(lively music) >> Welcome back to HPE Discover 2021. My name is Dave Vellante and you're watching theCUBE's virtual coverage of Discover '21, and we're excited to welcome back Arwa Kaddoura, she's a vice president and world-wide go-to market leader for HPE's smoking hot GreenLake Cloud Services. Arwa, welcome back to theCUBE, good to see you again. >> Thank you for having me, it's good to be with you. >> So, talk about how your products and services are supporting customer transformations. I'm interested in the experience that everybody's been dreaming about. Describe how you're giving your customer that competitive advantage. And if you've got an examples, that would be awesome. >> Yeah, you got it. I think as we heard Antonio say, that cloud is an experience, not a destination, right? And what we're doing with GreenLake is bringing those cloud capabilities and the cloud experience to our customers. You know, we like to say, colocations, data center and edge of course. So this is the cloud on prem. And so rather than forcing customers to only have to go up to cloud, to get modern cloud capabilities or the benefits of things like, pay as you go for consumption, etc, cloud native capabilities, like containers, leveraging Kubernetes, we now bring all of that to GreenLake and to our customers, edge locations, and Colocation and data centers. We've been able to dramatically transform many of our customers businesses, right, and you'll probably see it discover some of those examples come to life, for example, Carestream, who is in the electronic medical imaging world, right, they have all of the X-Ray equipment that capture X-rays and different sort of diagnostics for patients. And we worked with them to not only craft a ML solution to better read and diagnose these images, but also all of the underlying infrastructure with the HPE GreenLake ML Ops platform that allows them to instantly leverage the capabilities of machine learning and the infrastructure to go with it. >> And so tell me, so how is it resonating with customers? They're talking to customers all the time? What do they tell you? >> Sure, you know I think what our customers appreciate about HP GreenLake is, it's not sort of look, it's either all on prem in my data center, and I have to fully manage it, build it, implement it, take care of it, or it's fully public cloud, I have little control and basically, I get whatever the public cloud gives me, right? HPE GreenLake gives our customers the flexibility and control that they require, right? And so you can think of many use cases where customers have a need to have the compute storage sort of processing need to happen closer to where their data and apps live. And so for that exact reason, our customers love the flexibility, right. Cloud One Dotto was public cloud, Cloud Two Dotto I think is the cloud that comes to our customers at their convenience. And to me, what I tell CIOs and CTOs and sort of other lines of business leaders when I meet with them, is you shouldn't be forced to have to take your data and apps elsewhere to get the transformation that you need. We want to be able to bring that directly to our customers. >> 'Cause a lot of the transformation is around data, we love talking about data on theCUBE. It's funny, I mean, we talked about big data last decade, we don't use that term much anymore. It was kind of overhyped, but as oftentimes is the case may be in the early days it's overhyped, but then it's underhyped. When it actually starts to kick in, and I feel like we're entering a new age of data and insights with the ascendancy of machine learning and AI. What does this mean from HPEs perspective and what are customers telling you that it means for them? >> Yeah, now, data I think, we often hear data is the new currency, right? It's the new gold. we've heard Antonio even say things like, data can even become something that maybe over time companies start to put some kind of value on their balance sheet behind, right, the same way that maybe brands represented this value on a balance sheet. Effectively, what's happened with data is, a lot of people have a lot of data. But there's not been a lot of ability to extract insights from data, right. And I think this is the new revolution that we're all undergoing is we finally have the modern analytics tools to actually turn the data into insights. And what we bring to the table from an HPE perspective is the fact that we have the best infrastructure, we obviously now have the cloud capabilities mixed in with our data fabric or container platform, or machine learning operations platform, to then be able to process that data, again, integrated with many of the great ISV partners that we have on the data side allow our customers to turn that into real insights for their business. And effectively data is becoming a huge competitive advantage, right? I think many of us are leveraging some pretty interesting tools or gadgets these days, right? Like, I wear one of those sleep rings. You can imagine a company like that in the future that's able to collect so much data from the folks that purchase their products, then being able to give us insights about, where's the best ZIP Code that people get the most amount of sleep and which ZIP Codes are the healthiest in the United States or countries, et cetera? But data really is becoming a competitive advantage. And one of the things that we care most about at HPE is also using it as a force for good and making sure that there is a sort of ethical AI capability. >> That's a great message and very important one. It's interesting what you're saying about data and the value, how we value, it's clearly being valued in terms of companies' market caps, but maybe it's not in the balance sheet yet, but it's on the income statement in terms of data products and data services that that's happening. So, maybe we'll see if Antonia is right in the next several years. But so, let's talk more about the specific data challenges that you're solving for your customers, they talk about silos, they talk about, they haven't gotten as much value out of their data initiatives as they wanted to. What are they telling you are their challenges and how are you approaching it? >> Yeah, I think data is everywhere, right? The ability for customers to store the right amount of data is a huge challenge. Because obviously, there's a huge cost associated with collecting, keeping, cleansing, processing, all the way to sort of analyzing your data. There tends to be a ton of data silos, right. So customers are looking for a common data fabric that they can then process their data sources across, and then be able to sort of tap into that data from an analytics perspective. So much of the technology, again, that we're focused on is be able to store the data, right, our Data Fabric layer with Ezmeral, right, being able to process that data, capture that data, and then allow the analytics tools to then harness the power of that data and turn that into real business insights for our customers. Every customer that I spoken to whether their financial services, you can imagine the big financial services, I mean, they've got just bazillions of pockets of data everywhere. And the real sort of challenge for them is how do I build a common data platform that allows me to tap into that data in effective ways for my business users? >> Can you talk a little bit about how you're changing the way you're providing solutions, maybe you could contrast it with the way HPE has done in the past? Because I think that's important when you think about, you talk a lot about GreenLake and as a service. But if the products are still kind of boxes and lands and gigahertz and ports, then that's a discontinuity. So, what's changed from the past and how are you feeding into the way customers are transforming their business and supporting their outcomes? >> That's exactly right. At some point in time, right, if you think maybe 10 or 20 years back, it used to be very much about the infrastructure for HPE. What's exciting about what we're doing differently for our customers, is, look, we have the best infrastructure in the business, right? HPE has been doing this longer than anyone has probably almost 60 years now. But being able to vertically integrate right, move up in that value chain so that our customers can get more complete solutions, is the more interesting part for our customers. Our customers love our technology yes, the gigahertz and the speeds and feeds, all of that do matter because they make for some very powerful