>> live from the Congress Centre in London, England. It's the queue at M i t. And the digital economy The second machine age Brought to you by headlines sponsor M i t. >> I already We're back Dave along with Student of American Nelson and Macca Fear are back here after the day Each of them gave a detailed presentation today related to the book Gentlemen, welcome back to to see you >> Good to see you again I want to start with you >> on a question. That last question That and he got from a woman when you're >> starting with him on a question that was asked of him Yes. And you'LL see why when you find something you like. You dodged the question by the way. Fair for record Hanging out with you guys makes us smarter. Thank you. Hear it? So the question was >> around education She expressed real concern, particularly around education for younger people. I guess by the time they get to secondary education it's too late. You talked about in the book about the three r's we need to read. Obviously we need to write Teo be able to do arithmetic in our head. Sure. What's your take on that on that question. You >> know those basics, our table stakes. I mean, you have to be able to do that kind of stuff. But the real payoff comes from creativity doing something really new and original. The good news is that most people love being creative and original. You look at a kid playing, you know, whether it there two or three years old, that's all that you put some blocks in front of them. They start building, creating things, and our school system is, Andy was saying in his his talkers, questions was, is that many of the schools are almost explicitly designed to tamp that down to get people to conform, get them to all be consistent. Which is exactly what Henry Ford needed for his factories, you know, to work on the assembly line. But now that machines could do that repetitive, consistent kind of work, it's time to let creativity flourish again. And that's when you got to do on top of those basic skills. >> So I have one, and it's pretty clear that that that are Kramer education model. It's really hard for some kids to accept. They just want they want to run around. They want to go express themselves. They wantto poke a world. That's not what that grid full of desks is designed to do. >> We call that a d d. Now I follow. Yeah, I have one >> Montessori kid out of my foot. Really? He's by far the most creative most ano didactic. You're a Montessori Travel Marie, not the story. Have it right? Is that >> Look, I'm not educational research. I am Amon a story kid. I think she got it right. And she was able to demonstrate that she could take kids out of the slums of Bologna who were, at the time considered mentally defective. There's this notion that the reason the poor are poor because they were they were just mentally insufficient. And she could show their learning and their progress. So I completely agree with Eric. We need all of our students need to be able to Teo, accomplish the basics, to read, to write, to do basic math. What Montessori taught me is you can get there via this completely kind of hippie freeform route. And I'm really happy for that education talk. Talk about you and your students. >> Your brainstorm on things that people could do with computers. Can't. >> Yeah, a lot of money >> this and exercise that you do pretty regularly. What's that? How is >> that evolved? A little >> something. We do it more systematically, I almost always doing in at talking over where With Forum. It's a kind of dinner conversation out we can't get away from. So we're hearing a lot. And you know, there's a recurring patterns that emerged, and you heard some of them today around interpersonal skills around creativity. Still, coordination is still physical coordination. What some of these have in common is that their skills that we've evolved over literally, you know, hundreds of thousands or millions of years. And there are billions of neurons devoted to some of these skills. Coordination, vision, interpersonal skills and other skills like arithmetic is something that's really very recent, and we don't have a lot of neurons devoted to that. So it's not surprising the machines can pick up those more recent skills more than the Maurin eight ones. Now overtime, will machines be able to do more of those other skills? I suspect they probably will exactly how long it will take. That's the question for neuroscientists. The AI researchers >> made me make that country think about not just diagnosing a patient but getting them to comply with the treatment regimen. Take your medicine. Eat better. Stop smoking. We know the compliance rates for terrible for demonstrably good ideas. How do we improve them? Is in a technology solution a little bit. Is it an interpersonal solution? Absolutely. I think we need deeply empathetic, deeply capable people to help each other become healthier, become better people. Right Program might come from an algorithm, but that algorithm on the computer that spits it out is going to be lousy at getting most people to comply. Way need human beings for that. So when >> we talking technology space, we've been evangelizing that people need to get rid of what we call the undifferentiated having lifting. And I wonder if there's an opportunity in our personal life, you think about how much time we spend Well, you know, what are we doing for dinner when we're running the kids around? You know, how do I get dressed in the different things that have here their studies sometimes like waste so much brain power, trying to get rid of these things and there's opportunities. Welcome, Jetsons. Actually, no, they >> didn't have these problems that can help us with some of that. I think people should actually help us with over of it. You know, I actually I have a personal trainer and he's one of the last people that I would ever have exclude from my life because he's the guy who could actually help me lead a healthier life. And I play so much value on that. >> I like your metaphor of this is undifferentiated stuff, that really it's not the stuff that makes you great. It's just stuff you have to do. And I remember having a conversation with folks that s AP, and they said, you know, sure would like to brag about this, but we take away a lot of stuff that isn't what differentiates companies in the back office stuff. Getting your basic bookkeeping, accounting, supply chain stuff done and it's interesting. I think we could use the same thing for for personal lives. Let's get rid of that sort of underbrush of necessity stuff so we can focus on the things that are uniquely good at >> alright so way have to run out when I need garbage bags with toilet paper. Honestly, a drone should show up and drop that on my friends. >> So I wonder when I look at the self driving car that you've talked about, will we reach a point that not only do we trust computers in the car, it's cars to drive herself? But we've reached a point where we're just got nothing. Trust humans anymore because self driving cars there just so much safer and better than what we've got is that coming >> in the next twenty years? I personally think so, and the first time is deeply weird and unsettling. I think both of us were a little bit terrified the first time we drove in the Google Autonomous Car and the Google or driving it hit the button and took his hands off the controls. That was a weird moment. I liken it to when I was learning to scuba dive. Very first breath you take underwater is deeply unsettling because you're not supposed to be doing this. After a few breaths, it becomes background. >> But you know, I was I was driving to the airport to come here, and I look in the lanes left to me. There's a woman, you know, texting, and I'd be much you're terrifying if she wasn't driving. If the computer is doing because then we could be more, that's the right way to think about it. I think the time will come and it may not be that far away. We're the norm's shift exactly the other way around and be considered risky to have a human at the wheel and the safety. That thing that the insurance company will want is to have a machine there. You know, I think this is a temporary phase with Newt technology. We become frightened of them. When microwave ovens first came out, they were weird and wonderful. Not most of us think of them is really kind of boring and routine. Same thing is gonna happen with self driving to accidents. Well, that's the story is, that is, But none of them were. Of course, according to the story >> driving, what's clear is that they're safer than the human driver. As of today, they are only going to get safer. We're not evolving that quick, >> but you got the question. Is that self driving, car driven story? Dr. We laughed because we're live in Boston. But your answer was, Will drive started driving, driving, >> you know, eventually, you know, I think it's fair to say that there's a big difference. You know, the first nineteen, ninety five, ninety nine percent of driving is something that's a lot easier. That last one percent or one hundredth of one percent becomes much, much harder. And right now we've had There's a card just last week that drove across the United States, but there were half a dozen times when he had to have a human interviews and particularly unusual situations. And I think because of our norms and expectations, that won't be enough for a self driving car to be safer than humans will need it to be te next paper or something like maybe >> like the just example may be the ultimate combination is a combination of human and self driving car, >> Maybe situation after situation. I think that's going to be the case and I'LL go back to medical diagnosis. I would at least for the short to medium term, I would like to have a pair of human eyes over the treatment plan that the that being completely digital diagnostician spits out. Maybe over time it will be clear that there are no flaws in that. We could go totally digital, but we can combine the two. >> I think in most cases what anything is right, what you brought up. But you know the case of self driving cars in particular, and other situations where humans have to take over for a machine that's failing for someway like aircraft. When the autopilot is doing things right, it turns out that that transition could be very, very rocky and expecting a human to be on call to be able to quickly grasp what's going on in the middle of a crisis of a freak out that's not reasonable isn't necessarily the best time to be swishing over. So there's a there's a fuel. Human factors issued their of how you design it, not just to the human could take over, but you could make a kind of a seamless transition. And that's not easy. >> Okay, so maybe self driving cars, that doesn't happen. But back to the medical example. Maybe Watson will replace Dr Welby, but have not Dr Oz >> interaction or any nurse or somebody who actually gets me to comply again. But also, I do think that Dr Watson can and should take over for people in the developing world who only have access instead of First World medical care. They've got a smartphone. OK, we're going to be able to deliver absolute top shelf world class medical diagnostics to those people fairly quickly. Of course, we should >> do that and then combine it with a coach who gets people to take the prescription when they're supposed to do it, change their eating habits or communities or whatever else you hear your peers are all losing weight. >> Why aren't you? >> I wantto askyou something coming on. Time here has been gracious with your time and your talk. We're very out spoken about. A couple of things I would summarize. It is you lot must Bill Gates and Stephen Hawking. You're paranoid tens. There's no privacy in the Internet, so get over. >> I didn't say there's no privacy. I know working. I think it's important to be clear on this. I think privacy is really important. I do think it's right that we have, and we should have. What I don't want to do is have a bureaucrat defined my privacy rights for me and start telling >> companies what they can and can't do is a result. What >> I'd much prefer instead is to say, Look, if there are things that we know >> Cos we're doing that we do not approve >> of let's deal with that situation as opposed to trying to put the guard rails in place and fence off the different kinds of innovative, strict growth, right? >> I mean, there's two kinds of mistakes you could make. One is, you can let companies do things and you should have regulated them. The other is. You could regulate them preemptively when you really should have let them do things and both kinds of errors or possible. Our sense of looking at what's happening in Jinan is that we've thrived where we allow more permission, listen innovation. We allowed companies to do things and then go back and fix things rather than when we try and locked down the past in the existing processes, so are leaning. In most cases, not every case is to be a little more free, a little more open recognized that there will be mistakes. It's not gonna be that we're perfectly guaranteed is that there is a risk when you walk across the street but go back and fix things at that point rather than preemptively define exactly how things are gonna play. Let >> me give you an example. If Google were to say to me, Hey, Andy, unless you pay us x dollars per month, we're gonna show the world your last fifty Google searches. I would completely pay for that kind of blackmail, right? Certain your search history is incredibly personal reveals a lot about you. Google is not going to do that. It would just it would crater their own business. So trying to trying to fence that kind of stuff often advance makes a lot of sense to me. Then then then relying on this. This sounds a little bit weird, but a combination of for profit companies and people with three choice that that's a really good guarantor of our freedoms and our rights. So you >> guys have a pretty good thing going. It doesn't look like strangle each other anytime soon. But >> how do you How do you decide who >> does one treat by how you operate with reading the book? It's like, Okay, like I think that was Andy because he's talking about Erica. I think that was Erica's. He's talking, >> but I couldn't tell you. I think it's hard for you to reverse engineer because it gets so co mingled over time. And, you know, I gave the example the end of the talk about humans and machines working together synergistically. I think the same thing is true with Indian me out. You may disagree, but I find that we are smarter when we work together so much smarter. Then when we work individually, we go and bring some things on the blackboard. And I had these aha moments that I don't think I would've had just sitting by myself and do I should be that ah ha moment to Andy. To me, it's actually to this Borg of us working together >> and fundamentally, these air bumper sticker things to say. If after working with someone, you become convinced that they respect you and that you could trust them and like Erik says that you're better off together, that you would be individually, it's a complete no brainer to >> keep doing the work together. Well, we're really humbled to be here. You guys are great contact. Everything is free and available. We really believe in that sort of economics. And so thank you very much for having us here. >> Well, it's just a real pleasure. >> All right, Right there, buddy. We'LL be back to wrap up right after this is Q relied from London. My tea.

>> live from the Congress Centre in London, England. It's the queue at M I t. And the digital economy. The second machine Age Brought to you by headlines sponsor M I T. >> Everybody, welcome to London. This is Dave along with student men. And this is the cube. The cube goes out, we go to the events. We extract the signal from the noise. We're very pleased to be in London, the scene of the first machine age. But we're here to talk about the second Machine age. Andrew McAfee and Erik Brynjolfsson. Gentlemen, first of all, congratulations on this fantastic book. It's been getting great acclaim. So it's a wonderful book if you haven't read it. Ah, Andrew, Maybe you could hold it up for our audience here, the second machine age >> and Dave to start off thanks to you for being able to pronounce both of our names correctly, that's just about unprecedented. In the history of this, >> I can probably even spell them. Whoa, Don't. So, anyway, welcome. We appreciate you guys coming on and appreciate the opportunity to talk about the book. So if you want to start with you, so why London? I mean, I talked about the first machine age. Why are we back here? One of the >> things we learned when we were writing the book is how big deal technological progress is on the way you learn that is by going back and looking at a lot of history and trying to understand what bet the curve of human history. If we look at how advanced our civilizations are, if we look at how many people there are in the world, if we look at GDP per capita around the world, amazingly enough, we have that data going back hundreds, sometimes thousands of years. And no matter what data you're looking at, you get the same story, which is that nothing happened until the Industrial Revolution. So for us, the start of the first machine machine age for us, it's a real thrill to come to London to come to the UK, which was the birthplace of the Industrial Revolution. The first machine age to talk about the second. >> So, Eric, I wonder if you could have with two sort of main vectors that you take away from the book won is that you know, machines have always replaced humans and maybe doing so at a different rate of these days. But the other is the potential of continued innovation, even though many people say Moore's law is dead. You guys have come up with sort of premises to how innovation will continue to double. So boil it down for the lay person. What should we think about? Well, sure. >> I mean, let me just elaborate on what you just said. Technology's always been destroying jobs, but it's also always been creating jobs, you know, A couple centuries ago, ninety percent of Americans worked in agriculture on farms in nineteen hundred is down to about forty one percent. Now is less than two percent. All those people didn't simply become unemployed. Instead, new industries were invented by Henry Ford, Steve Jobs, Bill Gates. Lots of other people and people got rather unemployed, became redeployed. One of the concerns is is, Are we doing that fast enough? This time around, we see a lot of bounty being created by technology. Global poverty rates are falling. Record wealth in the United States record GDP per person. But not everyone's participating in that. Not even when sharing the past ten fifteen years, we've actually to our surprise seem median income fall that's income of the person the fiftieth percentile, even though the overall pie is getting bigger. And one of the reasons that we created the initiative on the digital economy was to try to crack that, not understand what exactly is going on? How is technology behaving differently this time around in earlier eras and part that has to do with some of the unique characteristics of eventual goods? >> Well, your point in the book is that normally median income tracks productivity, and it's it's not this time around. Should we be concerned about that? >> I think we should be concerned about it. That's different than trying to stop for halt course of technology. That's absolutely not something you >> should >> be more concerned about. That way, Neto let >> technology move ahead. We need to let the innovation happen, and if we are concerned about some of the side effects or some of the consequences of that fine, let's deal with those. You bring up what I think is the one of most important side effects to have our eye on, which is exactly as you say when we look back for a long time, the average worker was taking home more pay, a higher standard of living decade after decade as their productivity improved. To the point that we started to think about that as an economic law, your compensation is your marginal productivity fantastic what we've noticed over the past couple of decades, and I don't think it's a coincidence that we've noticed this, as the computer age has accelerated, is that there's been a decoupling. The productivity continues to go up, but the wage that average income has stagnated. Dealing with that is one of our big challenges. >> So what you tell your students become a superstar? I mean, not everybody could become a superstar. Well, our students cats, you know, maybe the thing you know they're all aspired to write. >> A lot of people focus on the way that technology has helped superstars reach global audiences. You know, I had one student. He wrote an app, and about two or three weeks, he tells me, and within a few months he had reached a million people with that app. That's something that probably would have been impossible a couple of decades ago. But he was able to do that because he built it on top of the Facebook platform, which is on top of the Internet and a lot of other innovations that came before. So in some ways it's never been easier to become a superstar and to reach literally not just millions, but even billions of people. But that's not the only successful path in the second machine age. There's also other categories where machines just aren't very good. Yet one of the ones that comes to mind is interpersonal skills, whether that's coaching or underst picking up on other cues from people nurturing people carrying for people. And there are a whole set of professions around those categories as well. You don't have to have some superstar programmer to be successful in those categories, and there are millions of jobs that are needed in those categories for to take care of other P people. So I think there's gonna be a lot of ways to be successful in the second machine age, >> so I think >> that's really important because one take away that I don't like from people who've looked at our work is that only the amazing entrepreneurs or the people with one forty plus IQ's are going to be successful in the second machine age. That's it's just not correct. As Eric says, the ability to negotiate the ability Teo be empathetic to somebody, the ability to care for somebody machines they're lousy of thes. They remain really important things to do. They remain economically valuable things >> love concern that they won't remain louse. If I'm a you know, student listening, you said in your book, Self driving cars, You know, decade ago, even five years ago so it can happen. So how do we predict with computers Will and won't be good at We >> basically don't. Our track record in doing that is actually fairly lousy. The mantra that I've learned is that objects in the future are closer than they appear on the stuff that seem like complete SciFi. You're never goingto happen keeps on happening now. That said, I am still going to be blown away the first time I see a computer written novel that that that works, that that I find compelling, that that seems like a very human skill. But we are starting to see technologies that are good at recognizing human emotions that can compose music that can do art paintings that I find pretty compelling. So never say never is another. >> I mean right, right. If if I look some of the examples lately, you know, basic news computers could do that really well. IBM, you know, the lots of machine can make recipes that we would have never thought of. Very things would be creative. And Ian, the technology space, you know, you know, a decade ago computer science is where you tell everybody to go into today is data scientists still like a hot opportunity for people to go in And the technology space? Where, where is there some good opportunity? >> Or whether or not that's what the job title on the business card is that going to be hot being a numerous person being ableto work with large amounts of data input, particular being able to work with huge amounts of data in a digital environment in a computer that skills not going anywhere >> you could think of jobs in three categories is ready to technology. They're ones that air substitutes racing against machine. They're ones that air compliments that are using technology under ones that just aren't really affected yet by technology. The first category you definitely want to stay away from. You know, a lot of routine information processing work. Those were things machines could do well, >> prepare yourself as a job. Is that for a job as a payroll clerk? There's a really bad wait. >> See that those jobs were disappearing, both in terms of the numbers of employment and the wages that they get. The second category jobs. That compliment data scientist is a great example of that or somebody who's AP Writer or YouTube. Those are things that technology makes your skills more and more valuable. And there's this huge middle category. We talked earlier about interpersonal skills, a lot of physical task. Still, where machines just really can't touch them too much. Those are also categories that so far hell >> no, I didnt know it like middle >> school football, Coach is a job. It's going to be around a human job. It's going to be around for a long time to come because I have not seen the piece of technology that can inspire a group of twelve or thirteen year olds to go out there and play together as a team. Now Erik has actually been a middle school football coach, and he actually used a lot of technology to help him get good at that job, to the point where you are pretty successful. Middle school football coach >> way want a lot of teams games, and part of it was way could learn from technology. We were able to break down films in ways that people never could've previously at the middle school level. His technology's made a lot of things much cheaper. Now then we're available. >> So it was learning to be competitive versus learning how to teach kids to play football. Is that right? Or was a bit? Well, actually, >> one of the most important things and being a coach is that interpersonal connection is one thing I liked the most about it, and that's something I think no robot could do. What I think it be a long, long time. If ever that inspiring halftime speech could be given by a robot >> on getting Eric Gipper bring the Olsen Well, the to me, the more, most interesting examples I didn't realise this until I read your book, is that the best chess player in the world is not a computer, it's a computer and a human. That's what those to me. It seemed to be the greatest opportunities for innovative way. Call a >> racing with machines, and we want to emphasize that that's what people should be focusing. I think there's been a lot of attention on how machines can replace humans. But the bigger opportunities how humans and machines could work together to do things they could never have been done before in games like chess. We see that possibility. But even more, interestingly, is when they're making new discoveries in neuroscience or new kinds of business models like Uber and others, where we are seeing value creation in ways that was just not possible >> previously, and that chess example is going to spill over into the rest of the economy very, very quickly. I think about medicine and medical diagnosis. I believe that work needs to be a huge amount, more digital automated than it is today. I want Dr Watson as my primary care physician, but I do think that the real opportunities we're going to be to combine digital diagnosis, digital pattern recognition with the union skills and abilities of the human doctor. Let's bring those two skill sets together >> well, the Staton your book is. It would take a physician one hundred sixty hours a week to stay on top of reading, to stay on top of all the new That's publication. That's the >> estimate. And but there's no amount of time that watching could learn how to do that empathy that requires to communicate that and learn from a patient so that humans and machines have complementary skills. The machines are strong in some categories of humans and others, and that's why a team of humans and computers could be so >> That's the killer. Since >> the book came out, we found another great example related to automation and medicine in science. There's a really clever experiment that the IBM Watson team did with team out of Baylor. They fed the technology a couple hundred thousand papers related to one area of gene expression and proteins. And they said, Why don't you predict what the next molecules all we should look at to get this tart to get this desired response out on the computer said Okay, we think these nine are the next ones that are going to be good candidates. What they did that was so clever they only gave the computer papers that had been published through two thousand three. So then we have twelve years to see if those hypotheses turned out to be correct. Computer was batting about seven hundred, so people say, didn't that technology could never be creative. I think coming up with a a good scientific hypothesis is an example of creative work. Let's make that work a lot more digital as well. >> So, you know, I got a question from the crowd here. Thie First Industrial Revolution really helped build up a lot of the cities. The question is, with the speed and reach of the Internet and everything, is this really going to help distribute the population? Maur. What? The digital economy? I don't I don't think so. I don't think we want to come to cities, not just because it's the only waited to communicate with somebody we actually want to be >> face to face with them. We want to hang out with urbanization is a really, really powerful trend. Even as our technologies have gotten more powerful. I don't think that's going to revert, but I do think that if you if you want to get away from the city, at least for a period of time and go contemplate and be out in the world. You can now do that and not >> lose touch. You know, the social undistributed workforce isn't gonna drive that away. It's It's a real phenomenon, but it's not going to >> mean that cities were going >> to be popular. Well, the cities have two unique abilities. One is the entertainment. If you'd like to socialize with people in a face to face way most of the time, although people do it online as well, the other is that there's still a lot of types of communication that are best done in person. And, in fact, real estate value suggests that being able to be close toe other experts in your field. Whether it's in Silicon Valley, Hollywood, Wall Street is still a valuable asset. Eric and I >> travel a ton not always together. We could get a lot of our work done via email on via digital tools. When it comes time to actually get together and think about the next article or the next book, we need to be in the same room with the white bored doing it. Old school >> want to come back to the roots of innovation. Moore's law is Gordon Mohr put forth fiftieth anniversary next week, and it's it's It's coming to an end in terms of that actually has ended in terms of the way it's doubling every eighteen months, but looks like we still have some runway. But you know, experts can predict and you guys made it a point you book People always underestimate, you know, human's ability to do the things that people think they can't do. But the rial innovation is coming from this notion of combinatorial technologies. That's where we're going to see that continued exponential growth. What gives you confidence that that >> curve will continue? If you look at innovation as the work, not of coming up with some brand new Eureka, but as putting together existing building blocks in a new and powerful way, Then you should get really optimistic because the number of building blocks out there in the world is only going up with iPhones and sensors and banned weapon and all these different new tools and the ability to tap into more brains around the world to allow more people to try to do that recombination. That ability is only increasing as well. I'm massively optimistic about innovation, >> yet that's a fundamental break from the common attitude. We hear that we're using up all the low hanging fruit, that innovation. There's some fixed stock of it, and first we get the easy innovations, and then it gets harder and harder to innovate. We fundamentally disagree with that. You, in fact, every innovation we create creates more and more building blocks for additional innovations. And if you look historically, most of the breakthroughs have been achieved by combining previously existing innovations. So that makes me optimistic that we'LL have more and more of those building blocks going >> forward. People say that we've we've wrung all of the benefit out of the internal combustion engine, for example, and it's all just rounding error. For here. Know a completely autonomous car is not rounding error. That's the new thing that's going to change. Our lives is going to change our cities is going to change our supply chains, and it's making a new, entirely new use case out of that internal combustion. >> So you used the example of ways in the book, Really, you know, their software, obviously was involved, but it really was sensors and it was social media. And we're mobile phones and networks, just these combinations of technologies for innovation, >> none of which was an invention of the Ways team, none of which was original. Theyjust put those elements together in a really powerful way. >> So that's I mean, the value of ways isn't over. So we're just scratching the surface, and we could talk about sort of what you guys expect. Going forward. I know it's hard to predict well, another >> really important thing about wages in addition to the wake and combined and recombined existing components. It's available for free on my phone, and GPS would've cost hundreds of dollars a few years ago, and it wouldn't have been nearly as good at ways. And in a decade before that, it would have been infinitely expensive. You couldn't get it at any price, and this is a really important phenomenon. The digital economy that is underappreciated is that so much of what we get is now available at zero cost. Our GDP measures are all the goods and services they're bought and sold. If they have zero price, they show up is a zero in GDP. >> Wikipedia, right? Wikipedia, but that just wait here overvalue ways. Yeah, it doesn't. That >> doesn't mean zero value. It's still quite valuable to us. And more and more. I think our metrics are not capturing the real essence of the digital economy. One of the things we're doing at the Initiative initiative, the addition on the usual economy is to understand better what the right metrics will be for seeing this kind of growth. >> And I want to talk about that in the context of what you just said. The competitiveness. So if I get a piece of fruit disappears Smythe Digital economy, it's different. I wonder if you could explain that, >> and one of the ways it's different will use waze is an example here again, is network effects become really, really powerful? So ways gets more valuable to me? The more other ways er's there are out there in the world, they provide more traffic information that let me know where the potholes and the construction are. So network effects lead to really kind of different competitive dynamics. They tend to lead toward more winner, take all situations. They tend to lead toward things that look more not like monopolies, and that tends to freak some people out. I'm a little more home about that because one of the things we also know from observing the high tech industries is that today's near monopolist is yesterday's also ran. We just see that over and over because complacency and inertia are so deadly, there's always some some disruptor coming up, even in the high tech industries to make the incumbents nervous. >> Right? Open source. >> We'LL open source And that's a perfect example of how some of the characteristics of goods in the digital economy are fundamentally different from earlier eras and microeconomics. We talk about rival and excludable goods, and that's what you need for a competitive equilibrium. Digital goods, our non rival and non excludable. You go back to your micro economics textbook for more detail in that, but in essence, what it means is that these goods could be freely coffee at almost zero cost. Each copy is a perfect replica of the original that could be transmitted anywhere on the planet almost instantaneously, and that leads to a very different kind of economics that what we had for the previous few hundred years, >> or you don't work to quantify that. Does that sort of Yeah, wave wanted >> Find the effect on the economy more broadly. But there's also a very profound effects on business and the kind of business models that work. You know, you mentioned open source as an example. There are platform economics, Marshall Banal Stein. One of the experts in the field, is speaking here today about that. Maybe we get a chance to talk about it later. You can sometimes make a lot of money by giving stuff away for free and gaining from complimentary goods. These are things that >> way started. Yeah, Well, there you go. Well, that would be working for you could only do that for a little >> while. You'll like you're a drug dealer. You could do that for a little while. And then you get people addicted many. You start charging them a lot. There's a really different business model in the second machine age, which is just give stuff away for free. You can make enough off other ancillary streams like advertising to have a large, very, very successful business. >> Okay, I wonder if we could sort of, uh, two things I want first I want to talk about the constraints. What is the constraints to taking advantage of that? That innovation curve in the next day? >> Well, that's a great question, and less and less of the constraint is technological. More and more of the constraint is our ability as individuals to cope with change and said There's a race between technology and education, and an even more profound constraint is the ability of our organisations in our culture to adapt. We really see that it's a bottleneck. And at the MIT Sloan School, we're very much focused on trying to relieve those constraints. We've got some brilliant technologists that are inventing the future on the technology side, but we've got to keep up with our business. Models are economic systems, and that's not happening fast enough. >> So let's think about where the technology's aren't in. The constraints aren't and are. As Eric says, access to technology is vanishing as a constraint. Access to capital is vanishing as a constraint, at least a demonstrator to start showing that you've got a good idea because of the cloud. Because of Moore's law and a small team or alone innovator can demonstrate the power of their idea and then ramp it up. So those air really vanishing constraints are mindset, constraints, our institutional constraints. And unfortunately, increasingly, I believe regulatory constraints. Our colleague Larry Lessing has a great way to phrase the choice, he says, With our policies, with our regulations, we can protect the future from the past, or we could protect the past from the future. That choice is really, really write. The future is a better place. Let's protect that from the incumbents in the inertia. >> So that leads us to sort of some of the proposals that you guys made in terms of how we can approach this. Good news is, capitalism is not something that you're you're you're you're very much in favor of, you know, attacking no poulet bureau, I think, was your comments on DH some of the other things? Actually, I found pretty practical, although not not likely, but practical things, right? Yes, but but still, you know, feasible certainly, certainly, certainly intellectually. But what have you seen in terms of the reaction to your proposals? And do you have any once that the public policy will begin to shape in a way that wages >> conference that the conversation is shifting. So just from the publication date now we've noticed there's a lot more willingness to engage with these ideas with the ideas that tech progress is racing ahead but leaving some people behind in more people behind in an economic sense over time. So we've talked to politicians. We've talked to policy makers. We've talked to faint thanks. That conversation is progressing. And if we want to change our our government, you want to change our policies. I think it has to start with changing the conversation. It's a bottom out phenomenon >> and is exactly right. And that's really one of the key things that we learned, you know well, we talked to our political science friends. They remind us that in American other democracies, leaders are really followers on. They follow public opinion and the people are the leaders. So we're not going to be able to get changes in our policies until we change the old broad conversation. We get people recognizing the issues they're underway here, and I wouldn't be too quick to dismiss some of these bigger changes we describe as possible the book. I mean, historically, there've been some huge changes the cost of the mass public education was a pretty radical idea when it was introduced. The concept of Social Security were recently the concept of marriage. Equality with something I think people wouldn't have imagined maybe a decade or two ago so you could have some big changes in the political conversation. It starts with what the people want, and ultimately the leaders will follow. >> It's easy to get dismayed about the logjam in Washington, and I get dismayed once in a while. But I think back a decade ago, if somebody had told me that gay marriage and legal marijuana would be pretty widespread in America, I would have laughed in their face. And, you know, I'm straight and I don't smoke dope. I think these were both fantastic developments, and they came because the conversation shifted. Not not because we had a gay pot smoker in the white. >> Gentlemen, Listen, thank you very much. First of all, for running this great book, well, even I got one last question. So I understand you guys were working on your topic for you next, but can you give us a little bit of, uh, some thoughts as to what you're thinking. What do we do? We tip the hand. Well, sure, I think that >> it's no no mystery that we teach in a business school. And we spent a lot of time interacting with business leaders. And as we've mentioned in the discussion here, there have been some huge changes in the kind of business models that are successful in the second machine age. We want to elaborate on those describe nuts what were seeing when we talk to business leaders but also with the economic theory says about what will and what? What won't work. >> So second machine age was our attempt it like a big idea book. Let's write the Business guide to the Second Machine Age. >> Excellent. First of all, the book is a big idea. A lot of big ideas in the book, with excellent examples and some prescription, I think, for moving forward. So thank you for writing that book. And congratulations on its success. Really appreciate you guys coming in the Cube. Good luck today and we look forward to talking to in the future. Thanks for having been a real pleasure. Keep right. Everybody will be right back. We're live from London. This is M I t E. This is the cube right back

