(upbeat music) >> theCUBE's back on day three here in Cloud City Mobile World Congress. This is where all the action is, and this is theCUBE set. I'm John Furrier with Dave Vellante. We're here with DR, Danielle Royston, who is the CEO of TelcoDR, as well as the CEO of Totogi. Great to see you again. >> Hey. >> Hey, how are you guys? >> Good. >> Great time, great boat last night, good industry executives. A lot of intimate high player, big players here in the industry, even though not a lot of attendance, but the right people are here and events are back. >> Yeah. Yeah. I think, MWC was the first event to cancel with COVID in February, end of February 2020. So first big event to come back. It's such a nice symmetry. Yeah. Typically you have big delegations, hundreds of people from the big groups coming to the show. We're seeing the executives are coming, smaller delegations, but they're all in the booth and that we're having great conversations and it's awesome. >> Yeah, and the thing I will say is that theCUBE's back too. We'd like them to be, be in here in the action, because one of the things that's happened with this hybrid events is that people are watching. And so there's a virtual space and the physical space and Cloud City has built out paradise. It's beautiful and spectacular behind us. If you look around, for the people who can't see, it's really made for the combination of on-site and virtual experience, the content, the people, Bon Jovi last night, it's just the top of Mobile World Congress and it's translating to the industry. This has been amazing. So congratulations. >> Thank you so much. >> Well. I got to say, you have a lot to say as we all know. >> Danielle: Yeah. >> But I think it was easy for the big guys. >> Danielle: Can't shut me up. (laughing) >> That's why we love you in theCUBE. But I think it was easy for the big guys to tap out and say, hey, we can save a bunch more money. >> Danielle: Yeah. >> We don't really have much to talk about. We're going to talk about it again. Hey, let's talk about 5G. >> Yeah, yeah, exactly. >> 5G's coming. >> It's the revolution. >> And I told you about 5G though. >> Whereas the narrative here is all about the future. And it's not about the future of blah blah blah, it's about the future of, this is the journey that we're taking and here's where it's starting and with the meat in the bone. >> Yeah. And I think what's really interesting about Cloud City is the fact that we've brought these different players together that are all focused, as you said, on the future. And I'm starting to see these connections where they're collaborating. Vendors that didn't know each other probably would never have partnered before. Totally different areas. I'm hearing the conversation in the booth about like, hey, I talked to P1 security, or I went and talked to LMX and we're putting deals together 'cause we're complimentary. And it's amazing and so that's really good. >> And the integration partnership, heard that from Google yesterday on our news exclusive break in there. They see integration and they're talking about Android, with what Android did for mobile. They're seeing a whole new software paradigm coming into telco. Its partnership, its ecosystem and open. These are new kind of dynamics. >> And I think for you guys, when you say integration and open, I think those things are really paired and they're important. A lot of times Telco people will hear integration, and they'll think customization. Coding it up and customizing it so that they talk to each other. But I think the open part of that is really important where we're connecting via APIs. And I think that's bringing the hyperscalers. That's what they do. They provide these systems and the software that's all API based and you can use it very quickly and you can unravel it if you need to. And it's that feature velocity, we talked about a couple days ago. >> And automation is the underpinning. >> Yeah, yeah. >> I mean, that's really the theme, right? >> Right. >> It's not like a one-off hardcore custom integration that's going to be frozen. >> One time to upgrade it every 18 months or whatever it is. Yeah, it's a life. >> Dave: How about Musk yesterday? >> John: I mean, he's always a crowd pleaser. First of all, my kids love him. He's crazy. >> Who doesn't love Elon Musk? >> I mean, he is amazing. He's a builder and he takes no prisoners. He's just, you know what, my goal was not to go bankrupt. That's what he said a couple of years ago. >> Dave: Which was brilliant because everybody's gone bankrupt in that business and he's just close it off. >> And he's just like, look, we're here, we're just going to chip away at it and we're just going to keep striving, not making up excuses. He takes the failures. He takes the phase plans. He gets back up and he keeps going. He's focused on building. >> He's focused on one thing. He's not focused on everything. He's focused on getting to Mars. And I think that's what I like to compare myself to Elon Musk. Not that I'm building rockets or getting to Mars, but that the hard problem that I'm solving is getting Telco to the public cloud and that's going to take a decade. It might have been accelerated because of COVID, it might've taken 20 years and now it might take 10. But you look at what he does, and that guy, he has haters on Twitter that are pew- pew. Always like, throw in their bars, but he's like, I got my rocket company. I got my communication and space company. We're going to need the bore holes, the Boring Company. I need batteries, I got my Tesla company. And so this guy focuses. >> He's got some haters, but he's got a lot more lovers on his other side because people might not know this, but he fired the entire PR department because he's like, I don't need PR. I'm just going to go do my own, his own PR. >> Obviously, the crypto stuff's always fun. Doge coins, always a laugh. >> Danielle: I think he just plays around with that. >> And it's just more of like playing. >> Yeah, that's a watch this. >> He just likes to see what he can do. >> Doge coins app. That Saturday Night Live was an interesting thing he did, but I think he illustrates the point of a new generation. And I think my young kids, not young, they're in their twenties now. They look at him and they say, that's aspirational because he's building and he's focused on that one thing. And again, the growth that you mentioned Telco to the cloud, getting back to that is that, I want to ask you this growth question. It used to be like, okay, growth was there, people expanded cell towers, networks were networks. Now it seems that the growth of Telco, with Telco is going into, with the edge and all the open-RAN stuff, which means we need more infrastructure. >> Danielle: Yeah. >> We need more stuff. There's more needed and there's growth behind them. What's your reaction? >> I think we need more software. Software eats the world. And it's, I mean, there's a lot of hardware to chomp in Telco and it's just going to keep eating it and that's just going to accelerate. I think that's where Telco needs to start to build that muscle. They don't have great software capability. They don't have public cloud building capability. And so that's a big up-skilling. That's a new hiring. And I think it's an executive conversation. It's not just an IT thing or just a marketing thing or networking thing. >> I got to chime in here for a second because there are a lot of parallels with how the data center transition has occurred. And what's happening here. We talk about all the time. It was a mainframe, et cetera. There are parallels. >> Danielle: Yeah, yeah. >> And what happened when the data center went to software-defined a whole bunch of hardware was allocated to run all the software-defined stuff. It wasn't built for that. >> Danielle: Yeah. >> But the cloud, what you guys are doing with Totogi and taking advantage of AWS's is Nitro and Graviton. That's built to be software-defined. >> Correct. >> And so the Telcos are going to go through the same thing. If they just virtualize, they're going to say, oh wow, we're wasting 30% of our power, our compute power on just supporting all this software-defined stuff, because it wasn't built for that, but the cloud is built for that. >> Danielle: Yeah. >> And that is going to be a huge difference. >> And I keep trying to make this distinction. And I think people in Telco still don't get this about the public cloud. They think of it as a place. It's a place to run a workload. And that tells me, they think of it as infrastructure. They think of it as servers still like, well, I'm going to run into my closet or AWS's closet. I'm like, and I was just having a conversation about this with this senior person from GSMA. I'm like, it's actually about the software that's there. It's about the databases they're building and the analytics and the AI and the ML but they let you buy by the minutes or by the API call. And that is my, like you need to think about that because it's mind-blowing. It's a totally different way to think. >> And you're totally right. I'm just going to, again, give you props on this. I've had many one-on-one with Andy Jassy for the past seven years for exclusives, but over the years it's been consistent. Each platform lifting and shift wasn't the end game. Okay. Replatforming in the cloud, certainly a great advantage, a great starting point. It was the refactoring. And that's why you see Amazon Web Services, for instance, keep adding more services 'cause that's the model. >> Danielle: Yeah. >> They keep offering more goodness so that the businesses could refactor, not just replatform. >> Danielle: Yeah. >> And that's what you're getting at. I think with the AI and machine learning, where you start getting into these new use cases, but why I couldn't do that before. >> Danielle: Right, right. >> This is going to be a huge game changer. >> Well, Forrest Brazeal. A great guy, a cloud guru wrote a great blog called a lift-and-shift is a ticking time bomb. And it's a great start to get your stuff over there. It forces your team to start to interact with like an AWS or GCP in a real way. Like now they, they got to use it. You take it away and I'm like, but once you move it, you got to re-factor. You got to rewrite. And then that's why it's a ticking time bomb. You got to get, move it over and get going. >> Danielle Royston, DR, Digital Revolution of you are one. You got it here, Telco DR. And this has been a great experience for theCUBE, as we get back to business with real life events and virtual. For the folks who couldn't make it here, Barcelona is still a great city. Obviously a great place to come and the events will be back. They'll be hybrid. They'll be different. Certainly, theCUBE will wait double them down, but, we've got a great video. I want to share for the group, the Barcelona and Cloud City. This is a montage of what it's like here and a little experiential video. So take it away and run that video. (upbeat techno music) >> Hi, I'm Katie Goldfinch, here in Barcelona for an action packed Day Two at TelcoDR's Cloud City. This morning, the focus was firmly on DR. and her MWC keynote, which told Telco execs in no uncertain terms that now is the time to act on embracing public cloud. Back in Cloud City content ruled the day with both theCUBE and Cloud City live stages, hosting public cloud, thought-leaders covering a wide range of topics to educate and inspire attendees. And in the beautiful space of Cloud City, the excitement grew throughout the day as we streamed MWC's exclusive keynotes from Elon Musk and preparations got underway for tonight's star performer, Jon Bon Jovi. (upbeat techno music) Wow! What an amazing day from groundbreaking keynotes into space and back to a star studded performance. Don't forget, you can catch up on anything you missed and join us for the rest of the week at cloudcity.telcodr.com or following #cloudcity. (upbeat techno music) >> Okay, we're back. That was great look at what's going on here in Cloud City. This next video, DR, you're going to love this. Your keynote highlights and some Bon Jovi highlights, which by the way, was the most epic thing. People were packed. >> Dave: It was exciting. >> Place was packed. It had the security clicking people, counting all the people, people are standing back. All the people from their booths are all coming in to watch. >> Dave: He was pumped. >> Let's take a look at this awesome highlight video from yesterday. (upbeat techno music) (upbeat techno music) >> Okay, we're back at theCUBE. Dave, that was a highlight reel yesterday. DR has got some action on stage, great messaging, revolution, digital revolution. >> You know your comment about how you think like Elon Musk. That's an inspiration from it. I mean, what a lot of people don't know is when you look at autonomous vehicles, remember you're driving down Palo Alto, you see one of those lidar things. He's doing away with lidars, it's too expensive. It's $7,000. He's taking it with cheap cameras and software down to a couple of hundred bucks per vehicle. >> Danielle: Wow. >> That's the way he thinks. And you're doing the same thing to Telco. >> Danielle: I am. I am I'm trying to change Telco. I mean, he's changing the world. He might be one of the most important humans on Earth right now. I don't think I'm exactly that level, but I'm trying to become a really important person in Telco. We have this great message. I think it's going to help Telcos to get better businesses. And I think it's a great idea. >> For the folks out there watching, what is that big change? If you're going to drive down this Cloud City street, main street of Cloud City and just all about Cloud. Because public clouds here, it's going to become hybrid, dynamics, operating models are changing. What is the key message that you'd like to send? >> I think all of the software in Telco needs to be rewritten. And that's how many millions of lines of code is that? And it's going to be shrunk down and put out on public cloud and rewritten using the software Legos of the public cloud. That is a big undertaking. No one's working on it. I'm working on it. I'm doing it. Let's go do it. >> Let's do it. And if you look out a couple of years, what would be a successful, what does checkmate look like in this chess game? >> I'm winning? #winning >> You're opening move is pretty good as we say in chess. >> I mean, I think it, it takes, again, it takes singular focus like Elon Musk on Mars. Someone needs to singularly focus on getting the public cloud and you can't sit there and protect your old business models, your CR revenue, if you're Amdocs. Give that up. When they start to give up their CR revenue to focus on public cloud, then they'll be, okay, there's a worthy adversary out there really focusing on it. >> I mean the late Clayton Christensen had all the same things. Innovator's dilemma. You get stuck here, what do you do? >> Danielle: What do you do? >> You kill your own, you eat your own to bring in the new, I mean, all these things are going on. This is a huge test. >> And to be willing to burn some boats. >> I think it's transparency, simplicity, and the consumer saying, hey, this is a great experience. That's the Tel sign. >> Danielle: Yeah. >> And that's what we're going to see over this next decade. >> Plus consumers love their Telco. I can't wait for that. I want to love my Telco. >> Dave: Like you love Netflix. >> Yes, exactly. >> DR, we love you because you've got a bold vision. You're putting it out there and you're driving it. You're walking the talk. Congratulations. And again, Cloud City's a home run. >> Awesome. >> Great success. Thanks for having theCUBE. >> Thank you guys. As always super fun. Great day. >> Okay. >> CUBE's coverage here. And remember, we're here getting all the action and it's all going to go online after a synchronous consumption. But right now, it's all about Mobile World Congress and Cloud City. This is the action. And of course, Adam in Cloud City Studio is waiting for us and he's going to take it from here.

