(gentle music) >> Okay, welcome back to Supercloud 2, live here in Palo Alto, California for our live stage performance. Supercloud 2 is our second Supercloud event. We're going to get these out as fast as we can every couple months. It's our second one, you'll see two and three this year. I'm John Furrier, my co-host, Dave Vellante. A panel here to break down the Supercloud momentum, the wave, and the developer impact that we bringing back Vittorio Viarengo, who's a VP for Cross-Cloud Services at VMware. Sarbjeet Johal, industry influencer and Analyst at StackPayne, his company, Cube alumni and Influencer. Sarbjeet, great to see you. Vittorio, thanks for coming back. >> Nice to be here. >> My pleasure. >> Vittorio, you just gave a keynote where we unpacked the cross-cloud services, what VMware is doing, how you guys see it, not just from VMware's perspective, but VMware looking out broadly at the industry and developers came up and you were like, "Developers, developer, developers", kind of a goof on the Steve Ballmer famous meme that everyone's seen. This is a huge star, sorry, I mean a big piece of it. The developers are the canary in the coal mines. They're the ones who are being asked to code the digital transformation, which is fully business transformation and with the market the way it is right now in terms of the accelerated technology, every enterprise grade business model's changing. The technology is evolving, the builders are kind of, they want go faster. I'm saying they're stuck in a way, but that's my opinion, but there's a lot of growth. >> Yeah. >> The impact, they got to get released up and let it go. Those developers need to accelerate faster. It's been a big part of productivity, and the conversations we've had. So developer impact is huge in Supercloud. What's your, what do you guys think about this? We'll start with you, Sarbjeet. >> Yeah, actually, developers are the masons of the digital empires I call 'em, right? They lay every brick and build all these big empires. On the left side of the SDLC, or the, you know, when you look at the system operations, developer is number one cost from economic side of things, and from technology side of things, they are tech hungry people. They are developers for that reason because developer nights are long, hours are long, they forget about when to eat, you know, like, I've been a developer, I still code. So you want to keep them happy, you want to hug your developers. We always say that, right? Vittorio said that right earlier. The key is to, in this context, in the Supercloud context, is that developers don't mind mucking around with platforms or APIs or new languages, but they hate the infrastructure part. That's a fact. They don't want to muck around with servers. It's friction for them, it is like they don't want to muck around even with the VMs. So they want the programmability to the nth degree. They want to automate everything, so that's how they think and cloud is the programmable infrastructure, industrialization of infrastructure in many ways. So they are happy with where we are going, and we need more abstraction layers for some developers. By the way, I have this sort of thinking frame for last year or so, not all developers are same, right? So if you are a developer at an ISV, you behave differently. If you are a developer at a typical enterprise, you behave differently or you are forced to behave differently because you're not writing software.- >> Well, developers, developers have changed, I mean, Vittorio, you and I were talking earlier on the keynote, and this is kind of the key point is what is a developer these days? If everything is software enabled, I mean, even hardware interviews we do with Nvidia, and Amazon and other people building silicon, they all say the same thing, "It's software on a chip." So you're seeing the role of software up and down the stack and the role of the stack is changing. The old days of full stack developer, what does that even mean? I mean, the cloud is a half a stack kind of right there. So, you know, developers are certainly more agile, but cloud native, I mean VMware is epitome of operations, IT operations, and the Tan Zoo initiative, you guys started, you went after the developers to look at them, and ask them questions, "What do you need?", "How do you transform the Ops from virtualization?" Again, back to your point, so this hardware abstraction, what is software, what is cloud native? It's kind of messy equation these days. How do you guys grokel with that? >> I would argue that developers don't want the Supercloud. I dropped that up there, so, >> Dave: Why not? >> Because developers, they, once they get comfortable in AWS or Google, because they're doing some AI stuff, which is, you know, very trendy right now, or they are in IBM, any of the IPA scaler, professional developers, system developers, they love that stuff, right? Yeah, they don't, the infrastructure gets in the way, but they're just, the problem is, and I think the Supercloud should be driven by the operators because as we discussed, the operators have been left behind because they're busy with day-to-day jobs, and in most cases IT is centralized, developers are in the business units. >> John: Yeah. >> Right? So they get the mandate from the top, say, "Our bank, they're competing against". They gave teenagers or like young people the ability to do all these new things online, and Venmo and all this integration, where are we? "Oh yeah, we can do it", and then build it, and then deploy it, "Okay, we caught up." but now the operators are back in the private cloud trying to keep the backend system running and so I think the Supercloud is needed for the primarily, initially, for the operators to get in front of the developers, fit in the workflow, but lay the foundation so it is secure.- >> So, so I love this thinking because I love the rift, because the rift points to what is the target audience for the value proposition and if you're a developer, Supercloud enables you so you shouldn't have to deal with Supercloud. >> Exactly. >> What you're saying is get the operating environment or operating system done properly, whether it's architecture, building the platform, this comes back to architecture platform conversations. What is the future platform? Is it a vendor supplied or is it customer created platform? >> Dave: So developers want best to breed, is what you just said. >> Vittorio: Yeah. >> Right and operators, they, 'cause developers don't want to deal with governance, they don't want to deal with security, >> No. >> They don't want to deal with spinning up infrastructure. That's the role of the operator, but that's where Supercloud enables, to John's point, the developer, so to your question, is it a platform where the platform vendor is responsible for the architecture, or there is it an architectural standard that spans multiple clouds that has to emerge? Based on what you just presented earlier, Vittorio, you are the determinant of the architecture. It's got to be open, but you guys determine that, whereas the nirvana is, "Oh no, it's all open, and it just kind of works." >> Yeah, so first of all, let's all level set on one thing. You cannot tell developers what to do. >> Dave: Right, great >> At least great developers, right? Cannot tell them what to do. >> Dave: So that's what, that's the way I want to sort of, >> You can tell 'em what's possible. >> There's a bottle on that >> If you tell 'em what's possible, they'll test it, they'll look at it, but if you try to jam it down their throat, >> Yeah. >> Dave: You can't tell 'em how to do it, just like your point >> Let me answer your answer the question. >> Yeah, yeah. >> So I think we need to build an architect, help them build an architecture, but it cannot be proprietary, has to be built on what works in the cloud and so what works in the cloud today is Kubernetes, is you know, number of different open source project that you need to enable and then provide, use this, but when I first got exposed to Kubernetes, I said, "Hallelujah!" We had a runtime that works the same everywhere only to realize there are 12 different distributions. So that's where we come in, right? And other vendors come in to say, "Hey, no, we can make them all look the same. So you still use Kubernetes, but we give you a place to build, to set those operation policy once so that you don't create friction for the developers because that's the last thing you want to do." >> Yeah, actually, coming back to the same point, not all developers are same, right? So if you're ISV developer, you want to go to the lowest sort of level of the infrastructure and you want to shave off the milliseconds from to get that performance, right? If you're working at AWS, you are doing that. If you're working at scale at Facebook, you're doing that. At Twitter, you're doing that, but when you go to DMV and Kansas City, you're not doing that, right? So your developers are different in nature. They are given certain parameters to work with, certain sort of constraints on the budget side. They are educated at a different level as well. Like they don't go to that end of the degree of sort of automation, if you will. So you cannot have the broad stroking of developers. We are talking about a citizen developer these days. That's a extreme low, >> You mean Low-Code. >> Yeah, Low-Code, No-code, yeah, on the extreme side. On one side, that's citizen developers. On the left side is the professional developers, when you say developers, your mind goes to the professional developers, like the hardcore developers, they love the flexibility, you know, >> John: Well app, developers too, I mean. >> App developers, yeah. >> You're right a lot of, >> Sarbjeet: Infrastructure platform developers, app developers, yes. >> But there are a lot of customers, its a spectrum, you're saying. >> Yes, it's a spectrum >> There's a lot of customers don't want deal with that muck. >> Yeah. >> You know, like you said, AWS, Twitter, the sophisticated developers do, but there's a whole suite of developers out there >> Yeah >> That just want tools that are abstracted. >> Within a company, within a company. Like how I see the Supercloud is there shouldn't be anything which blocks the developers, like their view of the world, of the future. Like if you're blocked as a developer, like something comes in front of you, you are not developer anymore, believe me, (John laughing) so you'll go somewhere else >> John: First of all, I'm, >> You'll leave the company by the way. >> Dave: Yeah, you got to quit >> Yeah, you will quit, you will go where the action is, where there's no sort of blockage there. So like if you put in front of them like a huge amount of a distraction, they don't like it, so they don't, >> Well, the idea of a developer, >> Coming back to that >> Let's get into 'cause you mentioned platform. Get year in the term platform engineering now. >> Yeah. >> Platform developer. You know, I remember back in, and I think there's still a term used today, but when I graduated my computer science degree, we were called "Software engineers," right? Do people use that term "Software engineering", or is it "Software development", or they the same, are they different? >> Well, >> I think there's a, >> So, who's engineering what? Are they engineering or are they developing? Or both? Well, I think it the, you made a great point. There is a factor of, I had the, I was blessed to work with Adam Bosworth, that is the guy that created some of the abstraction layer, like Visual Basic and Microsoft Access and he had so, he made his whole career thinking about this layer, and he always talk about the professional developers, the developers that, you know, give him a user manual, maybe just go at the APIs, he'll build anything, right, from system engine, go down there, and then through obstruction, you get the more the procedural logic type of engineers, the people that used to be able to write procedural logic and visual basic and so on and so forth. I think those developers right now are a little cut out of the picture. There's some No-code, Low-Code environment that are maybe gain some traction, I caught up with Adam Bosworth two weeks ago in New York and I asked him "What's happening to this higher level developers?" and you know what he is told me, and he is always a little bit out there, so I'm going to use his thought process here. He says, "ChapGPT", I mean, they will get to a point where this high level procedural logic will be written by, >> John: Computers. >> Computers, and so we may not need as many at the high level, but we still need the engineers down there. The point is the operation needs to get in front of them >> But, wait, wait, you seen the ChatGPT meme, I dunno if it's a Dilbert thing where it's like, "Time to tic" >> Yeah, yeah, yeah, I did that >> "Time to develop the code >> Five minutes, time to decode", you know, to debug the codes like five hours. So you know, the whole equation >> Well, this ChatGPT is a hot wave, everyone's been talking about it because I think it illustrates something that's NextGen, feels NextGen, and it's just getting started so it's going to get better. I mean people are throwing stones at it, but I think it's amazing. It's the equivalent of me seeing the browser for the first time, you know, like, "Wow, this is really compelling." This is game-changing, it's not just keyword chat bots. It's like this is real, this is next level, and I think the Supercloud wave that people are getting behind points to that and I think the question of Ops and Dev comes up because I think if you limit the infrastructure opportunity for a developer, I think they're going to be handicapped. I mean that's a general, my opinion, the thesis is you give more aperture to developers, more choice, more capabilities, more good things could happen, policy, and that's why you're seeing the convergence of networking people, virtualization talent, operational talent, get into the conversation because I think it's an infrastructure engineering opportunity. I think this is a seminal moment in a new stack that's emerging from an infrastructure, software virtualization, low-code, no-code layer that will be completely programmable by things like the next Chat GPT or something different, but yet still the mechanics and the plumbing will still need engineering. >> Sarbjeet: Oh yeah. >> So there's still going to be more stuff coming on. >> Yeah, we have, with the cloud, we have made the infrastructure programmable and you give the programmability to the programmer, they will be very creative with that and so we are being very creative with our infrastructure now and on top of that, we are being very creative with the silicone now, right? So we talk about that. That's part of it, by the way. So you write the code to the particle's silicone now, and on the flip side, the silicone is built for certain use cases for AI Inference and all that. >> You saw this at CES? >> Yeah, I saw at CES, the scenario is this, the Bosch, I spoke to Bosch, I spoke to John Deere, I spoke to AWS guys, >> Yeah. >> They were showcasing their technology there and I was spoke to Azure guys as well. So the Bosch is a good example. So they are building, they are right now using AWS. I have that interview on camera, I will put it some sometime later on there online. So they're using AWS on the back end now, but Bosch is the number one, number one or number two depending on what day it is of the year, supplier of the componentry to the auto industry, and they are creating a platform for our auto industry, so is Qualcomm actually by the way, with the Snapdragon. So they told me that customers, their customers, BMW, Audi, all the manufacturers, they demand the diversity of the backend. Like they don't want all, they, all of them don't want to go to AWS. So they want the choice on the backend. So whatever they cook in the middle has to work, they have to sprinkle the data for the data sovereign side because they have Chinese car makers as well, and for, you know, for other reasons, competitive reasons and like use. >> People don't go to, aw, people don't go to AWS either for political reasons or like competitive reasons or specific use cases, but for the most part, generally, I haven't met anyone who hasn't gone first choice with either, but that's me personally. >> No, but they're building. >> Point is the developer wants choice at the back end is what I'm hearing, but then finish that thought. >> Their developers want the choice, they want the choice on the back end, number one, because the customers are asking for, in this case, the customers are asking for it, right? But the customers requirements actually drive, their economics drives that decision making, right? So in the middle they have to, they're forced to cook up some solution which is vendor neutral on the backend or multicloud in nature. So >> Yeah, >> Every >> I mean I think that's nirvana. I don't think, I personally don't see that happening right now. I mean, I don't see the parody with clouds. So I think that's a challenge. I mean, >> Yeah, true. >> I mean the fact of the matter is if the development teams get fragmented, we had this chat with Kit Colbert last time, I think he's going to come on and I think he's going to talk about his keynote in a few, in an hour or so, development teams is this, the cloud is heterogenous, which is great. It's complex, which is challenging. You need skilled engineering to manage these clouds. So if you're a CIO and you go all in on AWS, it's hard. Then to then go out and say, "I want to be completely multi-vendor neutral" that's a tall order on many levels and this is the multicloud challenge, right? So, the question is, what's the strategy for me, the CIO or CISO, what do I do? I mean, to me, I would go all in on one and start getting hedges and start playing and then look at some >> Crystal clear. Crystal clear to me. >> Go ahead. >> If you're a CIO today, you have to build a platform engineering team, no question. 'Cause if we agree that we cannot tell the great developers what to do, we have to create a platform engineering team that using pieces of the Supercloud can build, and let's make this very pragmatic and give examples. First you need to be able to lay down the run time, okay? So you need a way to deploy multiple different Kubernetes environment in depending on the cloud. Okay, now we got that. The second part >> That's like table stakes. >> That are table stake, right? But now what is the advantage of having a Supercloud service to do that is that now you can put a policy in one place and it gets distributed everywhere consistently. So for example, you want to say, "If anybody in this organization across all these different buildings, all these developers don't even know, build a PCI compliant microservice, They can only talk to PCI compliant microservice." Now, I sleep tight. The developers still do that. Of course they're going to get their hands slapped if they don't encrypt some messages and say, "Oh, that should have been encrypted." So number one. The second thing I want to be able to say, "This service that this developer built over there better satisfy this SLA." So if the SLA is not satisfied, boom, I automatically spin up multiple instances to certify the SLA. Developers unencumbered, they don't even know. So this for me is like, CIO build a platform engineering team using one of the many Supercloud services that allow you to do that and lay down. >> And part of that is that the vendor behavior is such, 'cause the incentive is that they don't necessarily always work together. (John chuckling) I'll give you an example, we're going to hear today from Western Union. They're AWS shop, but they want to go to Google, they want to use some of Google's AI tools 'cause they're good and maybe they're even arguably better, but they're also a Snowflake customer and what you'll hear from them is Amazon and Snowflake are working together so that SageMaker can be integrated with Snowflake but Google said, "No, you want to use our AI tools, you got to use BigQuery." >> Yeah. >> Okay. So they say, "Ah, forget it." So if you have a platform engineering team, you can maybe solve some of that vendor friction and get competitive advantage. >> I think that the future proximity concept that I talk about is like, when you're doing one thing, you want to do another thing. Where do you go to get that thing, right? So that is very important. Like your question, John, is that your point is that AWS is ahead of the pack, which is true, right? They have the >> breadth of >> Infrastructure by a lot >> infrastructure service, right? They breadth of services, right? So, how do you, When do you bring in other cloud providers, right? So I believe that you should standardize on one cloud provider, like that's your primary, and for others, bring them in on as needed basis, in the subsection or sub portfolio of your applications or your platforms, what ever you can. >> So yeah, the Google AI example >> Yeah, I mean, >> Or the Microsoft collaboration software example. I mean there's always or the M and A. >> Yeah, but- >> You're going to get to run Windows, you can run Windows on Amazon, so. >> By the way, Supercloud doesn't mean that you cannot do that. So the perfect example is say that you're using Azure because you have a SQL server intensive workload. >> Yep >> And you're using Google for ML, great. If you are using some differentiated feature of this cloud, you'll have to go somewhere and configure this widget, but what you can abstract with the Supercloud is the lifecycle manage of the service that runs on top, right? So how does the service get deployed, right? How do you monitor performance? How do you lifecycle it? How you secure it that you can abstract and that's the value and eventually value will win. So the customers will find what is the values, obstructing in making it uniform or going deeper? >> How about identity? Like take identity for instance, you know, that's an opportunity to abstract. Whether I use Microsoft Identity or Okta, and I can abstract that. >> Yeah, and then we have APIs and standards that we can use so eventually I think where there is enough pain, the right open source will emerge to solve that problem. >> Dave: Yeah, I can use abstract things like object store, right? That's pretty simple. >> But back to the engineering question though, is that developers, developers, developers, one thing about developers psychology is if something's not right, they say, "Go get fixing. I'm not touching it until you fix it." They're very sticky about, if something's not working, they're not going to do it again, right? So you got to get it right for developers. I mean, they'll maybe tolerate something new, but is the "juice worth the squeeze" as they say, right? So you can't go to direct say, "Hey, it's, what's a work in progress? We're going to get our infrastructure together and the world's going to be great for you, but just hang tight." They're going to be like, "Get your shit together then talk to me." So I think that to me is the question. It's an Ops question, but where's that value for the developer in Supercloud where the capabilities are there, there's less friction, it's simpler, it solves the complexity problem. I don't need these high skilled labor to manage Amazon. I got services exposed. >> That's what we talked about earlier. It's like the Walmart example. They basically, they took away from the developer the need to spin up infrastructure and worry about all the governance. I mean, it's not completely there yet. So the developer could focus on what he or she wanted to do. >> But there's a big, like in our industry, there's a big sort of flaw or the contention between developers and operators. Developers want to be on the cutting edge, right? And operators want to be on the stability, you know, like we want governance. >> Yeah, totally. >> Right, so they want to control, developers are like these little bratty kids, right? And they want Legos, like they want toys, right? Some of them want toys by way. They want Legos, they want to build there and they want make a mess out of it. So you got to make sure. My number one advice in this context is that do it up your application portfolio and, or your platform portfolio if you are an ISV, right? So if you are ISV you most probably, you're building a platform these days, do it up in a way that you can say this portion of our applications and our platform will adhere to what you are saying, standardization, you know, like Kubernetes, like slam dunk, you know, it works across clouds and in your data center hybrid, you know, whole nine yards, but there is some subset on the next door systems of innovation. Everybody has, it doesn't matter if you're DMV of Kansas or you are, you know, metaverse, right? Or Meta company, right, which is Facebook, they have it, they are building something new. For that, give them some freedom to choose different things like play with non-standard things. So that is the mantra for moving forward, for any enterprise. >> Do you think developers are happy with the infrastructure now or are they wanting people to get their act together? I mean, what's your reaction, or you think. >> Developers are happy as long as they can do their stuff, which is running code. They want to write code and innovate. So to me, when Ballmer said, "Developer, develop, Developer, what he meant was, all you other people get your act together so these developers can do their thing, and to me the Supercloud is the way for IT to get there and let developer be creative and go fast. Why not, without getting in trouble. >> Okay, let's wrap up this segment with a super clip. Okay, we're going to do a sound bite that we're going to make into a short video for each of you >> All right >> On you guys summarizing why Supercloud's important, why this next wave is relevant for the practitioners, for the industry and we'll turn this into an Instagram reel, YouTube short. So we'll call it a "Super clip. >> Alright, >> Sarbjeet, you want, you want some time to think about it? You want to go first? Vittorio, you want. >> I just didn't mind. (all laughing) >> No, okay, okay. >> I'll do it again. >> Go back. No, we got a fresh one. We'll going to already got that one in the can. >> I'll go. >> Sarbjeet, you go first. >> I'll go >> What's your super clip? >> In software systems, abstraction is your friend. I always say that. Abstraction is your friend, even if you're super professional developer, abstraction is your friend. We saw from the MFC library from C++ days till today. Abstract, use abstraction. Do not try to reinvent what's already being invented. Leverage cloud, leverage the platform side of the cloud. Not just infrastructure service, but platform as a service side of the cloud as well, and Supercloud is a meta platform built on top of these infrastructure services from three or four or five cloud providers. So use that and embrace the programmability, embrace the abstraction layer. That's the key actually, and developers who are true developers or professional developers as you said, they know that. >> Awesome. Great super clip. Vittorio, another shot at the plate here for super clip. Go. >> Multicloud is awesome. There's a reason why multicloud happened, is because gave our developers the ability to innovate fast and ever before. So if you are embarking on a digital transformation journey, which I call a survival journey, if you're not innovating and transforming, you're not going to be around in business three, five years from now. You have to adopt the Supercloud so the developer can be developer and keep building great, innovating digital experiences for your customers and IT can get in front of it and not get in trouble together. >> Building those super apps with Supercloud. That was a great super clip. Vittorio, thank you for sharing. >> Thanks guys. >> Sarbjeet, thanks for coming on talking about the developer impact Supercloud 2. On our next segment, coming up right now, we're going to hear from Walmart enterprise architect, how they are building and they are continuing to innovate, to build their own Supercloud. Really informative, instructive from a practitioner doing it in real time. Be right back with Walmart here in Palo Alto. Thanks for watching. (gentle music)

>>Hello everyone. My name is Savannah Peterson, coming to you from the Cube Studios in Palo Alto, California. We're gonna be talking about super computing an event coming up in Dallas this November. I'm joined by the infamous John Furrier. John, thank you for joining me today. >>Great to see you. You look great. >>Thank you. You know, I don't know if anyone's checked out the conference colors for for supercomputing, but I happen to match the accent pink and you are rocking their blue. I got the so on >>There it is. >>We don't always tie our fashion to the tech ladies and gentlemen, but we're, we're a new crew here at, at the Cube and I think it should be a thing that we, that we do moving forward. So John, you are a veteran and I'm a newbie to Supercomputing. It'll be my first time in Dallas. What can I expect? >>Basically it's a hardware nerd fest, basically of the top >>Minds. So it's like ces, >>It's like CES for like, like hardware. It's like really the coolest show if you're into like high performance computing, I mean game changing kind of, you know, physics, laws of physics and hardware. This is the show. I mean this is like the confluence of it's, it's really old. It started when I graduated college, 1988. And back then it was servers, you know, super computing was a concept. It was usually a box and it was hardware, big machine. And it would crank out calculations, simulations and, and you know, you were limited to the processor and all the, the systems components, just the architecture system software, I mean it was technical, it was, it was, it was hardware, it was fun. Very cool back then. But you know, servers got bigger and you got grid computing, you got clusters and then it be really became high performance computing concept. But that's now multiple disciplines, hence it's been around for a while. It's evergreen in the sense it's always changing, attracting talent, students, mentors, scholarships. It's kind of big funding and big companies are behind it. Wl, look, Packard Enterprise, Dell computing startups and hardware matters more than ever. You look at the cloud, what Amazon and, and the cloud hyper skills, they're building the fastest chips down at the root level hardware's back. And I think this show's gonna show a lot of that. >>There isn't the cloud without hardware to support it. So I think it's important that we're all headed here. You, you touched on the evolution there from super computing in the beginning and complex calculations and processing to what we're now calling high performance computing. Can you go a little bit deeper? What is, what does that mean, What does that cover? >>Well, I mean high high performance computing and now is a range of different things. So the super computing needs to be like a thing now. You got clusters and grids that's distributed, you got a backbone, it's well architected and there's a lot involved. This network and security, there's system software. So now it's multiple disciplines in high performance computing and you can do a lot more. And now with cloud computing you can do simulations, say drug research or drug testing. You have, you can do all kinds of cal genome sequencing. I mean the, the, the ability to actually use compute right now is so awesome. The field's got, you know, is rebooting itself in real time, you know, pun intended. So it's like really, it's really good thing. More compute makes things go faster, especially with more data. So high encapsulates all the, the engineering behind it. A lot of robotics coming in the future. All this is gonna be about the edge. You're seeing a lot more hardware making noise around things that are new use cases. You know, your Apple watch that's, you know, very high functionality to a cell tower. Cars again, high performance computing hits all these new use cases. >>It yeah, it absolutely does. I mean high performance computing touches pretty much every aspect of our lives in some capacity at this point and including how we drive our cars to, to get to the studio here in Palo Alto. Do you think that we're entering an era when all of this is about to scale exponentially versus some of the linear growth that we've seen in the space due to the frustration of some of us in the hardware world the last five to 10 years? >>Well, it's a good question. I think everyone has, has seen Moore's law, right? They've seen, you know, that's been, been well documented. I think the world's changing. You're starting to see the trend of more hardware that's specialized like DPU are now out there. You got GPUs, you're seeing the, you know, Bolton hardware, accelerators, you got chi layer software abstraction. So essentially it's, it's a software industry that's in impacted the hardware. So hardware really is software too and it's a lot more software in there. Again, system software's a lot different. So it's, I think it's, it's boomerang back up. I think there's an inflection point because if you look at cyber security and physical devices, they all kind of play in this world where they need compute at the edge. Edge is gonna be a big use case. You can see Dell Technologies there. I think they have a really big opportunity to sell more hardware. H WL Packard Enterprise, others, these are old school >>Box companies. >>So I think the distributed nature of cloud and hybrid and multi-cloud coming on earth and in space means a lot more high performance computing will be sold and and implemented. So that's my take on it. I just think I'm very bullish on this space. >>Ah, yes. And you know me, I get really personally excited about the edge. So I can't wait to see what's in store. Thinking about the variety of vendors and companies, I know we see some of the biggest players in the space. Who are you most excited to see in Dallas coming up in November? >>You know, HP enter, you look back on enterprise has always been informally, HP huge on hpc, Dell and hpe. This is their bread and butter. They've been making servers from many computers to Intel based servers now to arm-based servers and and building their own stuff. So you're gonna start to see a lot more of those players kind of transforming. We're seeing both Dell and HPE transforming and you're gonna see a lot of chip companies there. I'm sure you're gonna see a lot more younger talent, a lot, a lot of young talent are coming, like I said, robotics and the new physical world we're living in is software and IP connected. So it's not like the old school operational technology systems. You have, you know, IP enabled devices that opens up all kinds of new challenges around security vulnerabilities and also capabilities. So it's, I think it's gonna be a lot younger crowd I think than we usually see this year. And you seeing a lot of students, and again universities participating. >>Yeah, I noticed that they have a student competition that's a, a big part of the event. I'm curious when you say younger, are you expecting to see new startups and some interesting players in the space that maybe we haven't heard of before? >>I think we might see more use cases that are different. When I say younger, I don't mean so much on the Democratic but young, younger i new ideas, right? So I think you're gonna see a lot of smart people coming in that might not have the, you know, the, the lens from when it started in 1988 and remember 1988 to now so much has changed. In fact we just did AEG a segment on the cube called does hardware matter because for many, many years, over the past decades, like hardware doesn't matter, it's all about the cloud and we're not a box company. Boxes are coming back. So you know, that's gonna be music for for into the years of Dell Technologies HPE the world. But like hardware does matter and this, you're starting to see that here. So I think you'll see a lot a younger thinking, a little bit different thinking. You're gonna start to see more conf confluence of like machine learning. You're gonna see security and again, I mentioned space. These are areas where you're starting to see where hardware and high performance is gonna be part of all the new systems. And so it's just gonna be industrial to i o is gonna be a big part too. >>Yeah, absolutely. I, I was thinking about some of these use cases, I don't know if you heard about the new drones they're sending up into hurricanes, but it takes literally what a, what an edge use case, how durable it has to be and the rapid processing that has to happen as a result of the software. So many exciting things we could dive down the rabbit hole with. What can folks expect to see here on the cube during supercomputing? >>Well we're gonna talk to a lot of the leaders on the cube from this community, mostly from the practitioner's side, expert side. We're gonna have, we're gonna hear from Dell Technologies, Hewlett Packer Enterprise and a lot of other executives who are investing wanna find out what they're investing in, how it ties into the cloud. Cuz the cloud has become a great environment for multi-cloud with more grid-like capability and what's the future? Where's the hardware going, what's the evolution of the components? How is it being designed? And then how does it fit into the overall software open source market that's booming right now that cloud technology has been doing. So I wanna, we wanna try to connect the dots on the cube. >>Great. So we have a very easy task ahead of us. Hopefully everyone will enjoy the content and the guests that we leaving to, to our table here from from the show floor. When we think about, do you think there's gonna be any trends that we've seen in the past that might not be there? Has anything phased out of the super computing world? You're someone who's been around this game for a while? >>Yeah, that's a good question. I think the game is still the same but the players might shift a little bit. So for example, a lot more with the supply chain challenges you might see that impact. We're gonna watch that very closely to find out what components are gonna be in what. But I'm thinking more about system architecture because the use case is interesting. You know, I was talking to Dell folks about this, you know they have standard machines but then they have use cases for how do you put the equivalent of a data center next to say a mobile cell tower because now you have the capability for wireless and 5g. You gotta put the data center like CAPA speed functionality and capacity for compute at these edges in a smaller form factor. How do you do that? How do you handle all the IO and that's gonna be all these, all these things are nerd again nerdy conversations but they're gonna be very relevant. So I like the new use cases of power more compute in places that they've never been before. So I think that to me is where the exciting part is. Like okay, who's got the, who's really got the real deal going on here? That's something be the fun part. >>I think it allows for a new era in innovation and I don't say that lightly, but when we can put processing power literally anywhere, it certainly thrills the minds of hardware nerds. Like me, my I'm OG hardware, I know you are too, I won't reveal your roots, but I got my, my start in in hardware product design back in the day. So I can't wait >>To, well you then, you know, you know hardware, when you talk about processing power and memory, you can never have enough compute and memory. It's like, it's like the internet bandwidth. You can't never have enough bandwidth. Bandwidth, right? Network power, compute power, you know, bring it on, you know, >>Even battery life, simple things like that when it comes to hardware, especially when we're talking about being on the edge. It's just like our cell phones. Our cell phones are an edge device >>And we get, well when you combine cloud on premises hybrid and then multi-cloud and edge, you now have the ability to get compute at capabilities that were never fathom in the past. And most of the creativity is limited to the hardware capability and now that's gonna be unleashed. I think a lot of creativity. That's again back to the use cases and yes, again, you're gonna start to see more industrial stuff come out edge and I, I, I love the edge. I think this is a great use case for the edge. >>Me too. A absolutely so bold claim. I don't know if you're ready to, to draw a line in the sand. Are we on the precipice of a hardware renaissance? >>Definitely no doubt about it. When we, when we did the does hardware matter segment, it was really kind of to test, you know, everyone's talking about the cloud, but cloud also runs hardware. You look at what AWS is doing, for instance, all the innovation, it's at robotics, it's at that at the physical level, pro, pro, you know you got physics, I mean they're working on so low level engineering and the speed difference. I think from a workload standpoint, whoever can get the best out of the physics and the materials will have a winning formula. Cause you can have a lot more processing specialized processors. That's a new system architecture. And so to me the hype, definitely the HPC high press computing fits perfectly into that construct because now you got more power so that software can be more capable. And I think at the end of the day, nobody wants to write a app on our workload to run on on bad hardware, not have enough compute. >>Amen to that. On that note, John, how can people get in touch with you and us here on the show in anticipation of supercomputing? >>Of course hit the cube handle at the cube at Furrier, my last name F U R R I E R. And of course my dms are always open for scoops and story ideas. And go to silicon angle.com and the cube.net. >>Fantastic. John, I look forward to joining you in Dallas and thank you for being here with me today. And thank you all for joining us for this super computing preview. My name is Savannah Peterson and we're here on the cube live. Well not live prerecorded from Palo Alto. And look forward to seeing you for some high performance computing excitement soon.