>> Announcer: TheCUBE presents Ignite '22, brought to you by Palo Alto Networks. >> Welcome back to Las Vegas. It's theCUBE covering Palo Alto Networks '22, from the MGM Grand, Lisa Martin with Dave Vellante. Dave, we are going to unpack in the next few minutes what we heard and saw at day one of Palo Alto Networks, Ignite. A lot of great conversations, some great guests on the program today. >> Yeah last event, CUBE event of the year. Probably last major tech event of the year. It's kind of an interesting choice of timing, two weeks after reInvent. But you know, this crowd is it's a lot of like network engineers, SecOps pros. There's not a lot of suits here. I think they were here yesterday, all the partners. >> Yeah. >> We talked to Carl Sunderland about, Hey, these, these guys want to know how do I grow my business? You know, so it was a lot of C level executives talking about their business, and how they partner with Palo Alto to grow. The crowd today is really, you know hardcore security professionals. >> Yeah. >> So we're hearing a story of consolidation. >> Yes. >> No surprise. We've talked about that and reported on it, you know, quite extensively. The one big takeaway, and I want, I came in, as you know, wanting to understand, okay, can you through m and a maintain, you know, build a suite of great, big portfolio and at the same time maintain best of breed? And the answer was consistent. We heard it from Nikesh, we heard it from Nir Zuk. The answer was you can't be best of breed without having that large portfolio, single data lake, you know? Single version of the truth, of there is such a thing. That was interesting, that in security, you have to have that visibility. I would imagine, that's true for a lot of things. Data, see what Snowflake and Databricks are both trying to do, now AWS. So to join, we heard that last week, so that was one of the big takeaways. What were your, some of your thoughts? >> Just impressed with the level of threat intelligence that Unit 42 has done. I mean, we had Wendy Whitmer on, and she was one of the alumni, great guest. The landscape has changed so dramatically. Every business, in any industry, nobody's safe. They have such great intelligence on what's going on with malware, with ransomware, with Smishing, that they're able to get, help organizations on their way to becoming cyber resilient. You know, we've been talking a lot about cyber resiliency lately. I always want to understand, well what does it mean? How do different organizations and customers define it? Can they actually really get there? And Wendy talked about yes, it is a journey, but organizations can achieve cyber resiliency. But they need to partner with Palo Alto Networks to be able to understand the landscape and ensure that they've got security established across their organization, as it's now growingly Multicloud. >> Yeah, she's a blonde-haired Wonder Woman, superhero. I always ask security pros that question. But you know, when you talk to people like Wendy Whitmore, Kevin Mandy is somebody else. And the people at AWS, or the big cloud companies, who are on the inside, looking at the threat intelligence. They have so much data, and they have so much knowledge. They can, they analyze, they could identify the fingerprints of nation states, different, you know, criminal organizations. And the the one thing, I think it was Wendy who said, maybe it was somebody else, I think it was Wendy, that they're they're tearing down and reforming, right? >> Yes. >> After they're discovered. Okay, they pack up and leave. They're like, you know, Oceans 11. >> Yep. >> Okay. And then they recruit them and bring them back in. So that was really fascinating. Nir Zuk, we'd never had him on theCUBE before. He was tremendous founder and and CTO of Palo Alto Networks, very opinionated. You know, very clear thinker, basically saying, look you're SOC is going to be run by AI >> Yeah. >> within the next five years. And machines are going to do things that humans can't do at scale, is really what he was saying. And then they're going to get better at that, and they're going to do other things that you have done well that they haven't done well, and then they're going to do well. And so, this is an interesting discussion about you know, I remember, you know we had an event with MIT. Eric Brynjolfsson and Andy McAfee, they wrote the book "Second Machine Age." And they made the point, machines have always replaced humans. This is the first time ever that machines are replacing humans in cognitive functions. So what does that mean? That means that humans have to rely on, you know, creativity. There's got to be new training, new thinking. So it's not like you're going to be out of a job, you're just going to be doing a different job. >> Right. I thought Nir Zuk did a great job of explaining that. We often hear people that are concerned with machines taking jobs. He did a great job of, and you did a great recap, of articulating the value that both bring, and the opportunities to the humans that the machines actually deliver as well. >> Yeah so, you know, we didn't, we didn't get deep into the products today. Tomorrow we're going to have a little bit more deep dive on products. We did, we had some partners on, AWS came on, talked about their ecosystem. BJ Jenkins so, you know, BJ Jenkins again I mean super senior executive. And if I were Nikesh, he's doing exactly what I would do. Putting him on a plane and saying, go meet with customers, go make rain, right? And that's what he's doing is, he's an individual who really knows how to interact with the C-suite, has driven value, you know, over the years. So they've got that angle goin', they're driving go to market. They've got the technology piece and they've, they got to build out the ecosystem. That I think is the big opportunity for them. You know, if they're going to double as a company, this ecosystem has to quadruple. >> Yeah, yeah. >> In my opinion. And I, we saw the same thing at CrowdStrike. We said the same thing about Service Now in 2013. And so, what's happened is the GSIs, the global system integrators start to get involved. They start to partner with them and then they get to get that flywheel effect. And then there's a supercloud, I think that, you know I think Nir Zuk said, Hey, we are basically building out that, he didn't use the term supercloud. But, we're building out that cross cloud capability. You don't need another stove pipe for the edge. You know, so they got on-prem, they got AWS, Azure, you said you have to, absolutely have to run on Microsoft. 'Cause I don't believe today, right? Today they run on, I heard somebody say they run on AWS and Google. >> Yeah. >> I haven't heard much about Microsoft. >> Right. >> Both AWS and Google are here. Microsoft, the bigger competitor in security, but Nir Zuk was unequivocal. Yes, of course you have to run, you got to run it on an Alibaba cloud. He didn't say that, but if you want to secure the China cloud, you got to run on Alibaba. >> Absolutely. >> And Oracle he said. Didn't mention IBM, but no reason they can't run on IBM's cloud. But unless IBM doesn't want 'em to. >> Well they're very customer focused and customer first. So it'll be interesting to see if customers take them in that direction. >> Well it's a good point, right? If customers say, Hey we want you running in this cloud, they will. And, but he did call out Oracle, which I thought was interesting. And so, Oracle's all about mission critical data, mission critical apps. So, you know, that's a good sign. You know, I mean there's so much opportunity in cyber, but so much confusion. You know, sneak had a raise today. It was a down round, no surprise there. But you know, these companies are going to start getting tight on cash, and you've seen layoffs, right? And so, I dunno who said it, I think it was Carl at the end said in a downturn, the strongest companies come out stronger. And that's generally, generally been the case. That kind of rich get richer. We see that in the last downturn? Yes and no, to a certain extent. It's still all about execution. I mean I think about EMC coming out of the last downturn. They did come out stronger and then they started to rocket, but then look what happened. They couldn't remain independent. They were just using m and a as a technique to hide the warts. You know so, what Nir Zuk said that was most interesting to me is when we acquire, we acquire with the intent of integrating. ServiceNow has a similar philosophy. I think that's why they've been somewhat successful. And Oracle, for sure, has had a similar philosophy. So, and that idea of shifting labor into vendor R and D has always been a winning formula. >> I think we heard that today. Excited for day two tomorrow. We've got some great conversations. We're going to be able to talk with some customers, the chief product officer is on. So we have more great content coming from our last live show over the year. Dave, it's been great co-hosting day one with you. Look forward to doing it tomorrow. >> Yeah, thanks for doing this. >> All right. >> All right. For Dave Vellante, I'm Lisa Martin. You've been watching theCUBE, the leader in live enterprise and emerging tech coverage. See you tomorrow. (gentle music fades)

>>we'll go back to the cubes. Coverage of the age of US Executive Summit at Davis. Reinvent made possible by Accenture My name is Dave Volunteer. We're gonna talk about the arm nation advantage, embraced the future of productivity, improve speed quality and customer experience through artificial intelligence. And we herewith Bhaskar goes, Who's the chief strategy Officer X censure in Rajendra RP Prasad is the senior managing director in Global Automation. The Accenture guys walk into the Cube. Get to seal. >>Thank you. >>Hey, congratulations on the new book. I know it's like giving birth, but it's a mini version. If the well, the automation advantage embraced a future of productivity, improve speed, quality and customer experience to artificial intelligence. What inspired you to write this book? Can you tell us a little bit more about it and how businesses are going to be able to take advantage of the information that's in there? Maybe you could start, >>so I think you know, if we say that what inspired as primarily the two things really style, you know, over inspired have to start this project in first of all is the technology change step change in the technology. Second is the mile maturity of the buyer maturity of the market when it's a little more, you know, when I talk about the technology change, automation is nothing new in the industry. In the starting from the Industrial Revolution, always, industry adopted the automation. But last few years would happen. That there is a significant change in the technology in terms of not of new technologies are coming together like cloud data, artificial intelligence, machine learning and they are gearing match you, and that created a huge opportunity in the industry. So that is number one second if fighting the maturity of the buyer. So buyers are always buying automation, adopting the automation. So when I talked to this different by a different industrial wire, suddenly we realise they're not asking about workings automation, how that will help. But primarily they're talking about how they can scaling. They have all have done the pilot, the prototype, how they can take the full advantage in their enterprise through scheme and talking to few client few of our clients, and he realised that it's best to write this boat and film all our clients to take advantage of this new technologies to skill up their business. If I give a little more than inside that one, exactly we are trying to do in this boat primarily, we dealt with three things. One is the individual automation which deals with the human efficiency. Second is the industrial automation who visited a group efficiency. And third is the intelligent automation. We deal city business, official efficiency while business value. So we believe that this is what will really change their business and help our client help the automation. It users to really make clear an impact in their business. >>Yeah, And so you talked about that? The maturity of the customer. And and I like the way you should describe that spectrum ending with intelligent automation. So the point is you not just paving the cow path, if you will, automating processes that maybe were invented decades ago. You're really trying to rethink the best approach. And that's where you going to get the most business value, our peace In thinking about the maturity, I think the a pre pandemic people were maybe a little reluctant s Bhaskar was saying maybe needed some education. But But how? If things change me, obviously the penned Emmick has had a huge impact. It's accelerated things, but but what's changed in the business environment? In terms of the need to implement automation? R. P >>thank you Well, that is an excellent question. As even through the pandemic, most of the enterprises accelerated what I call as the digital transformation, technology transformation and the war all time that it takes to do. The transformation is compressed in our most land prices. Now do compress transformation. The core of it is innovation and innovation, led technology and technology based solutions. To drive this transformation automation. Artificial intelligence becomes hot of what we do while we are implementing this accelerators. Innovation enablers within the enterprises, most of the enterprises prior to the pandemic we're looking automation and I as a solution for cost efficiency. Saving cost in DePina deriving capacity efficiency does if they do the transformation when we press the fast forward but draw the transformation journey liberating automation. What happens is most of the enterprises which the focus from cost efficiency to speed to market application availability and system resiliency at the core. When I speaking to most of the sea woes Corrine Wall in the tech transformation they have now embrace automation and air as a Conan able to bribe this journeys towards, you know, growth, innovation, lead application, availability and transformation and sustainability of the applications through the are A book addresses all of these aspects, including the most important element of which is compute storeys and the enablement that it can accomplish through cloud transformation, cloud computing services and how I I and Michelle learning take log technologies can in a benefit from transformation to the block. In addition, we also heard person talk about automation in the cloud zero automation taking journey towards the cloud on automation Once you're in the clouds, water the philosophy and principles he should be following to drive the motivation. We also provide holy holistic approach to dry automation by focusing process technology that includes talent and change management and also addressing automation culture for the organisations in the way they work as they go forward. >>You mentioned a couple things computing, storage and when we look at our surveys, guys is it is interesting to see em, especially since the pandemic, four items have popped up where all the spending momentum is cloud province reasons scale and in resource and, you know, be able the report to remotely containers because a lot of people have work loads on Prem that they just can automatically move in the company, want to do development in the cloud and maybe connect to some of those on from work clothes. R P A. Which is underscores automation in, of course, and R. P. You mentioned a computing storage and, of course, the other pieces. Data's We have always data, but so my question is, how has the cloud and eight of us specifically influenced changes in automation? In a >>brilliant question and brilliant point, I say no winner. I talked to my clients. One of the things that I always says, Yeah, I I is nothing but y for the data that is the of the data. So that date of place underlying a very critical part of applying intelligence, artificial intelligence and I in the organization's right as the organisation move along their automation journey. Like you said, promoting process automation to contain a realisation to establishing data, building the data cubes and managing the massive data leveraging cloud and how Yebda please can help in a significant way to help the data stratification Dana Enablement data analysis and not data clustering classification All aspects of the what we need to do within the between the data space that helps for the Lord scale automation effort, the cloud and and ablest place a significant role to help accelerate and enable the data part. Once you do that, building mission learning models on the top of it liberating containers clusters develops techniques to drive, you know the principles on the top of it is very makes it easier to drive that on foster enablement advancement through cloud technologists. Alternatively, using automation itself to come enable the cloud transformation data transformation data migration aspects to manage the complexity, speed and scale is very important. The book stresses the very importance of fuelling the motion of the entire organisation to agility, embracing new development methods like automation in the cloud develops Davis a cop's and the importance of oral cloud adoptions that bills the foundational elements of, you know, making sure you're automation and air capabilities are established in a way that it is scalable and sustainable within the organisations as they move forward, >>Right? Thank you for that r p vast crime want to come back to this notion of maturity and and just quite automation. So Andy Jossy made the phrase undifferentiated, heavy lifting popular. But that was largely last decade. Apply to it. And now we're talking about deeper business integration. And so you know, automation certainly is solves the problem of Okay, I can take Monday and cast like provisioning storage in compute and automate that great. But what is some of the business problems, that deeper business integration that we're solving through things? And I want to use the phrase they used earlier intelligent automation? What is that? Can you give an example? >>Let's a very good question as we said, that the automation is a journey, you know, if we talk to any blind, so everybody wants to use data and artificial intelligence to transform their business, so that is very simple. But the point is that you cannot reach their anti unless you follow the steps. So in our book, we have explained that the process that means you know, we defined in a five steps. We said that everybody has to follow the foundation, which is primarily tools driven optimise, which is process drivel. An official see improvement, which is primarily are driven. Then comes predictive capability, the organisation, which is data driven, and then intelligence, which is primarily artificial intelligence driven. Now, when I talked about the use of artificial intelligence and this new intelligent in the business, what the what I mean is basically improved decision making in every level in the organisation and give the example. We have given multiple example in this, both in a very simple example, if I take suppose, a financial secretary organisation, they're selling wealth management product to the client, so they have a number of management product, and they have number of their number of clients a different profile. But now what is happening? This artificial intelligence is helping their agents to target the night product for the night customers. So then, at the success rate is very high. So that is a change that is a change in the way they do business. Now some of the platform companies like Amazon on Netflix. He will see that this this killed is a very native skill for them. They used the artificial intelligence try to use everywhere, but there a lot of other companies who are trying to adopt this killed today. Their fundamental problem is they do not have the right data. They do not have the capability. They do not have all the processes so that they can inject the decision making artificial intelligence capability in every decision making to empower their workforce. And that is what we have written in this book. To provide the guidance to this in this book. How they can use the better business decision improved the create, the more business value using artificial intelligence and intelligent automation. >>Interesting. Bhaskar are gonna stay with you, you know, in their book in the middle of last decade, Erik Brynjolfsson and Andy McAfee wrote the second Machine Age, and they made a point in the book that machines have always replaced humans in instead of various tasks. But for the first time ever, we're seeing machines replacing human in cognitive task that scares a lot of people so hardy you inspire employees to embrace the change that automation can bring. What what are you seeing is the best ways to do that? >>This is a very good question. The intelligent automation implementation is not, Iet Project is primarily change management. It's primarily change in the culture, the people in the organisation into embrace this change and how they will get empowered with the machine. It is not about the replacing people by machine, which has happened historically into the earlier stages of automation, which I explained. But in this intelligent automation, it is basically empowering people to do the better. Dwelled the example. That is the thing we have written in the book about about a newspaper, 100 years old newspaper in Italy. And you know, this industry has gone through multiple automation and changes black and white printing, printing to digital. Everything happened. And now what is happening? They're using artificial intelligence, so they're writers are using those technologies to write faster. So when they are writing immediately, they're getting supported with the later they're supporting with the related article they are supporting with this script, even they're supported to the heading of this article. So the question is that it is not replacing the news, you know, the content writer, but is basically empowering them so that they can produce the better quality of product they can, better writing in a faster time. So is very different approach and that is why is, um, needs a change management and it's a cultural change. >>Garden R P What's it for me? Why should we read the automation advantage? Maybe you can talk about some of the key takeaways and, you know, maybe the best places to start on an automation journey. >>Very will cut the fastest MP, Newer automation journey and Claude Adoption Journey is to start simple and start right if you know what's have free one of the process, Guru says, If you don't know where you are on a map, a map won't help you, so to start right, a company needs to know where they are on a map today, identify the right focus areas, create a clear roadmap and then move forward with the structured approach for successful our option. The other important element is if you automate an inefficient process, we are going to make your inefficiency run more efficiently. So it is very important to baseline, and then I established the baseline and know very or on the journey map. This is one of the key teams we discuss in the Automation Advantis book, with principles and tips and real world examples on how to approach each of these stages. We also stress the importance of building the right architecture is for intelligent automation, cloud enablement, security at the core of automation and the platform centric approach. Leading enterprises can fade out adopters and Iraq, whether they are in the early stages of the automation, journey or surrender advanced stage the formation journey. They can look at the automation advantage book and build and take the best practises and and what is provided as a practical tips within the book to drive there. Automation journey. This also includes importance of having right partners in the cloud space, like a loveliest who can accelerate automation, journey and making sure accompanies cloud migration. Strategy includes automation, automation, lead, yea and data as part of their journey. Management. >>That's great. Good advice there. Bring us home. Maybe you can wrap it up with the final final world. >>So, lefty, keep it very simple. This book will help you to create difference in your business with the power of automation and artificial intelligence. >>That's a simple message and will governor what industry you're in? There is a disruptions scenario for your industry and that disruption scenarios going to involve automation, so you better get ahead of editor game. They're The book is available, of course, at amazon dot com. You can get more information. X censure dot com slash automation advantage. Gosh, thanks so much for coming in the Cube. Really appreciate your time. >>Thank you. Thank >>you. >>Eh? Thank you for watching this episode of the eight of US Executive Summit of reinvent made possible by Accenture. Keep it right there for more discussions that educating spy inspire You're watching the queue.

(upbeat music) >> Welcome back to the Cube's coverage of the AWS Executive Summit at AWS re:Invent made possible by Accenture. My name is Dave Vellante. We going to talk about The Automation Advantage, embrace the future of productivity, and improve speed quality and customer experience through artificial intelligence. And we're here with Bhaskar Ghosh who is the Chief Strategy Officer at Accenture and Rajendra 'RP' Prasad who is a Senior Managing Director and Global Automation Lead at Accenture. Guys, welcome to the cube, good to see you. >> Good to see you. >> Hello, David, thank you. >> Hey, congratulations on the new book. I know it's not like giving birth, but it's a mini version if you will. The automation advantage embraced a future of productivity, improved speed, quality, and customer experience through artificial intelligence. What inspired you to write this book? Can you tell us a little bit more about it, and how businesses are going to be able to take advantage of the information that's in there? That's great. Maybe you could start. >> Okay. So I think, you know, if we say that what inspired us, primarily the two things really inspired us to start this project. First of all, is the technology change, step change in the technology. Second is the maturity of the buyer, maturity of the market. So let me explain a little more. When I talk about the technology change, automation is nothing new in the industry, starting from the industrial revolution, always industry adopted the automation. But last few years, what happened, that there is a significant change in the technology in terms of lot of new technologies are coming together like Cloud, Data, Artificial Intelligence, machine learning, and they are getting matured. I think that created a huge opportunity in the industry. So that is number one. Second thing I think the maturity of the buyer. So buyers are always buying the automation, adopting the automation. So when I talk to this different buyer, different industrial buyer, suddenly we realize, they are not asking about what is automation. How that will help. But primarily they're talking about how they can scale it. They have all have done the pilot, the prototype, how they can take the full advantage in that enterprise to scale. And after talking to a few clients, few of our clients, they don't realize that it would be best to write this book and help all our clients to take advantage of this new technologies to scale up their business. If I give them a little more insight that what exactly we are trying to do in this book, primarily we dealt with three things. One is the individual automation, which deals with the human efficiency. Second is the industrial automation, which deals with the group efficiency . And third is the intelligent automation, which deals with the business efficiency or business value. So we believe that, this is what will really change their business and help our client help the automation IT users to really make an impact in their business. >> Yeah, and so you talked about that, the maturity of the customer and I liked the way you sort of described that spectrum ending with intelligent automation. So the point is you're not just paving the cow path if you will, automating processes that maybe were invented decades ago, you're really trying to rethink the best approach. And that's where you going to get the most business value and RP in thinking about the maturity, I think in pre-pandemic, people were maybe a little reluctant or as Bhaskar was saying, maybe needed some education. But how have things changed? Obviously the pandemic has had a huge impact. It's accelerated things. But what's changed in the business environment in terms of the need to implement automation, RP? >> Thank you for that is an excellent question. As we went through the pandemic, most of the enterprises accelerated what I call as the digital transformation. Technology transformation. And the overall time that it takes to do the transformation has compressed. Most of the enterprises now do compress transformation. The core of it is innovation and innovation led technology and technology based solutions. To drive this transformation, automation, artificial intelligence becomes part of what we do, while we are implementing these accelerators, innovation enablers within the enterprises. Most of the enterprises prior to the pandemic, we're looking, automation and AI as a solution for cost efficiency, saving costs and not deriving capacity efficiency as if they do the transformation (indistinct). Let me press the fast forward button through the transformation journey, leveraging automation. What happens is most of the enterprises switch the focus from cost efficiency to speed, to market, application availability and system resiliency are the core. When I speak to most of the CIO's, who are involved in the tech transformation, they now embrace automation and AI as a core enabler to drive this journeys towards, growth, innovation led, application availability and transformation and sustainability of the applications through their journey. Our book addresses, all of these aspects, including the most important element of AI, which is compute, storage and the enablement that it can accomplish through cloud transformation, cloud computing services and how AI and machine learning technologies can benefit from transformation to the cloud. In addition, we also address and talk about automation in the cloud. Automation, taking journey towards the cloud and automation, once you are in the cloud, what are the philosophy and principles you should be following to drive that automation? We also provide holistic approach to drive automation by focusing process technology that includes talent and change management, and also addressing automation culture for the organizations in the way they work as they move forward. >> So you mentioned a couple of things, compute and storage and when we look at our surveys, guys, it's interesting to see, especially since the pandemic, four items have popped up, where all the spending momentum is cloud, but for obvious reasons, scale and resource, and be able to work remotely, contain us because a lot of people have workloads on prem that they just can't automatically move into cloud, but they want to do development in the cloud and maybe connect to some of those on-prem workloads, RPA, which is _automation, and of course, AI. And, RP, you mentioned compute and storage, and of course the other pieces' data. So we have all this data. But so my question is, how has the cloud and AWS specifically influenced changes in automation in AI? >> Brilliant question and brilliant point. I say, whenever I talk to my clients, one of the things that I always say is, AI is nothing but an UI for the data. Let me repeat that, AI is the UI of the data. So that data plays a underlying and very critical part of applied intelligence, artificial intelligence and AI in the organizations, right? As the organization move along their automation journey, like you said, robotic process automation to containerization, to establishing data, building the data cubes and managing the massive data leveraging cloud and how AWS can help in a significant way to help the data stratification, data enablement, data analysis, and data clustering, classification, all aspects of that what we need to do within the data space. That helps for the large scale automation effort. The cloud and AWS plays a significant role to help accelerate and enable the data part. Once you do that, building machine learning models on the top of it, leveraging containers, clusters, DevOps techniques to drive, the AI principles on the top of it is very, it's kind of makes it easier to drive that and foster enablement advancement through cloud technologies. Alternatively, using automation itself to kind of enable the cloud transformation, data transformation, data migration aspects to manage the complexity speed and scale is very important. The book stresses the very importance of fueling the motion of the entire organization through agility, embracing new development, whether it's like automation in the cloud, DevOps, DevSecOps and the importance of oral cloud adoption that builds the foundational elements of making sure your automation and AI capabilities are established in a way that it is scalable and sustainable within the organizations as they move forward. >> Great. Thank you for that, RP. Bhaskar, I want to come back to this notion of maturity and just apply it to automation. So, Andy Jassy made the phrase, undifferentiated heavy lifting popular, but that was largely last decade applied to IT. And now we're talking about deeper business integration. And so, automation certainly solves the problem of, okay, I got to take mundane tasks like provisioning, storage, and compute and automate that. Great. But what are some of the business problems that deeper business integration that we're solving through things that, and I want to use the phrase that you used earlier, intelligent automation. What is that? And can you give an example? >> That's a very good question. As we said, that the automation is a journey. If we talk to any clients, so everybody wants to use data and artificial intelligence to transform their business. So that is very simple, but the point is that you cannot reach there unless you follow the steps. So in our book we have explained the process. That means, we defined in a five steps. We said that everybody has to follow the foundation which is primarily the tools driven, optimize, which is process-driven then efficiency improvement, which is primarily RPA driven, then comes predictive capability, the organization, which is data driven and then intelligence, which is primarily artificial intelligence driven. Now, when I talk about the use of artificial intelligence and this new intelligent ID in the business, what we mean is basically improved decision-making in every level in the organization. I'll give you an example. We have given multiple example in this book and a very simple example if I take. Suppose a financial sector organization, they're selling wealth management product to the clients. So they have a number of wealth management products and they have number, there are number of clients with different profile, but now what is happening, this artificial intelligence is helping their agents to target the right product for the right customer, so that the success rate is very high. So that is a change. That is a change in the way they do business. Now, some of the platform companies like Amazon and Netflix, you will see that this skill is a very native skill for them. They use the artificial intelligence, try to use everywhere. But there are a lot of other companies who are trying to adopt this skill today. Their fundamental problem is that they do not have the right data. They do not have that capability. They do not have all the processes so that they can inject the decision-making artificial intelligence capability in every decision-making to empower their workforce. And that is what we have written in this book to provide the guidance to this in this book. How they can use the better business decision, improve then create the more business value using artificial intelligence and intelligent automation. >> Interesting, Bhaskar, I want to stay with you, in their book, in the middle of last decade, Erik Brynjolfsson and Andy McAfee wrote. The Second Machine Age and they made the point in the book that machines have always replaced humans in sort of various tasks, but for the first time ever, we're seeing, machines replacing humans in cognitive tasks, and that scares a lot of people. So how do you inspire employees to embrace the change that automation can bring? What are you seeing as the best ways to do that? >> That's a very good question. Intelligent automation implementation is not an IT project. It's primarily change management. It's primarily change in the culture. The people in the organization need to embrace this change and how they will get empowered with the machine. It is not about the replacing people by machine, which has happened historically into the earliest stages of automation, which I explained. But in this intelligent automation, it is basically empowering people to do the better job. I will give you example. That is the thing we have written in the book, about a newspaper, a hundred years old newspaper in Italy. And this industry has gone through multiple automation and changes. So black and white printing to color, printing to digital, everything happened. And now what is happening, they are using artificial intelligence, so their writers are using those technologies to write faster, so when they're writing immediately, they are getting supported with the data, they are supporting with the related article. They are supporting with the script, even they're supported with the heading of this article. So the question is that it is not replacing the news, the content writer, but it's basically empowering them so that they can produce the better quality of product, they can be better at writing in a faster time. So it's a very different approach and that is why this needs a change management than a cultural change. >> Got it. RP, what's in it for me? Why should we read the automation advantage? Maybe you could talk about some of the key takeaways and maybe the best places to start on an automation journey. >> Very good question. The fastest step in your automation journey and cloud adoption journey is to start simple and start right. If you know what's happening, one of the process guru says, "If you don't know where you are on a map, a map won't help you." So to start right, a company needs to know where they are on a map today, identify the right focus areas, create a clear roadmap and then move forward with a structured approach for successful adoption. The other important element is if you automate an inefficient process, you are going to make your inefficiency run more efficiently. So it is very important to baseline and establish the baseline and know where you are on the journey map. This is one of the key themes we discuss in the Automation Advantage book. With principles and tips and real world examples on how to approach each of these stages. We also stress the importance of building the right architectures for intelligent automation, cloud enablement, security at the core of automation and the platform centric approach. Leading enterprises can fit on adopters and whether they are in the earlier stages of the automation journey or they're in the advanced stage of automation journey. They can look at the Automation Advantage book and build and take the best practices and what is provided as a practical tips within the book to drive their automation journey. This also includes importance of having right partners in the cloud space like AWS, who can accelerate automation journey and making sure a company's cloud migration strategy includes automation, automation-led AI and data as part of their journey management. >> That's great. Good advice there. But Bhaskar, bring us home, maybe you could wrap it up with the final word. >> So let me keep it very simple. This book will help you to create difference in your business with the power of automation and artificial intelligence. >> That's a simple message. And no matter what industry you're in, there is a disruption scenario for your industry, and that disruption scenario is going to involve automation. So you better get ahead of the game there. The book is available of course, at Amazon.com and you can get more information at accenture.com/automationadvantage. Guys, thanks so much for coming in the Cube. I really appreciate your time. >> Thank you. >> Thank you. >> And thank you for watching this episode of the AWS Executive Summit at re:Invent made possible by Accenture. Keep it right there for more discussions that educate and inspire, you're watching the Cube. (upbeat music)