>>from around the globe. It's the Cube with digital coverage of biz ops Manifesto unveiled Brought to you by Biz Ops Coalition >>Hey, Welcome back, everybody. Jeffrey here with the Cube. Welcome back to our ongoing coverage of the biz. Opps manifesto Unveil Something has been in the works for a little while. Today's a formal unveiling and we're excited to have three of the core founding members of the manifesto Authors of the manifesto, if you will joining us again. We've had them all on individually. Now we're gonna have a great power panel. First up, we have met Kirsten returning. He's the founder and CEO of Task Top make good to see again. Where you dialing in from? >>Great to see you again, Jeff. I'm dialing from Vancouver, Canada. >>Vancouver, Canada. One of my favorite cities in the whole wide world. Also, we've got Tom Davenport coming from across the country. He's a distinguished professor and author from Babson College. Tom, great to see. And I think you said you're a fund Exotic place on the East Coast. >>Falmouth, Massachusetts, on Cape Cod. >>Nice. Great to see you again. And also joining surge. Lucio. He is the VP and general manager Enterprise Software division at Broadcom Surge. Great to see you again. Where you coming in from? >>From Boston. Right next to kick off. Terrific. >>So welcome back, everybody again. Congratulations. On this day I know it's It's been a lot of work to get here for this unveil, but let's just jump into it. Biz Opps Manifesto What was the initial reason to do this? And how did you decide to do it in a kind of a coalition way, bringing together a group of people versus just making it an internal company, uh, initiative that, you know, you could do better stuff within your own company Surge. Why don't we start with you? >>Yeah, so? So I think we are really a critical juncture, right? Many large enterprises are basically struggling with their digital transformation. In fact, many recognized that the the Business Society collaboration has been one of the major impediments to drive that kind of transformation. And if we look at the industry today, many people or whether we're talking about vendors or system integrators, consulting firms are talking about the same kind of concepts but using very different language. And so we believe that bringing a lot these different players together assed part of the coalition and formalizing, uh, basically the core principles and values in a busy office manifesto. We can really start to have kind of a much bigger movement where we can all talk about kind of the same concepts. And we can really start to provide kind of a much better support for large organizations to transform eso, whether it is technology or services or trading. I think that that's really the value of bringing all of these players together >>and Mick to you. Why did you get involved in this in this effort? >>So I've been closely involved the actual movement since it started two decades ago with that manifesto, and I think we got a lot of improvement at the team level. And I think, as started just noted, we really need to improving. At the business level, every companies trying to become a software innovator trying to make sure that they can pick them, adapt quickly in the changing market economy and what everyone's dealing with in terms of needing to deliver value to customers. Sooner. However, agile practices have really focused that these metrics these measures and understanding processes that help teams be productive. Those things now need to be elevated to the business as a whole, and that just hasn't happened. Organizations are agile. Transmissions are actually failing because they're measuring activities and how they're becoming more agile. Have teams air functioning, not how much quickly they're delivering value to the customer. So we need to now move. Asked that. And that's exactly what the buzz off there's also manifested. Provides, >>right? Right And Tom to you. You've been covering tech for a very long time. You've been looking at really hard challenges and and a lot of work around analytics and data on data evolution. So there's a definitely a data angle here. I wonder if you kind of share your perspective of of what you got excited Thio to sign on to this manifesto? >>Sure. Well, I have. You know, for the past 15 or 20 years, I've been focusing on Data Analytics and AI. But before that, I was a process management guy and a knowledge management guy and a in general. I think, you know, we've just kind of optimized at too narrow a level. Whether you're talking about agile or Dev ops or, um, ml ops. Any of these kind of obs oriented movements, we're making individual project, um, performance and productivity better, But we're not changing the business effectively enough. And that's the thing that appealed to me about the biz ops idea that we're finally creating a closer connection between what we do with technology and how it changes the business and provides value to it. >>That's great, uh, surge back to you, right? I mean, people have been talking about digital transformation for a long time, and it's been, you know, kind of trucking along. And then Cove it hit, and it was instant lights, which everyone's working from home. You've got a lot more reliance on your digital tools, digital communication both within your customer base and your partner base, but also then you're employees. When if you could share how that really pushed this all along, right, because now suddenly the acceleration of digital transformation is higher. Even more importantly, you've got much more critical decisions to make into what you do next. So kind of your portfolio management of projects has been elevated significantly. When maybe revenues are down on. Do you really have Thio prioritize and get it right? >>Yeah. I mean, I'll just start by quoting city An Adele basically recently said that there's bean two years of digital transformation just last two months, and in many ways that's true. Um, but But yet when we look at large enterprises, they're still struggling with kind of a changes in culture that they really need Thio drive to be able to describe themselves. And not surprisingly, you know, when we look at certain parts of the industry, you know, we see some things which are very disturbing, right. About 40% of the personal loans today are being origin dated by Finn tax of a like of Sophie or or ah Lendingclub, right, Not your traditional brick and worked for bank. And so the while there is kind of ah, much more of an appetite, and it's it's more of a survival type driver these days. The reality is that in order for these large enterprises to truly transform and engage on these digital transformation, they need to start to really aligned the business 90 you know, in many ways and make cover that actually really emerge from the court desire to really improve software predictability, but we've which we have really missed is all the way. Start to aligning the software predictability to business predictability and to be able to have continuously continuous improvement and measurement off business outcomes. So by lining, but of this dis kind of inward metrics that I t is typically being using to business outcomes, we think we can start to really help different stakeholders within the organization to collaborate. So I think there is more than ever. There is an imperative to act now, um, and and results. I think it's kind of the right approach to drive that kind of transformation, >>right? I want to follow up on the culture comment with Utah because you've talked before about kind of process, flow and process flow throughout a whore, unorganized ation. And, you know, we talk about people process and tech all the time, and I think the tech is the easy part compared to actually changing the people the way they think and then the actual processes that they put in place. It's a much more difficult issue than just a tech issue to get this digital transformation in your organization. >>Yeah, you know, I've always found that the soft stuff the you know, the culture of the behavior of the values is the hard stuff to change and mawr and mawr. We we realized that to be successful with any kind of digital transformation, you have tow change, people's behaviors and attitudes. Um, we haven't made much progress in that area as we might have. I mean, I've done some surveys suggesting that most organizations still don't have data driven cultures, and in many cases, there is a lower percentage of companies that say they have that then did a few years ago. So we're kind of moving in the wrong direction, which means I think that we have to start explicitly addressing that cultural behavioral dimension and not just assuming that it will happen if we if we build a system, you know, if if we build it, they won't necessarily come right, >>right? So I want to go toe to you, Nick, because, you know, we're talking about work flows and flow. Andi, you've written about flow both in terms of, you know, moving things along a process and trying to find bottlenecks, identify bottlenecks which is now even more important again when these decisions are much more critical because you have a lot less ah, wiggle room in tough times. But you also talked about flow from the culture side on the people's side. So I wonder if you could just share your thoughts on, you know, using flow as a way to think about things to get the answers better? >>Yeah, absolutely. And I'll refer back to what Tom just said. If you're optimize, you need to optimize your system. You need to optimize how you innovate and how you deliver value to the business into the customer. Now what we've noticed in the data since that that we've learned from customers value streams, enterprise organizations, value streams is that what's taking six months and to and to deliver that value, the flow is that slow. You've got a bunch of unhappy developers. Unhappy customers, when you're innovating, have so high performing organizations we can measure their intent flow time in days. All of a sudden, that feedback loop the satisfaction your developers measurably goes up. So not only do you have people context switching last year, delivering so much more value to customers at a lower cost because you've optimized for flow rather than optimizing for these thes other approximately six that we use, which is how efficient my annual team. How quickly can we deploy software? Those are important, but they do not provide the value of agility, of fast learning, of adaptability, of the business. And that's exactly what the bishops manifesto pushes your organization to. You need to put in place this new operate model that's based on flow on the delivery of business value and on bringing value to market much more quickly than you were before, >>right? I love that. I'm gonna go back to Utah, him on that to follow up, because I think I don't think people think enough about how they prioritize what they're optimizing for. Because, you know, if you're optimizing for a vs B, you know you could have a very different product that that you kick out. You know, my favorite example with With Clayton Christensen and Innovator's Dilemma talking about the three inch our drive, if you optimize it for power, you know, is one thing. If you optimize it for vibration is another thing, and sure enough, you know they missed it on the Palm because it was the it was the game council which which drove that whole business. So when you're talking to customers and we think we're here with cloud all the time people optimizing for cost efficiency instead of thinking about it as an innovation tool, how do you help them? Kind of rethink and really, you know, forced them to to look at the at the prioritization and make sure they're prioritizing on the right thing is make just that. What do you optimizing for? >>Oh yeah, you have one of the most important aspects of any decision or attempt to resolve a problem in an organization is the framing process. And, um, you know, it's it's a difficult aspect toe of the decision toe frame it correctly in the first place. Um, there. It's not a technology issue. In many cases, it's largely a human issue. But if you frame that decision or that problem incorrectly too narrowly, say, or you frame it as an either or situation when you could actually have some of both, um, it's very difficult for the process toe work out correctly. So in many cases, I think we need to think mawr at the beginning about how we frame this issue or this decision in the best way possible before we charge off and build a system to support it. You know, it's worth that extra time to think. Think carefully about how the decision has been structured. Right? >>Surge. I wanna go back to you and talk about the human factors because we just discussed you could put in great technology. But if the culture doesn't adopt it and people don't feel good about it, you know it's not gonna be successful. And that's going to reflect poorly on the technology. Even if I had nothing to do with it. And you know, when you look at the core values of the best hopes manifesto, you know a big one is trust and collaboration. You know, learn, responded pivot. Wonder if you can share your thoughts on trying to get that cultural shift s so that you can have success with the people or excuse me with the technology in the process and helping customers, you know, take this more trustworthy and kind of proactive position. >>So I think I think at the ground level, it really starts with the realization that we were all different. We come from different backgrounds. Oftentimes we tend Thio. Blame the data. It's not uncommon my experience that we spend the first, you know, 30 minutes of any kind of one hour the conversation to debate the ability of the data on DSO, one of the first kind of probably manifestations that we've had. Our revelations as we start to engage with our customers is by just exposing high Fidelity data set two different stakeholders from their different lands. We start to enable these different stakeholders to not debate the data, but that's really collaborate to find a solution. So in many ways, when when when we think about kind of the types of changes were trying Thio truly affect around data driven decision making? It's all about bringing the data in context the context that is relevant and understandable for different stakeholders. Whether we're talking about an operator developed for a business analyst, so that's that's the first thing. The second layer, I think, is really to provide context to what people are doing in their specific silo. So I think one of the best examples I have is if you start to be able to align business k p i. Whether you are accounting, you know, with sales per hour or the engagement of your users on your mobile application, whatever it is, if you start to connect that k p I business K p I to the key piece that developers might be looking at, whether it is now the number of defects or velocity or whatever over metrics that they are used to to actually track, you start to be able to actually contextual eyes in what we are. The affecting, basically metric that that is really relevant. And what we see is that this is a much more systematic way to approach the transformation than say, You know, some organizations kind of creating some of these new products or services or initiatives to to drive engagement, right? So, you know, if you look at zoom, for instance, Zoom giving away, it's service thio education is all about. I mean, there's obviously a marketing aspect in there, but it's it's fundamentally about trying to drive also the engagement of their own teams and because now they're doing something for good, and many organizations are trying to do that. But you only can do this kind of things in a limited way. And so you really want to start to rethink? Oh, you connect everybody kind of business objective fruit data. And I always start to get people to stare at the same data from their own lands and collaborating on the data. Right? >>Right. That's good. Uh, Tom, I want to go back to you. You've been studying I t for a long time writing lots of books and and getting into it. Um, Why now? You know what? Why now? Are we finally aligning business objectives with objects? You know, why didn't this happen before? And, you know, what are the factors that are making now? The time for this. This this move with the with the biz ops. >>Well, in much of the past, I t waas sort of a back office related activity. You know, it was important for, um, producing your paychecks and, uh, capturing the customer orders, but the business wasn't built around it. Now, every organization needs to be a software business of data business. A digital business. The anti has been raised considerably. And if you aren't making that connection between your business objectives and the technology that supports it. You run a pretty big risk of, you know, going out of business or losing out to competitors. Totally so. And even if you're in a new industry that hasn't historically been terribly, um, technology oriented customer expectations flow from, you know, the digital native companies that they work with to basically every industry. So you're compared against the best in the world. So we don't really have the luxury anymore of screwing up our I T projects or building things that don't really work for the business. Um, it's mission critical that we do that well, almost every time, >>right. And I just I just wanna fall by that time, in terms of the you've talked extensively about kind of these evolutions of data analytics, from artisanal stage to the big data stage, the data economy stage the ai driven stage. What I find interesting about all the stages you always put a start date. You never put it in date. Um, so you know, is the is the big data. I'm just gonna use that generically moment in time. Finally, here. Where were, you know, off mahogany row with the data scientists, But actually could start to see the promise of delivering the right insight to the right person at the right time to make that decision. >>Well, I think it is true that in general, these previous stages never seem to go away. The three artisanal stuff is still being done, but we would like for less and less of it to be artisanal. We can't really afford for everything to be artisanal anymore. It's too labor and time consuming to do things that way. So we shift Mawr and Mawr of it to be done through automation and be to be done with a higher level of productivity. And, um, you know, at some point maybe we we reached the stage where we don't do anything artisanal e anymore. I'm not sure we're there yet, but, you know, we are We are making progress, >>right? Right. And make back to you in terms of looking at agile because you're you're such a student of agile. When when you look at the opportunity with biz ops, um, and taking the lessons from agile, you know what's been the inhibitor to stop this in the past. And what are you so excited about? you know, taking this approach will enable >>Yeah, I think both surgeon Tom hit on this. Is that in agile? What's happened is that we've been, you know, measuring tiny subsets of the value stream, right? We need to elevate the data's there, developers air working on these tools of delivering features. The foundations for for great culture are there. I spent two decades as a developer, and when I was really happy when I was able to deliver value to customers, the quicker is able to do that. The fewer impediments are in my way, the quicker was deployed and running the cloud, the happier I waas and that's exactly what's happening if we could just get the right data elevated to the business, not just to the agile teams, but really these values of ours are to make sure that you've got these data driven decisions with meaningful data that's oriented and delivering value to customers. None of these legacies that Tom touched on, which has cost center metrics from a nightie, came from where for I t being a cost center and something that provided email on back office systems. So we need thio rapidly shift to those new, meaningful metrics, their customer and business centric. And make sure that every development organization is focused on those as well as the business itself that we're measuring value. And they were helping that value flow without interruption. >>I love that because if you don't measure it, you can't improve on it. And you gotta but you gotta be measuring the right thing. So, gentlemen, thank you again for for your time. Uh, congratulations on the on the unveil of the biz ops manifesto and bringing together this coalition of industry experts to get behind this. And, you know, there's probably never been a more important time than now to make sure that your prioritization is in the right spot. And you're not wasting resource is where you're not gonna get the r. O. I. So, uh, congratulations again. And thank you for sharing your thoughts with us here on the Cube. Thank >>you. All >>right, So we have surged. Tom and Mick. I'm Jeff. You're watching the Cube. It's a biz ops manifesto unveiled. Thanks for watching. We'll see you next time. Yeah,