>> From theCUBE Studios in Palo Alto in Boston, bringing you data-driven insights from theCUBE and ETR. This is "Breaking Analysis" with Dave Vellante. >> When Facebook changed its name to Meta last fall, it catalyzed a chain reaction throughout the tech industry. Software firms, gaming companies, chip makers, device manufacturers, and others have joined in hype machine. Now, it's easy to dismiss the metaverse as futuristic hyperbole, but do we really believe that tapping on a smartphone, or staring at a screen, or two-dimensional Zoom meetings are the future of how we work, play, and communicate? As the internet itself proved to be larger than we ever imagined, it's very possible, and even quite likely that the combination of massive processing power, cheap storage, AI, blockchains, crypto, sensors, AR, VR, brain interfaces, and other emerging technologies will combine to create new and unimaginable consumer experiences, and massive wealth for creators of the metaverse. Hello, and welcome to this week's Wiki Bond Cube Insights, powered by ETR. In this "Breaking Analysis" we welcome in cyber expert, hacker gamer, NFT expert, and founder of ORE System, Nick Donarski. Nick, welcome, thanks so much for coming on theCUBE. >> Thank you, sir, glad to be here. >> Yeah, okay, so today we're going to traverse two parallel paths, one that took Nick from security expert and PenTester to NFTs, tokens, and the metaverse. And we'll simultaneously explore the complicated world of cybersecurity in the enterprise, and how the blockchain, crypto, and NFTs will provide key underpinnings for digital ownership in the metaverse. We're going to talk a little bit about blockchain, and crypto, and get things started there, and some of the realities and misconceptions, and how innovations in those worlds have led to the NFT craze. We'll look at what's really going on in NFTs and why they're important as both a technology and societal trend. Then, we're going to dig into the tech and try to explain why and how blockchain and NFTs are going to lay the foundation for the metaverse. And, finally, who's going to build the metaverse. And how long is it going to take? All right, Nick, let's start with you. Tell us a little bit about your background, your career. You started as a hacker at a really, really young age, and then got deep into cyber as a PenTester. You did some pretty crazy stuff. You have some great stories about sneaking into buildings. You weren't just doing it all remote. Tell us about yourself. >> Yeah, so I mean, really, I started a long time ago. My dad was really the foray into technology. I wrote my first program on an Apple IIe in BASIC in 1989. So, I like to say I was born on the internet, if you will. But, yeah, in high school at 16, I incorporated my first company, did just tech support for parents and teachers. And then in 2000 I transitioned really into security and focused there ever since. I joined Rapid7 and after they picked up Medis boy, I joined HP. I was one of their founding members of Shadowlabs and really have been part of the information security and the cyber community all throughout, whether it's training at various different conferences or talking. My biggest thing and my most awesome moments as various things of being broken into, is really when I get to actually work with somebody that's coming up in the industry and who's new and actually has that light bulb moment of really kind of understanding of technology, understanding an idea, or getting it when it comes to that kind of stuff. >> Yeah, and when you think about what's going on in crypto and NFTs and okay, now the metaverse it's you get to see some of the most innovative people. Now I want to first share a little bit of data on enterprise security and maybe Nick get you to comment. We've reported over the past several years on the complexity in the security business and the numerous vendor choices that SecOps Pros face. And this chart really tells that story in the cybersecurity space. It's an X,Y graph. We've shown it many times from the ETR surveys where the vertical axis, it's a measure of spending momentum called net score. And the horizontal axis is market share, which represents each company's presence in the data set, and a couple of points stand out. First, it's really crowded. In that red dotted line that you see there, that's 40%, above that line on the net score axis, marks highly elevated spending momentum. Now, let's just zoom in a bit and I've cut the data by those companies that have more than a hundred responses in the survey. And you can see here on this next chart, it's still very crowded, but a few call-outs are noteworthy. First companies like SentinelOne, Elastic, Tanium, Datadog, Netskope and Darktrace. They were all above that 40% line in the previous chart, but they've fallen off. They still have actually a decent presence in the survey over 60 responses, but under that hundred. And you can see Auth0 now Okta, big $7 billion acquisition. They got the highest net score CrowdStrike's up there, Okta classic they're kind of enterprise business, and Zscaler and others above that line. You see Palo Alto Networks and Microsoft very impressive because they're both big and they're above that elevated spending velocity. So Nick, kind of a long-winded intro, but it was a little bit off topic, but I wanted to start here because this is the life of a SecOps pro. They lack the talent in a capacity to keep bad guys fully at bay. And so they have to keep throwing tooling at the problem, which adds to the complexity and as a PenTester and hacker, this chaos and complexity means cash for the bad guys. Doesn't it? >> Absolutely. You know, the more systems that these organizations find to integrate into the systems, means that there's more components, more dollars and cents as far as the amount of time and the engineers that need to actually be responsible for these tools. There's a lot of reasons that, the more, I guess, hands in the cookie jar, if you will, when it comes to the security architecture, the more links that are, or avenues for attack built into the system. And really one of the biggest things that organizations face is being able to have engineers that are qualified and technical enough to be able to support that architecture as well, 'cause buying it from a vendor and deploying it, putting it onto a shelf is good, but if it's not tuned properly, or if it's not connected properly, that security tool can just hold up more avenues of attack for you. >> Right, okay, thank you. Now, let's get into the meat of the discussion for today and talk a little bit about blockchain and crypto for a bit. I saw sub stack post the other day, and it was ripping Matt Damon for pedaling crypto on TV ads and how crypto is just this big pyramid scheme. And it's all about allowing criminals to be anonymous and it's ransomware and drug trafficking. And yes, there are definitely scams and you got to be careful and lots of dangers out there, but these are common criticisms in the mainstream press, that overlooked the fact by the way that IPO's and specs are just as much of a pyramid scheme. Now, I'm not saying there shouldn't be more regulation, there should, but Bitcoin was born out of the 2008 financial crisis, cryptocurrency, and you think about, it's really the confluence of software engineering, cryptography and game theory. And there's some really powerful innovation being created by the blockchain community. Crypto and blockchain are really at the heart of a new decentralized platform being built out. And where today, you got a few, large internet companies. They control the protocols and the platform. Now the aspiration of people like yourself, is to create new value opportunities. And there are many more chances for the little guys and girls to get in on the ground floor and blockchain technology underpins all this. So Nick, what's your take, what are some of the biggest misconceptions around blockchain and crypto? And do you even pair those two in the same context? What are your thoughts? >> So, I mean, really, we like to separate ourselves and say that we are a blockchain company, as opposed to necessarily saying(indistinct) anything like that. We leverage those tools. We leverage cryptocurrencies, we leverage NFTs and those types of things within there, but blockchain is a technology, which is the underlying piece, is something that can be used and utilized in a very large number of different organizations out there. So, cryptocurrency and a lot of that negative context comes with a fear of something new, without having that regulation in place, without having the rules in place. And we were a big proponent of, we want the regulation, right? We want to do right. We want to do it by the rules. We want to do it under the context of, this is what should be done. And we also want to help write those rules as well, because a lot of the lawmakers, a lot of the lobbyists and things, they have a certain aspect or a certain goal of when they're trying to get these things. Our goal is simplicity. We want the ability for the normal average person to be able to interact with crypto, interact with NFTs, interact with the blockchain. And basically by saying, blockchain in quotes, it's very ambiguous 'cause there's many different things that blockchain can be, the easiest way, right? The easiest way to understand blockchain is simply a distributed database. That's really the core of what blockchain is. It's a record keeping mechanism that allows you to reference that. And the beauty of it, is that it's quote unquote immutable. You can't edit that data. So, especially when we're talking about blockchain, being underlying for technologies in the future, things like security, where you have logging, you have keeping, whether you're talking about sales, where you may have to have multiple different locations (indistinct) users from different locations around the globe. It creates a central repository that provides distribution and security in the way that you're ensuring your data, ensuring the validation of where that data exists when it was created. Those types of things that blockchain really is. If you go to the historical, right, the very early on Bitcoin absolutely was made to have a way of not having to deal with the fed. That was the core functionality of the initial crypto. And then you had a lot of the illicit trades, those black markets that jumped onto it because of what it could do. The maturity of the technology though, of where we are now versus say back in 97 is a much different world of blockchain, and there's a much different world of cryptocurrency. You still have to be careful because with any fed, you're still going to have that FUD that goes out there and sells that fear, uncertainty and doubt, which spurs a lot of those types of scams, and a lot of those things that target end users that we face as security professionals today. You still get mailers that go out, looking for people to give their social security number over during tax time. Snail mail is considered a very ancient technology, but it still works. You still get a portion of the population that falls for those tricks, fishing, whatever it might be. It's all about trying to make sure that you have fear about what is that change. And I think that as we move forward, and move into the future, the simpler and the more comfortable these types of technologies become, the easier it is to utilize and indoctrinate normal users, to be able to use these things. >> You know, I want to ask you about that, Nick, because you mentioned immutability, there's a lot of misconceptions about that. I had somebody tell me one time, "Blockchain's Bs," and they say, "Well, oh, hold on a second. They say, oh, they say it's a mutable, but you can hack Coinbase, whatever it is." So I guess a couple of things, one is that the killer app for blockchain became money. And so we learned a lot through that. And you had Bitcoin and it really wasn't programmable through its interface. And then Ethereum comes out. I know, you know a lot about Ether and you have solidity, which is a lot simpler, but it ain't JavaScript, which is ubiquitous. And so now you have a lot of potential for the initial ICO's and probably still the ones today, the white papers, a lot of security flaws in there. I'm sure you can talk to that, but maybe you can help square that circle about immutability and security. I've mentioned game theory before, it's harder to hack Bitcoin and the Bitcoin blockchain than it is to mine. So that's why people mine, but maybe you could add some context to that. >> Yeah, you know it goes to just about any technology out there. Now, when you're talking about blockchain specifically, the majority of the attacks happen with the applications and the smart contracts that are actually running on the blockchain, as opposed to necessarily the blockchain itself. And like you said, the impact for whether that's loss of revenue or loss of tokens or whatever it is, in most cases that results from something that was a phishing attack, you gave up your credentials, somebody said, paste your private key in here, and you win a cookie or whatever it might be, but those are still the fundamental pieces. When you're talking about various different networks out there, depending on the blockchain, depends on how much the overall security really is. The more distributed it is, and the more stable it is as the network goes, the better or the more stable any of the code is going to be. The underlying architecture of any system is the key to success when it comes to the overall security. So the blockchain itself is immutable, in the case that the owner are ones have to be trusted. If you look at distributed networks, something like Ethereum or Bitcoin, where you have those proof of work systems, that disperses that information at a much more remote location, So the more disperse that information is, the less likely it is to be able to be impacted by one small instance. If you look at like the DAO Hack, or if you look at a lot of the other vulnerabilities that exist on the blockchain, it's more about the code. And like you said, solidity being as new as it is, it's not JavaScript. The industry is very early and very infantile, as far as the developers that are skilled in doing this. And with that just comes the inexperience and the lack of information that you don't learn until JavaScript is 10 or 12 years old. >> And the last thing I'll say about this topic, and we'll move on to NFTs, but NFTs relate is that, again, I said earlier that the big internet giants have pretty much co-opted the platform. You know, if you wanted to invest in Linux in the early days, there was no way to do that. You maybe have to wait until red hat came up with its IPO and there's your pyramid scheme folks. But with crypto it, which is again, as Nick was explaining underpinning is the blockchain, you can actually participate in early projects. Now you got to be careful 'cause there are a lot of scams and many of them are going to blow out if not most of them, but there are some, gems out there, because as Nick was describing, you've got this decentralized platform that causes scaling issues or performance issues, and people are solving those problems, essentially building out a new internet. But I want to get into NFTs, because it's sort of the next big thing here before we get into the metaverse, what Nick, why should people pay attention to NFTs? Why do they matter? Are they really an important trend? And what are the societal and technological impacts that you see in this space? >> Yeah, I mean, NFTs are a very new technology and ultimately it's just another entry on the blockchain. It's just another piece of data in the database. But how it's leveraged in the grand scheme of how we, as users see it, it can be the classic idea of an NFT is just the art, or as good as the poster on your wall. But in the case of some of the new applications, is where are you actually get that utility function. Now, in the case of say video games, video games and gamers in general, already utilize digital items. They already utilize digital points. As in the case of like Call of Duty points, those are just different versions of digital currencies. You know, World of Warcraft Gold, I like to affectionately say, was the very first cryptocurrency. There was a Harvard course taught on the economy of WOW, there was a black market where you could trade your end game gold for Fiat currencies. And there's even places around the world that you can purchase real world items and stay at hotels for World of Warcraft Gold. So the adoption of blockchain just simply gives a more stable and a more diverse technology for those same types of systems. You're going to see that carry over into shipping and logistics, where you need to have data that is single repository for being able to have multiple locations, multiple shippers from multiple global efforts out there that need to have access to that data. But in the current context, it's either sitting on a shipping log, it's sitting on somebody's desk. All of those types of paper transactions can be leveraged as NFTs on the blockchain. It's just simply that representation. And once you break the idea of this is just a piece of art, or this is a cryptocurrency, you get into a world where you can apply that NFT technology to a lot more things than I think most people think of today. >> Yeah, and of course you mentioned art a couple of times when people sold as digital art for whatever, it was 60, 65 million, 69 million, that caught a lot of people's attention, but you're seeing, I mean, there's virtually infinite number of applications for this. One of the Washington wizards, tokenized portions of his contract, maybe he was creating a new bond, that's really interesting use cases and opportunities, and that kind of segues into the latest, hot topic, which is the metaverse. And you've said yourself that blockchain and NFTs are the foundation of the metaverse, they're foundational elements. So first, what is the metaverse to you and where do blockchain and NFTs, fit in? >> Sure, so, I mean, I affectionately refer to the metaverse just a VR and essentially, we've been playing virtual reality games and all the rest for a long time. And VR has really kind of been out there for a long time. So most people's interpretation or idea of what the metaverse is, is a virtual reality version of yourself and this right, that idea of once it becomes yourself, is where things like NFT items, where blockchain and digital currencies are going to come in, because if you have a manufacturer, so you take on an organization like Nike, and they want to put their shoes into the metaverse because we, as humans, want to individualize ourselves. We go out and we want to have that one of one shoe or that, t-shirt or whatever it is, we're going to want to represent that same type of individuality in our virtual self. So NFTs, crypto and all of those digital currencies, like I was saying that we've known as gamers are going to play that very similar role inside of the metaverse. >> Yeah. Okay. So basically you're going to take your physical world into the metaverse. You're going to be able to, as you just mentioned, acquire things- I loved your WOW example. And so let's stay on this for a bit, if we may, of course, Facebook spawned a lot of speculation and discussion about the concept of the metaverse and really, as you pointed out, it's not new. You talked about why second life, really started in 2003, and it's still around today. It's small, I read recently, it's creators coming back into the company and books were written in the early 90s that used the term metaverse. But Nick, talk about how you see this evolving, what role you hope to play with your company and your community in the future, and who builds the metaverse, when is it going to be here? >> Yeah, so, I mean, right now, and we actually just got back from CES last week. And the Metaverse is a very big buzzword. You're going to see a lot of integration of what people are calling, quote unquote, the metaverse. And there was organizations that were showing virtual office space, virtual malls, virtual concerts, and those types of experiences. And the one thing right now that I don't think that a lot of organizations have grasp is how to make one metaverse. There's no real player one, if you will always this yet, There's a lot of organizations that are creating their version of the metaverse, which then again, just like every other software and game vendor out there has their version of cryptocurrency and their version of NFTs. You're going to see it start to pop up, especially as Oculus is going to come down in price, especially as you get new technologies, like some of the VR glasses that look more augmented reality and look more like regular glasses that you're wearing, things like that, the easier that those technologies become as in adopting into our normal lifestyle, as far as like looks and feels, the faster that stuff's going to actually come out to the world. But when it comes to like, what we're doing is we believe that the metaverse should actually span multiple different blockchains, multiple different segments, if you will. So what ORE system is doing, is we're actually building the underlying architecture and technologies for developers to bring their metaverse too. You can leverage the ORE Systems NFTs, where we like to call our utility NFTs as an in-game item in one game, or you can take it over and it could be a t-shirt in another game. The ability for having that cross support within the ecosystem is what really no one has grasp on yet. Most of the organizations out there are using a very classic business model. Get the user in the game, make them spend their money in the game, make all their game stuff as only good in their game. And that's where the developer has you, they have you in their bubble. Our goal, and what we like to affectionately say is, we want to bring white collar tools and technology to blue collar folks, We want to make it simple. We want to make it off the shelf, and we want to make it a less cost prohibitive, faster, and cheaper to actually get out to all the users. We do it by supporting the technology. That's our angle. If you support the technology and you support the platform, you can build a community that will build all of the metaverse around them. >> Well, and so this is interesting because, if you think about some of the big names, we've Microsoft is talking about it, obviously we mentioned Facebook. They have essentially walled gardens. Now, yeah, okay, I could take Tik Tok and pump it into Instagram is fine, but they're really siloed off. And what you're saying is in the metaverse, you should be able to buy a pair of sneakers in one location and then bring it to another one. >> Absolutely, that's exactly it. >> And so my original kind of investment in attractiveness, if you will, to crypto, was that, the little guy can get an early, but I worry that some of these walled gardens, these big internet giants are going to try to co-op this. So I think what you're doing is right on, and I think it's aligned with the objectives of consumers and the users who don't want to be forced in to a pen. They want to be able to live freely. And that's really what you're trying to do. >> That's exactly it. You know, when you buy an item, say a Skin in Fortnite or Skin in Call of Duty, it's only good in that game. And not even in the franchise, it's only good in that version of the game. In the case of what we want to do is, you can not only have that carry over and your character. So say you buy a really cool shirt, and you've got that in your Call of Duty or in our case, we're really Osiris Protocol, which is our proof of concept video game to show that this all thing actually works, but you can actually go in and you can get a gun in Osiris Protocol. And if we release, Osiris Protocol two, you'll be able to take that to Osiris Protocol two. Now the benefit of that is, is you're going to be the only one in the next version with that item, if you haven't sold it or traded it or whatever else. So we don't lock you into a game. We don't lock you into a specific application. You own that, you can trade that freely with other users. You can sell that on the open market. We're embracing what used to be considered the black market. I don't understand why a lot of video games, we're always against the skins and mods and all the rest. For me as a gamer and coming up, through the many, many years of various different Call of Duties and everything in my time, I wish I could still have some this year. I still have a World of Warcraft account. I wasn't on, Vanilla, Burning Crusade was my foray, but I still have a character. If you look at it that way, if I had that wild character and that gear was NFTs, in theory, I could actually pass that onto my kid who could carry on that character. And it would actually increase in value because they're NFT back then. And then if needed, you could trade those on the open market and all the rest. It just makes gaming a much different thing. >> I love it. All right, Nick, hey, we're out of time, but I got to say, Nick Donarski, thanks so much for coming on the program today, sharing your insights and really good luck to you and building out your technology platform and your community. >> Thank you, sir, it's been an absolute pleasure. >> And thank you for watching. Remember, all these episodes are available as podcasts, just search "Breaking Analysis Podcast", and you'll find them. I publish pretty much every week on siliconangle.com and wikibond.com. And you can reach me @dvellante on Twitter or comment on my LinkedIn posts. You can always email me david.vellante@siliconangle.com. And don't forget, check out etr.plus for all the survey data. This is Dave Vellante for theCUBE Insights, powered by ETR, happy 2022 be well, and we'll see you next time. (upbeat music)

(upbeat electronic music) >> Okay thanks, Adam, and the studio. We're here on the floor in Cloud City, right in the middle of all the action, the keynotes are going on in the background. It's a packed house. I'm John Furrier. Dave Vellante's on assignment, digging in, getting those stories. He'll have the analysis, he'll be back on theCUBE, but I want to welcome Chloe Richardson, who has been holding down the main stage here in Cloud City with amazing content that she's been hosting. Chloe, great to see you. Thanks for coming on theCUBE, and kicking it off day two with me. >> No, not at all. Thank you for having me! It's very exciting! I love what you guys have got over here, very fun! >> We're inside theCUBE. This is where all the action is, and also, Cloud City is really changing the game. If you look at what's going on here in Cloud City, it's pretty spectacular. >> No, I mean, the atmosphere is absolutely palpable. Isn't it? You can just feel it. People walk in and see what the future looks like for the telecoms industry. Very exciting. >> And you've been doing a great job on the main stage, we're really loving your content. Let's get into some of the content here. After the keynotes are going on, we're going to have DR maybe fly by the set later, we're going to check that out. But let's check out this videotape. This is TelcoDR. You got to check out this reel, and we'll be right back, and we'll talk about it. (smooth electronic music) >> TelcoDR burst onto the global telecom scene this year, making headlines for taking over the huge Erickson space at MWC 21, and for building Cloud City in just a hundred days. But why did the company go to such trouble? And what is their unique offering to the telecoms industry? And what drives their dynamic CEO, Danielle Royston, or DR, as everyone calls her? Cloud City Live caught up with DR, away from the hustle and bustle of the city to find out. (upbeat instrumental music) >> Hi, I'm Danielle Royston, coming to you from beautiful Barcelona! I'm here for MWC 21. About a hundred days ago, I decided to take over the iconic Erickson booth to turn it into Cloud City. Cloud City has over 30 vendors, and 70 demos, to introduce telco to what I think is the future for our industry. We're going to have three awesome experiences. We're going to talk about the new subscriber experience. We're going to talk about what's in store for the new network, and the future of work. And I'm really excited to create a community, and invite awesome telco executives to see this new feature. It's been a really tough 18 months, and we didn't know what MWC 21 was going to be like in terms of attendance. And so from the get-go, we planned this amazing experience that we call Cloud City Live. At Cloud City Live, we have two main components. We have the speaker series, where we have over 50 speakers from Amazon, Google, Microsoft, as well as CSPs, and awesome vendors, talking about the public cloud in telco. The second part of Cloud City Live is theCUBE. Think of this as like an ESPN desk of awesome tech interviews focused on telco and the public cloud, hosted by John furrier and Dave Vallente. Dave and John are going to talk to a variety of guests focused on telco in the public cloud. It's a great way for our virtual participants to feel like they're at the show, experiencing what's going on here. So excited to have them as part of the Cloud City booth. There's a ton of innovation going on in telco, and 20 years ago, Elon Musk set on his mission to Mars. I, like Elon Musk, am on a quest to take telco to the public cloud. Every year at MWC, there's always a flurry of announcements, and this year is no different. At this year's MWC, Totogi, a startup that I invested $1,000,000 in, will be launching. Totogi is introducing two products to the market this week at MWC. The first is at planetary scale charger. More than a charger, it's an engagement, coupling your network data with charging information to drive subscriber engagement, and doubling your ARPU. The second product that Totogi is introducing is a planetary scale BSS system, built on top of the TM Forum Open APIs. Both of these products will be available for viewing in the virtual booth, as well as on the show floor. The public cloud is an unstoppable mega trend that's coming to telco! I'm super excited to bring to you the vendors, the products, the demonstrations, and the speakers, both to people here in Barcelona, and virtually around the world! (upbeat instrumental music) Well, that was a fascinating insight into the origins of TelcoDR, why public cloud is going to truly disrupt the telecoms industry, and why DR herself is so passionate about it. If you'd like to find out more, come and see us at Cloud City. (groovy electronic music) >> Okay, thanks. Just rolling that reel. Chloe, I mean, look at that reel, I mean, DR, Danielle Royston, she's a star. And I've seen a lot of power players in the industry. She's got guts and determination, and she's got a vision, and she's not just, you know, making noise about telco and cloud, there's actually a lot of real good vision there! I mean, it's just so impressive. >> No, it really is. And for me, it's almost like the next moonshot. It's the moonshot of the telco world! She's innovative, she's exciting. And if we've learned anything over the last 18 months, it's that we need that in this industry, to grow for the future of the industry. So, so exciting. I think she's a real inspiration! >> And I love the fact that she's so takes the tiger by the tail. Because the telco industry is being disrupted, she's just driving the bus here. And I remember, I did a story on Teresa Carlson, who was with Amazon Web Services, she was running the public sector, and she was doing the same exact thing in that public sector world in DC, and around the world. She opened up regions in Bahrain, which as a woman, that was an amazing accomplishment. And she wasn't just a woman, she was just a power player! And she was an exceptional leader. I see DR doing the same thing, and people aren't going to like that, I'll tell you right now. People are going to be like, "Whoa, what's going on here?" >> Now of course, it's always that way we pioneers though, isn't it? At the time, people thinking what is going on here, we don't like change, why are being shaken up? But actually, afterwards, in retrospect, they think, "Oh, okay. I see why that happened, and we needed it." So, really exciting stuff. >> Making things happen, that's what we're doing here on theCUBE. Obviously, the main stage's doing a great job. Let's go check out this highlight reel. If you're watching and you missed some of the action, this is obviously the physical event back since 2019 in February, but there's also a hybrid event, a lot of virtual action going on. So, you got theCUBE Virtual, you got a lot of content on virtual sites. But in person here, we're going to go show you a highlight reel from what we did yesterday, and what was happening around the show. Enjoy this quick highlight reel from yesterday. (groovy electronic music) (cheerful instrumental music) (groovy electronic music) Okay. We're back here in theCUBE. We're on the main floor out here with Chloe, who is emceeing, hosting, and driving the content on the Cloud City main stage. Chloe, it's been great here. I mean so far, day one, I was watching your presentations and fireside chats you've been hosting. Awesome content. I mean, people are like jazzed up. >> Yeah, no, for sure. We had Scott Brighton on yesterday, who was our opening keynote on the live stage, and his session was all about the future of work, which is so relevant and so pertinent to now. And he talked about the way it's changing. And in 10 years, it's going to be a trillion dollar industry to be in the cloud at work. So, really interesting! I mean, yeah, the atmosphere here is great. Everyone's excited. It's new content everyday. And that's the thing, it's not stale content! It's stuff that people want to hear. People are here for the new hot trends, the new hot topics. It's very exciting. >> Yeah, the next big thing. And also it's a fiscal event, so since 2019, this Mobile World Congress has been a massive event, and hasn't happened since February, 2019. That's a lot of time that's elapsed in the industry because of COVID, and people are glad to be here. But a lot of stuff's changed! >> Yeah. It's a different world, right? I mean, two years in the telco industry is like a hundred years elsewhere. Everything has changed! Digital transformation migration, obviously cloud, which is what we're talking about over here at Cloud City Live. I'm wondering though, John, I'd like to pick your brains on something. >> John: Sure. >> It has changed in the last two years. We know that! But what about the future of Mobile World Congress? How do you see it changing in the next few years. >> Oh, man. That's a great question. I mean, my observation, I've been coming to the show for a very long time, over a decade and a half, and it's been a nerdy show about networks, and telecom, which is basically radios, and wireless, and then mobile. But it's very global, a lot of networks. But now it's evolving! And many people are saying, and we were talking on theCUBE yesterday, Dave Vellante was commenting, that this show is turning into a consumer like show. So CES is the big consumer electronics show in the US, in Las Vegas every year. This show has got a vibe, because of all the technology from the cloud players, and from the chips, getting smaller, faster, cheaper, more capability, lower power. So people look at the chips, the hardware. It's less about the speeds and feeds, it's more about the consumer experience. We got cars. I was talking to a guy yesterday, he said, "Vehicle e-commerce is coming." I went, "What the hell his vehicle e-commerce?" And you could be on your app driving down the freeway and go, "Hey, I want some food." Instead of having it delivered to you, you order it, you pick it up. So that's kind of what can be happening now in real time, you can do all kinds of other things. So, a lot of new things are happening. >> Yeah, I think so. Do you see that as another disruption for the industry? That is, the fact that it's moving to be more consumer focused? Is there anything we should be worried about in that space? >> Well, I think the incumbents are going to lose their positions. So I think in any new shift, new brands come in out of nowhere. And it's the people that you don't think about. It's the the company that you don't see. (audience in background applauding) And we got DR on the main stage right here, look at this! We saw her walk out with the confidence of a pro. >> Chloe: Yeah, for sure. >> She just walked out there, and she's not afraid. >> Well, as she said in her video, she is ready to wake them up! And you can see as soon as she walks out, that is what she intends to do today. >> I love her mojo. She's got a lot of energy. And back to the show, I mean, she's just an example of what I was saying. Like in every market shift, a new brand emerges. >> Chloe: Yep. >> I mean, even when Apple was tainted, they were about to shut down, they were going to run out of cash, when Steve Jobs brought back Apple, he consolidated and rebooted the company, the iPad was a seminal, iPod, a seminal moment. Then the iPhone, and just, the rest is history. That kind of disruption is coming. You're going to see that now. >> Oh, it's exciting though, isn't it? To be future ready, rather than future proof! But actually I wanted to ask you something as well, because we are seeing all these cloud players getting hot under the collar about telco. Why are they so excited? What's the buzz about wire, as you're on AWS and Google Cloud, why do they want to have a slice of the pie? >> Well, I think they're hot and heavy on the fact that telco is a ripe opportunity. And it used to be this boring, slow moving glacier. It's almost like global warming now, the icebergs are melting, and it's going to just change. And because of the edge, 5G is not a consumer wireless thing, it's not like a better phone. It's a commercial app opportunity, because it's high bandwidth. We've all been to concerts, or football games, or sporting events where a stadium is packed. Everyone gets bars on their wifi, but can't get out. Can't upload their picture to Instagram. Why? Because it's choking them on the network. That's where 5G solves a problem. It brings a lot of bandwidth, and that's going to bring the edge to life, and that's money. So when you got money, and greed, and power, changing hands, if it's on the table, and the wheel's spinning, it could be double zero, or it could be lucky seven. You don't know! >> Oh, for sure. And that's certainly enough to get all the big players hot and bothered about getting involved! And I suppose it circles back to the fact that DR is really leading the charge, and they're probably thinking, "Okay, what's going on here? This is different. We want something new." You did notice it, OpenRAN is something that we've been talking about over the last day or so. We've had quite a few of us speakers over here at Cloud City Live mention OpenRAN. What is it all about, Don? Because why all the buzz if 5G is such a hot topic? Why are we get excited about it? >> That's a great thing. The 5G certainly will drive the main trend, for sure. OpenRAN is essentially an answer to the fact that 5G is popular, and they need more infrastructure. So open source, the Linux Foundation, has been the driver for most of the open source software. So, they're trying to make open software, and open architectures, to create more entrepreneurial activity around hardware, and around infrastructure, because we need more infrastructure, we need more antennas, we need more transceivers, we need more devices. That could be open. So in order to do that, you got to open up the technology, and you want to minimize the licensing, and minimize a lot of these, you know, proprietary aspects. >> What did we look at? So on Wednesday, we've got a great keynote from Phillip Langlois, who is CEO and founder of P1 Security. And he's coming to talk to us about cybersecurity within the cloud, and within telco. So you just mentioned that OpenRAN is all about having open source, about having that space where we can share more efficiently and easily more easily. What does that mean for security though? Is it at risk? >> I think it's going to increase the value of security, and minimize the threats. Because open source, even though it's open, the more people that are working on it, the more secure it could be. So yes, it could be more open in a sense that could be explored by hackers, but open can also protect. And I think we've seen open source, and cloud in particular, be more secure. Because everyone said, cloud is not secure, open source is insecure. And as it turns out, when the collective hive minds of developers work on things, it gets secure. >> And it is interesting, isn't it? Because we have seen that there has been an uptick in cyber security threats, but actually I was speaking to some leaders across various industries, and particularly in tech, and they were saying, actually, there's not been an uptick in attempted threats, there's been an uptick because with this open-source environment, we are able to track them, and measure them, and defend more efficiently. So actually, they're being batted away. But the number is probably the same as it always was, we just didn't know about them before we had this open source environment. >> There's more money in threats, and there's more surface area. So as the tide rises, so to the threats. So on a net basis, it's more, because there's more volume, but it's pretty much the same. And look it, there's money involved, they are organized. There's a business model on attacking and getting the cash out of your bank, or ransomware is at an all time high. >> Yes! >> So this is like a big problem, and it's beyond the government. It's around individual freedom. So, security is huge. And I think open source and cloud are going to be, I think, the answer to that. >> Yeah, for sure. And it's, again, about collaboration, isn't it? Which we talk about all the time, but without collaboration, the industries are going to have to work together to promote this environment. So yeah, it should be good to talk with Phillip on Wednesday. >> I'd just say on security, don't download that PDF, if you don't know who it came from. The phishing is always good. Well, we got some great stuff coming up. We're going to have a great day. We got a video here of Mobile World Live. We're going to show this next segment, and we're going to toss it to a video. And this is really about to give the experience, Chloe, for people who aren't here. To get a feel for what's going on in Barcelona, and all the action. And if you look at the video, enjoy it. >> Hi, I'm Daniel Royston, CEO and founder of TelcoDR. But you can call me DR! Ready for some more straight talk about telco? It's go time! Let's do it. Holy shit! It sure is a great time to be a tech company! I mean, if you're Amazon, Microsoft, Google, Grab, Twilio, Door Dash, or Uber, life's pretty great! Just look at these stock prices over the past five years, with their shareholder value going up and to the right. Totally amazing! But where's telco? Dare I add our stocks to this awesome chart? Let's compare these fabulous tech stocks to AT&T, Vodafone, Telefonica, TIM, America Movil, and Zain Group. Huh. Not so great, right? Yep. I'm talking directly to you, senior telco execs. I'm here to wake you up! Why is it that Wall Street doesn't see you as tech? Why aren't CSPs seen as driving all the tech change? Why is it always Apple, Amazon and Google who get the big buzz? But more importantly, why isn't it you? Before I came to this industry, I always thought of carriers as tech companies. I gave more of my money to AT&T than to Apple, because I really cared about the quality of the network. But I also wondered why on earth the carriers allowed all the other tech companies to take center stage. After spending the last few years in telco, I now understand why. It's because you are network people, you are not customer people! I get it. You have the security blanket. You're a network oligopoly. It's crazy expensive to build a network, and it's expensive to buy spectrum. It takes operational chops to run a killer network, and it takes great skill to convince Wall Street to finance all of it. You telco execs are amazing at all those things. But because you focus on the network, it means you don't focus on the customer. And so far, you haven't had to. Every Telco's KPI is to be less shitty than their next competitor. You don't have to be the best. Just don't be last. Everyone else's NPS is in the thirties too. Their mobile app ratings are just as terrible as yours. Everyone's sucks at customer sat. And it's widely acknowledged and accepted. Let's talk about the cost of that. The cost is not measured on market share against other MNOs. The cost is measured in lost ARPU that the tech guys are getting. Everyone knows about the loss of texting to WeChat, WhatsApp, and the other OTT apps. But it is not just texting. The total adjustable market, or TAM, of the mobile app disruptors is huge! Instead of remaining network focused, you should be leveraging your network into a premier position. And because you're network people, I bet you think I'm talking about coercive network leverage. That is not what I'm talking about! I'm talking about love, customer love. There is one thing the highly valued tech companies all have in common. They all crush it on customer love! They look at every interaction with the customer and say, how do we make the customer love this? Like Netflix has easy monthly cancellation, Amazon does no questions asked returns, Uber gives users a real time view into driver rating and availability. Compare those ideas to the standard telco customer interaction. The highly valued tech companies don't have the network oligopoly to fall back on like you do. To survive, they must make customers love them. So, they focus on it in a big way! And it pays off. Their NPS is close to 70, and they have app ratings of 4.5 or higher. A far cry from your thirties NPS, and app ratings of 3.5. If you want to have those huge tech multiples for yourself, you have to start thinking about these guys as your new competition, not the other telcos in your market. The crazy thing is, if you give up using your network as a crutch, and put all of your focus on the customer, the network becomes an asset worth more than all the super apps. Let's step back and talk about the value of super apps, and becoming customer centered! Retooling around the customer is a huge change, so let's make sure it's worth it. We aren't talking about 25% improvement. I'm going to show you that if you become customer centric, you can double your ARPU, double your valuation multiples, and drive big shareholder value, just like the tech companies on that chart! Now let's talk about the customer focused super apps. There are hundreds of companies in a variety of categories vying for your subscribers' disposable income. Movies, food delivery, financial services. Who are they? And why does Wall Street give them such high valuations and like them so much? Well first, look at what they are telling Wall Street about their TAM. They broadcast ridiculously huge TAMs that are greater than the telco TAMs. You know, who should have a ridiculously huge TAM? You! Hello? What I'm saying is that if you got what's yours, you double in size. And if you take the TAMs they throw around, you'd be five times as big. When I think about the opportunity to double ARPU, without having to double the cap ex to build out the network, I say to myself, hell yeah! We should totally go do it, and do whatever it takes to go get it. For example, let's talk about Grab. Grab is a Southeast Asian super app company with an expected $40 billion valuation. Grab's customer focus started in Rideshare, but then leveraged its customer love into wallet deliveries, hospitality, and investing. Their ARPU is now larger than a Telco's ARPU in countries where they compete, and they have a higher valuation than those telcos too. Imagine if you could combine a great user experience with the valuable services that helped grow your ARPU. That would be huge! So, how do you build a super app? I bet right about now, you're wishing you had a super app. Everyone wants a super app! A lot of money has been unsuccessfully spent by telcos trying to build their own. I bet you're saying to yourself, "DR, your pie in the sky sounds great, but it has no chance of success." Well, I'm betting things are about to change. There is a public cloud startup called to Totogi that is going to help carriers build world-class super apps. To have a successful super app, there is one key metric you need to know. It is the KPI that determines if your super app will be a success or a flop. It's not about the daily active users. It's not the average order value. It's not even gross merchandise value. It's all about the frequency of use per day by the user. That's the metric that matters. How many have you used that metric in your telco apps? Do you have a team driving up user app interactions every day? Most telco apps are used for top-up, or to check a bill. This is a huge missed opportunity. Super app companies excel at building great experiences and driving a huge amount of interactions. They have to, their business depends on it. They have to be customer focused. They have to keep bringing the user back to the app, every day, multiple times a day. And you know what? They do a great job. Customers love their super apps. They have great user experiences. Like Apple credit cards, no information required application process. They have high net promoter scores because of customer friendly policies. Like how Door Dash retroactively credits fees when you move to a better plan. And they have great app store ratings, because they do simple things, like remember your last order, or allow you to use the app, rather than forced you to call customer service. Customers of successful super apps love it when new services are added. And because of the customer love, every time something is added to the app, customers adopt it immediately. New services drive frequent daily user interactions. So our problem in telco is we have an app that is only open once per month, not multiple times per day. And without frequent opens, there is no super app. Hm, what do we have in telco that we could use to help with this problem? I wonder. While you don't currently have a mobile app that subscribers use multiple times a day, you have something that's 10 times better! You have a network. Subscribers already interact with your network. 10 times more frequently than any user with any of the super apps. But telcos don't leverage those interactions into the insanely valuable engagements they could be. Worse, even if you wanted to, your crappy, over customized, on-premise solutions, make it impossible. Thankfully, there's this new tech that's come around, you may have heard of it, the public cloud. When you bring the enabling technology of the public cloud, you can turn your network interactions into valuable super app interactions. And there's a special new startup that's going to help you do it, Totogi! Totogi will leverage all those network interactions, and turn them into valuable customer interactions. Let me repeat that. Totogi will leverage all those network interactions, and turn them into valuable customer interactions. Totogi allows the carrier to leverage its network, and all the network interactions, into customer engagement. This is something that super apps don't have, but will wish they did. But this magic technology is not enough. Telcos also need to move from being network focused to being customer focused. Totogi enables telcos to chase exciting revenue growth without that annoying, massive cap ex investment. Totogi is going to help you transform your sucky mobile apps, with the crappy customer ratings, into something your subscribers want to open multiple times a day, and become a platform for growth. I'm so excited about Totogi, I'm investing $100,000,000 into it. You heard me right. $100,000,000. Is this what it feels like to be SoftBank? I'm investing into Totogi because it's going to enable telcos to leverage their network interactions into super app usage! Which will lead to an improved subscriber experience, and will give you a massive jump in your ARPU. And once you do that, all those telco valuations will go from down here, (buzzes lips) to up here. And so I've been talking to some folks, you know, checking in, feeling them out, getting their thoughts. And I've been asking them, what do you think about telcos building super apps? And the response has been, "Click. Eh." Everyone says, no way. Telcos can't do it. Zero chance. Total goose egg. (egg cracking) One suggested I build a bonfire with a hundred million dollars, because then at least I wouldn't waste years of my life. Well, I think those people are dead wrong! I do believe that telcos can build super apps and make them super successful. The public cloud is changing all parts of telco, and Totogi and super apps are fundamentally changing the customer relationships. In one month at MWC, people will see what Totogi has to offer, and they will understand why I'm making this bold call. Because Totogi takes the value of the network, and the power of the public cloud, to help telcos move from being network centric, to being customer centric. Boom! If you want to make this transformation and reap all the financial benefits, you will have to compete for customers with a whole new set of players. You will no longer compete with the network focused guys, like the other telcos. Instead, you will be competing against the customer focused companies. These players don't have a network to fall back on like your old competitors, they know they have to make customers love them. Their customer loyalty is so off the charts, their customers are called fans. So if you want that big money, you will have to compete on their turf, and make the customers want to choose you. You need Apple level loyalty. That bar is uber high. We'll have to give up the security blanket of the network, and change. Instead of NPS at the thirties, it needs to be in the seventies. Instead of mobile app ratings in the threes, they need to get five stars. I'm betting big that Totogi will make that possible! I'm going to help you every step of the way, starting with my keynote next month at MWC. Join me, and I'll share the secrets to converting your super valuable network interactions to make your super app a massive success. We're going to have an amazing time, and I can't wait to see you there! >> Okay. We're back here in theCUBE here at Mobile World Congress in Cloud City. I'm John Furrier. Chloe Richardson's filling in for Dave Vellante who's out on assignment. He's out getting all the data out there and getting stories. Chloe, what a great keynote by Danielle Royston. We just heard her involving major action, major pump you up, punch in the face, "Wake the heck up cloud people, cloud is here!" She didn't pull any punches. >> No, I mean the thing is, John, there's trillions of dollars on the table, and everyone seems to be fighting for it. >> And you heard her up there, if you're not on the public cloud, you're not going to get access to that money. It's a free for all. And I think the cloud people are like, they might think they're going to walk right in, and the telco industry is going to just give it up. >> No, of course. >> And it's not going to be, it's going to be a fight! Who will win? >> Who will win, but also who will build the next big thing? (John laughing) >> Someone needs to die in the media conversations. It's always a fight. Something's dead. Something's dead but keeps the living. All that kidding aside, this is really about partnering. Think what's happened is Telco's already acknowledged that they need to change. And the 5G edge conversation, the chip acceleration. Look at Apple. They've got their own processors, Nvidia, Amazon makes their own chips, Intel's pumping stuff out, you've got Qualcomm. You've got all these new things. So, the chips are getting faster, and the software's more open source. And I'm telling you, the cloud is just going to drive that bus right down Cloud Street, and it's going to be in Cloud City everywhere. >> And it's going to be peepin' on the board as it drives down. (John laughing) John, I'm not a stalker, but I have read some of the things that you've written, and one of the things you mentioned that was really interesting was the difference between building and operating. Break it down for me, what does that mean? >> That means basically in mature markets, and growing markets, things behave differently, and certainly economics, and the people, and the makeup, and the mindset. So the telco has been kind of this mature market, it's been changing and growing, but not like radically. Cost optimization, make profit. You know, to install a lot of cable, you got to get the rents out of that infrastructure. And that's kind of gone on for too long. Cloud is a growth market. And it's about building, not just operating. And you've got operators, carriers are operating networks. So you're going to see the convergence of operators and builders coming together. Builders being software developers, new technology, and executives that think about building. And you want people on your team that are going to be, I won't say war time, you know, lieutenants or generals, but people who can handle the pace of change. Because the change and the nature is different. And some people want slow and steady, keep the boat from rocking. But in a growth market, it's turbulent, and the ride might not be quiet, first-class ticket to paradise. It's bumpy, but it's thrilling. >> No, of course. Is it similar to the old sales adage of hunter versus farmer? Are there parallels there? >> Yeah. I mean, there's a mindset. If you have a team of people that aren't knocking down new opportunities and building the next big thing, fixing your house, get your house in order, you know, refactor, reset, reboot, replatform with the cloud, and then refactor your business! If you don't have the people thinking like that, you're probably either going to be taken over, or go out of business. And that's what the telcos with all these assets, they're going to get bought, rolled into a SPAC, Special Purpose Acquisition Company, which is super hot in the United States. A lot of roll-ups going on with private equity. So a lot of these telcos, if they don't refactor, or replatform then refactor, they're going to be toast, and they're going to get rolled up, and eaten up by somebody else. >> Yeah, sure. It's interesting though, isn't it? Because when we think of telco in tech, we often think of, obviously we've got the triad, people, process, technology, and we think, process and technology really to the forefront here. But like you said there, people are also so important because if you don't have this right balance, you're not going to be able to drive that change. We had, obviously, Scott Brighton on the stage yesterday, and after his session, somebody came up to me and just said, "I'm interested to hear what that means for education." So how can we establish this new generation of tech and telco leaders from the grassroots with educational associations, establishments. How can we encourage that? I wonder, is this something that you talk about? >> Yeah. I mean, education's huge, and this highlights the change that telco's now part of. Telco used to be a boring industry that ran the networks, or moving packets around, and mobile was there. But once the iPhone came out in 2007, the life has changed, society has changed, education's changed, how people interact has changed. So, you start to see people now aware of the value. And if you look at during COVID, the internet didn't crash, the telcos actually saved our asses, and everyone survived because the network didn't break. Yeah, we had some bad Zoom meetings here and there, and some teleconferences that didn't go well, but for the most part we survived, and they really saved everybody. So, they should get kudos for that. But now they're dependent upon healthcare, education. People care about that stuff, so now you're going to start to see an elevated focus on what telecom is doing. That's why the edge has got trillions of dollars up for grabs. But education, there's negative unemployment in cybersecurity and in cloud. So for the people who say, "Oh, there's no jobs." Or, "I can't work." That's a bunch of BS, because you can just get online, get on YouTube, and just get a degree. You can get a degree. You can get an Amazon job. It pays a hundred thousand dollars a year! American. You can make a hundred thousand pounds, and be unemployed six months, and then be employed. So negative unemployment means, there's more jobs than people to fill them all, in fact. >> Yeah, it's interesting you mentioned that, because I was talking to a cyber security leader who was saying in something, I think there were now 3 million vacancies in cybersecurity. And there's such a skill shortage. There is nobody around to fill it! So it's an interesting problem to have, isn't it? Because it's reversed to what we've been used to for the last few decades! And obviously, telco is in the same space. But what can we do about it do you think, to actually -- >> I think it's going to take leadership, and I'm a big proponent of kids not going to university if they don't have to. Why spend the dough, money, if you don't have to? You can get online. I mean, the data's there. But to me, it's the relationships, the mentorship. You're starting to see a women in tech, and underrepresented minorities in the tech field, where mentorship is more important than curriculum. Community is more important than just going through a linear courseware. Nobody wants to sit online and go through linear courseware. Now, if they have to get a certificate, or degree, and accreditation, no problem. But the communities are out there, so that's a big change over, I'm a big fan of that. And I think people should, you know, get some specialized skills. You can get that online, so why even go to school? So, people are figuring that out. >> For sure. And also, even transferring. I mean, so many skills are transferable nowadays, aren't they, so we could easily be talking to people from other industries, and bringing them into telco, and saying, "Look, bring what you know from your retail background, or your healthcare background, and help us at telco to, again, drive forwards." Just like DR was saying, it's all about the next big thing. >> Well, Danielle is always also driving a lot of change. And if you think about the jobs, and the pedigree of going to a university, oh, Harvard, all the big Ivy Leagues, Oxford in your area. So it's like, if you go to the school like that, and you get a pedigree, you instantly get a job. Now the jobs that are available weren't around five years ago, so there's no like pedigree or track record. There's no like, everyone's equal. >> Yeah. >> So you could, the democratization of the internet now, from a job standpoint, is people are leveling up faster. So it's not about the Ivy League, or the big degree, or silver spoon in your mouth, you've got the entitlement. So you start to see people emerging and making things happen. Entrepreneurship in America, immigrant entrepreneurship. People are billionaires that have no high school diplomas! >> It's interesting you mention that, John, because we can't have more than five years experience in this space, we know that. But in telco, there is a problem. And maybe it's, again, it's a flipped problem where telco recruiters, or talent acquisition leaders, are now asking for kind of 10, 20 years experience when they're sending out job descriptions. So does that mean that we are at fault for not being able to fill all these vacancies? >> I think that's just, I mean I think there's a transition of the new skill set happening, one. But two, I think, you know, to be like a chip engineer, (laughs) you can't learn that online. But if you want to run a cloud infrastructure, you can. But I think embedded systems is an area that I was talking to an engineer, there's a huge shortage of engineers who code on the microprocessors, on the chips. So, embedded systems is a big career. So there's definitely paths you can specialize. Space is another area you've seen a lot of activity on. You see Jeff Bezos and Elon Musk is going to be here on a virtual keynote, trying to go to Mars. And you know, Danielle Royston always says, "What's going to happen first, Mars colony, or telco adopting public cloud?" And some people think Mars will happen first, but. >> What do you think, John? >> I think Telco's going to get cloud. I mean first of all, public cloud is now hybrid cloud, and the edge, this whole internet edge, 5G, is so symbolic and so important, because it's an architectural beachhead. And that's where the trillion dollar baby is. So, the inside baseball, and the inside money, and all the investors are focusing on the edge, because whoever can command the edge, wins all the dollars. So everyone kind of knows, it's a public secret, and it's fun to watch everyone jockey for the positions. >> Yeah no, it really is. But it's also quite funny, isn't it? Because the edge is almost where we were decades ago, but we're putting the control back in the hands of consumers. So, it's an interesting flip. And I wonder if, with the edge, we can really enhance this acceleration of product development, this efficiency, this frictionless system in which we live in. And also, I've heard you say hybrid a few times, John. >> John: Yeah. >> Is hybrid going to be the future of the world no matter what industry you're in? >> Hybrid is everything now. So, we're the hybrid CUBE, we've got hybrid cloud. >> Exactly. >> You got hybrid telco, because now you've got the confluence of online and offline coming together. That is critical dynamic! And you're seeing it. Like virtual reality, for instance, now you're seeing things, I know you guys are doing some great work at your company around creating experiences that are virtual. You got, companies like Roblox went public recently. Metaverse. It's a good time to be in that business, because experiential human relations are coming. So, I think that's going to be powered by 5G. You know, gamers. So, all good stuff. Chloe, great to be with you here on theCUBE, and we're looking forward to seeing your main stage. >> Great. >> And then we're going to send it back to the studio, Adam, and the team. We're waiting for DR to arrive here in Cloud City. And this is theCUBE, from Cloud City, back to you, Adam, and the studio.