>>From the Bellagio hotel in Las Vegas. It's the cube covering UI path forward for brought to you by UI path. >>Good morning. Welcome to the cubes coverage of UI path forward for day two. Live from the Bellagio in Las Vegas. I'm Lisa Martin with Dave Velante, Dave. We had a great action packed day yesterday. We're going to have another action packed day today. We've got the CEO coming on. We've got customers coming on, but there's been a lot in the news last 24 hours. Facebook, what are your thoughts? >>Yeah, so wall street journal today, headline Facebook hearing fuels call for rain in on big tech. All right, everybody's going after big tech. Uh, for those of you who missed it, 60 minutes had a, uh, an interview with the whistleblower. Her name is, uh, Francis Haugen. She's very credible, just a little background. I'll give you my take. I mean, she was hired to help set Facebook straight and protect privacy of individuals, of children. And I really feel like, again, she, she didn't come across as, as bitter or antagonistic, but, but I feel as though she feels betrayed, right, I think she was hired to do a job. They lured her in to say, Hey, this is again, just my take to say, Hey, we want your help in earnest to protect the privacy of our users, our citizens, et cetera. And I think she feels betrayed because she's now saying, listen, this is not cool. >>You hired us to do a job. We in earnest, went in and tried to solve this problem. And you guys kind of ignored it and you put profit ahead of safety. And I think that is the fundamental crux of this. Now she made a number of really good points in her hearing yesterday and I'll, and we'll try to summarize, I mean, there's a lot of putting advertising revenue ahead of children's safety and, and, and others. The examples they're using are during the 2020 election, they shut down any sort of negative conversations. They would be really proactive about that, but after the election, they turned it back on and you know, we all know what happened on January 6th. So there's sort of, you know, the senators are trying that night. Um, the second thing is she talked about Facebook as a wall garden, and she made the point yesterday at the congressional hearings that Google actually, you can data scientists, anybody can go download all the data that Google has on you. >>You and I can do that. Right? There's that website that we've gone to and you look at all the data Google has and you kind of freak out. Yeah, you can't do that with Facebook, right? It's all hidden. So it's kind of this big black box. I will say this it's interesting. The calls for breaking up big tech, Bernie Sanders tweeted something out yesterday said that, uh, mark Zuckerberg was worth, I don't know. I think 9 billion in 2007 or eight or nine, whatever it was. And he's worth 122 billion today, which of course is mostly tied up in Facebook stock, but still he's got incredible wealth. And then Bernie went on his red it's time to break up big tech. It's time to get people to pay their fair share, et cetera. I'm intrigued that the senators don't have as much vigilance around other industries, whether it's big pharma, food companies addicting children to sugar and the like, but that doesn't let Facebook. >>No, it doesn't, but, but you ha you bring up a good point. You and I were chatting about this yesterday. What the whistleblower is identifying is scary. It's dangerous. And the vast majority, I think of its users, don't understand it. They're not aware of it. Um, and why is big tech being maybe singled out and use as an example here, when, to your point, you know, the addiction to sugar and other things are, uh, have very serious implications. Why is big tech being singled out here as the poster child for what's going wrong? >>Well, and they're comparing it to big tobacco, which is the last thing you want to be compared to as big tobacco. But the, but the, but the comparison is, is valid in that her claim, the whistleblower's claim was that Facebook had data and research that it knew, it knows it's hurting, you know, you know, young people. And so what did it do? It created, you know, Instagram for kids, uh, or it had 600,000. She had another really interesting comment or maybe one of the senators did. Facebook said, look, we scan our records and you know, kids lie. And we, uh, we kicked 600,000 kids off the network recently who were underaged. And the point was made if you have 600,000 people on your network that are underage, you have to go kill. That's a problem. Right? So now the flip side of this, again, trying to be balanced is Facebook shut down Donald Trump and his nonsense, uh, and basically took him off the platform. >>They kind of thwarted all the hunter Biden stuff, right. So, you know, they did do some, they did. It's not like they didn't take any actions. Uh, and now they're up, you know, in front of the senators getting hammered. But I think the Zuckerberg brings a lot of this on himself because he put out an Instagram he's on his yacht, he's drinking, he's having fun. It's like he doesn't care. And he, you know, who knows, he probably doesn't. She also made the point that he owns an inordinate percentage and controls an inordinate percentage of the stock, I think 52% or 53%. So he can kind of do what he wants. And I guess, you know, coming back to public policy, there's a lot of narrative of, I get the billionaires and I get that, you know, the Mo I'm all for billionaires paying more taxes. >>But if you look at the tax policies that's coming out of the house of representatives, it really doesn't hit the billionaires the way billionaires can. We kind of know the way that they protect their wealth is they don't sell and they take out low interest loans that aren't taxed. And so if you look at the tax policies that are coming out, they're really not going after the billionaires. It's a lot of rhetoric. I like to deal in facts. And so I think, I think there's, there's a lot of disingenuous discourse going on right now at the same time, you know, Facebook, they gotta, they gotta figure it out. They have to really do a better job and become more transparent, or they are going to get broken up. And I think that's a big risk to the, to their franchise and maybe Zuckerberg doesn't care. Maybe he just wants to give it a, give it to the government, say, Hey, are you guys are on? It >>Happens. What do you think would happen with Amazon, Google, apple, some of the other big giants. >>That's a really good question. And I think if you look at the history of the us government, in terms of ant anti monopolistic practices, it spent decade plus going after IBM, you know, at the end of the day and at the same thing with Microsoft at the end of the day, and those are pretty big, you know, high profiles. And then you look at, at T and T the breakup of at T and T if you take IBM, IBM and Microsoft, they were slowed down by the U S government. No question I've in particular had his hands shackled, but it was ultimately their own mistakes that caused their problems. IBM misunderstood. The PC market. It gave its monopoly to Intel and Microsoft, Microsoft for its part. You know, it was hugging windows. They tried to do the windows phone to try to jam windows into everything. >>And then, you know, open source came and, you know, the world woke up and said, oh, there's this internet that's built on Linux. You know, that kind of moderated by at T and T was broken up. And then they were the baby bells, and then they all got absorbed. And now you have, you know, all this big, giant telcos and cable companies. So the history of the U S government in terms of adjudicating monopolistic behavior has not been great at the same time. You know, if companies are breaking the law, they have to be held accountable. I think in the case of Amazon and Google and apple, they, a lot of lawyers and they'll fight it. You look at what China's doing. They just cut right to the chase and they say, don't go to the, they don't litigate. They just say, this is what we're doing. >>Big tech, you can't do a, B and C. We're going to fund a bunch of small startups to go compete. So that's an interesting model. I was talking to John Chambers about this and he said, you know, he was flat out that the Western way is the right way. And I believe in, you know, democracy and so forth. But I think if, to answer your question, I think they'll, they'll slow it down in courts. And I think at some point somebody's going to figure out a way to disrupt these big companies. They always do, you know, >>You're right. They always do >>Right. I mean, you know, the other thing John Chambers points out is that he used to be at 1 28, working for Wang. There is no guarantee that the past is prologue that because you succeeded in the past, you're going to succeed in the future. So, so that's kind of the Facebook break up big tech. I'd like to see a little bit more discussion around, you know, things like food companies and the, like >>You bring up a great point about that, that they're equally harmful in different ways. And yet they're not getting the visibility that a Facebook is getting. And maybe that's because of the number of users that it has worldwide and how many people depend on it for communication, especially in the last 18 months when it was one of the few channels we had to connect and engage >>Well. And, and the whistleblower's point, Facebook puts out this marketing narrative that, Hey, look at all this good we're doing in reality. They're all about the, the, the advertising profits. But you know, I'm not sure what laws they're breaking. They're a public company. They're, they're, they have a responsibility to shareholders. So that's, you know, to be continued. The other big news is, and the headline is banks challenge, apple pay over fees for transactions, right? In 2014, when apple came up with apple pay, all the banks lined up, oh, they had FOMO. They didn't want to miss out on this. So they signed up. Now. They don't like the fact that they have to pay apple fees. They don't like the fact that apple introduced its own credit card. They don't like the fact that they have to pay fees on monthly recurring charges on your, you know, your iTunes. >>And so we talked about this and we talk about it a lot on the cube is that, that in, in, in, in his book, seeing digital David, Michelle, or the author talked about Silicon valley broadly defined. So he's including Seattle, Microsoft, but more so Amazon, et cetera, has a dual disruption agenda. They're not only trying to disrupt horizontally the technology industry, but they're also disrupting industry. We talked about this yesterday, apple and finances. The example here, Amazon, who was a bookseller got into cloud and is in grocery and is doing content. And you're seeing these a large companies, traverse industry value chains, which have historically been very insulated right from that type of competition. And it's all because of digital and data. So it's a very, pretty fascinating trends going on. >>Well, from a financial services perspective, we've been seeing the unbundling of the banks for a while. You know, the big guys with B of A's, those folks are clearly concerned about the smaller, well, I'll say the smaller FinTech disruptors for one, but, but the non FinTech folks, the apples of the world, for example, who aren't in that industry who are now to your point, disrupting horizontally and now going after individual specific industries, ultimately I think as consumers we want, whatever is going to make our lives easier. Um, do you ever, ever, I always kind of scratch my nose when somebody doesn't take apple pay, I'm like, you don't take apple pay so easy. It's so easy to make this easy for me. >>Yeah. Yeah. So it's, it's going to be really interesting to see how this plays out. I, I do think, um, you know, it begs the question when will banks or Willbanks lose control of the payment systems. They seem to be doing that already with, with alternative forms of payment, uh, whether it's PayPal or Stripe or apple pay. And then crypto is, uh, with, with, with decentralized finance is a whole nother topic of disruption and innovation, >>Right? Well, these big legacy institutions, these organizations, and we've spoke with some of them yesterday, we're going to be speaking with some of them today. They need to be able to be agile, to transform. They have to have the right culture in order to do that. That's the big one. They have to be willing. I think an open to partner with the broader ecosystem to unlock more opportunities. If they want to be competitive and retain the trust of the clients that they've had for so long. >>I think every industry has a digital disruption scenario. We used to always use the, don't get Uber prized example Uber's coming on today, right? And, and there isn't an industry, whether it's manufacturing or retail or healthcare or, or government that isn't going to get disrupted by digital. And I think the unique piece of this is it's it's data, data, putting data at the core. That's what the big internet giants have done. That's what we're hearing. All these incumbents try to do is to put data. We heard this from Coca-Cola yesterday, we're putting data at the core of our company and what we're enabling through automation and other activities, uh, digital, you know, a company. And so, you know, can these, can these giants, these hundred plus year old giants compete? I think they can because they don't have to invent AI. They can work with companies like UI path and embed AI into their business and focused on, on what they do best. Now, of course, Google and Amazon and Facebook and Microsoft there may be going to have the best AI in the world. But I think ultimately all these companies are on a giant collision course, but the market is so huge that I think there's a lot of, >>There's a tremendous amount of opportunity. I think one of the things that was exciting about talking to one, the female CIO of Coca-Cola yesterday, a hundred plus old organization, and she came in with a very transformative, very different mindset. So when you see these, I always appreciate when I say legacy institutions like Coca-Cola or Merck who was on yesterday, blue cross blue shield who's on today, embracing change, cultural change going. We can't do things the way we used to do, because there are competitors in that review mirror who are smaller, they're more nimble, they're faster. They're going to be, they're going to take our customers away from us. We have to deliver this exceptional customer and employee experience. And Coca-Cola is a great example of one that really came in with CA brought in a disruptor in order to align digital with the CEO's thoughts and processes and organization. These are >>Highly capable companies. We heard from the head of finance at, at applied materials today. He was also coming on. I was quite, I mean, this is a applied materials is really strong company. They're talking about a 20 plus billion dollar company with $120 billion market cap. They supply semiconductor equipment and they're a critical component of the semiconductor supply chain. And we all know what's going on in semiconductors today with a huge shortage. So they're a really important company, but I was impressed with, uh, their finance leaders vision on how they're transforming the company. And it was not like, you know, 10 years out, these were not like aspirational goals. This is like 20, 19, 20, 22. Right. And, and really taking costs out of the business, driving new innovation. And, and it's, it was it's, it's refreshing to me Lisa, to see CFOs, you know, typically just bottom line finance focused on these industry transformations. Now, of course, at the end of the day, it's all about the bottom line, but they see technology as a way to get there. In fact, he put technology right in the middle of his stack. I want to ask him about that too. I actually want to challenge him a little bit on it because he had that big Hadoop elephant in the middle and this as an elephant in the room. And that picture, >>The strategy though, that applied materials had, it was very well thought out, but it was also to your point designed to create outcomes year upon year upon year. And I was looking at some of the notes. I took that in year one, alone, 274 automations in production. That's a lot, 150,000 in annual work hours automated 124 use cases they tackled in one year. >>So I want to, I want to poke at that a little bit too. And I, and I did yesterday with some guests. I feel like, well, let's see. So, um, I believe it was, uh, I forget what guests it was, but she said we don't put anything forward that doesn't hit the income statement. Do you remember that? Yes, it was Chevron because that was pushing her. I'm like, well, you're not firing people. Right. And we saw from IDC data today, only 13% of organizations are saying, or, or, or the organizations at 13% of the value was from reduction in force. And a lot of that was probably in plan anyway, and they just maybe accelerated it. So they're not getting rid of headcount, but they're counting hours saved. So that says to me, there's gotta be an normally or often CFOs say, well, it's that soft dollars because we're redeploying folks. But she said, no, it hits the income statement. So I don't, I want to push a little bit and see how they connect the dots, because if you're going to save hours, you're going to apply people to new work. And so either they're generating revenue or cutting costs somewhere. So, so there's another layer that I want to appeal to understand how that hits the income state. >>Let's talk about some of that IDC data. They announced a new white paper this morning sponsored by UI path. And I want to get your perspectives on some of the stats that they talked about. They were painting a positive picture, an optimistic picture. You know, we can't talk about automation without talking about the fear of job loss. They've been in a very optimistic picture for the actual gains over a few year period. What are your thoughts about that? Especially when we saw that stat 41% slowed hiring. >>Yeah. So, well, first of all, it's a sponsored study. So, you know, and of course the conferences, so it's going to be, be positive, but I will say this about IDC. IDC is a company I would put, you know, forest they're similar. They do sponsored research and they're credible. They don't, they, they have the answer to their audience, so they can't just out garbage. And so it has to be defensible. So I give them credit there that they won't just take whatever the vendor wants them to write and then write it. I've used to work there. And I, and I know the culture and there's a great deal of pride in being able to defend what you do. And if the answer doesn't come out, right, sorry, this is the answer. You know, you could pay a kill fee or I dunno how they handle it today. >>But, but, so my point is I think, and I know the people who did that study, many of them, and I think they're pretty credible. I, I thought by the way, you, to your 41% point. So the, the stat was 13% are gonna reduce head count, right? And then there were two in the middle and then 41% are gonna reduce or defer hiring in the future. And this to me, ties into the Erik Brynjolfsson and, and, and, uh, and, and McAfee work. Andy McAfee work from MIT who said, look, initially actually made back up. They said, look at machines, have always replaced humans. Historically this was in their book, the second machine age and what they said was, but for the first time in history, machines are replacing humans with cognitive functions. And this is sort of, we've never seen this before. It's okay. That's cool. >>And their, their research suggests that near term, this is going to be a negative economic impact, sorry, negative impact on jobs and salaries. And we've, we've generally seen this, the average salary, uh, up until recently has been flat in the United States for years and somewhere in the mid fifties. But longterm, their research shows that, and this is consistent. I think with IDC that it's going to help hiring, right? There's going to be a boost buddy, a net job creator. And there's a, there's a, there's a chasm you've got across, which is education training and skill skillsets, which Brynjolfsson and McAfee focused on things that humans can do that machines can't. And you have this long list and they revisited every year. Like they used to be robots. Couldn't walk upstairs. Well, you see robots upstairs all the time now, but it's empathy, it's creativity. It's things like that. >>Contact that humans are, are much better at than machines, uh, even, even negotiations. And, and so, so that's, those are skills. I don't know where you get those skills. Do you teach those and, you know, MBA class or, you know, there's these. So their point is there needs to be a new thought process around education, public policy, and the like, and, and look at it. You can't protect the past from the future, right? This is inevitable. And we've seen this in terms of economic activity around the world countries that try to protect, you know, a hundred percent employment and don't let competition, they tend to fall behind competitively. You know, the U S is, is not of that category. It's an open market. So I think this is inevitable. >>So a lot about upskilling yesterday, and the number of we talked with PWC about, for example, about what they're doing and a big focus on upscaling. And that was part of the IDC data that was shared this morning. For example, I'll share a stat. This was a survey of 518 people. 68% of upscaled workers had higher salaries than before. They also shared 57% of upskilled workers had higher roles and their enterprises then before. So some, again, two point it's a sponsored study, so it's going to be positive, but there, there was a lot of discussion of upskilling yesterday and the importance on that education, because to your point, we can't have one without the other. You can't give these people access to these tools and not educate them on how to use it and help them help themselves become more relevant to the organization. Get rid of the mundane tasks and be able to start focusing on more strategic business outcome, impacting processes. >>We talked yesterday about, um, I use the example of, of SAP. You, you couldn't have predicted SAP would have won the ERP wars in the early to mid 1990s, but if you could have figured out who was going to apply ERP to their businesses, you know what, you know, manufacturing companies and these global firms, you could have made a lot of money in the stock market by, by identifying those that were going to do that. And we used to say the same thing about big data, and the reason I'm bringing all this up is, you know, the conversations with PWC, Deloitte and others. This is a huge automation, a huge services opportunity. Now, I think the difference between this and the big data era, which is really driven by Hadoop is it was big data was so complicated and you had a lack of data scientists. >>So you had to hire these services firms to come in and fill those gaps. I think this is an enormous services opportunity with automation, but it's not because the software is hard to get to work. It's all around the organizational processes, rethinking those as people process technology, it's about the people in the process, whereas Hadoop and the big data era, it was all about the tech and they would celebrate, Hey, this stuff works great. There are very few companies really made it through that knothole to dominate as we've seen with the big internet giants. So you're seeing all these big services companies playing in this market because as I often say, they like to eat at the trough. I know it's kind of a pejorative, but it's true. So it's huge, huge market, but I'm more optimistic about the outcomes for a broader audience with automation than I was with, you know, big data slash Hadoop, because I think the software as much, as much more adoptable, easier to use, and you've got the cloud and it's just a whole different ball game. >>That's certainly what we heard yesterday from Chevron about the ease of use and that you should be able to see results and returns very quickly. And that's something too that UI path talks about. And a lot of their marketing materials, they have a 96, 90 7% retention rate. They've done a great job building their existing customers land and expand as we talked about yesterday, a great use case for that, but they've done so by making things easy, but hearing that articulated through the voice of their customers, fantastic validation. >>So, you know, the cube is like a little, it's like a interesting tip of the spirits, like a probe. And I will tell you when I, when we first started doing the cube and the early part of the last decade, there were three companies that stood out. It was Splunk service now and Tableau. And the reason they stood out is because they were able to get customers to talk about how great they were. And the light bulb went off for us. We were like, wow, these are three companies to watch. You know, I would tell all my wall street friends, Hey, watch these companies. Yeah. And now you see, you know, with Frank Slootman at snowflake, the war, the cat's out of the bag, everybody knows it's there. And they're expecting, you know, great things. The stock is so priced to perfection. You could argue, it's overpriced. >>The reason I'm bringing this up is in terms of customer loyalty and affinity and customer love. You're getting it here. Absolutely this ecosystem. And the reason I bring that up is because there's a lot of questions in the, in the event last night, it was walking around. I saw a couple of wall street guys who came up to me and said, Hey, I read your stuff. It was good. Let's, let's chat. And there's a lot of skepticism on, on wall street right now about this company. Right? And to me, that's, that's good news for you. Investors who want to do some research, because the words may be not out. You know, they, they, they gotta prove themselves here. And to me, the proof is in the customer and the lifetime value of that customer. So, you know, again, we don't give stock advice. We, we kind of give fundamental observations, but this stock, I think it's trading just about 50. >>Now. I don't think it's going to go to 30, unless the market just tanks. It could have some, you know, if that happens, okay, everything will go down. But I actually think, even though this is a richly priced stock, I think the future of this company is very bright. Obviously, if they continue to execute and we're going to hear from the CEO, right? People don't know Daniel, Denise, right? They're like, who is this guy? You know, he started this company and he's from Eastern Europe. And we know he's never have run a public company before, so they're not diving all in, you know? And so that to me is something that really pay attention to, >>And we can unpack that with him later today. And we've got some great customers on the program. You mentioned Uber's here. Spotify is here, applied materials. I feel like I'm announcing something on Saturday night. Live Uber's here. Spotify is here. All right, Dave, looking forward to a great action packed today. We're going to dig more into this and let's get going. Shall we let's do it. All right. For David Dante, I'm Lisa Martin. This is the cube live in Las Vegas. At the Bellagio. We are coming to you presenting UI path forward for come back right away. Our first guest comes up in just a second.

>> From theCube studios in Palo Alto in Boston, bringing you data-driven insights from theCube in ETR. This is Breaking Analysis with Dave Vellante. >> New data suggests the tech spending will be higher than we previously thought for 2021. COVID learnings, a faster than expected vaccine rollout, productivity gains in the last 10 months, and broad-based cloud leverage lead us to raise our outlook for next year. We now expect a three to 5% increase in 2021 technology spending, roughly double our previously forecasted growth rate of 2%. Hello everyone and welcome to this week's we keep on Cube Insights powered by ETR. In this breaking analysis, we're going to share new spending data from ETR partners and take a preliminary look at which sectors and which companies are showing momentum heading into next year. Let's get right into it. The data is pointing to a strong 2021 rebound. A latest survey from ETR and the information from theCube Community suggests that the accelerated pace of the vaccine rollout pent up demand for normalcy and learnings from COVID will boost 2021 tech spending higher than previously anticipated. Now a key factor we've cited is that the forced March to digital transformation due to the pandemic created a massive proof of concept for what works and what doesn't in a digital business. CIOs are planning to bet on those sure things to drive continued productivity improvements and new business opportunities. Now, speaking of productivity, nearly 80% of respondents in the latest ETR survey indicate that productivity either stayed the same or improved over the past three months. Now of those, the vast majority, more than 80% cited improvements in productivity. This has been a common theme throughout the year. As well, the expectation among CIOs is that many workers will return to the office in the second half of the year, which we expect will drive new spending in the infrastructure needs of company HQs, which have been neglected over the past 10 months. Now, despite the expectation that many workers will return to the office, 2020 has shown us that working remotely, hey, it's here to stay, and a much larger number of employees are going to be permanently remote working than pre pandemic. ETR survey data shows that that number is going to be approximately double over the longterm. We'll look at some of that specific data. In addition, cloud computing, it became the staple of business viability in 2020. Those that were up the cloud adoption ramp, well, they benefited greatly, those that weren't well, they had to learn fast. Now, along with remote work cloud necessitated new thinking around network security, and as we've reported identity access management, endpoint security and cloud security with the beneficiaries. Companies like Okta, CrowdStrike, Zscaler, a number of others continue to ride this wave. Larger established security companies like Cisco, Palo Alto Networks, F5, Fortunate and others, they have major portions of their business that are benefiting from the tailwinds in the shift and network traffic, as a result of cloud and remote work. Now, despite all the momentum in the market and the expect of improvements in 2021, these tailwinds are not expected to be evenly distributed, far from it. We think Q4 is going to remain soft relative to last year and Q1 2021 is going to be flat, maybe up slightly. Remember the COVID impact was definitely felt in March of this year. So based on the earnings that we saw, there may be some upside in Q1, given that organizations are still being cautious in Q4, and really there's still some uncertainty in Q1. Let's look at some of the survey responses and you'll see why we're more optimistic than we've previously reported. This chart shows the responses to key questions around spending trajectories from the March, June, September, and December surveys of this year. Now it's no surprise that there's been little change in remote workers and limiting business travel. But look at the other categories, seeing a dramatic reduction in hiring freezes. The percentage of companies freezing new IT deployments continues to drop throughout the year. And then conversely, the percentage of companies accelerating new it deployments that's sharply up to 34% from the March low of 12%. And look at the headcount trends. The percentage of companies instituting layoffs. It continues its downward trajectory while accelerated hiring is now up to 17%. So there's a lot to be excited about in these results. Now let's look the remote worker trend. How do CIO see that shift in the near to midterm? This chart shows the work from home data and it's amazingly consistent from the September survey drill down. You can see CIO's is indicate that on average, 15 to 60% of workers were remote prior to the pandemic, and that jumped up to 72 to 73% currently, and is expected to stay in the high fifties until the summer of 2021. Thereafter, organizations expect that the number of employees that work remotely on a permanent basis is going to more than double to 34% long term. By the way, I've talked to a number of executives, CEOs, CIOs, and CFOs that expect that number to be higher than these especially in the technology sector. They expect more than half of their workers to be remote and are looking to consolidate facilities cost to save money. As we've said, cloud computing has been the most significant contributor to business resilience and digital transformation this year. So let's look at cloud strategies and see how CIOs expect those to evolve. This chart shows responses to how organizations see multi-cloud evolving. It's interesting to note the ETR call-out, which concludes that the narrative around multi-cloud multi-cloud is real, and it is. But I want to talk to you about a flip side to this notion in that, as many customers have, or are planning to increasingly concentrate workloads in the cloud. This actually makes some sense. Sure, virtually every major company uses multiple clouds, but more often than not, it concentrate work on a primary cloud. CIO strategies, they're not generally evenly distributed across clouds. The data shows that this is the case for less than 20% of the respondents, rather organizations are typically going to apply an 80, 20 or a 70, 30 rule for their multi-cloud approach. Meaning they pick a primary cloud on which most work is done, and then they use alternative clouds as either a hedge or maybe for specific workloads or maybe even data protection purposes. Now, if you think about it, optimizing on a primary cloud allows organizations to simplify their security and governance and consolidate their skills. At this point in the cloud evolution, it seems CIOs feel there's more value that is going to come from leveraging the cloud to change their operating models, and maybe broadly spreading the wealth to reduce risk or maybe cut costs, or maybe even to tap specialized capabilities. What's more in thinking about AWS and Microsoft respectively. Each can make a very strong case from MANO cloud. AWS has more features than any other cloud, and as such can handle most workloads. Microsoft can make a similar argument for its customers that have an affinity and a largest state of Microsoft software. The key for multi-cloud in our view will be the degree to which technology vendors can abstract the underlying cloud complexity and create a layer that floats above the clouds and adds incremental value. Snowflakes data cloud is one of the best examples of this, and we've covered that pretty extensively. Now, clearly VMware and Red Hat have aspirations at the infrastructure layer in a similar fashion. Pure storage, and NetApp are a couple of the largest storage players with similar visions. And then Qumulo and Clumio are two other examples with promising technologies, but they have a much smaller install base. Take a look at Cisco, Dell, IBM and HPE. They have a lot to gain and a lot to lose in this cloud game. So multi-cloud is an imperative for these leaders, but for them it's much more complicated because of the complexity and vastness of their portfolios. And notably Dell has VMware and IBM of course has Red Hat, which are key assets that can be leveraged for this multi-cloud game. HPE has a channel and a large install base, but all of these firms, they have to spread R&D much more thinly than some of these other companies that we mentioned for example. The bottom line is that multi-cloud has to be more than just plugging into an operating well on any of the clouds. It require... Which is by the way, this is mostly where we are today. It requires an incremental value proposition that solves a clear problem, and at the same time runs efficiently, meaning it takes advantage of cloud native services at scale. What sectors are showing momentum heading into 2021? And who are some of the names that are looking strong? We've reported a lot that cloud containers and container orchestration, machine intelligence and automation are by far the hottest sectors, the biggest areas of investment with the greatest spending momentum. Now we measure this in ETR parlance, remember by net score. But here's the good news, almost every other sector in the ETR taxonomy with the notable exception of IT outsourcing and IT consulting is showing positive spending momentum relative to previous surveys this year. Yeah, maybe not, it's not a shock, but it appears that the tech spending recovery will be broad-based. It's also worth noting that there are several vendors that stand out and we show a number of them here. CrowdStrike, Microsoft has had consistent performance in the dataset throughout this year. Okta, we called out those guys last year and they've clearly performed as you can see in their earnings reports. Pure storage, interestingly, big acceleration and a turnaround from last quarter in the dataset, and of course, snowflake has been off the charts as we reported many times. These guys are all seeing highly accelerated momentum. UiPath just announced its intent to IPO, AWS, Google, Zscaler, SailPoint, ServiceNow, and Elastic, these all continue to trend up. And so, there are some real positives that we're looking for a member of the ETR surveys, they're forward-looking. So we'll see, as we catch up next quarter. Now, before we wrap, I want to say a few words on security, and maybe it's a bit of a non-sequitur here, but I think it's relevant to the trends that we've been discussing, especially as we talk about moving to the cloud. And as you know, we've reported many times on the security space, basically updating you quarterly with our scenarios and the spending and the technology trends and highlighting our four-star companies. Four-star company's insecurity on those with both momentum and significant market presence. And last year we put CrowdStrike, Okta and Zscaler, and some others on the radar. And we've closely track the cyber business of larger companies with a security portfolio like Palo Alto and Cisco, and more recently, VMware has made some acquisitions. Now the government hacked that became news this week. It really underscores the importance of security. It remains the most challenging area for organizations because well, failure's not an option, skills are short, tools are abundant, the adversaries are very well-funded and extremely capable yet failure is common as we saw this week. And there's a misconception that cloud solves the security problem, and it's important to point out that it does not. Cloud is a shared responsibility model, meaning the cloud provider is going to secure the infrastructure for example, but it's up to you as the customer to configure things properly and deal with application security. It's ultimately on you. And the example of S3 is instructive because we've seen a number S3 breaches over the years where the customer didn't properly configure the S3 bucket. We're talking about companies like Honda and Capital One, not just small businesses that don't have the SecOps resources. And generally it was because a non-security person was configuring things. Maybe they were Or developers who are not focused on security, and perhaps permission set too broadly, and access was given to far too many people. Whatever the issue, it took some breaches and subsequent education to increase awareness of this problem and tighten it up. We see some similar trends occurring with new workloads, especially in cloud databases. It's becoming so easy to spin up new data warehouses for example, and we believe that there are exposures out there due the lack of awareness or inconsistent corporate governance being applied to these new data stores. As well, even though important areas like threat intelligence and database security are important, SecOps budgets are stretched thin. And when you ask companies where the priorities are, these fall lower down the list, these areas specifically have taken a back seat, the endpoint, identity and cloud security. And we bring this up because it's a potential blind spot as we saw this week with the US government hack. It was stealthy, it wasn't detected for many, many months. Who knows maybe even years. And not to be a buzzkill, but the point is, cloud enthusiasm has to be concompetent with security vigilant. Enough preaching, let's wrap up here. As we enter 2020, this year, we said the cloud was going to be the force that drove innovation along with data and AI. And as we look in the rear view mirror and put 2020 behind us, I know many of you want to do that, it was the cloud that enabled businesses to not only continue to operate, but to actually increase productivity. Nonetheless, we still see IT spending declines of four to 5% this year with an expectation of a tepid Q4 relative to the last year. We see Q1 slowly rebounding and kind of a swoosh, let me try that again, recovery in the subsequent quarters with tech spending rebounding in 2021 to a positive three to 5%, let's call it 4%. Now supporting us scenario, the pandemic forced a giant Petri dish for digital. And we see some real successes and learnings that organizations will apply in 2021 to bet on sure things. These are cloud, containers, AI, ML, machine intelligence pieces and automation. For sure, along with upticks for virtually every other sector of technology because spending has been so depressed. The two exceptions are outsourcing and IT consulting and related services which continue to be a drag on overall spending. Priorities must be focused on security and governance and further improvements in applying corporate edicts in a cloud world. We also see new data architectures emerging where domain knowledge becomes central to data platforms. We'll be covering this in more detail on top of the work that we've already done in this area. Now, automation is not only an opportunity, it's become a mandate. Yes, RPA, but also broader automation agendas be on point tools. And importantly, we're not talking about paving the cow path here by automating existing processes. Rather we're talking about rethinking processes across the entire organization for a new digital reality where many of these processes are being invented. The work of Erik Brynjolfsson and Andrew McAfee on the second machine age. It was pressured back in 2014 and the conclusions they drew, they're becoming increasingly important in the 2020s, meaning that look machines have always replaced humans throughout time. But for the first time in history, it's happening for cognitive functions, and a huge base of workers is going to be, or as being marginalized, unless they're retrained. Education and public policy that supports this transition is critical. And I for one would like to see a much more productive discussion that goes beyond the cult of break up big tech. Rather I'd like to see governments partner with big tech to truly do good and help drive the re-skilling of workers for the digital age. Now cloud remains the underpinning of the digital business mandate, but the path forward isn't really always crystal clear. This is evidenced by the virtual dead heat between those organizations that are consolidating workloads in a cloud workloads versus those that are hedging bets on a multi-cloud strategy. One thing is clear cloud is the linchpin for our growth scenarios and will continue to be the substrate for innovation in the coming decade. Remember, these episodes, they're all available as podcasts, wherever you listen, all you got to do is search Breaking Analysis podcast, and please subscribe to the series, appreciate that. Check out ETR's website at ETR.plus. We also publish full report every week on wikibond.com and siliconangle.com and get in touch with me at David.vallante, siliconangle.Com, you can DM me at D. Vellante. And please by all means comment on our LinkedIn posts. This is Dave Vellante for theCube Insights powered by ETR. Have a great week everybody, Merry Christmas, happy Hanukkah, happy Kwanzaa, or happy, whatever holiday you celebrate. Stay safe, be well, and we'll see you next time. (upbeat music)