>>from around the globe. It's the Cube with digital coverage of biz ops Manifesto unveiled Brought to you by Biz Ops Coalition >>Hey, welcome back, everybody. Jeffrey here with the Q. Come to you from our Palo Alto studios today for a big big reveal. We're excited to be here. It's the biz. Opps manifesto, unveiling things been in the works for a while and we're excited. Have our next guest one of the really the powers behind this whole effort. And he's joining us from Boston. It's surge Lucio, the vice president and general manager Enterprise software division that Broadcom Serge, Great to see you. >>Good to see. Oh, absolutely. So you've been >>in this business for a very long time? You've seen a lot of changes in technology. What is the biz Ops manifesto? What is this coalition all about? Why do we need this today in in 2020? >>Yeah, so? So I've been in this business for close to 25 years, writes about 25 years ago, the agile manifesto was created, and the goal of the actual manifesto was was really to address the uncertainty around software development and the inability to predict the effort to build software. And if you if you roll that kind of 20 years later and if you look at the current state of the industry, the Product Project Management Institute estimates that we're wasting about a million dollars every 20 seconds in digital transformation initiatives that do not deliver on business results. In fact, we we recently served, uh, the number of executives in partnership with Harvard Business Review and 77% off. Those executives think that one of the key challenges that they have is really at the collaboration between business and I t. And that that's been kind of a case for almost 20 years now. Eso the key challenge we're faced with is really that we need a new approach. And many of the players in the industry, including ourselves, have been using different terms. Right? Some are. We are talking about value stream management. Some are talking about software delivery management. If you look at the site reliability engineering movement, in many ways it embodies a lot of this kind of concepts and principles. So we believe that it became really imperative for us to crystallize around kind of one concept and so In many ways, the Bezos concept and the bazaars manifesto are out, bringing together a number of ideas which have been emerging in the last five years or so and defining the key values and principles to finally helped these organizations truly transform and become digital businesses. And so the hope is that by joining our forces and defining kind of key principles and values, we can help kind of the industry not just by, you know, providing them with support, but also tools and consulting that is required for them to truly achieve that kind of transformation, that everybody's >>right, right? So co vid Now we're six months into it, approximately seven months into it. Um, a lot of pain, a lot of bad stuff still happening. We've got a ways to go. But one of the things that on the positive side, right and you've seen all the memes and social media is a driver of digital transformation and a driver of change. Because we have this light switch moment in the middle of March and there was no more planning, there was no more conversation. You suddenly got remote. Workforce is everybody's working from home, and you gotta go, right, So the reliance on these tools increases dramatically. But I'm curious, you know, kind of short of the beginnings of this effort and short of kind of covert, which, you know, came along unexpectedly. I mean, what were those inhibitors? Because we've been making software for a very long time. Write the software development community has has adopted kind of rapid change and and iterative delivery and and sprints what was holding back the connection with the business side to make sure that those investments were properly aligned with outcomes. >>Well, so So that you have to understand that I ts is kind of its own silos. And traditionally it has been treated as a cost center within large organizations and not as a value center. And so as a result, kind of the traditional dynamic between the I t. And the business is basically one of a kind of supplier to to kind of a business on. Do you know if you could go back? Thio? I think Elon Musk a few years ago, basically, at these concepts, off the machines to build the machines and you went as far as saying that the machines or the production line is actually the product, so meaning that the core of the innovation is really about building kind of the engine to deliver on the value. And so, in many ways, way have missed on this shift from, um, kind of I t becoming this kind of value center within the enterprises and any told about culture now culture is is the sum total of behaviors and the realities that if you look at the i t, especially in the last decade with the agile with develops with hybrid infrastructures, it's it's way more volatile today than it was 10 years ago. And so the when you start to look at the velocity of the data, the volume of data, the variety of data to analyze kind of the system, um, it's very challenging for I t. To actually even understand and optimize its own processes, let alone to actually include business as kind of an integral part of kind of a delivery chain. And so it's both kind of a combination off culture which is required a za well as tools, right to be able to start to bring together all these data together and then given the volume variety velocity of the data. We have to apply some core technologies which have only really, truly emerging last 5 to 10 years around machine learning and knowledge. And so it's really kind of a combination of those freaks which are coming together today. Truly, organizations get to the next level, >>right? Right. So let's talk about the manifesto. Let's talk about the coalition, the Biz Ops Coalition. I just like that you put down these really simple you know, kind of straightforward core values. You guys have four core values that you're highlighting, you know, business outcomes over individual projects and outputs, trust and collaboration over side load teams and organizations, data driven decisions. What you just talked about, you know, over opinions and judgment on learned, responded Pivot. I mean, surgery sounds like pretty basic stuff, right? I mean, aren't isn't everyone working to these values already? And I think you touched on it on culture, right? Trust and collaboration, data driven decisions. I mean, these air fundamental ways that people must run their business today or the person that's across the street that's doing it is gonna knock him right off the block. >>Yeah, so that's very true. But so I'll mention the novel survey. We need, uh, think about six months ago and twist in partnership with an industry analyst, and we serve it again. The number of 80 executives to understand how many were tracking business outcomes somebody you have, the software executives I T executives were tracking business outcomes, and the there were. Less than 15% of these executives were actually tracking the outcomes of the software delivery. And you see that every day, right? So in my own teams, for instance, we've bean adopting a lot of these core principles in the last year or so, and we've uncovered that 16% of our resource is we're basically aligned around initiatives which were not strategic for us. I take, you know, another example. For instance, one of our customers in the airline industry uncovered, for instance, that a number of that they had software issues that led to people searching for flights and not returning any kind of availability. And yet, you know, the I T teams whether its operations software involvement were completely oblivious to that because they were completely blindsided to it. And so the connectivity between the in words metrics that Turkey is using, whether it's database I, time cycle, time or whatever metric we use in I t are typically completely divorced from the business metrics. And so at its core, it's really about starting to align the business metrics with with the the software delivered change. Right, this, uh, this system, which is really a core differentiator for these organizations. It's about connecting those two things and and starting Thio infuse some of the actual culture and principles. Um, that's emerged from the software side into the business side. Of course, the lien movement and over movements have started to change some of these dynamics on the business side. And and so I think this thesis is the moment where we were starting to see kind of the imperative to transform. Now Cuvee the obviously has been a key driver for that. The the technology is right to start to be able to leave data together and really kind of also the cultural shifts through agile fruit develops through the SRE movement, fueling business transformation. All of these things are coming together and that are really creating kind of conditions. For the Bezos Manifesto to exist. >>So, uh, Clayton Christensen, great hard professor innovator's dilemma might still my all time favorite business books, you know, talks about how difficult it is for in comments to react to to disruptive change, right, because they're always working on incremental change because that's what their customers are asking for. And there's a good our ally when you talk about, you know, companies not measuring the right thing. I mean, clearly, I t has some portion of their budget that has to go to keeping the lights on, right, that that's always the case. But hopefully that's a an ever decreasing percentage of their total activity. So, you know what should people be measuring? I mean, what are kind of the new metrics? Um, in biz ops that drive people to be looking at the right things, measuring the right things and subsequently making the right decisions investment decisions on whether they should do, you know, move Project a along or Project B. >>So there are really two things, right? So So I think what you are talking about this portfolio management, investment management, right and which, which is a key challenge, right in my own experience, right driving strategy or large scale kind of software organization for years. It's very difficult to even get kind of a base data as to who is doing what. Uh, I mean, some of our largest customers were engaged with right now are simply trying to get a very simple answer, which is how many people do I have, and that specific initiative at any point in time and just tracking that information is extremely difficult. So and and again, back to Product Project Management Institute, they have estimated that on average, I two organizations have anywhere between 10 to 20% of their resource is focused on initiatives which are not strategically aligned. So so that's one dimensional portfolio management. I think the key aspect, though that we are we're really keen on is really around kind of the alignment of the business metrics to the ICTY metrics eso I'll use kind of two simple examples, right and my background is around quality and I have always believed that fitness for purpose is really kind of a key, um, a philosophy, if you will. And so if you start to think about quality is fitness for purpose, you start to look at it from a customer point of view, right? And fitness for purpose for core banking application or mobile application are different, right? So the definition of a business value that you're trying to achieve is different on DSO the And yet if you look at our I t operations are operating there are using kind of the same type of kind of inward metrics like a database off time or a cycle time or what is my point? Velocity, right? And s o the challenge really is this inward facing metrics that the I t. Is using which are divorced from ultimately the outcome. And so, you know, if I'm if I'm trying to build a poor banking application, my core metric is likely going to be up time, right? If I'm if I'm trying to build a mobile application or maybe a social mobile app, it's probably going to be engagement. And so what you want is for everybody across I t to look at these metric and what part of the metrics withing the software delivery chain which ultimately contribute to that business metric in some cases, cycle time, maybe completely relevant. Right again. My core banking up. Maybe I don't care about cycle time. And so it's really about aligning those metrics and be able to start to differentiate. Um, the key challenge you mentioned around the around the disruption that we see is or the investors is. Dilemma now is really around the fact that many idea organizations are essentially applying the same approaches for innovation right for basically scrap work, Then they would apply to kind of over more traditional projects. And so, you know, there's been a lot of talk about to speed I t. And yes, it exists. But in reality are are really organizations truly differentiating out of the operate their their projects and products based on the outcomes that they're trying to achieve? And and this is really where bizarre is trying to affect. >>I love that. You know, again, it doesn't seem like brain surgery, but focus on the outcomes right and and it's horses for courses. As you said this project, you know what you're measuring and how you define success isn't necessarily the same as it is on this other project. So let's talk about some of the principles we talked about the values, but you know I think it's interesting that that that the bishops coalition, you know, just basically took the time to write these things down, and they don't seem all that super insightful. But I guess you just got to get him down and have them on paper and have it in front of your face. But I want to talk about, you know, one of the key ones which you just talked about, which is changing requirements right and working in a dynamic situation, which is really what's driven. You know this, the software to change and software development because, you know, if you're in a game app and your competitors comes out with a new blue sword, you've got to come out with a new blue swords. So whether you have that on your compound wall, we're not. So it's It's really this embracing of the speed of change and and and making that you know the rule, not the exception. I think that's a phenomenon. And the other one you talked about his data right and that today's organizations generate more data than humans can process. So informed decisions must be generated by machine learning and ai and you know and the big data thing with a dupe you know, started years ago. But we are seeing more and more that people are finally figuring it out that it's not just big data on It's not even generic machine learning artificial intelligence. But it's applying those particular data sets and that particular types of algorithms to a specific problem to your point, to try to actually reach an objective. Whether that's, you know, increasing the your average ticket or, you know, increasing your check out rate with with with shopping carts that don't get left behind and these types of things. So it's a really different way to think about the world in the good old days, probably when you got started, when we had big Giant you know, M R D s and P R. D s and sat down and coded for two years and and came out with a product release and hopefully not too many patches subsequently to that. Yeah, >>it's interesting right again, back to one of these service that we did with about 600 the ICTY executives and we we purposely designed those questions to be pretty open. Andi and one of them was really wrong requirements, and it was really around. Kind of. What is the best approach? What is your preferred approach towards requirements? And if I remember correctly, Over 80% of the ICTY executives said that the best approach their preferred approach is for requires to be completely defined before self for the bombing starts, let me pause there. We're 20 years after the agile manifesto, right, and for 80% of these idea executives to basically claimed that the best approach is for requires to be fully baked before solved before software development starts basically shows that we still have a very major issue again. Our apotheosis in working with many organizations is that the key challenges really the boundary between business and I t. Which is still very much contract based. If you look at the business side, they basically are expecting for I t deliver on time on budget, Right? But what is the incentive for I t to actually deliver on the business outcomes, right? How often is I t measured on the business outcomes and not on S L. A or on a budget secretary, and so that that's really the fundamental shift that we need to. We really need to drive up to send industry andi way. Talk about kind of this dis imperative for organizations to operate. That's one. And back to the, you know, various doors still, Um, no. The key difference between these large organization is really kind of a. If you look at the amount of capital investment that they can put into pretty much anything, why are they losing compared Thio? You know, startups. What? Why is it that more than 40% off personal loans today are issued not by your traditional brick and mortar banks, but by start ups? Well, the reason, Yes, it's the traditional culture of doing incremental changes, not disrupting ourselves, which Christenson covered at length. But it's also the inability to really fundamentally change kind of dynamic between business I t and partner, right, to to deliver on a specific business. All >>right, I love that. That's a great That's a great summary and in fact, getting ready for this interview. I saw you mentioning another thing where you know the problem with the agile development is that you're actually now getting mawr silos because you have all these autonomous people working you know, kind of independently. So it's even harder challenge for for the business leaders toe, as you said to know what's actually going on. But But, sir, I want to close um, and talk about the coalition eso clearly These are all great concepts, these air concepts. You want to apply to your business every day. Why the coalition? Why, you know, take these concepts out to a broader audience, including your competition and the broader industry to say, Hey, we as a group need to put a stamp of approval on these concepts. These values these principles. It's >>so first, I think we we want everybody to realize that we are all talking about the same things, the same concepts e think we were all from our own different vantage point, realizing that things have to change and again back to you know, whether it's value stream management or site reliability, engineering or biz Opps we're all kind of using slightly different languages on DSO. I think one of the important aspects of these apps is for us, all of us, whether we're talking about consulting actual transformation experts, whether we're talking about vendors right to provide sort of tools and technologies or these larger enterprises to transform for all of us to basically have kind of a reference that lets us speak around kind of in a much more consistent way. The second aspect is for to me is for these concepts to start to be embraced not just by us or trying or vendors, um, system integrators, consulting firms, educators, spot leaders but also for some of our own customers to start to become evangelists of their own in the industry. So we are. Our objective with the coalition is to be pretty, pretty broad, Um, and our hope is by by starting to basically educate our joint customers or our partners that we can start to really foster disbelievers and and start to really change some of dynamics. So we're very pleased that if you look at what some of the companies which have joined the the manifesto eso, we have vendors such as stashed up or advance or pager duty, for instance, or even planned you one of my direct competitors but also fought leaders like Tom Davenport or or Cap Gemini or smaller firms like Business Agility Institute or Agility Elf on DSO our goal really is to start to bring together. For three years, people have bean LP. Large organizations do digital transformation. Vendors were providing the technologies that many of these organizations used to deliver all these digital transformation and for all of us to start to provide the kind of education, support and tools that the industry need. >>That's great search. And, you know, congratulations to you and the team. I know this has been going on for a while putting all this together, getting people to sign onto the manifesto of putting the coalition together and finally today getting to unveil it to the world in a little bit more of a public opportunity. So again, you know, really good values, really simple principles, something that that shouldn't have to be written down. But it's nice because it is. And now you can print it out and stick it on your wall. So thank you for for sharing the story. And again, congrats to you on the team. >>Thank you. Thank you. Appreciate it. >>My pleasure. Alright, He surge If you wanna learn more about the bizarre manifesto goto biz Opps manifesto dot or greed it and you can sign it and you can stay here from or coverage on. The Cube of the bizarre manifesto unveiled. Thanks for watching. See you next time.

>> Announcer: From around the globe, it's theCUBE with digital coverage of BizOps Manifesto Unveiled, brought to you by BizOps Coalition. >> Hey, welcome back, everybody. Jeff Frick here with theCUBE for our ongoing coverage of the big unveil. It's the BizOps Manifesto Unveil and we're going to start that again. >> From the top. >> Three. >> Crew Member: Yeah, from the top. Little bleep bleep bleep, there we go. >> Manifesto. >> Crew Member: Second time's the charm, coming to you in five, four, three, two. >> Hey, welcome back, everybody. Jeff Frick here with theCUBE coming to you from our Palo Alto studios today for a big, big reveal. We're excited to be here. It's the BizOps Manifesto Unveiling. Things have been in the works for a while and we're excited to have our next guest, one of the really the powers behind this whole effort and he's joining us from Boston. It's Serge Lucio, the Vice President and General Manager, Enterprise Software Division at Broadcom. Serge, great to see you. >> Good to see you, Jeff, Glad to be here. >> Absolutely. So, you've been in this business for a very long time, you've seen a lot of changes in technology. What is the BizOps Manifesto? What is this coalition all about? Why do we need this today in 2020? >> Yeah, so I've been in this business for close to 25 years, right? So, about 20 years ago, the Agile Manifesto was created. And the goal of the Agile Manifesto was really to address the uncertainty around software development and the inability to predict the effort to build software. And if you roll back kind of 20 years later and if you look at the current state of the industry, the Project Management Institute estimates that we're wasting about a million dollars every 20 seconds in digital transformation initiatives that do not deliver on business results. In fact, we recently surveyed a number of executives in partnership with Harvard Business Review and 77% of those executives think that one of the key challenges that they have is really at the collaboration between business and IT. And that's been kind of the case for almost 20 years now. So, the key challenge we're faced with is really that we need a new approach. And many of the players in the industry, including ourselves, have been using different terms, right? Some are talking about value stream management, some are talking about software delivery management. If you look at the Site Reliability Engineering movement, in many ways, it embodies a lot of these kind of concepts and principles. So, we believe that it became really imperative for us to crystallize around that one concept. And so, in many ways, the BizOps concept and the BizOps Manifesto are around bringing together a number of ideas which have been emerging in the last five years or so and defining the key values and principles to finally help these organizations truly transform and become digital businesses. And so, the hope is that by joining our forces and defining the key principles and values, we can help the industry, not just by providing them with support, but also the tools and consulting that is required for them to truly achieve the kind of transformation that everybody is seeking. >> Right, right. So, COVID, now, we're six months into it approximately, seven months into it, a lot of pain, a lot of bad stuff still happening, we've got two ways to go. But one of the things that on the positive side, right, and you seen all the memes in social media is a driver of digital transformation and a driver of change 'cause we had this light switch moment in the middle of March and there was no more planning, there was no more conversation, you suddenly got remote workforces, everybody's working from home and you got to go, right? So, the