people yeah now you got to build it back up again exactly I mean we when we left at P&G 15 years ago about 5,000 people left the organization when we outsource them when we outsource the technology to our partner at that time now it's time we're starting to bring it back in we've brought the network team back in and stood up our own sock in our own NOC for the first time in years just this past year we're doing the same thing by moving things out to the cloud more and more is moving to the cloud we're setting up our own cloud operations and DevOps capabilities I can tell you having been on both sides of it it's a lot harder to be able to bring it back in than it is to take it out and you know interesting proctoring games well known as being a very intimate with the data very data-driven company the data is valuable and having that infrastructure NIT to support the data that's important what's your vision on the data future of the data in the world well I think data is has a value to itself but when you tie it to products you tie it to your customers and consumers it's even more valuable and we're in the process now of things that we used to do completely internally with our own technology or technology partners we're now moving all of that out into the cloud now and I must say cloud its clouds plural again going back to certain clouds are better for certain things so you're seeing a dramatic shift we have a number of projects underway that are in the cloud space but for customers and consumers number of cloud projects in the way for our own internal employees it's all about collecting the data processing the data protecting that data because we take that very seriously and being able to use it to make better decisions I want to get your reaction on two points and two quite lines of questioning here because I think it's very relevant on the enterprise side you're a big account for the big whales the old ERP so the big cloud providers so people want to sell you stuff at the same time you're also running IT innovation so you want to play with the new shiny new toys and experiments start up so if startups want to get your attention and big vendors want to sell to you the tables have kind of turned it's been good this is a good it's a good buyers market right now in my opinion so what's your thoughts on that so you know start with the big companies what do they got to do to win you over well they got to look like how they got to engage and for startups how do they get your attention I think the biggest thing for either startup or large companies understanding the company you're dealing with whether it's Procter & Gamble whether it's coca-cola whether it was DHL if you understand how I operate if you understand how decisions are made if you understand how I'm organized that's gonna give you an a competitive advantage now the large corporations understand this because they've been around through the entire journey of computing with these large corporations the startups need to step back and take a look and see where do I add that competitive advantage many times when you're selling to a large corporate you're not selling to a large corporate you're selling two divisions you're selling two functions and that's how you get in I've been working with startups as I said back since web methods and it was just a two-person company but we brought them in for a very specific capability I then took web methods with me when I left DHL I took them to GE when I left GE I took them to ing because I trusted them and they matured along the way I think finding that right individual that has the right need is the key and working it slowly don't think you're gonna close the deal fast if you're start-up know it's gonna take some time and decide if that's in your best interest or not slow things down focus don't try to boil the ocean over too many of them try to boy you're right Jimmy people try to boil the ocean get that win one win will get you another one which will get you another win and that's the best way to succeed get that beachhead Ellen so if you could go back and knowing what you know now and you're breaking into the IT leadership's position looking forward what would you do differently can do a mulligan hey what would you do differently well you know I think one of the one of the dangers of being an innovator in IT is that you really are risk taker and taking risks is counterculture to corporations so I think I would probably try to get by in a little bit more I mean someone once told me that you know you see the force through the trees before anybody else does your problem is you don't bring people along with you so I think I would probably slow down a little bit not in the adoption of technology but I'd probably take more time to build the case to bring people along a lot faster so that they can see it and they can take credit for it and they can move that needle as well yeah always sometimes early adopters and pioneers had the arrows on the back as they say I've had my share now thanks for sharing your experience what's next for you what's the next mountain you're going to climb well I think that as we're looking forward latency is still an issue you know we have to find a way to defeat latency we're not going to do it through basic physics so we're gonna have to change our business models change our technology distribution change everything that we're doing consumers and customers are demanding instant access to enhanced information through AI and m/l right at the point where they want it and that means we're now dealing with milliseconds and nanoseconds of having to make decisions so I'm very interested in looking at how are we going to change consumer behavior and customer behavior by combining a lot of the new technology trends that are underway and we have to do it also with the security in mind now before we security was secondary now as we're seeing with all of the hacks and the malware and everything that's going on in the world we have to go in and think a little bit different about how we're gonna do that so I'm very much engaged in working with a lot of startups I live here in the Silicon Valley I commute to Cincinnati for Procter & Gamble I'm spending time and just flew in from tel-aviv literally an hour ago I'm in the middle of all the technology hotspots trying to find that next big thing and it's a global it's global innovation happens everywhere and anywhere the venture community if you look at the amount of funds it used to be invested out of the Silicon Valley versus the rest of the world it continues to be on a downward trend not because the funding isn't here in the Silicon Valley but because everyone is recognizing that innovation and technology is developed everywhere in the world Alan Bain was the CTO global CTO and IT innovator there at the cube conversation here in San Hill Road I'm John for a year thanks for watching you