>>from around the globe. It's the Cube presenting innovation for good, brought to you by on shape. >>Hello, everyone, and welcome to Innovation for Good Program, hosted by the Cuban. Brought to You by on Shape, which is a PTC company. My name is Dave Valentin. I'm coming to you from our studios outside of Boston. I'll be directing the conversations today. It's a very exciting, all live program. We're gonna look at how product innovation has evolved and where it's going and how engineers, entrepreneurs and educators are applying cutting edge, cutting edge product development techniques and technology to change our world. You know, the pandemic is, of course, profoundly impacted society and altered how individuals and organizations they're gonna be thinking about an approaching the coming decade. Leading technologists, engineers, product developers and educators have responded to the new challenges that we're facing from creating lifesaving products to helping students learn from home toe how to apply the latest product development techniques and solve the world's hardest problems. And in this program, you'll hear from some of the world's leading experts and practitioners on how product development and continuous innovation has evolved, how it's being applied toe positive positively affect society and importantly where it's going in the coming decades. So let's get started with our first session fueling Tech for good. And with me is John Hirschbeck, who is the president of the Suffers, a service division of PTC, which acquired on shape just over a year ago, where John was the CEO and co founder, and Dana Grayson is here. She is the co founder and general partner at Construct Capital, a new venture capital firm. Folks, welcome to the program. Thanks so much for coming on. >>Great to be here, Dave. >>All right, John. >>You're very welcome. Dana. Look, John, let's get into it for first Belated congratulations on the acquisition of Von Shape. That was an awesome seven year journey for your company. Tell our audience a little bit about the story of on shape, but take us back to Day zero. Why did you and your co founders start on shape? Well, >>actually, start before on shaping the You know, David, I've been in this business for almost 40 years. The business of building software tools for product developers and I had been part of some previous products in the industry and companies that had been in their era. Big changes in this market and about, you know, a little Before founding on shape, we started to see the problems product development teams were having with the traditional tools of that era years ago, and we saw the opportunity presented by Cloud Web and Mobile Technology. And we said, Hey, we could use Cloud Web and Mobile to solve the problems of product developers make their Their business is run better. But we have to build an entirely new system, an entirely new company, to do it. And that's what on shapes about. >>Well, so notwithstanding the challenges of co vid and difficulties this year, how is the first year been as, Ah, division of PTC for you guys? How's business? Anything you can share with us? >>Yeah, our first year of PTC has been awesome. It's been, you know, when you get acquired, Dave, you never You know, you have great optimism, but you never know what life will really be like. It's sort of like getting married or something, you know, until you're really doing it, you don't know. And so I'm happy to say that one year into our acquisition, um, PTC on shape is thriving. It's worked out better than I could have imagined a year ago. Along always, I mean sales are up. In Q four, our new sales rate grew 80% vs Excuse me, our fiscal Q four Q three. In the calendar year, it grew 80% compared to the year before. Our educational uses skyrocketing with around 400% growth, most recently year to year of students and teachers and co vid. And we've launched a major cloud platform using the core of on shape technology called Atlas. So, um, just tons of exciting things going on a TTC. >>That's awesome. But thank you for sharing some of those metrics. And of course, you're very humble individual. You know, people should know a little bit more about you mentioned, you know, we founded Solid Works, co founded Solid where I actually found it solid works. You had a great exit in the in the late nineties. But what I really appreciate is, you know, you're an entrepreneur. You've got a passion for the babies that you you helped birth. You stayed with the salt systems for a number of years. The company that quiet, solid works well over a decade. And and, of course, you and I have talked about how you participated in the the M I T. Blackjack team. You know, back in the day, a zai say you're very understated, for somebody was so accomplished. Well, >>that's kind of you, but I tend to I tend Thio always keep my eye more on what's ahead. You know what's next, then? And you know, I look back Sure to enjoy it and learn from it about what I can put to work making new memories, making new successes. >>Love it. Okay, let's bring Dana into the conversation. Hello, Dana. You look you're a fairly early investor in in on shape when you were with any A And and I think it was like it was a serious B, but it was very right close after the A raise. And and you were and still are a big believer in industrial transformation. So take us back. What did you see about on shape back then? That excited you. >>Thanks. Thanks for that. Yeah. I was lucky to be a early investment in shape. You know, the things that actually attracted me. Don shape were largely around John and, uh, the team. They're really setting out to do something, as John says humbly, something totally new, but really building off of their background was a large part of it. Um, but, you know, I was really intrigued by the design collaboration side of the product. Um, I would say that's frankly what originally attracted me to it. What kept me in the room, you know, in terms of the industrial world was seeing just if you start with collaboration around design what that does to the overall industrial product lifecycle accelerating manufacturing just, you know, modernizing all the manufacturing, just starting with design. So I'm really thankful to the on shape guys, because it was one of the first investments I've made that turned me on to the whole sector. And while just such a great pleasure to work with with John and the whole team there. Now see what they're doing inside PTC. >>And you just launched construct capital this year, right in the middle of a pandemic and which is awesome. I love it. And you're focused on early stage investing. Maybe tell us a little bit about construct capital. What your investment thesis is and you know, one of the big waves that you're hoping to ride. >>Sure, it construct it is literally lifting out of any what I was doing there. Um uh, for on shape, I went on to invest in companies such as desktop metal and Tulip, to name a couple of them form labs, another one in and around the manufacturing space. But our thesis that construct is broader than just, you know, manufacturing and industrial. It really incorporates all of what we'd call foundational industries that have let yet to be fully tech enabled or digitized. Manufacturing is a big piece of it. Supply chain, logistics, transportation of mobility or not, or other big pieces of it. And together they really drive, you know, half of the GDP in the US and have been very under invested. And frankly, they haven't attracted really great founders like they're on in droves. And I think that's going to change. We're seeing, um, entrepreneurs coming out of the tech world orthe Agnelli into these industries and then bringing them back into the tech world, which is which is something that needs to happen. So John and team were certainly early pioneers, and I think, you know, frankly, obviously, that voting with my feet that the next set, a really strong companies are going to come out of the space over the next decade. >>I think it's a huge opportunity to digitize the sort of traditionally non digital organizations. But Dana, you focused. I think it's it's accurate to say you're focused on even Mawr early stage investing now. And I want to understand why you feel it's important to be early. I mean, it's obviously riskier and reward e er, but what do you look for in companies and and founders like John >>Mhm, Um, you know, I think they're different styles of investing all the way up to public market investing. I've always been early stage investors, so I like to work with founders and teams when they're, you know, just starting out. Um, I happened to also think that we were just really early in the whole digital transformation of this world. You know, John and team have been, you know, back from solid works, etcetera around the space for a long time. But again, the downstream impact of what they're doing really changes the whole industry. And and so we're pretty early and in digitally transforming that market. Um, so that's another reason why I wanna invest early now, because I do really firmly believe that the next set of strong companies and strong returns for my own investors will be in the spaces. Um, you know, what I look for in Founders are people that really see the world in a different way. And, you know, sometimes some people think of founders or entrepreneurs is being very risk seeking. You know, if you asked John probably and another successful entrepreneurs, they would call themselves sort of risk averse, because by the time they start the company, they really have isolated all the risk out of it and think that they have given their expertise or what they're seeing their just so compelled to go change something, eh? So I look for that type of attitude experience a Z. You can also tell from John. He's fairly humble. So humility and just focus is also really important. Um, that there's a That's a lot of it. Frankly, >>Excellent. Thank you, John. You got such a rich history in the space. Uh, and one of you could sort of connect the dots over time. I mean, when you look back, what were the major forces that you saw in the market in in the early days? Particularly days of on shape on? And how is that evolved? And what are you seeing today? Well, >>I think I touched on it earlier. Actually, could I just reflect on what Dana said about risk taking for just a quick one and say, throughout my life, from blackjack to starting solid works on shape, it's about taking calculated risks. Yes, you try to eliminate the risk Sa's much as you can, but I always say, I don't mind taking a risk that I'm aware of, and I've calculated through as best I can. I don't like taking risks that I don't know I'm taking. That's right. You >>like to bet on >>sure things as much as you sure things, or at least where you feel you. You've done the research and you see them and you know they're there and you know, you, you you keep that in mind in the room, and I think that's great. And Dana did so much for us. Dana, I want to thank you again. For all that, you did it every step of the way, from where we started to to, you know, your journey with us ended formally but continues informally. Now back to you, Dave, I think, question about the opportunity and how it's shaped up. Well, I think I touched on it earlier when I said It's about helping product developers. You know, our customers of the people build the future off manufactured goods. Anything you think of that would be manufacturing factory. You know, the chair you're sitting in machine that made your coffee. You know, the computer you're using, the trucks that drive by on the street, all the covert product research, the equipment being used to make vaccines. All that stuff is designed by someone, and our job is given the tools to do it better. And I could see the problems that those product developers had that we're slowing them down with using the computing systems of the time. When we built solid works, that was almost 30 years ago. If people don't realize that it was in the early >>nineties and you know, we did the >>best we could for the early nineties, but what we did. We didn't anticipate the world of today. And so people were having problems with just installing the systems. Dave, you wouldn't believe how hard it is to install these systems. You need toe speck up a special windows computer, you know, and make sure you've got all the memory and graphics you need and getting to get that set up. You need to make sure the device drivers air, right, install a big piece of software. Ah, license key. I'm not making this up. They're still around. You may not even know what those are. You know, Dennis laughing because, you know, zero cool people do things like this anymore. Um, and it only runs some windows. You want a second user to use it? They need a copy. They need a code. Are they on the same version? It's a nightmare. The teams change, you know? You just say, Well, get everyone on the software. Well, who's everyone? You know, you got a new vendor today? A new customer tomorrow, a new employee. People come on and off the team. The other problem is the data stored in files, thousands of files. This isn't like a spreadsheet or word processor, where there's one file to pass around these air thousands of files to make one, even a simple product. People were tearing their hair out. John, what do we do? I've got copies everywhere. I don't know where the latest version is. We tried like, you know, locking people out so that only one person can change it At the time that works against speed, it works against innovation. We saw what was happening with Cloud Web and mobile. So what's happened in the years since is every one of the forces that product developers experience the need for speed, the need for innovation, the need to be more efficient with their people in their capital. Resource is every one of those trends have been amplified since we started on shape by a lot of forces in the world. And covert is amplified all those the need for agility and remote work cove it is amplified all that the same time, The acceptance of cloud. You know, a few years ago, people were like cloud, you know, how is that gonna work now They're saying to me, You know, increasingly, how would you ever even have done this without the cloud. How do you make solid works work without the cloud? How would that even happen? You know, once people understand what on shapes about >>and we're the >>Onley full SAS solution software >>as a service, >>full SAS solution in our industry. So what's happened in those years? Same problems we saw earlier, but turn up the gain, their bigger problems. And with cloud, we've seen skepticism of years ago turn into acceptance. And now even embracement in the cova driven new normal. >>Yeah. So a lot of friction in the previous environments cloud obviously a huge factor on, I guess. I guess Dana John could see it coming, you know, in the early days of solid works with, you know, had Salesforce, which is kind of the first major independent SAS player. Well, I guess that was late nineties. So his post solid works, but pre in shape and their work day was, you know, pre on shape in the mid two thousands. And and but But, you know, the bet was on the SAS model was right for Crick had and and product development, you know, which maybe the time wasn't a no brainer. Or maybe it was, I don't know, but Dana is there. Is there anything that you would invest in today? That's not Cloud based? >>Um, that's a great question. I mean, I think we still see things all the time in the manufacturing world that are not cloud based. I think you know, the closer you get to the shop floor in the production environment. Um e think John and the PTC folks would agree with this, too, but that it's, you know, there's reliability requirements, performance requirements. There's still this attitude of, you know, don't touch the printing press. So the cloud is still a little bit scary sometimes. And I think hybrid cloud is a real thing for those or on premise. Solutions, in some cases is still a real thing. What what we're more focused on. And, um, despite whether it's on premise or hybrid or or SAS and Cloud is a frictionless go to market model, um, in the companies we invest in so sass and cloud, or really make that easy to adopt for new users, you know, you sign up, started using a product, um, but whether it's hosted in the cloud, whether it's as you can still distribute buying power. And, um, I would I'm just encouraging customers in the customer world and the more industrial environment to entrust some of their lower level engineers with more budget discretionary spending so they can try more products and unlock innovation. >>Right? The unit economics are so compelling. So let's bring it, you know, toe today's you know, situation. John, you decided to exit about a year ago. You know? What did you see in PTC? Other than the obvious money? What was the strategic fit? >>Yeah, Well, David, I wanna be clear. I didn't exit anything. Really? You >>know, I love you and I don't like that term exit. I >>mean, Dana had exit is a shareholder on and so it's not It's not exit for me. It's just a step in the journey. What we saw in PTC was a partner. First of all, that shared our vision from the top down at PTC. Jim Hempleman, the CEO. He had a great vision for for the impact that SAS can make based on cloud technology and really is Dana of highlighted so much. It's not just the technology is how you go to market and the whole business being run and how you support and make the customers successful. So Jim shared a vision for the potential. And really, really, um said Hey, come join us and we can do this bigger, Better, faster. We expanded the vision really to include this Atlas platform for hosting other SAS applications. That P D. C. I mean, David Day arrived at PTC. I met the head of the academic program. He came over to me and I said, You know, and and how many people on your team? I thought he'd say 5 40 people on the PTC academic team. It was amazing to me because, you know, we were we were just near about 100 people were required are total company. We didn't even have a dedicated academic team and we had ah, lot of students signing up, you know, thousands and thousands. Well, now we have hundreds of thousands of students were approaching a million users and that shows you the power of this team that PTC had combined with our product and technology whom you get a big success for us and for the teachers and students to the world. We're giving them great tools. So so many good things were also putting some PTC technology from other parts of PTC back into on shape. One area, a little spoiler, little sneak peek. Working on taking generative design. Dana knows all about generative design. We couldn't acquire that technology were start up, you know, just to too much to do. But PTC owns one of the best in the business. This frustrated technology we're working on putting that into on shaping our customers. Um, will be happy to see it, hopefully in the coming year sometime. >>It's great to see that two way exchange. Now, you both know very well when you start a company, of course, a very exciting time. You know, a lot of baggage, you know, our customers pulling you in a lot of different directions and asking you for specials. You have this kind of clean slate, so to speak in it. I would think in many ways, John, despite you know, your install base, you have a bit of that dynamic occurring today especially, you know, driven by the forced march to digital transformation that cove it caused. So when you sit down with the team PTC and talk strategy. You now have more global resource is you got cohorts selling opportunities. What's the conversation like in terms of where you want to take the division? >>Well, Dave, you actually you sounds like we should have you coming in and talking about strategy because you've got the strategy down. I mean, we're doing everything said global expansion were able to reach across selling. We got some excellent PTC customers that we can reach reach now and they're finding uses for on shape. I think the plan is to, you know, just go, go, go and grow, grow, grow where we're looking for this year, priorities are expand the product. I mentioned the breath of the product with new things PTC did recently. Another technology that they acquired for on shape. We did an acquisition. It was it was small, wasn't widely announced. It, um, in an area related to interfacing with electrical cad systems. So So we're doing We're expanding the breath of on shape. We're going Maura, depth in the areas were already in. We have enormous opportunity to add more features and functions that's in the product. Go to market. You mentioned it global global presence. That's something we were a little light on a year ago. Now we have a team. Dana may not even know what we have. A non shape, dedicated team in Barcelona, based in Barcelona but throughout Europe were doing multiple languages. Um, the academic program just introduced a new product into that space that z even fueling more success and growth there. Um, and of course, continuing to to invest in customer success and this Atlas platform story I keep mentioning, we're going to soon have We're gonna soon have four other major PTC brands shipping products on our Atlas Saas platform. And so we're really excited about that. That's good for the other PTC products. It's also good for on shape because now there's there's. There's other interesting products that are on shape customers can use take advantage of very easily using, say, a common log in conventions about user experience there, used to invest of all they're SAS based, so they that makes it easier to begin with. So that's some of the exciting things going on. I think you'll see PTC, um, expanding our lead in SAS based applications for this sector for our our target, uh, sectors not just in, um, in cat and data management, but another area. PTC's Big and his augmented reality with of euphoria, product line leader and industrial uses of a R. That's a whole other story we should do. A whole nother show augmented reality. But these products are amazing. You can you can help factory workers people on, uh, people who are left out of the digital transformation. Sometimes we're standing from machine >>all day. >>They can't be sitting like we are doing Zoom. They can wear a R headset in our tools, let them create great content. This is an area Dana is invested in other companies. But what I wanted to note is the new releases of our authoring software. For this, our content getting released this month, used through the Atlas platform, the SAS components of on shape for things like revision management and collaboration on duh workflow activity. All that those are tools that we're able to share leverage. We get a lot of synergy. It's just really good. It's really fun to have a good time. That's >>awesome. And then we're gonna be talking to John MacLean later about that. Let's do a little deeper Dive on that. And, Dana, what is your involvement today with with on shape? But you're looking for you know, which of their customers air actually adopting. And they're gonna disrupt their industries. And you get good pipeline from that. How do you collaborate today? >>That sounds like a great idea. Um, Aziz, John will tell you I'm constantly just asking him for advice and impressions of other entrepreneurs and picking his brain on ideas. No formal relationship clearly, but continue to count John and and John and other people in on shaping in the circle of experts that I rely on for their opinions. >>All right, so we have some questions from the crowd here. Uh, one of the questions is for the dream team. You know, John and Dana. What's your next next collective venture? I don't think we're there yet, are we? No. >>I just say, as Dana said, we love talking to her about. You know, Dana, you just returned the compliment. We would try and give you advice and the deals you're looking at, and I'm sort of casually mentoring at least one of your portfolio entrepreneurs, and that's been a lot of fun for May on, hopefully a value to them. But also Dana. We uran important pipeline to us in the world of some new things that are happening that we wouldn't see if you know you've shown us some things that you've said. What do you think of this business? And for us, it's like, Wow, it's cool to see that's going on And that's what's supposed to work in an ecosystem like this. So we we deeply value the ongoing relationship. And no, we're not starting something new. I got a lot of work left to do with what I'm doing and really happy. But we can We can collaborate in this way on other ventures. >>I like this question to somebody asking With the cloud options like on shape, Wilmore students have stem opportunities s Oh, that's a great question. Are you because of sass and cloud? Are you able to reach? You know, more students? Much more cost effectively. >>Yeah, Dave, I'm so glad that that that I was asked about this because Yes, and it's extremely gratified us. Yes, we are because of cloud, because on shape is the only full cloud full SAS system or industry were able to reach. Stem education brings able to be part of bringing step education to students who couldn't get it otherwise. And one of most gratifying gratifying things to me is the emails were getting from teachers, um, that that really, um, on the phone calls that were they really pour their heart out and say We're able to get to students in areas that have very limited compute resource is that don't have an I T staff where they don't know what computer that the students can have at home, and they probably don't even have a computer. We're talking about being able to teach them on a phone to have an android phone a low end android phone. You can do three D modeling on there with on shape. Now you can't do it any other system, but with on shape, you could do it. And so the teacher can say to the students, They have to have Internet access, and I know there's a huge community that doesn't even have Internet access, and we're not able, unfortunately to help that. But if you have Internet and you have even an android phone, we can enable the educator to teach them. And so we have case after case of saving a stem program or expanding it into the students that need it most is the ones we're helping here. So really excited about that. And we're also able to let in addition to the run on run on whatever computing devices they have, we also offer them the tools they need for remote teaching with a much richer experience. Could you teach solid works remotely? Well, maybe if the student ran it had a windows workstation. You know, big, big, high end workstation. Maybe it could, but it would be like the difference between collaborating with on shape and collaborate with solid works. Like the difference between a zoom video call and talking on the landline phone. You know, it's a much richer experience, and that's what you need. And stem teaching stem is hard, So yeah, we're super super. Um, I'm excited about bringing stem to more students because of cloud yond >>we're talking about innovation for good, and then the discussion, John, you just had it. Really? There could be a whole another vector here. We could discuss on diversity, and I wanna end with just pointing out. So, Dana, your new firm, it's a woman led firm, too. Two women leaders, you know, going forward. So that's awesome to see, so really? Yeah, thumbs up on that. Congratulations on getting that off the ground. >>Thank you. Thank you. >>Okay, so thank you guys. Really appreciate It was a great discussion. I learned a lot and I'm sure the audience did a swell in a moment. We're gonna talk with on shaped customers to see how they're applying tech for good and some of the products that they're building. So keep it right there. I'm Dave Volonte. You're watching innovation for good on the Cube, the global leader in digital tech event coverage. Stay right there. >>Oh, yeah, it's >>yeah, yeah, around >>the globe. It's the Cube presenting innovation for good. Brought to you by on shape. >>Okay, we're back. This is Dave Volonte and you're watching innovation for good. A program on Cuba 3 65 made possible by on shape of PTC company. We're live today really live tv, which is the heritage of the Cube. And now we're gonna go to the sources and talkto on shape customers to find out how they're applying technology to create real world innovations that are changing the world. So let me introduce our panel members. Rafael Gomez Furberg is with the Chan Zuckerberg bio hub. A very big idea. And collaborative nonprofit was initiative that was funded by Mark Zuckerberg and his wife, Priscilla Chan, and really around diagnosing and curing and better managing infectious diseases. So really timely topic. Philip Tabor is also joining us. He's with silver side detectors, which develops neutron detective detection systems. Yet you want to know if early, if neutrons and radiation or in places where you don't want them, So this should be really interesting. And last but not least, Matthew Shields is with the Charlottesville schools and is gonna educate us on how he and his team are educating students in the use of modern engineering tools and techniques. Gentlemen, welcome to the Cuban to the program. This should be really interesting. Thanks for coming on. >>Hi. Or pleasure >>for having us. >>You're very welcome. Okay, let me ask each of you because you're all doing such interesting and compelling work. Let's start with Rafael. Tell us more about the bio hub and your role there, please. >>Okay. Yeah. So you said that I hope is a nonprofit research institution, um, funded by Mark Zuckerberg and his wife, Priscilla Chan. Um, and our main mission is to develop new technologies to help advance medicine and help, hopefully cure and manage diseases. Um, we also have very close collaborations with Universe California, San Francisco, Stanford University and the University California Berkeley on. We tried to bring those universities together, so they collaborate more of biomedical topics. And I manage a team of engineers. They by joining platform. Um, and we're tasked with creating instruments for the laboratory to help the scientist boats inside the organization and also in the partner universities Do their experiments in better ways in ways that they couldn't do before >>in this edition was launched Well, five years ago, >>it was announced at the end of 2016, and we actually started operation with at the beginning of 2017, which is when I joined, um, So this is our third year. >>And how's how's it going? How does it work? I mean, these things take time. >>It's been a fantastic experience. Uh, the organization works beautifully. Um, it was amazing to see it grow From the beginning, I was employee number 12, I think eso When I came in, it was just a nem P office building and empty labs. And very quickly we had something running about. It's amazing eso I'm very proud of the work that we have done to make that possible. Um And then, of course, that's you mentioned now with co vid, um, we've been able to do a lot of very cool work attire being of the pandemic in March, when there was a deficit of testing, uh, capacity in California, we spun up a testing laboratory in record time in about a week. It was crazy. It was a crazy project, Um, but but incredibly satisfying. And we ended up running all the way until the beginning of November, when the lab was finally shut down. We could process about 3000 samples a day. I think at the end of it all, we were able to test about 100 on the order of 100 and 50,000 samples from all over the state. We were providing free testing toe all of the Department of Public Health Department of Public Health in California, which at the media pandemic, had no way to do testing affordably and fast. So I think that was a great service to the state. Now the state has created that testing system that would serve those departments. So then we decided that it was unnecessary to keep going with testing in the other biopsy that would shut down. >>All right. Thank you for that. Now, Now, Philip, you What you do is mind melting. You basically helped keep the world safe. Maybe describe a little bit more about silver sod detectors and what your role is there and how it all works. >>Tour. So we make a nuclear bomb detectors and we also make water detectors. So we try and do our part thio keep the world from blowing up and make it a better place at the same time. Both of these applications use neutron radiation detectors. That's what we make. Put them out by import border crossing places like that. They can help make sure that people aren't smuggling. Shall we say very bad things. Um, there's also a burgeoning field of research and application where you can use neutrons with some pretty cool physics to find water so you could do things. Like what? A detector up in the mountains and measure snowpack. Put it out in the middle of the field and measure soil moisture content. And as you might imagine, there's some really cool applications in, uh, research and agronomy and public policy for this. >>All right, so it's OK, so it's a It's much more than, you know, whatever fighting terrorism, it's there's a riel edge or I kind of i o t application for what you guys >>do. We do both its's to plowshares. You might >>say a mat. I I look at your role is kind of scaling the brain power for for the future. Maybe tell us more about Charlottesville schools and in the mission that you're pursuing and what you do. >>Thank you. Um, I've been in Charlottesville City schools for about 11 or 12 years. I started their teaching, um, a handful of classes, math and science and things like that. But Thescore board and my administration had the crazy idea of starting an engineering program about seven years ago. My background is an engineering is an engineering. My masters is in mechanical and aerospace engineering and um, I basically spent a summer kind of coming up with what might be a fun engineering curriculum for our students. And it started with just me and 30 students about seven years ago, Um, kind of a home spun from scratch curriculum. One of my goals from the outset was to be a completely project based curriculum, and it's now grown. We probably have about six or 700 students, five or six full time teachers. We now have pre engineering going on at the 5th and 6th grade level. I now have students graduating. Uh, you know, graduating after senior year with, like, seven years of engineering under their belt and heading off to doing some pretty cool stuff. So it's It's been a lot of fun building a program and, um, and learning a lot in the process. >>That's awesome. I mean, you know, Cuba's. We've been passionate about things like women in tech, uh, diversity stem. You know, not only do we need more, more students and stem, we need mawr underrepresented women, minorities, etcetera. We were just talking to John Herstek and integrate gration about this is Do you do you feel is though you're I mean, first of all, the work that you do is awesome, but but I'll go one step further. Do you feel as though it's reaching, um, or diverse base? And how is that going? >>That's a great question. I think research shows that a lot of people get funneled into one kind of track or career path or set of interests really early on in their educational career, and sometimes that that funnel is kind of artificial. And so that's one of the reasons we keep pushing back. Um, so our school systems introducing kindergartners to programming on DSO We're trying to push back how we expose students to engineering and to stem fields as early as possible. And we've definitely seen the first of that in my program. In fact, my engineering program, uh, sprung out of an after school in Extracurricular Science Club that actually three girls started at our school. So I think that actually has helped that three girls started the club that eventually is what led to our engineering programs that sort of baked into the DNA and also our eyes a big public school. And we have about 50% of the students are under the poverty line and we e in Charlottesville, which is a big refugee town. And so I've been adamant from Day one that there are no barriers to entry into the program. There's no test you have to take. You don't have to have be taking a certain level of math or anything like that. That's been a lot of fun. To have a really diverse set of kids enter the program and be successful, >>that's final. That's great to hear. So, Philip, I wanna come back to you. You know, I think about maybe some day we'll be able to go back to a sporting events, and I know when I when I'm in there, there's somebody up on the roof looking out for me, you know, watching the crowd, and they have my back. And I think in many ways, the products that you build, you know, our similar. I may not know they're there, but they're keeping us safe or they're measuring things that that that I don't necessarily see. But I wonder if you could talk about a little bit more detail about the products you build and how they're impacting society. >>Sure, so There are certainly a lot of people who are who are watching, trying to make sure things were going well in keeping you safe that you may or may not be aware of. And we try and support ah lot of them. So we have detectors that are that are deployed in a variety of variety of uses, with a number of agencies and governments that dio like I was saying, ports and border crossing some other interesting applications that are looking for looking for signals that should not be there and working closely to fit into the operations these folks do. Onda. We also have a lot of outreach to researchers and scientists trying to help them support the work they're doing. Um, using neutron detection for soil moisture monitoring is a some really cool opportunities for doing it at large scale and with much less, um, expense or complication than would have been done. Previous technologies. Um, you know, they were talking about collaboration in the previous segment. We've been able to join a number of conferences for that, virtually including one that was supposed to be held in Boston, but another one that was held out of the University of Heidelberg in Germany. And, uh, this is sort of things that in some ways, the pandemic is pushing people towards greater collaboration than they would have been able to do. Had it all but in person. >>Yeah, we did. Uh, the cube did live works a couple years ago in Boston. It was awesome show. And I think, you know, with this whole trend toward digit, I call it the Force march to digital. Thanks to cove it I think that's just gonna continue. Thio grow. Rafael. What if you could describe the process that you use to better understand diseases? And what's your organization's involvement? Been in more detail, addressing the cove in pandemic. >>Um, so so we have the bio be structured in, Um um in a way that foster so the combination of technology and science. So we have to scientific tracks, one about infectious diseases and the other one about understanding just basic human biology, how the human body functions, and especially how the cells in the human body function on how they're organized to create tissues in the body. On Ben, it has this set of platforms. Um, mind is one of them by engineering that are all technology rated. So we have data science platform, all about data analysis, machine learning, things like that. Um, we have a mass spectrometry platform is all about mass spectrometry technologies to, um, exploit those ones in service for the scientist on. We have a genomics platform that it's all about sequencing DNA and are gonna, um and then an advanced microscopy. It's all about developing technologies, uh, to look at things with advanced microscopes and developed technologies to marry computation on microscopy. So, um, the scientists set the agenda and the platforms, we just serve their needs, support their needs, and hopefully develop technologies that help them do their experiments better, faster, or allow them to the experiment that they couldn't do in any other way before. Um And so with cove, it because we have that very strong group of scientists that work on have been working on infectious disease before, and especially in viruses, we've been able to very quickly pivot to working on that s O. For example, my team was able to build pretty quickly a machine to automatically purified proteins on is being used to purify all these different important proteins in the cove. It virus the SARS cov to virus Onda. We're sending some of those purified proteins all over the world. Two scientists that are researching the virus and trying to figure out how to develop vaccines, understand how the virus affects the body and all that. Um, so some of the machines we built are having a very direct impact on this. Um, Also for the copy testing lab, we were able to very quickly develop some very simple machines that allowed the lab to function sort of faster and more efficiently. Sort of had a little bit of automation in places where we couldn't find commercial machines that would do it. >>Um, eso Matt. I mean, you gotta be listening to this and thinking about Okay, So someday your students are gonna be working at organizations like like, like Bio Hub and Silver Side. And you know, a lot of young people they're just don't know about you guys, but like my kids, they're really passionate about changing the world. You know, there's way more important than you know, the financial angles and it z e. I gotta believe you're seeing that you're right in the front lines there. >>Really? Um, in fact, when I started the curriculum six or seven years ago, one of the first bits of feedback I got from my students is they said Okay, this is a lot of fun. So I had my students designing projects and programming microcontrollers raspberry, PiS and order we nose and things like that. The first bit of feedback I got from students was they said Okay, when do we get to impact the world? I've heard engineering >>is about >>making the world a better place, and robots are fun and all, but, you know, where is the real impact? And so um, dude, yeah, thanks to the guidance of my students, I'm baking that Maurin. Now I'm like day one of engineering one. We talk about how the things that the tools they're learning and the skills they're gaining, uh, eventually, you know, very soon could be could be used to make the world a better place. >>You know, we all probably heard that famous line by Jeff Hammer Barker. The greatest minds of my generation are trying to figure out how to get people to click on ads. I think we're really generally generationally, finally, at the point where young students and engineering a really, you know, a passionate about affecting society. I wanna get into the product, you know, side and understand how each of you are using on shape and and the value that that it brings. Maybe Raphael, you could start how long you've been using it. You know, what's your experience with it? Let's let's start there. >>I begin for about two years, and I switched to it with some trepidation. You know, I was used to always using the traditional product that you have to install on your computer, that everybody uses that. So I was kind of locked into that. But I started being very frustrated with the way it worked, um, and decided to give on ship chance. Which reputation? Because any change always, you know, causes anxiety. Um, but very quickly my engineers started loving it, Uh, just because it's it's first of all, the learning curve wasn't very difficult at all. You can transfer from one from the traditional product to entree very quickly and easily. You can learn all the concepts very, very fast. It has all the functionality that we needed and and what's best is that it allows to do things that we couldn't do before or we couldn't do easily. Now we can access the our cat documents from anywhere in the world. Um, so when we're in the lab fabricating something or testing a machine, any computer we have next to us or a tablet or on iPhone, we can pull it up and look at the cad and check things or make changes. That's something that couldn't do before because before you had to pay for every installation off the software for the computer, and I couldn't afford to have 20 installations to have some computers with the cat ready to use them like once every six months would have been very inefficient. So we love that part. And the collaboration features are fantastic, especially now with Kobe, that we have to have all the remote meetings eyes fantastic, that you can have another person drive the cad while the whole team is watching that person change the model and do things and point to things that is absolutely revolutionary. We love it. The fact that you have very, very sophisticated version control before it was always a challenge asking people, please, if you create anniversary and apart, how do we name it so that people find it? And then you end up with all these collection of files with names that nobody ever remembers, what they are, the person left. And now nobody knows which version is the right one. A mess with on shape on the version ING system it has, and the fact that you can go back in history off the document and go back to previous version so easily and then go back to the press and version and explore the history of the part that is truly, um, just world changing for us, that we can do that so easily on for me as a manager to manage this collection of information that is critical for our operations. It makes it so much easier because everything is in one place. I don't have to worry about file servers that go down that I have to administer that have to have I t taken care off that have to figure how to keep access to people to those servers when they're at home, and they need a virtual private network and all of that mess disappears. I just simply give give a person in accounting on shape and then magically, they have access to everything in the way I want. And we can manage the lower documents and everything in a way that is absolutely fantastic. >>Feel what was your what? What were some of the concerns you had mentioned? You had some trepidation. Was it a performance? Was it security? You know some of the traditional cloud stuff, and I'm curious as to how, How, whether any of those act manifested really that you had to manage. What were your concerns? >>Look, the main concern is how long is it going to take for everybody in the team to learn to use the system like it and buy into it? Because I don't want to have my engineers using tools against their will write. I want everybody to be happy because that's how they're productive. They're happy, and they enjoyed the tools they have. That was my main concern. I was a little bit worried about the whole concept of not having the files in a place where I couldn't quote unquote seat in some server and on site, but that That's kind of an outdated concept, right? So that took a little bit of a mind shift, but very quickly. Then I started thinking, Look, I have a lot of documents on Google Drive. Like, I don't worry about that. Why would I worry about my cat on on shape, right? Is the same thing. So I just needed to sort of put things in perspective that way. Um, the other, um, you know, the concern was the learning curve, right? Is like, how is he Will be for everybody to and for me to learn it on whether it had all of the features that we needed. And there were a few features that I actually discussed with, um uh, Cody at on shape on, they were actually awesome about using their scripting language in on shape to sort of mimic some of the features of the old cat, uh, in on, shaped in a way that actually works even better than the old system. So it was It was amazing. Yeah, >>Great. Thank you for that, Philip. What's your experience been? Maybe you could take us through your journey within shape. >>Sure. So we've been we've been using on shaped silver side for coming up on about four years now, and we love it. We're very happy with it. We have a very modular product line, so we make anything from detectors that would go into backpacks. Two vehicles, two very large things that a shipping container would go through and saw. Excuse me. Shape helps us to track and collaborate faster on the design. Have multiple people working a same time on a project. And it also helps us to figure out if somebody else comes to us and say, Hey, I want something new how we congrats modules from things that we already have put them together and then keep track of the design development and the different branches and ideas that we have, how they all fit together. A za design comes together, and it's just been fantastic from a mechanical engineering background. I will also say that having used a number of different systems and solid works was the greatest thing since sliced bread. Before I got using on shape, I went, Wow, this is amazing and I really don't want to design in any other platform. After after getting on Lee, a little bit familiar with it. >>You know, it's funny, right? I'll have the speed of technology progression. I was explaining to some young guns the other day how I used to have a daytime er and that was my life. And if I lost that daytime, er I was dead. And I don't know how we weigh existed without, you know, Google maps eso we get anywhere, I don't know, but, uh but so So, Matt, you know, it's interesting to think about, you know, some of the concerns that Raphael brought up, you hear? For instance, you know, all the time. Wow. You know, I get my Amazon bill at the end of the month that zip through the roof in, But the reality is that Yeah, well, maybe you are doing more, but you're doing things that you couldn't have done before. And I think about your experience in teaching and educating. I mean, you so much more limited in terms of the resource is that you would have had to be able to educate people. So what's your experience been with With on shape and what is it enabled? >>Um, yeah, it was actually talking before we went with on shape. We had a previous CAD program, and I was talking to my vendor about it, and he let me know that we were actually one of the biggest CAD shops in the state. Because if you think about it a really big program, you know, really big company might employ. 