infrastructure. However, what makes it easier is the fact that we are building platform stacks on top of that hardware, that help abstract away the complexity of that infrastructure and the ability to use it far more seamlessly. And then, if you think about it we of course have also one of the most advanced services organizations. So being able to leverage our services capabilities, our platform capabilities, on top of that hardware, again, deliver it back to our customers in a consumption model, which they've come to expect from a cloud model. And then surrounded by a very rich ecosystem of partners, and we're talking about system integrators that now have capabilities on helping our customers run their GreenLake environments. We're talking about ISVs, right, so software stacks and platforms that fully integrate with the GreenLake platform for completely seamless solutions, as well as channel partners and global distributors. So I think that's where we can truly deliver the ultimate end-to-end solution. It's not just the hardware, right? But it's being complemented with the right services, being complemented with the right platform capabilities, the software integrations to deliver that workload that the customer expects. >> So customers and partners, they got to place bets, they've got to put resources, time, money, and align their resources with their partners and their suppliers like HPE. So when they ask you, hey, okay, "HPE, tell me what's your overall strategy? "Why is it compelling? "And why do you give me competitive advantage relative to some of your peers in the industry?" >> Yeah, I think what partners are going to be most excited about is the openness of the platform, right? Being able to allow our partners to leverage GreenLake Central with open API, so that they can integrate some of their own technologies into our platform, the ability to allow them to also layer in their own managed services on top of the platform is key. And, of course, being able to build sort of these win-win solutions with the system integrators, right? The system integrators have some fantastic capabilities all the way from an application development, all the way down to the infrastructure management, and data center delivery centers that they have. And so leveraging HPE GreenLake really helps them have access to the core technologies that they need to deliver these solutions. >> I wonder if I could take a little sort of side road here and ask you because so many changes going on, HPE itself is transforming, your customers are transforming, the pandemic has accelerated all these transformations. Can you talk a little bit about how you've transformed go-to-market specifically in the context of as a service? I mean, that had to be quite a change for you guys. >> Yeah, now go-to-market transformations in support of sort of moving from traditional go-to-markets, right, to cloud go-to-markets are significant. They required us to really think through what does delivering as a service solutions mean for our direct Salesforce? What does it mean for our partners and their transformations and being able to support as a service solutions? For HPE specifically, it also means thinking about our customer outcomes, not just our ability to ship the requisite hardware and say, look, once it's left our dock, our job is done, right. It really takes our obligation all the way to the customer using the technology on a day by day basis, as well as supporting them in making sure that everything from implementation to set up to the ongoing monitoring operations of the technology is working for them in the way that they'd expect in an as a service way, right? We don't expect them to operate it, we don't expect them to do anything more than pick up the phone and call us if something doesn't go as planned. >> Then how about your sellers and your partners? How did they respond? I mean, you wake up one day is Okay guys, here we go. New compensation scheme, new way to sell, new way to market. That took some thought and some time and where are you in that journey? >> That's right. And I always say, if you expect people to wake up one day and be transformed, right, you're kidding yourself. So everything from sort of the way that we think about our customers use cases, right, and empowering our sellers to understand the outcomes that our customers expect and demand from us to things like compensation to the partner rebate program that we leverage through the channel partners in order to give them the right incentives to also allow them to make the right investments to support GreenLake. HPE has a fairly significant field, sales and solution team. And so not thinking about this only as a single person that represents GreenLake, but looking at our capabilities across the board, right, we have fantastic advisory consultants on the ground with PhDs and data science, we have folks that understand high performance computing. So making sure that we're embedding the expertise in all of the right personas that support our customers, not just from a comp perspective, but also from an understanding of the end-to-end solutions that we're bringing to those markets. >> So what gets you stoked in the morning, you get out of bed, you're like, "Okay, I'm going to go attack the world." What are you most excited about for HPE and its future? >> There's so much happening right now in this sort of cloud world, right? To me, the most exciting portion is the fact that given that we've now introduced on prem cloud to the world, our ability to ship new services and new capabilities, but also do that via a very rich partner ecosystem, honestly is what probably has me most excited. This is no longer the age of go-at-it-alone, right. So not only are our engineering and product teams hard at work in the engine room producing capabilities at sort of lightning fast speeds, but it's also our ability to partner, whether it's with platform providers, software providers, or system integrators and services providers. That ecosystem is starting to come together to deliver highly meaningful solutions to our customers and all in a very open way. The number one thing that I personally care about is that our customers never feel like they are being locked in, or that they are sort of being forced, have to give up certain levels of capabilities, we want to give them the best of what's out there and allow them to then have that flexibility in their solution. >> And one of the challenges, of course, with virtual events is you don't have the hallway track, somebody can say, "Hey, have you seen that IoT zone? It's amazing, they got all these robots going around." So what would you say that people should be focused on at discover maybe things that you want to call out specific highlights or segments that you think are relevant? >> Yeah, there's going to be a ton of fantastic stuff. I think, really looking for that edge to cloud strategy, that we're going to be spending a lot of time talking about looking at some of our vertical workload solutions, right? We're going to be talking about quite a few from electronic healthcare records, to payment solutions and many more. I think, depending on what folks are interested in there's going to be something for everyone. Project Aurora, which now starts to announce our new security capabilities, the zero trust capabilities that we're delivering is probably interesting to a lot of our customers. So lots of exciting things coming and I'm excited for our customers to check those out. >> No doubt, that's a hot topic, especially given what's been happening in the news these past several months. Arwa, thanks so much for coming back in theCUBE. It's great to see you hopefully face-to-face next time. >> Thank you, I sure hope so. Thanks so much for having me. >> It was our pleasure. And thank you for watching and thank you for being with us in our ongoing coverage of HPE Discover 2021. This is Dave Vellante. You're watching theCUBE, the leader in digital tech coverage. >> Thank you. (soft music)