reliance on these tools increases dramatically. But I'm curious kind of short of the beginnings of this effort and short of kind of COVID which came along unexpectedly, I mean, what were those inhibitors 'cause we've been making software for a very long time, right? The software development community has adopted kind of rapid change and iterative delivery and sprints, what was holding back the connection with the business side to make sure that those investments were properly aligned with outcomes? >> Well, you have to understand that IT is kind of its own silos and traditionally, IT has been treated as a cost center within large organizations and not as a value center. And so as a result, kind of the traditional dynamic between IT and the business is basically one of kind of supplier up to kind of a business. And if you go back to I think Elon Musk a few years ago basically had these concepts of the machines to build the machines and he went as far as saying that the machines or the production line is actually the product. So, meaning that the core of the innovation is really about building kind of the engine to deliver on the value. And so, in many ways, we have missed on this shift from kind of IT becoming this kind of value center within the enterprises. And it's all about culture. Now, culture is the sum total of behaviors and the reality is that if you look at IT, especially in the last decade, with Agile, with DevOps, with hybrid infrastructures, it's way more volatile today than it was 10 years ago. And so, when you start to look at the velocity of the data, the volume of data, the variety of data to analyze the system, it's very challenging for IT to actually even understand and optimize its own processes, let alone to actually include business as kind of an integral part of a delivery chain. And so, it's both kind of a combination of culture, which is required, as well as tools, right? To be able to start to bring together all these data together. And then, given the volume, variety, velocity of the data, we have to apply some core technologies, which have only really truly emerged in the last five to 10 years around machine learning and analytics. And so, it's really kind of a combination of those things, which are coming together today to really help organizations kind of get to the next level. >> Right, right. So, let's talk about the manifesto. Let's talk about the coalition, the BizOps Coalition. I just like that you put down these really simple kind of straightforward core values. You guys have four core values that you're highlighting, business outcomes over individual projects and outputs, trust and collaboration over siloed teams and organizations, data driven decisions, what you just talked about, over opinions and judgment and learn to respond and pivot. I mean, Serge, these sounds like pretty basic stuff, right? I mean, isn't everyone working to these values already? And I think you touched on it, on culture, right? Trust and collaboration, data driven decisions. I mean, these are fundamental ways that people must run their business today or the person that's across the street that's doing it is going to knock them right off their block. >> Yeah, so that's very true. So, I'll mention another survey we did I think about six months ago. It was in partnership with an industry analyst. And we surveyed, again, a number of IT executives to understand how many were tracking business outcomes, how many of these software executives, IT executives were tracking business outcomes. And there were less than 15% of these executives who were actually tracking the outcomes of the software delivery. And you see that every day, right? So, in my own teams, for instance, we've been adopting a lot of these core principles in the last year or so. And we've uncovered that 16% of our resources were basically aligned around initiatives which were not strategic for us. I take another example. For instance, one of our customers in the airline industry uncovered, for instance, that a number of... That they had software issues that led to people searching for flights and not returning any kind of availability. And yet, the IT teams, whether it's operations or software development, were completely oblivious to that because they were completely blindsided to it. And so, the connectivity between the inwards metrics that IT is using, whether it's database uptime, cycle time or whatever metric we use in IT, are typically completely divorced from the business metrics. And so, at its core, it's really about starting to align the business metrics with the software delivery chain, right? This system which is really a core differentiator for these organizations. It's about connecting those two things and starting to infuse some of the Agile culture and principles that emerge from the software side into the business side. Of course, the Lean movement and other movements have started to change some of these dynamic on the business side. And so, I think this is the moment where we are starting to see kind of the imperative to transform now, COVID obviously has been a key driver for that. The technology is right to start to be able to weave data together and really kind of also the cultural shifts through Agile, through DevOps, through the SRE movement, through Lean business transformation. All these things are coming together and are really creating kind of conditions for the BizOps Manifesto to exist. So, Clayton Christensen, great Harvard Professor, "Innovator's Dilemma", still my all-time favorite business book, talks about how difficult it is for incumbents to react to disruptive change, right? Because they're always working on incremental change 'cause that's what their customers are asking for and there's a good ROI.' When you talk about companies not measuring the right thing, I mean, clearly, IT has some portion of their budget that has to go to keeping the lights on, right? That's always the case, but hopefully, that's an ever decreasing percentage of their total activity. So, what should people be measuring? I mean, what are kind of the new metrics in BizOps that drive people to be looking at the right things, measuring the right things and subsequently making the right decisions, investment decisions, on whether they should move project A along or project B? >> So, there are really two things, right? So, I think what you were talking about is portfolio management, investment management, right? And which is a key challenge, right? In my own experience, right? Driving strategy or a large scale kind of software organization for years, it's very difficult to even get kind of a base data as to who's doing what. I mean, some of our largest customers we're engaged with right now are simply trying to get a very simple answer, which is, how many people do I have in that specific initiative at any point in time and just tracking down information is extremely difficult. And again, back to the Project Management Institute, they have estimated that on average, IT organizations have anywhere between 10 to 20% of their resources focused on initiatives which are not strategically aligned. So, that's one dimension on portfolio management. I think the key aspect though, that's we're really keen on is really around kind of the alignment of a business metrics to the IT metrics. So, I'll use kind of two simple examples, right? And my background is around quality and I've always believed that fitness for purpose is really kind of a key philosophy, if you will. And so, if you start to think about quality as fitness for purpose, you start to look at it from a customer point of view, right? And fitness for purpose for a core banking application or mobile application are different, right? So, the definition of a business value that you're trying to achieve is different. And yet, if you look at our IT operations are operating, they were using kind of a same type of inward metrics, like a database uptime or a cycle time or what is my point velocity, right? And so, the challenge really is this inward facing metrics that the IT is using which are divorced from ultimately the outcome. And so, if I'm trying to build a core banking application, my core metric is likely going to be uptime, right? If I'm trying to build a mobile application or maybe a social mobile app, it's probably going to be engagement. And so, what you want is for everybody across IT to look at these metric and what are the metrics within the software delivery chain which ultimately contribute to that business metric? In some cases, cycle time may be completely irrelevant, right? Again, my core banking app, maybe I don't care about cycle time. And so, it's really about aligning those metrics and be able to start to differentiate. The key challenge you mentioned around the disruption that we see is or the investor's dilemma is really around the fact that many IT organizations are essentially applying the same approaches for innovation, right? For basically scrap work than they would apply to kind of other more traditional projects. And so, there's been a lot of talk about two-speed IT. And yes, it exists, but in reality, are really organizations truly differentiating how they operate their projects and products based on the outcomes that they're trying to achieve? And this is really where BizOps is trying to affect. >> I love that. Again, it doesn't seem like brain surgery, but focus on the outcomes, right? And it's horses for courses, as you said. This project, what you're measuring and how you define success isn't necessarily the same as on this other project. So, let's talk about some of the principles. We talked about the values, but I think it's interesting that the BizOps coalition just basically took the time to write these things down and they don't seem all that super insightful, but I guess you just got to get them down and have them on paper and have them in front of your face. But I want to talk about one of the key ones, which you just talked about, which is changing requirements, right? And working in a dynamic situation, which is really what's driven the software to change in software development because if you're in a game app and your competitor comes out with a new blue sword, you got to come out with a new blue sword. So, whether you had that on your Kanban wall or not. So, it's really this embracing of the speed of change and making that the rule, not the exception. I think that's a phenomenal one. And the other one you talked about is data, right? And that today's organizations generate more data than humans can process. So, informed decisions must be generated by machine learning and AI. And the big data thing with Hadoop started years ago, but we are seeing more and more that people are finally figuring it out, that it's not just big data and it's not even generic machine learning or artificial intelligence, but it's applying those particular data sets and that particular types of algorithms to a specific problem to your point, to try to actually reach an objective, whether that's increasing your average ticket or increasing your checkout rate with shopping carts that don't get left behind and these types of things. So, it's a really different way to think about the world in the good old days, probably when you guys started when we had big giant MRDs and PRDS and sat down and coded for two years and came out with a product release and hopefully, not too many patches subsequently to that. >> It's interesting, right? Again, back to one of these surveys that we did with about 600 IT executives. And we purposely designed those questions to be pretty open. And one of them was really around requirements. And it was really around kind of what is the best approach? What is your preferred approach towards requirements? And if I remember correctly, over 80% of the IT executives said that the best approach, their preferred approach, is for requirements to be completely defined before software development starts. So, let me pause there. We're 20 years after the Agile Manifesto, right? And for 80% of these IT executives to basically claim that the best approach is for requirements to be fully baked before software development starts, basically shows that we still have a very major issue. And again, our hypothesis in working with many organizations is that the key challenge is really the boundary between business and IT, which is still very much contract-based. If you look at the business side, they basically are expecting for IT to deliver on time on budget, right? But what is the incentive for IT to actually deliver on the business outcomes, right? How often is IT measured on the business outcomes and not on an SLA or on a budget type criteria. And so, that's really the fundamental shift that we really need to drive out as an industry. And, we talk about kind of this imperative for organizations to operate as one. And back to the the "Innovator's Dilemma", the key difference between these larger organization is really kind of a... If you look at the amount of capital investment that they can put into pretty much anything, why are they losing compared to startups? Why is it that more than 40% of personal loans today are issued, not by your traditional brick and mortar banks, but by startups? Well, the reason, yes, it's the traditional culture of doing incremental changes and not disrupting ourselves, which Christensen covered at length, but it's also the inability to really fundamentally change kind of the dynamic between business and IT and partner, right? To deliver on a specific business outcome. >> Right, I love that. That's a great summary and in fact, getting ready for this interview, I saw you mentioning another thing where the problem with the Agile development is that you're actually now getting more silos 'cause you have all these autonomous people working kind of independently. So, it's even a harder challenge for the business leaders, as you said, to know what's actually going on. But Serge, I want to close and talk about the coalition. So clearly, these are all great concepts. These are concepts you want to apply to your business every day. Why the coalition? Why take these concepts out to a broader audience, including your competition and the broader industry to say, "Hey, we as a group need to put a stamp of approval on these concepts, these values, these principles?" >> So first, I think we want everybody to realize that we are all talking about the same things, the same concepts. I think we're all from our own different vantage point realizing that things have to change. And again, back to whether it's value stream management or Site Reliability Engineering or BizOps, we're all kind of using slightly different languages. And so, I think one of the important aspects of BizOps is for us, all of us, whether we're talking about consulting, Agile transformation experts, whether we're talking about vendors, right? To provides kind of tools and technologies or these large enterprises to transform for all of us to basically have kind of a reference that lets us speak around kind of in a much more consistent way. The second aspect, to me, is for these concepts to start to be embraced, not just by us or vendors, system integrators, consulting firms, educators, thought leaders, but also for some of our own customers to start to become evangelists of their own in the industry. So, our objective with the coalition is to be pretty, pretty broad. And our hope is by starting to basically educate our joint customers or partners, that we can start to really foster these behaviors and start to really change some of dynamics. So, we're very pleased that if you look at some of the companies which have joined the manifesto, so we have vendors, such as Tasktop, or Appvance or PagerDuty, for instance, or even Planview, one of my direct competitors, but also thought leaders like Tom Davenport or Capgemini or smaller firms like Business Agility Institute or AgilityHealth. And so, our goal really is to start to bring together thought leaders, people who've been helping large organizations do digital transformation, vendors who are providing the technologies that many of these organizations use to deliver on this digital transformation and for all of us to start to provide the kind of education, support and tools that the industry needs. >> Yeah, that's great, Serge, and congratulations to you and the team. I know this has been going on for a while, putting all this together, getting people to sign on to the manifesto, putting the coalition together and finally today, getting to unveil it to the world in a little bit more of a public opportunity. So again, really good values, really simple principles, something that shouldn't have to be written down, but it's nice 'cause it is and now you can print it out and stick it on your wall. So, thank you for sharing the story and again, congrats to you and the team. >> Thank you, thanks, Jeff, appreciate it. >> My pleasure, all righty, Serge. If you want to learn more about the BizOps Manifesto, go to bizopsmanifesto.org, read it and you can sign it and you can stay here for more coverage on theCUBE of the BizOps Manifesto Unveiled. Thanks for watching, see you next time. (upbeat music)

>> Announcer: From around the globe. It's theCUBE. With digital coverage of BizOps Manifesto Unveiled. Brought to you by BizOps Coalition. >> Hey, welcome back everybody ,Jeff Frick here with theCUBE. Welcome back to our ongoing coverage of the BizOps Manifesto Unveiled. Something has been in the works for a little while. Today's the formal unveiling and we're excited to have three of the core founding members of the manifesto, authors of the manifesto, if you will. And joining us again, we've had them all on individually, now we're going to have a great power panel. First up, we're going to have Mik Kersten returning. He's the founder and CEO of Tasktop. Mik, good to see you again. Where are you dialing in from? >> Great to see you again, Jeff. I'm dialing from Vancouver, Canada. >> Vancouver, Canada. One of my favorite cities in the whole wide world. Also we've got Tom Davenport, coming in from across the country. He's a distinguished professor and author from Babson College. Tom, great to see you. And I think you said you're at a fun exotic place on the East Coast. >> From Massachusetts, Cape Cod. >> Nice, great to see you again. And also joining Serge Lucio. He is the VP and General Manager Enterprise Software Division at Broadcom. Serge, great to see you again, where are you coming in from? >> From Boston right next to Cape Cod. >> Terrific. So welcome back, everybody again. Congratulations on this day. I know it's been a lot of work to get here for this unveil. But let's just jump into it. BizOps Manifesto, what was the initial reason to do this? And how did you decide to do it in a kind of a coalition, way bringing together a group of people versus just making it an internal company initiative that you know, you can do better stuff within your own company? Serge, why don't we start with you? >> Yeah, so I think we were at a really critical juncture, right. Many large enterprises are basically struggling with their digital transformation. In fact, many recognized that the business (indistinct) collaboration has been one of the major impediments to drive that kind of transformation. And if we look at the industry today, many people are, whether we're talking about vendors or system decorators, consulting firms, are talking about the same kind of concepts, but using very different language. And so we believe that bringing all these different players together as part of the coalition and formalizing, basically the core principles and values in a BizOps Manifesto, we can really start to kind of have a much bigger movement where we can all talk about kind of the same concepts and we can really start to provide, could have a much better support for large organizations to transform. So whether it is technology or services or training, I think that's really the value of bringing all of these players together. >> Great. And Mik to you. Why did you get involved in this effort? >> So I've been close and follow the agile movement since it started two decades ago with that manifesto. And I think we got a lot of improvement at the team level and I think as Serge has noted, we really need to improve at the business level. Every company is trying to become a software innovator, trying to make sure that they can pivot that quickly and then changing market economy and what everyone's dealing with in terms of needing to deliver value to customers sooner. However, agile practices have really focused that these metrics, these measures and understanding processes that help teams be productive. Those things now need to be elevated to the business as a whole. And that just hasn't happened. Organizations are actually failing because they're measuring activities and how they're becoming more agile, how teams are functioning not how much quickly they're delivering value to the customer. So we need to now move past that. And that's exactly what the BizOps Manifesto provides. >> Right, great And Tom to you, you've been covering tech for a very very long time. You've been looking at really hard challenges and a lot of work around analytics and data and data evolution. So there's a definitely a data angle here. I wonder if you could kind of share your perspective of what you got excited to sign onto this manifesto. >> Sure. Well, I have, you know, for the past 15 or 20 years, I've been focusing on Data Analytics and AI, but before that I was a process management guy and a knowledge management guy. And in general, I think, you know we've just kind of optimize that to narrow a level whether you're talking about agile or DevOps or MLops, any of these kind of ops oriented movements. We're making individual project performance and productivity better but we're not changing the business effectively enough. And that's the thing that appealed to me about the BizOps idea that we're finally creating a closer connection between what we do with technology and how it changes the business and provides value to it. >> That's great. Serge back to you, right. I mean, people have been talking about digital transformation for a long time and it's been you know, kind of trucking along and then COVID hit and it was instant light switch. Everyone's working from home, you've got a lot more reliance on your digital tools, digital communication, both within your customer base and your partner base but also then your employees. One of you can share how that really pushed this all along, right. Because now suddenly the acceleration of digital transformation is higher. Even more importantly, you got much more critical decisions to make into what you do next. So kind of your portfolio management of projects has been elevated significantly when maybe revenues are down and you really have to prioritize and get it right. >> Yeah. Maybe I'll just start by quoting Satina Nello, basically recently said that there's been two years of digital transformation just last two months. And in any many ways that's true. But yet when we look at large enterprises, they're still struggling with a kind of a changes in culture. That they really need to drive to be able to disrupt themselves. And not surprisingly you know, when we look at certain parts of the industry you know, we see some things which are very disturbing, right? About 40% of the personal loans today, are being originated by fintechs of a like of Sophie or LendingClub, right? Not to traditional brick and mortar for a bank. And so the, well, there is kind of a much more of an appetite and it's a more of a survival type of driver these days. The reality is that in order for these large enterprises to truly transform and engage on this digital transformation they need to start to really align the business in IT. You know, in many ways and make cover that agile really emerge from the core desire to truly improve software predictability which we've really missed is all that we start to aligning the software predictability to business predictability and to be able to have continual sleep continuous improvement and measurement of business outcomes. So by aligning that of these discuss inward metrics that's, IT is typically being using to business outcomes. We think we can start to really help different stakeholders within the organization to collaborate. So I think there is more than ever. There's an imperative to acts now and resolves I think is kind of the right approach to drive that kind of transformation. >> Great. I want to follow up on the culture comment with you, Tom because you've talked before about kind of process flow and process flow throughout a whore and an organization. And, you know, we talk about people process and tech all the time. And I think the tech is the easy part compared to actually changing the people the way they think. And then the actual processes that they put in place. It's a much more difficult issue than just the tech issue to get this digital transformation in your organization. >> Yeah. You know, I've always found that the soft stuff about, you know, the culture of a behavior the values is the hard stuff to change and more and more we realized that to be successful with any kind of digital transformation you have to change people's behaviors and attitudes. We haven't made as much progress in that area as we might have. I mean, I've done some surveys suggesting that most organizations still don't have data driven cultures. And in many cases there is a lower percentage of companies that say they have that then did a few years ago. So we're kind of moving in the wrong direction, which means I think that we have to start explicitly addressing that cultural, behavioral dimension and not just assuming that it will happen if we build system. You know, if we build it, they won't necessarily come. >> Right. So I want to go to you Nick. 