5, 10, 15, 20 cad guys, right? I mean, when I worked for a large defense contractor, I think there were probably 20 of us as the cad guys. I now have about 300 students doing cat. So there's probably more students with more hours of cat under their belt in my building than there were when I worked for the big defense contractor. Um, but like you mentioned, uh, probably our biggest hurdle is just re sources. And so we want We want one of things I've always prided myself and trying to do in this. Programs provide students with access two tools and skills that they're going to see either in college or in the real world. So it's one of the reason we went with a big professional cad program. There are, you know, sort of K 12 oriented software and programs and things. But, you know, I want my kids coding and python and using slack and using professional type of tools on DSO when it comes to cat. That's just that That was a really hurt. I mean, you know, you could spend $30,000 on one seat of, you know, professional level cad program, and then you need a $30,000 computer to run it on if you're doing a heavy assemblies, Um and so one of my dreams And it was always just a crazy dream. And I was the way I would always pitcher in my school system and say, someday I'm gonna have a kid on a school issued chromebook in subsidized housing, on public WiFi doing professional level bad and that that was a crazy statement until a couple of years ago. So we're really excited that I literally and you know, March and you said the forced march, the forced march into, you know, modernity, March 13th kids sitting in my engineering lab that we spent a lot of money on doing cad March 14th. Those kids were at home on their school issued chromebooks on public WiFi, uh, keeping their designs going and collaborating. And then, yeah, I could go on and on about some of the things you know, the features that we've learned since then they're even better. So it's not like this is some inferior, diminished version of Academy. There's so much about it. Well, I >>wanna I wanna ask you that I may be over my skis on this, but we're seeing we're starting to see the early days of the democratization of CAD and product design. It is the the citizen engineer, I mean, maybe insulting to the engineers in the room, But but is that we're beginning to see that >>I have to believe that everything moves into the cloud. Part of that is democratization that I don't need. I can whether you know, I think artists, you know, I could have a music studio in my basement with a nice enough software package. And Aiken, I could be a professional for now. My wife's a photographer. I'm not allowed to say that I could be a professional photographer with, you know, some cloud based software, and so, yeah, I do think that's part of what we're seeing is more and more technology is moving to the cloud. >>Philip. Rafael Anything you Dad, >>I think I mean, yeah, that that that combination of cloud based cat and then three d printing that is becoming more and more affordable on ubiquitous It's truly transformative, and I think for education is fantastic. I wish when I was a kid I had the opportunity to play with those kinds of things because I was always the late things. But, you know, the in a very primitive way. So, um, I think this is a dream for kids. Teoh be able to do this. And, um, yeah, there's so many other technologies coming on, like Arduino on all of these electronic things that live kids play at home very cheaply with things that back in my day would have been unthinkable. >>So we know there's a go ahead. Philip, please. >>We had a pandemic and silver site moved to a new manufacturing facility this year. I was just on the shop floor, talking with contractors, standing 6 ft apart, pointing at things. But through it all, our CAD system was completely unruffled. Nothing stopped in our development work. Nothing stopped in our support for existing systems in the field. We didn't have to think about it. We had other server issues, but none with our, you know, engineering cad, platform and product development in support world right ahead, which was cool, but also a in that's point. I think it's just really cool what you're doing with the kids. The most interesting secondary and college level engineering work that I did was project based, taken important problem to the world. Go solve it and that is what we do here. That is what my entire career has been. And I'm super excited to see. See what your students are going to be doing, uh, in there home classrooms on their chromebooks now and what they do building on that. >>Yeah, I'm super excited to see your kids coming out of college with engineering degrees because, yeah, I think that Project based experience is so much better than just sitting in a classroom, taking notes and doing math problems on day. I think it will give the kids a much better flavor. What engineering is really about Think a lot of kids get turned off by engineering because they think it's kind of dry because it's just about the math for some very abstract abstract concept on they are there. But I think the most important thing is just that hands on a building and the creativity off, making things that you can touch that you can see that you can see functioning. >>Great. So, you know, we all know the relentless pace of technology progression. So when you think about when you're sitting down with the folks that on shape and there the customer advisor for one of the things that that you want on shape to do that it doesn't do today >>I could start by saying, I just love some of the things that does do because it's such a modern platform. And I think some of these, uh, some some platforms that have a lot of legacy and a lot of history behind them. I think we're dragging some of that behind them. So it's cool to see a platform that seemed to be developed in the modern era, and so that Z it is the Google docks. And so the fact that collaboration and version ing and link sharing is and like platform agnostic abilities, the fact that that seems to be just built into the nature of the thing so far, That's super exciting. As far as things that, uh, to go from there, Um, I don't know, >>Other than price. >>You can't say >>I >>can't say lower price. >>Yeah, so far on P. D. C. S that work with us. Really? Well, so I'm not complaining. There you there, >>right? Yeah. Yeah. No gaps, guys. Whitespace, Come on. >>We've been really enjoying the three week update. Cadence. You know, there's a new version every three weeks and we don't have to install it. We just get all the latest and greatest goodies. One of the trends that we've been following and enjoying is the the help with a revision management and release work flows. Um, and I know that there's more than on shape is working on that we're very excited for, because that's a big important part about making real hardware and supporting it in the field. Something that was cool. They just integrated Cem markup capability. In the last release that took, we were doing that anyway, but we were doing it outside of on shapes. And now we get to streamline our workflow and put it in the CAD system where We're making those changes anyway when we're reviewing drawings and doing this kind of collaboration. And so I think from our perspective, we continue to look forward. Toa further progress on that. There's a lot of capability in the cloud that I think they're just kind of scratching the surface on you, >>right? I would. I mean, you're you're asking to knit. Pick. I would say one of the things that I would like to see is is faster regeneration speed. There are a few times with convicts, necessities that regenerating the document takes a little longer than I would like. It's not a serious issue, but anyway, I I'm being spoiled, >>you know? That's good. I've been doing this a long time, and I like toe ask that question of practitioners and to me, it It's a signal like when you're nit picking and that's what you're struggling to knit. Pick that to me is a sign of a successful product, and and I wonder, I don't know, uh, have the deep dive into the architecture. But are things like alternative processors. You're seeing them hit the market in a big way. Uh, you know, maybe helping address the challenge, But I'm gonna ask you the big, chewy question now. Then we maybe go to some audience questions when you think about the world's biggest problems. I mean, we're global pandemics, obviously top of mind. You think about nutrition, you know, feeding the global community. We've actually done a pretty good job of that. But it's not necessarily with the greatest nutrition, climate change, alternative energy, the economic divides. You've got geopolitical threats and social unrest. Health care is a continuing problem. What's your vision for changing the world and how product innovation for good and be applied to some of the the problems that that you all are passionate about? Big question. Who wants toe start? >>Not biased. But for years I've been saying that if you want to solve the economy, the environment, uh, global unrest, pandemics, education is the case. If you wanna. If you want to, um, make progress in those in those realms, I think funding funding education is probably gonna pay off pretty well. >>Absolutely. And I think Stam is key to that. I mean, all of the ah lot of the well being that we have today and then industrialized countries. Thanks to science and technology, right improvements in health care, improvements in communication, transportation, air conditioning. Um, every aspect of life is touched by science and technology. So I think having more kids studying and understanding that is absolutely key. Yeah, I agree, >>Philip, you got anything to add? >>I think there's some big technical problems in the world today, Raphael and ourselves there certainly working on a couple of them. Think they're also collaboration problems and getting everybody to be able to pull together instead of pulling separately and to be able to spur the ideas on words. So that's where I think the education side is really exciting. What Matt is doing and it just kind of collaboration in general when we could do provide tools to help people do good work. Uh, that is, I think, valuable. >>Yeah, I think that's a very good point. And along those lines, we have some projects that are about creating very low cost instruments for low research settings, places in Africa, Southeast Asia, South America, so that they can do, um, um, biomedical research that it's difficult to do in those place because they don't have the money to buy the fancy lab machines that cost $30,000 an hour. Um, so we're trying to sort of democratize some of those instruments. And I think thanks to tools like Kahn shape then is easier, for example, to have a conversation with somebody in Africa and show them the design that we have and discuss the details of it with them on. But it's amazing, right to have somebody, you know, 10 time zones away, Um, looking really life in real time with you about your design and discussing the details or teaching them how to build a machine, right? Because, um, you know, they have a three D printer. You can you can just give them the design and say like, you build it yourself, uh, even cheaper than and, you know, also billing and shipping it there. Um, so all that that that aspect of it is also super important. I think for any of these efforts to improve some of the hardest part was in the world for climate change. Do you say, as you say, poverty, nutrition issues? Um, you know, availability of water. You have that project at about finding water. Um, if we can also help deploy technologies that teach people remotely how to create their own technologies or how to build their own systems that will help them solve those forms locally. I think that's very powerful. >>Yeah, the point about education is right on. I think some people in the audience may be familiar with the work of Erik Brynjolfsson and Andrew McAfee, the second machine age where they sort of put forth the premise that, uh, is it laid it out. Look, for the first time in history, machines air replacing humans from a cognitive perspective. Machines have always replaced humans, but that's gonna have an impact on jobs. But the answer is not toe protect the past from the future. The answer is education and public policy that really supports that. So I couldn't agree more. I think it's a really great point. Um, we have We do have some questions from the audience. If if we could If I can ask you guys, um, you know, this one kind of stands out. How do you see artificial intelligence? I was just talking about machine intelligence. Um, how do you see that? Impacting the design space guys trying to infuse a I into your product development. Can you tell me? >>Um, absolutely, like, we're using AI for some things, including some of these very low cost instruments that will hopefully help us diagnose certain diseases, especially this is that are very prevalent in the Third World. Um, and some of those diagnostics are these days done by thes armies of technicians that are trained to look under the microscope. But, um, that's a very slow process. Is very error prone and having machine learning systems that can to the same diagnosis faster, cheaper and also little machines that can be taken to very remote places to these villages that have no access to a fancy microscope. To look at a sample from a patient that's very powerful. And I we don't do this, but I have read quite a bit about how certain places air using a Tribune attorneys to actually help them optimize designs for parts. So you get these very interesting looking parts that you would have never thought off a person would have never thought off, but that are incredibly light ink. Earlier, strong and I have all sort of properties that are interesting thanks to artificial intelligence machine learning in particular >>yet another. The advantage you get when when your work is in the cloud I've seen. I mean, there's just so many applications that so if the radiology scan is in the cloud and the radiologist is goes to bed at night, Radiologist could come in in the morning and and say, Oh, the machine while you were sleeping was using artificial intelligence to scan these 40,000 images. And here's the five that we picked out that we think you should take a closer look at. Or like Raphael said, I can design my part. My, my, my, my, my you know, mount or bracket or whatever and go to sleep. And then I wake up in the morning. The machine has improved. It for me has made it strider strider stronger and lighter. Um And so just when your when your work is in the cloud, that's just that's a really cool advantage that you get that you can have machines doing some of your design work for you. >>Yeah, we've been watching, uh, you know, this week is this month, I guess is AWS re invent and it's just amazing to see how much effort is coming around machine learning machine intelligence. You know Amazon has sage maker Google's got, you know, embedded you no ML and big query. Uh, certainly Microsoft with Azure is doing tons of stuff and machine learning. I think the point there is that that these things will be infused in tow R and D and in tow software product by the vendor community. And you all will apply that to your business and and build value through the unique data that your collecting, you know, in your ecosystems. And and that's how you add value. You don't have to be necessarily, you know, developers of artificial intelligence, but you have to be practitioners to apply that. Does that make sense to you, Philip? >>Yeah, absolutely. And I think your point about value is really well chosen. We see AI involved from the physics simulations all the way up to interpreting radiation data, and that's where the value question, I think, is really important because it's is the output of the AI giving helpful information that the people that need to be looking at it. So if it's curating a serious of radiation alert, saying, Hey, like these air the anomalies. You need to look at eyes it, doing that in a way that's going to help a good response on. In some cases, the II is only as good as the people. That sort of gave it a direction and turn it loose. And you want to make sure that you don't have biases or things like that underlying your AI that they're going to result in less than helpful outcomes coming from it. So we spend quite a lot of time thinking about how do we provide the right outcomes to people who are who are relying on our systems? >>That's a great point, right? Humans air biased and humans build models, so models are inherently biased. But then the software is hitting the market. That's gonna help us identify those biases and help us, you know? Of course. Correct. So we're entering Cem some very exciting times, guys. Great conversation. I can't thank you enough for spending the time with us and sharing with our audience the innovations that you're bringing to help the world. So thanks again. >>Thank you so much. >>Thank you. >>Okay. Welcome. Okay. When we come back, John McElheny is gonna join me. He's on shape. Co founder. And he's currently the VP of strategy at PTC. He's gonna join the program. We're gonna take a look at what's next and product innovation. I'm Dave Volonte and you're watching innovation for good on the Cube, the global leader. Digital technology event coverage. We'll be right back. >>Okay? Okay. Yeah. Okay. >>From around >>the globe, it's the Cube. Presenting innovation for good. Brought to you by on shape. >>Okay, welcome back to innovation. For good. With me is John McElheny, who is one of the co founders of On Shape and is now the VP of strategy at PTC. John, it's good to see you. Thanks for making the time to come on the program. Thanks, Dave. So we heard earlier some of the accomplishments that you've made since the acquisition. How has the acquisition affected your strategy? Maybe you could talk about what resource is PTC brought to the table that allowed you toe sort of rethink or evolve your strategy? What can you share with us? >>Sure. You know, a year ago, when when John and myself met with Jim Pepperman early on is we're we're pondering. Started joining PTC one of things became very clear is that we had a very clear shared vision about how we could take the on shape platform and really extended for, for all of the PTC products, particular sort of their augmented reality as well as their their thing works or the i o. T business and their product. And so from the very beginning there was a clear strategy about taking on shape, extending the platform and really investing, um, pretty significantly in the product development as well as go to market side of things, uh, toe to bring on shape out to not only the PTC based but sort of the broader community at large. So So So PTC has been a terrific, terrific, um, sort of partner as we've we've gonna go on after this market together. Eso We've added a lot of resource and product development side of things. Ah, lot of resource and they go to market and customer success and support. So, really, on many fronts, that's been both. Resource is as well a sort of support at the corporate level from from a strategic standpoint and then in the field, we've had wonderful interactions with many large enterprise customers as well as the PTC channels. So it's been really a great a great year. >>Well, and you think about the challenges of in your business going to SAS, which you guys, you know, took on that journey. You know, 78 years ago. Uh, it's not trivial for a lot of companies to make that transition, especially a company that's been around as long as PTC. So So I'm wondering how much you know, I was just asking you How about what PCP TC brought to the table? E gotta believe you're bringing a lot to the table to in terms of the mindset, uh, even things is, is mundane is not the right word, but things like how you compensate salespeople, how you interact with customers, the notion of a service versus a product. I wonder if you could address >>that. Yeah, it's a it's a really great point. In fact, after we had met Jim last year, John and I one of the things we walked out in the seaport area in Boston, one of things we sort of said is, you know, Jim really gets what we're trying to do here and and part of let me bring you into the thinking early on. Part of what Jim talked about is there's lots of, you know, installed base sort of software that's inside of PTC base. That's helped literally thousands of customers around the world. But the idea of moving to sass and all that it entails both from a technology standpoint but also a cultural standpoint. Like How do you not not just compensate the sales people as an example? But how do you think about customer success? In the past, it might have been that you had professional services that you bring out to a customer, help them deploy your solutions. Well, when you're thinking about a SAS based offering, it's really critical that you get customers successful with it. Otherwise, you may have turned, and you know it will be very expensive in terms of your business long term. So you've got to get customers success with software in the very beginning. So you know, Jim really looked at on shape and he said that John and I, from a cultural standpoint, you know, a lot of times companies get acquired and they've acquired technology in the past that they integrate directly into into PTC and then sort of roll it out through their products, are there just reached channel, he said. In some respects, John John, think about it as we're gonna take PTC and we want to integrate it into on shape because we want you to share with us both on the sales side and customer success on marketing on operations. You know all the things because long term, we believe the world is a SAS world, that the whole industry is gonna move too. So really, it was sort of an inverse in terms of the thought process related to normal transactions >>on That makes a lot of sense to me. You mentioned Sharon turns the silent killer of a SAS company, and you know, there's a lot of discussion, you know, in the entrepreneurial community because you live this, you know what's the best path? I mean today, You see, you know, if you watch Silicon Valley double, double, triple triple, but but there's a lot of people who believe, and I wonder, if you come in there is the best path to, you know, in the X Y axis. If if it's if it's uh, growth on one and retention on the other axis. What's the best way to get to the upper right on? Really? The the best path is probably make sure you've nailed obviously the product market fit, But make sure that you can retain customers and then throw gas on the fire. You see a lot of companies they burn out trying to grow too fast, but they haven't figured out, you know that. But there's too much churn. They haven't figured out those metrics. I mean, obviously on shape. You know, you were sort of a pioneer in here. I gotta believe you've figured out that customer retention before you really, You know, put the pedal to the >>metal. Yeah, and you know, growth growth can mask a lot of things, but getting getting customers, especially the engineering space. Nobody goes and sits there and says, Tomorrow we're gonna go and and, you know, put 100 users on this and and immediately swap out all of our existing tools. These tools are very rich and deep in terms of capability, and they become part of the operational process of how a company designs and builds products. So any time anybody is actually going through the purchasing process. Typically, they will run a try along or they'll run a project where they look at. Kind of What? What is this new solution gonna help them dio. How are we gonna orient ourselves for success? Longer term. So for us, you know, getting new customers and customer acquisition is really critical. But getting those customers to actually deploy the solution to be successful with it. You know, we like to sort of, say, the marketing or the lead generation and even some of the initial sales. That's sort of like the Kindle ing. But the fire really starts when customers deploy it and get successful. The solution because they bring other customers into the fold. And then, of course, if they're successful with it, you know, then in fact, you have negative turn which, ironically, means growth in terms of your inside of your install. Bates. >>Right? And you've seen that with some of the emerging, you know, SAS companies, where you're you're actually you know, when you calculate whatever its net retention or renew ALS, it's actually from a dollar standpoint. It's up in the high nineties or even over 100%. >>So >>and that's a trend we're gonna continue. See, I >>wonder >>if we could sort of go back. Uh, and when you guys were starting on shape, some of the things that you saw that you were trying to strategically leverage and what's changed, you know, today we were talking. I was talking to John earlier about in a way, you kinda you kinda got a blank slate is like doing another startup. >>You're >>not. Obviously you've got installed base and customers to service, but But it's a new beginning for you guys. So one of the things that you saw then you know, cloud and and sas and okay, but that's we've been there, done that. What are you seeing? You know today? >>Well, you know, So So this is a journey, of course, that that on shape on its own has gone through it had I'll sort of say, you know, several iterations, both in terms of of of, you know, how do you How do you get customers? How do you How do you get them successful? How do you grow those customers? And now that we've been part of PTC, the question becomes okay. One, There is certainly a higher level of credibility that helps us in terms of our our megaphone is much bigger than it was when we're standalone company. But on top of that now, figuring out how to work with their channel with their direct sales force, you know, they have, um, for example, you know, very large enterprises. Well, many of those customers are not gonna go in forklift out their existing solution to replace it with with on shape. However, many of them do have challenges in their supply chain and communications with contractors and vendors across the globe. And so, you know, finding our fit inside of those large enterprises as they extend out with their their customers is a very interesting area that we've really been sort of incremental to to PTC. And then, you know, they they have access to lots of other technology, like the i o. T business. And now, of course, the augmented reality business that that we can bring things to bear. For example, in the augmented reality world, they've they've got something called expert capture. And this is essentially imagine, you know, in a are ah, headset that allows you to be ableto to speak to it, but also capture images still images in video. And you could take somebody who's doing their task and capture literally the steps that they're taking its geo location and from their builds steps for new employees to be, we'll learn and understand how todo use that technology to help them do their job better. Well, when they do that, if there is replacement products or variation of of some of the tools that that they built the original design instruction set for they now have another version. Well, they have to manage multiple versions. Well, that's what on shape is really great at doing and so taking our technology and helping their solutions as well. So it's not only expanding our customer footprint, it's expanding the application footprint in terms of how we can help them and help customers. >>So that leads me to the tam discussion and again, as part of your strategist role. How do you think about that? Was just talking to some of your customers earlier about the democratization of cat and engineering? You know, I kind of joked, sort of like citizen engineering, but but so that you know, the demographics are changing the number of users potentially that can access the products because the it's so much more of a facile experience. How are you thinking about the total available market? >>It really is a great question, You know, it used to be when you when you sold boxes of software, it was how many engineers were out there. And that's the size of the market. The fact that matter is now when, When you think about access to that information, that data is simply a pane of glass. Whether it's a computer, whether it's a laptop, UH, a a cell phone or whether it's a tablet, the ability to to use different vehicles, access information and data expands the capabilities and power of a system to allow feedback and iteration. I mean, one of the one of the very interesting things is in technology is when you can take something and really unleash it to a larger audience and builds, you know, purpose built applications. You can start to iterate, get better feedback. You know there's a classic case in the clothing industry where Zara, you know, is a fast sort of turnaround. Agile manufacturer. And there was a great New York Times article written a couple years ago. My wife's a fan of Zara, and I think she justifies any purchases by saying, You know, Zara, you gotta purchase it now. Otherwise it may not be there the next time. Yet you go back to the store. They had some people in a store in New York that had this woman's throw kind of covering Shaw. And they said, Well, it would be great if we could have this little clip here so we can hook it through or something. And they sent a note back toe to the factory in Spain, and literally two weeks later they had, you know, 4000 of these things in store, and they sold out because they had a closed loop and iterative process. And so if we could take information and allow people access in multiple ways through different devices and different screens, that could be very specific information that, you know, we remove a lot of the engineering data book, bring the end user products conceptually to somebody that would have had to wait months to get the actual physical prototype, and we could get feedback well, Weaken have a better chance of making sure whatever product we're building is the right product when it ultimately gets delivered to a customer. So it's really it's a much larger market that has to be thought of rather than just the kind of selling A boxes software to an engineer. >>That's a great story. And again, it's gonna be exciting for you guys to see that with. The added resource is that you have a PTC, Um, so let's talk. I promise people we wanna talk about Atlas. Let's talk about the platform. A little bit of Atlas was announced last year. Atlas. For those who don't know it's a SAS space platform, it purports to go beyond product lifecycle management and you You're talking cloud like agility and scale to CAD and product design. But John, you could do a better job than I. What do >>we need to know about Atlas? Well, I think Atlas is a great description because it really is metaphorically sort of holding up all of the PTC applications themselves. But from the very beginning, when John and I met with Jim, part of what we were intrigued about was that he shared a vision that on shape was more than just going to be a cad authoring tool that, in fact, you know, in the past these engineering tools were very powerful, but they were very narrow in their purpose and focus. And we had specialty applications to manage the versions, etcetera. What we did in on shape is we kind of inverted that thinking. We built this collaboration and sharing engine at the core and then kind of wrap the CAD system around it. But that collaboration sharing and version ING engine is really powerful. And it was that vision that Jim had that he shared that we had from the beginning, which was, how do we take this thing to make a platform that could be used for many other applications inside of inside of any company? And so not only do we have a partner application area that is is much like the APP store or Google play store. Uh, that was sort of our first Stan Shih ation of this. This this platform. But now we're extending out to broader applications and much meatier applications. And internally, that's the thing works in the in the augmented reality. But there'll be other applications that ultimately find its way on top of this platform. And so they'll get all the benefits of of the collaboration, sharing the version ing the multi platform, multi device. And that's an extremely extremely, um, strategic leverage point for the company. >>You know, it's interesting, John, you mentioned the seaport before. So PTC, for those who don't know, built a beautiful facility down at the Seaport in Boston. And, of course, when PTC started, you know, back in the mid 19 eighties, there was nothing at the seaport s. >>So it's >>kind of kind of ironic, you know, we were way seeing the transformation of the seaport. We're seeing the transformation of industry and of course, PTC. And I'm sure someday you'll get back into that beautiful office, you know? Wait. Yeah, I'll bet. And, uh and but I wanna bring this up because I want I want you to talk about the future. How you how you see that our industry and you've observed this has moved from very product centric, uh, plat platform centric with sass and cloud. And now we're seeing ecosystems form around those products and platforms and data flowing through the ecosystem powering, you know, new innovation. I wonder if you could paint a picture for us of what the future looks like to you from your vantage point. >>Yeah, I think one of the key words you said there is data because up until now, data for companies really was sort of trapped in different applications. And it wasn't because people were nefarious and they want to keep it limited. It was just the way in which things were built. And, you know, when people use an application like on shape, what ends up happening is there their day to day interaction and everything that they do is actually captured by the platform. And, you know, we don't have access to that data. Of course it's it's the customer's data. But as as an artifact of them using the system than doing their day to day job, what's happening is they're creating huge amounts of information that can then be accessed and analyzed to help them both improve their design process, improve their efficiencies, improve their actual schedules in terms of making sure they can hit delivery times and be able to understand where there might be roadblocks in the future. So the way I see it is companies now are deploying SAS based tools like on shape and an artifact of them. Using that platform is that they have now analytics and tools to better understand and an instrument and manage their business. And then from there, I think you're going to see, because these systems are all you know extremely well. Architected allow through, you know, very structured AP. I calls to connect other SAS based applications. You're gonna start seeing closed loop sort of system. So, for example, people design using on shape, they end up going and deploying their system or installing it, or people use the end using products. People then may call back into the customers support line and report issues, problems, challenges. They'll be able to do traceability back to the underlying design. They'll be able to do trend analysis and defect analysis from the support lines and tie it back and closed loop the product design, manufacture, deployment in the field sort of cycles. In addition, you can imagine there's many things that air sort of as designed. But then when people go on site and they have to install it. There's some alterations modifications. Think about think about like a large air conditioning units for buildings. You go and you go to train and you get a large air conditioning unit that put up on top of building with a crane. They have to build all kinds of adaptors to make sure that that will fit inside of the particulars of that building. You know, with on shape and tools like this, you'll be able to not only take the design of what the air conditioning system might be, but also the all the adapter plates, but also how they installed it. So it sort of as designed as manufactured as stalled. And all these things can be traced, just like if you think about the transformation of customer service or customer contacts. In the early days, you used to have tools that were PC based tools called contact management solution, you know, kind of act or gold mine. And these were basically glorified Elektronik role in Texas. It had a customer names and they had phone numbers and whatever else. And Salesforce and Siebel, you know, these types of systems really broadened out the perspective of what a customer relationship? Waas. So it wasn't just the contact information it was, you know, How did they come to find out about you as a company? So all of the pre sort of marketing and then kind of what happens after they become a customer and it really was a 3 60 view. I think that 3 60 view gets extended to not just to the customers, but also tools and the products they use. And then, of course, the performance information that could come back to the manufacturer. So, you know, as an engineer, one of the things you learn about with systems is the following. And if you remember, when the CD first came out CDs that used to talk about four times over sampling or eight times over sampling and it was really kind of, you know, the fidelity the system. And we know from systems theory that the best way to improve the performance of a system is to actually have more feedback. The more feedback you have, the better system could be. And so that's why you get 16 60 for example, etcetera. Same thing here. The more feedback we have of different parts of a company that a better performance, The company will be better customer relationships. Better, uh, overall financial performance as well. So that's that's the view I have of how these systems all tied together. >>It's a great vision in your point about the data is I think right on. It used to be so fragmented in silos, and in order to take a system view, you've gotta have a system view of the data. Now, for years, we've optimized maybe on one little component of the system and that sometimes we lose sight of the overall outcome. And so what you just described, I think is, I think sets up. You know very well as we exit. Hopefully soon we exit this this covert era on John. I hope that you and I can sit down face to face at a PTC on shape event in the near term >>in the seaport in the >>seaport would tell you that great facility toe have have an event for sure. It >>z wonderful >>there. So So John McElhinney. Thanks so much for for participating in the program. It was really great to have you on, >>right? Thanks, Dave. >>Okay. And I want to thank everyone for participating. Today we have some great guest speakers. And remember, this is a live program. So give us a little bit of time. We're gonna flip this site over toe on demand mode so you can share it with your colleagues and you, or you can come back and and watch the sessions that you heard today. Uh, this is Dave Volonte for the Cube and on shape PTC. Thank you so much for watching innovation for good. Be well, Have a great holiday. And we'll see you next time. Yeah.