(upbeat music) >> Okay, thanks Adam in the studio. We're here on the floor in Cloud City, right in the middle of all the action. The keynotes are going on in the background, it's a packed house. I'm John Furrier. Dave Vellante is on assignment, digging in, getting those stories. He'll have the analysis, he'll be back on theCUBE but I want to welcome Chloe Richardson, who has been holding down the main stage here in Cloud City, with amazing content that she's been hosting. Chloe, great to see you. Thanks for coming on theCUBE and kicking it up day two with me. >> No, not at all. Thank you for having me. It's very exciting. I love what you guys have got over here, very fun. >> We're inside theCUBE. This is where all the action is. And also the Cloud City is really changing the game. If you look at what's going on here in Cloud City, it's pretty spectacular. >> Know, I mean the atmosphere is absolutely palpable, isn't it? You can just feel as people walk in and see what the future looks like to the Telecoms industry, it's very exciting. >> And you've been doing a great job on the main stage. We've been really loving your content. Let's get into some of the content here. Actually the keynote is going on, we're going to have DR, maybe fly by the set later, we're going to check that up. But let's check out this videotape of, this is TelcoDR. You got to check out this reel and we'll be right back, we'll talk about it. (upbeat music) >> TelcoDR burst onto the global telecom scene this year, making headlines for taking over the huge Erickson's space at MWC21. And for building Cloud City in just a hundred days. But why did the company go to such trouble? And what is the unique offering to the telecoms industry? And what drives their dynamic CEO, Danielle Royston or DR as everyone calls her? Cloud City Live caught up with DR, away from the hustle and bustle of the city to find out. (upbeat music) >> Hi, I'm Danielle Royston, coming to you from beautiful Barcelona. I'm here for MWC21. About a hundred days ago, I decided to take over the iconic Erickson booth to turn it into Cloud City. Cloud City has over 30 vendors and 70 demos to introduce telco to what I think is the future for our industry. We're going to have three awesome experiences. We're going to talk about the new subscriber experience, we're going to talk about what's in store for the new network and the future of work. I'm really excited to create a community and invite awesome telco executives to see this new future. It's been a really tough 18 months, and we didn't know what MWC21 was going to be like in terms of attendance. And so from the get go we plan this amazing experience that we call, Cloud City Live. At Cloud City Live, we have two main components. We have the speaker series where we have over 50 speakers from Amazon, Google, Microsoft, as well as CSPs and awesome vendors talking about the public cloud in telco. The second part of Cloud City Live, is theCUBE. Think of this as like an ESPN desk of awesome tech interviews focused on telco and the public cloud hosted by John Furrier and Dave Vellante. Dave and John are going to talk to a variety of guests, focused on telco and the public cloud. It's a great way for our virtual participants to feel like they're at the show, experiencing what's going on here. So excited to have them as part of the Cloud City booth. There's a ton of innovation going on in telco. And 20 years ago, Elon Musk set on his mission to Mars. I, like Elon Musk, I'm on a quest to take telco to the public cloud. Every year at MWC, there's always a flurry of announcements and this year is no different. At this year's MWC, Totogi, a startup that I invested a hundred million dollars in, will be launching. Totogi is introducing two products to the market, this week at MWC. The first is a planetary scale charger. More than a charger, it's an engagement coupling dual network data with charging information to drive subscriber engagement and doubling your ARPU. The second product that Totogi is introducing, is a planetary scale BSS system built on top of the TM forum, open APIs. Both of these products will be available for viewing in the virtual booth, as well as on the show for. The public cloud is an unstoppable mega trend that's coming to telco. I'm super excited to bring to you, the vendors, the products, the demonstrations, and the speakers, both to people here in Barcelona and virtually around the world. (upbeat music) >> Well, that was a fascinating insight into the origins of TelcoDR, why public cloud is going to truly disrupt the telecoms industry and why DR herself is so passionate about it. If you'd like to find out more, come and see us at Cloud City. (upbeat music) >> Okay, thanks. Just roll on that reel. Chloe, I mean, look at that reel. I mean, DR, Danielle Royston, she's a star and I've seen a lot of power players in the industry. She's got guts and determination, and she's got a vision and she's not just, you know, making noise about telco and cloud, there's actually a lot of real good vision there. I mean, it's just so impressive. >> No, really isn't. And for me, it's almost like the next moonshot. It's the moonshot of the telco world. She's innovative, she's exciting and if we've learned anything over the last 18 months is that we need to in this industry to grow and for the future of the industry. So, it's so exciting. I think she's a real inspiration. >> And I love the fact that she's so, takes a tiger by the tail, because the telco industry is being disrupted. She's just driving the bus here and I remember I did a story on Teresa Carlson, who was with Amazon web services, she was running the public sector and she was doing the same exact thing in that public sector world in DC and around the world. She opened up regions in Bahrain, which as a woman, that was an amazing accomplishment. And she wasn't just a woman, she was just a power player. And she was exceptional leader. I see DR doing the same thing and people aren't going to like that, I'll tell you right now. People are going to be like, whoa, what's going on here? >> And of course, it's always the way we pioneers though, isn't it? At the time people thinking what's going, we don't like change, why are we being shaken up. But actually afterwards, in retrospect, they think, oh, okay, I see why that happened and we needed it. So really exciting stuff. >> Making things happen, that's what we're doing here in theCUBE. Obviously the main stage's doing a great job. Let's go check out this highlight reel. If you're watching and you miss some of the action, this is, I'll see the physical event back since 2019 in February, but there's also a Hybrid event. A lot of virtual action going on. So you got theCUBE virtual, you got a lot of content on virtual sites, but in person here, we're going to go show you a highlight reel from what we did yesterday, what was happening around the show? Enjoy this quick highlight reel from yesterday. (upbeat music) (upbeat music) (upbeat music) Okay. We're back here in theCUBE. We're the main floor out here with Chloe Richardson, who is emceeing, hosting and driving the content on the Cloud City main stage. Chloe, it's been great here. I mean, so far day one, I was watching your presentations and inspire site chats you've been hosting. Awesome content. I mean, people are like jazzed up. >> Yeah, I know for sure. We had Scott Brighton on yesterday, who was our opening keynote on the live stage. And his session was all about the future of work, which is so relevant and so pertinent to now. And he talked about the way it's changing and in 10 years it's going to be a trillion dollar industry to be in the cloud at work. So really interesting. I mean, yeah, the atmosphere here is great, everyone's excited, there's new content everyday. And that's the thing, it's not stale content. It's stuff that people want to hear. People are here for the new hot trends, the new hot topics. Really exciting. >> Yeah, the next big thing. And also it's a fiscal event. So since 2019, this Mobile World Congress has been a massive event and hasn't happened since February, 2019. That's a lot of time that's elapsed in the industry cause of COVID and people are glad to be here, but a lot of stuff's changed. >> Yeah, it's a different world, right? I mean, two years in the telco industry is like a hundred years elsewhere. Everything has changed, digital transformation migration, obviously cloud, which is what we're talking about over here at Cloud City Live. I'm wondering though John, I'd like to pick your brains on something. >> Sure. >> It has changed in the last two years, we know that, but what about the future of Mobile World Congress? How do you see it changing in the next few years? >> Oh man, that's a great question. I mean, my observation, I've been coming to the show for a very long time, over a decade and a half, and it's been a nerdy show about networks and telecom, which is basically radios and wireless and then mobile. It's very global, a lot of networks, but now it's evolving and many people are saying, and we were talking on theCUBE yesterday, Dave Vellante was commenting that this show is turning into a consumer like show. So CES is the big consumer electronics show in the US, in Las Vegas every year. This show has got a vibe because what's all the technology from the cloud players and from the chips, are getting smaller, faster, cheaper, more capability, lower power. So if you look at the chips, the hardware, it's less about the speeds and feeds. It's more about the consumer experience. You got cars. I was talking to a guy yesterday, he said, "Vehicle e-commerce is coming." I'm like, "What the hell his vehicle e-commerce?" And you could be on your app, driving down the freeway and go, "Hey, I want some food." Instead of having it delivered to you, if you order it you pick it up. So that's kind of can be happening now in real time, you can do all kinds of other things. so a lot of new things are happening. >> Yeah, I think so. Do you see that as another disruption for the industry that is the fact that it's moving to be more consumer focused? Is that anything we should be worried about in that space? >> Well I think the incumbents are going to lose their position. So I think in any new shift, new brands come in out of nowhere. >> For sure. >> And it's the people that you don't think about. It's the company that's not, that you don't see. And we got DR on the main stage right here, look at this. You saw her walk out with the confidence of a pro. She just walked out there and she's not afraid. >> No. Well, as she said in her video, she is ready to wake them up and you can see as soon as she worked out. That is what she intends to do. >> I love her mojo, she's got a lot of energy. And back to the show, I mean, she's just an example of what I was saying. Like in every market shift, a new brand emerges. >> Yep. >> I mean, even when apple was tainted, they were about to shut down, they were going to run out of cash. When Steve Jobs brought back apple, he consolidated and rebooted the company. The iPad was a similar moment, then the iPhone and just the rest is history. That kind of disruption's coming. You're going to see that here. >> Yeah. Oh, it's exciting though isn't it? To be future ready rather than future proof but actually I wanted to ask you something as well, because we are seeing all these cloud players getting hot under the collar about telco. Why are they so excited? What's the buzz about why, as you're in MWS and Google Cloud? Why do they want to have a slice of the pie? >> Well, I think they're hot, hot and heavy on the fact that telco is a ripe opportunity and it used to be this boring, slow moving glacier. >> Okay. >> It's almost like global warming now. The icebergs are melting and it's going to just change and because of the edge, 5G is not a consumer wireless thing. It's not like a better phone, it's a commercial app opportunity cause it's high bandwidth. We've all been to concerts or football games or sporting events where a stadium is packed. Everyone gets bars on their wifi, but can't get out, can't upload their pictures on Instagram. Why? Because it's choking them in the network. That's where 5G solves the problem. It brings a lot of bandwidth and that's going to bring the edge to life and that's money. So when you got money and greed and power changing hands, it's every, it's on the table and the wheel's spinning, and it could be double zero, or it could be lucky seven. You don't know. >> Yeah, for sure. And that's certainly enough to get all the big players hot and bothered about getting involved. And I suppose it circles back to the fact that, DR is really leading the charge and they're probably thinking, okay, what's going on here? This is different, we want something new. You didn't know it's an open run or something that we've been talking about over the last day or so. We've had quite a few of us speakers over here constantly. I've mentioned open run. What is it all about John? Because why all the bars, if 5G is such a hot topic? Why are we getting excited about it? >> That's a great thing. 5G certainly is Google Drive the main trend for sure. OpenRent is essentially an answer to the fact that 5G is popular and they need more infrastructure. So open source, the Linux Foundation has been the driver for most of the open source software. So they're trying to bring software and open architectures to create more entrepreneurial activity around hardware and around infrastructure because we need more infrastructure. We need more antennas, we need more transceivers, we need more devices that could be open. So in order to do that, you got to open up the technology and you want to minimize the licensing and minimize a lot of these, you know, proprietary aspects. >> What if we look at, so on Wednesday, we've got a great keynote from Philippe Langlois, who is CEO and founder of P1 Security. And he's coming to talk to us about cybersecurity within the cloud and within telco. So you just mentioned that. Open mind, it's all about having open source, about having that space where we can share more efficiently and easy, more easily. What does that mean for security though? Is it a risk? >> I think that's going to increase the value of security and minimize the threats. Because open source, even though it's open, the more people that are working on it, the more secure it could be. So yes, it could be more open in sense that could be explored by hackers, but it can be open to also protect. And I think we've seen open source and cloud in particular be more secure because everyone said, "Cloud is not secure, open source is not secure." And as it turns out when the collective hive minds of developers work on things, it gets secure. >> And it is interesting, isn't it? Because we have seen that there has been an uptick in cyber security and threats. But actually I was speaking to some leaders in across various industries and particularly in tech. And they were saying, "Actually there's not been an uptick in attempted threats, there's been an uptick because with this open source environment. We are able to track them and measure them and defend more efficiently. So actually they're being battered away, but the number is probably the same as it always was. We just didn't know about them before we had this open source environment. >> There's more money in threats and there's more surface area. So as the tide rises, so do the threats. So on a net basis it's more because there's more volume, but it's pretty much the same. And look at it, there's money involved, they're organized, there's a business model on attacking and getting the cash out of your bank or ransomwares at an all time high. So this is like a big problem and it's beyond the government, it's our individual freedom. So security its huge and I think open source and cloud are going to be, I think the answer to that. >> Yeah, for sure. And it's again about collaboration, isn't it? Which we talk about all the time but without collaboration that the industries aren't going to have to work together to promote this environment. So yeah, it should be good to talk with Phillip on Wednesday. >> I just say in security, don't download that PDF if you don't know who came from. The fishing is always good. Well, we got some great stuff coming up. We're going to have a great day. We got a video here on Mobile World Live, we're going to show this next segment and we're going to toss it to a video. And this is really about to give the experience Chloe, for people who aren't here, right? >> Yeah. >> To get a feel for what's going on in Barcelona and all the actions. And if you look at the video, enjoy it. >> Hi, I'm Danielle Royston, CEO and founder of TelcoDr, but you can call me DR. Ready for some more straight talk about telco? It's go time, let's do it. Holy shit. It sure is a great time to be a tech company. I mean, if you're Amazon, Microsoft, Google, Grab, Twilio, DoorDash or Uber, life's pretty great. Just look at these stock prices over the past five years with their shareholder value going up into the right. Totally amazing. But where's telco? There I add our stocks to this awesome chart. Let's compare these fabulous tech stocks to AT&T, Vodafone, Telefonica, Tim, America Movil and Zain group. Huh, not so great, right? Yep. I'm talking directly to you senior telco execs. I'm here to wake you up. Why is it that Wall Street doesn't see you as tech? Why aren't CSPs seen as driving all the tech change? Why is it always Apple, Amazon and Google who get the big buzz? But more importantly, why isn't it you? Before I came to this industry, I always thought of carriers as tech companies. I gave more of my money to AT&T and to Apple because I really cared about the quality of the network. But I also wondered why on earth, the carriers allowed all the other tech companies to take center stage. After spending the last few years in telco, I now understand why. It's because you are network people, you are not customer people. I get it, you have the security blanket, you're a network oligopoly. It's crazy expensive to build a network and it's expensive to buy spectrum. It takes operational chops to run a killer network and it takes great skill to convince Wall Street, to finance all of it. You telco execs are amazing at all those things, but because you focus on the network, it means you don't focus on the customer. And so far you haven't had to. Every telco's KPI is to be less shitty than their next competitor. You don't have to be the best, just don't be last. Everyone else's NPS, is in the thirties too. Their mobile app ratings are just as terrible as yours. Everyone's sucks at customer sat and it's widely acknowledged and accepted. Let's talk about the cost of that. The cost is not measured on market share against other MNOs. The cost is measured in lost ARPU that the tech guys are getting. Everyone knows about the loss of texting, to WeChat, WhatsApp and the other OTT apps, but it is not just texting. The total adjustable market or term of the mobile app disruptors is huge. Instead of remaining network focused, you should be leveraging your network into a premier position. And because you're a network people, I bet you think I'm talking about coercive network leverage. That is not what I'm talking about. I'm talking about love, customer love. There is one thing the highly valued tech companies all have in common. They all crush it on customer love. They look at every interaction with the customer and say, "How do we make the customer love this?" Like Netflix has easy monthly cancellation, Amazon does no questions asked returns, Uber gives users a real time view into driver rating and availability. Compare those ideas to the standard telco customer interaction. The highly valued tech companies, don't have the network oligopoly to fall back on like you do. To survive they must make customers love them. So they focus on it in a big way and it pays off. Their NPS is close to 70 and they have app ratings of 4.5 or higher. A far cry from your thirties NPS and app ratings of 3.5. If you want to have those huge tech multiples for yourself, you have to start thinking about these guys as your new competition, not the other telcos in your market. The crazy thing is, if you give up using your network as a crutch and put all of your focus on the customer, the network becomes an asset worth more than all the super apps. Let's step back and talk about the value of super apps and becoming customer centric. Retooling around the customer is a huge change. So let's make sure it's worth it. We aren't talking about 25% improvement. I'm going to show you that if you become customer centric, you can double your ARPU, double your valuation multiples and drive big shareholder value just like the tech companies on that chart. Now let's talk about the customer focused super apps. There are hundreds of companies and a variety of categories vying for your subscriber's disposable income. Movies, food delivery, financial services, who are they? And why does Wall Street give them such high evaluations and like them so much? Well first, look at what they are telling Wall Street about their TAM. They broadcast ridiculously huge TAMs that are greater than the telco TAMs. You know, who should have a ridiculously huge TAM? You. Hello. What I'm saying is that if you got what's yours, you double in size. And if you take the TAAMs they throw around, you'll be five times as big. When I think about the opportunity to double ARPU, without having to double the CapEx, to build out the network, I say to myself, "Hell yeah, we should totally go do it and do whatever it takes to go get." For example, let's talk about Grab. Grab is a southeast Asian super app company with an expected $40 billion valuation. Grab's customer focused started in rideshare, but then leverage its customer love into wallet deliveries, hospitality, and investing. Their ARPU is now larger than a telco's ARPU in countries where they compete, and they have a higher valuation than those telcos too. Imagine if you could combine a great user experience with a valuable services that helped grow your ARPU, that would be huge. So how do you build a super app? I bet right about now, you're wishing you had a super app. Everyone wants a super app. A lot of money has been unsuccessfully spent by telcos trying to build their own. I bet you're saying to yourself, "DR, your pie in the sky sounds great but it has no chance of success." Well, I'm betting things are about to change. There is a public cloud startup called Totogi that is going to help carriers build world class super apps. To have a successful super app, there is one key metric you need to know. It is the KPI that determines if your super app will be a success or a flop. It's not about the daily active users, it's not the average order value, it's not even gross merchandise value. It's all about the frequency of use per day by the user, that's the metric that matters. How many of you use that metric in your telco apps? Do you have a team driving up user app interactions every day? Most telco apps are used for top up or to check a bill. This is a huge missed opportunity. Super app companies excel at building great experiences and driving a huge amount of interactions. They have to, their business depends on it. They have to be customer focused. They have to keep bringing the user back to the app, every day, multiple times a day. And you know what? They do a great job. Customers love their super apps. They have great user experiences like Apple credit cards, no information required, application process. They have high net promoter scores because of customer friendly policies, like how DoorDash retroactively credits fees when you move to a better plan. And they have great app store ratings because they do simple things like remember your last order, or allow you to use the app rather than force you to call customer service. Customers of successful super apps love it when new services are added. And because of the customer love, every time something is added to the app, customers adopt it immediately. New services drive frequent daily user interactions. So our problem in telco is we have an app that is only open once per month, not multiple times per day. And without frequent opens, there is no super app. What do we do we have in telco that we could use to help with this problem? I wonder, why you don't currently have a mobile app that subscribers use multiple times a day. You have something that's 10 times better. You have a network. Subscribers already interact with your network 10 times more frequently than any user with any of the super apps. But telcos don't leverage those interactions into the insanely valuable engagements they could be. Worse, even if you wanted to your crappy over customized on premise solutions, make it impossible. Thankfully, there's this new tech that's come around, you may have heard of it. The public cloud. When you bring the enabling technology of the public cloud, you can turn your network interactions into valuable super app interactions. And there's a special new startup that's going to help you do it, Totogi. Totogi will leverage all those network interactions and turn them into valuable customer interactions. Let me repeat that. Totogi will leverage all those network interactions and turn them into valuable customer interactions. Totogi allows the carrier to leverage its network and all the network interactions into customer engagement. This is something the super apps don't have but will wish they did. But this magic technology is not enough. Telcos also need to move from being network focus to being customer focused. Totogi enables telcos to chase exciting revenue growth without that annoying massive CapEx investment. Totogi is going to help you transform your sucky mobile apps with the crappy customer ratings, into something your subscribers want to open multiple times a day and become a platform for growth. I'm so excited about Totogi, I'm investing $100 million into it. You heard me right, $100 million. Is this what it feels like to be soft bank? I'm investing in Totogi because it's going to enable telcos to leverage the network interactions into super app usage. Which will lead to an improved subscriber experience and will give you a massive jump in your ARPU. And once you do that, all those Telco valuations will go from down here to up here. And so I've been talking to some folks, you know, checking in, feeling them out, getting their thoughts, and I've been asking them, what do you think about telcos building super apps? And the response has been, click, everyone says, "No way, telcos can't do it." Zero chance, total goose egg. One suggested I build a bonfire with 100 million dollars, because then at least I wouldn't waste years of my life. Well I think those people are dead wrong. I do believe that telcos can build super apps and make them super successful. The public cloud is changing all parts of telco and Totogi and super apps are fundamentally changing, the customer relationships. In one month at MWC, people will see what Totogi has to offer, and they will understand why I'm making this bold call. Because the Totogi takes the value of the network and the power of the public cloud to help telcos move from being network centric, to being customer centric. Boom! If you want to make this transformation and reap all the financial benefits, you will have to compete for customers with a whole new set of players. You will no longer compete with the network focus guys like the other telcos, instead you will be competing against the customer focused companies. These players don't have a network to fall back on like your old competitors. They know they have to make customers love them. Their customer loyalty is so off the charts, their customers are called fans. So if you want that big money, you will have to compete on their turf and make the customers want to choose you, you need Apple level loyalty. That bar is uber high. We will have to give up the security blanket of the network and change. Instead of NPS of the thirties, it needs to be in the 70s. Instead of mobile app ratings in the threes, they need to get five stars. I'm betting big that Totogi will make that possible. I'm going to help you every step of the way, starting with my keynote next month at MWC. Join me and I'll share the secrets to converting your super valuable network interactions to make your super app a massive success. We're going to have an amazing time and I can't wait to see you there. >> Okay. We're back here in theCUBE here at Mobile World Congress in Cloud City. I'm John Furrier, Chloe Richardson filling it for Dave Vellante who's out on assignment. He's out getting all the data out there and getting stories. Chloe, what a great keynote by Danielle Royston. We just heard her and while with major action, major pump me up, punch in the face, wake the heck up cloud people, cloud is here. She didn't pull any punches. >> No, I mean the thing is John, there's trillions of dollars on the table and everyone seems to be fighting for it. >> And you heard her up there, if you're not on the public cloud, you're not going to get access to that money. It's a free for all. And I think the cloud people are like, they might think they're going to walk right in and the telco industry is going to just give it up. >> No, of course. >> There's not going to be, it's going to be a fight, who will win. >> Who will win but also who will build the next big thing? >> Someone needs to die in the media conversation, it's always a fight, something's dead, something's dead but keeps the living. All that kidding aside, this is really about partnering. I think what's happened is, telco's already acknowledged that they need to change in the 5G edge conversation, the chip acceleration. Look at Apple, they've got their own processors, Nvidia, Amazon makes their own chips, Intel's pumping stuff out, you've got Qualcomm, you've got all these new things. So the chips are getting faster and the software's more open source and I'm telling you, cloud is just going to drive that bus right down clouds street and it's going to be in Cloud City everywhere. >> And it's going to be peeping on the board as it drives down. John, I'm not a stalker, but I have read some of the things that you've written. And one of the things you mentioned that was really interesting was the difference between building and operating. Break it down for me. What does that mean? >> That means basically in mature markets and growing markets things behave differently and certainly economics and the people and the makeup and the mindset. >> Okay. >> So the telco has been kind of this mature market. It's been changing and growing but not like radically. Cost optimization, make profit, you know, install a lot of cable. You got to get the rents out of that infrastructure and that's kind of gone on for too long. Cloud is a growth market, and it's about building, not just operating and you've got operators, carriers are operating networks. So you're going to see the convergence of operators and builders coming together, builders being software developers, new technology and executives that think about building. And you want people on your team that are going to be, I won't say war time, you know, lieutenants or generals, but people who can handle the pace of change. >> Okay. >> Because the change and the nature is different. And some people want slow and steady, keep the boat from rocking, but in a growth market, it's turbulent and ride might not be quiet, first class ticket to paradise, but it's bumpy, but it's thrilling. >> No, of course. Is it similar to the old sales adage of hunter versus farmer and the parallels? >> Yeah. I mean, the mindset. If you have a team of people that aren't knocking down new opportunities and building the next big thing, fixing your house, get your house in order, you know, refactor, reset, reboot, re platform with the cloud and then refactor your business. If you don't have the people thinking like that, you're probably either going to be taken over or go out of business. And that's what the telco with all these assets, they're going to get bought roll into a SPAC, special purpose acquisition company was a super hot in the United States. A lot of roll ups going on with Private equity. So a lot of these telcos, if they don't refactor or re platform, then refactor, they're going to be toast and they're going to get rolled up and eaten up by somebody else. >> Yeah, sure. It's interesting though, isn't it? Because when we think of telco in tech, we often think of, obviously we've got the triad. People process technology, and we think process and technology really take the forefront here but like you said there, people are also so important because if you don't have this right balance, you're not going to be able to drive that change. We had, obviously Scott Brighton on the stage yesterday and after his session, somebody came up to me and just said, "I'm interested to hear what that means for education." So how can we establish this new generation of tech and telco leaders from the grassroots with educational associations establishments? How can we encourage that? I wonder, is this something that you talk about often? >> Yeah. I mean, education is huge and this highlights the change that telcos now part of. Telco used to be a boring industry that ran the networks, or moving packets around and mobile was there, but once the iPhone came out in 2007, the life has changed, society has changed, education's changed, how people interact has changed. So you start to see people now aware of the value and if you look at the, during the COVID, the internet didn't crash, the telcos actually saved our asses and everyone was, survive because the network didn't break. Yeah, we had some bad zoom meetings here and there and some teleconferences that didn't go well but for the most part we survived and they really saved everybody, my goodness. So they should get kudos for that. But now they're dependent upon healthcare, education, people care about that stuff. So now you're going to start to see an elevated focus on what telecom is doing. That's why The Edge has checked trillions of dollars up for grabs. But education, there's negative unemployment in cybersecurity and in cloud. So for the people who say, oh, there's no jobs or I can't work, that's a bunch of BS because you can just get online, get on YouTube and just get a degree. You can get a degree, you can get an Amazon job, it pays a hundred thousand dollars a year, American. You can make a hundred thousand pounds and be unemployed six months and then be employed. So negative unemployment means there's more jobs than people to fill them qualify. >> Yeah, it's interesting you mentioned that because I was talking to a cyber security leader who was saying in some of the things there were now 3 million vacancies in cybersecurity and there's such a skill shortage, there is nobody around to fill it. So it's an interesting problem to have isn't it? Cause it's reversed to what we've been used to for the last few decades and obviously telco is in the same space. What can we do about it? Do you think it will actually bring people in? >> I think it's going to take leadership and I'm a big proponent of kids not going to university, they don't have to. Why spend the dough, money if you don't have to? You can get online. I mean, the data's there, but to me it's the relationships, the mentorship. You starting to see women in tech and underrepresented minorities in the tech field, where mentorship is more important than curriculum. Community is more important than just going through a linear course where nobody wants to sit online and go through linear courseware. Now, if they have to get a certificate or degree and accreditation no problem, but communities are out there. So that's a big change over, I'm a big fan of that and I think people should, you know, get some specialized skills, you can get that online. So why even go to school? So people are figuring that out. >> For sure. And also even transferring, I mean, so many skills are transferable nowadays, aren't there? So we could easily be talking to people from other industries and bringing them into telco and saying, look, bring what you know from your retail background or your healthcare background and help us at telco to again, drive forward, just like DR is saying it's all about the next big thing. >> Danielle, I was also driving a lot of change and if you think about the jobs and a pedigree of going to a university, oh, Harvard, all the big Ivy leagues, Oxford in your area. So it's like, if you go to a school like that and you get a pedigree, you instantly get a job. Now, the jobs that are available, weren't around five years ago. So there's no like pedigree or track record, there's no like, everyone's equal. >> Yeah. >> So you could, the democratization of the internet now is, from a job standpoint is, people are leveling up faster. So it's not about the Ivy league or the big degree or silver spoon in your mouth, you've got the entitlement. So you start to see people emergent and make things happen, entrepreneurship in America, immigrant entrepreneurship. People are billionaires that have no high school diplomas. >> It's interesting you mentioned that John, because we can have more than five years experience in this space, we know that but in telco there is a problem and maybe it's, again it's a flipped problem where, telco recruiters or talent acquisition leaders, are now asking for kind of 10, 20 years experience when they're sending out job descriptions. So does that mean that we are at fault for not being able to fill all these vacancies? >> Well, I mean, I think that's just, I mean, I think there's a transition of the new skill set happening one, but two, I think, you know, you've got to be like a chip engineer, you can't learn that online, but if you want to run a cloud infrastructure, you can. But I think embedded systems is an area that I was talking to an engineer, there's a huge shortage of engineers who code on the microprocessors, on the chips. So embedded systems is a big career. So there's definitely parts, you can specialize, space is another area you've seen a lot of activity on, obviously Jeff Bezos and Elon Musk is going to be here on virtual keynote, trying to go to Mars. And, you know, Danielle Royston always says, who's going to happen first, Mars, colony, or telco adopting public cloud? Some people think Mars will happen first but. >> What do you think John? >> I think telco's going to get cloud. I mean, first of all, public cloud is now hybrid cloud and the edge, this whole internet edge, 5G, is so symbolic and so important because it's an architectural beachhead. >> Yeah. >> And that's where the trillion dollar baby is. >> Of course. >> So the inside baseball and the inside money and all the investors are focusing on the edge because whoever can command the edge, wins all the dollars. So everyone kind of knows it's a public secret and it's fun to watch, everyone jockey for the positions. >> Yeah, know, it really is. But it's also quite funny, isn't it? Because the edge is almost where we were decades ago, but we're putting the control back in the hands of consumers. So it's an interesting flip and I wonder if with the edge, we can really enhance this acceleration of product development its efficiency, this frictionless system in which we live in. And also, I've heard you say hybrid a few times John. >> Yeah. >> Is hybrid going to be the future of the world no matter what industry you're in? >> Hybrid is everything now. So it's, we're the hybrid cube, we've got hybrid cloud. >> Exactly. >> You got hybrid telco, because now you've got the confluence of online and offline coming together. >> Yeah. >> That is critical dynamic, and you seeing it. Like virtual reality for instance, now you seeing things, I know you guys are doing some great work at your company around creating experiences that are virtual. >> Exactly. >> You got, like Roblox went public recently. >> Yeah. >> Metaverse is a good time to be in that business because experiential human relations are coming. So I think that's going to be powered by 5G, you know, gamers. So all good stuff, Chloe, great to be with you here in theCUBE. >> Thank you. >> And we're looking forward to seeing your main stage. >> Great. >> And then we're going to send it back to the studio, Adam and the team, we're waiting for DR to arrive here in Cloud City and this is theCUBE, from Cloud City back to you, Adam in the studio.