[Music] Andre one of the things that have come up is your relation with Russia as we talked about so I have to ask you a direct question do you to work with sanctioned Russian entities or Russian companies shown we and c5 we do not work with any company that's sanctioned from any country including Russia and the same applies to me we take sanctions very very seriously the one thing you don't mess with is US sanctions which has application worldwide and so you always have to stay absolutely on the right side of the law when it comes to sanctions so nothing nothing that's something that's connection nets are trying to make they're also the other connection is a guy named Victor Vail Selberg Viktor Vekselberg Vekselberg to go with the Russian names as people know what is your relationship with Viktor Vekselberg so victim Viktor Vekselberg is a is a very well known Russian businessman he's perhaps one of the best known Russian businessman in the West because he also lived in the US for a period of time it's a very well-known personality in in in Europe he's a donor for example to the Clinton Foundation and he has aggregated the largest collection of Faberge eggs in the world as part of national Russian treasure so he's a very well known business personality and of course during the course of my career which has focused heavily on also doing investigations on Russian related issues I have come across Viktor Vekselberg and I've had the opportunity to meet with him and so I know him as a as a business leader but c5 has no relationship with Viktor Vekselberg and we've never accepted any investment from him we've never asked him for an investment and our firm a venture capital firm has no ties to Viktor Vekselberg so you've worked had a relationship at some point in your career but no I wouldn't on a daily basis you don't have a deep relationship can you explain how deep that relationship is what were the interactions you had with him so clarify that point so so I know Viktor Vekselberg and I've met him on more than one occasion in different settings and as I shared with you I served on the board of a South African mining company which is black owned for a period of a year and which Renova had a minority investment alongside an Australian company called South 32 and that's the extent of the contact and exposure I've had to so casual business run-ins and interactions not like again that's correct deep joint ventures are very kind of okay let's get back to c5 for a minute cause I want to ask you it but just do just a circle just one last issue and Viktor Vekselberg Viktor Vekselberg is the chairman of scope over the Russian technology innovation park that we discussed and he became the chairman under the presidency of President Dmitry Medvedev during the time when Hillary Clinton was doing a reset on Russian relations and during that time so vekselberg have built up very effective relationships with all of the or many of the leading big US technology companies and today you can find the roster of those partners the list of those partners on the scope of our website and those nuclear drove that yes Victor drove that Victor drove that during during in the Clinton Secretary of this started the scope of our project started during the the Medvedev presidency and in the period 2010-2011 you'll find many photographs of mr. vekselberg signing partnership agreements with very well known technology companies for Skolkovo and most of those companies still in one way or another remain involved in the Skolkovo project this has been the feature the article so there are I think and I've read all the other places where they wanted to make this decision Valley of Russia correct there's a lot of Russian programmers who work for American companies I know a few of them that do so there's technology they get great programmers in Russia but certainly they have technology so oracles they're ibm's they're cisco say we talked about earlier there is US presence there are you do you have a presence there and does Amazon Web service have a presence on do you see five it and that's knowing I was alright it's well it's a warning in the wrong oh sorry about that what's the Skog Obama's called spoke over so Andres Kokomo's this has been well report it's the Silicon Valley of Russia and so a lot of American companies they're IBM Oracle Cisco you mentioned earlier I can imagine it makes sense they a lot of recruiting little labs going on we see people hire Russian engineers all the time you know c5 have a presence there and does AWS have a presence there and do you work together in a TBS in that area explain that relationship certainly c5 Amazon individually or you can't speak for Amazon but let's see if I've have there and do you work with Amazon in any way there c-5m there's no work in Russia and neither does any of our portfolio companies c5 has no relationship with the Skolkovo Technology Park and as I said the parties for this spoke of a Technology Park is a matter of record is only website anyone can take a look at it and our name is not amongst those partners and I think this was this is an issue which I which I fault the BBC report on because if the BBC report was fair and accurate they would have disclosed the fact that there's a long list of partners with a scope of our project very well known companies many of them competitors in the Jedi process but that was not the case the BBC programme in a very misleading and deceptive way created the impression that for some reason somehow c5 was involved in Skolkovo without disclosing the fact that many other companies are involved they and of course we are not involved and your only relationship with Declan Berg Viktor Vekselberg was through the c5 raiser bid three c5 no no Viktor Vekselberg was never involved in c5 raiser Petco we had Vladimir Kuznetsov as a man not as a minority investor day and when we diligence him one of our key findings was that he was acting in independent capacity and he was investing his own money as a you national aniseh Swiss resident so you if you've had no business dealings with Viktor Vekselberg other than casual working c-5 has had no business dealings with with Viktor Vekselberg in a in a personal capacity earlier before the onset of sanctions I served on the board of a black-owned South African mining company and which Renault bombs the Vekselberg company as a minority investment alongside an Australian company called South 32 and my motivation for doing so was to support African entrepreneurship because this was one of the first black owned mining companies in the country was established with a British investment in which I was involved in and I was very supportive of the work that this company does to develop manganese mining in the Kalahari Desert and your role there was advisory formal what was the role there it was an advisory role so no ownership no ownership no equity no engagement you call them to help out on a project I was asked to support the company at the crucial time when they had a dispute on royalties when they were looking at the future of the Kalahari basin and the future of the manganese reserve say and also to help the company through a transition of the black leadership the black executive leadership of the cut year is that roughly 2017 so recently okay let on the ownership of c5 can you explain who owns c5 I mean you're described as the owner if it's a venture capital firm you probably of investors so your managing director you probably have some carry of some sort and then talk about the relationship between c5 razor bidco the Russian special purpose vehicle that was created is that owning what does it fit is it a subordinate role so see my capital so Jones to start with c5 razor boot code was was never a Russian special purpose vehicle this was a British special purpose vehicle which we established for our own investment into a European enterprise software company vladimir kuznetsov later invested as an angel investor into the same company and we required him to do it through our structure because it was transparent and subject to FCA regulation there's no ties back to c5 he's been not an owner in any way of c5 no not on c5 so C fibers owned by five families who helped to establish the business and grow the business and partner in the business these are blue chip very well known European and American families it's a small transatlantic community or family investors who believe that it's important to use private capital for the greater good right history dealing with Russians can you talk about your career you mentioned your career in South Africa earlier talk about your career deal in Russia when did you start working with Russian people I was the international stage Russian Russia's that time in 90s and 2000 and now certainly has changed a lot let's talk about your history and deal with the Russians so percent of the Soviet Union I think there was a significant window for Western investment into Russia and Western investment during this time also grew very significantly during my career as an investigator