>>from around the globe. It's the Cube presenting innovation for good. Brought to you by on shape. >>Okay, we're back. This is Dave Volonte and you're watching innovation for good. A program on Cuba 3 65 made possible by on shape of BTC company. We're live today really live TV, which is the heritage of the Cuban. Now we're gonna go to the sources and talkto on shape customers to find out how they're applying technology to create real world innovations that are changing the world. So let me introduce our panel members. Rafael Gomez Fribourg is with the Chan Zuckerberg bio hub. A very big idea. And collaborative nonprofit was initiative that was funded by Mark Zuckerberg and his wife, Priscilla Chan, and really around diagnosing and curing and better managing infectious diseases. So really timely topic. Philip Tabor is also joining us. He's with silver side detectors which develops neutron detective detection systems. Yet you want to know if early if neutrons and radiation or in places where you don't want them, so this should be really interesting. And last but not least, Matthew Shields is with the Charlottesville schools and is gonna educate us on how he and his team are educating students in the use of modern engineering tools and techniques. Gentlemen, welcome to the Cuban to the program. This should be really interesting. Thanks for coming on. >>Hi. Or pleasure >>for having us. >>You're very welcome. Okay, let me ask each of you because you're all doing such interesting and compelling work. Let's start with Rafael. Tell us more about the bio hub and your role there, please. >>Okay. Yes. As you said, the Bio Hope is a nonprofit research institution, um, funded by Mark Zuckerberg and his wife, Priscilla Chan. Um and our main mission is to develop new technologies to help advance medicine and help, hopefully cure and manage diseases. Um, we also have very close collaborations with Universe California, San Francisco, Stanford University and the University California Berkeley on. We tried to bring those universities together, so they collaborate more of biomedical topics. And I manage a team of engineers in by joining platform. Um, and we're tasked with creating instruments for the laboratory to help the scientist boats inside the organization and also in the partner universities do their experiments in better ways in ways that they couldn't do before >>in this edition was launched five years ago. It >>was announced at the end of 2016, and we actually started operations in the beginning of 2017, which is when I joined um, so this is our third year. >>And how's how's it going? How does it work? I mean, these things >>take time. It's been a fantastic experience. Uh, the organization works beautifully. Um, it was amazing to see it grow from the beginning. I was employee number 12, I think eso When I came in, it was just a nem p off his building and MP labs. And very quickly we had something running about from anything. Eso I'm very proud of the work that we have done to make that possible. Um And then, of course, that's you mentioned now, with co vid, um, we've been able to do a lot of very cool work, um, very being of the pandemic In March, when there was a deficit of testing, uh, capacity in California, we spun up a testing laboratory in record time in about a week. It was crazy. It was a crazy project. Um, but but incredibly satisfying. And we ended up running all the way until the beginning of November, when the lab was finally shut down, we could process about 3000 samples a day. I think at the end of it all, we were able to test about 100 on the road, 150,000 samples from all over the state. We were providing free testing toe all of the Department of Public Health Department of Public Health in California, which, at the media pandemic, had no way to do testing affordably and fast. So I think that was a great service to the state. Now the state has created a testing system that will serve those departments. So then we decided that it was unnecessary to keep going with testing in the other biopsy that would shut down, >>right? Thank you for that. Now, Now, Philip, you What you do is mind melting. You basically helped keep the world safe. Maybe you describe a little bit more about silver side detectors and what your role is there and how it all works. >>Tour. So we make a nuclear bomb detectors and we also make water detectors. So we try and do our part. Thio Keep the world from blowing up and make it a better place at the same time. Both of these applications use neutron radiation detectors. That's what we make. Put them out by a port border crossing Places like that they can help make sure that people aren't smuggling, shall we say, very bad things. Um, there's also a burgeoning field of research and application where you can use neutrons with some pretty cool physics to find water so you can do things like but a detector up in the mountains and measure snowpack. Put it out in the middle of the field and measure soil moisture content. And as you might imagine, there's some really cool applications in, uh, research and agronomy and public policy for this. >>All right, so it's OK, so it's It's much more than you know, whatever fighting terrorism, it's there's a riel edge, or I kind of i o t application for what you guys do. >>You do both Zito shares. You might >>say a mat. I I look at your role is kind of scaling the brain power for for the future. Maybe tell us more about Charlottesville schools and in the mission that you're pursuing and what you do. >>Thank you. Um, I've been in Charlottesville city schools for about 11 or 12 years. I started their teaching, Um, a handful of classes, math and science and things like that. But Thescore board and my administration had the crazy idea of starting an engineering program about seven years ago. My background is an engineering is an engineering. My masters is in mechanical and aerospace engineering. And, um, I basically spent a summer kind of coming up with what might be a fun engineering curriculum for our students. And it started with just me and 30 students about seven years ago, Um, kind of a home spun from scratch curriculum. One of my goals from the outside was to be a completely project based curriculum, and it's now grown. We probably have about six or 700 students, five or six full time teachers. We now have pre engineering going on at the 5th and 6th grade level. I now have students graduating. Uh, you know, graduating after senior year with, like, seven years of engineering under their belt and heading off to doing some pretty cool stuff. So it's It's been a lot of fun building up a program and, um, and learning a lot in the process. >>That's awesome. I mean, you know, Cuba's. We've been passionate about things like women in tech, uh, diversity stem. You know, not only do we need more more students in stem, we need mawr underrepresented women, minorities, etcetera. We were just talking to John her stock and integrate Grayson about this is do you do you feel is though you're I mean, first of all, the work that you do is awesome, but but I'll go one step further. Do you feel as though it's reaching, um, or, you know, diverse base and And how is that going? >>That's a great question. I think research shows that a lot of people get funneled into one kind of track or career path or set of interests really early on in their educational career. And sometimes that that funnels kind of artificial. And so that's one of the reasons we keep pushing back. Um, so our school systems introducing kindergartners to programming on DSO. We're trying to push back how we expose students to engineering and to stem fields as early as possible, and we've definitely seen the fruits of that in my program. In fact, my engineering program, uh, sprung out of an after school in Extracurricular Science Club that actually three girls started at our school. So I think that actually has helped that three girls started the club That eventually is what led our engineering programs that sort of baked into the DNA and also are a big public school. And we have about 50% of the students are under the poverty line, and we should I mean, Charlottesville, which is a big refugee town. And so I've been adamant from Day one that there are no barriers to entry into the program. There's no test you have to take. You don't have to have be taking a certain level of math or anything like that. That's been a lot of fun. To have a really diverse set of kids and or the program and be successful, >>that's phenomenal. That's great to hear. So, Philip, I wanna come back to you. You know, I think about maybe some day we'll be able to go back to a sporting events, and I know when I when I'm in there, there's somebody up on the roof looking out for me, you know, watching the crowd. And they have my back. And I think in many ways, the products that you build, you know, our similar I may not know they're there, but they're keeping us safe or they're measuring things that that that I don't necessarily see. But I wonder if you could talk about a little bit more detail about the products you build and how they're impacting society. >>Sure, So there are certainly a lot of people who are who are watching, trying to make sure things were going well in keeping you safe that you may or may not be aware of. And we try and support ah lot of them. So we have detectors that are that are deployed in a variety of variety of uses with a number of agencies and governments that dio like I was saying, ports and border crossing some other interesting applications that are looking for looking for signals that should not be there and working closely to fit into the operations these folks do Onda. We also have ah lot of outreach to researchers and scientists trying to help them support the work they're doing, um, using neutron detection for soil moisture monitoring is a some really cool opportunities for doing it at large scale and with much less, um, expense or complication then would have been done previous technologies. Mhm. You know, they were talking about collaboration in the previous segment. We've been able to join a number of conferences for that, virtually including one that was supposed to be held in Boston. But another one that was held, uh, of the University of Heidelberg in Germany. And, uh, this is sort of things that in some ways, the pandemic is pushing people towards greater collaboration than there would have been able to do. Had it all but in person. >>Yeah, we did. Uh, the cube did live works a couple years ago in Boston. It was awesome show. And I think, you know, with this whole trend toward digit, I call it the forced march to digital. Thanks to cove it I think that's just gonna continue. Thio grow Raphael one. If you could describe the process that you used to better understand diseases and what's your organization's involvement? Been in more detail, addressing the cove in pandemic. >>Um, so so we have the bio be structured in, Um um, in a way that foster So the combination of technology and science. So we have to scientific tracks, one about infectious diseases and the other one about understanding just basic human biology how the human body functions and especially how the cells in the human body function on how they're organized to create teachers in the body. Um, and then it has the set of platforms. Um, mind is one of them by engineering that are all technology. Read it. So we have data science platform, all about data analysis, machine learning, things like that. Um, we have a mass spectrometry platform is all about mass spectrometry technologies to, um, exploit those ones in service for the scientists on. We have a genomics platform. That is all about sequencing DNA in our DNA. Um, and then an advanced microscopy. It's all about developing technologies, uh, to look at things with advanced microscopes and the little technologies to marry computation on microscope. So, um, the scientists said the agenda and the platforms we just serve their needs, support their needs, and hopefully develop technologies that help them do their experiments better, faster, or allow them to the experiment that they couldn't do in any other way before. Um And so with cove, it because we have that very strong group of scientists that work on. I have been working on infectious disease before, and especially in viruses, we've been able to very quickly pivot to working on that s O, for example, my team was able to build pretty quickly a machine to automatically purified proteins, and it's being used to purify all these different important proteins in the cove. It virus the SARS cov to virus on Dwyer, sending some of those purified proteins all over the world. Two scientists that are researching the virus and trying to figure out how to develop vaccines, understand how the virus affects the body and all that. So some of the machines we built are having a very direct impact on this. Um, Also for the copy testing lab, we were able to very quickly develop some very simple machines that allowed the lab to function sort of faster and more efficiently. Sort of had a little bit of automation in places where we couldn't find commercial machines that would do it. >>Um, God s o mat. I mean, you gotta be listening to this in thinking about, Okay? Some. Someday your students are gonna be working at organizations like Like like Bio Hub and Silver Side. And you know, a lot of young people that just have I don't know about you guys, but like my kids, they're really passionate about changing the world. You know, there's way more important than, you know, the financial angles and that z e I gotta believe you're seeing that you're right in the front lines there. >>Really? Um, in fact, when I started the curriculum six or seven years ago, one of the first bits of feedback I got from my students is they said Okay, this is a lot of fun. So I had my students designing projects and programming microcontrollers raspberry, PiS and order We nose and things like that. The first bit of feedback I got from students was they said Okay, when do we get to impact the world? I've heard engineering is about making the world a better place, and robots are fun and all, but, you know, where is the real impact? And so, um do Yeah, thanks to the guidance of my students, I'm baking that Maurin. Now I'm like Day one of engineering one. We talk about how the things that the tools they're learning and the skills they're gaining eventually you know, very soon could be could be used to make the world a better place. >>You know, we all probably heard that famous line By Jeff Hammond Barker. The greatest minds of my generation are trying to figure out how to get people to click on ads. E. I think we're really generally generationally finally, at the point where you know young students and engineering and really you know it passionate about affecting society. I wanna get into the product, you know, side and understand how each of you are using on shape and and the value that that it brings. Maybe Raphael, you could start how long you've been using it. You know, what's your experience with it? Let's let's start there. >>I begin for about two years, and I switched to it with some trepidation. You know, I was used to always using the traditional product that you have to install on your computer, that everybody uses that. So I was kind of locked into that, but I started being very frustrated with the way it worked, um, and decided to give on ship chance. Which reputation? Because any change always, you know, causes anxiety. But very quickly my engineers started loving it. Uh, just because it's it's first of all, the learning curve wasn't very difficult at all. You can transfer from one from the traditional product to entree very quickly and easily. You can learn all the concepts very, very fast. It has all the functionality that we needed, and and what's best is that it allows to do things that we couldn't do before or we couldn't do easily. Um, now we can access the our cat documents from anywhere in the world. Um, so when we're in the lab fabricating something or testing a machine, any computer we have next to us or a tablet or on iPhone, we can pull it up and look at the cad and check things or make changes that something that couldn't do before because before you had to pay for every installation off the software for the computer, and I couldn't afford to have 20 installations to have some computers with the cat ready to use them like once every six months would have been very inefficient. So we love that part. And the collaboration features are fantastic. Especially now with Kobe, that we have to have all the remote meetings, eyes fantastic, that you can have another person drive the cad while the whole team is watching that person change the model and do things and point to things that is absolutely revolutionary. We love it. The fact that you have very, very sophisticated version control before it was always a challenge asking people, please, if you create anniversary and apart, how do we name it so that people find it? And then you end up with all these collection of files with names that nobody remembers, what they are, the person left and now nobody knows which version is the right one m s with on shape on the version ING system it has, and the fact that you can go back in history off the document and go back to previous version so easily and then go back to the press and version and explore the history of the part that is truly, um, just world changing for us, that we can do that so easily on for me as a manager to manage this collection of information that is critical for our operations. It makes it so much easier because everything is in one place. I don't have to worry about file servers that go down that I have to administer that have to have I t taken care off that have to figure how to keep access to people to those servers when they're at home. And they need a virtual private network and all of that mess disappears. I just simply give give a personal account on shape. And then, magically, they have access to everything in the way I want. And we can manage the lower documents and everything in a way, that is absolutely fantastic. >>Rafael, what was your what? What were some of the concerns you had mentioned? You had some trepidation. Was it a performance? Was it security? You know, some of the traditional cloud stuff and I'm curious as to how How whether any of those act manifested were they really that you had to manage? What were your concerns? >>Look, the main concern is how long is it going to take for everybody in the team? to learn to use the system like it and buy into it because I don't want to have my engineers using tools against their will write. I want everybody to be happy because that's how they're productive. They're happy and they enjoyed the tools they have. That was my main concern. I was a little bit worried about the whole concept of not having the files in a place where I couldn't quote unquote seat in some serving on site, but that that's kind of an outdated concept, right? So that took a little bit of a mind shift. But very quickly. Then I started thinking, Look, I have a lot of documents on Google Drive like I don't worry about that. Why would I worry about my cat on on shape? Right is the same thing. So I just needed to sort of put things in perspective that way. Um, the other, um, you know, their concern was the learning curve right is like how is he will be for everybody to and for me to learn it on whether it had all of the features that we needed and there were a few features that I actually discussed with, um uh, Cody at on shape on. They were actually awesome about using their scripting language in on shape to sort of mimic some of the features of the old cat, uh, in on shaped in a way that actually works even better than the old system. So it was It was amazing. Yeah. >>Great. Thank you for that, Phillip. What's your experience been? Maybe you could take us through your journey with on shape? >>Sure. So we've been we've been using on shaped Silver Side for coming up on about four years now, and we love it. We're very happy with it. We have a very modular product line, so and we make anything from detectors that would go into backpacks? Two vehicles, two very large things that a shipping container would go through and saw. Excuse me. Shape helps us to track and collaborate faster on the design, have multiple people working a same time on a project. And it also helps us to figure out if somebody else comes to us and say, Hey, I want something new. How we congrats modules from things that we already have. Put them together and then keep track of the design development and the different branches and ideas that we have, how they all fit together. A za design comes together and it's just been fantastic from a mechanical engineering background. I will also say that having used a number of different systems and solid works was the greatest thing since sliced bread. Before I got using on shape, I went, Wow, this is amazing. And I really don't want to design in any other platform after after getting on Lee a little bit familiar with it. >>You know, it's funny, right? I will have the speed of technology progression. I was explaining to some young guns the other day how e used to have a daytime er and that was my life. And if I lost that day, timer, I was dead. And I don't know how we weigh existed without, you know, Google Maps. Eso did we get anywhere? I don't know, but, uh, but so So, Matt, you know, it's interesting to think about, um, you know, some of the concerns that Raphael brought up, you hear? For instance, you know, all the time. Wow. You know, I get my Amazon bill at the end of the month It's through the roof in. But the reality is that Yeah, well, maybe you are doing more, but you're doing things that you couldn't have done before. And I think about your experience in teaching and educating. I mean, you so much more limited in terms of the resource is that you would have had to be able to educate people. So what's your experience been with With on shape and what is it enabled? >>Um, yeah, it was actually talking before we went with on shape. We had a previous CAD program and I was talking to my vendor about it, and he let me know that we were actually one of the biggest CAD shops in the state. Because if you think about it a really big program, you know, really big company might employ 5, 10, 15, 20 cad guys, right? I mean, when I worked for a large defense contractor, I think there were probably 20 of us as the cad guys. I now have about 300 students doing cat. So there's probably more students with more hours of cat under their belt in my building than there were when I worked for the big defense contractor. Um, but like you mentioned, uh, probably our biggest hurdle is just re sources. And so we want We want one of things I've always prided myself and trying to do in this programs provide students with access two tools and skills that they're going to see either in college or in the real world. So it's one of the reason we went with a big professional cad program. There are, you know, sort of k 12 oriented software and programs and things. But, you know, I want my kids coding and python and using slack and using professional type of tools on DSO when it comes to cat. That's just that that was a really hurt. I mean, you know, you could spend $30,000 on one seat of, you know, professional level cad program, and then you need a $30,000 computer to run it on if you're doing a heavy assemblies, Um, and so one of my dreams and it was always just a crazy dream. And I was the way I would always pitcher in my school system and say someday I'm gonna have a kid on a school issued chromebook in subsidized housing on public WiFi doing professional level bad and that that was a crazy statement until a couple of years ago. So we're really excited that I literally and, you know, march in, um, you said the forced march the forced march into, you know, modernity, March 13th kids sitting in my engineering lab that we spent a lot of money on doing. Cad March 14th. Those kids were at home on their school shoot chromebooks on public WiFi, uh, keeping their designs going and collaborating. And then, yeah, I could go on and on about some of the things you know, the features that we've learned since then they're even better. So it's not like this is some inferior, diminished version of the cat. And there's so much about it, E >>wanna I wanna ask you that I may be over my skis on this, but we're seeing we're starting to see the early days of the democratization of CAD and product design. It is the the citizen engineer. I mean, maybe insulting to the engineers in the room, but but is that we're beginning to see that >>I have to believe that everything moves into the cloud. Part of that is democratization that I don't need. I can whether you know, I think artists, you know, I could have a music studio in my basement with a nice enough software package. And Aiken, I could be a professional for now. My wife's a photographer. I'm not allowed to say that I could be a professional photographer with, you know, some cloud based software. And so, yeah, I do think that's part of what we're seeing is more and more technology is moving to the cloud >>Philip or Rafael anything. Your dad, >>I think I mean yeah, that that that combination of cloud based cat and then three D printing that is becoming more and more affordable on ubiquitous It's truly transformative, and I think for education is fantastic. I wish when I was a kid I had the opportunity to play with those kinds of things because I was always the late things. But, you know, the in a very primitive way. So, um, I think there's a dream for kids Thio to be able to do this. And, um, yeah, there's so many other technologies coming on, like Arduino and all of these electronic things that live. Kids play at home very cheaply with things that back in my day would have been unthinkable. >>So we know there's a go ahead. Philip Way >>had a pandemic and silver site moved to a new manufacturing facility this year. I was just on the shop floor, talking with contractors, standing 6 ft apart, pointing at things. But through it all, our CAD system was completely unruffled. Nothing stopped in our development work. Nothing stopped in our support for existing systems in the field. We didn't have to think about it. We had other server issues, but none with our, you know, engineering cad, platform and product development and support world right ahead, which was cool, but also a That's point. I think it's just really cool what you're doing with the kids. The most interesting secondary and college level engineering work that I did was project based. It's an important problem to the world. Go solve it and that is what we do here. That is what my entire career has been. And I'm super excited to see See what your students are gonna be doing, uh, in there home classrooms on their chromebooks now and what they do. Building on that. >>Yeah, I'm super excited to see your kids coming out of college with engineering degrees because yeah, I think that project based experience is so much better than just sitting in a classroom, taking notes and doing math problems on. And I think he will give the kids a much better flavor What engineering is really about. Think a lot of kids get turned off by engineering because they think it's kind of dry because it's just about the math for some very abstract abstract concept, and they are there. But I think the most important thing is just that. Hands on a building and the creativity off, making things that you can touch that you can see that you can see functioning. >>Great. So you know, we all know the relentless pace of technology progression. So when you think about when you're sitting down with the folks that on shape and there the customer advisor for one of the things that you want on shape to do that it doesn't do today >>I could start by saying, I just love some of the things that does do because it's such a modern platform and I think some of these, uh, some some platforms that have a lot of legacy and a lot of history behind them. I think we're dragging some of that behind them. So it's cool to see a platform that seemed to be developed in a modern era. And so that's, you know, it is the Google docks. And so the fact that collaboration and version ing and link sharing is, and, like, platform agnostic abilities the fact that that seems to be just built into the nature of the thing so far, that's super exciting as far as things that it to go from there, Um, I don't know. >>Other than price, >>you can't say I >>can't say lower price. >>Yeah, so far on a PTC s that worked with us. Really well, so I'm not complaining. There. You there? >>Yeah. Yeah. No Gaps, guys. Whitespace, Come on. >>We've been really enjoying the three week update Cadence. You know, there's a new version every three weeks and we don't have to install it. We just get all the latest and greatest goodies. One of the trends that we've been following and enjoying is the the help with a revision management and release work flows. Um, and I know that there's more than on shape is working on that we're very excited for, because that's a big important part about making real hardware and supporting it in the field. Um, something that was cool. They just integrated Cem markup capability In the last release that took, we were doing that anyway, but we were doing it outside of on shapes, and now we get to streamline our workflow and put it in the CAD system where we're making those changes anyway, when we're reviewing drawings and doing this kind of collaboration. And so I think from our perspective, we continue to look forward toa further progress on that. There's a lot of capability in the cloud that I think they're just kind of scratching the surface on you. >>I would. I mean, you're you're asking to knit. Pick. I would say one of the things that I would like to see is is faster regeneration speed. There are a few times with comics necessities that regenerating the document takes a little longer than I would like to. It's not a serious issue, but anyway, I'm being spoiled, >>you know. That's good. I've been doing this a long time and I like toe Ask that question of practitioners and to me, it it's a signal like when you're nit picking and that you're struggling to knit. Pick that to me is a sign of a successful product. And And I wonder, I don't know, uh, have the deep dive into the architecture, But are things like alternative processors? You're seeing them hit the market in a big way. Uh, you know, maybe a helping address the challenge, But I'm gonna ask you the big, chewy question now, then would maybe go to some audience questions when you think about the world's biggest problems. I mean, we're global pandemics. Obviously top of mind. You think about nutrition, you know, feeding the global community. We've actually done a pretty good job of that. But it's not necessarily with the greatest nutrition climate change, alternative energy, the economic divides. You've got geopolitical threats and social unrest. Health care is a continuing problem. What's your vision for changing the world and how product innovation for good can be applied to some of the the problems that that you all are passionate about? Big question. But who wants toe start >>not biased. But for years I've been saying that if you want to solve the economy, the environment, uh, global unrest, pandemics education is the case If you wanna if you want to, um, make progress in those in those realms, I think funding funding education is probably gonna pay off pretty well. >>Absolutely. And I think stem is key to that. I mean, all of the, ah lot of the well being that we have today and then industrialized countries, thanks to science and technology, right, improvements in health care, improvements in communication, transportation, air conditioning. Um, every aspect of life is touched by science and technology. So I think having more kids studying and understanding that is absolutely key. Yeah, I agree, >>Philip, you got anything they had? >>I think there's some big technical problems in the world today, Raphael and ourselves there certainly working on a couple of them. Think they're also collaboration problems and getting everybody doing ableto pull together instead of pulling, pulling separately and to be able to spur the idea is onwards. So that's where I think the education side is really exciting. What Matt is doing and and it just kind of collaboration in general when we could do provide tools to help people do good work? Uh, that is, I think, valuable. >>Yeah, I think that's a very good point. And along those lines, we have some projects that are about creating very low cost instruments for low research settings places in Africa, Southeast Asia, South America so that they can do, um, um, biomedical research that it's difficult to do in those place because they don't have the money to buy the fancy lab machines that cost $30,000 an hour. Um, so we're trying to sort of democratize some of those instruments. And I think thanks to tools like Kahn shaped and is easier, for example, to have a conversation with somebody in Africa and show them the design that we have and discuss the details of it with them. Andi, that's amazing. Right? To have somebody you know, 10 time zones away, Um, looking really life in real time with you about your design and discussing the details or teaching them how to build a machine. Right? Because, um, you know, they have a three d printer. You can you just give them the design and say, like, you build it yourself, uh, even cheaper than and, you know, also billing and shipping it there. Um, so all that that that aspect of it is also so super important, I think, for any of these efforts to improve, um, some of the hardest part was in the world from climate change. Do you say, as you say, poverty, nutrition issues? Um, you know, availability of water. You have that project at about finding water. Um, if we can also help deploy technologies that teach people remotely how to create their own technologies or how to build their own systems that will help them solve those forms locally. I think that's very powerful. >>Yeah, that point about education is right on. I think some people in the audience may be familiar with the work of Erik Brynjolfsson and Andrew McAfee, the second machine age where they sort of put forth the premise that, uh, is it laid it out. Look, for the first time in history, machines air replacing humans from a cognitive perspective. Machines have always replaced humans, but that's gonna have an impact on jobs. But the answer is not toe protect the past from the future. Uh, the answer is education and public policy. That really supports that. So I couldn't agree more. I think it's a really great point. Um, we have We do have some questions from the audience. If if we can. If I can ask you guys, um, you know, this one kind of stands out. How do you see artificial intelligence? I was just talking about machine intelligence. Um, how do you see that? Impacting the design space guys trying to infuse a I into your product development. What can you tell me? >>Um, absolutely. Like, we're using AI for some things, including some of these very low cost instruments that will hopefully help us diagnose certain diseases, especially this is that are very prevalent in the Third World. Um, and some of those diagnostics are these days done by thes armies of technicians that are trained to look under the microscope. But, um, that's a very slow process. Is very error prone and having machine learning systems that can, to the same diagnosis faster, cheaper and also little machines that can be taken to very remote places to these villages that have no access to a fancy microscope to look at a sample from a patient that's very powerful, and I we don't do this. But I have read quite a bit about how certain places air, using a Tribune attorneys to actually help them optimize designs for parts. So you get these very interesting looking parts that you would have never thought off. A person would have never thought off, but that are incredibly light ink earlier strong and I have all sort of properties that are interesting thanks to artificial intelligence machine learning in particular, >>yet another, uh, advantage you get when when your work is in the cloud I've seen. I mean, there's just so many applications that so if the radiology scan is in the cloud and the radiologist is goes to bed at night, radiologist could come in in the morning and and say, Oh, the machine while you were sleeping was using artificial intelligence to scan these 40,000 images. And here's the five that we picked out that we think you should take a closer look at or like Raphael said. I can design my part. My, my, my, my, my you know, mount or bracket or whatever and go to sleep. And then I wake up in the morning. The machine has improved. It for me has made it strider strider stronger and lighter. Um And so just when your when your work is in the cloud, that's just that's a really cool advantage that you get that you can have machines doing some of your design work for you. >>Yeah, we've been watching, uh, you know, this week is this month, I guess is aws re invent and it's just amazing to see how much effort is coming around machine learning machine intelligence. You know, Amazon has sage maker Google's got, you know, embedded you no ML and big query. Certainly Microsoft with Azure is doing tons of stuff and machine learning. I think the point there is that that these things will be infused in tow R and D and in tow software products by the vendor community. And you all will apply that to your business and and build value through the unique data that your collecting you know, in your ecosystems. And and that's how you add value. You don't have to be necessarily, you know, developers of artificial intelligence, but you have to be practitioners to apply that. Does that make sense to you, Philip? >>Yeah, absolutely. And I think your point about value is really well chosen. We see AI involved from the physics simulations all the way up to interpreting radiation data, and that's where the value question, I think, is really important because it's is the output of the AI giving helpful information that the people that need to be looking at it. So if it's curating a serious of radiation alert, saying, Hey, like these are the anomalies you need to look at eyes it, doing that in a way that's going to help a good response on. In some cases, the II is only as good as the people. That sort of gave it a direction and turn it loose. And you want to make sure that you don't have biases or things like that underlying your AI that air going to result in, uh in less than helpful outcomes coming from it. So we spend quite a lot of time thinking about how do we provide the right outcomes to people who are who are relying on our systems? >>That's a great point, right? Humans, air biased and humans build models, so models are inherently biased. But then software is hitting the market. That's gonna help us identify those biases and help us, you know? Of course. Correct. So we're entering Cem some very exciting times, guys. Great conversation. I can't thank you enough for spending the time with us and sharing with our audience the innovations that you're bringing to help the world. So thanks again. >>Thank you so much. >>Thank you. >>Okay. You're welcome. Okay. When we come back, John McElheny is gonna join me. He's on shape. Co founder. And he's currently the VP of strategy at PTC. He's gonna join the program. We're gonna take a look at what's next and product innovation. I'm Dave Volonte and you're watching innovation for good on the Cube, the global leader. Digital technology event coverage. We'll be right back

>> Narrator: From around the globe, it's theCUBE. With digital coverage of UiPath Live, the Release Show. Brought to you by UiPath. >> Every body welcome back, to this special presentation, theCUBE has been covering the RPA space for quite some time. UiPath just had recently a huge launch, and Daniel Dines, as the CEO and founder of UiPath, has set forth the vision, of a robot for every person. (Giggles) pretty substantial goals that he has. And Brandon Node is here. He's the Senior Vice President of Product at UiPath. Brandon, good to see you. Thanks for coming on. >> Thanks for having me. >> So that is a really ambitious goal. And, we're going to poke at that a little bit, and ask you to sort of defend it. Give us some proof points and help us understand sort of why you guys are so confident in this vision. You guys obviously the leader in RPA, growing like crazy, you've shared some metrics, very transparent. So we'd love to have these transparent and open honest computation. So I'm going to start with just sort of the basic, I mean, people understand RPA, just as in terms of automating a lot of mundane tasks, these tasks, you know, are often very repetitive or rules based. They're sort of interacting with existing applications. Now, in the early days of RPA, these are stable legacy apps with people sitting in front of a screen. So I guess my first question to you is, you know, some of the criticisms of RPA have been that if the app changes, you know, the robot breaks. So, first of all, is that the correct way to be thinking about the state of RPA. Today, is that an outdated view? And let's get into it so we can understand how we achieve robot for every person. >> Your thought sure. So I think it's a fair point in that RPA, by definition is built on top of applications. And it's always been the case that you need to be in coordination with your release teams with the application teams to understand what's happening there. Do I think it's a fair statement on where the industry is? I don't think so I think that is a small component of what the center of excellence looks at. And when you look at RPA, at scale today, there are many considerations governance, change management training, things that make these companies successful and these companies that are embracing it as part of their strategic plan for digital transformation. So for sure, it's a part of the story. But I would say, it's just a small part, the bigger part of the story is really about how you bring RPA into the culture. And that's what I think we'll talk about some more with the robot for every person. >> Yeah, definitely. You know, and I want to get back into that sort of how you make RPA strategic but before we get there, so a lot of people have said. Okay, you know're your interacting with existing legacy applications stable. There's no problem, you kind of sort of refuted that. But a lot of people also talk about a point into the API economy that API's are really a way that your platform or other your competitors platform can interact with applications. And that begins to sort of widen the opportunity, sort of modernize both infrastructure and applications. Where do where does the API economy, the whole equation? >> Sure. When you look at RPA, we shouldn't look at it as just a narrow set of implementations. RPA is capable of connecting directly to API's directly to it interfaces to you know, mouse and click style integrations as well as deeper levels, connecting directly to the lower levels of the application bypassing the mouse and keyboard entirely. So think about RPA, not just as keyboard and mouse automations, but also benefiting from all of those API's that exists, also being able to span the full spectrum of automation. >> So I want to talk sometimes I joke, you know, tongue in cheek, it's sort of a pejorative, I say, hey, RPA sometimes paves the cow path. But you know, what if my cow path works, and I can pave it and allows me to go faster and automate. So what? There's other opportunities I can I can attack. So my question is, where are you seeing people really applying RPA today, and how rapidly are they going forward? You know, really transforming. You mentioned digital transformation. And you guys announced a ton of product getting into it where do you see them in terms of glomming on to some of those more strategic areas >> Yeah, absolutely. So we've had lots of conversation around what the right methodology is for RPA, kind of like you said, should I just automate the process as it is? Or should I break down the process, assess it, re-engineer it and then automate? And the answer is, we have customers all over the spectrum. And there's a lot to be said for automating the process as is, if a robot can do it in a minute and a half as is. But if I re engineer it, it can do it in a minute flat. Where's your time best spent? And I think the biggest consideration that companies need to have right now with regard to automation is just really around opportunity costs. If I can automate a process as is and put my re-engineering team on to a bigger problem, that's going to get a bigger lift for the organization. ploy those people there, right? So what you end up having is this kind of mosaic of opportunities. How much does it cost to automate? How much does it cost to re engineer? What's my benefit going to be from that automation or from that re engineering, and now you have different tools that you can apply to your backlog. So, for sure, RPA can automate things as it is as is as well as do take that re-engineering approach and make sure that you are getting the most out of that automation. In terms of the strategic nature of it. Again, all over the map. You know, we've always said automate the mundane automate the repeatable. I was a customer before I was an employee, some of my automations were actually my most critical things, the things that I couldn't let fall through the cracks under any circumstances. So while they were maybe relatively easy for a human To do the compliance pick up that I had the guaranteed delivery pick up that I had, to me made it worth it. >> How does artificial intelligence address some of this in terms of, of making RPA more strategic. In one hand, it is going to inject some, simplicity into the process. On the other hand, you know, people cerned about AI, where does it fit? In? What form does it take? Is it natural language processing? Is it? Is it actually taking actions like systems of agency? How should we think about that? >> Sure. I think about it as, again, a spectrum. You know, so many of these questions, there's not a single answer. There. It's really about what you want to accomplish and how you're going to approach it. So for instance, let's say I'm a company and I want to build the next best action AI model or ML model. right, I'm going to start with the data that I have from my operation. So I may want to use RPA. To help extract data out of processes the build repository that I'm going to build my, my model off of, or let's say I, you know, we have customers that are implementing complex models to help with with their customers. And they have those models being surfaced through RPA. So now I have the model, but I want a human to review it before it takes action. I can surface that in an attended automation in a form or something that's pre built that gives the agent guidance on what to do. And then at the fully autonomous side, you have AI and ML models attached to chat bots that are hooked into RPA processes that can service customers in real time. >> You know, I want to ask you about sort of Product versus platforms in their, their book, the second Machine Age Andy McAfee and Erik brynjolfsson MIT professors years ago sort of laid out, they said products or platforms beat products. And I think a lot of the criticisms of EA around point products, you guys made a big deal. In your your last release, you didn't really talk specifically about this. But to me, my one of my takeaways is, you're building out a platform, you talked about a spectrum. You know, you've got, you know, studio x versus low code, you've got your studio, which is for RPA developers, you got Studio Pro, for hardcore, you know what to do quality assurance, so you've really got a spectrum of capabilities. So it strikes me that one of the ways in which you get to a robot for every person is that you've got a platform that can evolve, you know, with the market. And I wonder if you could sort of talk about that and really try to plug it into that vision that Daniel set out a couple years ago. >> Absolutely. You know, to be honest, this always been a blessing and a curse for us, right? When you install UiPath, you have all of these tools, all of these capabilities. And you've got some places that you can start immediately we place a number of pre existing code bases and modules up on our marketplace. For instance, we have sample code that you can use that we provide. But still, you need to take the platform and customize it for your applications for your business. And when we talk about the platform mindset, really what our primary goal is, is to build something robust enough, flexible enough, reliable enough that any company can use it within their operations. And you see that that's borne out on our customer list that we publish. And we talked about, you have every industry covered, every region covered, and and that's our Challenge is really to make something robust enough to be everywhere, but intuitive and understandable enough that anyone can pick an entry point and begin to use that platform. >> So when we talk about a robot for every person, I want to know better definition around a person we talking about every worker, or is it even more sort of ambitious. >> More ambitious, because it's not just a worker, an employee, it includes students, teachers, take the broadest definition. And think about how taking advantage of automation or being able to write your own automations is beneficial. There's, there's no limit my son is in first grade. He's taking a class right now as part of his curriculum, on the basics of coding. He's doing loops and retries and step based algorithm. Islamic teaching, this is something that's ubiquitous, this applies to everybody. >> That's awesome. Scary at the same time. [Laughter] So I'm talking about this idea of bringing your own AI to the equation. You guys referenced that a little bit of your kind of fabric approach. But can you clarify sort of how you see that playing out? >> This goes straight back to the platform concept, right? If it's the case, that you already have an existing model, and I talk to customers almost daily, who have some form of intelligence existing within their platform today, right? It could be a model that helps with payment processing. Could be that next best action model, right? Data science has been on its own rocket ship for the past couple decades. And by now, most enterprise companies already have models that they're using. Or somewhere or something, we don't want to come in and say, rebuild that model with us. We're not a takeout company. We're an integration company. So we want you to be able to use those existing models, connect them directly to orchestrator. And once it's connected to orchestrator, that means that your developers can access those models directly within the automations that they're writing. So the ability to attach what you already have, those assets that you've already been working on, and make it one click, one drag and drop accessible to your developers is huge. >> It is huge. I mean, I think that's you can observe markets, the ones that have less friction in terms of, you know, their deployments tend to have greater adoption, you're not asking people to rip and replace. This is really sort of additive and you can get some quick wins. I want to come back to mentioned, you know, security, you mentioned that you've got to be in sync with your your teams. What's the right regime? I'm particularly interested in the security and compliance piece because a lot of times users when they hear it security, compliance governance, they go slow me down, say no. How do you help square that circle? >> Yeah, it's a great question. And it's funny because the narrative has changed so much. A year and a half ago, we were educating people on you know, the fact that robots won't go rogue, they won't. All of a sudden just start doing things that you haven't told him to do or haven't programmed in. Right. It was very much a fear of the unknown. I don't have those conversations anymore. Now the conversations with customers are really around. I will enable people to build around automations. I wanted to democratize RPA but I don't want people to automate things. That I don't want them to, for instance, I have a legacy database, it has a limited amount of bandwidth of capacity. So if all of my developers hit that database at once, I could slow down the the access to that database. So maybe I want to blacklist that from my development environments, because that's off limits for automation. And from our standpoint, we're completely okay with this. We want customers to use RPA for the right tools for their organization and give them the ability to build governance into the development tools and into the overall framework, so that it's very much in line with what their expectations. >> Brandon, I really appreciate you helping me wrap up this sort of RPA market analysis, the post UI path, Folks, you can you can DM me @DaveVellante or hit me on Twitter, and you know, love to hear your comment. UiPath as I've said, very open and transparent in the organization, go hit them up, challenge them as I have. Brandon again, thanks so much for for coming on theCUBE and helping us with this program. >> Great. Thanks for having me. It's always great to be here. All right, you're welcome. And thank you everybody for watching Dave volante for theCUBE. We'll see you next time. [Smooth Music]