(upbeat music) >> We're here theCUBE on Cloud Startup Showcase brought to you by AWS. And right now we're going to explore the next frontier for privacy, you know, security, privacy, and compliance, they're often lumped together and they're often lumped on as an afterthought bolted on to infrastructure, data and applications. But, you know, while they're certainly related they're different disciplines and they require a specific domain knowledge and expertise to really solve the challenges of today. One thing they all share is successful implementations, must be comprehensive and designed in at the start and with me to discuss going beyond compliance and designing privacy protections into products and services. Justin Antonipillai, who is the founder and CEO of WireWheel, Justin awesome having you on the AWS Startup Showcase. Thanks for being here >> Dave, thanks so much for having me. It's a real honor, and I appreciate it. Look forward to the discussion. >> So I always love to ask founders, like, take us back. Why did you start this company? Where did your inspiration come from? >> So Dave, I was very lucky. I had the honor of serving in president Obama's second term as an Acting Under Secretary for Economic Affairs. So I ran the part of the government that includes the U.S. Census Bureau and the Bureau of Economic Analysis. So core economic statistical bureaus. But I helped lead a lot of the Obama administration's, outreach and negotiations on data privacy around the world. Including on something called the EU-U.S. Privacy Shield. So at the time the two jobs I had really aligned with what our discussion is here today. The first part of it was, I could see that all around the world in the U.S. and around the world, data privacy and protecting privacy, had become a human rights issue. It was a trade issue. You could see it as a national security issue and companies all around the world were just struggling with how to get legal, how to make sure that I do it right, and how I make sure that I'm treating my customer's data, in the right way. But when I was also leading the agency, a lot of what we were trying to do was to help our U.S. citizens, our folks here around the country solve big public problems by ethically and responsibly using government data to do it. And I can talk about what that meant in a little while. So the inspiration behind why WireWheel was, we need better more technically driven ways to help companies get compliance, to show their customers that they're protecting privacy and to put customers, our customers onto a path where they can start using the customer data better, faster and stronger, but most importantly, ethically. And that's really what we try to tackle at WireWheel. >> Right, excellent. Thank you for that. I mean, yeah you know, in the early days of social media, people kind of fluffed it off and oh there is no privacy in the internet, blah, blah, blah. And then wow, it became a huge social issue and public policy really needed to step in but also technology needs this to help solve this problem. So let's try to paint a picture for people as to really dig into the problem that you solve and why it's so complicated. We actually have a graphic. It's a map of the U S that we want to pull up here. Explain this. >> Yeah, I mean, what you're saying here is that every one of your, our viewers today is going to be looking at privacy laws moving across the country Dave but there's a lot of different ones. You know, if you're a company that's launching and building your product, that you might be helping your customers your consumer facing. The law, and you're even let's assume you want to do the right thing. You want to treat that customer data responsibly and protect it. When you look at a map like this and you can see three States have already passed different privacy laws, but look at the number of different States all across the country that are considering their own privacy laws. It really could be overwhelming. And Virginia, as you can see is just about to pass it's next privacy law but there's something like 23,24 States that are moving them through. The other thing Dave, that's really important about this is, these are not just breach laws. You know, I think years ago we were all looking at these kinds of laws spreading across the country and you would be saying, okay, that's just a breach law. These laws are very comprehensive. They have a lot to them. So what we have been really helping companies with is to enable you to get compliant with a lot of these very quickly. And that's really what we've tried to take on. Because if you're trying to do the right thing there should be a way to do it. >> Got it. Yeah, I can't even imagine what the it had been so many permutations and complexities but imagine this, if this were a globe we were looking at it says it gets out of control. Okay, now you guys well you use a term called phrase beyond compliance? What do we mean by that? >> There are a couple of things. So I'd say almost every company taking a product to market right now, whether you're B2C or B2B you want to make sure you can answer the customer question and say, yes, I'm compliant. And usually that means if you're a B2C company it means that your customers can come to your site. Your site is compliant with all of the laws out there. You can take consents and preferences. You can get their data back to them. All of these are legal requirements. If you're a B2B company, you're also looking at making sure you can create some critical compliance records that's it, right? But when we think beyond compliance, we think of a couple of basic things. Number one, do you tell the story about all the trust and protection you put around your data in a way that your customers want to do business with you? I mean Dave, if you went to CES the last couple of years and you were walking into the center or looking at a virtual version of it, on every billboard, the top five, top 10 global companies advertise that they take care of your data and they're onto something, they're onto something. You can actually build a winning strategy by solving a customer's problem and also showing them that you care, and that they're trustworthy. Because there are too many products out there, that aren't. The second thing, I'm sorry, go ahead. >> No, please carry on. >> No, I mean the second thing, and then I think I'd say is going beyond compliance also means that you're thinking about how you can use that data for your customer, to solve all of their problems. And Dave, what I'd say here is imagine a world right now, in which, you know you trusted that the data that you gave to companies or to the government, was protected and that if you changed your mind and you wanted it back that they would delete it or give it back to you. Can you imagine how much more quickly we would have solved getting a COVID vaccine? Can you imagine how much data would have been available to pharmaceutical companies to actually develop a vaccine? Can you imagine how much more quickly we would have opened the economy? The thing is companies can't solve every problem that they could for a customer because customers don't trust that the data is going to be used correctly and companies don't know how to use it in that way and ethically. And that's what we're talking about when we say getting beyond compliance which is we want to enable our customers to use the data in the best way and most ethical way to solve all of their customer's problems. >> Okay, so I ask the elephant in the room question. If you asked most businesses about personal information, where it's stored, you know who has access to it, the fact is that most people can't answer it. And so when they're confronted with these uncomfortable questions. The other documents and policies that maybe check some boxes, why is that not a good idea? I mean, there's an expense to going beyond that but so why is that not just a good idea to check it off? >> Well look, a lot of companies do need to just check it off and what I mean, get it right, make sure you label and the way we've thought about this is that when you're building on a backbone like AWS, it does give you the ability to buy a lot of services quickly and scale with your company. But it also gives us an ability to comply faster by leveraging that infrastructure to get compliant faster. So if you think about it, 20 years ago whenever I wanted to buy storage or if I wanted to buy servers and look we're a company that built in the cloud, Dave it would have been very difficult for us to buy the right storage and the processing we needed, given that we were starting. But I was able to buy very small amounts of it until our customer profile grew. But that also means my data moved out of a single hard drive and out of a single set of servers, into other places that are hosted in the cloud. So the entire tech stack that all of our customers are building on means they're distributing personal data into the cloud, into SAS platforms. And there's been a really big move through integration platforms as a service to allow you to spread the personal data quickly. But that same infrastructure can be used to also get you compliant faster, and that's the differentiation. So we built a platform that enables a company to inventory their systems, to track what they're doing in those systems and to both create a compliance record faster by tracking what they're doing inside the cloud and in SAS systems. And that's the different way we've been thinking about it as we've been going to market. >> So, okay. So what actually do you sell, you sell a service? Is it a subscription? >> Yeah. >> And AWS is underneath that, maybe you could put down a picture for us. >> Sure, we're a cloud hosted software as a service. We have two core offerings. One is the WireWheel Trust Access Consent Solution. So if you go to a number of major brands, and you go to their website, when they tell you here's the data we're collecting about you, when they collect your consents and preferences, when they collect a request for data correction or deletion of the data, all the way from the request to delivery back to the consumer, we have an end to end system that our customers use with their customers, a completely cloud hostable in a subscription. So enables even very small startups, to build that experience into their website and into their products, from the very beginning, at a cost efficient point. So if you want to stand up a compliant website or you want to build into your product that Trust Access Consent Solution, we have a SAS platform, and we have developer tools and our developer portal to let you do it quickly. The second thing we do is we have a privacy operations manager. So this is the most security center but for privacy operations. It helps you inventory your systems, actually create data flow maps and most critically create compliance records that you need to comply with, you know the European law, the Brazilian law, and that whole spectrum of U.S. privacy laws that you showed a few minutes ago. And those are the two core offerings we have. >> I love it. I mean, it's the cloud story, right? One is you don't have to spend a millions of dollars on hardware and software. And the second is, when you launch you enable small companies, not just the biggest companies you give them the same, essentially the same services. And that's a great story. Who do you sell to Justin? What does a typical customer engagement look? >> Yeah, we, in many of our customers and in the AWS say startup environment, you often don't have companies that have like a privacy officer. They often don't even have a general counsel. So we sell a package that will often go to whoever is responsible at the company for privacy compliance. And, you know, interestingly Dave in some startups that might be a marketing officer, it might be a CLO, it might be the CTO. So in startups and sort of growing companies, we've put out a lot of guidance, and our core WireWheel developer portal is meant to give even a startup all they need to stand up that experience and get it going, so that when you get that procurement imagine you're about to go sell your product, and they ask you, are you compliant, then you have that document ready to provide. We also do provide this core infrastructure for enormous enterprises. So think telecoms, think top three global technology companies. So Dave, we get excited about is we've built a core software platform privacy infrastructure that is permanently being used by some of the largest companies in the world. And our goal is to get that infrastructure at the right price point into every company in the world, right? We want to enable any company to spend and stand up the right system, that's leveraging that same privacy infrastructure that the big folks have, so that as they scale, they can continue to do the right thing. >> That's awesome. I mean, you mentioned a number of roles of marketing folks. I can even see a sales, let's say sales lead saying, okay we got this deal on the table. How do we get through the procurement because we didn't check the box, all right. So, let me ask you this. We talked a little bit about designing privacy in a and it's clear you help do that. How do you make it, you know fundamental to customer's workloads? Do they have to be like an AWS customer to take advantage of that concept? Or how did they make it part of their workflow? >> Yeah, so there's a couple of critical things. How do you make it part of the workflow? The first thing is, you go to any company's website right now, they have to be compliant with the California law. So a very straightforward thing we do is we can for both B2B and B2C companies stand up an entire customer experience that matches the scale of the company that enables it to be compliant. That means you have a trust center that shows the right information to your customers, it collects the consents, preferences, and it stands up with a portal to request data. These are basics. And for a company that's standing up the internal operations, we can get them app collecting that core record and create a compliance record very fast. With larger companies, Dave you're right. I mean, when you're talking about understanding your entire infrastructure and understanding where you're storing and processing data it could seem overwhelming, but the truth is, the way we onboard our customers is we get you compliance on your product and website first, right? We focus on your product to get that compliance record done. We focus on your website so that you can sell your product. And then we go through the rest of the major systems where you're handling personal information, your sales, your marketing, you know, it's like a natural process. So larger enterprises we have a pretty straightforward way that we get them up and running, but even small startups we can get them to a point of getting them compliant and starting to think about other things very, very quickly. >> And so Justin, you're a government so you understand big, but how I talk about the secret ingredient that allows you to do this at scale and still handle all that diversity, like what we showed in that graphic, the different locations, different local laws, data sovereignty, et cetera. >> Yeah, there's a couple things on the secret source. One is, we have to think about our customers every day. And we had to understand that companies will use whatever their infrastructure is to build. Like you've seen, even on AWS there are so many different services you can use. So number one, we always think with an engineering point of view in mind. Understand the tools, understand the infrastructure in a way that brings that kind of basic visibility to whoever it is that's handling privacy, that basic understanding. The second is, we focused on core user experience for the non-technical user. It's really easy to get started. It's really easy to stand up your privacy page and your privacy policy. It's really easy to collect that and make that first record. The third is, and you know, this is one of those key things. When I was in the government, I met with folks in the intelligence community at one point day, and this always stuck with me. They were telling me that 20 years ago, you know to do the kind of innovation that you have going on now, you would have had to have had a defense contract. You would have had to have invested an enormous amount of money to buy the processing and the services and the team. But the ability for me as a startup founder, to understand the big picture and understand that companies need to be compliant fast, get their website compliant fast, get their product compliant fast, but build on a cloud infrastructure that allowed me to scale was incredible. Because it allows us to do a lot with our customers that a company like ours would have been really challenged to do without that cloud backbone. >> Love this, the agility and the innovation. Last question, give us the company update Justin, you know where are you? What can you share with us, fundraising, head count, are you generating revenue? Where you are? >> Oh yeah, we're excited as I mentioned, we are already the privacy platform of choice of some of the larger brands in the world, which we're very excited about. And we help them solve both the trust, access consent problem for their customers, and we help with the privacy operations management. We recently announced a new $20 million infusion of capital, led by a terrific venture capital fund, ForgePoint Capital. We've been lucky to have been supported by NEA, Sands Capital, Revolution Capital, Pritzker Capital, PSP. And so we have a terrific group of investors behind us. We are scaling, we've grown the company a lot in the last year. Obviously it's been an interesting and challenging year with COVID, but we are really focused on growing our sales team, our marketing team, and we're going to be offering some pretty exciting solutions here for the rest of the year. >> The timing was unbelievable, you had the cloud at your beck and call, you had the experience in government. You've got your background as a lawyer. And it all came in, and the legal come into the forefront of public policy, just a congratulations on all your progress today. We're really looking forward to seeing you guys rocket in the future. I really appreciate you coming on. >> Dave, thanks so much for having me, really enjoyed it. And I look forward to seeing you soon. >> Great, and thank you for watching everyone is Dave Vellante for theCUBE on cloud startups. Keep it right there. (upbeat music)

(upbeat music) >> We're here theCUBE on Cloud Startup Showcase brought to you by AWS. And right now we're going to explore the next frontier for privacy, you know, security, privacy, and compliance, they're often lumped together and they're often lumped on as an afterthought bolted on to infrastructure, data and applications. But, you know, while they're certainly related they're different disciplines and they require a specific domain knowledge and expertise to really solve the challenges of today. One thing they all share is successful implementations, must be comprehensive and designed in at the start and with me to discuss going beyond compliance and designing privacy protections into products and services. Justin Antonipillai, who is the founder and CEO of WireWheel, Justin awesome having you on the AWS Startup Showcase. Thanks for being here >> Dave, thanks so much for having me. It's a real honor, and I appreciate it. Look forward to the discussion. >> So I always love to ask founders, like, take us back. Why did you start this company? Where did your inspiration come from? >> So Dave, I was very lucky. I had the honor of serving in president Obama's second term as an Acting Under Secretary for Economic Affairs. So I ran the part of the government that includes the U.S. Census Bureau and the Bureau of Economic Analysis. So core economic statistical bureaus. But I helped lead a lot of the Obama administration's, outreach and negotiations on data privacy around the world. Including on something called the EU-U.S. Privacy Shield. So at the time the two jobs I had really aligned with what our discussion is here today. The first part of it was, I could see that all around the world in the U.S. and around the world, data privacy and protecting privacy, had become a human rights issue. It was a trade issue. You could see it as a national security issue and companies all around the world were just struggling with how to get legal, how to make sure that I do it right, and how I make sure that I'm treating my customer's data, in the right way. But when I was also leading the agency, a lot of what we were trying to do was to help our U.S. citizens, our folks here around the country solve big public problems by ethically and responsibly using government data to do it. And I can talk about what that meant in a little while. So the inspiration behind why WireWheel was, we need better more technically driven ways to help companies get compliance, to show their customers that they're protecting privacy and to put customers, our customers onto a path where they can start using the customer data better, faster and stronger, but most importantly, ethically. And that's really what we try to tackle at WireWheel. >> Right, excellent. Thank you for that. I mean, yeah you know, in the early days of social media, people kind of fluffed it off and oh there is no privacy in the internet, blah, blah, blah. And then wow, it became a huge social issue and public policy really needed to step in but also technology needs this to help solve this problem. So let's try to paint a picture for people as to really dig into the problem that you solve and why it's so complicated. We actually have a graphic. It's a map of the U S that we want to pull up here. Explain this. >> Yeah, I mean, what you're saying here is that every one of your, our viewers today is going to be looking at privacy laws moving across the country Dave but there's a lot of different ones. You know, if you're a company that's launching and building your product, that you might be helping your customers your consumer facing. The law, and you're even let's assume you want to do the right thing. You want to treat that customer data responsibly and protect it. When you look at a map like this and you can see three States have already passed different privacy laws, but look at the number of different States all across the country that are considering their own privacy laws. It really could be overwhelming. And Virginia, as you can see is just about to pass it's next privacy law but there's something like 23,24 States that are moving them through. The other thing Dave, that's really important about this is, these are not just breach laws. You know, I think years ago we were all looking at these kinds of laws spreading across the country and you would be saying, okay, that's just a breach law. These laws are very comprehensive. They have a lot to them. So what we have been really helping companies with is to enable you to get compliant with a lot of these very quickly. And that's really what we've tried to take on. Because if you're trying to do the right thing there should be a way to do it. >> Got it. Yeah, I can't even imagine what the it had been so many permutations and complexities but imagine this, if this were a globe we were looking at it says it gets out of control. Okay, now you guys well you use a term called phrase beyond compliance? What do we mean by that? >> There are a couple of things. So I'd say almost every company taking a product to market right now, whether you're B2C or B2B you want to make sure you can answer the customer question and say, yes, I'm compliant. And usually that means if you're a B2C company it means that your customers can come to your site. Your site is compliant with all of the laws out there. You can take consents and preferences. You can get their data back to them. All of these are legal requirements. If you're a B2B company, you're also looking at making sure you can create some critical compliance records that's it, right? But when we think beyond compliance, we think of a couple of basic things. Number one, do you tell the story about all the trust and protection you put around your data in a way that your customers want to do business with you? I mean Dave, if you went to CES the last couple of years and you were walking into the center or looking at a virtual version of it, on every billboard, the top five, top 10 global companies advertise that they take care of your data and they're onto something, they're onto something. You can actually build a winning strategy by solving a customer's problem and also showing them that you care, and that they're trustworthy. Because there are too many products out there, that aren't. The second thing, I'm sorry, go ahead. >> No, please carry on. >> No, I mean the second thing, and then I think I'd say is going beyond compliance also means that you're thinking about how you can use that data for your customer, to solve all of their problems. And Dave, what I'd say here is imagine a world right now, in which, you know you trusted that the data that you gave to companies or to the government, was protected and that if you changed your mind and you wanted it back that they would delete it or give it back to you. Can you imagine how much more quickly we would have solved getting a COVID vaccine? Can you imagine how much data would have been available to pharmaceutical companies to actually develop a vaccine? Can you imagine how much more quickly we would have opened the economy? The thing is companies can't solve every problem that they could for a customer because customers don't trust that the data is going to be used correctly and companies don't know how to use it in that way and ethically. And that's what we're talking about when we say getting beyond compliance which is we want to enable our customers to use the data in the best way and most ethical way to solve all of their customer's problems. >> Okay, so I ask the elephant in the room question. If you asked most businesses about personal information, where it's stored, you know who has access to it, the fact is that most people can't answer it. And so when they're confronted with these uncomfortable questions. The other documents and policies that maybe check some boxes, why is that not a good idea? I mean, there's an expense to going beyond that but so why is that not just a good idea to check it off? >> Well look, a lot of companies do need to just check it off and what I mean, get it right, make sure you label and the way we've thought about this is that when you're building on a backbone like AWS, it does give you the ability to buy a lot of services quickly and scale with your company. But it also gives us an ability to comply faster by leveraging that infrastructure to get compliant faster. So if you think about it, 20 years ago whenever I wanted to buy storage or if I wanted to buy servers and look we're a company that built in the cloud, Dave it would have been very difficult for us to buy the right storage and the processing we needed, given that we were starting. But I was able to buy very small amounts of it until our customer profile grew. But that also means my data moved out of a single hard drive and out of a single set of servers, into other places that are hosted in the cloud. So the entire tech stack that all of our customers are building on means they're distributing personal data into the cloud, into SAS platforms. And there's been a really big move through integration platforms as a service to allow you to spread the personal data quickly. But that same infrastructure can be used to also get you compliant faster, and that's the differentiation. So we built a platform that enables a company to inventory their systems, to track what they're doing in those systems and to both create a compliance record faster by tracking what they're doing inside the cloud and in SAS systems. And that's the different way we've been thinking about it as we've been going to market. >> So, okay. So what actually do you sell, you sell a service? Is it a subscription? >> Yeah. >> And AWS is underneath that, maybe you could put down a picture for us. >> Sure, we're a cloud hosted software as a service. We have two core offerings. One is the WireWheel Trust Access Consent Solution. So if you go to a number of major brands, and you go to their website, when they tell you here's the data we're collecting about you, when they collect your consents and preferences, when they collect a request for data correction or deletion of the data, all the way from the request to delivery back to the consumer, we have an end to end system that our customers use with their customers, a completely cloud hostable in a subscription. So enables even very small startups, to build that experience into their website and into their products, from the very beginning, at a cost efficient point. So if you want to stand up a compliant website or you want to build into your product that Trust Access Consent Solution, we have a SAS platform, and we have developer tools and our developer portal to let you do it quickly. The second thing we do is we have a privacy operations manager. So this is the most security center but for privacy operations. It helps you inventory your systems, actually create data flow maps and most critically create compliance records that you need to comply with, you know the European law, the Brazilian law, and that whole spectrum of U.S. privacy laws that you showed a few minutes ago. And those are the two core offerings we have. >> I love it. I mean, it's the cloud story, right? One is you don't have to spend a millions of dollars on hardware and software. And the second is, when you launch you enable small companies, not just the biggest companies you give them the same, essentially the same services. And that's a great story. Who do you sell to Justin? What does a typical customer engagement look? >> Yeah, we, in many of our customers and in the AWS say startup environment, you often don't have companies that have like a privacy officer. They often don't even have a general counsel. So we sell a package that will often go to whoever is responsible at the company for privacy compliance. And, you know, interestingly Dave in some startups that might be a marketing officer, it might be a CLO, it might be the CTO. So in startups and sort of growing companies, we've put out a lot of guidance, and our core WireWheel developer portal is meant to give even a startup all they need to stand up that experience and get it going, so that when you get that procurement imagine you're about to go sell your product, and they ask you, are you compliant, then you have that document ready to provide. We also do provide this core infrastructure for enormous enterprises. So think telecoms, think top three global technology companies. So Dave, we get excited about is we've built a core software platform privacy infrastructure that is permanently being used by some of the largest companies in the world. And our goal is to get that infrastructure at the right price point into every company in the world, right? We want to enable any company to spend and stand up the right system, that's leveraging that same privacy infrastructure that the big folks have, so that as they scale, they can continue to do the right thing. >> That's awesome. I mean, you mentioned a number of roles of marketing folks. I can even see a sales, let's say sales lead saying, okay we got this deal on the table. How do we get through the procurement because we didn't check the box, all right. So, let me ask you this. We talked a little bit about designing privacy in a and it's clear you help do that. How do you make it, you know fundamental to customer's workloads? Do they have to be like an AWS customer to take advantage of that concept? Or how did they make it part of their workflow? >> Yeah, so there's a couple of critical things. How do you make it part of the workflow? The first thing is, you go to any company's website right now, they have to be compliant with the California law. So a very straightforward thing we do is we can for both B2B and B2C companies stand up an entire customer experience that matches the scale of the company that enables it to be compliant. That means you have a trust center that shows the right information to your customers, it collects the consents, preferences, and it stands up with a portal to request data. These are basics. And for a company that's standing up the internal operations, we can get them app collecting that core record and create a compliance record very fast. With larger companies, Dave you're right. I mean, when you're talking about understanding your entire infrastructure and understanding where you're storing and processing data it could seem overwhelming, but the truth is, the way we onboard our customers is we get you compliance on your product and website first, right? We focus on your product to get that compliance record done. We focus on your website so that you can sell your product. And then we go through the rest of the major systems where you're handling personal information, your sales, your marketing, you know, it's like a natural process. So larger enterprises we have a pretty straightforward way that we get them up and running, but even small startups we can get them to a point of getting them compliant and starting to think about other things very, very quickly. >> And so Justin, you're a government so you understand big, but how I talk about the secret ingredient that allows you to do this at scale and still handle all that diversity, like what we showed in that graphic, the different locations, different local laws, data sovereignty, et cetera. >> Yeah, there's a couple things on the secret source. One is, we have to think about our customers every day. And we had to understand that companies will use whatever their infrastructure is to build. Like you've seen, even on AWS there are so many different services you can use. So number one, we always think with an engineering point of view in mind. Understand the tools, understand the infrastructure in a way that brings that kind of basic visibility to whoever it is that's handling privacy, that basic understanding. The second is, we focused on core user experience for the non-technical user. It's really easy to get started. It's really easy to stand up your privacy page and your privacy policy. It's really easy to collect that and make that first record. The third is, and you know, this is one of those key things. When I was in the government, I met with folks in the intelligence community at one point day, and this always stuck with me. They were telling me that 20 years ago, you know to do the kind of innovation that you have going on now, you would have had to have had a defense contract. You would have had to have invested an enormous amount of money to buy the processing and the services and the team. But the ability for me as a startup founder, to understand the big picture and understand that companies need to be compliant fast, get their website compliant fast, get their product compliant fast, but build on a cloud infrastructure that allowed me to scale was incredible. Because it allows us to do a lot with our customers that a company like ours would have been really challenged to do without that cloud backbone. >> Love this, the agility and the innovation. Last question, give us the company update Justin, you know where are you? What can you share with us, fundraising, head count, are you generating revenue? Where you are? >> Oh yeah, we're excited as I mentioned, we are already the privacy platform of choice of some of the larger brands in the world, which we're very excited about. And we help them solve both the trust, access consent problem for their customers, and we help with the privacy operations management. We recently announced a new $20 million infusion of capital, led by a terrific venture capital fund, ForgePoint Capital. We've been lucky to have been supported by NEA, Sands Capital, Revolution Capital, Pritzker Capital, PSP. And so we have a terrific group of investors behind us. We are scaling, we've grown the company a lot in the last year. Obviously it's been an interesting and challenging year with COVID, but we are really focused on growing our sales team, our marketing team, and we're going to be offering some pretty exciting solutions here for the rest of the year. >> The timing was unbelievable, you had the cloud at your beck and call, you had the experience in government. You've got your background as a lawyer. And it all came in, and the legal come into the forefront of public policy, just a congratulations on all your progress today. We're really looking forward to seeing you guys rocket in the future. I really appreciate you coming on. >> Dave, thanks so much for having me, really enjoyed it. And I look forward to seeing you soon. >> Great, and thank you for watching everyone is Dave Vellante for theCUBE on cloud startups. Keep it right there. (upbeat music)

>> Announcer: From around the globe, it's theCUBE with digital coverage of VMworld 2020 brought to you by VMware and its ecosystem partners. >> Hello, welcome back to theCUBE's coverage of VMworld 2020. This is theCUBE virtual with VMworld 2020 virtual. I'm John Furrier, your host of theCUBE with Dave Vellante. It's our 11th year covering VMware. We're not in-person, we're virtual but all the content is flowing. Of course, we're here with Pat Gelsinger, the CEO of VMware who's been on theCUBE, all 11 years. This year virtual of theCUBE as we've been covering VMware from his early days in 2010 when theCUBE started, 11 years later, Pat, it's still changing and still exciting. Great to see you, thanks for taking the time. >> Hey, you guys are great. I love the interactions that we have, the energy, the fun, the intellectual sparring and of course the audiences have loved it now for 11 years, and I look forward to the next 11 that we'll be doing together. >> It's always exciting 'cause we have great conversations, Dave, and I like to drill in and really kind of probe and unpack the content that you're delivering at the keynotes, but also throughout the entire program. It is virtual this year which highlights a lot of the cloud native changes. Just want to get your thoughts on the virtual aspect, VMworld's not in-person, which is one of the best events of the year, everyone loves it, the great community. It's virtual this year but there's a slew of content, what should people take away from this virtual VMworld? >> Well, one aspect of it is that I'm actually excited about is that we're going to be well over 100,000 people which allows us to be bigger, right? You don't have the physical constraints, you also are able to reach places like I've gone to customers and maybe they had 20 people attend in prior years. This year they're having 100. They're able to have much larger teams also like some of the more regulated industries where they can't necessarily send people to events like this, The International Audience. So just being able to spread the audience much more. A digital foundation for an unpredictable world, and man, what an unpredictable world it has been this past year. And then key messages, lots of key products announcements, technology announcements, partnership announcements, and of course in all of the VMworld is that hands-on labs, the interactions that will be delivering a virtual. You come to VMware because the content is so robust and it's being delivered by the world's smartest people. >> Yeah, we've had great conversations over the years and we've talked about hybrid cloud, I think, 2012. A lot of the stuff I look back at a lot of the videos was early on we're picking out all these waves, but there was that moment four years ago or so, maybe even four three, I can't even remember it seems like yesterday. You gave the seminal keynote and you said, this is the way the world's going to happen. And since that keynote, I'll never forget, was in Moscone and since then, you guys have been performing extremely well both on the business front as well as making technology bets and it's paying off. So what's next, you got the cloud, cloud scale, is it Space, is it Cyber? All these things are going on what is next wave that you're watching and what's coming out and what can people extract out of VMworld this year about this next wave? >> Yeah, one of the things I really am excited about and I went to my buddy Jensen, I said, boy, we're doing this work in smart mix we really like to work with you and maybe some things to better generalize the GPU. And Jensen challenged me. Now usually, I'm the one challenging other people with bigger visions. This time Jensen said, "hey Pat, I think you're thinking too small. Let's do the entire AI landscape together, and let's make AI a enterprise class works load from the data center to the cloud and to the Edge. And so I'm going to bring all of my AI resources and make VMware and Tanzu the preferred infrastructure to deliver AI at scale. I need you guys to make the GPUs work like first-class citizens in the vSphere environment because I need them to be truly democratized for the enterprise, so that it's not some specialized AI Development Team, it's everybody being able to do that. And then we're going to connect the whole network together in a new and profound way with our Monterey program as well being able to use the Smart NIC, the DPU, as Jensen likes to call it. So now with CPU, GPU and DPU, all being managed through a distributed architecture of VMware. This is exciting, so this is one in particular that I think we are now re-architecting the data center, the cloud and the Edge. And this partnership is really a central point of that. >> Yeah, the NVIDIA thing's huge and I know Dave probably has some questions on that but I asked you a question because a lot of people ask me, is that just a hardware deal? Talking about SmartNICs, you talk about data processing units. It sounds like a motherboard in the cloud, if you will, but it's not just hardware. Can you talk about the aspect of the software piece? Because again, NVIDIA is known for GPUs, we all know that but we're talking about AI here so it's not just hardware. Can you just expand and share what the software aspect of all this is? >> Yeah well, NVIDIA has been investing in their AI stack and it's one of those where I say, this is Edison at work, right? The harder I work, the luckier I get. And NVIDIA was lucky that their architecture worked much better for the AI workload. But it was built on two decades of hard work in building a parallel data center architecture. And they have built a complete software stack for all the major AI workloads running on their platform. All of that is now coming to vSphere and Tanzu, that is a rich software layer across many vertical industries. And we'll talk about a variety of use cases, one of those that we highlight at VMworld is the University, California, San Francisco partnership, UCSF, one of the world's leading research hospitals. Some of the current vaccine use cases as well, the financial use cases for threat detection and trading benefits. It really is about how we bring that rich software stack. This is a decade and a half of work to the VMware platform, so that now every developer and every enterprise can take advantage of this at scale. That's a lot of software. So in many respects, yeah, there's a piece of hardware in here but the software stack is even more important. >> It's so well we're on the sort of NVIDIA, the arm piece. There's really interesting these alternative processing models, and I wonder if you could comment on the implications for AI inferencing at the Edge. It's not just as well processor implications, it's storage, it's networking, it's really a whole new fundamental paradigm, but how are you thinking about that, Pat? >> Yeah, and we've thought about there's three aspects, what we said, three problems that we're solving. One is the developer problem where we said now you develop once, right? And the developer can now say, "hey I want to have this new AI-centric app and I can develop and it can run in the data center on the cloud or at the Edge." Secondly, my Operations Team can be able to operate this just like I do all of my infrastructure, and now it's VMs containers and AI applications. And third, and this is where your question really comes to bear most significantly, is data gravity. Right, these data sets are big. Some of them need to be very low latency as well, they also have regulatory issues. And if I have to move these large regulated data sets to the cloud, boy, maybe I can't do that generally for my Apps or if I have low latency heavy apps at the Edge, huh, I can't pull it back to the cloud or to my data center. And that's where the uniform architecture and aspects of the Monterey Program where I'm able to take advantage of the network and the SmartNICs that are being built, but also being able to fully represent the data gravity issues of AI applications at scale. 'Cause in many cases, I'll need to do the processing, both the learning and the inference at the Edge as well. So that's a key part of our strategy here with NVIDIA and I do think is going to unlock a new class of apps because when you think about AI and containers, what am I using it for? Well, it's the next generation of applications. A lot of those are going to be Edge, 5G-based, so very critical. >> We've got to talk about security now too. I'm going to pivot a little bit here, John, if it's okay. Years ago, you said security is a do-over, you said that on theCUBE, it stuck with us. But there's been a lot of complacency. It's kind of if it ain't broke, don't fix it, but but COVID kind of broke it. And so you see three mega trends, you've got cloud security, you'll see in Z-scaler rocket, you've got Identity Access Management and Octo which I hope there's I think a customer of yours and then you got Endpoint, you're seeing Crowdstrike explode you guys paid 2.7 billion, I think, for Carbon Black, yet Crowdstrike has this huge valuation. That's a mega opportunity for you guys. What are you seeing there? How are you bringing that all together? You've got NSX components, EUC components, you've got sort of security throughout your entire stack. How should we be thinking about that? >> Well, one of the announcements that I am most excited about at VMworld is the release of Carbon Black workload. 