I often dealt with Russian organized crime cases and in fact I established my consulting business with a former head of the Central European division of the CIA who was an expert on Russia and probably one of the world's leading experts on Russia so to get his name William Lofgren so during the course of of building this business we helped many Western investors with problems and issues related to their investments in Russia so you were working for the West I was waiting for the West so you are the good side and but when you were absolutely and when and when you do work of this kind of course you get to know a lot of people in Russia and you make Russian contacts and like in any other country as as Alexander Solzhenitsyn the great Russian dissident wrote the line that separates good and evil doesn't run between countries it runs through the hearts of people and so in this context there are there are people in Russia who crossed my path and across my professional career who were good people who were working in a constructive way for Russia's freedom and for Russia's independence and that I continue to hold in high regard and you find there's no technical security risk the United States of America with your relationship with c5 and Russia well my my investigative work that related to Russia cases are all in the past this was all done in the past as you said I was acting in the interest of Western corporations and Western governments in their relations with Russia that's documented and you'd be prepared to be transparent about that absolutely that's all those many of those cases are well documented to corporations for which my consulting firm acted are very well known very well known businesses and it's pretty much all on the on the Podesta gaiting corruption we were we were we were helping Western corporations invest into Russia in a way that that that meant that they did not get in meshed in corruption that meant they didn't get blackmailed by Russia organized crime groups which meant that their investments were sustainable and compliant with the Foreign Corrupt Practices Act and other bribery regulation at war for everyone who I know that lives in Europe that's my age said when the EU was established there's a flight of Eastern Europeans and Russians into Western Europe and they don't have the same business practices so I'd imagine you'd run into some pretty seedy scenarios in this course of business well in drug-dealing under I mean a lot of underground stuff was going on they're different they're different government they're different economy I mean it wasn't like a structure so you probably were exposed to a lot many many post-conflict countries suffer from predatory predatory organized crime groups and I think what changed and of course of my invested investigative career was that many of these groups became digital and a lot of organized crime that was purely based in the physical world went into the into the digital world which was one of the other major reasons which led me to focus on cyber security and to invest in cyber security well gets that in a minute well that's great I may only imagine some of the things you're investigated it's easy to connect people with things when yeah things are orbiting around them so appreciate the candid response there I wanna move on to the other area I see in the stories national security risk conflict of interest in some of the stories you seeing this well is there conflict of interest this is an IT playbook I've seen over the years federal deals well you're gonna create some Fahd fear uncertainty and doubt there's always kind of accusations you know there's accusations around well are they self dealing and you know these companies or I've seen this before so I gotta ask you they're involved with you bought a company called s DB advisors it was one of the transactions that they're in I see connecting to in my research with the DoD Sally Donnelly who is Sally Donnelly why did you buy her business so I didn't buy Sonny Donnelly's business again so Sally Tony let's start with Sally darling so Sally Donny was introduced to me by Apple Mike Mullen as a former chairman of the Joint Chiefs of Staff and Sally served as his special advisor when he was the chairman of the Joint Chiefs of Staff Apple Mullen was one of the first operating parties which we had in c5 and he continues to serve Admiral Mullen the four start yes sir okay and he continues to serve as one of operating partners to this day salad only and that will Mike worked very closely with the Duke of Westminster on one of his charitable projects which we supported and which is close to my heart which is established a new veteran rehabilitation center for Britain upgrading our facility which dates back to the Second World War which is called Headley court to a brand-new state-of-the-art facility which was a half a billion dollar public-private partnership which Duke led and in this context that Ron Mullen and Sally helped the Duke and it's team to meet some of the best experts in the US on veteran rehabilitation on veteran care and on providing for veterans at the end of the service and this was a this was a great service which it did to the to this new center which is called the defense and national rehabilitation center which opened up last summer in Britain and is a terrific asset not only for Britain but also for allies and and so the acquisition she went on to work with secretary Manus in the Department of Defense yes in February Feb 9 you through the transaction yes in February 2017 Sally decided to do public service and support of safety matters when he joined the current administration when she left her firm she sold it free and clear to a group of local Washington entrepreneurs and she had to do that very quickly because the appointment of secretary mattis wasn't expected he wasn't involved in any political campaigns he was called back to come and serve his country in the nation's interest very unexpectedly and Sally and a colleague of us Tony de Martino because of their loyalty to him and the law did to the mission followed him into public service and my understanding is it's an EAJA to sell a business in a matter of a day or two to be able to be free and clear of title and to have no compliance issues while she was in government her consulting business didn't do any work for the government it was really focused on advising corporations on working with the government and on defense and national security issues I didn't buy Sonny's business one of c-5 portfolio companies a year later acquired SPD advisors from the owner supported with a view to establishing and expanding one of our cyber advising businesses into the US market and this is part of a broader bind bolt project which is called Haven ITC secure and this was just one of several acquisitions that this platform made so just for the record c5 didn't buy her company she repeat relieved herself of any kind of conflict of interest going into the public service your portfolio company acquired the company in short order because they knew the synergies because it would be were close to it so I know it's arm's length but as a venture capitalist you have no real influence other than having an investment or board seat on these companies right so they act independent in your structure absolutely make sure I get that's exactly right John but but not much more importantly only had no influence over the Jedi contract she acted as secretary mitosis chief of staff for a period of a year and have functions as described by the Government Accounting Office was really of a ministerial nature so she was much more focused on the Secretary's diary than she was focused on any contracting issues as you know government contracting is very complex it's very technical sally has as many wonderful talents and attributes but she's never claimed to be a cloud computing expert and of equal importance was when sally joined the government in february 17 jeddah wasn't even on the radar it wasn't even conceived as a possibility why did yet I cannot just for just for the record the Jedi contract my understanding is that and I'm not an expert on one government contracting but my understanding is that the RFP the request for proposals for the July contract came out in quarter three of this year for the first time earlier this year there was a publication of an intention to put out an RFP I think that happened in at the end of quarter one five yep classic yeah and then the RFP came out and called a three bits had to go in in November