>> Announcer: From theCUBE studios in Palo Alto and Boston, connecting with thought leaders all around the world, this is a CUBE Conversation. >> Hi, I'm Stu Miniman, and welcome to a CUBE Conversation. We always love talking to founders of companies. We love supporting the Boston-area community, but even more, right now, we're of course talking to leaders in the industry about some of the challenges facing with the global pandemic, so, happy to welcome to the program first-time guest Paulo Rosado, who is the founder and CEO of OutSystems. You are based in Boston, your company is global. Paulo, thanks so much for joining us, and let's start out talking about kind of the age we are in right now and how you are supporting your customers, your employees, and the developer community that you engage with. >> Absolutely, and it's a pleasure to be here, Stu. Actually, since the 23rd of March, that our 1,100 employees are all working remote, so we've had more than 1,000 Zoom calls logged, at least among the people that I know. And we have dogs and kids everywhere, and we have to adjust, 'cause we have a lot of new parents, so the kids are all over them and whatever. But actually, productivity and morale is really at a high rate. The business is going really, really well. However, as in a very OutSystems type of way, actually, because we're so fast building these digital solutions that we've launched a program with our partners. We asked them for ideas, we got more than 200 ideas coming in, and we're sponsoring 20 of those ideas. One of them is with Deloitte, for instance, where we fundamentally, in one week, they've created a full logistics system to manage all the supplies within 16 municipalities, including ventilators, masks, PPEs and the like. >> Well, that's great to hear, right. So if people want to find out more on the OutSystems website, it's the COVID-19 Community Response Program, and love to see, Paulo, we're going to talk a bit about OutSystems and what you're doing for customers. Of course, the speed of development of new applications is what your company's been doing for a long time, and it kind of becomes a little bit bromide that we talk about, "Oh, well, software's eating the world." Well, in challenging times, how is software hoping to meet the challenges that communities, municipalities, employees, companies need to survive in these challenging situations? So anything else you want to talk about, kind of the community program? >> Yeah, well, so what we did is we opened up the community, worldwide community, actually, because today we serve about 60 countries, and so we wanted to have projects that really add impact. We had a couple from Germany, and some from Asia, and it's amazing. Today, we have sponsored 14, so we have 14 scalable installations already running. Some of these projects have gone live, some are still in development. But what's interesting is that the 200,000-plus communities, that they're getting together. We have all these virtual teams, subject matter experts, relationships with house officers and house offices, and developers, and we're just churning away. And the innovation of the people when they have, actually, something that they can build real solutions fast, they can iterate on top, it's absolutely amazing. And it's our contribution, also, to the world here, really. >> Yeah, very important, Paulo, thank you for doing that. Boy, I think, Paulo, you started the company back in 2001. The discussion around software and developers was rather nascent back in those days. So bring us a little bit through the journey of the company, if you would, and some of the major things that are different now in, really, you're entering the third decade of the company, so bring us back to some of the early days, as well as, what is significantly different today? >> Actually, the idea that we had initially was very much the one that has become truth. We were just about 14 years ahead of the market. So the company's called OutSystems because at the time, we believed that a large percent of systems would migrate out of the data center. That is what today is called the cloud. We believed, at the time, based on all the evidence, that a lot of software that companies were going to be building needed to be done in a very agile way, which is, you need to build fast, but not only build fast, but change very, very fast. And it took us a while until we reached about three to four years ago, when suddenly, everything became agile. Suddenly, everything that you build, all the software that you build, you no longer had one year or 18 months to build this project. Now, you had weeks, and those times have been compressing. And so, what's happening now is we encounter ourselves in a world where companies increasingly want to build more software because they want to be differentiated, they want to compete, but the talent available and the speed they have to build these pieces of software are becoming more and more challenging, and we help a lot in doing that. We are the most mature, the most advanced no-code/low-code platform in the market. And so, it's a great time for us now. >> Yeah, Paulo, I'd like to help understand software development, application modernization are very important topics for a number of years now. I think back to last year, Satya Nadella on stage at Microsoft Ignite, and he was talking about just the massive amounts of new applications that would be built over the next few years. And it's interesting, a company like Microsoft that, you go back 10 years ago, it'd be like, "Well, you'll be using all of our software, "not thinking about building your own software." So you've got partnerships with the public cloud providers, there's all sorts of new partners as well as competitors entering the space. So help us understand kind of where OutSystems fits in this ecosystem and differentiates itself from some of the other noise that's out there. >> No, absolutely. Well, we've woken up a lot of giants, definitely, with this approach. One of the differentiators is that these platforms are actually pretty hard to build, and so, if you look into what Satya said in that particular conference, he was mentioning the fact that fundamentally, every company needs to become a cloud software company. But in order for you to become a cloud software company, you need a very large number of talent skills. You need good web developers, front-end developers, back-end developers. You need to have people who understand DevOps, you need to understand scalability, security, all of these things. You can do that with the tens and even hundreds of tools that are in the market, but what the platform like OutSystems stands up by doing is ends up abstracting a lot of debt and just gives you a very fast capacity for you to build your mobile applications, your pricing engines, your workflows, your portals, in a very fast way. So leveraging the people that you have, leveraging the unique knowledge of the business that you have, and letting you catch up to disruptors that really have all those technical skill sets that today are so rare. >> Yeah, and I'd love to hear, tell us a little bit about your customer base. So you've been around for many years, so I'm sure it is quite diverse, but how many customers does OutSystems have? If you've got a key use case or two that might help us understand where this low-code/no-code solution is helping them through their journey. >> Oh, absolutely, we have companies like Safeway, Chevron, T-Mobile. All of them have somehow different use cases, because we are in the business of innovation, and so, whatever you want to innovate with, you innovate typically with OutSystems. We have a particular company which is the largest oil and gas terminal management company in the world. They have 73 terminals. And one of the things they built was a full ERP, a full platform, digital platform, to manage all logistics of the tankers that come into the ports, deploy the oil in the reservoirs, and then having trucks that come and take the oil away. It's a very complex business, and they were looking at, fundamentally, a four- to six-year project to build this, and they did it in seven months. And so, these type of compressions of time for these very large systems is a huge, huge differentiator. Then we have, on the other hand, companies that have built their front ends, typically mobile applications integrated with web applications, and those applications change, fundamentally, almost every day or every week. We have a bank, for instance, that's releasing a version per day in their applications. That speed of development gives them a huge competitive advantage but puts a lot of pressure on the stack and all the IT that's needed, and we help there because of the platform. >> Yeah, Paulo, we've been talking for years about some of the transformations that companies are going through, and that application transformation really is one of the bigger challenges that they face along those lines. In some of the events I go to, the communities I look at, there's a lot of talk about how containerization in Kubernetes is helping to move the infrastructure team to get ready for this. Of course, we've talked a bit already about how public cloud's changing things. Serverless is a different paradigm for how application developers should think about the platforms they're living on. How does OutSystems kind of plug in to these trends which have come along in the time since you've been out there? >> Oh, very well. The way these platforms work, at least, the way the OutSystems platform works, is that we have an automation layer who's responsible, fundamentally, for compressing time and making things increasingly easier. Basically, just give an IT department or company the capacity to build things 100 times faster. But underneath, we actually use the newest architectures that give us high scalability, also scaling resilience, 99.999% of uptime. And in those cases, for instance, for that, we use containers, Linux, Docker, all of those type of technologies. We run standard on AWS, we also run on Azure. And so, we can provide automation, but underneath, we're fundamentally using the same tools that all enterprise-grade architects are using. >> Okay, great, Paulo. Last question I have for you, give us a little bit your outlook on the future of software development, what we should be looking at when it comes to OutSystems and your community. >> Well, actually, it's not only about OutSystems, it's all about development of the software. We believe, and we see evidence of it, that while software development used to be done by some elites about 10, 15 years ago, today, every company needs to build their own software. And more than 65% of new software that's going to be built in the next three to five years is going to be done with a no-code or low-code platform. That's just too much, you just need that speed, you don't have enough talent. And actually, what we see, and we're doing a lot of research there, is that complementing the developers, we're seeing more and more AI bots that actually assist development in a lot of the boring tasks that are part of the development and deployment cycle, like validation of code, automatic testing, creating the right patterns of architecture for high scalability and maintainability. We're introducing a lot of those things in the platform. So in the next years, we believe we'll see more and more developers being helped by artificial intelligence bots, therefore progressing in that 100X to 1,000X automation productivity enhancement. >> Well, I tell you, you're hitting on one of our favorite topics to talk about. (Paulo chuckles) We did an event years ago with Andy McAfee and Erik Brynjolfsson from MIT, talking about how it really is about racing with the machines. So I've seen things that said, "Oh, computer programmers, you're the next things "that are going to be replaced by robots." And what I'm hearing from you is, of course, what we know is that really it is the combination of people plus this software that are really going to supercharge things going forward. And you're nodding, so you would agree. >> That's exactly it. And we already have evidence of that because we have a lot of our AI is already deployed inside the platform, and so we're measuring, we're learning with it. And we can see tremendous, almost exponential improvements. It's almost as if a developer, as they're creating these functional requirements, gets augmented with an extra brain. So it really works, and it's time now, it's reaching time for AI to be used to help the software development cycle. >> Right, well, Paulo, thank you so much for the conversation. Absolutely we hope that these kind of technologies are the ones that are going to help the global economy as we hopefully move forward from the results of the current global situation here. So thank you so much for joining us, and definitely look forward to keeping track of the company in the future. All right-- >> Thank you, Stu, it was a pleasure. Thank you very much. >> Thanks, I'm Stu Miniman, and as always, check out theCUBE.net for all of the digital events, as well as the archives of interviews that we've done, reach out to us if you have any questions, and as always, thank you for watching theCUBE. (upbeat electronic music)

>> Live from Las Vegas it's theCUBE, covering Dell Technologies World 2019 brought to you by Dell Technologies and its ecosystem partners. >> Okay welcome back everyone we are here live in Las Vegas with Dell Technology World 2019 and I'm John Furrier and my co-host Dave Vellante breaking down all the action, three days of wall-to-wall coverage. We go all day, all night here at Dell's great event. We're here with the CMO of Dell Technology Allison Dew, great to see you, thanks for coming on. >> My pleasure, it's nice to be here. >> Good to see you again, Allison. >> It's fun. >> What a show, action-packed as always. We got two sets, we call it the theCUBE content cannons. We're just firing off content, a lot of conversations, a lot of boxes being checked, but also growth, lookin' at the numbers. The business performance of Dell is strong. Leadership across all categories, large-scale, and an integrated approach with the products and the relationship with VMware paying off in big-time. Azure News, Microsoft integrating in, so a lot of great product leadership, business results, things are booming at Dell Technologies. >> They really are and you know, when you think about the journey for us in particular over the last three years since starting the EMC combination, and all of the things that are written about integrations, technology integrations of this scale and scope, and you look at what the teams together have successfully done, the business performance, the share growth across categories, and as of today, the true end-to-end solutions that we're announcing in partnership with VMware and Secureworks. And we tend to be a pretty humble culture, but I will say, I think it's a pretty impressive result, when you look at most integrations are focused on don't break anything, and not only did we not break anything, we've kept the trust of our customers, we've continued to grow the customer base, and now we're really focused on, how across the Dell Technologies family, primarily with VMware and Secureworks and Pivotal do we bring to life the solutions that solve our customers' biggest IT problems. Pretty amazing spot to be in. >> You know one of the luxuries of doing theCUBE for 10 years is that we've had conversations over 10 years and I remember many years ago when Michael was about to go private, we saw him in Austin, was a small Dell world back then, we had two conferences, and he was standing there alone. We approached him, Dave and I, and we had a long conversation with him, he was very approachable, and then when he talked about, when he did the private and then the acquisition at these points, everyone was pooh-poohing it at saying, it's a declining market, things are going, why would you want to do this? Obviously the scale benefits are showing, but the macroeconomic conditions of the marketplace, you couldn't be happier for. Public cloud drove a lot of application deployment, you have SAS businesses started, you have on-premise booming, refresh and infrastructure, a complete growth. >> Right. >> Yeah, there's actual growth there. >> Right. >> So the bet paid off. You as a marketer have to market this now, so what's your strategy because you have digital transformation as the kind of standard positioning posture, but as you have to market Dell Technology on the portfolio of capabilities, which is large, I can only imagine it's challenging. >> So let me actually back up, and to one of the points that you talked about, and then I'll answer your actual question. So I can't remember off the top of my head, but we very jokingly talk about, in the era since the PC was declared dead, we have sold billions of PCs right and it would be funnier if I could remember the number, but you know we used to joke around with Jeff Clark, ala Monty Python, I'm not dead yet. >> Yeah. >> And so you get this hype about what's happening in the industry, and the truth is it's actually a very different picture than some of that hype, and one of the reasons I think that's important is because obviously we've continued to take share on the PC business, we've continued to grow there, but we also believe that the hype sometimes applies to these other technology cycles as well. So if you go back a couple of years ago, it was everything was going to the public cloud. If you don't go to the public cloud you are a dinosaur. You don't know what you're doing. You're going to go out of business. The traditional infrastructure companies are going to go out of the business, and to be honest, that is also just nonsense, right. And so if you think about what's evolving, is we believe very firmly that we're going to see the continued growth of a hybrid cloud, multi-cloud world and it's not one thing or the other. And in fact, when you look at all of the research around the economics of doing one or the other, it all becomes workload-dependent. So for some workloads you should go to the public cloud. For some workloads, you should have it on-prem and that conversation may not be as interesting a headline, but it's the truth. >> It's reality actually. >> It's the truth. >> Well it's also reality, the workloads are dictating what the architecture should be or the solutions. That's what you're saying is a reality. >> Exactly, and so that's why we're so excited about the announcements that we had this morning with VMware, with Microsoft. We're really talking about a multi-cloud, hybrid cloud world, and across all of the solutions that we announced this morning. The key, continuity and what we're really focused on, sounds so hackneyed, is how do we make it simpler for our customers? How do you make it simpler to manage and deploy PCs? How do you make it simpler to manage and deploy your cloud environment, that's it. >> So let's talk about the show a little bit, let's see 15,000 attendees, 122 countries represented, 4,000 channel partners, 250 industry analysts and media folks, so pretty big numbers. You could see it in the hallways. It's not quiet. You're kind of doing a lot of this. >> It's actually sort of hard to pay attention to you guys with all the noise in the background. You must be used to it. I'm like a goldfish, like what's happening? >> Now the interesting thing to me is, and we were talking about you know, it's the transitions, consolidations, oh it's traditional infrastructure companies are dead, et cetera, et cetera. I'd observe that over the years the testament of today's leaders is they respond, they don't just sit back and say oh Unix is snake-oil. Do you remember that famous quote? Look at what Microsoft has done, but my point is Michael's keynote today, it wasn't about a bunch of products, it was about big visions, solving a lot of the world's problems, and really conveying that Dell is in a position to help these companies as a partner. I presume you had some input to that keynote, I just wonder. >> I hope so. (laughs) >> What the thinking was there? >> So there's a lot of conversation and it's, you don't have to go that far in the media to read everything about technology as a force of evil in the world. One of the things that you notice, Michael's keynote this morning and I'll come back to what we're doing about it again later this week, is we are putting a very firm stake in the ground that we believe that technology is overall a force for positive change in the world and we're having a conversation about that on Wednesday that I'll talk a little bit more about in a second. And there's a subtlety there, that I think sometimes again, may not be the most interesting headline but is true, which is technology in aggregate drives great progress in the world, however we as leaders, we as humans, also have a responsibility to drive the responsible use of technology and so you see some of the conversations that we're having later this week in the Guru sessions, for example, where Joy Bilal-Meany is talking about responsible use of AI and some of the inherent biases in AI. Those are the tough issues that leaders need to be tackling now. >> Yeah well and one of the other you know, you're right a trade press loves to pick up on it and pick at it but one of the things to talk about, of course, is jobs, automation affecting jobs, I know Erik Brynjolfsson is one of your speakers, he's been on theCUBE before, and the discussion we had was machines have always replaced humans. For the first time ever,now they're replacing humans in cognitive functions. So the the answer is not protect the past from the future it's educate people, find new ways to be creative. I mean, technology has always been-- >> That's right. >> Part of human good and human advancement. There's always a two-sided coin, but it's got to be managed. >> That's right, one of the conversations that I think gets lost is when we talk about, I am a Battlestar Galactica fan, the second one not the one from the 70s, so you know I always say jokingly-- >> Darn. >> Yeah, yeah. >> We're a little older. >> Did you watch the one from the 2,000s? >> Yes, of course. >> 2,000s are so good. You know the conversation about are the Cylons coming to get us? And is AI really the thing that's destroying what's happening for human populations? The reality is AI has been evolving for many years, so it's not actually new. What is new is the combination of AI and data and the compute power to make that real and I do think it requires a different conversation with societies, with employers about how do you continue to reeducate your employee base? What does that mean? And that is really meaty stuff that we need to be leaning into. On aside, you've got me thinking of this whole Battlestar Galactica. My mind's thinking Star Trek, Star Wars. I heard a rumor that you guys had so many unhappy employees because Game of Thrones was on yesterday. >> Yeah. >> That you actually rented a big screen? >> Yeah, we did. >> A lot of Game of Thrones fans? Are you in that mix? >> So yeah. >> No spoiler alerts. >> No, I won't say anything about what happened. But I'll tell you, so we have all of our employees who work at the show, have to get here on Saturday or Sunday at the very latest. And even me personally, we came to Las Vegas and I thought, well I can watch it in my hotel room and then my hotel room didn't have HBO and I thought I don't really want to watch it on my little HBO Go app that's about this big because we're all waiting for what's going to happen in episode three, and I won't tell you if you haven't seen it. >> It's a lot of battling. >> So exactly, so my team and I had this conversation about could we have a joint viewing of Game of Thrones and it's really my team who did all of the work, but it was super-fun and we had a party with a bunch of team, had a few beers and it was fun. >> That's a great culture. >> I just wanted to get that out there. I think, cool culture. Allison, you mentioned something about the press and stories for good and how people looking for headlines. You know we're not advertising, so we're not trying to chase the clickbait, it's about getting the story right and sometimes the boring story doesn't get the headlines. Or the page views, advertising. So we're in a world now where a lot of other people in the media, they're censoring posts, there was an incident on Forbes where I wrote a negative post about a company and they took it down, that was Oracle. A lot of journalists looking for stories just to put tech in a bad spot. >> Right. >> And there's a lot of tech for good, but a lot of people can't point to one thing saying that's an example for tech for good and there's some few out there missing children, exploited children, trafficking, all kinds of things, talk about that dynamic because this is changing how you market, how people consume. You have the role of open communities. >> Yep. >> Social networking. A lot of dynamics going on. How do you view all this? >> So first of all, I think so much of the conversation about tech for good or tech for bad actually indexes only on social media and media broadly, and perhaps that's because it's the media who are writing about that. And so there's sort of this loop that we get in and I do think there are real issues that we need to think about in terms of social media. You guys likely saw Kara Swisher had a an op-ed in the New York Times after the Sri Lankan bombings where she, long-term technology advocate, actually said after the Sri Lankan bombings when the government shut down all social media communications, I thought that was a good thing and so that probably actually did help with the immediate situation on the ground and yet is a very scary precedent, right? I'd like to to take the conversation and say what about media? Right, so there's a lot of work that we need to do in order to maintain media fairness and then there's a whole other conversation about technology that we're not talking about. Everything that we're doing in terms of medicine and indexing the human genome, and addressing deafness and Michael talked about that even this morning, there are these really big technology problems that were really leaning into, and yet we're either talking about Amazon drone delivery or what Facebook is doing. We need to talk about those, but let's talk about where technology is really struggling to address real problems. >> I just read an essay yesterday from Dana Boyd who wrote a great fascinating piece around extremism in social media. Media's being hijacked by these extreme groups and they're mixing up causation and correlation and conflating many things to just tell a story to support an initiatives, no curation. >> Right. >> And with social media everything's open so that just flies out there. And so that's a big problem. >> And then takes off, you know. >> So how do you deal with that as a CMO 'cause you're spending advertising dollars. You're trying to deploy capital. You now have a new open source kind of mindset around communities customers are shopping themselves now. >> Right, so this is going to sound possibly a little bit overly simplistic but what I am responsible for in my job is the reputation and brand of this company right. I think about other things in terms of how we think about media and everything but I want to make sure that we are spending our media dollars in a responsible way and yet also recognize that people can disagree with us and that's okay and be comfortable with, we can be both a media advertiser on a publication who might write a review where they don't like one of our products and I'm never going to be in the business of saying take down our media dollars because that sets a terrible precedent and frankly there are people who would say take down our media dollars so that's one thing that we're really focused on. And then the other is, we consistently year-over-year are recognized as one of the world's most ethical companies and I will tell you from the leadership with Michael across the board I believe that that is true. And we actually think about business in an ethical way and we behave in an ethical way and that's why frankly you're not reading those headlines about us which are a lot more problematic. >> It's a cultural thing you guys have. Michael's always been a direct-to-consumer. That's been a direct mail, back in the glory days, now-- >> We still do that actually. >> Cloud, SAS, he texts me all the time. Hey John, what's going on? So he's he's open. >> Yeah. >> He's also now with Cloud and SAS, it's a direct to consumer business. >> I love your positive attitude. You have a session tomorrow, Optimism and Happiness in the Digital Age, looking forward to that. I have a personal question. So you started out your career, I think, in East Asia studies, right? >> That's right, good memory. >> You speak multiple languages. >> Yeah. >> I think three languages? >> If you count English, three. >> Yes okay so you're trilingual. >> Trilingual, yeah. >> If you speak two, you're what? >> Bilingual. >> Speak one, you're what? >> Monolingual, American. (all laughing) American, I was like, I know this joke. >> I wonder how that affected sort of your career? >> Absolutely. >> In terms of getting into this business. >> I would first say that I was an incredibly naive undergraduate. I wanted to be an editor of a paper and I loved foreign languages. So I studied Japanese and French and that led me to going to Japan as a very naive 22 year old and I started working in this small Japanese ad agency. I was the only non-Japanese person in that company and of course I learned some functional things in terms of the art of advertising but what I actually learned was how to survive in an environment that was so different to mine. Even if you speak Japanese, it is a language of unsaid things and you have to constantly be figuring out what's actually happening here and so ironically that decision that I made at 18, very naively, to study Japanese is one of the things that sets the course of my life because I've always been, my entire career, in international jobs and I think if I ever had to come back to just being in an American job, I wouldn't know what to do with myself, I'd be so bored. And it's also one of the reasons when we talk about technology and education and AI and what are robots going to do, This is my personal opinion, somewhat controversial opinion which is of course we need to support STEM, of course I want to see more women in STEM. At the same time, I want to see us focus our children on critical thinking skills. How do you write well? How do you have an argument? How do you convince somebody? And that's because until I went to business school I was a liberal arts major born and bred and so that's not the pat answer that you expect from somebody in my job which is it's all about STEM. It's about STEM and more. >> Emotional quotient's a big thing we're seeing a lot. The whole self. That's a big part of the kids growing up being aware. >> Yeah. >> Socially emotional. Allison, thanks coming on theCUBE and sharing. >> My pleasure. >> Great insights here in theCUBE. We're here with the CMO, Allison Dew, with Dell Technologies. I'm John Furrier, Dave Vellante. Stay with us for more day one coverage after this short break. >> Awesome. (upbeat electronic music)

>> From the SiliconANGLE media office in Boston, Massachusetts, it's theCUBE. Now, here's your host, Stu Miniman. >> Hi, I'm Stu Miniman, and welcome to theCUBE's Boston-area studio. Happy to welcome back to the program two CUBE alums. To my immediate right is Peter Smails, who's the CMO of Imanis Data, and joining him for the segment is Zeus Kerravala, who is founder and Principal at ZK Research. Gentlemen, thanks so much for joining us. >> Thank you. >> Thanks for having me. >> All right, so, we go out to so many shows, we're talking about massive change in the industry. Last two shows I've gone to, really looking at how hybrid and multi-cloud are shaping up, and change, and just the proliferation of options really seems to define what's happening in our industry. And Zeus, want to start with you because you've got some good research which looks at the data side of it. And of course, I'm an infrastructure guy, >> Yeah. >> but the reason we have infrastructure is to run my apps. And the only reason we have apps, really, is behind the data. And that transformation of data, and data at the core of everything, is something that we've loved to cover the last few years. So, what's new on your world? >> Yeah I, in fact, the word you said there, change, is apropos. Because I think I have never seen a time in IT, and I've been an analyst for 20 years and I was a CIO for a while, but I've never seen a period of change like this before. Where digital transformation is reshaping companies as fast as possible. Now, the key to being a successful digital organization is being able to take advantage the massive amounts of data that you have, and then be able to use some machine learning, or other analytic capabilities, to find those nuggets in there to be able to help you change your business process, make people more productive, improve customer service, whatever you're trying to do. I think it really stems from the analytics, that data. Now, what my research has found is that companies are really, and this shouldn't be a big surprise, but companies are really only using a very small slice of their data. Maybe five to 10% at the most in their data. Most data's kept in what's called secondary storage, and there what's happening is this concept called mass data fragmentation. Where we've always had data fragmentation, but it's becoming worse. Where data's now being stored, not only on local computers and servers, but also in the cloud, on IoT devices, out at the edge, within your organization. And so, this concept of mass data fragmentation has exploded. And it's hampering companies' ability to actually make critical decisions to be able to move fast and keep up with a lot of the cloud-native counterparts. And if they don't get a handle on this, they're going to wind falling further and further behind. I think it's absolutely critical today that this challenge of mass data fragmentation be solved. >> Yeah, Peter, want to pull you into this discussion. You talked to a lot of users, and we've talked to you at some of the Hadoop Shows. We look at what's happening in like the database world and there's so many options. >> Yeah. >> I know our team members that keep up to it, they keep spreadsheets. and they're trying to keep up with all of these, but seems like every week there's a new open-source this and that, >> Right, right. >> that's going to capture this segment of the market. But something that I found interesting from one of the previous interviews we'd done with you and your company is it's not that I took my main vendor of choice and I went to one other. It's that today, the database world is like everything else, I'm using a lot. >> Yeah, yeah. >> And it is, and, and therefore, we know that has ripple effects for what I do for security and what I do for things like data protection. Can you give us a little bit of, just kind of a view as to what customers, you know, why are they going to so many applications? What are some of the leading >> Sure. ones in the space? And we know that in IT nothing ever dies, >> and it's, >> Right. >> it tends to be additive. So, how are they dealing with this? >> Yeah, and it picks up directly on what Zeus was just saying before around this notion of fragmentation. So, Imanis Data, the genesis of Imanis Data was really around, if you look at it in the context of cloud, Could 1.0 was, it was essentially, let me take all my legacy applications, lift and shift. Right, let's just take everything on on-prem and let's put it in the cloud. People quickly realized that they were solving the wrong problem. The real answer to the problem was if I want to take advantage of all my data, if I want to take advantage of hybrid-cloud infrastructure. I've got to move from a traditional monolithic stack, application stack, to more of a microservices-based architecture. That led to a very rapid proliferation of new database platforms, both on the Hadoop side for big data, as well as the on the NoSQL side. So, the synergy here in why we like this research so much is because Hadoop, the key message is that Hadoop and NoSQL have both become significant contributors to the mass data fragmentation challenge. And that's really driven, ultimately, by digital transformation and organizations' desire to move to a true hybrid-cloud-based infrastructure. >> How does cloud and this data fragmentation, how does this all go together? >> Oh, our cloud and data fragmentation actually go hand in hand. People thought the cloud was actually solving a lot of their problems, but in a lot of ways it contributed to it, because, as you said, we never get rid of the old. We keep the old around and we add to it. In fact, what I've seen happens is with so many cloud repositories now, users are storing data in the place they were before and then making copies of it in these new cloud services. And in fact, almost all of the new app collaborative applications have their own cloud repositories. So, we've gone from an environment where we had a handful of storage repositories to manage to that absolutely exploding. And I think the cloud itself has matured. I think people are now starting to figure out how to really, to your point, use the cloud in a much different way than before. And so, they're reliant on it. The companies are dependent on it, but if we don't get a handle on where our data is we're going to wind up in a situation where it just becomes unmanageable. >> Yeah, and just to add to that, from additional researches, that according to recent research, 38% of interviewed companies had more than 25 databases. 