'Cause you know, we're talking about workflows and flow and, and you've written about flow both in terms of, you know, moving things along a process and trying to find bottlenecks, identify bottlenecks which is now even more important again when these decisions are much more critical 'cause you have a lot less wiggle room in tough times, but you also talked about flow from the culture side and the people side. So, I wanted if you can just share your thoughts on, you know, using flow as a way to think about things, to get the answers better. >> Yeah, absolutely. And I'll refer back to what Tom has said. If you're optimized, you need to optimize your system. You need to optimize how you innovate and how you deliver value to the business and the customer. Now, what we've noticed in the data, since that we've learned from customers, value streams, enterprise organizations value streams, is that when it's taking six months at the end to deliver that value with the flow is that slow. You've got a bunch of unhappy developers unhappy customers when you're innovating house. So high performing organizations we can measure their end flow time and dates. All of a sudden that feedback loop the satisfaction your developer's measurably goes up. So not only do you have people context, switching glass you're delivering so much more value to customers at a lower cost because you've optimized for flow rather than optimizing for these other approximate tricks that we use which is how efficient is my agile team. How quickly can we deploy software? Those are important, but they do not provide the value of agility of fast learning of adaptability to the business. And that's exactly what the BizOps Manifesto pushes your organization to do. You need to put in place this new operating model that's based on flow on the delivery of business value and on bringing value to market much more quickly than you were before. >> Right. I love that. And I'm going back to you, Tom, on that to follow up 'cause I think, I don't think people think enough about how they prioritize what they're optimizing for 'cause you know if you're optimizing for A versus B, you know you can have a very different product that you kick out and let you know. My favorite example is with Clayton Christensen and innovator's dilemma talking about the three inch hard drive. If you optimize it for power, you know, is one thing if you optimize it for vibration is another thing and sure enough, you know, they missed it on the poem because it was the game console which drove that whole business. So when you when you're talking to customers and we think we hear it with cloud all the time people optimizing for a cost efficiency instead of thinking about it as an innovation tool. How do you help them kind of rethink and really, you know, force them to look at the prioritization and make sure they're prioritizing on the right thing is make just said what are you optimizing for? >> Oh yeah, you have one of the most important aspects of any decision or attempt to resolve a problem in an organization is the framing process. And you know, it's a difficult aspect to the decision to frame it correctly in the first place. There, it's not a technology issue. In many cases, it's largely a human issue, but if you frame that decision or that problem incorrectly to narrowly say, or you frame it as an either or situation where you could actually have some of both, it's very difficult for the process to work out correctly. So in many cases that I think we need to think more at the beginning about how we bring this issue or this decision in the best way possible before we charge off and build a system to support it. You know, it's worth that extra time to think carefully about how the decision has been structured. >> Right. Serge, I want to go back to you and talk about the human factors, because as we've just discussed, you could put it in great technology, but if the culture doesn't adopt it and people don't feel good about it, you know, it's not going to be successful and that's going to reflect poorly on the technology, even if it had nothing to do with it. And you know, when you look at the core values of the Bezos Manifesto, you know, a big one is trust and collaboration, you know, learn, respond and pivot. One of you can share your thoughts on trying to get that cultural shift so that you can have success with the people or excuse me, with the technology in the process and helping customers, you know, take this more trustworthy and kind of proactive position. >> So I think, at the ground level, it truly starts with the realization that we're all different. We come from different backgrounds. Often times we tend to blame the data. It's not uncommon my experiments that we spend the first you know 30 minutes of any kind of one hour conversation to debate the validity of the data. And so one of the first kind of probably manifestations that we've had or revelations as we start to engage with our customers is like just exposing high-fidelity data sets to different stakeholders from their different lens. We start to enable these different stakeholders to not debate the data. That's really collaborate to find a solution. So in many ways, when we think about kind of the types of changes that we're trying to truly effect around data driven decision making it's all about bringing the data in context, the context that is relevant and understandable for different stakeholders, whether we're talking about an operator or a developer or a business analyst. So that's, the first thing. The second layer I think, is really to provide context to what people are doing in their specific cycle. And so I think one of the best examples I have is if you start to be able to align business KPI whether you are counting you know, sales per hour, or the engagements of your users on your mobile applications, whatever it is. You can start to connect that KPI to business KPI to the KPIs that developers might be looking at, whether it is the number of defects or a velocity or whatever, you know metrics that they are used to actually track. You start to be able to actually contextualize in what we are the effecting, basically a metric that is really relevant in which we see is that this is a much more systematic way to approach the transformation than say, you know, some organizations kind of creating some of these new products or services or initiatives to drive engagements, right? So if you look at zoom for instance, zoom giving away it's service to education, is all about, I mean, there's obviously a marketing aspect in therapists. It's fundamentally about trying to drive also the engagement of their own teams. And because now they're doing something for good and the organizations are trying to do that. But you only can do this kind of things in a limited way. And so you really want to start to rethink how you connect to everybody's kind of a business objective through data and now you start to get people to stare at the same data from their own lens and collaborate on all the data. >> Right, great That's a good. Tom I want to go back to you. You've been studying IT for a long time, writing lots of books and getting into it. Why now, you know, what why now (laughs) are we finally aligning business objectives with IT objectives? You know, why didn't this happen before? And you know, what are the factors that are making now the time for this move with the BizOps? >> Well, much of a past, IT was sort of a back office related activity. And, you know, it was important for producing your pay check and capturing the customer orders but the business wasn't built around it. Now, every organization needs to be a software business data business a digital business, the auntie has been raised considerably. And if you aren't making that connection between your business objectives and the technology that supports it you run a pretty big risk of, you know going out of business or losing out to competitors totally. So, and even if you're you know, an industry that hasn't historically been terribly technology oriented customer expectations flow from, you know, the digital native companies that they work with to basically every industry. So you're compared against the best in the world. So we don't really have the luxury anymore of screwing up our IT projects or building things that don't really work for the business. It's mission critical that we do that well almost every time. >> Right. And I just want to follow up by that, Tom In terms of the, you've talked extensively about kind of these evolutions of data and analytics from artisanal stage to the big data stage, the data economy stage the AI driven stage and what I find diff interesting that all those stages, you always put a start date. You never put an end date. So, you know, is the big data I'm just going to use that generically moment in time, finally here, where we're you know, off mahogany row with the data scientists but actually can start to see the promise of delivering the right insight to the right person at the right time to make that decision. >> Well, I think it is true that in general, these previous stages never seemed to go away. The artisanal stuff is still being done but we would like for less and lesser of it to be artisanal, we can't really afford for everything to be artisanal anymore. It's too labor and time consuming to do things that way. So we shift more and more of it to be done through automation and to be done with a higher level of productivity. And, you know at some point maybe we reached the stage where we don't do anything artisanally anymore. I'm not sure we're there yet but you know, we are making progress. >> Right And Mick, back to you in terms of looking at agile 'cause you're such a student of agile, when you look at the opportunity with BizOps and taking the lessons from agile, you know what's been the inhibitor to stop this in the past. And what are you so excited about? You know, taking this approach will enable. >> Yeah. I think both Serge and Tom hit on this is that in agile what's happened is that we've been you know measuring tiny subsets of the value stream right. We need to elevate the data's there. Developers are working on these tools that delivering features that the foundations for great culture are there. I spent two decades as a developer. And when I was really happy is when I was able to deliver value to customers, the quicker I was able to do that the fewer impediments are in my way the quicker was deployed and running in the cloud the happier I was, and that's exactly what's happening. If we can just get the right data elevated to the business, not just to the agile teams but really these values of ours are to make sure that you've got these data driven decisions with meaningful data that's oriented around delivering value to customers. Not only these legacies that Tom touched on, which has cost center metrics from an IT, for IT being a cost center and something that provided email and then back office systems. So we need to rapidly shift to those new meaningful metrics that are customized business centric and make sure that every developer the organization is focused on those as well as the business itself, that we're measuring value and we're helping that value flow without interruptions. >> I love that Mik 'cause if you don't measure it, you can't improve on it but you got to be measuring the right thing. So gentlemen, thank you again for your time. Congratulations on the unveil of the BizOps Manifesto and bringing together this coalition of industry experts to get behind this. And you know there's probably never been a more important time than now to make sure that your prioritization is in the right spot and you're not wasting resources where you're not going to get the ROI. So congratulations again. And thank you for sharing your thoughts with us here on theCUBE. >> Thank you. >> Thank you from Vancouver. >> Alright, so we had Serge, Tom and Mik. I'm Jeff, you're watching theCUBE. It's a BizOps Manifesto Unveiled. Thanks for watching. We'll see you next time. (soft music)

>> Narrator: From theCUBE studios in Palo Alto and Boston, connecting with thought leaders all around the world, this is a CUBE conversation. >> Hey welcome back everybody, Jeff Frick here with theCUBE we're in our Palo Alto studio, it's still 2020, we're still gettin' through the COVID crisis and we're still reaching out to our community really to talk to leaders who have lead through difficult times, led through transitions, and really go out to the experts and get some advice from people who have been around the block a few times, and I'm really, really excited to have one of my all time favorite business executives joining us, I haven't talked to him in years and years and almost decades, David Pottruck is joining us, he is formerly the CEO of Schwab, how he kind of made his name, now he's an author, he's teaching at the Wharton School, he's a New York Times best selling author and he's also the chairman of Red Eagle Ventures, David, great to see you. >> Thanks, Jeff, it's good to be with you today. >> Absolutely, so before we get in, just to check in, how are you doing, how are you gettin' through 2020, I can't believe we're already on the backside of this crazy year. >> Well, it's been a pretty challenging year as you know, and we've seen companies learn to operate in a virtual world. Zoom has been one of the huge beneficiaries, but technology companies in general, the whole FAANG group of Facebook, Amazon, Netflix and such, they've all benefited from people getting more virtual, and one of the non profits I'm involved with sends out videos to schools on social and emotional learning and that's seen a big uptick. So, the world is changing, and changing in very substantial ways, and I don't think we'll ever go back to the way it was in total, we will go back to having face to face meetings, of course, but I do think that operating virtually and doing more things remotely, remote business meetings over zoom are going to be a fixed part of the future, >> Right, right. >> At least in my opinion. >> So, the reason I wanted to reach out to you is you've managed through some crazy transitions and some crazy disruptions back in the day and for a lot of the young people that don't remember, there was a time before we did everything online. There was a time where you had a broker and you called him on the phone and you paid a pretty big price based on a percentage of the transactions. You were at Schwab in the late 90s when this new thing called the internet came along, and these new things called internet only businesses to compete with you, I wonder if you can kind of take us back as you started to see some of these new kinds of threats, coming not necessarily from people that you recognize from up and down the street, but people who are coming over horizons that you've never ever seen before. And how did you start to get a feel for hmm, the landscapes a changin'. >> You know it's really funny to look back that there actually was a day when something called the internet didn't exist. And, there was no connectivity, there was no internet. We were, of course, at that time a telephone based brokerage firm, what used to be called discount brokers. We don't use that phrase very much anymore at Schwab, but, we were a telephone based discount broker, and the internet popped up and started becoming commercialized, and some online only brokerage firms popped up. And these firms didn't have call centers, they didn't have branch offices, if you wanted to do a trade you did it over your computer, online, and the pricing was dramatically less. To give you some idea, to buy 100 shares of IBM, Merrill Lynch would have charged you $250, for that one trade, Schwab would have charged you $80 and E-Trade would have charged you $25. So, we were much cheaper than Merrill Lynch, but E-Trade was much cheaper than us. So, we were, at the time, we were worried about is there enough security on the internet, can we do trades. We have a reputation to protect, a brand new company they don't have a reputation to protect, we have customer security, we have a reputation to protect. Well, we started doing online trades, and the way we did it was we gave all of our customers a 20% discount on our normal pricing, so instead of charging 80-something dollars, you paid something like $60. So, it was a nice discount, customers liked it, they were doing online trades, and we're seeing that is just taking off, it's getting huge, and we're getting great press, the analysts love it, Wall Street loves it, we're a public company and it's going great, but of course at the same time I'm getting, a basket full of letters and emails from our customers saying "why can't you do trades for $25 like E-Trade? Why are they able to do an online trade for $25 and you're charging $65? I thought you stood for value, I thought you guys wanted to be the best value for the money." So, I'm in this dilemma where Wall Street doesn't see these letters, they don't get reported, I see them, and there dozens and then hundreds, and then thousands. >> Wow. >> We had millions of customers, so to get a thousand letters or emails in a month that's very possible. And so I go to Chuck with this and I said you know, I think we need to make a change because no great company was built on the back of unhappy customers. >> Right, right. But you know, it's so funny, not funny, I'm sure it was a huge challenge in the moment, but you know, Clayton Christensen's another one of my favorite business leaders and why I like him so much, and rest in peace he passed earlier this year, is his very simple statement in "The Innovator's Dilemma" that smart people making sound business decisions based on their customer feedback will always miss discontinuous change. You were right in the middle of this thing and you had to get discontinuous change and it's funny, you've mentioned quite a bit in some of your other conversations about looking for faint signals, well this was not a faint signal, this was pretty much, sounds like came up and banged you over the head. So, how do you make and convince the rest of the people of the team that this is kind of a short-term pain but it's a long-term gain, really thinking about this long-term relationship with our customers, even though it's going to cost us on a per transaction basis in the short-term. >> Well, I had our financial staff run some models, and show me what would be the impact if we reduced our pricing from 60 something dollars a trade to $29 a trade, and the assumption of more and more trades moving to the internet. We also had a model into that the fact that people trade a little more when prices go down, costs go down cause I don't have the cost of someone answering the telephone, so there were some benefits, and I had to run the math to understand how long would it take us to go through the trough to get to the other side. A big important part of this is modeling the numbers. You don't just make this decision as a public company and just hope for the best >> Jeff: Right. >> You need to model it out, you need to run math and say how long will it take, what do we have to assume, what do we need to do, what costs do we need to cut, how are we going to protect ourselves as best as we can? And we knew that the math said that our profitability will go down 25% when we make this change of internet pricing, and we expected that Wall Street would be so upset, because they didn't see this coming, no analyst saw this coming cause they don't know about complaint letters I'm getting, so, analysts would be upset and the stock would go down 40%, going to your board and telling them you want approval for a 25% reduction in profits and a 40% reduction in your stock price is not what you want to do as a CEO, you don't want to go to your board with that and when they ask you, well how sure are you that we're going to climb out of this, you say it's going to take 18 months, what if it takes three years, you know, I was, I didn't see the choice we had, honestly, in my heart, you don't build a great company with an increasing number of unhappy customers. I didn't think we had a choice, and Clayton Christensen was one of the consultants that I used to help me think all this through