and I understand a decision will be made sometime next year what's your relationship well where's she now what she still was so sunny left finished the public service and and I think February March of this year and she's since gone on to do a fellowship with a think-tank she's also reestablished her own business in her own right and although we remain to be good friends I'm in no way involved in a business or a business deal I have a lot of friends in DC I'm not a really policy wonk of any kind we have a lot of friends who are it's it's common when it administrations turnover people you know or either appointed or parked a work force they leave and they go could they go to consultancy until the next yeah until the next and frustration comes along yeah and that's pretty common that's pretty cool this is what goes on yeah and I think this whole issue of potential conflicts of interest that salad only or Tony the Martino might have had has been addressed by the Government Accounting Office in its ruling which is on the public record where the GAO very clearly state that neither of these two individuals were anywhere near the team that was writing the terms for the general contract and that their functions were really as described by the GAO as ministerial so XI salient Antonia was such a long way away from this contact there's just no way that they could have influenced it in in in any respect and their relation to c5 is advisory do they and do they both are they have relations with you now what's the current relationship since since Sally and Tony went to do public service we've had no contact with them we have no reason of course to have contact with them in any way they were doing public service they were serving the country and serving the nation and since they've come out of public service we've we've not reestablished any commercial relationship so we talked earlier about the relation with AWS there's only if have a field support two incubators its accelerator does c5 have any portfolio companies that are actually bidding or working on the Jedi contract none what Santa John not zero zero so outside of c5 having relation with Amazon and no portfolios working with a Jedi contract there's no link to c5 other than a portfolio company buying Sally Donnelly who's kind of connected to general mattis up here yeah Selleck has six degrees of separation yes I think this is a constant theme in this conspiracy theory Jonas is six degrees of separation it's it's taking relationships that that that developed in a small community in Washington and trying to draw nefarious and sinister conclusions from them instead of focusing on competing on performance competing on innovation and competing on price and perhaps that's not taking place because the companies that are trying to do this do not have the capability to do so Andre I really appreciate you coming on and answering these tough questions I want to talk about what's going on with c5 now but I got to say you know I want to ask you one more time because I think this is critical you've worked for big-time company Kroll with terminus international market very crazy time time transformation wise you've worked with the CIA in Quantico the FBI nuclei in Quantico on a collaboration you were to know you've done work for the good guys you have see if I've got multiple years operating why why are you being put as a bad guy here I mean you're gonna you know being you being put out there with if you search your name on Google it says you're a spy all these evil all these things are connecting and we're kind of digging through them they kind of don't Joan I've had the privilege of a tremendous career I've had the privilege of working with with great leaders and having had great mentors if you do anything of significance if you do anything that's helping to make a difference or to make a change you should first expect scrutiny but also expect criticism when that scrutiny and criticism are fact-based that's helpful and that's good for society and for the health of society when on the other hand it is fake news or it is the construct of elaborate conspiracy theories that's not good for the health of society it's not good for the national interest is not good for for doing good business you've been very after you're doing business for the for the credibility people questioning your credibility what do you want to tell people that are watching this about your credibility that's in question again with this stuff you've done and you're continuing to do what's the one share something to the folks that might mean something to them you can sway them or you want to say something directly what would you say the measure of a person it is his or her conduct in c-five we are continuing to build our business we continue to invest in great companies we continue to put cravat private capital to work to help drive innovation including in the US market we will continue to surround ourselves with good people and we will continue to set the highest standards for the way in which we invest and build our businesses it's common I guess I would say that I'm getting out as deep as you are in the in term over the years with looking at these patterns but the pattern that I see is very simple when bad guys get found out they leave the jurisdiction they flee they go do something else and they reinvent themselves and scam someone else you've been doing this for many many years got a great back record c5 now is still doing business continuing not skipping a beat the story comes out hopefully kind of derail this or something else will think we're gonna dig into it so than angle for sure but you still have investments you're deploying globally talk about what c5 is doing today tomorrow next few months the next year you have deals going down you're still doing business you have business out there our business has not slowed down for a moment we have the support of tremendous investors we have the support of tremendous partners in our portfolio companies we have the support of a great group of operating partners and most important of all we have a highly dedicated highly focused group of investment teams of very experienced and skilled professionals who are making profitable investments and so we are continuing to build our business we have a very full deal pipeline we will be completing more investment transactions next week and we are continue to scalar assets under management next year we will have half a billion dollars of assets under management and we continue to focus on our mission which is to use private capital to help innovate and drive a change for good after again thank you we have the story in the BBC kicked all this off the 12th no one's else picked it up I think other journals have you mentioned earlier you think this there's actually people putting this out you you call out let's got John wheeler we're going to look into him do you think there's an organized campaign right now organized to go after you go after Amazon are you just collateral damage you mentioned that earlier is there a funded effort here well Bloomberg has reported on the fact that that one of the competitors for this bit of trying to bring together a group of companies behind a concerted effort specifically to block Amazon Web Services and so we hear these reports we see this press speculation if that was the case of course that would not be good for a fair and open and competitive bidding process which is I think is the Department of Defense's intention and what is in the interests of the country at a time when national security innovation will determine not only the fate of future Wars but also the fate of a sons and daughters who are war fighters and to be fair to process having something undermine it like a paid-for dossier which I have multiple sources confirming that's happened it's kind of infiltrating the journalists and so that's kind of where I'm looking at right now is that okay the BBC story just didn't feel right to me credible outlet you work for them you did investigations for them back in the day have you talked to them yes no we are we are we are in correspondence with the BBC I think in particular we want them to address the fact that they've conflated facts in this story playing this parlor game of six degrees of separation we want them to address the important principle of the independence of the in editorial integrity at the fact that they did not disclose that they expert on this program actually has significant conflicts of interests of his own and finally we want them to disclose the fact that it's not c5 and Amazon Web Services who have had a relationship with the scope of our technology park the scope of our technology park actually has a very broad set of Western partners still highly engaged there and even in recent weeks of hosted major cloud contracts and conferences there and and all of this should have been part of the story in on the record well we're certainly going to dig into it I appreciate your answer the tough questions we're gonna certainly look into this dossier if this is true this is bad and if there's people behind it acting behind it then certainly we're gonna report on that and I know these were tough questions thanks for taking the time Andre to to answer them with us Joan thanks for doing a deep dive on us okay this is the Q exclusive conversation here in Palo Alto authority narc who's the founder of c-5 capital venture capital firm in the center of a controversy around this BBC story which we're going to dig into more this has been exclusive conversation I'm John Tory thanks for watching [Music] you