20% of those same companies had over 100 databases. So, the point is there is a huge fragmentation issue. And if the problem you're trying to solve, ultimately, is insight to your data and intelligence on your business, you've got to create, you've got to solve this problem of fragmentation, because otherwise, you're never going to have any economies of scale. You're never going to be able to give visibility to all your data. That's ultimately the problem that needs to be solved. >> Yeah, it's funny, 'cause you talked about early cloud, and people thought oh, right, I'm going to move everything there and I'll have one cloud, it'll be the cloud. >> The cloud. >> Ah yeah, things like that. And of course, we understand, there's lots of reasons why I'm going to choose multiple solutions. But, too many companies I talk to, when you figure out how they got there. It wasn't like they said, well this is our strategy and we're going to do this, and this, and this. It was, well, different business units have different reasons. Just like I would build infrastructure for my various applications, I would have different groups with different needs. And then, hey IT, can you help us bring all these pieces together? So, how are we doing as an industry for helping customers get their arms around this? Is this just a mess today? Is there a wave, or a trend, as to how we put together, right? Who solves it from a vendor standpoint, and who, from the customer standpoint, kind of has the, is the champion of helping to solve this issue? >> Yeah, I think one of anything is unrealistic, right? And in fact, customers do want choice and they do want options. So, it's not the industry's job to force customers consolidate to one. In fact, it's better to let them use whatever they want. Now, where it becomes, where the work needs to be done now is creating that middleware layer, if you will, or that management layer, that sits above the infrastructure, that gives you the common view. So, I think this mythical single pane of glass we've been searching for for so long, actually, the cloud drives us in that direction, because we do need something to help us give that visibility. I know one of your partners, Cohesity, does that on the secondary storage side to actually make MDF, or mass data fragmentation, manageable. And there's other vendors that do that in other areas, but I think the concept here isn't to try and drive customers into selective choices, but it's to allow them to use whatever they want and then create a management layer over top that gives them that visibility to it looks like one environment. But in fact, it's whatever they want to use underneath. >> Yeah, and picking up on that, the notion of, if you look at the, you asked the question about, sort of, who owns the mantle of driving all this stuff together? And the answer isn't, you could say, oh, the chief data officer. Certain organizations have gone to the level of saying we have a chief data officer and they're trying to drive towards a consolidated strategy. That's a great idea, but, sort of the federation of how things have evolved is actually, is been a good model. Like, a lot of the folks that, from an Imanis Data standpoint, that we speak to, it's architects, it's developers, it's DevOps. And so, from an organizational standpoint, what's happening is you've got to have, over time, you've got to have the application folks, the DevOps folks, the architects, the DBAs, get more closely aligned with your traditional IT and infrastructure folks. That's evolving. And to Zeus' point there, that's not, you're not going to drive them all to one thing, because they have different viewpoints and such, but you need to provide that common layer. Sort of let them do their own thing, but then on the backend be able to sort of provide that common layer to be able to eliminate the backend silos. >> Okay, and drill us down a little bit. We brought up then that the notion of management being able to see across these environments as a piece of the solution, but what is Imanis doing? What are you seeing out there? And, I'll caution, we know a single pane of glass to solve everything is kind of the holy grail, but reality is we need to solve real problems for customers today, and yeah. >> Yeah, and our piece of the puzzle, our piece of the puzzle is Imanis Data is enterprise data management for Hadoop and NoSQL. That's where we focus. We're basically delivering industry-leading solutions for Hadoop and NoSQL. That has led to a very logical collaboration with Cohesity, who's one of the leaders in hyper-converged secondary storage. So, they're trying to provide that common layer of infrastructure to address mass data fragmentation. We see that as, we're the Hadoop and NoSQL folks, so there's a very logical synergy, whereby the combination of Cohesity's solution and Imanis Data's solution essentially then provides, ultimately will provide that single pane of glass. But also, again, at the end of the day provides a common visibility and a common layer to all of your secondary storage whether traditional, relational, VM-based, cloud-based, whether it's your Hadoop and NoSQL-based data. >> Okay, so, bring us back to the customers. We know that simplification is something we want. You know, the cloud world doesn't feel like it's gotten things any simpler. So, where are we? What needs to happen down the road? What more can you share about customers? >> Yeah, I think that's fair to say it hasn't gotten more simple, and in fact, it's gotten more complicated. Everybody I talk to in IT is drowning today in whatever the task is. And I think the point you made of single pane of glass, of remain largely myth, I think the focus is wrong. I don't believe we actually need a single pane of glass that can manage, that can see everything. I think what we need are separate panes of glass that let us see what we need to see. And in fact, the way you guys do that for NoSQL and Hadoop makes some sense. Cohesity has their own that looks at things at more of a higher level, data plate. So, I think we're really in the early innings here, Stu. I think over the next few years, we will see a rise in better management tools and things to help us simplify. I know I just did some research on IT priority for 2019, and simplification actually is now ahead of even cybersecurity as the number one path for today's CIOs. So, I think we've gotten to the point where we've consumed so much stuff, now it's time to simplify it. And there's no one answer for that, but I think within the different departments within IT, they need to look at what those management tools are to let them do that. >> Yeah, I mean, going back, I think back to when I first became an analyst about nine years ago. A central premise is that enterprise IT doesn't necessarily have the skillset to go architect it. They're not a Google or a Yahoo. So, they will spend money from the vendors and the suppliers to help simplify that for them environment. But Peter, I want to ask you, brought up people who are drowning in information. >> Yeah, yes. >> Definitely, we know that today in 2019 there is more going on than they had a year from now, and when we look forward to 2020, we expect that there will be even more. So, the answer in the industry is AI and ML are going to come solve some of this for us. So, to tell us, how does that fits in to these sorts of solutions? >> Sure, and the answer is machine learning and AI will absolutely need to be. Our view is that they're critical pillars to the future of data management. They have to be, because the volume of data and the complexity of the infrastructure within which you're running. You can't, as human beings, we are drowning, and you need tools, you need help to solve this problem. And machine learning and AI are absolutely going to be key contributors. From an Imanis Data standpoint, our approach has been very much about completely avoiding the whole notion of machine learning whitewash. Let's talk about the practical application of machine learning. So, for example, what we do today is we apply machine learning to do what we call ThreatSense. So, it's very specifically applied to the automation of anomaly detection, okay. Build a model of what normal looks like from a backup and recovery standpoint. Anything that falls outside of normal gets flagged, so that administrators can then do something. Provide a human feedback loop to that machine running algorithm, so it can get smarter. We also recently introduced something that we call smart policies. That's about the automation of backup. So, again, it's not about the holy grail of machine learning. In the case of smart policies, it's instead of creating spreadsheets and having a human being trying to figure out how to address a particular RPO, it's tell us what's your RPO and what data do you want to protect. We'll go build a model and we'll address your RPOs, and if we can't, we'll tell you why we can't. So, very practical for today. To the point you made earlier about that fact that we're still in the early innings, today it's about the practical application of machine learning and AI to help people automate processes. >> I think the fear and doom and gloom around AI is, particularly in the IT circles, is completely misguided. I understand why people might think it's going to take their job, but AI and ML is the IT pro's best friend. There's so much data today, they're so much to do, that people just can't connect the dots between those data points fast enough. >> Right. >> Just like you look, today you wouldn't go to a radiologist that doesn't use machine learning to look at your brain scans, right? You know, it's getting harder and harder to work, to be a customer of a company that doesn't use AI or ML to analyze your data, and it becomes very apparent, because they're just not able to provide the same type of service. >> Yeah, totally agree. We've done some events with MIT and a couple of the professors there, Erik Brynjolfsson and Andy McAfee talk about racing with the machines. >> Yeah. >> So, the people that can actually harness and leverage that, the challenge is, if you're in IT and you're working on stuff that's five to 10 years old, and you can't take advantage of those new tools, well, you need to skill up, and you need to get ready. But most companies I talk to, it's not that they're looking to cut half the workforce, it's just that they can't add many more people, so most of them can be reskilled, or heck, if there's some automation they can have in there. There's lots of projects sittin' on the table that they've been trying to do for years. I don't find anybody that ever said, hey, if I could give ya an extra month in the year that you wouldn't have to figure out. >> The question is, do you want to be strategic to your organization, or tactical? And if you want to be tactical, your job's only as long as that tactic, right, so. >> Peter, when I was hearing you walk through some of that ML piece, things like security and ransomware kind of popped into my head. Is that a part of the solution in offer? >> Yeah, absolutely. So, ThreatSense is, specifically, we talk about as anomaly detection, because overall it really is about, ransomware is essentially about detecting anomalies. So, ransomeware is an application of anomaly detection. So, our ThreatSense capability is built into the product. What happens is, when we do backups, like I said, we build a model of what normal looks like, and then we flag anomalies. My dataset size, all of a sudden spike. My data type, all of a sudden I have a bunch of ZIP files, or something, all of a sudden. Something has changed that's outside of normal, and then we flag that, and you can take action against that. So, absolutely it is, but the initial application is specifically about ransomware. >> All right. Zeus, is there advice that you would want to give users, or when you're talking to customers, what's the profile of somebody that is handling their data, and leveraging it well? >> I don't always really hand it well. (all laughing) But I think the advice I'd give is you want to simplify and automate as much as you can, and ruthlessly automate. I think if you're trying to do things the old way, you're going to wind up falling behind. And so, I suppose to your question, what's the profile of a company that's doin' it well. It's one that's actually able to roll up new services quickly, and you see that in a lot of the big name cloud companies. They always new things comin' and new things goin', and they're able to transform the way they deal with customers and employees. That's the hallmark of a company that's using it's data well. Ones that aren't, frankly, we've seen a lot of 'em go out of business, right, over the last few years. And so, I think from an IT perspective, you want to embrace automation, embrace machine learning, right, embrace this concept of single pane of glass for your particular domain. Because what it lets you do is, it becomes a tool to help you do your job better. There's certain things people are good at and there's certain things people aren't, and connecting the dots, and terabits, petabytes of, bits of data isn't one of 'em. So, I think from an IT perspective, you want to automate, and you want to embrace machine learning, because it's going to be your best friend, and it's going to help you keep your skillset current. >> Yeah, and I would just pick up on that and say that the answer isn't constraining, to a large extent it's really embracing data diversity. Like the answer to mass data fragmentation isn't homogenization of your data, or limiting particular data types. The proliferation of different data types is a direct result of organizations trying to be more agile, and trying to be more nimble. So, the answer isn't sort of constraining data. The answer is making the strategic investments in the right tools, in sort of in some of the right policies and governance, if you will. So, that you keep everybody strategically going in the right direction in this sort of federated diverse type of environment. >> Yeah, if you look at any market in IT, well, really even in the consumer world, where there has been choice, it's create a rising tide for everybody. >> Right. >> The question is, you can't have it be chaotic. >> Right. >> Right, and so you're bringing a level of order to a world that was historically chaotic, and that untethers people to make whatever choice they want and use the best possible tools. >> Yeah. >> Right. >> Peter, I go back to the promise of big data, was that I was going to turn that proliferation of volume, velocity of data from a, oh my god, that's a problem, and flip it on its head, and become an opportunity for how we can leverage data. Give me the final word. How do we connect the dot from where that was a few years ago to this mass data fragmentation world today. >> Yeah, and the answer to that is don't treat, don't make big data sort of the three guys over in the corner who are the data scientist. Embrace big data. Embrace all your data types. So, our message, as the Hadoop and NoSQL data management folks, is simply, look Hadoop and NoSQL are a key part of your overall data strategy. Embrace those, include those in your overall strategy, and make sure you're basically taking the right contextual picture of what you're trying to do. Include all your different data types. Hadoop and NoSQL are contributors to mass data fragmentation, but as part of that salute, if they're part of the problem, then they need to be part of the solution, both from a data standpoint and from a solution standpoint. So, that's really the message that we're driving is that, embrace all your different data types, put the appropriate systems in place, take the right sort of approach to consolidating and solidifying your overall data strategy. >> All right, well, Peter and Zeus, thanks so much for sharing >> Thank you. the latest update. Absolutely, data at the center of it all, and need to embrace those new tools and opportunities out there. All right, I'm Stu Miniman. And be sure to check out thecube.net for all of our research and shows that we'll be at. And thank you, as always, for watching theCUBE. (electronic music)

>> Announcer: Live from Las Vegas, it's theCUBE, covering ServiceNow Knowledge 2018. Brought to you by ServiceNow. >> Welcome back, everyone, to theCUBE's live coverage of ServiceNow Knowledge 18, here in Las Vegas. I'm your hose, Rebecca Knight, along with my cohost, Dave Vellante. We're joined by Josh Kahn. He is the General Manager of Platforms, ServiceNow. Thanks so much for coming on theCUBE again. >> Yeah, really excited to be here. Thanks for being here and thanks for being part of our event. >> Thank you. >> You're welcome. >> It's been a lot of fun. >> Newly minted. >> Yeah that's right. (laughing) >> Yes, congrats on the recent promotion. So tell us about your new role. >> Yeah, so I run the Platform Business Unit. We use the word platform a lot of different ways at ServiceNow and I think we're trying to get a little bit more clear about that. On the one hand, our platform is the core foundation that all of our applications and all of our customers' applications are built on. It's also a way that independent software vendors and our customers can build their own applications. So what my group is trying to do is really be more thoughtful and structured about how we go about gathering those requirements from our customers and our independent software vendor partners and make sure we're bringing the products to market that meet their needs, and that we're doing all of the things across the board as a company we need to do to make them successful because there's a lot that goes into long-term customer success from the sales teams to the solutions consultants to professional services and the Customer Success Management Team. We're bringing all those things to make sure that, as our customers are building applications, we're helping them be successful. >> I remember we had Erik Brynjolfsson and Andy McAfee on and they were making a point. This was years ago when they wrote their, I think, most recent book. They were saying platforms beat products, I'm like, okay, what do you mean? Look, you can make a great living doing products, but we are entering a platform era. It reminds me of the old Scott McNealy, car dealers versus car makers. If you want to be a car maker in this day and age, unfortunately Sun Microsystems never became that car maker, but you've got to have a platform. What's your perspective on all that? >> I totally agree. I think that every customer I talk to is looking for fewer, more strategic vendors and partners, and they're really saying, hey, be a strategic partner to me. Digital transformation is everywhere. Disruption is everywhere, and they're saying, hey, we need a few people we can really count on to help us build a strategy and execute on that strategy to get to the next place. Isolated, independent pieces of software tend to have a hard time becoming one of those strategic vendors, and I think the more you can be thought of as a platform, the more different kinds of workloads run on the same common shared infrastructure that provide shared data services, that can provide simple ways to get work across each other, the more value that you can bring and the more you can be thought of in that strategic partner realm. >> So you guys are a platform of platforms, we use that terminology a lot, and I think there's no question that for a lot of the C-level executives, particularly the CIOs that I talk to, you are becoming, ServiceNow is becoming a strategic platform provider. Who else is in there? Let's throw some... IBM, because of its huge services in certain industries, for sure, SAP because of its massive ERP estate. I mean, I don't know, Oracle, maybe, but it feels different, but maybe in some cases. Who do you see as your peers? >> The category of players that are in this space are really people that are investing big in the Cloud and investing big in intelligence and automation. And, I think, a lot of times automation can have kind of a negative connotation to it, but we really believe that automation can be used to serve people in the workplace and to make the world work better for people, not just make the world of work work without people. So when you look around at the people that are moving into that strategic realm, it's Cloud players, people who are providing either Cloud infrastructure or Cloud functions, a wide set of microservices capabilities, and people providing applications software as a service that start to cover a broader and broader portfolio. Clearly, Workday is thought of oftentimes as a strategic partner to their customers, because they provide a human capital management capability that's broader than just being a data repository. Salesforce is clearly a strategic partner to the sales and marketing organizations. The reality, though, is a lot of work that happens in the Enterprise cuts across these things, and so there's an opportunity for us to work with the Saleforces and the Workdays and the Googles and the Amazon Web Services of the world to help bring all of those things together. I think that what customers want is not only strategic technology providers, but strategic technology providers that will work with each other to solve customers' problems. >> John Donahoe on, I guess it was Tuesday, was saying we're very comfortable being that horizontal layer. We don't have to be the top layer, although I would observe that the more applications you develop, the more interesting the whole landscape becomes. >> Yeah, well, I think that's absolutely true. We're in the early stages of this, right? If you look at the amount of money that's spent in IT in the enterprise sector and then you start adding up all of these areas that I just mentioned, Cloud and SAS, it's still a very small amount of that overall spent. So clearly, big legacy technology vendors are incredibly relevant still today, but the challenge they'll have is making sure they stay relevant as this tide shifts to more Cloud, more intelligence, more automation in the workplace. >> I wonder if you could walk us through the process that you go through when you are working closely with customers, collaborating, trying to figure out what their problems are and solve them and then also solve the problems they don't even know they have, that you can provide solutions for. >> Actually, it's amazing, because in a lot of cases, the innovation, and this has been a phenomenal week, because I've gotten to meet with so many customers and see what they're doing. And what tends to happen with ServiceNow is the IT organization, oftentimes, it starts there. The IT organization brings it in for IT service management, and people start using that to request things that they need from IT, and they very quickly say, man, I have a process that would really benefit from exactly what you just did. Can you build my application on that? And so there starts to become this tidal wave of people asking the IT organization if they can start hosting applications on the platform. I'll give you one example from a company called Cox Automotive. Donna Woodruff, who's an innovation leader there and leads the ServiceNow platform team, found a process where they had a set of safety checks they do at all these remote sites as part of a car auctions, and it was a very spreadsheet-driven process that involved a lot of people doing manual checks, but it also had regulatory implications, insurance implications, and workplace happiness implications. And they were able to take this, put it on ServiceNow, and automate a lot of that process, make it faster, I should say digitize it, 'cause you still need the people going through and doing the checks, but were able to digitize it and make that person's job that much better. These applications are all over the place. They're in shared email inboxes, they're in Excel spreadsheets, they're in legacy applications. We don't actually have to go drive the innovation and the ideas. They end up coming to the ServiceNow platform owners and our customers. >> I'd like you to comment on some of the advantages of the platform and maybe some of the challenges that you face. When I think about enterprise software, I would generally characterize enterprise software as not a great user experience, oftentimes enterprise software products don't play well with other software products. They're highly complex. Oftentimes there's lots of customerization required, which means it's really hard to go from one state to another. Those are things that you generally don't suffer from. Are there others that give you advantages? And what are maybe some of the challenges that you face? >> I think it's true. Enterprise software, you used to have to train yourself to it. It's like, hey, we're going to roll out the new system. How are we going to train all the users? But you don't do that with the software we use in the consumer world. You download it from the app store and you start using it. If you can't figure it out, it's not going to go. >> You aint going to use it. >> Josh: Exactly right. So we put a lot of that thought process from the consumer world into our technology, but not just the technology we provide. We're trying to make it easier for our customers to then provide that onto their internal and external customers as well. Things like the Mobile Application Builder that we showed earlier today, that's coming in Madrid, it's an incredibly simple way to build a beautiful mobile application for almost anything in the workplace. And, again, as I was saying before, a lot of the ideas for applications come from people in the workplace. We've got to make it easy enough for them to not only to identify what the application potential is, but then build something that's amazing. What we're trying to do is put a lot of those design concepts, not just into the end products we sell, but into tools and technology that are part of the platform and the Platform Business Unit so that our customers can build something just like it in terms of experience, usability, simplicity, and power without having to have as many developers as we do. >> You and I have known each other for a number of years now, and just as we observed the other day, off camera, that you've been forced into a lot of challenges. I say forced, but welcomed a lot of challenges. >> I love it, I love it. >> All right, I mean, it's like, hey, I'll take that. No problem. You've had a variety of experiences at large companies. Things you've learned, opportunities ahead, maybe advice you'd give for others, like the hard stuff. >> I think one of the biggest things I've learned here, particularly at ServiceNow, is just the importance of staying focused on customers rather than competitors. I think a lot of times when you're in the business roles or strategy roles, you can really think a lot about who am I competing against, and you can forget that you really just need to solve the customer's problem as well as you possibly can. Be there for them when they need it. Have something that's compelling that addresses their needs, and stay laser-focused on what works for them, and at the end of the day you're got be successful. So that's a strategy we've really tried to take to heart at ServiceNow, is put the customers at the center of everything we do. We don't worry that much about competitors. They're out there and we know they're there and we study them, but it's really the customer that gets us up every morning. >> You know, it's interesting, I've had this, as well as John Furrier has, had this conversation with Andy Jassy a lot, and they're insanely focused on the customer where he says, even though he'll say, we get into a competitive situation, we'll take on anybody, but his point was both methods can work. Your former company, I would put into the very competitive, Oracle, I think, is the same way. Microsoft maybe used to me, maybe that's changing, but to a great extent would rip your face off if you were a competitor. My question is this: Is the efficacy of the head-to-head, competitive drive as effective as it used to be, and are we seeing a change toward a customer-centric success model? >> I think there's two things going on. I think one is once a market really kind of reaches maturity, the competitive dynamic really heats up. >> Dave: 'Cause you got to gain share. >> Yeah, you got to gain share. And today, in the Cloud world, in the intelligence world, there's just so much opportunity that you could just keep going for a long time before you even bump into people. I think in mature markets it's different, so I think a lot of times, partly at EMC, that was one of the dynamics we had is a very, very mature market on on-premise storage, and so you had to go head-to-head every time. But I think there's also the changing tenor of the world. People have a lot less, they don't care for that kind of dialogue as much anymore. They don't like it when you come in and talk bad about anybody else. So I think there's both dynamics at one, and the markets we're in, they're so new, they're growing so fast that it's not as important, but also, people don't care for it. I don't think it helps, if anything, sometimes it makes people wonder if they ought to be, oh, I didn't think about talking to them, maybe we should go call the competitor you just mentioned. (laughing) so, all that said, when you get into a fight, you got to fight hard and you got to come with the best stuff, so I think that's the reality. >> Dave: Great answer. >> That's a good note to end on. Thanks so much, Josh, for coming on theCUBE again. It's been a real pleasure having you here. >> All right. Thank you, I really appreciate it. >> I'm Rebecca Knight for Dave Vellante. We will have more from ServiceNow Knowledge 18 just after this. (techy music)

>> Narrator: Live from Las Vegas, it's theCube covering ServiceNow Knowledge 2018. Brought to you by ServiceNow. >> Welcome back everyone to theCube's live coverage of ServiceNow Knowledge18 here in Las Vegas. I'm your host Rebecca Knight along with my cohost Dave Vellante. We're joined by Dave Wright. He is the chief innovation officer at ServiceNow. Thanks so much for coming on the program. >> It's a pleasure, always a pleasure. >> Good to see you again Dave. >> Good to see you as well. >> Yeah, you've been around the block. You've been around theCube a few times. >> Around the block, a bad way of putting it but yeah. (laughing) >> So chief innovation officer, we've had a lot of great new product launches at this show. What are you most excited about, and what are you already thinking about when you go back to your office? >> So I think what's been interesting to me is the different way of engaging now, we've got the concept of virtual agent technology and I don't just mean the fact that we've got virtual agents. The fact that it starts to give people alternatives and it gives people alternative ways to come into the system, whether it be through our interface or whether it be through someone else's interface, I start to wonder, what'll happen going forward as we get more and more bot type technologies out. How will you have that one interface that works with all those to get that information back of the chain? How will you almost have a single interface that allows you to connect to all these bots and solve your problems? Because the benefits kind of two fold. One is the bot technology you get from being a customer to coming in and actually doing a request. But the other is you'll eventually be able to take that same technology and apply it to the fulfilled user so the power user because if I'm doing something and I can have an agent that's helping me do it, almost like the agent assist concept, you saw this morning. If I can take that to a next level and have AI running on top of that, then I can make work easier for the people coming in but I can actually improve the people that are in the system and make them more effective. >> Go ahead. >> Go ahead, follow up please. >> No, I was just going to ask about, how you get your ideas? So you're here, you're interacting with customers, you're seeing how they're using your product. So is it interviewing customers to find out their pain points? Is it really just watching, I mean you're the chief innovation officer. How do you spark your own creativity? >> It's a really weird answer. I get most of it off kids, most of it off my kids. So I can tell you a story. We were in Barnes and Noble the other week and they had albums in the, plastic twelve inch albums. >> Rebecca: They're coming back. >> And they cost more than they use to. >> Dave Vellante: Yeah really. >> So I called the kids over, I said look, let's get educated. This is what I use to play music on. And now we moved to CD's and you guys miss CD's and this is why you guys buy music. Now I've got a 12 year old and seven year old. And the 12 year old was saying, well, we don't buy music. And I said yeah, and I thought, no you don't, you rent music. And then my youngest daughter said, why would you want to own a song forever? And I was like, this is interesting. We started having a discussion, >> These are deep, these are deep questions. >> It was while other kids we're over having a sleepover and they're all eating pizza and they were talking about the concept of having a job. They said, how do you decide what you want to do for the rest of your life and how do you do that? And we we're talking about how you do something, you get better. You go to another company, you get better at doing it. You go to another company. And one of them said, it sounds really boring just like doing the same thing. And then one of them had the best answer. She said, don't you think it's a waste of your time? And I said, why is it a waste? And she said, because if you're really good at something, why should you just do it for one company? And I was like, oh so, you're going to be a contactor. (laughing) But what I realize was because this whole generation don't need to own things, they just need to use things, so they don't need to know how to do something, they just know they want to do it. And they don't need to own something, they just need temporary access to it. Then it got me thinking when you talk about where could work go to. Do you get a whole concept of the gig economy becoming a gig enterprise. Because we've got a lot of people in work who've got all these different skills but we force them to do one job. And it might be that someone's doing a job but they've got skills that would be applicable outside of that job but they never get to use them. So have we seen the first generation arrive now where they expect everything to be tass based? And then it gives you control over your own career. Because then you say, well, actually I'm not good at this but I can start a bid for work. I can say to people, hey I'm only a three on a skills racing but if you don't need any complex, I'll take it cause I get to learn. So it's a whole new dynamic and I think when you ask whereabout ideas come from, some of the first stage ideas or the first horizon, I think they come form customers. Some of the second horizon, they come from people who aren't working. It's just trying to imagine how they all develop and whereabout that all goes. >> So you surround yourself with millennials? >> Not even millennials. >> Dave Vellante: They're kind of pre post millennials. >> Almost like the linksters, almost the people who've been born connected. It's definitely a Gen Z thing but it's beyond millennials. I think the millennials had a certain expectation around well it's kind of a negative connotation but before they were called millennials, people use to refer to it as the entitlement generation. And it wasn't because they were entitled, it was because they felt they just got access to everything. So it's like with my kids, they're kind of Gen Z and one of them is a linkster, but you never go to them and say, they never come to you and say, hey, I want to watch a movie and you go, great, let's go to Blockbuster's, let's rent it. They expect it to be just available on demand, available all the time. And that was what I think the kind of millennial generation started being entitled to access to data, then I think you went to the generation where it was everything always connected, no concept of banword. But now I think it's the, the real thing that's changing is the concept of ownership and I think that's where you start to see things like, will the car industry ever be the same because if you don't need to own a car because you're not driven by the same passions that people who own cars are driven by, it's just a way of communicating you don't need a garage on your house, you may as well park the car somewhere else. It comes when you need it. It can change the way cities are laid out. I mean there's so many different routes you can go down with this. >> SO how does that innovation, how does that knowledge that you gain get into ServiceNow products and services? >> That all comes back then to how you, how people are going to face new management dynamics or how people are going to manage things like IOT devices? How are people going to deal with managing work if it is a task based economy? How are people going to start to think about not just working in a system of record, or not just working in a system of engagements, but how are they going to start to build that mesh or that web that links all these different things together? And I think that's where our strand comes. Our strand comes in the ability to be able to link systems of records together. To link users with those backend systems, to be able to manage those complex work processes. That's kind of the core elements. Also I think when you look at what Fred Crasick when he built the platform and he had the whole work flow engine and it is that engine that's kind of the key pallet to the whole company. >> I think the metaphor of mesh, sometimes we talk about a matrix of digital services that becomes ubiquitous beyond a cloud of remote services, is really transforming to this mesh of digital capabilities that are everywhere that do things that Clouds don't do. They sense, they react, they respond, they read, they hear. It's an amazing time that we're entering in innovation. Andy McAfee and Erik Brynjolfsson when they wrote the book Second Machine Age talked about Moore's Law, power innovation but they also talked about the innovation curve reshaping from going from Linears Moore's Law which we've marched to the cadence of Moore's Law for decades in this industry to reshaping, to an expediential curve. And I wonder if we could get your thoughts. We've paused that it's accommodation of sort of data applying machine intelligence to that data and then leveraging Cloud economics at scale is really where the innovation is going to come from in the future. What are your thoughts on that? >> So let me try to understand the question. So you're talking about not actually the way that you've seen the growth from a process prospective but the way you actually see the growth from a machine learning capability being able to analyze that data? >> Applying that layer of machine learning. Maybe use that mesh metaphor, that top level. You know you've got horizontal technology services but then there's this new AI layer on top. The data is the fuel for that AI. >> Absolutely, I think it's the I think people can't even imagine what they can do with that data, people can't even contemplate some of the decisions they can make and it's when people start to look at things in completely different ways, it's when people start to say, well, if we apply machine learning to a user interface for example, could we come up with a better user interface because now if we understand how people interact with the system, could we actually build a better system? Or you see people starting to have this whole butterfly effect around the way that artificial intelligence works. So the best example I heard was from, I was actually at a convention with a girl called Louis Chang and she was talking to me about it. But they were speaking to hospitals. They we're talking about self drive cars and the application machine learning of being able to help cars drive. And they were saying the interest in knock on effect of this was a hospital saying it was going to be a real problem for them having self drive cars. And she said, why's it going to be a problem? And the problem was, if you look across the whole America you have about 20 people a day die because they can't get replacement organs. But 37 percent of the organs come from car crashes. So if you take car crashes out of the equation. So what they were investing in was actually looking at how they do cloning technology for organs. So no one would ever imagine (mumbled speaking) and this is going to improve cloning technology so much. And I think AI's in the same place. Everyone's using it in such a small area that they don't even see the potential of what they could do with it, they don't have any concept of what they could be starting to look at and how they could start to spot transvaterian people. Even on a base level, I was speaking to one of our customers the other night, and they managed to put an AI system in place that when they got a call in off the description of the call they could work out what the customer satisfaction was going to be and if it was going to be a bad satisfaction figure, they could preemp that and put different agents that were more skilled on that particular issue. And they said a few years ago all they were interested in was maybe one day we'll be able to categorize something asymmetrically. But now they can predict how well something's going to be resolved. >> It's very hard to predict isn't it? I mean who would of thought that Alexa would of emerged as one of the best if not the best natural language processing systems or that images of cats on the internet would lead to facial recognition in technology. >> That one especially. >> Could of never predicted that. So, but because you're such a clear thinker and a strategic thinker, I want to ask you to make some predictions. I'm going to run some things by you. You talked about autonomous vehicles for awhile. Do you believe that owning in the future, pick whatever time frame you want, that owning and driving your own car will become the exception? >> Yeah I think it will probably be the people who, well okay, so I definitely think driving your own car will become the exception. I think some people will always want that sense of ownership until we get to a generation that doesn't. I think they'll always be a hard core of people who do want to own and do want to drive and do want that experience, but I think you've already got the issue where congestion's such a level in most areas. Is there any enjoyment out of driving? So I love driving, I love sports cars, I collect them. But if someone said, hey you've got two options, you can sit in a high performance sports car to go to LA or you can sit in a Tesla and it will drive itself and you can read a book. I'm getting in the Tesla. (laughing) >> How about retail? Right for disruption, do you think that large retail stores will essentially, not essentially, it's never complete, but will largely go away? >> I think it depends on the nature of the experience. So I think for a lot of goods that are consumable goods, I can kind of see that going away. I don't think it will go away for luxury goods. I don't think it will go away fully for fashion. I think people always like to look at things and understand things and check fits but for some things that are high consumables maybe even for electronics, I can see those going or I can see it going for things where it's worn product. So something like a shop that just sells sneakers. I can see someone could easily offer a range and say, well look, here's what we sell. When you order something, we'll automatically ship you one size up, one size down, or two variations of color and it will be a free system return the ones you don't want. I think the whole experience of ordering one thing and hoping it works out, I think that will go away. It will be concept of ordering a group of things or maybe it will be applying to artificial intelligence to say, hey you've asked for this color, but we know that people who also ask for that color like this color as well. We're going to ship you them both. You can see how it goes and send us the one back you don't like. >> Okay, let's see. Will machines make better diagnosis than doctors? I've got to say I think you will get to a point where that will happen. Especially if it's things where it's image processing, where it's x-ray processing, MRI processing. Where it's something like process of mental health, then I don't know. Maybe, I'd probably rather have my mental health treated by a person than a questionnaire. But yeah I think the things we're using, image recognition, or things where you're looking at patent distribution or you're looking at even like virus distribution or virus structure, then I think those areas I think you will get to a point where diagnostic issue is better. But you look at where artificial intelligence is from diagnostics now and you go on doctor google and search for something, you know, everything finished with the bottom line, or it could be cancer. >> Dave Vennari: Yeah, you're dead. >> What about will there ever be a revolt, you know in the sense of, technology is so pervasive, and people just say forget it, I'm sick of just being tracked, I just kind of want to have a human to human connection and, >> Dave Vellante: Dream on. >> So are we done for? >> I was speaking to a girl who works for me, Menesha, and she was saying, we were talking on Friday and she said, hey, I was having a coffee with nother girl Cass, and Menesha's in Seattle and Cass in is San Francisco, and I said, oh was she in Seattle or were you in San Francisco and Menesha's a lot younger than me, and she went, no we weren't in the same room. We were just like doing it over video like a virtual coffee. And I was like what, so you both get coffee and sit and have a conversation? And she was like, oh yeah. >> Dave Vellante: Alright, I've got one more, I've got one more. >> Okay, let's hear it, let's hear it. >> Alright last one, it's great, thanks for playing along. >> I know this is fun. >> Financial services is an industry that really hasn't been disrupted. DO you feel like the banks will lose control, the major banks will lose control of payment systems? >> I think there's a lot of conversations now around how much those payment systems open up. Because if you, let's say you do a transaction with Amazon, you do a transaction with Google, how hard would it be for every transaction to be done that way? So rather than, if your setting off a payment for I don't know, gas bills or a car loan payments, rather than giving your bank details, why not give your PayPal details or your Amazon account details or your Google details? That could be, reduce all the banking transactions down to one interface. I think that could happen. I think you could get, well obviously you're already seeing the rise of Blockchain and I'm not a Blockchain expert. I'm itching to find a used case for us with Blockchain but I can't find it yet. But for direct transactions, if both sources can trust each other than yeah, that direct transaction between those two sources, I think that's completely possible. I think there's also areas where, you've seen happen in the past where a banking faces issues from retail coming into banking, so sometimes you'll get the big supermarket chains, especially in Europe they say, okay you're going to get (foreign name) or you're going to get Tesco's Bank, because they've got all our customer loyalty, they've got people waiting to give discounts to if they bank with them, so they can instantly bring, if you said to your shopping account base, hey, if you bank with me we'll give you 20 dollars a week off your grocery shopping, you could probably ring 10 million customers straight away. So I think banking's challenged from other industries that want to get into it, from places where you'll actually go and do each transactions now and from where places where you'll just go and order stuff online and you could filter all that through one place, I think they'll still always be the commercial side of banking. There's always going to be the stocks and bonds, there's still going to be the wealth management, but props for transactional banking, you could start to see a decline. >> Fantastic, thank you. >> I love this futurist talk, it's been a lot of fun. Thank you so much for coming on theCube Dave. >> Alright, thanks for having me, always a pleasure. >> Dave Vellante: Great to see you. >> We will have more from ServiceNow Knowledge18 theCube's live coverage just after this. (upbeat music)