'Cause we said we're going to take those carbon black assets and we're going to combine it with workspace one, we're going to build it in NSX, we're going to make it part of Tanzu, and we're going to make it part of vSphere. And Carbon Black workload is literally the vSphere embodiment of Carbon Black in an agent-less way. So now you don't need to insert new agents or anything, it becomes part of the hypervisor itself. Meaning that there's no attack surface available for the bad guys to pursue. But not only is this an exciting new product capability, but we're going to make it free, right? And what I'm announcing at VMworld and everybody who uses vSphere gets Carbon Black workload for free for an unlimited number of VMs for the next six months. And as I said in the keynote, today is a bad day for cyber criminals. This is what intrinsic security is about, making it part of the platform. Don't add anything on, just click the button and start using what's built into vSphere. And we're doing that same thing with what we're doing at the networking layer, this is the last line acquisition. We're going to bring that same workload kind of characteristic into the container, that's why we did the Octarine acquisition, and we're releasing the integration of workspace one with Carbon Black client and that's going to be the differentiator, and by the way, Crowdstrike is doing well, but guess what? So are we, and right both of us are eliminating the rotting dead carcasses of the traditional AV approach. So there's a huge market for both of us to go pursue here. So a lot of great things in security, and as you said, we're just starting to see that shift of the industry occur that I promised last year in theCUBE. >> So it'd be safe to say that you're a cloud native and a security company these days? >> Yeah well, absolutely. And the bigger picture of us is that we're this critical infrastructure layer for the Edge, for the cloud, for the Telco environment and for the data center from every endpoint, every application, every cloud. >> So, Pat, I want to ask you a virtual question we got from the community. I'm going to throw it out to you because a lot of people look at Amazon and the cloud and they say, okay we didn't see it coming, we saw it coming, we saw it scale all the benefits that are coming out of cloud well documented. The question for you is, what's next after cloud? As people start to rethink especially with COVID highlighting and all the scabs out there as people look at their exposed infrastructure and their software, they want to be modern, they want the modern apps. What's next after cloud, what's your vision? >> Well, with respect to cloud, we are taking customers on the multicloud vision, right, where you truly get to say, oh, this workload I want to be able to run it with Azure, with amazon, I need to bring this one on-premise, I want to run that one hosted. I'm not sure where I'm going to run that application, so develop it and then run it at the best place. And that's what we mean by our hybrid multicloud strategy, is being able for customers to really have cloud flexibility and choice. And even as our preferred relationship with Amazon is going super well, we're seeing a real uptick, we're also happy that the Microsoft Azure VMware service is now GA. So there in Marketplace, are Google, Oracle, IBM and Alibaba partnerships, and the much broader set of VMware Cloud partner programs. So the future is multicloud. Furthermore, it's then how do we do that in the Telco network for the 5G build out? The Telco cloud, and how do we do that for the Edge? And I think that might be sort of the granddaddy of all of these because increasingly in a 5G world, we'll be enabling Edge use cases, we'll be pushing AI to the Edge like we talked about earlier in this conversation, we'll be enabling these high bandwidth low latency use cases at the Edge, and we'll see more and more of the smart embodiment smart city, smart street, smart factory, the autonomous driving, all of those need these type of capabilities. >> Okay. >> So there's hybrid and there's multi, you just talked about multi. So hybrid are data, are data partner ETR they do quarterly surveys. We're seeing big uptick in VMware Cloud on AWS, you guys mentioned that in your call. We're also seeing the VMware Cloud, VMware Cloud Foundation and the other elements, clearly a big uptick. So how should we think about hybrid? It looks like that's an extension of on-prem maybe not incremental, maybe a share shift, whereas multi looks like it's incremental but today multi is really running on multiple clouds, but a vision toward incremental value. How are you thinking about that? >> Yeah, so clearly, the idea of multi is truly multiple clouds. Am I taking advantage of multiple clouds being my private clouds, my hosted clouds and of course my public cloud partners? We believe everybody will be running a great private cloud, picking a primary public cloud and then a secondary public cloud. Hybrid then is saying, which of those infrastructures are identical, so that I can run them without modifying any aspect of my infrastructure operations or applications? And in today's world where people are wanting to accelerate their move to the cloud, a hybrid cloud is spot-on with their needs. Because if I have to refactor my applications, it's a couple million dollars per app and I'll see you in a couple of years. If I can simply migrate my existing application to the hybrid cloud, what we're consistently seeing is the time is 1/4 and the cost is 1/8 or less. Those are powerful numbers. And if I need to exit a data center, I want to be able to move to a cloud environment to be able to access more of those native cloud services, wow, that's powerful. And that's why for seven years now, we've been preaching that hybrid is the future, it is not a way station to the future. And I believe that more fervently today than when I declared it seven years ago. So we are firmly on that path that we're enabling a multi and hybrid cloud future for all of our customers. >> Yeah, you addressed that like Cube 2013, I remember that interview vividly was not a weigh station I got hammered answered. Thank you, Pat, for clarifying that going back seven years. I love the vision, you always got the right wave, it's always great to talk to you but I got to ask you about these initiatives that you're seeing clearly. Last year, a year and a half ago, Project Pacific came out, almost like a guiding directional vision. It then put some meat on the bone Tanzu and now you guys have that whole cloud native initiative, it's starting to flower up, thousands of flowers are blooming. This year, Project Monterey has announced. Same kind of situation, you're showing out the vision. What are the plans to take that to the next level? And take a minute to explain how Project Monterey, what it means and how you see that filling out. I'm assuming it's going to take the same trajectory as Pacific. >> Yeah, Monterey is a big deal. This is re-architecting the core of vSphere and it really is ripping apart the IO stack from the intrinsic operation of vSphere and the SX itself because in many ways, the IO, we've been always leveraging the NIC and essentially virtual NICs, but we never leverage the resources of the network adapters themselves in any fundamental way. And as you think about SmartNICs, these are powerful resources now where they may have four, eight, 16 even 32 cores running in the SmartNIC itself. So how do I utilize that resource, but it also sits in the right place? In the sense that it is the network traffic cop, it is the place to do security acceleration, it is the place that enables IO bandwidth optimization across increasingly rich applications where the workloads, the data, the latency get more important both in the data center and across data centers, to the cloud and to the Edge. So this re-architecting is a big deal, we announced the three partners, Intel, NVIDIA Mellanox and Pensando that we're working with, and we'll begin the deliveries of this as part of the core vSphere offerings beginning next year. So it's a big re-architecting, these are our key partners, we're excited about the work that we're doing with them and then of course our system partners like Dell and Lenovo who've already come forward and says, "Yeah we're going to to be bringing these to market together with VMware." >> Pat, personal question for you. I want to get your personal take, your career going back to Intel, you've seen it all but the shift is consumer to enterprise and you look at just recently Snowflake IPO, the biggest ever in the history of Wall Street. It's an enterprise data company, and the enterprise is now relevant. The consumer enterprise feels consumery, we talked about consumerization of IT years and years ago. But now more than ever the hottest financial IPO enterprise, you guys are enterprise. You did enterprise at Intel (laughing), you know the enterprise, you're doing it here at VMware. The enterprise is the consumer now with cloud and all this new landscape. What is your view on this because you've seen the waves, have you seen the historical perspective? It was consumer, was the big thing now it's enterprise, what's your take on all this? How do you make sense of it because it's now mainstream, what's your view on this? >> Well, first I do want to say congratulations to my friend, Frank and the extraordinary Snowflake IPO. And by the way they use VMware, so I not only do I feel a sense of ownership 'cause Frank used to work for me for a period of time, but they're also a customer of ours so go Frank, go Snowflake. We're excited about that. But there is this episodic to the industry where for a period of time, it is consumer-driven and CES used to be the hottest ticket in the industry for technology trends. But as you say, it has now shifted to be more business-centric, and I've said this very firmly, for instance, in the case of 5G where I do not see consumer. A faster video or a better Facebook isn't going to be why I buy 5G. It's going to be driven by more business use cases where the latency, the security and the bandwidth will have radically differentiated views of the new applications that will be the case. So we do think that we're in a period of time and I expect that it's probably at least the next five years where business will be the technology drivers in the industry. And then probably, hey there'll be a wave of consumer innovation, and I'll have to get my black turtlenecks out again and start trying to be cool but I've always been more of an enterprise guy so I like the next five to 10 years better. I'm not cool enough to be a consumer guy and maybe my age is now starting to conspire against me as well. >> Hey, Pat I know you got to go but a quick question. So you guys, you gave guidance, pretty good guidance actually. I wonder, have you and Zane come up with a new algorithm to deal with all this uncertainty or is it kind of back to old school gut feel? >> (laughing) Well, I think as we thought about the year, as we came into the year, and obviously, COVID smacked everybody, we laid out a model, we looked at various industry analysts, what we call the Swoosh Model, right? Q2, Q3 and Q4 recovery, Q1 more so, Q2 more so. And basically, we built our own theories behind that, we tested against many analyst perspectives and we had Vs and we had Ws and we had Ls and so on. We picked what we thought was really sort of grounded in the best data that we could, put our own analysis which we have substantial data of our own customers' usage, et cetera and picked the model. And like any model, you put a touch of conservatism against it, and we've been pretty accurate. And I think there's a lot of things we've been able to sort of with good data, good thoughtfulness, take a view and then just consistently manage against it and everything that we said when we did that back in March has sort of proven out incrementally to be more accurate. And some are saying, "Hey things are coming back more quickly" and then, "Oh, we're starting to see the fall numbers climb up a little bit." Hey, we don't think this goes away quickly, there's still a lot of secondary things to get flushed through, the various economies as stimulus starts tailoring off, small businesses are more impacted, and we still don't have a widely deployed vaccine and I don't expect we will have one until second half of next year. Now there's the silver lining to that, as we said, which means that these changes, these faster to the future shifts in how we learn, how we work, how we educate, how we care for, how we worship, how we live, they will get more and more sedimented into the new normal, relying more and more on the digital foundation. And we think ultimately, that has extremely good upsides for us long-term, even as it's very difficult to navigate in the near term. And that's why we are just raving optimists for the long-term benefits of a more and more digital foundation for the future of every industry, every human, every workforce, every hospital, every educator, they are going to become more digital and that's why I think, going back to the last question this is a business-driven cycle, we're well positioned and we're thrilled for all of those who are participating with Vmworld 2020. This is a seminal moment for us and our industry. >> Pat, thank you so much for taking the time. It's an enabling model, it's what platforms are all about, you get that. My final parting question for you is whether you're a VC investing in startups or a large enterprise who's trying to get through COVID with a growth plan for that future. What does a modern app look like, and what does a modern company look like in your view? >> Well, a modern company would be that instead of having a lot of people looking down at infrastructure, the bulk of my IT resources are looking up at building apps, those apps are using modern CICD data pipeline approaches built for a multicloud embodiment, right, and of course VMware is the best partner that you possibly could have. So if you want to be modern cool on the front end, come and talk to us. >> All right, Pat Gelsinger, the CEO of VMware here on theCUBE for VMworld 2020 virtual, here with theCUBE virtual great to see you virtually, Pat, thanks for coming on, thanks for your time. >> Hey, thank you so much, love to see you in person soon enough but this is pretty good. >> Yeah. >> Thank you Dave. Thank you so much. >> Okay, you're watching theCUBE virtual here for VMworld 2020, I'm John Furrier, Dave Vellante with Pat Gelsinger, thanks for watching. (gentle music)

>> Narrator: From around the globe. It's theCUBE with digital coverage of VMworld 2020, brought to you by VMware and its ecosystem partners. >> Hello, welcome back to theCUBE's coverage of VMworld 2020. This is theCUBE virtual with VMworld 2020 virtual. I'm John Furrier your host of theCUBE with Dave Vellante. It's our 11th year covering VMware. We're not in person, we're virtual, but all the content is flowing. Of course, we're here with Pat Galsinger, the CEO of VMware. Who's been on theCUBE all 11 years. This year virtual of theCUBE as we've been covering VMware from his early days in 2010, when theCUBE started 11 years later, Pat is still changing and still exciting. Great to see you. Thanks for taking the time. >> Hey, you guys are great. I love the interactions that we have, the energy, the fun, the intellectual sparring. And of course that audiences have loved it now for 11 years. And I look forward to the next 11 that we'll be doing together. >> It's always exciting cause we'd love great conversations. Dave and I like to drill in and really kind of probe and unpack the content that you're delivering at the keynotes, but also throughout the entire program. It is virtual this year, which highlights a lot of the cloud native changes. Just want to get your thoughts on the virtual aspect of VMworld, not in person, which is one of the best events of the year. Everyone loves it. The great community. It's virtual this year, but there's a slew of content. What should people take away from this virtual VMworld? >> Well, one aspect of it is that I'm actually excited about is that we're going to be well over a hundred thousand people, which allows us to be bigger, right? You don't have the physical constraints. You also are able to reach places like I've gone to customers and maybe they had 20 people attend in prior years. This year they're having a hundred, they're able to have much larger teams. Also like some of the more regulated industries where they can't necessarily send people to events like this, the international audience. So just being able to spread the audience much more broadly well, also our key messages a digital foundation for unpredictable world. And man, what an unpredictable world it has been this past year? And then key messages, lots of key products announcements technology, announcements partnership, announcements and of course in all of the VMworld, is that hands on (murmurs) interactions that we'll be delivering our virtual, you come to the VMware because the content is so robust and it's being delivered by the world's smartest people. >> Yeah. We've had great conversations over the years. And we've talked about hybrid clothing 2012, a lot of this stuff I looked back in lot of the videos was early on, we're picking out all these waves, but it was that moment four years ago or so, maybe even four, three, I can't even remember, seems like yesterday. You gave the Seminole keynote and you said, "This is the way the world's going to happen." And since that keynote I'll never forget was in Moscone. And since then you guys have been performing extremely well both on the business as well as making technology bets and is paying off. So what's next? I mean, you've got the cloud scale. Is it space? Is it cyber? I mean, all these things are going on. What is next wave that you're watching and what's coming out and what can people extract out of VMworld this year about this next wave? >> Yeah, one of the things I really am excited about I went to my buddy Jensen. I said, "Boy, we're doing this work and smart. Next We really liked to work with you and maybe some things to better generalize the GPU." And Jensen challenged me. Now, usually, I'm the one challenging other people with bigger visions, this time Jensen said, "Hey Pat, I think you're thinking too small. Let's do the entire AI landscape together. And let's make AI a enterprise classwork stowed from the data center to the cloud and to the Edge. And so I'm going to bring all of my AI resources and make VMware, And Tansu the preferred infrastructure to deliver AI at scale. I need you guys to make the GPS work like first class citizens in the vSphere environment, because I need them to be truly democratized for the enterprise. so that it's not some specialized AI development team, it's everybody being able to do that. And then we're going to connect the whole network together in a new and profound way with our Monterey Program as well being able to use the SmartNIC, the DPU as Jensen likes to call it. So now it's CPU, GPU and DPU, all being managed through a distributed architecture of VMware." This is exciting. So this is one in particular that I think we are now rearchitecting the data center, the cloud in the Edge. And this partnership is really a central point of that. >> Yeah, the Nvid thing's huge. And I know Dave, Perharbs has some questions on that. But I ask you a question because a lot of people ask me, is it just a hardware deal? I mean, talking about SmartNIC, you talking about data processing units. It sounds like a motherboard in the cloud, if you will, but it's not just hardware. Can you talk about the aspect of the software piece? Because again, Nvidia is known for GP use, we all know that, but we're talking about AI here. So it's not just hardware. Can you just expand and share what the software aspect of all this is? >> Yeah. Well, Nvidia has been investing in their AI stack and it's one of those where I say, this is Edison at work, right? The harder I work, the luckier I get. And Nvidia was lucky that their architecture worked much better for the AI workload, but it was built on two decades of hard work in building a parallel data center architecture. And they have built a complete software stack for all of the major AI workloads running on their platform. All of that is now coming to vSphere and Tansu, that is a rich software layer across many vertical industries. And we'll talk about a variety of use cases. One of those that we highlight at Vmworld is the university of California, San Francisco partnership UCSF one of the world's leading research hospitals, some of the current vaccine use cases as well, the financial use cases for threat detection and trading benefits. It really is about how we bring that rich software stack. this is a decade and a half of work to the VMware platform so that now every developer and every enterprise could take advantage of this at scale, that's a lot of software. So in many respects, yeah, there's a piece of hardware in here, but the software stack is even more important. >> So well on the sort of Nvidia the arm piece, there's really interesting, these alternative processing models. And I wonder if you could comment on the implications for AI inferencing at the Edge. It's not just as well processor implications, it's storage, it's networking. It's really a whole new fundamental paradigm. How are you thinking about that Pat? >> Yeah, we've thought about, there's three aspects, but what we said three problems that we're solving. One is the developer problem, what we said, now you develop once, right? And the developer can now say, "Hey, I want to have this new AI centric app and I can develop, and it can run in the data center on the cloud or at the Edge." You'll secondly, my operations team can be able to operate this just like I do all my infrastructure. And now it's VMs containers and AI applications and third, and this is where your question really comes to bear. Most significantly is data gravity, right? These data sets are big. Some of them need to be very low latency as well. They also have regulatory issues. And if I have to move these large regulated data sets to the cloud, boy, maybe I can't do that generally for my apps or if I have low latency heavy apps at the Edge, ah, I can't pull it back to the cloud or to my data center. And that's where the uniform architecture and aspects of the Monterey program, where I'm able to take advantage of the network and the SmartNIC that are being built, but also being able to fully represent the data gravity issues of AI applications at scale 'cause in many cases I'll need to do the processing, both the learning and the inference at the Edge as well. So that's a key part of our strategy here with Nvidia. And I do think is going to be a lock, a new class of apps because when you think about AI and containers, what am I using it for? Well, it's the next generation of applications. A lot of those are going to be Edge 5G based. So very critical. >> We got to talk about security now, too. I mean, I'm going to pivot a little bit here John if it's okay. Years ago you said security is a do over. You said that on theCUBE, It stuck with us. There's there's been a lot of complacency it's kind of, if it didn't broke, don't fix it, but COVID kind of broke it. That's why you see three mega trends. You've got cloud security, you see in Z scaler rocket, you got identity access management and I'll check, I think a customer of yours. And then you've got endpoint you're seeing CrowdStrike explode. You guys pay 2.7 billion I think for carbon black yet CrowdStrike has this huge valuation. That's a mega opportunity for you guys. What are you seeing there? How are you bringing that all together? You've got NSX components, EUC components. You've got sort of security throughout your entire stack. How should we be thinking about that? >> Well, one of the announcements that I am most excited about at Vmworld is the release of carbon black workload, this research we're going to take those carbon black assets and we're going to combine it with workspace one. We're going to build it in NSX. We're going to make it part of Tansu and we're going to make it part of vSphere. And carbon black workload is literally the vSphere embodiment of carbon black in an agentless way. Ans so now you don't need to insert new agents or anything. It becomes part of the hypervisor itself, meaning that there's no attack surface available for the bad guys to pursue, but not only is this an exciting new product capability, but we're going to make it free, right? And what I'm announcing at VMworld and everybody who uses vSphere gets carbon black workload for free for an unlimited number of VMs for the next six months. And as I said in the keynote today is a bad day for cybercriminals. This is what intrinsic security is about, making it part of the platform. Don't add anything on, just click the button and start using what's built into vSphere. And we're doing that same thing with what we're doing at the networking layer. This is the act, the last line acquisition. We're going to bring that same workload kind of characteristic into the container. That's why we did the Octarine acquisition. And we're releasing the integration of workspace one with a carbon black client, and that's going to be the differentiator. And by the way, CrowdStrike is doing well, but guess what? So are we, and like both of us are eliminating the rotting dead carcasses of the traditional AV approach. So there is a huge market for both of us to go pursue here. So a lot of great things in security. And as you said, we're just starting to see that shift of the industry occur that I promised last year in theCUBE. >> So it'd be safe to say that you're a cloud native in a security company these days? >> You all, absolutely. And the bigger picture of us, is that we're critical infrastructure layer for the Edge for the cloud, for the telco environment and for the data center from every end point, every application, every cloud. >> So Padagonia asked you a virtual question, we got from the community, I'm going to throw it out to you because a lot of people look at Amazon, The cloud and they say, "Okay, we didn't see it coming. We saw it coming. We saw it scale all the benefits that are coming out of cloud, Well-documented." The question for you is what's next after cloud, as people start to rethink, especially with COVID highlighting all the scabs out there. As people look at their exposed infrastructure and their software, they want to be modern. They want the modern apps. What's next after cloud. What's your vision? >> Well, with respect to cloud, we are taking customers on the multicloud vision, right? Where you truly get to say, "Oh, this workload, I want to be able to run it with Azure, with Amazon. I need to bring this one on premise. I want to run that one hosted. I'm not sure where I'm going to run that application." So develop it and then run it at the best place. And that's what we mean by our hybrid multicloud strategy is being able for customers to really have cloud flexibility and choice. And even as our preferred relationship with Amazon is going super well. We're seeing a real uptick. We're also happy that the Microsoft Azure VMware services now GA so they're in marketplace, our Google, Oracle, IBM and Alibaba partnerships in the much broader set of VMware cloud Partner Program. So the future is multicloud. Furthermore, it's then how do we do that in the Telco Network for the 5G build out, The Telco cloud? And how do we do that for the Edge? And I think that might be sort of the granddaddy of all of these because increasingly in a 5G world will be a nibbling Edge use cases. We'll be pushing AI to the Edge like we talked about earlier in this conversation, will be enabling these high bandwidth, with low latency use cases at the Edge, and we'll see more and more of the smart embodiment, smart cities, smart street, smart factory, or the autonomous driving. All of those need these type of capabilities. >> So there's hybrid and there's multi, you just talked about multi. So hybrid are data partner ETR, they do quarterly surveys. We're seeing big uptick in VMware cloud and AWS, you guys mentioned that in your call. we're also seeing the VMware cloud, VMware cloud Coundation and the other elements, clearly a big uptake. So how should we think about hybrid? It looks like that's an extension of on-prem maybe not incremental, maybe a share shift whereas multi looks like it's incremental, but today multi has really running on multiple clouds, but vision toward incremental value. How are you thinking about that? >> Yeah, so clearly the idea of multi is to link multiple. Am I taking advantage of multiple clouds being my private clouds, my hosted clouds. And of course my public cloud partners, we believe everybody will be running a great private cloud, picking a primary, a public cloud, and then a secondary public cloud. Hybrid then is saying, which of those infrastructures are identical so that I can run them without modifying any aspect of my infrastructure operations or applications. And in today's world where people are wanting to accelerate their move to the cloud, a hybrid cloud is spot on with their needs because if I have to refactor my applications it's a couple million dollars per app, And I'll see you in a couple of years. If I can simply migrate my existing application to the hybrid cloud, what we're consistently seeing is the time is one quarter and the cost is one eight, four less. Those are powerful numbers. And if I need to exit a data center, I want to be able to move to a cloud environment, to be able to access more of those native cloud services. Wow. That's powerful. And that's why for seven years now we've been preaching that hybrid is the future. It is not a waystation to the future. And I believe that more fervently today than when I declared it seven years ago. So we are firmly on that path that we're enabling a multi and a hybrid cloud future for all of our customers. >> Yeah. You addressed that like CUBE 2013. I remember that interview vividly was not a waystation. I got (murmurs) the answer. Thank you Pat, for clarifying than going back seven years. I love the vision. You're always got the right wave. It's always great to talk to you, but I got to ask you about these initiatives you seeing clearly last year or a year and a half ago, project Pacific name out almost like a guiding directional vision, and then put some meat on the bone Tansu and now you guys have that whole Cloud Native Initiative is starting to flower up thousand flowers are blooming. This year Project Monterrey has announced same kind of situation. You're showing out the vision. What are the plans to take that to the next level and take a minute to explain how project Monterey, what it means and how you see that filling out. I'm assuming it's going to take the same trajectory as Pacific. >> Yeah. Monetary is a big deal. This is rearchitecting The core of vSphere. It really is ripping apart the IO stack from the intrinsic operation of a vSphere and ESX itself, because in many ways, the IO we've been always leveraging the NIC and essentially virtual NICs, but we never leverage the resources of the network adapters themselves in any fundamental way. And as you think about SmartNICs, these are powerful resources now where they may have four, eight, 16, even 32 cores running in the smartNIC itself. So how do I utilize that resource? But it also sits in the right place in the sense that it is the network traffic cop. It is the place to do security acceleration. It is the place that enables IO bandwidth optimization across increasingly rich applications where the workloads, the data, the latency get more important both in the data center and across data centers to the cloud and to the Edge. So this rearchitecting is a big deal. We announced the three partners, Intel, Nvidia, Mellanox, and Penn Sandow that we're working with. And we'll begin the deliveries of this as part of the core vSphere offerings of beginning next year. So it's a big rearchitecting. These are our key partners. We're excited about the work that we're doing with them. And then of course our system partners like Dell and Lenovo, who've already come forward and says, "Yeah, we're going to be bringing these to market together with VMware." >> Pat, personal question for you. I want to get your personal take, your career, going back to Intel. You've seen it all, but the shift is consumer to enterprise. And you look at just recently snowflake IPO, the biggest ever in the history of wall street, an enterprise data's company. And the enterprise is now relevant. Enterprise feels consumer. We talked about consumerization of IT years and years ago, but now more than ever the hottest financial IPO enterprise, you guys are enterprise. You did enterprise at Intel. (laughs) You know the enterprise, you doing it here at VMware. The enterprise is the consumer now with cloud and all this new landscape. What is your view on this? Because you've seen the waves, and you've seen the historical perspective. It was consumer, was the big thing. Now it's enterprise, what's your take on all this? How do you make sense of it? Because it's now mainstream. what's your view on this? >> Well, first I do want to say congratulations to my friend Frank, and the extraordinary snowflake IPO, and by the way, they use VMware. So not only do I feel a sense of ownership 'cause Frank used to work for me for a period of time, but they're also a customer of ours. So go Frank, go snowflake. We're we're excited about that. But there is this episodic, this to the industry where for a period of time it is consumer-driven and CES used to be the hottest ticket in the industry for technology trends. But as you say, it is now shifted to be more business centric. And I've said this very firmly, for instance, in the case of 5G where I do not see consumer a faster video or a better Facebook, isn't going to be why I buy 5G. It's going to be driven by more business use cases where the latency, the security and the bandwidth will have radically differentiated views of the new applications that will be the case. So we do think that we're in a period of time and I expect that it's probably at least the next five years where business will be the technology drivers in the industry. And then probably, hey, there'll be a wave of consumer innovation and I'll have to get my black turtlenecks out again and start trying to be cool, but I've always been more of an enterprise guy. So I like the next five to 10 years better. I'm not cool enough to be a consumer guy. And maybe my age is now starting to conspire against me as well. >> Hey, Pat, I know you've got to go, but quick question. So you guys, you gave guidance, pretty good guidance, actually. I wondered have you and Zane come up with a new algorithm to deal with all this uncertainty or is it kind of back to old school gut feel? (laughs) >> Well, I think as we thought about the year as we came into the year and obviously, COVID smacked everybody, we laid out a model, we looked at various industry analysts, what we call the swoosh model, right? Q2, Q3 and Q4 recovery, Q1 more so, Q2 more so, and basically, we build our own theories behind that. We test it against many analysts, the perspectives, and we had vs and we had Ws and we had Ls and so on. We picked what we thought was really sort of grounded of the best data that we could put our own analysis, which we have substantial data of our own customer's usage, et cetera, and pick the model. And like any model, you put a touch of conservatism against it, and we've been pretty accurate. And I think there's a lot of things, we've been able to sort of, with good data good thoughtfulness, take a view and then just consistently manage against it and everything that we said when we did that back in March, sort of proven out incrementally to be more accurate. And some are saying, "Hey, things are coming back more quickly." And then, oh we're starting to see the fall numbers climb up a little bit. Hey, we don't think this goes away quickly. There's still a lot of secondary things to get flushed through the various economies, as stimulus starts tailoring off small businesses are more impacted and we still don't have a widely deployed vaccine. And I don't expect we will have one until second half of next year. Now there's the silver lining to that, as we said, which means that these changes, these faster to the future shifts in how we learn, how we work, how we educate, how we care for, how we worship, how we live, they will get more and more sedimented into the new normal relying more and more on the digital foundation. And we think ultimately that has extremely good upsides for us longterm, even as it's very difficult to navigate in the near term. And that's why we are just raving optimists for the longterm benefits of a more and more digital foundation for the future of every industry, every human, every workforce, every hospital, every educator, they are going to become more digital. And that's why I think going back to the last question, this is a business driven cycle, we're well positioned, and we're thrilled for all of those who are participating with VMworld 2020. This is a seminal moment for us and our industry. >> Pat, thank you so much for taking the time. It's an enabling model. It's what platforms are all about. You get that. My final parting question for you is whether you're a VC investing in startups or a large enterprise who's trying to get through COVID with a growth plan for that future. What is a modern app look like? And what does a modern company look like in your view? >> Well, a modern company would be that instead of having a lot of people looking down at infrastructure, the bulk of my IT resources are looking up at building apps. Those apps are using modern CICD data pipeline approaches built for a multicloud embodiment, right? And of course, VMware is the best partner that you possibly could have. So if you want to be modern, cool on the front end, come and talk to us. >> All right. Pat Galsinger the CEO of VMware here on theCUBE for VML 2020 virtual here with theCUBE virtual. Great to see you virtually Pat. Thanks for coming on. Thanks for your time. >> Hey, thank you so much. Love to see you in person soon enough, but this is pretty good. Thank you, Dave. Thank you so much. >> Okay. You're watching theCUBE virtual here for VMworld 2020. I'm John Furrier with Dave Vallente with Pat Gelsinger. Thanks for watching. (upbeat music)

Narrator: From theCUBE studios in Palo Alto and Boston, it's theCUBE, covering IBM Think, brought to you by IBM. >> We're back. You're watching theCUBE and our coverage of IBM Think 2020, the digital IBM thinking. We're here with Jamie Thomas, who's the general manager of strategy and development for IBM Systems. Jamie, great to see you. >> It's great to see you as always. >> You have been knee deep in qubits, the last couple years. And we're going to talk quantum. We've talked quantum a lot in the past, but it's a really interesting field. We spoke to you last year at IBM Think about this topic. And a year in this industry is a long time, but so give us the update what's new in quantum land? >> Well, Dave first of all, I'd like to say that in this environment we find ourselves in, I think we can all appreciate why innovation of this nature is perhaps more important going forward, right? If we look at some of the opportunities to solve some of the unsolvable problems, or solve problems much more quickly, in the case of pharmaceutical research. But for us in IBM, it's been a really busy year. First of all, we worked to advance the technology, which is first and foremost in terms of this journey to quantum. We just brought online our 53 qubit computer, which also has a quantum volume of 32, which we can talk about. And we've continued to advance the software stack that's attached to the technology because you have to have both the software and the hardware thing, right rate and pace. We've advanced our new network, which you and I have spoken about, which are those individuals across the commercial enterprises, academic and startups, who are working with us to co-create around quantum to help us understand the use cases that really can be solved in the future with quantum. And we've also continued to advance our community, which is serving as well in this new digital world that we're finding ourselves in, in terms of reaching out to developers. Now, we have over 300,000 unique downloads of the programming model that represents the developers that we're touching out there every day with quantum. These developers have, in the last year, have run over 140 billion quantum circuits. So, our machines in the cloud are quite active, and the cloud model, of course, is serving us well. The data's, in addition, to all the other things that I mentioned. >> So Jamie, what metrics are you trying to optimize on? You mentioned 53 qubits I saw that actually came online, I think, last fall. So you're nearly six months in now, which is awesome. But what are you measuring? Are you measuring stability or coherence or error rates? Number of qubits? What are the things that you're trying to optimize on to measure progress? >> Well, that's a good question. So we have this metric that we've defined over the last year or two called quantum volume. And quantum volume 32, which is the capacity of our current machine really is a representation of many of the things that you mentioned. It represents the power of the quantum machine, if you will. It includes a definition of our ability to provide error correction, to maintain states, to really accomplish workloads with the computer. So there's a number of factors that go into quantum volume, which we think are important. Now, qubits and the number of qubits is just one such metric. It really depends on the coherence and the effect of error correction, to really get the value out of the machine, and that's a very important metric. >> Yeah, we love to boil things down to a single metric. It's more complicated than that >> Yeah, yeah. >> specifically with quantum. So, talk a little bit more about what clients are doing and I'm particularly interested in the ecosystem that you're forming around quantum. >> Well, as I said, the ecosystem is both the network, which are those that are really intently working with us to co-create because we found, through our long history in IBM, that co-creation is really important. And also these researchers and developers realize that some of our developers today are really researchers, but as you as you go forward you get many different types of developers that are part of this mix. But in terms of our ecosystem, we're really fundamentally focused on key problems around chemistry, material science, financial services. And over the last year, there's over 200 papers that have been written out there from our network that really embody their work with us on this journey. So we're looking at things like quadratic speed up of things like Monte Carlo simulation, which is used in the financial services arena today to quantify risk. There's papers out there around topics like trade settlements, which in the world today trade settlements is a very complex domain with very interconnected complex rules and trillions of dollars in the purview of trade settlement. So, it's just an example. Options pricing, so you see examples around options pricing from corporations like JPMC in the area of financial services. And likewise in chemistry, there's a lot of research out there focused on batteries. As you can imagine, getting everything to electric powered batteries is an important topic. But today, the way we manufacture batteries can in fact create air pollution, in terms of the process, as well as we want batteries to have more retention in life to be more effective in energy conservation. So, how do we create batteries and still protect our environment, as we all would like to do? And so we've had a lot of research around things like the next generation of electric batteries, which is a key topic. But if you can think, you know Dave, there's so many topics here around chemistry, also pharmaceuticals that could be advanced with a quantum computer. Obviously, if you look at the COVID-19 news, our supercomputer that we installed at Oak Ridge National Laboratory for instance, is being used to analyze 8000 different compounds for specifically around COVID-19 and the possibilities of using those compounds to solve COVID-19, or influence it in a positive manner. You can think of the quantum computer when it comes online as an accelerator to a supercomputer like that, helping speed up this kind of research even faster than what we're able to do with something like the Summit supercomputer. Oak Ridge is one of our prominent clients with the quantum technology, and they certainly see it that way, right, as an accelerator to the capacity they already have. So a great example that I think is very germane in the time that we find ourselves in. >> How 'about startups in this ecosystem? Are you able to-- I mean there must be startups popping up all over the place for this opportunity. Are you working with any startups or incubating any startups? Can you talk about that? >> Oh yep. Absolutely. There's about a third of our network are in VC startups and there's a long list of them out there. They're focused on many different aspects of quantum computing. Many of 'em are focused on what I would call loosely, the programming model, looking at improving algorithms across different industries, making it easier for those that are, perhaps more skilled in domains, whether that is chemistry or financial services or mathematics, to use the power of the quantum computer. Many of those startups are leveraging our Qiskit, our quantum information science open programming model that we put out there so it's open. Many of the startups are using that programming model and then adding their own secret sauce, if you will, to understand how they can help bring on users in different ways. So it depends on their domain. You see some startups that are focused on the hardware as well, of course, looking at different hardware technologies that can be used to solve quantum. I would say I feel like more of them are focused on the software programming model. >> Well Jamie, it was interesting hear you talk about what some of the clients are doing. I mean obviously in pharmaceuticals, and battery manufacturers do a lot of advanced R and D, but you mentioned financial services, you know JPMC. It's almost like they're now doing advanced R and D trying to figure out how they can apply quantum to their business down the road. >> Absolutely, and we have a number of financial institutions that we've announced as part of the network. JPMC is just one of our premiere references who have written papers about it. But I would tell you that in the world of Monte Carlo simulation, options pricing, risk management, a small change can make a big difference in dollars. So we're talking about operations that in many cases they could achieve, but not achieve in the right amount of time. The ability to use quantum as an accelerator for these kind of operations is very important. And I can tell you, even in the last few weeks, we've had a number of briefings with financial companies for five hours on this topic. Looking at what could they do and learning from the work that's already done out there. I think this kind of advanced research is going to be very important. We also had new members that we announced at the beginning of the year at the CES show. Delta Airlines joined. First Transportation Company, Amgen joined, a pharmaceutical, an example of pharmaceuticals, as well as a number of other research organizations. Georgia Tech, University of New Mexico, Anthem Insurance, just an example of the industries that are looking to take advantage of this kind of technology as it matures. >> Well, and it strikes me too, that as you start to bring machine intelligence into the equation, it's a game changer. I mean, I've been saying that it's not Moore's Law driving the industry anymore, it's this combination of data, AI, and cloud for scale, but now-- Of course there are alternative processors going on, we're seeing that, but now as you bring in quantum that actually adds to that innovation cocktail, doesn't it? >> Yes, and as you recall when you and I spoke last year about this, there are certain domains today where you really cannot get as much effective gain out of classical computing. And clearly, chemistry is one of those domains because today, with classical computers, we're really unable to model even something as simple as a caffeine molecule, which we're all so very familiar with. I have my caffeine here with me today. (laughs) But you know, clearly, to the degree we can actually apply molecular modeling and the advantages that quantum brings to those fields, we'll be able to understand so much more about materials that affect all of us around the world, about energy, how to explore energy, and create energy without creating the carbon footprint and the bad outcomes associated with energy creation, and how to obviously deal with pharmaceutical creation much more effectively. There's a real promise in a lot of these different areas. >> I wonder if you could talk a little bit about some of the landscape and I'm really interested in what IBM brings to the table that's sort of different. You're seeing a lot of companies enter this space, some big and many small, what's the unique aspect that IBM brings to the table? You've mentioned co-creating before. Are you co-creating, coopertating with some of the other big guys? Maybe you could address that. >> Well, obviously this is a very hot topic, both within the technology industry and across government entities. I think that some of the key values we bring to the table is we are the only vendor right now that has a fleet of systems available in the cloud, and we've been out there for several years, enabling clients to take advantage of our capacity. We have both free access and premium access, which is what the network is paying for because they get access to the highest fidelity machines. Clearly, we understand intently, classical computing and the ability to leverage classical with quantum for advantage across many of these different industries, which I think is unique. We understand the cloud experience that we're bringing to play here with quantum since day one, and most importantly, I think we have strong relationships. We have, in many cases, we're still running the world. I see it every day coming through my clients' port vantage point. We understand financial services. We understand healthcare. We understand many of these important domains, and we're used to solving tough problems. So, we'll bring that experience with our clients and those industries to the table here and help them on this journey. >> You mentioned your experience in sort of traditional computing, basically if I understand it correctly, you're still using traditional silicon microprocessors to read and write the data that's coming out of quantum. I don't know if they're sitting physically side by side, but you've got this big cryogenic unit, cables coming in. That's the sort of standard for some time. It reminds me, can it go back to ENIAC? And now, which is really excites me because you look at the potential to miniaturize this over the next several decades, but is that right, you're sort of side by side with traditional computing approaches? >> Right, effectively what we do with quantum today does not happen without classical computers. The front end, you're coming in on classical computers. You're storing your data on classical computers, so that is the model that we're in today, and that will continue to happen. In terms of the quantum processor itself, it is a silicon based processor, but it's a superconducting technology, in our case, that runs inside that cryogenics unit at a very cold temperature. It is powered by next-generation electronics that we in IBM have innovated around and created our own electronic stack that actually sends microwave pulses into the processor that resides in the cryogenics unit. So when you think about the components of the system, you have to be innovating around the processor, the cryogenics unit, the custom electronic stack, and the software all at the same time. And yes, we're doing that in terms of being surrounded by this classical backplane that allows our Q network, as well as the developers around the world to actually communicate with these systems. >> The other thing that I really like about this conversation is it's not just R and D for the sake of R and D, you've actually, you're working with partners to, like you said, co-create, customers, financial services, airlines, manufacturing, et cetera. I wonder if you could maybe kind of address some of the things that you see happening in the sort of near to midterm, specifically as it relates to where people start. If I'm interested in this, what do I do? Do I need new skills? Do I need-- It's in the cloud, right? >> Yeah. >> So I can spit it up there, but where do people get started? >> Well they can certainly come to the Quantum Experience, which is our cloud experience and start to try out the system. So, we have both easy ways to get started with visual composition of circuits, as well as using the programming model that I mentioned, the Qiskit programming model. We've provided extensive YouTube videos out there already. So, developers who are interested in starting to learn about quantum can go out there and subscribe to our YouTube channel. We've got over 40 assets already recorded out there, and we continue to do those. We did one last week on quantum circuits for those that are more interested in that particular domain, but I think that's a part of this journey is making sure that we have all the assets out there digitally available for those around the world that want to interact with us. We have tremendous amount of education. We're also providing education to our business partners. One of our key network members, who I'll be speaking with later, I think today, is from Accenture. Accenture's an example of an organization that's helping their clients understand this quantum journey, and of course they're providing their own assets, if you will, but once again, taking advantage of the education that we're providing to them as a business partner. >> People talk about quantum being a decade away, but I think that's the wrong way to think about it, and I'd love your thoughts on this. It feels like, almost like the return coming out of COVID-19, it's going to come in waves, and there's parts that are going to be commercialized thoroughly and it's not binary. It's not like all of a sudden one day we're going to wake, "Hey, quantum is here!" It's really going to come in layers. Your thoughts? >> Yeah, I definitely agree with that. It's very important, that thought process because if you want to be competitive in your industry, you should think about getting started now. And that's why you see so many financial services, industrial firms, and others joining to really start experimentation around some of these domain areas to understand jointly how we evolve these algorithms to solve these problems. I think that the production level characteristics will curate the rate and pace of the industry. The industry, as we know, can drive things together faster. So together, we can make this a reality faster, and certainly none of us want to say it's going to be a decade, right. I mean, we're getting advantage today, in terms of the experimentation and the understanding of these problems, and we have to expedite that, I think, in the next few years. And certainly, with this arms race that we see, that's going to continue. One of the things I didn't mention is that IBM is also working with certain countries and we have significant agreements now with the countries of Germany and Japan to put quantum computers in an IBM facility in those countries. It's in collaboration with Fraunhofer Institute or miR Scientific Organization in Germany and with the University of Tokyo in Japan. So you can see that it's not only being pushed by industry, but it's also being pushed from the vantage of countries and bringing this research and technology to their countries. >> All right, Jamie, we're going to have to leave it there. Thanks so much for coming on theCUBE and give us the update. It's always great to see you. Hopefully, next time I see you, it'll be face to face. >> That's right, I hope so too. It's great to see you guys, thank you. Bye. >> All right, you're welcome. Keep it right there everybody. This is Dave Vellante for theCUBE. Be back right after this short break. (gentle music)