(upbeat electronic music) >> Welcome back, everyone, to this special Cube conversation. I'm John Furrier in the Cube's Palo Alto Studios. My next guest is Dr. Tom Bradicich, he's a friend of the Cube, works at Hewlett Packard Enterprise, heads up the IOT. He's general manager and vice president of servers, converged edge, IOT systems. But we're here to talk about, not so much HPE but really that work that Tom's done in a topic called First Mover, a book that he's writing. It hasn't come out yet, so we'll get an early preview of what it's like to create a category innovation and how to use process to your advantage, not make it your enemy. (chuckles) How to use creativity and how to motivate people and how to sell it through organizations, whether it's venture capitalists or managers. Tom, you've got great experience, thanks for spending time to come into the studio. >> Great to be here, thanks for having me and I'm happy to have this discussion. >> If you go back to the Cube videos, folks watching that know you, seen all the videos at HPE Discover or HP Discover, back in the day, you had a great career. You were an engineer, built the first notebook computer with IBM, you've done a lot of groundbreaking things and I like the topic of your book, First Mover, 'cause it speaks to your mindset. Entrepreneurial, innovative, breaking through walls, you probably got a lot of scar tissue. So, I want to talk about that. Because this is what the opportunity many entrepreneurs have as you know, in the Cube, we really believe that a renaissance in software development is coming. It's so obvious, open source is growing at a extraordinary pace, reuse of code. >> Right. >> You got IOT. >> You're involved in, you got crypto currency, block chain, all these new waves are coming all at once. >> Yes. >> I wish I was 22 again. >> Because this is a great opportunity to innovate. But this improving things, what are some of those things? Let's jump in, what do you see as the playbook? What have you learned and what can you share? >> Well, sure, I've been blessed, I've had a career where I've been able to do a lot of innovation but also, I like to separate the notion of innovation from differentiation. Now see, it's possible to be innovated and not different. Like it's possible for you and I to have the same new suit. It's new, it's innovative, but it's not different. And differentiation is really where one can have a first mover advantage because differentiation by definition is new, is innovation. But it's not always the other way around. So, I always tell my teams and I always focus on, how can we be two things, both different and better. It's possible also to be different and not as good. You can have the highest failure rate in the industry, you're different but that's not good. >> Right? >> Yeah. >> So, the concept here is how do you be different, not just new and innovative but how to be different and how do you be good. And I've actually faced three risks in mostly the big corporate culture that we've had to innovation. And the first risk is, of course, the obvious one, will customers buy it, that's called market risk. Is it something that's good enough to be purchased at a profit? The second risk is, can it be manufactured at quality and at a rate of consumption. The third risk is your own company, does the company have what it takes, actually, to take on the risk of a brand new product category, not just a new product. But a new category of products that, by definition, have never been done before. And when one can do that, when one can figure that out, and I've had some significant experience with this, you can catapult your careers, you can catapult your company and your customers to new levels because you enjoy the benefits of the first mover. That's the name of the book, The First Mover. >> Well, I'm looking forward to seeing it. But I want to ask, this is super important because a lot of people are really good at something and they run hard, they break through a wall but might have missed something. So, you kind of bring up this holistic picture. What are some of the things that folks should focus in on? Say I have a breakthrough idea, I have a prototype I've been running, it's in market, I think it's the best thing since sliced bread, I'm pushing it hard, people are just going to lap this up, this is going to be great, I know it's innovative but no one else knows it. >> Right, right, yeah. >> What do I do? >> What's the process, what do you recommend? >> Well, what I like to do is portion the benefits into two categories. There's supply side benefits that's to your company. Why is this good for your company to do this? And then there are demand side benefits. Meaning, why is it good for the customer? Most people tend to focus mostly on the demand side. Oh, it's solves this problem and the customers will love it and that's important and I would call that a necessary but not a sufficient condition. The other condition is why is this good for your company? And many times, when it's a brand new product category, those inside a company aren't quite in tune with why it's good for the customer. Because, again, it's a new thing, it's a new product category. Why is an automobile better than a horse and buggy, right? Why is a laptop computer better than a desktop computer? These are the ideas where it may be intuitive, it may be instructive to talk about that but when you can get a business model first and start with that, well, the reason is, we can enjoy this margin. The reason is, we can enjoy this particular first mover advantage, the halo effect, the reputation of being the leader. The reason is because we can penetrate a new market. The reason is we can now overcome a falling revenue in a shrinking tam. Now we can accelerate in another tam, perhaps, as well. So, by coming up with both the demand side and the supply side, you have a better case to go forward for support and funding inside a big corporation. >> There's always product market fit, I hear the buzzwords, I got to get the cashflow positive, break even. There's always a motivating force to get something done. How should someone organize the order of their operations to get something done, to the market, if it's an innovative, groundbreaking, differentiating? Because a lot of the big challenge is, some people call it landing span, I heard that buzzword too but you get a champion inside a company and that champion embraces it and most people think, oh man, I got a customer. But then that person has to sell it through and then it has to be operationalized, meaning, people got to get used to it. These are really challenges. >> They are, yes. >> What is your view of how an entrepreneur or a business executive or practitioner to get through that? >> Well, you have to get people on your side and it's really important. Somebody's got to believe in, either, you not even understanding what you're proposing but they'd say, well, you have a track record. For some reason, I believe what you're saying. And then, secondly, getting customers. So, I have personally never done anything major without a customer that I call an inspiration customer. That's a name I just made up. So, a customer, by definition, is an end user that will buy something from you, that's the definition of a customer. And an inspiration customer is one that will help you that is okay with seeing your dirty laundry, okay with mistakes you might make because they see the value in it