because it was really hard to make this change, Jeff, because we were doing so well. >> Right. >> Ostensibly, we were killing it. >> Right, so it's interesting, I wonder if you could contrast it to what's happening say now with COVID, right, it was this, didn't sneak up on anyone, it was a really kind of a light switch moment in mid-March where suddenly everyone has to work from home, all your digital transformation initiatives are now put on fast forward, but we still have this situation where there's a variety of potential outcomes and timing that's really hard to gauge, so when you're thinking about managing through change within perfect information and you almost have kind of will we go back to normal, will we stay where we are or some spectrum in between, how do you help people think about how they should come up with contingency plans and think about managing through a number of options with imperfect information and really kind of no clear line, you said you had an 18 month ROI that the analytics point to, we're not really sure how long this thing is going to go and what it's going to look like when we get to the other side. >> Well, I think there's two issues there, one of them is how we get through this pandemic period. Until we get to, there's three things we need, we need inexpensive testing that is not done by a professional that we can do at home to see if we're safe. That's number one. Number two, we need a treatment that helps us get through this and get to the other side without dying, we need the fatality rate to even drop further. And number three we need a vaccine. So those are the three things that we need, that the world is working on all three of those, and my guess is that in the first half of 2021 we will have all three of those, we'll have all three of those and this will be a thing, basically, a thing of the past. >> Jeff: Right. >> So, but I don't think the world goes back, to exactly the way it was. People have learned they can have very effective meetings without everybody flying to Chicago, or New York, or Las Angeles, they can do it over Zoom, that doesn't mean meetings go away, but I think they're going to go down in numbers and more online things are going to happen. More people are going to be working from home at least part of the week. It's going to be different. >> Yeah. >> Those CEO's who sit in a somewhat of an ivory tower and get numbers fed to them from their financial staff, and they're not out talking to customers directly, people look at that as anecdotal information, I think it's more important than that, I think you need to see the passion behind the voice and the eyeballs of some of your best customers to understand what's going on with them, and a lot of CEO's don't actually do that. >> Right. You've made a really interesting comment in another interview that you did earlier, and you talked about the high gain questions. And one of the challenges of all CEO's is nobody wants to be the one that tells his CEO bad news, whether that be someone on your staff, whether that be some lower level person who's on the front lines and really knows there's some broken things, or whether it's a good customer as you said and kind of a social setting, how you doin', oh we love you, blah blah blah. But as a CEO you really have stressed that that is really some important hard to find, and hard to filter information up to the executive suite, so what were some of the tips and tricks you used to make sure that people either A. weren't afraid to tell you bad news, and B. that you could kind of go out and sniff it out a little bit more creatively than just kind of waiting for it to come through in the weekly reports. >> Well, obviously, you know, I think all kinds of executives get out and they talk to their customers on a regular basis, they're out and they're talking to them, the problem with those kind of discussions are no one wants to be disrespectful, people want to be nice in those meetings by and large, and you ask questions "how are we doing" "oh you guys are doing great", meanwhile the guy who tells you you're doing great is also looking at some newer technology that might replace you. (laughs) So that kind of question doesn't get you very far. So what we used to do, to be quite specific, is that we used to do a monthly luncheon where I had 12 of my mostly top executives but some people a level or two down, 12 Schwab people with 24 customers. And so they were tables of six, two of us, four customers, and we had a theme that we would talk through and the themes were always around things of, if you had to pick out three things we don't do well, what would they be? Give the customer permission to be comfortable being critical. What are the three things that you've heard about our customers, our competitors doing, that are better than us? What are the things that we need to change to make you even more delighted? You need to ask those kinds of high gain questions where there's no polite answer, the customer is permitted and given the opportunity to answer in a truthful and critical fashion. >> That's a great lesson, as you said give them permission and give them the format and the forum to say some of those things so that you get some of that information. Another great leadership principle that you shared many times, I want to dig into a little bit is kind of motivation verses inspiration. And that those are often confused, but very different concepts in the way that you lead people. I wonder if you can dig in a little bit on your philosophy on those two things. >> Sure, you know it's funny, those terms motivation and inspiration are used almost interchangeably as if they're the same thing. And they're not. Motivation is fundamental in business, and it's the exchange of behaviors for rewards. I was a psychology major in college, this was one of the things we learned about the exchange of behaviors for rewards and that's motivation. Inspiration on the other hand, is the effort to make people want to do something for, not for rewards that are tangible, but to be part of something great. We want you to be part of a movement, we want you to be part of something special, something that's going to change the world for the better and trying to get your employees to buy into this notion that we are on a mission and that mission is to make the world a somewhat better place, it doesn't mean we don't make money, of course we make money, but we're also out for more than a financial bottom line, we're out for a bottom line that's great for customers and maybe pretty great for employees as well. >> So it's interesting, cause you've seen 'em right, you've been in finance for ever, it's always about the shareholders, you've talked about the stock price a number of times in terms of a measure, but it seems more purposed led or purpose forward organizations now are more appealing to the younger generation, I think the search for a little bit more meaning in our day to day job and what that company is all about seems to have elevated over the last several years and taken a higher role in what they used to call triple line accounting, is it not only your shareholders who always are at the top of the list and have been traditionally, but your customers, your employee, and more and more your community and even the environment. Have you seen the swing towards, it's not just about shareholder value? >> Well, not on Wall Street. (laughs) I think, Wall Street is about money, and the people who go to work on Wall Street, and the way Wall Street operates, it's measured in dollars and cents and share price and profits and distributions to private equity partners and so forth, it's a numbers game and it is a profit game on Wall Street, we should be honest about that, it is what it is. >> Jeff: Sure. >> And, I have yet to see the Wall Street firm that is talking about triple bottom lines cause that just doesn't happen very much on Wall Street, it doesn't happen from my perspective, it almost doesn't happen at all. But there are other companies where they do talk about a more triple bottom line, and I think as a leader if you want to be that kind of company and you want to be that kind of leader you have to be comfortable talking about that, and not feel embarrassed by it, not feel that oh, that's too airy fairy, that's too goody two shoes. If you really believe that our goal is to have a triple bottom line, profitability, great for employees, and great for customers and the world at large, then as a leader you need to talk about that. You need to be willing to stand up and have those kinds of conversations and let yourself be challenged by perhaps the press, employees, shareholders, who think that that's not a good strategy. I believe that in many cases that's a great strategy because on a long-term basis you don't want every employee in your company, and all of your senior executives to basically be up for sale, that if a bigger job comes in with a bigger compensation, they're out the door. You're looking for loyalty, you're looking for buy in, for participation, for wanting to give every bit of themselves for the mission of the company. And as the CEO, if you want to take that path, you got to be willing to put yourself out there and talk about it and suffer the slings and arrows from those who don't believe that that's the best path for the company. >> Right, right. Well and that's another thing that you've talked about quite often, is really that the company feeds off the passion of the CEO, and the CEO has to have that passion because they're lookin', they're watchin', they're lookin' at your moves, they're lookin' at what you say, they're lookin' at your body language, they're lookin' at everything that you do. And I think within the context of these transitions and these difficult times, you have another great line that you've used a number of times, which is: "You need to have a perception of momentum." I love that line, so everyone needs to think that we're on the right path, we're not there yet, I feel it, he looks like he feels it, he looks like he's confident, so now I'm confident and I'm going to jump in and help be part of this change process. You've seen that time and time. >> Well, momentum is a tricky thing, you can have momentum and not have the perception of momentum. Because if you're doing a turn around, what often happens is in the early stages of the turn around, the numbers start to change but they're small, and you really haven't seen, it's not as steep. The turn around doesn't go steep, the turn around goes and builds slowly. And, what you need to be measuring in the beginning, are kind of the inputs and behaviors rather than the outputs, sales and profits. Those take longer. But you need to build belief, you need to build buy in, because it can take a long time before things start getting better and you don't want your best people to wonder whether this is the right move, should I be looking for another job, so, you have to build the perception of momentum even as you're building the reality of momentum. >> Right, right. So another thing we cover a lot of tech conferences, obviously, Cloud and AI, machine learning are hot things. But, you know, it always goes back to the big three. It's the technology, okay, but it's also people, and more importantly I think that gets left out is process. So, when you're thinking about, you know you're management is, and again, especially through a transition or a difficult time or some unknown and choppy waters, how do you think about those three, prioritizing those three and organizing those three between people, process and technology? >> Okay, well, you know always looking for technology that can be implemented to give you productivity, better customer service, you need to be monitoring what you're competitors are doing, and be looking out, sometimes at the bleeding edge, where you don't need to implement those kinds of changes right away, but you need to know where you want to go down the road, so you have some sense of that. As far as process goes, your processes are both a strength and a weakness because the strength of how well you run your processes today is also how hard they're going to be to change tomorrow. You know, companies are built for predictability, reliability, risk minimization, and all of your processes are built for those things. But those are also the things that are the opposite of big breakthrough changes. So you need to be thinking about, all right, are we strengthening our processes but also, if we have a change coming that's going to require a change of some of those processes, how is that going to get in our way and how are we going to get past that? >> Jeff: Right. >> I've left people for the last because to me that's the heart and soul of a successful executive. One person never gets everything done, it's all about the quality of your team. You've got to be a recruiter, you've got to be always on the look out for new talent that can help your company, and you've got to be thinking about how you're going to recruit that talent. You have to be a magnet for talent. When I sit on boards and I talk to the CEOs, I ask them, what are you doing to be a magnet for talent? What does that mean? What are you doing for great people to want to work for you? For you, and your company, what are you doing, how are you reinvesting in people, how are you putting time and energy in their professional development, in their growth? How are you getting to know them? How are you understanding their ambitions, their hopes and desires for the future? How much time and effort do you spend on that? And that's all part of having people not leave, everyone, in a way you can look at the world and think everyone is for sale. But you want people that are not for sale, that are committed to you and committed to the mission and in today's world where everything seems so fluid, I know my ideas about this probably seem very old and perhaps out of date, but I still believe in them with all my heart, that you want people that are committed to you and what we are accomplishing together. And you have to be reinforcing that with your words, and even more importantly with your actions. >> Yeah, I think it goes back to your inspiration, people are much more motivated by inspiration than just collecting a paycheck or getting a compensation back for what they're doing, which is a great segue to the last topic I wanted to cover with you, and I remember this, we had dinner, I think it was 1996 at the Wharton's Zweig Series, and you were such a phenomenal speaker, and I remember asking you the question and I remember your answer, and I've repeated it ad nauseam for the last 20 years. I said, "David, you're such a great speaker, why, how?" And you were so matter of fact in that you just said "hey, it's an important part of my job, I treat it as a skill, I hired a coach, I practiced like I would do any other skill", and why that's such a powerful story is you clearly are in a position of power, you could clearly have a crazy ego that got in the way of such a matter of fact accomplishment of these tasks and all the PR people I talk to and they hear this story "oh my gosh, we got to get him talking to my executives" because so many people let ego get in the way of what is really an important task for a CEO and a leader which is communication and you recognize that early on and really went after it to make sure that you were very good at this very important task. >> Well, what happened to me, I got lucky, I got lucky. When I got promoted to be the CEO of Schwab, I knew I was going to have to do a lot more public speaking and I already thought I was pretty good at being a public speaker, but I thought I needed to fine tune my messaging, I needed to get it better. So, I looked around and I got some referrals and I hired a guy that I thought was going to be a speech writer for me, that would help craft the message. And, we had our first meeting, and we're talking about an upcoming speech and he says to me things like, "Well, Dave, I want to know more about your life. Tell me how you grew up, tell me what you're proudest moments were, I want to learn about you." And I said to him, "Terry, I'm not looking for a biographer, I want a speech writer, I need a guy that can help me craft my message." And he said, "Well, Dave, that's not how I do things. I need to know who you are, I need to know what your passions are and where they come from so that we can give a message that has more than just words it has meaning, it has your passion built into it, that's what we need to do." And that's what Terry taught me, was that it's not just the words, it's also the passion, energy, and meaning and connection behind the words. And I want to mention one other thing that I think is very important. When people talk about being really good communicators, they often talk about speaking. They don't focus on listening. And listening is a tremendously important skill. So for example, you give a speech, you're the CEO or Senior Executive, you give a speech, do you stay there and do you do a Q+A session? The Q+A session can even be more important than the speech sometimes, because all the employees know that the speech is something that was pre-arranged, it's not on the cuff, it's something that's been thought about and prepared. But the questions and answers are authentic and in the moment. People are clamoring for authentic leadership. That Q+A session, where you're listening for the question and maybe the question behind the question. So you're not just trying to get through them as fast as you can, but you're trying to really answer and listen for the question and the question behind the question. And then answer those from the heart with passion, and that's how you will score the most points with your audience. >> That's great. And then who knows what comes from it, in getting ready for this I came across your blog post talking about Gopi Kallayil a mutual friend at Wharton who reached out to you after that same dinner, and you were happy enough, or you were kind enough to respond and grow a friendship and a relationship that again is lasted for decades. So that's such an important message to listen, as somebody said right, "God gave you two ears and one mouth should try to use them in that ratio." (laughs) Well David, thank you so much for taking some time, again I think these are really trying times in leadership, I think it's really an opportunity for great leaders to shine and those that don't there's really no place to hide. So I really appreciate you sharing your insight and taking a few minutes with us. >> Thanks, Jeff, I hope all the people that follow you and listen to your broadcasts learn something today and come away with some benefit from this time we've spent together. >> Undoubtedly, undoubtedly. Well, thanks again. All right, he's Dave Pottruck, I'm Jeff Frick, you're watching theCUBE, thanks for watching and we'll see you next time. (upbeat music)

(upbeat music) >> Announcer: From San Francisco, it's theCUBE. Covering Accenture Tech Vision 2020. Brought to you by Accenture. >> Hey, welcome back, everybody. Jeff Frick here with theCUBE. We're at the Accenture San Francisco Innovation Hub on the 33rd floor of the Sales Force Tower in downtown San Francisco. It's 2020, the year we know everything with the benefit of hindsight. And what better way to kick off the year than to have the Accenture Tech Vision reveal, which is happening later tonight, so we're really happy to have one of the authors who's really driving the whole thing. He's Michael Blitz, the managing director of the Accenture Tech Vision 2020, a very special edition. Michael, great to see you. >> Hey, thanks for having me. >> Absolutely, so you've been doing this for a while. I think we heard earlier, this thing's been going on for 20 years? >> It is. >> You've been involved for at least the last eight. >> Michael: I think a little bit more than that. >> More than that, so what's kind of the big theme before we get into some of the individual items? >> Yeah, so I mean, I think right now, what we're really talking about is that our real big theme is this: We the digital people. And it's that recognition that says that we've fundamentally changed. When you start looking at yourself and your lives, it's that you've gotten to a point where you're letting your cell phone track you. Your car knows where you are probably better than your spouse does. You're handing your key to Amazon and Walmart so they can deliver packages in your house. And more than that is that actually, we're trying to start to revolve our lives around this technology. I look at my own life, and we just sold our second car, specifically because we know that Uber and Lyft exist to fill that void. >> Right, well you don't have to look much further than phone numbers. How many people remember anybody's phone number anymore, right, 'cause you don't really have to. I think it's the 15th anniversary of Google Maps. >> Michael: Yep. >> This year, and to think of a world without Google Maps, without that kind of instant access to knowledge, is really hard to even fathom. But as you said, we're making trade-offs when we use all these services, and now, some of the costs of those things are being maybe more exposed? Maybe more cute or in your face? I don't know, what would you say? >> Yeah, I mean, I think what's happening now is that what we're realizing is that it's changed our relationship with companies. Is that suddenly we've actually brought them into our lives. And, on one hand, they're offering and have the ability to offer services that you could never really do before. But on the other hand is that, if I'm going to let somebody in my life, suddenly they don't have to just provide me value and this is useful, is that they actually, people are expecting them to retain their values, too. So, how they protect your data, what they're good for the community, for the environment, for society, whether it's sustainable or not. Is that suddenly, whereas people used to only care about what the product you're getting, now how it's built and how your company's being run is starting, it's just starting to become important, too. >> Right, well it's funny, 'cause you used to talk about kind of triple bottom line, shareholders, customers and your employees. And you talked about, really, this kind of fourth line, which is community and really being involved in the community. People care, suddenly you go to conferences where we spend a lot of time all the utensils are now compostable and the forks are compostable. And a lot of the individual packaging stuff is going away. So people do care. >> They do, and there's a fourth and a fifth. It says that your community cares, but your partners do, too. Is that you can't, I'm going to say, downgrade the idea that your B2B folks care is that suddenly, we're finding ourselves tied to these other companies, and not just in a supply chain, but from everything. And so, you're not in this alone in terms of how you're delivering these things. But now it's becoming a matter that says, Well, man, if my partners