>> Live from Las Vegas, it's theCUBE. Covering Dell Technologies World 2019. Brought to you by Dell Technologies and its ecosystem partners. >> Hello everyone, welcome back to theCUBE's live coverage here in Las Vegas for Dell Technologies World 2019. I'm John Furrier, your host of theCUBE, with Dave Vellante, co-hostman Dave. Great keynote, day one of three days. Great event. We got two more days of coverage. Our next guest is Jeff Clarke, vice chairman of Dell Technologies, Master of Ceremonies on the stage with Michael Dell. Great to see you again, CUBE alumni, welcome back. >> Thanks for having me. >> So, you're pretty busy. I know you're super scheduled up, so thanks for spending the time to come on. >> My pleasure, looking forward to it. >> So, break down what's going on here, because a slew of announcements, some game-changing announcements. Some new partnerships with Microsoft, in the end-user area, pretty positive, once competing with VMware, now tied in. Dell Technologies under the coverage with a full portfolio of services, massive macroeconomic tailwind around people refreshing their infrastructure for the Cloud. You guys are in good position. >> Oh, I think we are. Thanks for having us. To me, the biggest takeaway from this morning's keynote is the level of integration and alignment across Dell Technologies and all of its assets. We built upon that and gave two very specific examples. Pat and I talked about, on the PC side, trying to address the needs of this new digital native workforce that's coming in to bear with no boundaries of how they want to work, where they want to work, and how to modernize the PC experience. And we introduced Dell Technologies Unified Workspace. And then the second announcement, which we're really excited about, is the alignment of our company around the Dell Technologies Cloud. And the fact that we announced a component of a platform, where VCF is integrated onto our VxRail products, and you can deploy that on-prem as a solution today. And then we talked about building on VMware's announcement late last year around Project Dimension, bringing Project Dimension into a reality, a data center as a service of the VMware Cloud on Dell EMC, Data Center as a service, backed by Dell Technologies. And then we expanded upon that with Azure Services on VMware. So, pretty busy morning for us. >> Yeah, Project Dimension, I want to ask you real quick about. I always said that that's a fantasy kind of project, because it was so radical, and early on, when you think about it, but it makes so much sense when you think, as a service, with software service, why wouldn't you want to have theCUBE as a service? Data Center? And everything is becoming a service, and that's now clear. But it's hard to do. That is an interesting product. I think that's certainly an edge product. You guys see that, clearly. But what's going to be the impact to customers? Because this is now kind of easier to manage when you think about deploying a data center. >> There's a couple things that I think are underway. One is, workloads are migrating back to on-prem. And those workloads come out of a public cloud, so the cloud operating model is something customers are familiar with. Now with our Data Center as a service product, we have a cloud-operating model that drives consistency and, ultimately, provides an operational hub from the edge to the private cloud reaching out to the public cloud. Then you can get that as a specific product, build out your own, or this managed service, as you just referred to, and we think that's a pretty compelling proposition to help customers, particularly in smaller deployments, whether it's on the edge, remote location, remote office. And it's a service fully backed by us, single price. And we think it has a huge advantage in the marketplace to help customers deal with fewer vendors or manufacturers to get a single solution from one, from the hardware to the software to the service and the support. >> So you talk about alignment across Dell Technologies. You were clear in the analysts' discussion today as to what your primary go-to-market is with regard to VMware on Dell. That was clear. And appreciate the concise, clarity answer. You also talked about barriers to integrating that you've removed. In some respects, you do a lot of things, and one of them is you're a fixer. What were some of those barriers, and what does that hold for the future in terms of momentum? >> I think the first barrier that I encountered when I began leading the ISG team, we fundamentally weren't aligned with VMware. We had a strategy, they had a strategy, and while we worked both for Dell Technologies, we saw the world differently. And Pat and I recognized that early on, and our working together, and we've began to wrestle with that. Quite honestly, Michael and I expected us to get that result, and we subsequently did. So now we have an alignment. We have the same strategy that we're deploying with the same common vision: how to make IT easier and simpler in this data era that we're in today. And then we built a technical framework of where we're going to collaborate. And quite honestly, we had to teach our teams how to collaborate, and what collaborate meant. It wasn't you met once a month and each went off in their corner, then came back and said, look what I did, look what I did, and maybe we had two different answers. We forced an operating cadence and mechanism where Pat and I get with the team on regularly scheduled meetings, essentially every other week, and drive technical collaboration across five key domains that we care about. That we think are most valuable to our customers. And we're leading by example and breaking down every barrier from go-to-market, to operational, to technical, who tests what, how do you define what the requirements are, what customers are retargeting, and align the teams along those vectors. >> One follow-up, if I may. I think we got tight on time, but I want to ask you about the client business. I want to get you on record on this. Very important part of your business, it's almost half of the business revenue. It's a lower margin business, but it's critical that you hold serve in the client business, because it absorbs a lot of corporate overhead. I wonder if you could talk about the importance of the client business to Dell Technologies and it enabling your ability to do all these other things that you want to do. >> Well, you talked about the financial components of why the PC business or client business is important to us. But let's not forget, customers want an end-to-end solution and one end of that solution is what's on the edge of the network, and the PC is still the primary productivity machine in business. I don't see that changing. So the ability to start from there, and then migrate across our stack to the core to the cloud, as you've heard us talk about that, is a difference-maker, a differentiator from us over every one of our competitors today, who may have this component, this component, or this component, we're in a unique position to bring that together. Then we can bring differentiated value by linking the seven assets of Dell Technologies together in a highly integrated way. We talked this morning about SecureWorks, Workspace ONE from VMware, RPCs, and then our total service offering around ProSupport and ProDeploy that stitches that together in a very differentiated way. That's what customers want, and we're able to do that. And that has components of the entire enterprise, per se. >> Jeff, I want to get your thoughts on the customer situation. Obviously, one of the keynote customers was Bank of America. I like how the CTO, how she said this. "It's not how we got here, it's how we go forward." This is really the digital transformation reality. The rules have changed a bit. Certainly, there's some tech that's coming to the table, that's going to be good for customers. But as you look at the trends, and it's pretty clear what we're seeing, you've got developers, and you've got operators. If you compartmentalize the different roles within the corporation, that seems to be the big ones within IT and operations. And then the workloads are the result of the developers that have to run on the operations. So, it seems that you guys have a clear view that you want to make that infrastructure be operationally consistent. That was one of the messages. >> Spot on. >> How are customers talking to you about this? Because, one anecdotal thing is Google, for instance, has their own cloud for their own search and everything else. They have SREs, Site Reliability Engineers, which kind of validates this notion that operations is highly critical with developers for those now multitude of workloads. Because Edge is going to spawn a huge amount of applications, we think. More workloads, small and big. So, existing workloads, new workloads are coming. How do you guys see the operation piece? 'Cause I think this is a real key point. >> Well, I think in simple terms, customers are asking us to help them drive out complexity in their operations, help simplify it so they can actually invest more in the types of technologies, the application, the development of things that differentiate their business. So, if you believe that to be the basis, which we do, then driving out complexity, having a consistent level of automation, a consistent operational model, a hub to be able to move workloads across any of those environments, we think is a real advantage, and it will lower their cost. They will have consistent infrastructure, a consistent software management stack, management or orchestration and automation, we think that's exactly what they're asking for. And the reality is, we just announced the ability to do it. >> And if you have the developers, you get revenue on top of it, so cost savings and revenue. Out of the customer conversations, could you stack rank the pattern of issues that come up that they're concerned about, that they're solving? Opportunities that are challenges today, opportunities tomorrow, what are some of the areas that are popping up to the top of these conversations? >> Cloud strategy. Security. How to do DevOps. Edge. And how to deal with all of this data. >> We've got a question from the crowd. Ask Jeff about sustainable innovation in Dell's work in transforming electronic waste into jewelry. I didn't know about that. And ocean plastic in the laptop packaging. That I did know about. I think the question came from somebody who works from you maybe. >> Maybe so. >> That's a good question. I didn't know, you're making jewelry? >> We've been on the forefront of what we call the circular economy, where you reuse materials that you introduced in the marketplace in new forms. Whether that's wheat straw, the byproduct of harvesting wheat and turning that into packaging. We announced at CES 15 months ago, recycling printed circuit boards, extracting the gold, and creating and providing that gold, in this case to a jeweler who made jewelry out of recycled printed circuit boards. Our commitment to use recycled plastics and to take all these plastic bottles and do something with the material, we have a high percentage of our products today that are built on recycled plastics. We have many examples, wonderful choices of PCs in front of you, has carbon fiber in it. The carbon fiber in the product is actually a waste out of the automotive industry that we reused to build out this product. So, we have a long tradition, and something that's very important to us, of building sustainable products, recycling materials, to be able to do that across our entire portfolio. >> Jeff, thanks for coming on theCUBE. I know you're tight on schedule. We appreciate the time. Final question, I'll give you the final word. What's the most important story here at Dell Technologies World this week in your opinion? >> Dell Technologies has a breadth of unique hardware, software, and services capability unlike anybody else across our seven strategically-aligned businesses that will help, ultimately, make customers' lives easier, simpler, and reduce complexity in their environments. >> And the numbers are showing its financial performance is looking good. Congratulations. >> Thanks, thanks for having me. >> Jeff Clarke, vice chairman of Dell Technologies, here inside theCUBE breaking it down, sharing his insight and commentary on the announcements and the event here at Dell Technologies. Stay with us for more live coverage. Day one of three days of two CUBE sets here on the ground floor of Dell Tech World. We'll be right back. (upbeat techno music)

(upbeat electronic music) >> Hey, welcome back everybody, Jeff Frick here with theCUBE. We're in Reno, Nevada at Interbike 2018. I think it's like 20,000 people. I'm trying to get the official number. I haven't been able to run it down yet. >> It feels big. >> It feels big, a lot of stuff going on here. We came up because really the last mile vehicles, this amazing kind of revolution in small motors and big batteries and reliability and smart cities and it's really going to play an important part in travel going forward. And we're excited to be here on the floor and the first company we came across, I'm obviously a big fan if you follow me on social, is Future Motion, they make the Onewheel. It's a crazy cool device and we have Orion O'Neill, the sales manager from Future Motion. Orion, great to see you. >> Thanks for having me. >> Absolutely, so you said it's your first year at the show. We were kind of wondering kind of where, you know, your class of vehicles fits within this whole bicycle world. >> Yeah absolutely, so generally speaking, we generally exhibit in kind of more like outdoor retailer and outdoor apparel shows but really the cool thing about Interbike is, at the end of the day, bikes are like transportation, you know? And really our product, the Onewheel Plus, is really a last mile transportation tool. So we decided to come to Interbike and see what's going on in the industry and see how we can kind of fit into the new last mile transportation. >> Right, and how's it been going? >> It's been awesome, the response has been really cool. Surprisingly, not a lot of people here know about us, so it's always cool to see people who have never seen our product, you know. >> Right, right, but what's interesting in terms of the bikes and the E part of it is, what we're seeing a lot of here is the outdoors so now the e-bike has gone beyond just kind of the road bike or the city bike, the commuter bike, and they're running 'em up and down the mountains out there. >> Yeah absolutely, and you know I talk with a fair amount of people in the bike industry and my understanding is that lots of the growth in mountain biking is coming from the e-bike, you know, and that's because it just lowers the barriers to entry. It's all about getting more people out there and able to enjoy the outdoors. >> Right. >> And we think with our board its kind of similar, you know, it has the utility to do commuting within the city, but the big tire also allows for us to kind of go out and explore trails, you know, beach, grass, gravel, all that stuff. >> Right, so I wonder if you guys are doing any work or you see anything on kind of the regulations? 'Cause, you know, the regs are always kind of behind the technology and it's interesting, you go on a lot of trails, which are perfect for bikes, they're perfect for Onewheels, they're perfect for e-bikes, but you see this sign, right, no motor vehicles, and I think, most of the time, they're thinking motorcycles, they're thinking kind of traditional internal combustion motor vehicles, not necessarily this new class. So I wonder kind of from your point of view, are you guys working on that? What do you kind of see in terms of the acceptance of having these new age vehicles in space? >> Totally. Yeah, I mean, generally speaking, you know, legislation is always very far behind, kind of, you know, where the industry and innovation is going. But we really think that slowly but surely we're seeing more acceptance on, you know, generally what we need to work on is the forest service and BLM. And they're starting to open dialogues with e-bike communities and we were actually talking with a few people in Tahoe and just having a more, you know, tailored legislation towards kind of last mile commutes and electric transportation that's not like a dirt bike or something like that. >> Right, right, because it's really about disparity of speed, that's where dangerous things happen. >> Exactly. >> But, if you're on a mountain trail or, you know, you're running around, it shouldn't be a big issue. And actually, Onewheels are unique because they work very well slow. >> I know. >> Which a lot of vehicles don't. >> And the cool thing about Onewheels on trails, that lots of people don't know is, the big tire actually packs the trails so it actually can like repair some of the ruts that bikes put in. >> Alright, that's a good reach. (Orion laughing) I like that. Thinking ahead, you're giving us a gift for a get, we're helping you do trail maintenance if you ride your Onewheel, I like it. So you guys just released this version a couple years ago, Kickstarter company, just kind of give us a quick overview of what's happening with the company now. I think you said you caught up with your back orders, you're getting into more retail locations. What's up with Future Motion? >> Yeah, so, minute overview, you know, we Kickstarted back in early 2014, first product came to market basically a year after that which was the original Onewheel. Then we had the Onewheel Plus two years ago and we just introduced the Onewheel Plus XR at CES this past January and, yeah, the growth has been pretty amazing. We're now up to basically 400 retailers worldwide. We have Europe, Australia, and North America. And the response to the product has just been amazing. >> Yeah, pretty cool, and the thing a lot of people don't know is you're actually riding on software which is what I think is part of the unique attributes of this vehicle. >> Right, I'm not an engineer, let me preface that, but my understanding is the hardest part in what makes our boards so amazing is the actual programming. The firmware that tells the motor how to respond to those inputs, you know >> Right, right >> That's the bread and butter. >> Right. >> Yeah. >> Very cool, well Orion thanks for spending a few minutes and congrats on the success. >> Absolutely, thanks for having me. >> Alright, he's Orion, I'm Jeff, you're watching theCUBE. We're at Interbike 2018 in Reno, Nevada. Thanks for watching. (upbeat techno music)

(electronic dance music) (Intel Jingle) (ethereal electronic dance music) ♪ Okay ♪ (upbeat techno dance music) ♪ Oh oh oh oh ♪ ♪ Oh oh oh oh ♪ ♪ Oh oh oh oh oh ♪ ♪ Oh oh oh oh ♪ ♪ Oh oh oh oh oh ♪ ♪ Take it back take it back ♪ ♪ Take it back ♪ ♪ Take it back take it back ♪ ♪ Take it back ♪ ♪ Take it back take it back ♪ ♪ Yeah everybody get loose yeah ♪ ♪ Yeah ♪ ♪ Ye-yeah yeah ♪ ♪ Yeah yeah ♪ ♪ Everybody everybody yeah ♪ ♪ Whoo whoo ♪ ♪ Whoo whoo ♪ ♪ Whoo yeah ♪ ♪ Everybody get loose whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ >> As a courtesy to the presenters and those around you, please silence all mobile devices, thank you. (electronic dance music) ♪ Everybody get loose ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ (upbeat salsa music) ♪ Ha ha ha ♪ ♪ Ah ♪ ♪ Ha ha ha ♪ ♪ So happy ♪ ♪ Whoo whoo ♪ (female singer scatting) >> Ladies and gentlemen, please take your seats. Our program will begin momentarily. ♪ Hey ♪ (female singer scatting) (male singer scatting) ♪ Hey ♪ ♪ Whoo ♪ (female singer scatting) (electronic dance music) ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ Red red red red ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ Red red red red ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ Red red red red ♪ ♪ Red don't go ♪ ♪ All hands are in don't go ♪ ♪ In don't go ♪ ♪ Oh red go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ Red red red red ♪ ♪ All hands are red don't go ♪ ♪ All hands are in red red red red ♪ ♪ All hands are in don't go ♪ ♪ All hands are in red go ♪ >> Ladies and gentlemen, there are available seats. Towards house left, house left there are available seats. If you are please standing, we ask that you please take an available seat. We will begin momentarily, thank you. ♪ Let go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ (upbeat electronic dance music) ♪ Just make me ♪ ♪ Just make me ♪ ♪ Just make me ♪ ♪ Just make me ♪ ♪ Just make me ♪ ♪ I live ♪ ♪ Just make me ♪ ♪ Just make me ♪ ♪ Hey ♪ ♪ Yeah ♪ ♪ Oh ♪ ♪ Ah ♪ ♪ Ah ah ah ah ah ah ♪ ♪ Just make me ♪ ♪ Just make me ♪ (bouncy techno music) >> Ladies and gentlemen, once again we ask that you please take the available seats to your left, house left, there are many available seats. If you are standing, please make your way there. The program will begin momentarily, thank you. Good morning! This is Lenovo Transform 2.0! (keyboard clicks) >> Progress. Why do we always talk about it in the future? When will it finally get here? We don't progress when it's ready for us. We need it when we're ready, and we're ready now. Our hospitals and their patients need it now, our businesses and their customers need it now, our cities and their citizens need it now. To deliver intelligent transformation, we need to build it into the products and solutions we make every day. At Lenovo, we're designing the systems to fight disease, power businesses, and help you reach more customers, end-to-end security solutions to protect your data and your companies reputation. We're making IT departments more agile and cost efficient. We're revolutionizing how kids learn with VR. We're designing smart devices and software that transform the way you collaborate, because technology shouldn't just power industries, it should power people. While everybody else is talking about tomorrow, we'll keep building today, because the progress we need can't wait for the future. >> Please welcome to the stage Lenovo's Rod Lappen! (electronic dance music) (audience applauding) >> Alright. Good morning everyone! >> Good morning. >> Ooh, that was pretty good actually, I'll give it one more shot. Good morning everyone! >> Good morning! >> Oh, that's much better! Hope everyone's had a great morning. Welcome very much to the second Lenovo Transform event here in New York. I think when I got up just now on the steps I realized there's probably one thing in common all of us have in this room including myself which is, absolutely no one has a clue what I'm going to say today. So, I'm hoping very much that we get through this thing very quickly and crisply. I love this town, love New York, and you're going to hear us talk a little bit about New York as we get through here, but just before we get started I'm going to ask anyone who's standing up the back, there are plenty of seats down here, and down here on the right hand side, I think he called it house left is the professional way of calling it, but these steps to my right, your left, get up here, let's get you all seated down so that you can actually sit down during the keynote session for us. Last year we had our very first Lenovo Transform. We had about 400 people. It was here in New York, fantastic event, today, over 1,000 people. We have over 62 different technology demonstrations and about 15 breakout sessions, which I'll talk you through a little bit later on as well, so it's a much bigger event. Next year we're definitely going to be shooting for over 2,000 people as Lenovo really transforms and starts to address a lot of the technology that our commercial customers are really looking for. We were however hampered last year by a storm, I don't know if those of you who were with us last year will remember, we had a storm on the evening before Transform last year in New York, and obviously the day that it actually occurred, and we had lots of logistics. Our media people from AMIA were coming in. They took the, the plane was circling around New York for a long time, and Kamran Amini, our General Manager of our Data Center Infrastructure Group, probably one of our largest groups in the Lenovo DCG business, took 17 hours to get from Raleigh, North Carolina to New York, 17 hours, I think it takes seven or eight hours to drive. Took him 17 hours by plane to get here. And then of course this year, we have Florence. And so, obviously the hurricane Florence down there in the Carolinas right now, we tried to help, but still Kamran has made it today. Unfortunately, very tragically, we were hoping he wouldn't, but he's here today to do a big presentation a little bit later on as well. However, I do want to say, obviously, Florence is a very serious tragedy and we have to take it very serious. We got, our headquarters is in Raleigh, North Carolina. While it looks like the hurricane is just missing it's heading a little bit southeast, all of our thoughts and prayers and well wishes are obviously with everyone in the Carolinas on behalf of Lenovo, everyone at our headquarters, everyone throughout the Carolinas, we want to make sure everyone stays safe and out of harm's way. We have a great mixture today in the crowd of all customers, partners, industry analysts, media, as well as our financial analysts from all around the world. There's over 30 countries represented here and people who are here to listen to both YY, Kirk, and Christian Teismann speak today. And so, it's going to be a really really exciting day, and I really appreciate everyone coming in from all around the world. So, a big round of applause for everyone whose come in. (audience applauding) We have a great agenda for you today, and it starts obviously a very consistent format which worked very successful for us last year, and that's obviously our keynote. You'll hear from YY, our CEO, talk a little bit about the vision he has in the industry and how he sees Lenovo's turned the corner and really driving some great strategy to address our customer's needs. Kirk Skaugen, our Executive Vice President of DCG, will be up talking about how we've transformed the DCG business and once again are hitting record growth ratios for our DCG business. And then you'll hear from Christian Teismann, our SVP and General Manager for our commercial business, get up and talk about everything that's going on in our IDG business. There's really exciting stuff going on there and obviously ThinkPad being the cornerstone of that I'm sure he's going to talk to us about a couple surprises in that space as well. Then we've got some great breakout sessions, I mentioned before, 15 breakout sessions, so while this keynote section goes until about 11:30, once we get through that, please go over and explore, and have a look at all of the breakout sessions. We have all of our subject matter experts from both our PC, NBG, and our DCG businesses out to showcase what we're doing as an organization to better address your needs. And then obviously we have the technology pieces that I've also spoken about, 62 different technology displays there arranged from everything IoT, 5G, NFV, everything that's really cool and hot in the industry right now is going to be on display up there, and I really encourage all of you to get up there. So, I'm going to have a quick video to show you from some of the setup yesterday on a couple of the 62 technology displays we've got on up on stage. Okay let's go, so we've got a demonstrations to show you today, one of the greats one here is the one we've done with NC State, a high-performance computing artificial intelligence demonstration of fresh produce. It's about modeling the population growth of the planet, and how we're going to supply water and food as we go forward. Whoo. Oh, that is not an apple. Okay. (woman laughs) Second one over here is really, hey Jonas, how are you? Is really around virtual reality, and how we look at one of the most amazing sites we've got, as an install on our high-performance computing practice here globally. And you can see, obviously, that this is the Barcelona supercomputer, and, where else in New York can you get access to being able to see something like that so easily? Only here at Lenovo Transform. Whoo, okay. (audience applauding) So there's two examples of some of the technology. We're really encouraging everyone in the room after the keynote to flow into that space and really get engaged, and interact with a lot of the technology we've got up there. It seems I need to also do something about my fashion, I've just realized I've worn a vest two days in a row, so I've got to work on that as well. Alright so listen, the last thing on the agenda, we've gone through the breakout sessions and the demo, tonight at four o'clock, there's about 400 of you registered to be on the cruise boat with us, the doors will open behind me. the boat is literally at the pier right behind us. You need to make sure you're on the boat for 4:00 p.m. this evening. Outside of that, I want everyone to have a great time today, really enjoy the experience, make it as experiential as you possibly can, get out there and really get in and touch the technology. There's some really cool AI displays up there for us all to get involved in as well. So ladies and gentlemen, without further adieu, it gives me great pleasure to introduce to you a lover of tennis, as some of you would've heard last year at Lenovo Transform, as well as a lover of technology, Lenovo, and of course, New York City. I am obviously very pleasured to introduce to you Yang Yuanqing, our CEO, as we like to call him, YY. (audience applauding) (upbeat funky music) >> Good morning, everyone. >> Good morning. >> Thank you Rod for that introduction. Welcome to New York City. So, this is the second year in a row we host our Transform event here, because New York is indeed one of the most transformative cities in the world. Last year on this stage, I spoke about the Fourth Industrial Revolution, and our vision around the intelligent transformation, how it would fundamentally change the nature of business and the customer relationships. And why preparing for this transformation is the key for the future of our company. And in the last year I can assure you, we were being very busy doing just that, from searching and bringing global talents around the world to the way we think about every product and every investment we make. I was here in New York just a month ago to announce our fiscal year Q1 earnings, which was a good day for us. I think now the world believes it when we say Lenovo has truly turned the corner to a new phase of growth and a new phase of acceleration in executing the transformation strategy. That's clear to me is that the last few years of a purposeful disruption at Lenovo have led us to a point where we can now claim leadership of the coming intelligent transformation. People often asked me, what is the intelligent transformation? I was saying this way. This is the unlimited potential of the Fourth Industrial Revolution driven by artificial intelligence being realized, ordering a pizza through our speaker, and locking the door with a look, letting your car drive itself back to your home. This indeed reflect the power of AI, but it just the surface of it. The true impact of AI will not only make our homes smarter and offices more efficient, but we are also completely transformed every value chip in every industry. However, to realize these amazing possibilities, we will need a structure built around the key components, and one that touches every part of all our lives. First of all, explosions in new technology always lead to new structures. This has happened many times before. In the early 20th century, thousands of companies provided a telephone service. City streets across the US looked like this, and now bundles of a microscopic fiber running from city to city bring the world closer together. Here's what a driving was like in the US, up until 1950s. Good luck finding your way. (audience laughs) And today, millions of vehicles are organized and routed daily, making the world more efficient. Structure is vital, from fiber cables and the interstate highways, to our cells bounded together to create humans. Thankfully the structure for intelligent transformation has emerged, and it is just as revolutionary. What does this new structure look like? We believe there are three key building blocks, data, computing power, and algorithms. Ever wondered what is it behind intelligent transformation? What is fueling this miracle of human possibility? Data. As the Internet becomes ubiquitous, not only PCs, mobile phones, have come online and been generating data. Today it is the cameras in this room, the climate controls in our offices, or the smart displays in our kitchens at home. The number of smart devices worldwide will reach over 20 billion in 2020, more than double the number in 2017. These devices and the sensors are connected and generating massive amount of data. By 2020, the amount of data generated will be 57 times more than all the grains of sand on Earth. This data will not only make devices smarter, but will also fuel the intelligence of our homes, offices, and entire industries. Then we need engines to turn the fuel into power, and the engine is actually the computing power. Last but not least the advanced algorithms combined with Big Data technology and industry know how will form vertical industrial intelligence and produce valuable insights for every value chain in every industry. When these three building blocks all come together, it will change the world. At Lenovo, we have each of these elements of intelligent transformations in a single place. We have built our business around the new structure of intelligent transformation, especially with mobile and the data center now firmly part of our business. I'm often asked why did you acquire these businesses? Why has a Lenovo gone into so many fields? People ask the same questions of the companies that become the leaders of the information technology revolution, or the third industrial transformation. They were the companies that saw the future and what the future required, and I believe Lenovo is the company today. From largest portfolio of devices in the world, leadership in the data center field, to the algorithm-powered intelligent vertical solutions, and not to mention the strong partnership Lenovo has built over decades. We are the only company that can unify all these essential assets and deliver end to end solutions. Let's look at each part. We now understand the important importance data plays as fuel in intelligent transformation. Hundreds of billions of devices and smart IoTs in the world are generating better and powering the intelligence. Who makes these devices in large volume and variety? Who puts these devices into people's home, offices, manufacturing lines, and in their hands? Lenovo definitely has the front row seats here. We are number one in PCs and tablets. We also produces smart phones, smart speakers, smart displays. AR/VR headsets, as well as commercial IoTs. All of these smart devices, or smart IoTs are linked to each other and to the cloud. In fact, we have more than 20 manufacturing facilities in China, US, Brazil, Japan, India, Mexico, Germany, and more, producing various devices around the clock. We actually make four devices every second, and 37 motherboards every minute. So, this factory located in my hometown, Hu-fi, China, is actually the largest laptop factory in the world, with more than three million square feet. So, this is as big as 42 soccer fields. Our scale and the larger portfolio of devices gives us access to massive amount of data, which very few companies can say. So, why is the ability to scale so critical? Let's look again at our example from before. The early days of telephone, dozens of service providers but only a few companies could survive consolidation and become the leader. The same was true for the third Industrial Revolution. Only a few companies could scale, only a few could survive to lead. Now the building blocks of the next revolution are locking into place. The (mumbles) will go to those who can operate at the scale. So, who could foresee the total integration of cloud, network, and the device, need to deliver intelligent transformation. Lenovo is that company. We are ready to scale. Next, our computing power. Computing power is provided in two ways. On one hand, the modern supercomputers are providing the brute force to quickly analyze the massive data like never before. On the other hand the cloud computing data centers with the server storage networking capabilities, and any computing IoT's, gateways, and miniservers are making computing available everywhere. Did you know, Lenovo is number one provider of super computers worldwide? 170 of the top 500 supercomputers, run on Lenovo. We hold 89 World Records in key workloads. We are number one in x86 server reliability for five years running, according to ITIC. a respected provider of industry research. We are also the fastest growing provider of hyperscale public cloud, hyper-converged and aggressively growing in edge computing. cur-ges target, we are expand on this point soon. And finally to run these individual nodes into our symphony, we must transform the data and utilize the computing power with advanced algorithms. Manufactured, industry maintenance, healthcare, education, retail, and more, so many industries are on the edge of intelligent transformation to improve efficiency and provide the better products and services. We are creating advanced algorithms and the big data tools combined with industry know-how to provide intelligent vertical solutions for several industries. In fact, we studied at Lenovo first. Our IT and research teams partnered with our global supply chain to develop an AI that improved our demand forecasting accuracy. Beyond managing our own supply chain we have offered our deep learning supply focused solution to other manufacturing companies to improve their efficiency. In the best case, we have improved the demand, focused the accuracy by 30 points to nearly 90 percent, for Baosteel, the largest of steel manufacturer in China, covering the world as well. Led by Lenovo research, we launched the industry-leading commercial ready AR headset, DaystAR, partnering with companies like the ones in this room. This technology is being used to revolutionize the way companies service utility, and even our jet engines. Using our workstations, servers, and award-winning imaging processing algorithms, we have partnered with hospitals to process complex CT scan data in minutes. So, this enable the doctors to more successfully detect the tumors, and it increases the success rate of cancer diagnosis all around the world. We are also piloting our smart IoT driven warehouse solution with one of the world's largest retail companies to greatly improve the efficiency. So, the opportunities are endless. This is where Lenovo will truly shine. When we combine the industry know-how of our customers with our end-to-end technology offerings, our intelligent vertical solutions like this are growing, which Kirk and Christian will share more. Now, what will drive this transformation even faster? The speed at which our networks operate, specifically 5G. You may know that Lenovo just launched the first-ever 5G smartphone, our Moto Z3, with the new 5G Moto model. We are partnering with multiple major network providers like Verizon, China Mobile. With the 5G model scheduled to ship early next year, we will be the first company to provide a 5G mobile experience to any users, customers. This is amazing innovation. You don't have to buy a new phone, just the 5G clip on. What can I say, except wow. (audience laughs) 5G is 10 times the fast faster than 4G. Its download speed will transform how people engage with the world, driverless car, new types of smart wearables, gaming, home security, industrial intelligence, all will be transformed. Finally, accelerating with partners, as ready as we are at Lenovo, we need partners to unlock our full potential, partners here to create with us the edge of the intelligent transformation. The opportunities of intelligent transformation are too profound, the scale is too vast. No company can drive it alone fully. We are eager to collaborate with all partners that can help bring our vision to life. We are dedicated to open partnerships, dedicated to cross-border collaboration, unify the standards, share the advantage, and market the synergies. We partner with the biggest names in the industry, Intel, Microsoft, AMD, Qualcomm, Google, Amazon, and Disney. We also find and partner with the smaller innovators as well. We're building the ultimate partner experience, open, shared, collaborative, diverse. So, everything is in place for intelligent transformation on a global scale. Smart devices are everywhere, the infrastructure is in place, networks are accelerating, and the industries demand to be more intelligent, and Lenovo is at the center of it all. We are helping to drive change with the hundreds of companies, companies just like yours, every day. We are your partner for intelligent transformation. Transformation never stops. This is what you will hear from Kirk, including details about Lenovo NetApp global partnership we just announced this morning. We've made the investments in every single aspect of the technology. We have the end-to-end resources to meet your end-to-end needs. As you attend the breakout session this afternoon, I hope you see for yourself how much Lenovo has transformed as a company this past year, and how we truly are delivering a future of intelligent transformation. Now, let me invite to the stage Kirk Skaugen, our president of Data Center growth to tell you about the exciting transformation happening in the global Data C enter market. Thank you. (audience applauding) (upbeat music) >> Well, good morning. >> Good morning. >> Good morning! >> Good morning! >> Excellent, well, I'm pleased to be here this morning to talk about how we're transforming the Data Center and taking you as our customers through your own intelligent transformation journey. Last year I stood up here at Transform 1.0, and we were proud to announce the largest Data Center portfolio in Lenovo's history, so I thought I'd start today and talk about the portfolio and the progress that we've made over the last year, and the strategies that we have going forward in phase 2.0 of Lenovo's transformation to be one of the largest data center companies in the world. We had an audacious vision that we talked about last year, and that is to be the most trusted data center provider in the world, empowering customers through the new IT, intelligent transformation. And now as the world's largest supercomputer provider, giving something back to humanity, is very important this week with the hurricanes now hitting North Carolina's coast, but we take this most trusted aspect very seriously, whether it's delivering the highest quality products on time to you as customers with the highest levels of security, or whether it's how we partner with our channel partners and our suppliers each and every day. You know we're in a unique world where we're going from hundreds of millions of PCs, and then over the next 25 years to hundred billions of connected devices, so each and every one of you is going through this intelligent transformation journey, and in many aspects were very early in that cycle. And we're going to talk today about our role as the largest supercomputer provider, and how we're solving humanity's greatest challenges. Last year we talked about two special milestones, the 25th anniversary of ThinkPad, but also the 25th anniversary of Lenovo with our IBM heritage in x86 computing. I joined the workforce in 1992 out of college, and the IBM first personal server was launching at the same time with an OS2 operating system and a free mouse when you bought the server as a marketing campaign. (audience laughing) But what I want to be very clear today, is that the innovation engine is alive and well at Lenovo, and it's really built on the culture that we're building as a company. All of these awards at the bottom are things that we earned over the last year at Lenovo. As a Fortune now 240 company, larger than companies like Nike, or AMEX, or Coca-Cola. The one I'm probably most proud of is Forbes first list of the top 2,000 globally regarded companies. This was something where 15,000 respondents in 60 countries voted based on ethics, trustworthiness, social conduct, company as an employer, and the overall company performance, and Lenovo was ranked number 27 of 2000 companies by our peer group, but we also now one of-- (audience applauding) But we also got a perfect score in the LGBTQ Equality Index, exemplifying the diversity internally. We're number 82 in the top working companies for mothers, top working companies for fathers, top 100 companies for sustainability. If you saw that factory, it's filled with solar panels on the top of that. And now again, one of the top global brands in the world. So, innovation is built on a customer foundation of trust. We also said last year that we'd be crossing an amazing milestone. So we did, over the last 12 months ship our 20 millionth x86 server. So, thank you very much to our customers for this milestone. (audience applauding) So, let me recap some of the transformation elements that have happened over the last year. Last year I talked about a lot of brand confusion, because we had the ThinkServer brand from the legacy Lenovo, the System x, from IBM, we had acquired a number of networking companies, like BLADE Network Technologies, et cetera, et cetera. Over the last year we've been ramping based on two brand structures, ThinkAgile for next generation IT, and all of our software-defined infrastructure products and ThinkSystem as the world's highest performance, highest reliable x86 server brand, but for servers, for storage, and for networking. We have transformed every single aspect of the customer experience. A year and a half ago, we had four different global channel programs around the world. Typically we're about twice the mix to our channel partners of any of our competitors, so this was really important to fix. We now have a single global Channel program, and have technically certified over 11,000 partners to be technical experts on our product line to deliver better solutions to our customer base. Gardner recently recognized Lenovo as the 26th ranked supply chain in the world. And, that's a pretty big honor, when you're up there with Amazon and Walmart and others, but in tech, we now are in the top five supply chains. You saw the factory network from YY, and today we'll be talking about product shipping in more than 160 countries, and I know there's people here that I've met already this morning, from India, from South Africa, from Brazil and China. We announced new Premier Support services, enabling you to go directly to local language support in nine languages in 49 countries in the world, going directly to a native speaker level three support engineer. And today we have more than 10,000 support specialists supporting our products in over 160 countries. We've delivered three times the number of engineered solutions to deliver a solutions orientation, whether it's on HANA, or SQL Server, or Oracle, et cetera, and we've completely reengaged our system integrator channel. Last year we had the CIO of DXE on stage, and here we're talking about more than 175 percent growth through our system integrator channel in the last year alone as we've brought that back and really built strong relationships there. So, thank you very much for amazing work here on the customer experience. (audience applauding) We also transformed our leadership. We thought it was extremely important with a focus on diversity, to have diverse talent from the legacy IBM, the legacy Lenovo, but also outside the industry. We made about 19 executive changes in the DCG group. This is the most senior leadership team within DCG, all which are newly on board, either from our outside competitors mainly over the last year. About 50 percent of our executives were now hired internally, 50 percent externally, and 31 percent of those new executives are diverse, representing the diversity of our global customer base and gender. So welcome, and most of them you're going to be able to meet over here in the breakout sessions later today. (audience applauding) But some things haven't changed, they're just keeping getting better within Lenovo. So, last year I got up and said we were committed with the new ThinkSystem brand to be a world performance leader. You're going to see that we're sponsoring Ducati for MotoGP. You saw the Ferrari out there with Formula One. That's not a surprise. We want the Lenovo ThinkSystem and ThinkAgile brands to be synonymous with world record performance. So in the last year we've gone from 39 to 89 world records, and partners like Intel would tell you, we now have four times the number of world record workloads on Lenovo hardware than any other server company on the planet today, with more than 89 world records across HPC, Java, database, transaction processing, et cetera. And we're proud to have just brought on Doug Fisher from Intel Corporation who had about 10-17,000 people on any given year working for him in workload optimizations across all of our software. It's just another testament to the leadership team we're bringing in to keep focusing on world-class performance software and solutions. We also per ITIC, are the number one now in x86 server reliability five years running. So, this is a survey where CIOs are in a blind survey asked to submit their reliability of their uptime on their x86 server equipment over the last 365 days. And you can see from 2016 to 2017 the downtime, there was over four hours as noted by the 750 CXOs in more than 20 countries is about one percent for the Lenovo products, and is getting worse generation from generation as we went from Broadwell to Pearlie. So we're taking our reliability, which was really paramount in the IBM System X heritage, and ensuring that we don't just recognize high performance but we recognize the highest level of reliability for mission-critical workloads. And what that translates into is that we at once again have been ranked number one in customer satisfaction from you our customers in 19 of 22 attributes, in North America in 18 of 22. This is a survey by TVR across hundreds of customers of us and our top competitors. This is the ninth consecutive study that we've been ranked number one in customer satisfaction, so we're taking this extremely seriously, and in fact YY now has increased the compensation of every single Lenovo employee. Up to 40 percent of their compensation bonus this year is going to be based on customer metrics like quality, order to ship, and things of this nature. So, we're really putting every employee focused on customer centricity this year. So, the summary on Transform 1.0 is that every aspect of what you knew about Lenovo's data center group has transformed, from the culture to the branding to dedicated sales and marketing, supply chain and quality groups, to a worldwide channel program and certifications, to new system integrator relationships, and to the new leadership team. So, rather than me just talk about it, I thought I'd share a quick video about what we've done over the last year, if you could run the video please. Turn around for a second. (epic music) (audience applauds) Okay. So, thank you to all our customers that allowed us to publicly display their logos in that video. So, what that means for you as investors, and for the investor community out there is, that our customers have responded, that this year Gardner just published that we are the fastest growing server company in the top 10, with 39 percent growth quarter-on-quarter, and 49 percent growth year-on-year. If you look at the progress we've made since the transformation the last three quarters publicly, we've grown 17 percent, then 44 percent, then 68 percent year on year in revenue, and I can tell you this quarter I'm as confident as ever in the financials around the DCG group, and it hasn't been