and they also see the value in them being a first mover. And I like to tell my team, we want to be a first mover and a trendsetter, so our customers can also be trendsetters in their business as well. So therefore, by getting that customer support, and that's in the form of POCs or in trials or in just customer testimony, combine that now with a second dimension called the analyst community, which you're team resides in as well, also saying well, I think this is good as well, brings a lot credibility because there's a saying, a verse in the bible that a prophet is not without honor except in his own home town. Now, if you think about that, a lot of times, you're own company that you reside in has a lower point of view because it's very consumed with, indeed, what is next and doing the right thing, by the way. I have to make this quarter, right. We have to protect the brand. We have to keep the cashflow coming in. These are all important things, so how do you get someone to focus on that? Many times, it's not you anymore, it's outside. And I call that the second C. The first C is internal, the company. The second C is your customers and the community. That also could include, by the way, analysts, the media, other experts, consultants, those type of Cs around there. Now the third C is the competition. This is a little bit controversial. What happens when the idea is now exploited by the competition first; sometimes that is a motivator for a company to jump on it as well and make the market. But, again, if you follow the competition, you're not the first mover, you don't enjoy the benefits of first mover advantage. Higher margin, the halo effect of being the innovators and also, learning, that's an important one. When you're a first mover, you're out there learning so that you can respond to the second generation in a better way. >> I like the notion of differentiation and innovation as two different variables. >> Yes. >> Because it's super important. You can be different and not innovative. You can be innovative and not different. Again, it's all contextual but I want to get back to the pioneering of the first movers. So, statistically speaking, a lot of the best entrepreneurs are first movers and they're often "misunderstood", you hear that all the time. >> Yes. >> Or being a visionary is the difference being 10 years in the future versus an hour, can make the difference between success. (chuckles) We are crazy on one end and you're brilliant on the other because the time to value catches up with that profit, if you will. So the question is that, how does first movers continue to win 'cause I've seen situations where first movers come in, get a position and win and stay, keep the lead. Other times, first movers come in, set the market up, create all the attention and then have arrows on their back. >> And a second mover enjoys the benefit. >> Yeah, so the second mover comes in, bigger scale, so this competition, competitive strategy overlaid on this. Which even complicates it even further. >> Indeed, yes. >> So, your thoughts on that. >> Yes, indeed. Well, one way to look at this is the way to move forward is again, when you can get some momentum that's not you. That's the number one as a... >> John: Market growth, number of subscribers, doing the internet as a trend. >> Yes. >> Mobile users. >> Yes. >> And a third party consultant who's highly respected, a greaser, an analyst. I ran into an analyst recently in a coffee shop who agreed with some of this first mover work we're doing and converged edge systems, which is a new class of products as well. But it's really important that you can't be discouraged, let me point this out. What I tell my team, and I tell students, I lecture at universities and I've been edge professor, those younger in their career, is if you cast and vision and you have an idea and nobody gets it, don't be discouraged, that's a good sign. That's sounds a little funny. Why is it a good sign? Because if everybody gets it right away, it's likely not that novel, it's likely rather ordinary, it's likely been thought of before as well. So, by the very nature and definition that the average person might think it's discouraging. Oh, nobody understands me, nobody gets this idea, should be an encouragement, and a motivation. Now the risk here, is people not getting it is also a sign of a stupid idea. So, usually, when people don't get it, it's either, really not good. >> Or really good. >> Or really amazing that, eventually, they'll come around to it. I had a boss in one of my career opportunities told me to stop working on a product. I don't want to give too much detail, but he literally told me that. And I said, I didn't want to be insubordinate to a boss, we have them and I said, can I please just keep working on it, okay, don't let it interfere with the other stuff. Dah, dah, dah. Today that market is a nine billion dollar market as well. >> Of that product that you-- >> Of that very product that I was told by a very astute person, one of my colleagues, my bosses, that I don't see the future in this, let's not do this, you know, as well. But, being able to have a second thing. So, number one is don't be discouraged by people not getting it. By definition, that's supposed to happen. >> Yeah. >> When you have new-- >> Good point, you want to finish that? >> I just want to get-- >> Get one more thing. >> If I may add a second one. And as you're moving forward with this as well is seek out and find those who do agree with you and stick with them very, very closely. And I have, I can say a couple of names. There's one, we've created this new product class called Converge Edge Systems. Alan Andriole is senior vice president at HP. >> Cube alumni. >> And he's a Cube alumni. >> Super smart. And I'm pointing him out because he has publicly taken on this idea that this product category can really, really work and he's worked-- >> John: Cloud Nine? >> Oh, the converge edge system called Edgeline. >> Okay, got it. >> The Edgeline product brand. >> You know it as well. So therefore, when you find someone who had authority-- >> Eagles fly together, you want to get a good peer group. >> Absolutely. >> Here's a question for you. >> One of my experiences, and I want to just get your reaction and add on to it, your thoughts is, most entrepreneurs or pioneers are misunderstood, so I agree, don't be discouraged, but also, keep validating and be a data seeker, get the data. But a lot of the times, just getting something in the market or getting it going creates movement and inertia to get rolling and sometimes the original idea is actually the big idea turns into it as you get more data. An example is like Air B&B wasn't... What it is, it was basically air mattresses and selling cereal. >> Yes, yes. >> That was the original story, right. And then it turned into, but conceptually, it was the same thing, so you don't have to be 100% right on the semantics. >> It's well known that most startups don't end up being successful with the product they start with. That's well known fact but that's true also in large companies with a product idea as well. So, you have to have this interesting balance. It's very interesting as I've thought about this in study. You have to have deep philosophical and conviction of principles. And here's why: If you don't, you will be swayed by everybody's opinion and you'll never get anything done because oh, well, that's a good idea, maybe I should do this well, that's a good idea, maybe I should do this. Now, I'm not saying that's bad to listen to others but if you don't have a grounding of principles. Example, we established the seven principles of the IOT over two years ago, and we've held on to them and created the success we have based on those principles. Now that's not to say we didn't modify them a little bit but the point is, we were convicted with something and when somebody would come up with a counter to it, we had a way to defend our convictions, if you will, in internal debates and external debates as well. And then, secondly, you got to be also okay with being the sole inhabitant of that field of discourse. Being a visionary can be a very lonely job because of that, right. And, again, it's because you are and your team is, it's not always a lone person right, the team is actually creating something that literally nobody's ever seen before. Nobody understand before. >> What process do you wrap around this? Because Dave Alonzo and I always talk about this on the Cube and after the Cube is that the process has to be your