are going to get pummeled because they're not doing the right thing or they don't have that broad scope, that's going to reflect on me, too. And so, now you're suddenly in this interesting position where all of the things that we suspected were going to happen around digital connecting everybody is just starting to, and I think that's going to have a lot of positive effects. >> Yeah, so one of the things you talked about earlier today, in an earlier presentation was kind of the shift from kind of buyer and seller, seller and consumer, to provider and collaborator. Really kind of reflecting a very different kind of a relationship between the parties as opposed to this one-shot transactional relationship. >> No, and that's right, and it doesn't matter who you're talking about, is that, if you're hiring folks for skills that you're assuming that they're going to learn, that's going to be different in three years, in five years, you're essentially partnering with them in order to take all of you on a journey. When you start talking about governments, is that you're now partnering with regulators. You look at companies like Tesla, who are working on regulations for electric cars, they're working on regulations around battery technology. And you see that this go-it-alone approach isn't what you're doing. Rather, it's becoming much more holistic. >> Right, so we're in the innovation hub, and I think number five of the five is really about innovation today. >> Michael: It is. >> And you guys are driving innovation. And, rest in peace, Clayton Christensen passed away, Innovator's Dilemma, my all-time favorite book. But the thing I love about that book is that smart people making sound decisions based on business logic and taking care of existing customers will always miss discontinuous change. But you guys are really trying to help big companies be innovative. What are some of the things that they should be thinking about, besides, obviously, engaging with Mary and the team here at Innovation Hub? >> Yeah, no, and that's the really interesting thing is that when we talked about innovation, you know, five or even 10 years ago, you were talking about, just: How do I find a new product or a new service to bring to market? And now, that's the minimum stakes. Like, that's what everybody's doing. And I think what we're realizing as we're seeing tech become such a big part is that we all see how it's affecting the world. And a lot of times that things are good is that there's no reason why you wouldn't look at somebody like a Lyft or Uber and say that it's had a lot of positive effects. But from the same standpoint is that, you ask questions of: Is it good for public transit? It is good for city infrastructure? And those are hard questions to ask. And I think where we're really pushing now is that question that says: We've got an entire generation of not-tech companies, but every company that's about to get into this innovation game, and what we want them to do is to look at this not the way that the tech folks did, that says, here's one service or one technology, but rather, look at it holistically that says: How am I actually going to implement this, and what is the real effects that it's going to have on all of these different aspects? >> Right, Law of Unintended Consequences is always a good one. >> Michael: It is. >> And I remember hearing years ago of this concept of curb management. I'm like, Curb management, who ever thought of that? Well, drive up and down in Manhattan when they're delivering groceries or delivering Amazon packages and FedEx packages and UberEats and delivery dog food now. Where is that stuff being staged now that the warehouse has kind of shifted out into the public space? So, you never kind of really know where these things are going to end up. >> No, and I'm not saying that we're going to be able to predict all of it. I think, rather, it's that starting point that says that we're starting to see a big push that says that these things need to be factored and considered. And then, similarly, it's the, if you're working with them up-front, it becomes less of a fault, on a fight of whose fault it is at the end, and it becomes more of a collaboration that says, How much more can we do if we're working with our cities, if we're working with our employees, if we're working with our customers? >> Right, now another follow up, you guys've been talking about this for years, is every company is a tech company or a digital company, depending on how you want to spin that. But as you were talking about it earlier today, in doing so and in converting from products to service, and converting from an ongoing relationship to a one-time transaction, it's not only at that point of touch with a customer, but you've got to make a bunch of fundamental changes back in your own systems to support kind of this changing business model. >> Now, and that's right, and I think this is going to become the big challenge of the generation, is that we've gotten to a point where just using their existing models for how you interact with your customers or how you protect their data or who owns the data, all of these types of things, is that they were designed back when we were doing single applications, and they were loading up on your Windows PC. And where we're at now is that we're starting to ask questions that says, All right, in this new world, what do I have to fundamentally do differently? And sometimes that can be as simple as asking a question that says, you know, there's a consortium of pharma folks who have created a joint way for them to develop all of their search algorithms for new drugs. But they're using block chain, and so they're not actually sharing the data. So they do all the good things, but they're pushing that up. But fundamentally, that's a different way to think about it. You're now creating an entirely new infrastructure because what you're used to is just handing somebody the data, and what they do with the data afterwards is kind of their issue and not yours. And so now we're asking big, new questions to do it. >> Right, another big thing that keeps coming up over and over is trust. And again, we talked a little earlier. But I find this really ironic situation where people don't necessarily trust the companies in terms of the people running the companies and what they're going to do with their data, but they fundamentally trust the technology coming out of the gate and this expectation of: Of course it works, everything works on my mobile phone. But the two are related, but not equal. >> Michael: No, I mean, they're not, I mean, and it's really pushing this idea that says we've been looking at all these, I'm going to say scary headlines, of people not trusting companies for the last number of years, while at the same time, the adoption for the technology has been huge. So there's this dichotomy that's going on in people, where at one point, they like the tech. You know, I think the last stat I saw is that everybody spends up to six-and-a-half hours a day involved on the internet, in their technology. But from the same standpoint is that they worry about who's using it and how and what is going to be done. And I think where we're at is that interesting piece that says we're not worried about a tech lash. We don't think that people are going to stop using technology. Rather, we think it's really this tech clash that says they're not getting the value that they thought out of it, or they're seeing companies that may be using this technologies that don't share the same values that they do, and really, what we think this becomes, is the next opportunity for the next generations of service providers in order to fill that gap. >> Right, yeah, don't forget there was a Friendster and a MySpace before there was a Facebook. >> Yeah, there was. >> So, nothing lasts forever. So, last question before I let you go, it's a busy night. The first one was the I in experience, and I think kind of the user experience doesn't get enough light as to such a defining thing that does move the market if, again, I love to pick on Uber, but the Uber experience compared to walking outside on a rainy day in Manhattan and hoping to hail down a cab is fundamentally different, and I would argue, that it's that technology put together in this user experience that defined this kind of game-changing event, as opposed to it's a bunch of APIs stitching stuff together in the back. >> No, that's right, and I think where we're at right now is that we're about to see the next leap beyond that. Is that, most of the time when we look at the experiences that we're doing today, they're one way. Is that people assume that, Yeah, I have your data, I'm trying to customize. And whether it's an ad or a buying experience or whatever, but they're pushing it as this one-way street, and when we talk about putting the I back in experience, it's that question of the next step to really get people both more engaged as well as to, I'm going to say improve the experience itself, means that it's going to become a partnership. So you're actually going to start looking for input back and forth, and it's sometimes going to be as simple as saying that that ad that they're pushing out is for a product that I've already bought. Or, you know, maybe even just tell me how you knew that that's what I was looking for. But it's sometimes that little things, the back and forth, is how you take something from, what can be a mediocre experience, even potentially a negative one, and really turn it into something that people like. >> Yeah, well, Michael, I'll let you go. I know you got a busy night, we're going to present this. And really thankful to you and the team, and congratulations for coming up with something that's a little bit more provocative than, Cloud's going to be big, or Mobile's going to be big, or Edge is going to be big. So this is great material, and thanks for having us back. Look forward to tonight. >> No, happy to do it, and next year we'll probably do it again. >> [Jeff\ I don't know, we already know everything, it's 2020, what else is unknown? >> Everything's going to change. >> All right, thanks again. (upbeat music)

>>from San Francisco. It's the Cube covering Accenture Tech Vision 20 twenties Brought to you by >>Accenture. >>Hey, welcome back here. Ready? Jeff Frick here with the Cube. We're at the Accenture San Francisco Innovation Hub in the 33rd floor of the Salesforce Tower in downtown San Francisco. It's 2020 the year we know everything with the benefit of hindsight. It what better way to kick off the year than they have the Accenture Tech vision reveal, which is happening later tonight. So we're really happy to have one of the authors who's really driving the whole thing. He's Michael Built the managing director of the Accenture Tech Vision. 2020. A very special edition. Michael, great to see you. Thanks for having me. Absolutely. So you've been doing this for a while? I think we heard earlier. This thing's been going on for 20 years, but you've been involved with at least the last eight a little bit more and more than that. So what's the, uh, what's kind of the big theme before we get into some of the individual? Yeah, So I >>mean, I think right now what we're really talking about is that our real big theme is this ui the digital people? And it's that recognition that says that we fundamentally changed. I mean, when you start looking at yourself in your lives, is that you've gotten to a point where you're letting your cellphone track you. You know your car knows where you are, probably better than your spouse does. You know you're handing your key to all go to Amazon and Wal Marts. They deliver packages. Your help, and more than that, is that actually, we're trying to start to revolve our lives around this technology. You know, I look at my own life and we just sold our second car specifically because we know that uber and lift exists to fill that void, >>right? Well, you don't look much further >>than than phone numbers. How many people remember anybody's phone number anymore? Right, cause you don't really have to. I >>think it's 1/15 anniversary of Google maps this year, and to think of a world without Google Maps without that kind of instant access to knowledge is is really hard to even fathom. But as you said, we're making trade offs when we use all these services and and Now, some of the costs of those things are being maybe more exposed, maybe more cuter in your face. I don't know. What would you say? >>I mean, I think what's happening now is that what we're realizing is that it's changed our relationship with is that suddenly we've actually brought them into our lives. And on one hand they're offering and have the ability to offer services that you could never really do before, you know. But on the other hand is that if I'm gonna let somebody in my life suddenly they don't have to provide. Just provide me value. And this is useful is that they actually irks people expecting them to retained their values to, you know, so how they protect your data. What they're good for the community, for the environment, for society, whether it's sustainable or not, is that suddenly whereas people used to only care about what the products are getting now, how it's built, how your company is being run, it's starting like it's just starting, you know, to become important too, >>right? Well, it's funny cause you used to talk about, you know, kind of triple bottom line shareholders, customers and your employees and you talked about really kind of this fourth line, which is the community and really being involved in the community. People care suddenly go to conferences that we spend >>a lot of time and you know, all the utensils air now compostable and the forks air compostable. And you know, a >>lot of the individual packaging stuff is going away, so people do care. >>They do. And then there's 1/4 and 1/5 that says, the your community cares, you know? But it's also your partners. Do, too, is that you can't you know, I'm going to say downgrade. You know, the idea that you're B two b folks care is that suddenly we're finding ourselves tied to these other companies, and not just in a supply chain, you know, but from everything. And so you're not in this alone in terms of how you're delivering these things. But now it's becoming a data that says the man, if my partners are going to get pummeled because they're not doing the right thing or they don't have that broad scope, is the that's going to reflect on me, too, And so now you're suddenly in this interesting position Where all of the things that we suspected we're gonna happen around digital connecting everybody is just starting to. And I think that's gonna have a lot of positive effects. >>Yep. So one of the things you talked about earlier today, earlier presentation was kind of the shift from kind of buyer and seller seller, consumer to provider and collaborator, Really kind of reflecting a very different kind of a relationship between the parties as opposed to kind of this 11 shot transactional relationship >>now And that's right. And it doesn't matter who you're talking about. This is that, You know, if you're hiring folks, you know, for skills that you're assuming that they're going to learn, you know, that's going to be different in three years and five years. You're essentially partnering with them in order to take all of you on a journey. You know, when you start talking about governments, is that you're now partnering with regulators. You know, you look at companies like Tesla who are working on, you know, regulations for electric cars. They're working on regulations around battery technology. And you see that this go it alone approaches and what you're doing? You know, Rather, it's becoming much more holistic, >>right? So we're in the innovation hub, and I think Number five of the five is really about innovation today. And you guys are driving >>innovation and you know the rest of peace. Clayton Christensen passed away. Innovator's Dilemma. My all Time favorite book The Thing I love about that book is it's smart people. Making sound decisions based on business logic and taking care of existing customers will always miss this continuous change. But you guys are really trying to help companies be innovative. What are some of the things that they that they should be thinking about besides obviously engaging with marrying the team here? And >>that's the really interesting thing is that you know, when we talk about innovation, you know, five or even 10 years ago, you were talking about just how do I find a new product or new service to bring to market? And now that's the minimum stakes like that's what everybody's doing. And I think what we're realizing as we're seeing tech become such a big part is that we all see how it's affecting the world. And a lot of times the things they're good is that there's no reason why you wouldn't look at somebody like a lifter uber and say that it's had a lot of positive effects. But from the same standpoint is that you ask questions of Is it good for public transit? It's good for city infrastructure, and those are hard questions to ask. And I think where we're really pushing now is that question that says We've got an entire generation of not tech companies. But every company that's about to get into this innovation game and what we want them to do is to look at this, not the way that the tech folks did. That says, Here's one service or one technology but rather look at it holistically. That says, How am I actually going to implement this? And what is the real effects that it's gonna have on all of these Different >>lot of unintended consequences is always >>a good, and I remember hearing years ago >>this concept of of curb management, curb management you ever thought of that will drive up and down in Manhattan when they're delivering groceries or delivering Amazon packages and FedEx packages and uber eats and delivery dog food. Now where's that stuff being staged? Now? The warehouses kind of shifted. You got into the public space, so you never kind of really know where these things they're going to end up? >>No. And I'm not saying that we're gonna be able to predict all of it. I think rather it's that starting point that says that, you know, we're starting to see a big push, you know, that says that these things need to be factored in and considered. And then similarly, it's the If you're working with them up front, it becomes less of a fault in a fight of who's fault. It is at the end, and it becomes more of a collaboration that says, How much more can we do if we're working with our cities that we're working with our employees? We're working with >>another follow up. You guys been talking about this for years? Is every company is a tech company or a digital company, depending on how you want to spin that. But as you were talking about earlier today in doing so and then converting from products to services and converting from an ongoing relationship 21 time transaction, it's not only at that point of view touch with a customer, but you've got to make a bunch of fundamental changes back in your own systems to support kind of this changing business >>models. And that's right. And I think this is going >>to become The big challenge of the generation is that we've gotten to a point where just using their existing models for you know how you interact with your customers or how you protect their data or who owns the data. All of these types of things is that they were designed back when we were doing single applications and they were loading up on your windows PC. And where we're at now is that we're starting ask questions that says Alright in this New World order why it's a fundamentally do differently, you know, And, you know, sometimes that could be You know, a simple is asking a question that says, You know, there's a consortium of pharma folks who have created a joint way for them to develop all of their search algorithms for new drugs, but they're using Blockchain, and so they're not actually sharing the data, so they do all the good things but they're pushing that. But fundamentally, that's a different way to think about it. You're not creating an entirely new infrastructure because what you're used to is just handing somebody the data on what they do with the data afterwards. It's kind of their issue and not yours. And so now we're asking big new questions to do it >>right. Another big thing that keeps coming up over and over is trust. And again, we talked little. Really? I find this really ironic situation where people don't necessarily trust the companies in terms of the people running the companies and what they're gonna do with their data. But they fundamentally trust the technology coming out of the gate and this expectation of, of course it works. Everything works on my on my mobile phone, but the two are inter related, but not equal. >>No, I mean, they're >>not. I mean, it's really pushing this idea that says the we've been looking at all of these. I'm going to say scary headlines. People are not trusting companies for the last number of years, while at the same time the adoption for the technology has been huge. But there's this dichotomy that's going on and people were at one point is the they like the tech. I think the last stat I stall is that everybody spends up to six and 1/2 hours a day involved on the Internet in their technology. But from the same standpoint is that they worry about who's using it, how and what it's done. And I think where we're at is that interesting piece that says the we're not worried about a backlash. We don't think that people are going to stop using technology. Rather, we think it's really this tech backlash that says they're not getting the value that they thought out of it, you know? Or they're seeing companies that may be using this, technologies that don't share the same values that they do. And really, what we think this becomes is the next opportunity for the next generations of service providers in order to fill that >>right. Don't forget, there was a Friendster and MySpace before there was a Facebook. Nothing lasts forever. So last question finally goes busy night. The 1st 1 was the eye and experience, and I think you know the kind of the user experience doesn't get enough light as to such a such a defining thing that doesn't move the market again. I lived in an uber right, but the uber experience compared to walking outside on a rainy day in Manhattan and hoping to nail down a cab is fundamentally different. And I would argue that it's that technology put together in this user experience that defined this kind of game changing event as opposed to, You know, it's a bunch of AP I stitch and stuff together in the back. >>That's right. And I think where we're at right now is that we're about to see the next leap. Beyond that is that you know, most of the time when we look at the experiences that we're doing today, they're one way is that people assume that, Yeah, I have your data trying to customize and whether it's a ad or buying experience or whatever. But they're pushing it as this one way street. And when we talk about putting the I back experience, it's that question of the next step to really get people both more engaged as well as to I'm going to say improve the experience. Self means that it's going to become a partnership. So you're actually going to start looking for input back and forth, you know? And it's sometimes it's going to be a simple is saying that that ad that they're pushing out is for a product that I've already bought or, you know, maybe even just tell me how you knew, You know, that that's what I was looking for. But it's sometimes that little things that back and forth is how you take something from, you know, which could be a mediocre experiences, even potentially a negative one and really turned it into something that people like. >>Yeah, well, Michael, I let you go. I know you got a busy night, and we're going to present this and ah, I really think to you and the team And congratulations for coming up with something that's a little bit more provocative than Cloud's Going to be big or mobile is going to be big or edge is going to be big. So this is a great material. And thanks for having us back. Look forward to tonight happening. >>Happy to do it. And, you know, next year will probably do it again. >>So we already know everything is 20. >>20. What else is No, A All right. Thanks again. >>Yeah,