in one area. You're going to see breakout sessions from hyperscale, software-defined, and flash, which are all growing more than a 100 percent year-on-year, supercomputing which we'll talk about shortly, now number one, and then ultimately from profitability, delivering five consecutive quarters of pre-tax profit increase, so I think, thank you very much to the customer base who's been working with us through this transformation journey. So, you're here to really hear what's next on 2.0, and that's what I'm excited to talk about today. Last year I came up with an audacious goal that we would become the largest supercomputer company on the planet by 2020, and this graph represents since the acquisition of the IBM System x business how far we were behind being the number one supercomputer. When we started we were 182 positions behind, even with the acquisition for example of SGI from HP, we've now accomplished our goal actually two years ahead of time. We're now the largest supercomputer company in the world. About one in every four supercomputers, 117 on the list, are now Lenovo computers, and you saw in the video where the universities are said, but I think what I'm most proud of is when your customers rank you as the best. So the awards at the bottom here, are actually Readers Choice from the last International Supercomputing Show where the scientific researchers on these computers ranked their vendors, and we were actually rated the number one server technology in supercomputing with our ThinkSystem SD530, and the number one storage technology with our ThinkSystem DSS-G, but more importantly what we're doing with the technology. You're going to see we won best in life sciences, best in data analytics, and best in collaboration as well, so you're going to see all of that in our breakout sessions. As you saw in the video now, 17 of the top 25 research institutions in the world are now running Lenovo supercomputers. And again coming from Raleigh and watching that hurricane come across the Atlantic, there are eight supercomputers crunching all of those models you see from Germany to Malaysia to Canada, and we're happy to have a SciNet from University of Toronto here with us in our breakout session to talk about what they're doing on climate modeling as well. But we're not stopping there. We just announced our new Neptune warm water cooling technology, which won the International Supercomputing Vendor Showdown, the first time we've won that best of show in 25 years, and we've now installed this. We're building out LRZ in Germany, the first ever warm water cooling in Peking University, at the India Space Propulsion Laboratory, at the Malaysian Weather and Meteorological Society, at Uninett, at the largest supercomputer in Norway, T-Systems, University of Birmingham. This is truly amazing technology where we're actually using water to cool the machine to deliver a significantly more energy-efficient computer. Super important, when we're looking at global warming and some of the electric bills can be millions of dollars just for one computer, and could actually power a small city just with the technology from the computer. We've built AI centers now in Morrisville, Stuttgart, Taipei, and Beijing, where customers can bring their AI workloads in with experts from Intel, from Nvidia, from our FPGA partners, to work on their workloads, and how they can best implement artificial intelligence. And we also this year launched LICO which is Lenovo Intelligent Compute Orchestrator software, and it's a software solution that simplifies the management and use of distributed clusters in both HPC and AI model development. So, what it enables you to do is take a single cluster, and run both HPC and AI workloads on it simultaneously, delivering better TCO for your environment, so check out LICO as well. A lot of the customers here and Wall Street are very excited and using it already. And we talked about solving humanity's greatest challenges. In the breakout session, you're going to have a virtual reality experience where you're going to be able to walk through what as was just ranked the world's most beautiful data center, the Barcelona Supercomputer. So, you can actually walk through one of the largest supercomputers in the world from Barcelona. You can see the work we're doing with NC State where we're going to have to grow the food supply of the world by 50 percent, and there's not enough fresh water in the world in the right places to actually make all those crops grow between now and 2055, so you're going to see the progression of how they're mapping the entire globe and the water around the world, how to build out the crop population over time using AI. You're going to see our work with Vestas is this largest supercomputer provider in the wind turbine areas, how they're working on wind energy, and then with University College London, how they're working on some of the toughest particle physics calculations in the world. So again, lots of opportunity here. Take advantage of it in the breakout sessions. Okay, let me transition to hyperscale. So in hyperscale now, we have completely transformed our business model. We are now powering six of the top 10 hyperscalers in the world, which is a significant difference from where we were two years ago. And the reason we're doing that, is we've coined a term called ODM+. We believe that hyperscalers want more procurement power than an ODM, and Lenovo is doing about $18 billion of procurement a year. They want a broader global supply chain that they can get from a local system integrator. We're more than 160 countries around the world, but they want the same world-class quality and reliability like they get from an MNC. So, what we're doing now is instead of just taking off the shelf motherboards from somewhere, we're starting with a blank sheet of paper, we're working with the customer base on customized SKUs and you can see we already are developing 33 custom solutions for the largest hyperscalers in the world. And then we're not just running notebooks through this factory where YY said, we're running 37 notebook boards a minute, we're now putting in tens and tens and tens of thousands of server board capacity per month into this same factory, so absolutely we can compete with the most aggressive ODM's in the world, but it's not just putting these things in in the motherboard side, we're also building out these systems all around the world, India, Brazil, Hungary, Mexico, China. This is an example of a new hyperscale customer we've had this last year, 34,000 servers we delivered in the first six months. The next 34,000 servers we delivered in 68 days. The next 34,000 servers we delivered in 35 days, with more than 99 percent on-time delivery to 35 data centers in 14 countries as diverse as South Africa, India, China, Brazil, et cetera. And I'm really ashamed to say it was 99.3, because we did have a forklift driver who rammed their forklift right through the middle of the one of the server racks. (audience laughing) At JFK Airport that we had to respond to, but I think this gives you a perspective of what it is to be a top five global supply chain and technology. So last year, I said we would invest significantly in IP, in joint ventures, and M and A to compete in software defined, in networking, and in storage, so I wanted to give you an update on that as well. Our newest software-defined partnership is with Cloudistics, enabling a fully composable cloud infrastructure. It's an exclusive agreement, you can see them here. I think Nag, our founder, is going to be here today, with a significant Lenovo investment in the company. So, this new ThinkAgile CP series delivers the simplicity of the public cloud, on-premise with exceptional support and a marketplace of essential enterprise applications all with a single click deployment. So simply put, we're delivering a private cloud with a premium experience. It's simple in that you need no specialists to deploy it. An IT generalist can set it up and manage it. It's agile in that you can provision dozens of workloads in minutes, and it's transformative in that you get all of the goodness of public cloud on-prem in a private cloud to unlock opportunity for use. So, we're extremely excited about the ThinkAgile CP series that's now shipping into the marketplace. Beyond that we're aggressively ramping, and we're either doubling, tripling, or quadrupling our market share as customers move from traditional server technology to software-defined technology. With Nutanix we've been public, growing about more than 150 percent year-on-year, with Nutanix as their fastest growing Nutanix partner, but today I want to set another audacious goal. I believe we cannot just be Nutanix's fastest growing partner but we can become their largest partner within two years. On Microsoft, we are already four times our market share on Azure stack of our traditional business. We were the first to launch our ThinkAgile on Broadwell and on Skylake with the Azure Stack Infrastructure. And on VMware we're about twice our market segment share. We were the first to deliver an Intel-optimized Optane-certified VSAN node. And with Optane technology, we're delivering 50 percent more VM density than any competitive SSD system in the marketplace, about 10 times lower latency, four times the performance of any SSD system out there, and Lenovo's first to market on that. And at VMworld you saw CEO Pat Gelsinger of VMware talked about project dimension, which is Edge as a service, and we're the only OEM beyond the Dell family that is participating today in project dimension. Beyond that you're going to see a number of other partnerships we have. I'm excited that we have the city of Bogota Columbia here, an eight million person city, where we announced a 3,000 camera video surveillance solution last month. With pivot three you're going to see city of Bogota in our breakout sessions. You're going to see a new partnership with Veeam around backup that's launching today. You're going to see partnerships with scale computing in IoT and hyper-converged infrastructure working on some of the largest retailers in the world. So again, everything out in the breakout session. Transitioning to storage and data management, it's been a great year for Lenovo, more than a 100 percent growth year-on-year, 2X market growth in flash arrays. IDC just reported 30 percent growth in storage, number one in price performance in the world and the best HPC storage product in the top 500 with our ThinkSystem DSS G, so strong coverage, but I'm excited today to announce for Transform 2.0 that Lenovo is launching the largest data management and storage portfolio in our 25-year data center history. (audience applauding) So a year ago, the largest server portfolio, becoming the largest fastest growing server OEM, today the largest storage portfolio, but as you saw this morning we're not doing it alone. Today Lenovo and NetApp, two global powerhouses are joining forces to deliver a multi-billion dollar global alliance in data management and storage to help customers through their intelligent transformation. As the fastest growing worldwide server leader and one of the fastest growing flash array and data management companies in the world, we're going to deliver more choice to customers than ever before, global scale that's never been seen, supply chain efficiencies, and rapidly accelerating innovation and solutions. So, let me unwrap this a little bit for you and talk about what we're announcing today. First, it's the largest portfolio in our history. You're going to see not just storage solutions launching today but a set of solution recipes from NetApp that are going to make Lenovo server and NetApp or Lenovo storage work better together. The announcement enables Lenovo to go from covering 15 percent of the global storage market to more than 90 percent of the global storage market and distribute these products in more than 160 countries around the world. So we're launching today, 10 new storage platforms, the ThinkSystem DE and ThinkSystem DM platforms. They're going to be centrally managed, so the same XClarity management that you've been using for server, you can now use across all of your storage platforms as well, and it'll be supported by the same 10,000 plus service personnel that are giving outstanding customer support to you today on the server side. And we didn't come up with this in the last month or the last quarter. We're announcing availability in ordering today and shipments tomorrow of the first products in this portfolio, so we're excited today that it's not just a future announcement but something you as customers can take advantage of immediately. (audience applauding) The second part of the announcement is we are announcing a joint venture in China. Not only will this be a multi-billion dollar global partnership, but Lenovo will be a 51 percent owner, NetApp a 49 percent owner of a new joint venture in China with the goal of becoming in the top three storage companies in the largest data and storage market in the world. We will deliver our R and D in China for China, pooling our IP and resources together, and delivering a single route to market through a complementary channel, not just in China but worldwide. And in the future I just want to tell everyone this is phase one. There is so much exciting stuff. We're going to be on the stage over the next year talking to you about around integrated solutions, next-generation technologies, and further synergies and collaborations. So, rather than just have me talk about it, I'd like to welcome to the stage our new partner NetApp and Brad Anderson who's the senior vice president and general manager of NetApp Cloud Infrastructure. (upbeat music) (audience applauding) >> Thank You Kirk. >> So Brad, we've known each other a long time. It's an exciting day. I'm going to give you the stage and allow you to say NetApp's perspective on this announcement. >> Very good, thank you very much, Kirk. Kirk and I go back to I think 1994, so hey good morning and welcome. My name is Brad Anderson. I manage the Cloud Infrastructure Group at NetApp, and I am honored and privileged to be here at Lenovo Transform, particularly today on today's announcement. Now, you've heard a lot about digital transformation about how companies have to transform their IT to compete in today's global environment. And today's announcement with the partnership between NetApp and Lenovo is what that's all about. This is the joining of two global leaders bringing innovative technology in a simplified solution to help customers modernize their IT and accelerate their global digital transformations. Drawing on the strengths of both companies, Lenovo's high performance compute world-class supply chain, and NetApp's hybrid cloud data management, hybrid flash and all flash storage solutions and products. And both companies providing our customers with the global scale for them to be able to meet their transformation goals. At NetApp, we're very excited. This is a quote from George Kurian our CEO. George spent all day yesterday with YY and Kirk, and would have been here today if it hadn't been also our shareholders meeting in California, but I want to just convey how excited we are for all across NetApp with this partnership. This is a partnership between two companies with tremendous market momentum. Kirk took you through all the amazing results that Lenovo has accomplished, number one in supercomputing, number one in performance, number one in x86 reliability, number one in x86 customers sat, number five in supply chain, really impressive and congratulations. Like Lenovo, NetApp is also on a transformation journey, from a storage company to the data authority in hybrid cloud, and we've seen some pretty impressive momentum as well. Just last week we became number one in all flash arrays worldwide, catching EMC and Dell, and we plan to keep on going by them, as we help customers modernize their their data centers with cloud connected flash. We have strategic partnerships with the largest hyperscalers to provide cloud native data services around the globe and we are having success helping our customers build their own private clouds with just, with a new disruptive hyper-converged technology that allows them to operate just like hyperscalers. These three initiatives has fueled NetApp's transformation, and has enabled our customers to change the world with data. And oh by the way, it has also fueled us to have meet or have beaten Wall Street's expectations for nine quarters in a row. These are two companies with tremendous market momentum. We are also building this partnership for long term success. We think about this as phase one and there are two important components to phase one. Kirk took you through them but let me just review them. Part one, the establishment of a multi-year commitment and a collaboration agreement to offer Lenovo branded flash products globally, and as Kurt said in 160 countries. Part two, the formation of a joint venture in PRC, People's Republic of China, that will provide long term commitment, joint product development, and increase go-to-market investment to meet the unique needs to China. Both companies will put in storage technologies and storage expertise to form an independent JV that establishes a data management company in China for China. And while we can dream about what phase two looks like, our entire focus is on making phase one incredibly successful and I'm pleased to repeat what Kirk, is that the first products are orderable and shippable this week in 160 different countries, and you will see our two companies focusing on the here and now. On our joint go to market strategy, you'll see us working together to drive strategic alignment, focused execution, strong governance, and realistic expectations and milestones. And it starts with the success of our customers and our channel partners is job one. Enabling customers to modernize their legacy IT with complete data center solutions, ensuring that our customers get the best from both companies, new offerings the fuel business success, efficiencies to reinvest in game-changing initiatives, and new solutions for new mission-critical applications like data analytics, IoT, artificial intelligence, and machine learning. Channel partners are also top of mind for both our two companies. We are committed to the success of our existing and our future channel partners. For NetApp channel partners, it is new pathways to new segments and to new customers. For Lenovo's channel partners, it is the competitive weapons that now allows you to compete and more importantly win against Dell, EMC, and HP. And the good news for both companies is that our channel partner ecosystem is highly complementary with minimal overlap. Today is the first day of a very exciting partnership, of a partnership that will better serve our customers today and will provide new opportunities to both our companies and to our partners, new products to our customers globally and in China. I am personally very excited. I will be on the board of the JV. And so, I look forward to working with you, partnering with you and serving you as we go forward, and with that, I'd like to invite Kirk back up. (audience applauding) >> Thank you. >> Thank you. >> Well, thank you, Brad. I think it's an exciting overview, and these products will be manufactured in China, in Mexico, in Hungary, and around the world, enabling this amazing supply chain we talked about to deliver in over 160 countries. So thank you Brad, thank you George, for the amazing partnership. So again, that's not all. In Transform 2.0, last year, we talked about the joint ventures that were coming. I want to give you a sneak peek at what you should expect at future Lenovo events around the world. We have this Transform in Beijing in a couple weeks. We'll then be repeating this in 20 different locations roughly around the world over the next year, and I'm excited probably more than ever about what else is coming. Let's talk about Telco 5G and network function virtualization. Today, Motorola phones are certified on 46 global networks. We launched the world's first 5G upgradable phone here in the United States with Verizon. Lenovo DCG sells to 58 telecommunication providers around the world. At Mobile World Congress in Barcelona and Shanghai, you saw China Telecom and China Mobile in the Lenovo booth, China Telecom showing a video broadband remote access server, a VBRAS, with video streaming demonstrations with 2x less jitter than they had seen before. You saw China Mobile with a virtual remote access network, a VRAN, with greater than 10 times the throughput and 10x lower latency running on Lenovo. And this year, we'll be launching a new NFV company, a software company in China for China to drive the entire NFV stack, delivering not just hardware solutions, but software solutions, and we've recently hired a new CEO. You're going to hear more about that over the next several quarters. Very exciting as we try to drive new economics into the networks to deliver these 20 billion devices. We're going to need new economics that I think Lenovo can uniquely deliver. The second on IoT and edge, we've integrated on the device side into our intelligent devices group. With everything that's going to consume electricity computes and communicates, Lenovo is in a unique position on the device side to take advantage of the communications from Motorola and being one of the largest device companies in the world. But this year, we're also going to roll out a comprehensive set of edge gateways and ruggedized industrial servers and edge servers and ISP appliances for the edge and for IoT. So look for that as well. And then lastly, as a service, you're going to see Lenovo delivering hardware as a service, device as a service, infrastructure as a service, software as a service, and hardware as a service, not just as a glorified leasing contract, but with IP, we've developed true flexible metering capability that enables you to scale up and scale down freely and paying strictly based on usage, and we'll be having those announcements within this fiscal year. So Transform 2.0, lots to talk about, NetApp the big news of the day, but a lot more to come over the next year from the Data Center group. So in summary, I'm excited that we have a lot of customers that are going to be on stage with us that you saw in the video. Lots of testimonials so that you can talk to colleagues of yourself. Alamos Gold from Canada, a Canadian gold producer, Caligo for data optimization and privacy, SciNet, the largest supercomputer we've ever put into North America, and the largest in Canada at the University of Toronto will be here talking about climate change. City of Bogota again with our hyper-converged solutions around smart city putting in 3,000 cameras for criminal detection, license plate detection, et cetera, and then more from a channel mid market perspective, Jerry's Foods, which is from my home state of Wisconsin, and Minnesota which has about 57 stores in the specialty foods market, and how they're leveraging our IoT solutions as well. So again, about five times the number of demos that we had last year. So in summary, first and foremost to the customers, thank you for your business. It's been a great journey and I think we're on a tremendous role. You saw from last year, we're trying to build credibility with you. After the largest server portfolio, we're now the fastest-growing server OEM per Gardner, number one in performance, number one in reliability, number one in customer satisfaction, number one in supercomputing. Today, the largest storage portfolio in our history, with the goal of becoming the fastest growing storage company in the world, top three in China, multibillion-dollar collaboration with NetApp. And the transformation is going to continue with new edge gateways, edge servers, NFV solutions, telecommunications infrastructure, and hardware as a service with dynamic metering. So thank you for your time. I've looked forward to meeting many of you over the next day. We appreciate your business, and with that, I'd like to bring up Rod Lappen to introduce our next speaker. Rod? (audience applauding) >> Thanks, boss, well done. Alright ladies and gentlemen. No real secret there. I think we've heard why I might talk about the fourth Industrial Revolution in data and exactly what's going on with that. You've heard Kirk with some amazing announcements, obviously now with our NetApp partnership, talk about 5G, NFV, cloud, artificial intelligence, I think we've hit just about all the key hot topics. It's with great pleasure that I now bring up on stage Mr. Christian Teismann, our senior vice president and general manager of commercial business for both our PCs and our IoT business, so Christian Teismann. (techno music) Here, take that. >> Thank you. I think I'll need that. >> Okay, Christian, so obviously just before we get down, you and I last year, we had a bit of a chat about being in New York. >> Exports. >> You were an expat in New York for a long time. >> That's true. >> And now, you've moved from New York. You're in Munich? >> Yep. >> How does that feel? >> Well Munich is a wonderful city, and it's a great place to live and raise kids, but you know there's no place in the world like New York. >> Right. >> And I miss it a lot, quite frankly. >> So what exactly do you miss in New York? >> Well there's a lot of things in New York that are unique, but I know you spent some time in Japan, but I still believe the best sushi in the world is still in New York City. (all laughing) >> I will beg to differ. I will beg to differ. I think Mr. Guchi-san from Softbank is here somewhere. He will get up an argue very quickly that Japan definitely has better sushi than New York. But obviously you know, it's a very very special place, and I have had sushi here, it's been fantastic. What about Munich? Anything else that you like in Munich? >> Well I mean in Munich, we have pork knuckles. >> Pork knuckles. (Christian laughing) Very similar sushi. >> What is also very fantastic, but we have the real, the real Oktoberfest in Munich, and it starts next week, mid-September, and I think it's unique in the world. So it's very special as well. >> Oktoberfest. >> Yes. >> Unfortunately, I'm not going this year, 'cause you didn't invite me, but-- (audience chuckling) How about, I think you've got a bit of a secret in relation to Oktoberfest, probably not in Munich, however. >> It's a secret, yes, but-- >> Are you going to share? >> Well I mean-- >> See how I'm putting you on the spot? >> In the 10 years, while living here in New York, I was a regular visitor of the Oktoberfest at the Lower East Side in Avenue C at Zum Schneider, where I actually met my wife, and she's German. >> Very good. So, how about a big round of applause? (audience applauding) Not so much for Christian, but more I think, obviously for his wife, who obviously had been drinking and consequently ended up with you. (all laughing) See you later, mate. >> That's the beauty about Oktoberfest, but yes. So first of all, good morning to everybody, and great to be back here in New York for a second Transform event. New York clearly is the melting pot of the world in terms of culture, nations, but also business professionals from all kind of different industries, and having this event here in New York City I believe is manifesting what we are trying to do here at Lenovo, is transform every aspect of our business and helping our customers on the journey of intelligent transformation. Last year, in our transformation on the device business, I talked about how the PC is transforming to personalized computing, and we've made a lot of progress in that journey over the last 12 months. One major change that we have made is we combined all our device business under one roof. So basically PCs, smart devices, and smart phones are now under the roof and under the intelligent device group. But from my perspective makes a lot of sense, because at the end of the day, all devices connect in the modern world into the cloud and are operating in a seamless way. But we are also moving from a device business what is mainly a hardware focus historically, more and more also into a solutions business, and I will give you during my speech a little bit of a sense of what we are trying to do, as we are trying to bring all these components closer together, and specifically also with our strengths on the data center side really build end-to-end customer solution. Ultimately, what we want to do is make our business, our customer's businesses faster, safer, and ultimately smarter as well. So I want to look a little bit back, because I really believe it's important to understand what's going on today on the device side. Many of us have still grown up with phones with terminals, ultimately getting their first desktop, their first laptop, their first mobile phone, and ultimately smartphone. Emails and internet improved our speed, how we could operate together, but still we were defined by linear technology advances. Today, the world has changed completely. Technology itself is not a limiting factor anymore. It is how we use technology going forward. The Internet is pervasive, and we are not yet there that we are always connected, but we are nearly always connected, and we are moving to the stage, that everything is getting connected all the time. Sharing experiences is the most driving force in our behavior. In our private life, sharing pictures, videos constantly, real-time around the world, with our friends and with our family, and you see the same behavior actually happening in the business life as well. Collaboration is the number-one topic if it comes down to workplace, and video and instant messaging, things that are coming from the consumer side are dominating the way we are operating in the commercial business as well. Most important beside technology, that a new generation of workforce has completely changed the way we are working. As the famous workforce the first generation of Millennials that have now fully entered in the global workforce, and the next generation, it's called Generation Z, is already starting to enter the global workforce. By 2025, 75 percent of the world's workforce will be composed out of two of these generations. Why is this so important? These two generations have been growing up using state-of-the-art IT technology during their private life, during their education, school and study, and are taking these learnings and taking these behaviors in the commercial workspace. And this is the number one force of change that we are seeing in the moment. Diverse workforces are driving this change in the IT spectrum, and for years in many of our customers' focus was their customer focus. Customer experience also in Lenovo is the most important thing, but we've realized that our own human capital is equally valuable in our customer relationships, and employee experience is becoming a very important thing for many of our customers, and equally for Lenovo as well. As you have heard YY, as we heard from YY, Lenovo is focused on intelligent transformation. What that means for us in the intelligent device business is ultimately starting with putting intelligence in all of our devices, smartify every single one of our devices, adding value to our customers, traditionally IT departments, but also focusing on their end users and building products that make their end users more productive. And as a world leader in commercial devices with more than 33 percent market share, we can solve problems been even better than any other company in the world. So, let's talk about transformation of productivity first. We are in a device-led world. Everything we do is connected. There's more interaction with devices than ever, but also with spaces who are increasingly becoming smart and intelligent. YY said it, by 2020 we have more than 20 billion connected devices in the world, and it will grow exponentially from there on. And users have unique personal choices for technology, and that's very important to recognize, and we call this concept a digital wardrobe. And it means that every single end-user in the commercial business is composing his personal wardrobe on an ongoing basis and is reconfiguring it based on the work he's doing and based where he's going and based what task he is doing. I would ask all of you to put out all the devices you're carrying in your pockets and in your bags. You will see a lot of you are using phones, tablets, laptops, but also cameras and even smartwatches. They're all different, but they have one underlying technology that is bringing it all together. Recognizing digital wardrobe dynamics is a core factor for us to put all the devices under one roof in IDG, one business group that is dedicated to end-user solutions across mobile, PC, but also software services and imaging, to emerging technologies like AR, VR, IoT, and ultimately a AI as well. A couple of years back there was a big debate around bring-your-own-device, what was called consumerization. Today consumerization does not exist anymore, because consumerization has happened into every single device we build in our commercial business. End users and commercial customers today do expect superior display performance, superior audio, microphone, voice, and touch quality, and have it all connected and working seamlessly together in an ease of use space. We are already deep in the journey of personalized computing today. But the center point of it has been for the last 25 years, the mobile PC, that we have perfected over the last 25 years, and has been the undisputed leader in mobility computing. We believe in the commercial business, the ThinkPad is still the core device of a digital wardrobe, and we continue to drive the success of the ThinkPad in the marketplace. We've sold more than 140 million over the last 26 years, and even last year we exceeded nearly 11 million units. That is about 21 ThinkPads per minute, or one Thinkpad every three seconds that we are shipping out in the market. It's the number one commercial PC in the world. It has gotten countless awards but we felt last year after Transform we need to build a step further, in really tailoring the ThinkPad towards the need of the future. So, we announced a new line of X1 Carbon and Yoga at CES the Consumer Electronics Show. And the reason is not we want to sell to consumer, but that we do recognize that a lot of CIOs and IT decision makers need to understand what consumers are really doing in terms of technology to make them successful. So, let's take a look at the video. (suspenseful music) >> When you're the number one business laptop of all time, your only competition is yourself. (wall shattering) And, that's different. Different, like resisting heat, ice, dust, and spills. Different, like sharper, brighter OLA display. The trackpoint that reinvented controls, and a carbon fiber roll cage to protect what's inside, built by an engineering and design team, doing the impossible for the last 25 years. This is the number one business laptop of all time, but it's not a laptop. It's a ThinkPad. (audience applauding) >> Thank you very much. And we are very proud that Lenovo ThinkPad has been selected as the best laptop in the world in the second year in a row. I think it's a wonderful tribute to what our engineers have been done on this one. And users do want awesome displays. They want the best possible audio, voice, and touch control, but some users they want more. What they want is super power, and I'm really proud to announce our newest member of the X1 family, and that's the X1 extreme. It's exceptionally featured. It has six core I9 intel chipset, the highest performance you get in the commercial space. It has Nvidia XTX graphic, it is a 4K UHD display with HDR with Dolby vision and Dolby Atmos Audio, two terabyte in SSD, so it is really the absolute Ferrari in terms of building high performance commercial computer. Of course it has touch and voice, but it is one thing. It has so much performance that it serves also a purpose that is not typical for commercial, and I know there's a lot of secret gamers also here in this room. So you see, by really bringing technology together in the commercial space, you're creating productivity solutions of one of a kind. But there's another category of products from a productivity perspective that is incredibly important in our commercial business, and that is the workstation business . Clearly workstations are very specifically designed computers for very advanced high-performance workloads, serving designers, architects, researchers, developers, or data analysts. And power and performance is not just about the performance itself. It has to be tailored towards the specific use case, and traditionally these products have a similar size, like a server. They are running on Intel Xeon technology, and they are equally complex to manufacture. We have now created a new category as the ultra mobile workstation, and I'm very proud that we can announce here the lightest mobile workstation in the industry. It is so powerful that it really can run AI and big data analysis. And with this performance you can go really close where you need this power, to the sensors, into the cars, or into the manufacturing places where you not only wannna read the sensors but get real-time analytics out of these sensors. To build a machine like this one you need customers who are really challenging you to the limit. and we're very happy that we had a customer who went on this journey with us, and ultimately jointly with us created this product. So, let's take a look at the video. (suspenseful music) >> My world involves pathfinding both the hardware needs to the various work sites throughout the company, and then finding an appropriate model of desktop, laptop, or workstation to match those needs. My first impressions when I first seen the ThinkPad P1 was I didn't actually believe that we could get everything that I was asked for inside something as small and light in comparison to other mobile workstations. That was one of the I can't believe this is real sort of moments for me. (engine roars) >> Well, it's better than general when you're going around in the wind tunnel, which isn't alway easy, and going on a track is not necessarily the best bet, so having a lightweight very powerful laptop is extremely useful. It can take a Xeon processor, which can support ECC from when we try to load a full car, and when we're analyzing live simulation results. through and RCFT post processor or example. It needs a pretty powerful machine. >> It's come a long way to be able to deliver this. I hate to use the word game changer, but it is that for us. >> Aston Martin has got a lot of different projects going. There's some pretty exciting projects and a pretty versatile range coming out. Having Lenovo as a partner is certainly going to ensure that future. (engine roars) (audience applauds) >> So, don't you think the Aston Martin design and the ThinkPad design fit very well together? (audience laughs) So if Q, would get a new laptop, I think you would get a ThinkPad X P1. So, I want to switch gears a little bit, and go into something in terms of productivity that is not necessarily on top of the mind or every end user but I believe it's on top of the mind of every C-level executive and of every CEO. Security is the number one threat in terms of potential risk in your business and the cost of cybersecurity is estimated by 2020 around six trillion dollars. That's more than the GDP of Japan and we've seen a significant amount of data breach incidents already this years. Now, they're threatening to take companies out of business and that are threatening companies to lose a huge amount of sensitive customer data or internal data. At Lenovo, we are taking security very, very seriously, and we run a very deep analysis, around our own security capabilities in the products that we are building. And we are announcing today a new brand under the Think umbrella that is called ThinkShield. Our goal is to build the world's most secure PC, and ultimately the most secure devices in the industry. And when we looked at this end-to-end, there is no silver bullet around security. You have to go through every aspect where security breaches can potentially happen. That is why we have changed the whole organization, how we look at security in our device business, and really have it grouped under one complete ecosystem of solutions, Security is always something where you constantly are getting challenged with the next potential breach the next potential technology flaw. As we keep innovating and as we keep integrating, a lot of our partners' software and hardware components into our products. So for us, it's really very important that we partner with companies like Intel, Microsoft, Coronet, Absolute, and many others to really as an example to drive full encryption on all the data seamlessly, to have multi-factor authentication to protect your users' identity, to protect you in unsecured Wi-Fi locations, or even simple things like innovation on the device itself, to and an example protect the camera, against usage with a little thing like a thinkShutter that you can shut off the camera. SO what I want to show you here, is this is the full portfolio of ThinkShield that we are announcing today. This is clearly not something I can even read to you today, but I believe it shows you the breadth of security management that we are announcing today. There are four key pillars in managing security end-to-end. The first one is your data, and this has a lot of aspects around the hardware and the software itself. The second is identity. The third is the security around online, and ultimately the device itself. So, there is a breakout on security and ThinkShield today, available in the afternoon, and encourage you to really take a deeper look at this one. The first pillar around productivity was the device, and around the device. The second major pillar that we are seeing in terms of intelligent transformation is the workspace itself. Employees of a new generation have a very different habit how they work. They split their time between travel, working remotely but if they do come in the office, they expect a very different office environment than what they've seen in the past in cubicles or small offices. They come into the office to collaborate, and they want to create ideas, and they really work in cross-functional teams, and they want to do it instantly. And what we've seen is there is a huge amount of investment that companies are doing today in reconfiguring real estate reconfiguring offices. And most of these kind of things are moving to a digital platform. And what we are doing, is we want to build an entire set of solutions that are just focused on making the workspace more productive for remote workforce, and to create technology that allow people to work anywhere and connect instantly. And the core of this is that we need to be, the productivity of the employee as high as possible, and make it for him as easy as possible to use these kind of technologies. Last year in Transform, I announced that we will enter the smart office space. By the end of last year, we brought the first product into the market. It's called the Hub 500. It's already deployed in thousands of our customers, and it's uniquely focused on Microsoft Skype for Business, and making meeting instantly happen. And the product is very successful in the market. What we are announcing today is the next generation of this product, what is the Hub 700, what has a fantastic audio quality. It has far few microphones, and it is usable in small office environment, as well as in major conference rooms, but the most important part of this new announcement is that we are also announcing a software platform, and this software platform allows you to run multiple video conferencing software solutions on the same platform. Many of you may have standardized for one software solution or for another one, but as you are moving in a world of collaborating instantly with partners, customers, suppliers, you always will face multiple software standards in your company, and Lenovo is uniquely positioned but providing a middleware platform for the device to really enable multiple of these UX interfaces. And there's more to come and we will add additional UX interfaces on an ongoing base, based on our customer requirements. But this software does not only help to create a better experience and a higher productivity in the conference room or the huddle room itself. It really will allow you ultimately to manage all your conference rooms in the company in one instance. And you can run AI technologies around how to increase productivity utilization of your entire conference room ecosystem in your company. You will see a lot more devices coming from the node in this space, around intelligent screens, cameras, and so on, and so on. The idea is really that Lenovo will become a core provider in the whole movement into the smart office space. But it's great if you have hardware and software that is really supporting the approach of modern IT, but one component that Kirk also mentioned is absolutely critical, that we are providing this to you in an as a service approach. Get it what you want, when you need it, and pay it in the amount that you're really using it. And within UIT there is also I think a new philosophy around IT management, where you're much more focused on the value that you are consuming instead of investing into technology. We are launched as a service two years back and we already have a significant number of customers running PC as a service, but we believe as a service will stretch far more than just the PC device. It will go into categories like smart office. It might go even into categories like phone, and it will definitely go also in categories like storage and server in terms of capacity management. I want to highlight three offerings that we are also displaying today that are sort of building blocks in terms of how we really run as a service. The first one is that we collaborated intensively over the last year with Microsoft to be the launch pilot for their Autopilot offering, basically deploying images easily in the same approach like you would deploy a new phone on the network. The purpose really is to make new imaging and enabling new PC as seamless as it's used to be in the phone industry, and we have a complete set of offerings, and already a significant number customers have deployed Autopilot with Lenovo. The second major offering is Premier Support, like in the in the server business, where Premier Support is absolutely critical to run critical infrastructure, we see a lot of our customers do want to have Premier Support for their end users, so they can be back into work basically instantly, and that you have the highest possible instant repair on every single device. And then finally we have a significant amount of time invested into understanding how the software as a service really can get into one philosophy. And many of you already are consuming software as a service in many different contracts from many different vendors, but what we've created is one platform that really can manage this all together. All these things are the foundation for a device as a service offering that really can manage this end-to-end. So, implementing an intelligent workplace can be really a daunting prospect depending on where you're starting from, and how big your company ultimately is. But how do you manage the transformation of technology workspace if you're present in 50 or more countries and you run an infrastructure for more than 100,000 people? Michelin, famous for their tires, infamous for their Michelin star restaurant rating, especially in New York, and instantly recognizable by the Michelin Man, has just doing that. Please welcome with me Damon McIntyre from Michelin to talk to us about the challenges and transforming collaboration and productivity. (audience applauding) (electronic dance music) Thank you, David. >> Thank you, thank you very much. >> We on? >> So, how do you feel here? >> Well good, I want to thank you first of all for your partnership and the devices you create that helped us design, manufacture, and distribute the best tire in the world, okay? I just had to say it and put out there, alright. And I was wondering, were those Michelin tires on that Aston Martin? >> I'm pretty sure there is no other tire that would fit to that. >> Yeah, no, thank you, thank you again, and thank you for the introduction. >> So, when we talk about the transformation happening really in the workplace, the most tangible transformation that you actually see is the drastic change that companies are doing physically. They're breaking down walls. They're removing cubes, and they're moving to flexible layouts, new desks, new huddle rooms, open spaces, but the underlying technology for that is clearly not so visible very often. So, tell us about Michelin's strategy, and the technology you are deploying to really enable this corporation. >> So we, so let me give a little bit a history about the company to understand the daunting tasks that we had before us. So we have over 114,000 people in the company under 170 nationalities, okay? If you go to the corporate office in France, it's Clermont. It's about 3,000 executives and directors, and what have you in the marketing, sales, all the way up to the chain of the global CIO, right? Inside of the Americas, we merged in Americas about three years ago. Now we have the Americas zone. There's about 28,000 employees across the Americas, so it's really, it's really hard in a lot of cases. You start looking at the different areas that you lose time, and you lose you know, your productivity and what have you, so there, it's when we looked at different aspects of how we were going to manage the meeting rooms, right? because we have opened up our areas of workspace, our CIO, CEOs in our zones will no longer have an office. They'll sit out in front of everybody else and mingle with the crowd. So, how do you take those spaces that were originally used by an individual but now turn them into like meeting rooms? So, we went through a large process, and looked at the Hub 500, and that really met our needs, because at the end of the day what we noticed was, it was it was just it just worked, okay? We've just added it to the catalog, so we're going to be deploying it very soon, and I just want to again point that I know everybody struggles with this, and if you look at all the minutes that you lose in starting up a meeting, and we know you know what I'm talking about when I say this, it equates to many many many dollars, okay? And so at the end the day, this product helps us to be more efficient in starting up the meeting, and more productive during the meeting. >> Okay, it's very good to hear. Another major trend we are seeing in IT departments is taking a more hands-off approach to hardware. We're seeing new technologies enable IT to create a more efficient model, how IT gets hardware in the hands of end-users, and how they are ultimately supporting themselves. So what's your strategy around the lifecycle management of the devices? >> So yeah you mentioned, again, we'll go back to the 114,000 employees in the company, right? You imagine looking at all the devices we use. I'm not going to get into the number of devices we have, but we have a set number that we use, and we have to go through a process of deploying these devices, which we right now service our own image. We build our images, we service them through our help desk and all that process, and we go through it. If you imagine deploying 25,000 PCs in a year, okay? The time and the daunting task that's behind all that, you can probably add up to 20 or 30 people just full-time doing that, okay? So, with