(theCube jingle) >> Hey, welcome back everybody! Jeff Frick here with theCube. We are in San Francisco at Zuora Subscribe 2017, about 2,000 people talking about the subscription economy. But what I liked is when Tien had some sample stories up, he went with the big iron. He went with GE, and he went with Caterpillar, companies that you probably don't think of as subscription economy, like maybe you do Spotify or Amazon Prime. So, we're really excited to have Tom Bucklar. He's the director of IoT and Channel Solutions for Caterpillar. Tom, welcome. >> Yeah, I appreciate it, thanks for having me. >> So, I love that you had a ton of industrial Internet stories. I mean this is real. This is not coming down the road, but it's here today. >> No, absolutely. I mentioned during the keynote that since the mid 90s, we've been connecting equipment. Since the mid 90s, we've been on our autonomous journey. And just today we can talk about the largest industrial fleets of over 500,000 assets connected. All of that valuable information coming in to help our customers. And then the fully autonomous fleets in the mines. It's pretty exciting stuff. >> Right, and you touched on something we talk about often in the context of GE. We've had GE on a number of times where do they sell engines or do they sell propulsion to the airlines, and you talked about do we sell this big earth-moving equipment or do we sell x number of, I don't know how you measure big giant masses of rocking gravel move, but really, selling it as a service, not necessarily just the truck. >> Yeah, that was an important part of our discussion because when we talk about IoT and digital, it's really a very customer-centric strategy, so we're going to get into services like IoT type or digital based services, which is our Cat Connect portfolio, if it's going to help serve our customers that we have today in the industries we play, be more successful, increase their operations, increase their efficiency. So, we're not looking to build a platform or be a software company. When we get into this space, it's focused on those customers and increasing their profitability, and that's what leads us into these areas. We're going to be a heavy equipment manufacturer, we're going to sell big iron, that's what we do. We're going to leverage digital to help our customers be more successful. >> Yeah, you say that, but I'm telling you, I can turn the lens a little bit. I see a whole lot of software company behind that big iron, so... >> No, I'm not. You know, there's a lot of software on those machines. >> You're right. >> There's a lot of software that's coming off those machines. And, certainly, we want to take all of that information. We want to put analytics on it, and we want to help our customers go from being reactive to predictive. And, really, that's why we're at this conference, right, because when you get to what we call our Cat Connect services, a lot of those are subscription-based. You know, when we're connecting 500,000 machines, or we're able to go out and, you know, enable grade assist on a machine over the air, or we're going to have these predictive health services to make sure uptime is maximized. All of those are data-driven services through Cat Connect, and they're all subscriptions. So it's a natural fit for us to migrate into that along with our product business. >> Yes, some interesting numbers that you shared in the keynote. 500,000 connected machines. You talked about the obvious stuff, unplanned downtime, these are huge assets that need to run as close to 24/7 as they predictably can. But then, you mentioned looking at some other data, and not even really heavy-lifting data, but customers getting tremendous utilization gains by leveraging some of the software that you guys have incorporated in the machines. >> Yeah, it's powerful stuff. I mean, if I talk about construction, the customer we mentioned, they asked us to connect all 16,000 pieces of their equipment. You know, 3,000 of those were Cat earth-moving machines. You know, the other 13,000 weren't. They were a variety of other types of machines. But with the customer, with that information, and then when they can get put it on one screen, and they can look at utilization, they can look at location, they can look at idle time, they can increase their utilization significantly. So basic data, with a fleet that size, can help customers realize 10, almost 20% utilization gains, and across the fleet that size, it's big money, and it's big customer value. But even all the way down to the person whose got 10 machines. You know, they can start to look at idle time, they can look at operator abuse and where they can train their operators better, to perform better. So basic information of some these machines is very valuable. >> It's such an interesting concept because you keep talking about your customers doing better with the assets that you guy provide them. You know, when you're in a subscription relationship, and you have those ongoing back-and-forth repetitive connection, it's a very different relationship than when you just sell something, and you ship it, and you take the money, and you go on to the other one. And it seems like that's really kind of the secret sauce of the subscription economy that no enough people really highlight. >> Yeah, you know, in some cases, that's a great point. And, you know, one of the strength of Caterpillar is our global dealer network. And so you mention about selling the product. You know, when we sell the product, our dealers provide their product and sell it to our customers, they generally have a long-standing relationship with that customer. Everything from helping the with uptime to machine selection, to operation to operator training. So, we're in the business of working with customers through the long haul. But to your point that these digital services, you know, they create a digital relationship that's ongoing, along with our dealer's relationship that they've had for decades. So, it's a really powerful kind of combination. >> And then, I would imagine the data that you're now getting back off these machines, which before they were all connected. You know, you kind of saw them at the maintenance cycles, and you could kind of see maybe what happened or what didn't happen, or maybe there's some patterns that are geographic or type of job or whatever. But now, I love the quote, you used to take a sample of old data, and now we take all of current data. There must be tremendous value for you guys to develop better products, have better maintenance on your own products, see how these things can do much, much better. >> Yeah, you're absolutely right. And, you know, when we talk about the data off the products, a lot of people initially go to telematics, and certainly, when talk about 500,000 assets, I'm talking telematics. But we also do about 5,000,000 fluid samples a year of different compartments. We've got visual inspections that are on electronically through Cat Inspect, that's all the data coming back. So, all of that information is really rich information. And, to your point, we can take that all the way back to new product design and make sure that our next products are optimized. >> Pretty exciting stuff. >> Absolutely. >> And who doesn't love a big yellow tracker truck? (laughs) Absolutely. All right, Tom, well, thanks for taking a few minutes out of your busy day and congratulations. >> All right, thanks for having me. >> All right, he's Tom Bucklar, I'm Jeff Frick. You're watching theCube. We'll be back after this short break. Thanks for watching. (theCube jingle)