friend, not your enemy. It has to work for you. >> I always say that, yeah. >> Also says that as well on Amazon. But also Charlie Munger, Warren Buffet's partner always says I'm not a big fan of master plans, meaning, because become a slave to the plan rather than the opportunity. >> Yep, yep. >> So these are process kind of things, right. So how does an innovator that's a first mover that wants to create a category, 'cause categories killers or category creators are huge opportunities financially. So they create a lot of value wealth and opportunity. What process is best? Is there a view, is it conditional on certain things? What's your thoughts on... >> Well, let me say, I'm going to give you a big company or a medium size company context, not a startup, I think they're distinctly different. I have limited experience with a startup but I've had significant experience with bigger, medium and large, now, companies as well. You can't try to change the system because now you have two variables. You got this new product that nobody's ever heard of and now you're trying to change the whole system. Now, again, this is just advice for bigger companies. So be careful how many things you want to change, how many things you want to stop. So you want to take this new thing and align it with existing processes and existing core competencies as much as you can, even though it's new, it has to have some alignment; I'll give you an example. When we built the converged edge systems, the Edgeline brand, we aligned it with compute. It's not only compute, but we aligned it with compute, why? Because HPE or HP, at the time, was and is and now, number one in compute when it comes to data center. Compute systems when it comes to high performance computing and mission critical, right. So therefore, that was easy to understand so you're okay, you're familiar with this, but now, let me tell you this new twist on it. And I would assume, and I don't know this for sure, but I would assume Steve Jobs and the Apple team that was thinking of this smartphone concept, the iPhone as well, they had to align it with some level of compute capabilities, right. And if you notice, as it emerged, it also included something that already exists called the iPod which was already aligned with their laptop computers and their desktops, right. Your music would be downloaded as an app to connectivity, but now you can take it with you and by the way, now I'll add a phone to it and so this incrementally built and by the way, you ain't seen nothing yet, I'm going to add a GPS system, I'm going to add a camera, your flashlight, your wallet, I'm going to add all that in. So, I think, by incrementally moving but not upsetting the system, like you said, in a large company really, really helps because you can't change everything too quickly. You got to be okay being alone-- >> Well, I want to interrupt you there for a second. Peter Buress and I talk all the time; I love his quote, Peter Buress, head Cube on research says, the iPhone was a computer that happened to make phone calls. Okay, and that's the smartphone, it's category creator and we know what happened, the rest is history. However, you mentioned talking to customers, having an inspiration customer, I love that concept. Because you need a muse as an innovator. You got to have someone you can trust that knows what you're trying to do that understands the mission. If Steve Jobs went into the marketplace and did market research, he would have probably had the customer feedback to build the best Blackberry. A better Blackberry or another device. Instead, he used is gut, was on his mission and then he understood the inspirational customer, whether it was real or not, he was going down a different road. It takes guts but also some discipline. >> I hear you and I agree with this 100%. When I had the great fortune of leading a team that created the first enterprise blade server or converge system, and today that is pushing about a 10 billion dollar market opportunity, and not one customer asked me for it. Now, that doesn't mean I didn't listen, okay. But I had to bring it to them. So here's the difference, we're not responding to trends, this is a key point, we're creating a trend. And what I tell my team is, you must create trends, not follow them. Many of competitors, are by the way making good money and doing good business, I'm not knocking that, but I'm saying they're not creating a trend, they're actually following one. They're in an exploding tam. >> Pretty lucrative trend. >> It can be. >> Very mature, big market. >> Dave Thomas with Wendy's followed a trend called hamburgers and he did pretty well. He didn't create the hamburger market but he followed one. Now, this is really rather interesting. So when you come in, and then you're saying I want to actually set a trend and create one, it really gives you this opportunity to redefine what is happening. So now, quick story, you may have heard this, maybe your viewers have heard this. A manager of a shoe company sends two guys to an island. He says, I want you to sell shoes on this island. They get to the island, the first guy calls back and says, boss, this is terrible, everybody is barefoot. There's no opportunity to sell shoes. This is terrible, I'm coming home. The second guy calls and says, boss, you're not going to believe this, there's not a shoe on this island and I have a tam that's 100% of the market to sell shoes. I believe, as you pointed out, Steve Jobs didn't go and say well, what apps do you own on your Blackberry. What he did is reversed it and this is what we're doing, we're reversing, we're saying, if you could watch a full length high definition movie in your hand, would you? Well, I can but I can't do it on this device. But if you could, right. So now, in the IOT, I hear this all the time from my competitors and even some colleagues out in the industry, well, we ask them what apps they run at the Edge. We ask them what they do at the Edge. That's good, that's necessary but not sufficient. You have to say, but if you had this product, wouldn't you, for example, run an entire database? Would you compile your machine learning models at the Edge, do it in the cloud now, wouldn't you do that, if you had it? Well, I never thought of that because I don't have that capability, just like, well, I never thought of being able to take pictures and watch full length high definition movies 'cause I never had it. But what if you did, would you do it? So you always got to be setting that trend, not responding to it only. >> That's awesome. >> Dr. Tom Bradicich, writing a book called First Mover really about being innovative. Give you the final word, thanks for coming in, appreciate you sharing the advice. What's going on with HPE and your IOT work? Take a minute to talk about what's happening at HPE. >> Well, thanks, pretty exciting, we've been able to move forward with some really great customer wins. I'm hoping to go public with them. We're in many ways, I know this is an abused term, but we're revolutionizing the industrial IOT in particular and manufacturing floors. We have the large auto-manufacturer that has chosen Edgeline as the standard to produce more and more vehicles per day. That's their goal, how many more vehicles can I get into my customer's hands per day. We have snack company making potato chips. Looking at what we're doing with sulfur, defining operations. We have even, we've talked about this before, space travel, engage with what the space edge is all about. In many ways, we're potato chips to space ships. >> Data centers on Mars. >> Data centers everywhere. >> And then, also, converging OT, just like the smartphone converged the camera and the GPS system, we're converging control systems, data acquisition systems. It's pretty exciting, I've been fortunate to have a company and our new CEO, Antonia Neery, has been very supportive, I was with him this morning and we talked about that new, first-of-a-kind product that we have at this auto-- >> So, is Antonio going to let us come in and do an exclusive interview since he's been a Cube alumni multiple times? >> Yes, I think he should. >> Tell him we said hello. >> I will, I will. >> Tom, great to see you. >> Thanks for having me. >> Tom Bradicich, great thought leader, really around category killers, category creators, being innovative and different, that's the key to success. Thanks for sharing. This is the Cube Conversation here in Palo Alto, I'm John Furrier, thanks for watching. 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