partnering with Lenovo and their excellent technology, their technical teams, and putting together the whole process of how we do imaging, it now lifts that burden off of our folks, and it shifts it into a more automated process through the cloud, okay? And, it's with the Autopilot on the end of the project, we'll have Autopilot fully engaged, but what I really appreciate is how Lenovo really, really kind of got with us, and partnered with us for the whole process. I mean it wasn't just a partner between Michelin and Lenovo. Microsoft was also partnered during that whole process, and it really was a good project that we put together, and we hope to have something in a full production mode next year for sure. >> So, David thank you very, very much to be here with us on stage. What I really want to say, customers like you, who are always challenging us on every single aspect of our capabilities really do make the big difference for us to get better every single day and we really appreciate the partnership. >> Yeah, and I would like to say this is that I am, I'm doing what he's exactly said he just said. I am challenging Lenovo to show us how we can innovate in our work space with your devices, right? That's a challenge, and it's going to be starting up next year for sure. We've done some in the past, but I'm really going to challenge you, and my whole aspect about how to do that is bring you into our workspace. Show you how we make how we go through the process of making tires and all that process, and how we distribute those tires, so you can brainstorm, come back to the table and say, here's a device that can do exactly what you're doing right now, better, more efficient, and save money, so thank you. >> Thank you very much, David. (audience applauding) Well it's sometimes really refreshing to get a very challenging customers feedback. And you know, we will continue to grow this business together, and I'm very confident that your challenge will ultimately help to make our products even more seamless together. So, as we now covered productivity and how we are really improving our devices itself, and the transformation around the workplace, there is one pillar left I want to talk about, and that's really, how do we make businesses smarter than ever? What that really means is, that we are on a journey on trying to understand our customer's business, deeper than ever, understanding our customer's processes even better than ever, and trying to understand how we can help our customers to become more competitive by injecting state-of-the-art technology in this intelligent transformation process, into core processes. But this cannot be done without talking about a fundamental and that is the journey towards 5G. I really believe that 5G is changing everything the way we are operating devices today, because they will be connected in a way like it has never done before. YY talked about you know, 20 times 10 times the amount of performance. There are other studies that talk about even 200 times the performance, how you can use these devices. What it will lead to ultimately is that we will build devices that will be always connected to the cloud. And, we are preparing for this, and Kirk already talked about, and how many operators in the world we already present with our Moto phones, with how many Telcos we are working already on the backend, and we are working on the device side on integrating 5G basically into every single one of our product in the future. One of the areas that will benefit hugely from always connected is the world of virtual reality and augmented reality. And I'm going to pick here one example, and that is that we have created a commercial VR solution for classrooms and education, and basically using consumer type of product like our Mirage Solo with Daydream and put a solution around this one that enables teachers and schools to use these products in the classroom experience. So, students now can have immersive learning. They can studying sciences. They can look at environmental issues. They can exploring their careers, or they can even taking a tour in the next college they're going to go after this one. And no matter what grade level, this is how people will continue to learn in the future. It's quite a departure from the old world of textbooks. In our area that we are looking is IoT, And as YY already elaborated, we are clearly learning from our own processes around how we improve our supply chain and manufacturing and how we improve also retail experience and warehousing, and we are working with some of the largest companies in the world on pilots, on deploying IoT solutions to make their businesses, their processes, and their businesses, you know, more competitive, and some of them you can see in the demo environment. Lenovo itself already is managing 55 million devices in an IoT fashion connecting to our own cloud, and constantly improving the experience by learning from the behavior of these devices in an IoT way, and we are collecting significant amount of data to really improve the performance of these systems and our future generations of products on a ongoing base. We have a very strong partnership with a company called ADLINK from Taiwan that is one of the leading manufacturers of manufacturing PC and hardened devices to create solutions on the IoT platform. The next area that we are very actively investing in is commercial augmented reality. I believe augmented reality has by far more opportunity in commercial than virtual reality, because it has the potential to ultimately improve every single business process of commercial customers. Imagine in the future how complex surgeries can be simplified by basically having real-time augmented reality information about the surgery, by having people connecting into a virtual surgery, and supporting the surgery around the world. Visit a furniture store in the future and see how this furniture looks in your home instantly. Doing some maintenance on some devices yourself by just calling the company and getting an online manual into an augmented reality device. Lenovo is exploring all kinds of possibilities, and you will see a solution very soon from Lenovo. Early when we talked about smart office, I talked about the importance of creating a software platform that really run all these use cases for a smart office. We are creating a similar platform for augmented reality where companies can develop and run all their argumented reality use cases. So you will see that early in 2019 we will announce an augmented reality device, as well as an augmented reality platform. So, I know you're very interested on what exactly we are rolling out, so we will have a first prototype view available there. It's still a codename project on the horizon, and we will announce it ultimately in 2019, but I think it's good for you to take a look what we are doing here. So, I just wanted to give you a peek on what we are working beyond smart office and the device productivity in terms of really how we make businesses smarter. It's really about increasing productivity, providing you the most secure solutions, increase workplace collaboration, increase IT efficiency, using new computing devices and software and services to make business smarter in the future. There's no other company that will enable to offer what we do in commercial. No company has the breadth of commercial devices, software solutions, and the same data center capabilities, and no other company can do more for your intelligent transformation than Lenovo. Thank you very much. (audience applauding) >> Thanks mate, give me that. I need that. Alright, ladies and gentlemen, we are done. So firstly, I've got a couple of little housekeeping pieces at the end of this and then we can go straight into going and experiencing some of the technology we've got on the left-hand side of the room here. So, I want to thank Christian obviously. Christian, awesome as always, some great announcements there. I love the P1. I actually like the Aston Martin a little bit better, but I'll take either if you want to give me one for free. I'll take it. We heard from YY obviously about the industry and how the the fourth Industrial Revolution is impacting us all from a digital transformation perspective, and obviously Kirk on DCG, the great NetApp announcement, which is going to be really exciting, actually that Twitter and some of the social media panels are absolutely going crazy, so it's good to see that the industry is really taking some impact. Some of the publications are really great, so thank you for the media who are obviously in the room publishing right no. But now, I really want to say it's all of your turn. So, all of you up the back there who are having coffee, it's your turn now. I want everyone who's sitting down here after this event move into there, and really take advantage of the 15 breakouts that we've got set there. There are four breakout sessions from a time perspective. I want to try and get you all out there at least to use up three of them and use your fourth one to get out and actually experience some of the technology. So, you've got four breakout sessions. A lot of the breakout sessions are actually done twice. If you have not downloaded the app, please download the app so you can actually see what time things are going on and make sure you're registering correctly. There's a lot of great experience of stuff out there for you to go do. I've got one quick video to show you on some of the technology we've got and then we're about to close. Alright, here we are acting crazy. Now, you can see obviously, artificial intelligence machine learning in the browser. God, I hate that dance, I'm not a Millenial at all. It's effectively going to be implemented by healthcare. I want you to come around and test that out. Look at these two guys. This looks like a Lenovo management meeting to be honest with you. These two guys are actually concentrating, using their brain power to race each others in cars. You got to come past and give that a try. Give that a try obviously. Fantastic event here, lots of technology for you to experience, and great partners that have been involved as well. And so, from a Lenovo perspective, we've had some great alliance partners contribute, including obviously our number one partner, Intel, who's been a really big loyal contributor to us, and been a real part of our success here at Transform. Excellent, so please, you've just seen a little bit of tech out there that you can go and play with. I really want you, I mean go put on those black things, like Scott Hawkins our chief marketing officer from Lenovo's DCG business was doing and racing around this little car with his concentration not using his hands. He said it's really good actually, but as soon as someone comes up to speak to him, his car stops, so you got to try and do better. You got to try and prove if you can multitask or not. Get up there and concentrate and talk at the same time. 62 different breakouts up there. I'm not going to go into too much detai, but you can see we've got a very, very unusual numbering system, 18 to 18.8. I think over here we've got a 4849. There's a 4114. And then up here we've got a 46.1 and a 46.2. So, you need the decoder ring to be able to understand it. Get over there have a lot of fun. Remember the boat leaves today at 4:00 o'clock, right behind us at the pier right behind us here. There's 400 of us registered. Go onto the app and let us know if there's more people coming. It's going to be a great event out there on the Hudson River. Ladies and gentlemen that is the end of your keynote. I want to thank you all for being patient and thank all of our speakers today. Have a great have a great day, thank you very much. 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>> Announcer: From the VMware Campus in Palo Alto, California It's the CUBE. Covering Women Transforming Technology >> I'm Lisa Martin with the CUBE and we are on the ground in Palo Alto at VMware headquarters with the third annual Women Transforming Technology event. Excited to be speaking with Kathy Chou, the VP of R&D Operations and Central Services from VMware. Kathy, nice to meet you. >> Nice to meet you, as well. >> So, third annual Women Transforming Technology event. Sold out within hours. It was standing room only in the keynote this morning. We got to hear from Laila Ali. So inspiring. What a strong female, who used the word purpose a lot during her talk this morning. You're a mom of four boys. You've been a female in tech for a long time, now. What is it that has kept you in tech and pursuing a career in technology as a leader? >> Well, I have been in tech for over 25 years. And it has been an absolute amazing journey. From early career to mid career to now, I'm going to say mid-to-late career, it's just a passion that's I've had. When I was a young girl, I was just good at math and science. And I pursued that passion and ended up with a mechanical engineering degree. And there are many steps along the way where I was getting discouraged. "Why do you want to do this tech thing? "You should maybe drop out, do something else." But I'm so glad I stuck with it. And really, as you mentioned, the four boys. I want to be an example for my sons because I want them to understand there can be women with all sorts of talents. And if they happen to find someone who is technical and wants to do something in this world or do something in hi-tech or management or whatever that is, that they support them in every way, shape, or form. >> How have you gotten the coveted or sought-after work-life balance? What are some of you tips and tricks we can learn from? >> Well, first of all, I call it work-life integration. Because it's really not a balance. You've got to integrate it. And one of the things I've also ... First thing, I've chosen companies that really believe in that. VMware is a company that really believes in this bringing your authentic self to work and making sure that you can integrate your work with your life. And you need to have that balance. In fact, I do a career journey. And when I talk about my career journey, there's above line, below line. And above the line is the work stuff, and below the line is the life stuff. And you need to make sure that they're equally full. Because I believe that if you have a very, very full and busy life outside of work, it'll actually make you a better employee. So I encourage my folks, as a leader now, I'm finally a leader and I manage a team, that if folks have to go and do something in the middle of the day, doctor's appointment, do something with the kid, go do it. Because as long as you get your job done, you can integrate both work and life. >> Lisa: I love that. I think you're absolutely right, that it isn't about ... It's integration. They have to work together. So, from your career in mechanical engineering, what were some of the things that ... Were you just sort of born with an innate, "I'm really interested in this," in terms of keeping your head down and focused and getting into a fairly male-dominated industry and field? Was it just sort of that innate, that you were born with, "Hey I like this. "Yeah, I'm in a male-dominated field, but I don't care?" >> Yeah, it kind of was. Because, you know, my love ... So I had two focus areas in mechanical engineering. One was material science. I just loved material science. And so I ended up working for my first job out of Stanford was Instron Corporation which was a materials testing firm. My other love was robotics. So, I had actually worked for GM on the production line and helped program some of those early robots. And so, I was able to combine those two passions when I ended up going to Instron and developed their robotics line. Now, here's the thing. As I'm going through all of this, am I looking around and realizing, "My goodness, there are no other females here?" That was the case. But my passion for learning new things, and doing something, and making a difference seemed to outstrip the fact that there weren't females. And now that, as I'm getting, again, more advanced in my career, I'm realizing that I have a duty to play as a role-model to say "Hey, you can do it. "You can have a family. "You can have a great job. "You can have a great life outside of work. "You know, as long as you integrate all of those things." So I think with that perseverance, that's how you can get through. >> And I think that there is such a need for those role models because like we were talking about Laila Ali this morning who clearing was born with this natural confidence, which not a lot of women are, >> Kathy: Yes. >> Not a lot of people are, in general. So, I think it's really important that you've recognized you're in this position to be a mentor. >> Kathy: Mm hmm. >> What are some of the ... How do you advise, either women that are in their early stage careers or even those maybe in the middle of their careers that are pondering, "Hey, I don't see any "or a lot of strong female leaders "in the executive suite. "Should I stay here?" You had that internally, but what is your advise to women who might be at that crossroads. >> Yeah. I think the first and most important thing is that it takes courage to stay the course. I know that sounds a little odd, but don't care about what you see around yourself, right? Just know about what do you love? What is your passion? And, you know, I always say that there is something I call the sweet spot. It's where your passion meets your talent. And if you're in a place like that, you're in a very special place. Because that means it's a strength of yours that you also love. And if you do that, it doesn't matter who else is around you. You know, one thing Laila said that I really loved and I really, really believe in myself is preparation. You have to be prepared so as long as you are prepared that's what gives you the confidence. We don't ... Okay, maybe she was born confident. She came out of the womb confident. I certainly wasn't. I was someone who grew up with ... I really lacked a lot self confidence. I was painfully shy. I had trouble speaking in front of people. I worked very, very hard. I was prepared to get over that fear. You know, I put myself ... She mentioned this thing about being uncomfortable. And I think I put myself in a lot of uncomfortable situations as well. I was really resonating with what she said. Speaking in front of large audiences. In fact, I used to memorize a lot of my speeches and then I remember I would forget it in the middle of it and- (gasp) I would be horrified. But you know what? You do a few of those things, you get better and better at it and if you just get out of that comfort zone and you have those little butterflies. I always say if you have those little butterflies, you're stretching your learning and that's what helps you achieve. >> I couldn't agree more. I think that, you know, I think that I always say, "Get comfortably uncomfortable." >> Kathy: Yeah. >> No matter what you're doing. If it's above the line or below the line as you were saying before. But you're right, she talked about preparation, being prepared and we talk a lot about imposter syndrome. >> Kathy: Mm hmm. >> Often times at Women and Technology events, just because it comes up, it's something I didn't even know what it was until a few years ago. And I think just simply finding out that this is a legitimate issue that many people face of any industry, gender, you name it. That alone, knowing that that was legitimate, was, "Okay, I'm not alone here." But if you can go, "Let me prepare and get prepared for what I need to do." That preparation part is, I think, a huge key that, if more people understand that just work and be prepared, you're not alone in feeling that. Sort of maybe setting the level setting there. I think that can go a long way to helping those women in any stage of their career just get that little bit more courage that you said. >> Yes. >> That you need to get out of that comfort zone. And I agree I think goals that make you a little nervous, are good goals to have. >> Totally agree. I have some tips on how to get out of that comfort zone, Or get out of your comfort zone. So, I find, okay, there's always the smartest-person-in-the-room thing you hear about, and, forget about that, okay? Ask questions. You always here this: There's no such thing as a dumb question. And there really is no such thing. I know how many times someone has asked a question say, "I asked that question." >> Lisa: Absolutely. >> And actually it's a brilliant way to be heard. Because a lot of times, a lot of women ... Actually, it doesn't matter. A woman, unrepresented minority, it could be a white male who's shy, right? In an inclusive environment, if you don't speak up, you're not heard. And a lot of the brilliant things that people have, are those questions that people have. Because if they don't understand something, I'm sure there's someone else who doesn't either. And so if you just ask some questions, you'll find that you'll get that courage to ask a few more. And then eventually you get to the point where you actually can advocate. >> I agree. You have to be willing to try and I love that. So, the theme of this event, Inclusion in Action. >> Kathy: Yes. >> I'd love to get your perspective on how do you see inclusion in action here at VMware in engineering, for example in R&D. >> Yes. First of all, I'm on the Diversity and Inclusion Council. So I represent R&D. Yes, I just had a meeting with Betsy Sutter. We had our Diversity and Inclusion Council for VMware so I was representing R&D. So it's something that is very, very important to us. One thing I will say that I've learned at this conference is it's not about the stats. It's not about the fact that you have meetings or goals. It's something you must internalize. It's something, as a leader, I think it's my job and duty to exude it, you know, through example, through being inclusive, to making sure, like I was at an event the other day here at VMware I was talking about I was at the Watermark Conference, and I was basically doing a replay of what I did at the Watermark Conference. And in there, I saw three men. And I said to myself, "You know what? "We need more men at this event." And so, even at this conference today, I want to see more men. It's all about inclusion, right? And I think people sometimes forget that, even though it says Women Transforming Technology, men, women, whatever your sexual orientation, whatever that is, we all care about how women can transform technology. You don't have to be a woman to do that. >> Right. Well one of the things that came out today was the great news about this massive investment that VMware is doing. 15 million to create this lab at Stanford. >> Kathy: Yeah. >> This innovation lab. And we were talking with Betsy earlier. And actually, in the press release, it cited that McKinsey report that states that, companies that have a more diverse executive team, >> Yes. no stats or anything, more diverse, are 21 percent more profitable. And it just seems like a no brainer. Every company wants to be profitable, right? Except for an NPO. So, if all you need to do is to increase that thought diversity alone and you're more profitable, why is this so difficult for so many other organizations to culturally adopt that mindset? >> Yeah. What I find fascinating is that diversity and inclusion is obviously a very hot topic in Silicon Valley, right? Every company is either fearing having their numbers publicly outputted or their working on these things. And yet we're doing a lot of things, but the needle isn't moving, right? So, I think it was mentioned today, by a professor from Stanford. She was saying there's not a silver bullet. Some of these things will take a long time. One of the things that we had talked about was this pipeline of, it doesn't matter again, young women, under-represented minorities, whatever you say in the STEM fields. We need to encourage more of that, okay? And so, what's interesting is there's more, well certainly more females than males that are graduating these days, yet, when you start off in a hi-tech company, you will see quite a bit of balance between male and female, I'll just use that as an example. It's even worse as far as under-represented minorities. But as you move up the chain, what happens is the numbers just fall off. And, one of the root causes that I see as an issue, is that when these women look up at the top and say, "I don't see women." Or if I am a person of color, "I don't see a person of color in this leadership position. "Why should I continue?" And then you see just a lot of attrition happening at those levels. And so, what it takes is every single one of us internalizing how important this is. And I think when that happens, when it's not a, "Oh, it's a project." Or, "Oh, it's an initiative." Or, "Oh, it's a goal." And this, by the way, may take a decade or more. But once we all internalize this, I think that's when the needle's going to move. >> Yeah, we talked a lot earlier about accelerating this. Because you're right, the attrition rates are incredibly high, much higher for women leaving technology than leaving other industries. And a lot of women are looking for those role models, like somebody like you for example. But, I think the more awareness, the more consistent awareness we can get ... And also the fact that, you know, in the last six months we've had the Me Too Movement explode onto the scene, getting this unlikely alliance with Hollywood, Time's Up, Brotopia coming out a couple of months ago, and was something that I actually put off reading because I thought, "I don't think I want to know", and I thought, "Actually, yes I do." Because there's no reason that these things should continue. >> Right. >> But, to your point, it's not just about getting more women involved. It's really about integrating and including everybody. >> Kathy: Absolutely. >> To move the needle, but much faster. Half of 2018 is almost over. There were no big females onstage for CES five months ago. And there's really no reason for that. So the more we can all come together and just identify role models and examples and share the different things that we've been through, the more I think we can impact this acceleration of this movement. >> Totally agree. I actually have a thought that you just triggered around perhaps accelerating this in the best way we can. Knowing, again, there's no silver bullet. But I was at my business school reunion and I was shocked to see that 80 percent of my business school graduates were not working. And what happened is many of these women had taken jobs in consulting firms, investment banking firms, that weren't that friendly. And when they started to have children, they stopped out. And they didn't want to compromise their family. Who does? Nobody wants to do that. But when they wanted to come back, they found that they had either gotten off, they call it the mommy track, right? The train left the station, they couldn't make it back on. Or they weren't willing to take a lower job. And so, because of that, many of them ended up not working. And, you know, that's sad. Because these are really, really smart, brilliant ... >> Lisa: These are Harvard graduates, right? >> They are. Harvard Business School graduates that were not working. And so, like you said, it requires everyone to understand, right? It's the employers, a lot of these men, need to understand that women, if they want ... And by the way, it's not even women these days. It's young men who want to be with their families, as well. Paternity leaves, time off with the kids, those sorts of things. If you allow those people that freedom. You know, when I was young, I felt like I went through this by myself. So I had three kids five and under. My career was not progressing. I was just doing lateral moves and I didn't feel like I was successful in anything. Not successful in my job, not successful at home. And then I had no friends, 'cause I was too busy and work and home. But if I had more of a support network at the time, fortunately I didn't drop out. I could have. I think many people do. So, if we can provide more support at that really important time when they're raising their families, people can see that, "Hey, I can have a great family life and also a great work life." >> So key, just for support alone. And that's one of the things that I think is really exciting about Women Transforming Technology. It's this consortium of organizations and industry and academia and non-profits, coming together to identify and tackle these issues that we're facing. 'Cause the issues that women are facing are issues that corporations, profitable corporations, are facing. But to connect on these challenge points, provide that support and that network, and also, to your point, maybe even providing an unlikely mentor to somebody who might have in your position where, "I don't think I'm being successful anywhere." But you stuck with it, and you might have at times gone, "I don't know why I'm sticking with this." But you had some intestinal fortitude to do that. More of those supportive and mentoring voices and people, the more we can elevate them, and show them to other people who might be struggling, the better we're going to be able to move this needle. >> Completely agree. And you know what? They always say "it takes a village," right? It takes a village to raise a family. It takes a village to work and do what you need to do and make a change in the world, and we all need to do this together. And, by the way, there's nothing more inclusive than that, is there? >> Lisa: Right. >> We all have to deal with this. It doesn't matter your sexual orientation, your age, your gender, your ethnicity, doesn't matter. We all share in this common bond, right, around how do we integrate our work and our life. >> Kathy, brilliantly said. Thank you so much for stopping by the CUBE and sharing your experiences and your wisdom. I, for one, was very inspired. So thank you for your time. >> Thank you, I was inspired as well. I really appreciate it. >> Oh, thank you. Thank you for watching the CUBE. We are on the ground at VMware for the Women Transforming Technology event. Thanks for watching. (music)

>> Host: Live from Las Vegas, it's theCUBE, covering Dell Technologies World 2018, brought to you by Dell EMC and its ecosystem partners. >> Welcome back to theCUBE. We are live, day three of Dell Technologies World. I'm Lisa Martin, back hosting with Dave Velante and we're very excited to welcome back to theCUBE Karen Quintos, Chief Customer Officer at Dell EMC. Hey, welcome back. >> Thank you, thank you. It's great to be here with you both. >> Dave: Good to see you again. >> So, we saw you on stage on Monday, recognizing innovators and trailblazers. I always love, as a marketer, when customers are recognized for their achievements because the voice of the customer is the best brand validation that you can get. Talk to us about the customer awards program and highlight a few of the winners that were on stage. >> Well, first of all, I agree with you, Lisa, that the best way to talk about your products and your solutions is to do it through the eyes of the customer, so being able to honor eight of our super most inspiring customers on stage was great. We had hundreds of submissions from our sales teams working with our customers. We really wanted to bring the transformation stories to life. The stories that we were able to tell and the evolution that these customers have done in their industry and their business, was remarkable, so, you think about Ford and the autonomous car. You think about J and J and the work they're doing around securing their customer data. You think about Volvo and Zenuity, and the opportunities that they have had with technology and then some of my favorite, Arrowfarms, >> Love that. >> Teleconnected farm, and they're using technology in Newark, New Jersey, to transform the way that farming is done, conserving our natural resources, using 95% less water, and being able to do it, and, this, the IOT of farming, they're just all super rich and really really great stories. >> And then, you got, I have to ask you to say it, to pronounce, I loved your pronunciation of, Unidad, come on, help me. >> I know it was the first one, right? >> Dave: Unidad de Conocimiento. (laughing) >> Yes, yeah, you got it right, you got it right. >> Okay. >> They're a great story, too, right, I mean, here's an organization in Colombia that is a consolidation of different industries that are providing these services across Colombia and Latin America. They've absolutely figured out how to take a country like Columbia out of the perils of what has happened there with the drug cartel, really thrive on economic prosperity and they're absolutely kicking butt when it comes to the services that they're providing to all of their, their customers, so it's... >> And the state bank of India, was that the other one? >> State bank of India. >> They really had a global representation, it's awesome. >> Well, we looked hard for that. We looked hard for the global representation. We also looked really really hard and gave extra points to companies that had a purpose and a soul, so what they were doing, either with the technology or with the services that they're providing to their end customers, what's that, that purpose side? And, you know, you saw that in a number of these really awesome organizations. >> I'm going to ask you, so I'm going to ask a leadership question. When we first met, I think it was at Dell World. It might have been 2012, I think you were CMO of Dell at the time, so you, like a lot of leaders, you chair hop, that's kind of what you do. So you've now, playing it up. >> But 18 years at Dell, so, you know. >> Right, but, right, so, you take your best leaders and you say, alright, go fix this problem, go fix this problem, go, go inspire some people to do that, so, you've been, and also it's the, is it the chief customer office that you started? >> I did. Well, actually, Michael started it. >> A year and a half ago? >> Right. >> Well, what's that all about? How's the progress going? Give us the update there. >> Well, you know, I have to tell you, I give a ton of credit to Michael because he saw an opportunity in something that was quite new and quite novel, and now you look a year and a half later at what some of our competitors and others are doing. You know, Microsoft just named somebody that sits at their executive leadership team meeting, recognizing that customer relationships are the ultimate prize. Our ability to deliver a great customer experience is going to be the, is the next battleground, and, we've been leading in that area now for a year and a half, so, I'm the first chief customer officer ever at Dell Technologies, and our mission is really to make sure that we continue to push the needle, and drive an even better end to end customer experience. We're doing a lot around taking our top, most important customers, and there's a couple of thousand of them at Dell. I'm not talking about five or six, I'm talking about like thousands of customers that have consistently honored us with their business over the years so how do we put high touch, high loyalty kind of programs in place? The customer awards were a great way to recognize some of those top customers and put them on the stage and tell their story, and the piece that gets me even more excited is what we're doing around our customer data, so, how do we unleash the power of our customer data? How do we integrate it? How do we automate it? How do we put real time predictive analytics? By looking at a customer end to end and being able to figure out if that account is going to go red, because they've had a combination of things, go figure out what are the sources of value for them and unleash those, so, we're living in this AI big data world and living it realtime with, under the remit of the chief customer office. >> And if I heard you correctly, at the leadership team, you're kind of the voice of the customer? >> I am, I am. There's a lot of voices for the customer. >> Well, yeah, because the head, the head of sales are going to be doing that and. >> But they all come with their own bias, right? Or their own lens, right, so, we're actually, my team is a very very strong partner to our heads of sales, because sometimes heads of sales, I mean, they see these things clearly the same way that we do, but sometimes the voice around, well, this isn't working, we need to get better at this, our customers want us to go faster here, tends to get lost in, you know, business performance and close rates and all of that, and we have this unique ability to look at this end to end, and help to really advocate on behalf of customers and really do the right thing for them at the end of the day. >> Independent of the transaction metrics, is what you're saying. >> Yes. >> And it's different perspective, right? We talked about the voice of the customer being an objective brand validation, and you come from a different perspective. One of the things that, we had your CIO on earlier today, Bask, and he said, "We drink our own champagne." And then we had Ravi Pentaconti and he says, we eat our own dog food, we're right next to the therapy dogs. So I like that, but from what you're saying, you're using customer data to help make Dell Technologies differentiated, be able to revolutionize the customer experience, listening to those customers is key. Can you tell us a little bit more about how some of that data is being applied to revolutionize that experience? >> Sure, so, some of it's basic, some of it can be pretty transformational, so, and by the way Baz Guyer has been a significant partner with me on this journey, because he understands it. Listen, Dell's the only technology company out there today that has the rich, direct data that we have, combined with rich channel partner data. So, we have all of it, right? And some of our competitors do everything through the channel, a few of them do everything all direct, we do both. So, we have a huge advantage when it comes to that. We can look at the amalgamation of all of the listening posts that we have for our customers. We have a booth here, where we've brought in hundreds, thousands of customers, and we've asked them a series of questions. We have voice of the field surveys that we do with our sales team, we do NPS surveys, this survey, all of that. We can bring all of that together using big data and insights and we can prioritize the big things that matter. So one of the things that I see a lot of my peers at other companies get caught up in, is they're chasing 15 or 20 things. You know, at any given moment, we're chasing 3 to 5. And we want to move the needle on those 3 to 5 and then we want to get, capture and address the next ones. So that's what I would call kind of the basic, fundamental pieces. What I think is exciting, is, we can now take a view of a customer, a complete view of that customer, we know what they bought, we know who they bought it from, we know the number of escalations they've had, we know what their delivery performance has been, we know how many times they've changed the AE on the account we know what their corporate responsibility priorities are, and we can look at that in totality, and we can put an outreach kind of program in place for them, or, we can look at it and go, this one is about to go south, and we need to put our best people to go call on the account and help the account executive, who in a lot of ways sees this also, and help to figure out how to turn it around. >> So, and you can do that across the integrated company today? >> We have piloted across the integrated set of companies, and in the Q3 period of time, working closely with Baz, we're going to automate this and turn it into like an Amber Alert, early warning type of system, so that we can help the AE and our customers before things happen. And the other piece that we can do, is we know, we know the ten levers of customer value. And, you know, for the most part we do those generally well. But in some cases, some of the reasons that our customers come back to us is because we've discovered things at their account that they didn't even know was happening. So we're, we've got this power of big data sitting right in front of us with Chief Customer Office that can really, really light it up. >> Well the other thing you said is the account teams know when there's a problem, but the executive teams, they have limited resources. So you don't know where to prioritize. >> Right, and some of our AE's have more than one account. >> Dave: Yeah, right. >> So, you know, some of them are handling 20 accounts. So where this thing becomes really interesting is as you think about scaling it, down through the organization, not just at the top ones. The top accounts, they're one to, one-to-one kind of engagement, and those types of things. It gets really interesting when you start to get below that and you start to really use it in a more scaleable way. >> Plus, as you go more channel, right, and you go more to edge, you get all these complexities beyond just product portfolio. You're dealing with that stuff, but then the channel complexities, and then the new markets that are emerging, particularly in edge, and the channels that that's going to precipitate. >> Right, right. >> To me, this is even more important. >> So 18 months into this new role that Michael Dell created, lots of accomplishments, it sounds like you're really leveraging it to partner with customers to help, not just them, but also your internal teams, be able to identify where there needs to be escalations. What are some of the things that you're opening up with respect to diversity and inclusion, because that's also under your purview? >> That's right, that's right Lisa. What I think is really interesting is how much our sales teams now is coming to my team, to use some of these other platforms to open doors and have conversations with CIOS that they could not get before. So I'll give you a perfect case in point. The sales leader in the U.K. came to me and said, "I have a particular account in London, "I haven't really been able to make any progress, "the CIO is a woman, their head of infrastructure is a woman "you're going to be there in London, would you send her a note "and let's have a conversation around some of the things "that we have some mutual interest in." Technology being one, as well as getting more women involved in to technology. So we had this conversation, an hour in, she said, you know, if Dell would host a session with other female CIOs in the U.K area, I will open up my Rolodex and we will get other women to come. Two months later, we did it, in London in January. I was there, Michael was there, our heads of sales were there, we had about 15 or 20 of these super impressive women in the public sector, the private sector, higher education universities, big brands, we just did a similar one here at Dell Technologies World. We just hosted, as a matter of fact yesterday, 20 women, we actually had a couple of men that were there, too, all just coming together talking about areas that we deeply care about. How do we get more women and minorities interested in these technology fields. >> And here we are in 2018, this is still such an issue, and it's something that's still surprising when we get to see females on stage in keynotes, like yourself, like Allison Doo who was just chatting with you, Dave, and Stu. It's still, we're actually kind of going, hey, we're starting from a deficit whereas 20 30 years ago we were kind of going up. What are some of the things that you hear from your male peers in terms of the importance of showing multiple generations of girls and women you do belong here, if this is something that you're interested in, do not be afraid. >> Yeah, what I find remarkable in these conversations is there's clearly a number of key themes that are emerging. One of the biggest ones is, this is an economic imperative. You think about, there's going to be 1.1 million jobs in the computer science technology field over the next ten years. 45% of those jobs are going to be filled by U.S. college grads. It's a gap 55%. Women that are graduating in the area of computer science and technology is down, significantly, from like 30% down to like 18% right now. You are simply not going to have enough of what has been the traditional workforce in order to fill these jobs. So, that's one, and that's one that we at Dell care about a lot. Second piece that we care about, is, we just know that when you bring together a diverse group of individuals, always get to a better answer for your customers, you do. Research has proven it, we can prove it, we can see it, all of that. And then the third piece is, I just think women bring unique skills in a collaborative global context that can really bust through some of the big, complex, thorny opportunities that corporations are working through. >> So, ladies, let me jump in here, if I may. So there's two sides to this coin is, one is yes, we've got to get young women excited, but the other is you've got to promote women to leadership positions. Obviously Dell does a good job of that, clearly IBM gets high marks for that, I mean one of the sad things about seeing Meg Whitman go was that you had a dynamic woman leader. Maybe not the greatest speaker in the world, but one-on-one, super strong, and I think an inspiration to a lot of young women. And I think our industry clearly, Silicon Valley, Boston, just not doing enough. Particularly in smaller companies, larger companies I think do a better job, so your thoughts on that? >> My thought on that is it's a hard problem, but at its very basic, it's actually quite simple. And these are the things that we're doing at Dell, it takes commitment from the top, and at all levels of the company to make change, drive the accountability, set goals. To your point, go place some bets on the younger generation up-and-coming diverse talent, put them in roles, and then surround them with a support system that they need to be successful. And, we've done that, you know, Michael has done that, he did it with me. When, six or seven years ago, he called me and said how'd ya like to be Dell's next Chief Marketing Officer? And then you know, called me 18 months ago and said, how'd ya like to be Dell's first Chief Customer Officer. You need people that see things in that talent and you need that commitment. You need a culture that supports that. You need more role models. You need to get rid of and totally eliminate the harassment and the bullying and the old boys kind of club. You've got to create places where women and minorities feel like they can be themselves. Culture plays a huge, huge, huge role. And then, you know, communities play a huge role. So we have a very, very growing and thriving employee resource group set of networks. We have 14 of them across Dell and Dell EMC. And they're just a safe haven for where people of color, women, LGBT, veterans, disabilities can come and just be themselves, and be with others that they feel safe with. So, some level, it's not that hard. It really does take the commitment and the wherewithal and the sense of urgency that says we've got to fix it, and we have to fix it now. >> I feel like 2017 was a milestone year, I'd love to know what your thoughts are. You had that incident in the tech industry, with that poor misguided soul from Google who decided to write this Jerry Maguire memo and just brought a lot of attention to the issue, and then the #MeToo movement, so I feel like 2018 is a more optimistic year, but still, a lot of that stuff that you were talking about goes on, and it needs to be exposed. Again, I think the #MeToo movement brings that out and a lot of people are thinking uh-oh, wow. This really has to stop. Your thoughts, do you agree with that, or do you just think, no Dave, we're still way too far away. >> I think what #MeToo has done is opened a lot of eyes around how pervasive all of this is. I know, in the case of Dell, we have a zero tolerance zero tolerance policy when it comes to all of that. What was so shocking to us is how pervasive it still was in either other companies or other industries. To me, what is encouraging now, is the conversation is going beyond harassment, to aggression and bullying and culture and some of the things that have happened over the years, and by the way, it happens across all genders. There's articles that are being written now about women that are bullying and have bullied, so. This is something that all corporations need to be setting the tone around what are the right behaviors and those types of things, and we've been doing that now, for years. The other piece that I feel very strongly about, is, if men retreat from this conversation, that is a huge problem, a huge problem. Leaders like you have to be part of it. They have to be part of, this has to change. I want to be part of the solution. I have daughters, or wives, or nieces or whatever it is that I know that they have just as much capability as boys and men do, and my job is to help them. So I love it, I love the way that men and women are both coming together and engaging in this conversation. And we are seeing progress. I think everybody wants it to be faster, but we are seeing progress. Hey, yesterday at this CIO round table that we have, one of my favorite quotes, we got into this whole conversation around, well what is the next generation feeling? And one of the women that was there said, "hey, my daughter told me three weeks ago, "you know mom, she goes, I really think, "to me it's really simple. "I want to be a mom and I want to be a CEO." It's that simple. >> Wow, I love that. So in the last few seconds or so, Karen, you've made a tremendous amount of progress impact as the Chief Customer Officer in 18 months. What are you looking forward to accomplishing the rest of 2018? >> Well I think the thing that gets me really energized, too is how we're applying our technology in the area of corporate responsibility and innovation. So, you know, you saw our plastic bottle demo that we had here, that fish moves from one event to another, we got really serious around how do we play a really key role in stopping the plastics from entering the ocean? So there's 86 million metric tons of plastic that is in the ocean today. By the year 2050, there will be more pieces of plastic in the ocean than there are fish. You have to stop the plastic from entering the ocean, which is a pilot project that we did about a year ago, and we recently announced an expansion of that called next wave, where we have our customers that are partnering with us to figure out how do we scale that? So, General Motors, Herman Miller, are just a couple of examples. And then, at CES this year, we announced an effort that we're doing around how do you extract gold out of motherboards, and using that, and recycling that back into our motherboards and using it in jewelry manufacturing. So we partnered with a jewelry manufacturer out of the West Coast, Nikki Reed. She is creating this jewelry, these rings, through recycled gold, and it's 99% more environmentally friendly. So, I love the fact that we can use our technology to innovate, change the world, use, reuse the stuff that we're putting into the economy. So, scaling these is a big, big priority for me in 2018. >> Dave: Awesome. >> Wow, momentum is the only word I can think of to describe what you've achieved, what you're doing so far. Karen, thank you so much for stopping by and chatting with Dave and me, and congratulations on what you've accomplished, and we look forward to talking to you next year. >> Thanks, thank you. >> We want to thank you for watching theCUBE we are live, finishing up day three at Dell Technologies World in Las Vegas, I am Lisa Martin for Dave Vellante, thanks for watching.