(upbeat music) >> Man: From San Francisco it's theCUBE covering Accenture Tech Vision 2020 (upbeat music) brought to you by Accenture. >> Hey, welcome back everybody. Jeff Frick here with theCUBE. We are high atop San Francisco. It is absolutely beautiful outside. Sun is going down, we're here for a really special event, It's the Accenture Tech Vision, kind of unveiling of the five things that we should be paying attention to as we look to 2020 the year that we're going to know everything with the benefit of hindsight. So it's pretty exciting, it's pretty exciting time. And we have a new guest, Mike Redding, he's the managing director of Accenture Ventures telling us where the Accenture Ventures plays in all this stuff, so Mike, well, welcome. >> Well, thanks for having me, I'm really excited to be here. It's a big day here at Accenture with the launch of the 2020 tech vision. You know, and one of the key trends is about innovation DNA, which is really saying, how does an organization connect to the external ecosystems to systematically and scalably and sustainably innovate? And that's part of the role of Accenture Ventures. >> Well, it's an interesting play, right? Because unfortunately Clayton Christensen just passed away, my favorite business writer ever. And the whole innovator's dilemma is that smart people working at big companies making sound business decisions based on revenue and their customers will always miss this continuous change. So really you need some other things to help motivate that. And that's really piece that you guys play. >> Right, exactly cause what, you know, we're a bridge builder between those highly successful large enterprises, which are big, they're slow and they're risk adverse, and the startups, which are small, fast and nothing but risk. And so for us, the role of Accenture and Accenture ventures as being part of that innovation DNA is to say, let's make a bridge, let's figure out how the elephant can dance. And as a result, not get caught up in those disruptions, but in fact leverage them to propel those big enterprises forward. >> Right, now you guys invest in all types of areas, Ais, looking through the portfolio, security, big data, I love this Industry X Dot O, what is Industry X Dot O? >> Well, so, you know, a lot of places talk about industry 4.0 but we're like, why put it, you know, X dot O, is make it a variable? five point O, six point O, which makes it evergreen. Which says, every industry on the planet is going through a transformation, you know, powered by AI, powered by all those areas you mentioned. And as a result, we want to make sure that whatever the future of any industry is, Accenture is part of it and we're bringing in the startups and of course the big technology players that are going to be the fundamental players making that transformation possible. >> Right, there's so much synergy, right? Because for the little guys, right? They've got all the juice behind the innovation and the really smart people and they're kind of breaking things and moving fast, but the challenges there are scale and a sales force and marketing and reach and distribution and all these things that are not too hard for the big guys. >> Right, and so that's why it's a marriage made heaven, right? Again, if you can bring, I always like to say the analogy of you've got the aircraft carrier and then you have all the battleships and the PT boats circling around it, that's a battle group. And so that's what we really see as the opportunity is to bring what each strength, the strength of that disruption and passion and energy and capital to marry to market scale and data and customer base, right? Put those things together, unstoppable force? >> How do the enterprises, you know, kind of view it, do they, obviously they see the value, you wouldn't be doing what you're doing, but is that something that's attracted to them? Is it too disruptive to them? How do they try to work these little startups? Cause (laughs) the other thing, right? Is always vendor viability when you're a little startup doing business with a big company and they can kill you with meetings and there's all kinds of, you know, kind of interesting things that can happen to screw that up. >> Well you're right on and so that's part of where, you know, Accenture comes in as that broker, that bridge maker, because we help each other find how to match up, how not to crush the little guy with infinite meetings, you know, in an enterprise, you know, six months is quick, in a startup, that's a funding cycle, right? And so we've got to find a way to meet each other in the middle and as a result, get the strength of each, but pointed in the same direction and really, you know, become really good dance partners. And that's what we really think any organization, cause they know they need to do it, they know they want to do it, they just don't know how. And that's the gap we help fill. >> And then how do you find your investments? Are you partnering with other venture firms? How are you kind of out prospecting for new opportunities? >> Well, so for us, since we're a corporate strategic, we're really focused on the future of our client's business, the future of the marketplace. And so for us, it's a network game. It's, you know, it's everything from what the corporate venture units at our clients are up to where they're seeing strategic bets. Of course, we're the VC, you know, of Sand Hill Road, of Tel Aviv, of Shenzhen and Shanghai, you know, Bangalore, you know, there's so many great venture capital communities. We love the syndicate, we love friends because we, you know, a financial VC will bring their discipline and we'll bring Accenture's discipline and that's a combo pack that one plus one is three. >> Right, so I want to get your take, you've been in this for a while -- >> Oh, yeah. and one of the themes that we hear over and over, right, is the acceleration of accelerating pace of technology innovation, right? And this exponential curve and people have a hard time with exponential curves, we like linear curves. But it's getting steeper and steeper and steeper. So you know, from your kind of cap bird seed, as you've watched the evolution, do you see, you know, kind of, is this the only way for the enterprises to keep ahead of these things? Is it just an augment? Is it more important than it used to be? How has the landscape kind of changing as this acceleration just keeps going and going and going? >> Well, I think that the era of build it all yourself vertically integrate it So, you know, start to finish, soup to nuts yourself, you can't do it, right? If you're a large incumbent and, but also if you think about this way, and I would talk to audience especially, you know, business audience and say, "Who's got enough budget?" Nobody, there's no such thing as enough budget, the government doesn't have enough budget, right? Nobody does, but if you partner, you can leverage other people's money, their investment cycles, and as a result, for every dollar you have, you can get multiple dollars of leverage. And as a result, no matter how fast it's going, because of the Public Clouds, because of the big software players, you can get so much further. So even though things are moving faster, what you can leverage to adapt to that change is more powerful than ever before. So the good news is the rate of change is fast, but you're not starting from dead stop. You're jumping on a moving train and going where it's going and putting your own business spin on it. >> Right, the other piece is kind of the disruptive speeds. It's funny you mentioned Amazon just, you know, watch a lot of great interviews with Bezos. One of them, he talks about AWS having, you know, a seven-year uninterrupted headstart because no one down the road in Redwood shores or Philadelphia or Waldorf was really paying attention to the little bookseller up in Seattle as a competitor for enterprise infrastructure. So you know that which is going to get you is often not the competitors that you're benchmarking against. It's not the same people that you've been competing with but can completely come out of left field. >> Well, and so that again, is why we really believe passionately that with this future, the next few years, those enterprises that have an innovation DNA that get out of their foxhole and don't just look at your bank, don't just look at FinTech, look at all tech and thanks to this thing called the internet. It's really possible, and language translation, even if you don't speak Chinese, you can get a sense of what's happening in China, where you can call a friend like Accenture and we can hook you up. And regardless of the fact is you can now, if you cast that wide net, if you challenge yourself to get out of that Foxhole and look around, well then suddenly you can't be surprised. You can see it coming and you can then use your superpowers, which is incumbency, scale, balance sheet, customer base, you know, loyalty, all those things that you brand, all the things that make you strong, you can now append that disruption to it and basically, not get disrupted. So I think that's, that's the formula for going forward. >> Yeah, well, I love the one plus one makes three formula cause it really is kind of a match made in heaven really bringing together two sets of strengths that the other person or the other party doesn't really have. So you guys been at it for awhile and continued success. >> Well, thank you very much. All right. Well, Mike, thanks for taking a minute. He's Mike, I'm Jeff, you're watching theCUBE. With the Accenture Tech Vision launch 2020. Thanks for watching, we'll see you next time. (upbeat music)

>> Announcer: From San Francisco, it's theCUBE covering Accenture Tech Vision 2020, brought to you by Accenture. >> Hey, welcome back, everybody. Jeff Rick here with theCUBE. We are high atop San Francisco, at the Accenture Innovation Hub, 33rd floor of the Salesforce Tower at the Accenture Technology Vision 2020 party. The party's getting started. Paul, and Mike, and the team are going to present the findings, and we're excited to have, actually, the hostess of this great facility. She's Ashley Miller, managing director of the San Francisco Innovation Hub. Ashley, great to see you. >> Great to see you again. >> So, congratulations once again. We were here last year. It was the grand opening of this facility. >> Ashley: Yes, sure was. >> You've had it open for a year now. >> We sure have. It's been a year. We also have a soft launch in September, so a little more than a year under our belt, and as you can see, the place is busy. >> Right, so you had the hard job, right? So Mike, and Paul, and all the big brains, they put together pretty pictures, and great statements. You're the one that actually has to help customers implement this stuff, so tell us a little bit about how you use the Tech Vision because it's pretty insightful. It's a lot deeper than cloud's going to be big, or mobile's going to be big, but to take some of these things to help you with your customers drive this innovation. >> Yeah, well, I don't know about having the hard job against theirs. They certainly have the hard job understanding what these technology trends are that are going to have an impact on business three to five years out, but I certainly do have the fun job, and the exciting job. I get to work with our clients every day here in the hub, and work with our 250 dedicated innovation teammates here in the hub to think about the impact of these trends to their business, so clients come in for a day, two days, a week, and we'll sit with technologists. We'll get our hands on some of these emerging technologies, on quantum computing, on artificial intelligence, machine vision, machine learning, natural language processing. You name it, we have it here. We have a smart materials showcase going on upstairs that a lot of these clients have checked out, so they can come here, they can get their hands on these technologies that are driving these trends, and then, they can sit and work with strategists, and others who can think about, what are the application of these technologies to their business? And then, what's really exciting is we have engineers here who can then help build prototypes to actually test these technologies to see what their impacts are for the business, and then, finally, support the rollout of pilots that prove successful, so it's, again, it's a fun job. I love it. >> And how does it actually work in terms of best practices? Is it starting out as some strategy conversation with the top-level people about trying to integrate say, more AI into their products, or is it maybe more of within a product group, where they're trying to be a little bit more innovative, and it really challenges on the product development path? You talked about the material science that they want to go down, what are some of the ways that people actually work with you, and work with your teams, and leverage this asset here at the hub? >> Yeah, so ultimately, it's both, and it's at all ends of the spectrum. We are here in the Silicon Valley, where clients are coming from all over the globe to understand what the trends are that are going to shape their business operations in the future, so we have clients that are coming through. Some people call them digital safaris, or innovation safaris. Some people may say that's not valuable. I think it is valuable to come and get firsthand experience, knowledge, touch and feel these things, and really dedicate time to think about the application to your business. On the other end of the spectrum, we'll have clients who are here for days, weeks, and months, and we have ongoing partnerships with clients. We've been open for about a year and a half, for that and longer to actually embed this innovation capabilities into their business, so I think maybe an answer is, what is the most successful model I see? I really get to dig into these clients who are using our services as an innovation engine to help them drive their business, and to help augment their innovation capabilities, and it's those clients I see who are continuously testing, continuously learning, understanding the impact of these technologies, driving proofs of concepts to test them who are able to make progress. >> Can it happen without top down support? I mean, we talked, unfortunately Clayton Christensen just passed away. Innovator's Dilemma, my favorite business book of all time because he said smart people making sound business decisions based on customers, profitability, and business, logical business priorities, will always miss discontinuous change. Jeff Bezos talks about AWS had a seven-year head start on their public cloud because no one down in Redwood Shores, or Waldorf was paying attention to the bookseller in Seattle, so it's hard for big companies to innovate, so is it really necessary for that top down, that, hey, we are going to invest, and we are going to saddle up, and get our hands dirty with some of these technologies for them to be successful, and drive innovation because it's not easy for big enterprises. >> You're exactly right. Innovation is hard. Change is difficult. I was a student of Clayton Christensen, and like you and many others, are mourning his passing. He made a significant impact, this area of research. Change is hard. It's difficult, so we see a lot of clients who are coming in, and are doing interesting things to overcome that inertia to stay put, and I think tops down leadership is a significant piece of that. You need to have leaders who are supporting movement, who are enabling decision making quickly, so they are supporting small decisions they're making frequently so that there's not a massive decision that happens at the end of a pilot, but rather, micro-decisions that help ensure things are being moved along, building pilots and proof of concepts, of course, helped in that movement to get buy-in, to get leaders to see the value, and to also pivot if something isn't working, so innovation is hard. Accenture's Innovation Hub helps to fill some of those gaps because really, we are a sandbox, where you can come in, build the proof of concepts, test these ideas, and then, in an ongoing, continuous way, help understand their impacts to your business. >> Right, and I'm just curious how often, as order of magnitude, this innovation around a particular, existing business, maybe it's the new materials, the new way of thinking about it, versus maybe, is this a way for them to really explore wild ideas, or go out a little bit beyond the edge of what they're going to execute in their normal, day to day, say, product development because which of those do you find is best use of your resources? >> Yeah, so again, it runs the spectrum. I mean, I think the companies who are innovating around the edges, they're spending a lot of money to run pilots, and tests, proof of concepts that may not have significant value to the core of their business, so of course, it's the companies who are really thinking about how they're going to innovate new business models, how they're going to build on these trends to figure out where their company is going in the future, and be ready, and be ahead of the curve, but in order to get there, maybe you do need to get your hands dirty, and run some tests, run some proof of concepts to understand the technology. The key is, in order to ensure that the investment in those activities is actually helping you move the needle. >> Right, so how should people, if somebody's watching this, and they want to get involved, or I'm busting my head. We're not moving as fast as we need to. I'm nervous. I have an imperative. I need to accelerate this stuff. How do they get involved, and how do they end up here getting their hands dirty with some of your team? >> Yeah, thanks for that, appreciate that. Accenture works with the largest organizations around the globe, and there's typically a client account leader, partner, from Accenture embedded into the biggest organizations, and so, for those who are existing clients, they can reach out to their client account lead, and we would be delighted to welcome them in, and do some, either, exploratory research into these technologies, or actually, do some longer-term innovation engine work, where we're helping to augment their capabilities. For those who, maybe, aren't an Accenture client, then, we do have open houses. We do quarterly open events, not only for potential new clients, but also, for people in the community for partners, for schools. We're really committed to helping to be an asset for San Francisco, for this community, so keep your eyes peeled for opportunities to come in. >> Yeah, that's great because last time when we were here when we opened there was a lot of conversation about being a very active participant in the community. You guys are sponsors with the Warriors at the Chase Center, but no, I think we had a number of people from the city and county of San Francisco in talking about the opportunities, and being an active, engaged member of the community beyond just a for-profit company. >> Absolutely, and the undercurrent of this year's Tech Vision, which is about to launch is all about thinking beyond the edges of your organization, and understanding the choices that you make, how they impact the communities you serve, so it's really important to us to be a good steward of that here at Accenture, and we have teammates accessible within the hub. For example, data enthesis, who can help you understand the decisions you're making around artificial intelligence. Are you using data securely? Are you using it in a way that makes people feel comfortable? So we have teammates here who can help clients consider the impact of these decisions that goes beyond the four walls, to really be a good steward for the next generation. >> Okay, well, next time I come, I'm wearing a white coat, so we can go get our hands dirty. >> I like it. >> All right, Ashley, well, again, congratulations to you and the team, and have a great evening. >> Thank you so much. >> All right, she's Ashley, I'm Jeff. You're watching theCUBE. We're at the Accenture Innovation Hub for the Technology Vision 2020. Thanks for watching, and we'll see you next time. (funky electronic music)

>> From New York City, it's theCUBE, covering Welcome to the New Edge. Brought to you by Pensando Systems. >> Hey, welcome back everybody, Jeff Frick here with theCUBE. We're on top of Goldman Sachs in downtown Manhattan. It was a really beautiful day a couple of hours ago, but the rain is moving in, but it's appropriate 'cause we're talking about cloud. And we're here for a very special event. It's the Pensando launch, I'll get the pronunciation right, Pensando launch, and it's really about Welcome to the New Edge. And to start off, I mean, I couldn't come up with two better tech executives who've been around the block, seen it all, and they're both here for this launch event which is pretty special. On my left, Antonio Neri, CEO and president of HP. Antonio, great to see you. >> Thanks for having me. >> And John Chambers, of course we know him from his many years at Cisco, but now he's the chairman of Pensando, and of course J2 Ventures, and an author, and John, you're keeping yourself busy. >> I am, tryin' to change the world one more time. >> All right, so let's talk about that changing the world, 'cause you are two very high, powerful people. You run big companies, and you talked about, in your opening remarks, the next wave. You talked about these kind of 10-year waves. And we're starting a new one, which is why you got involved. Why did you see that coming, what do you see in Pensando, and how are we going to address this opportunity? >> Well, when you think about it, every 10 years there's a new leader in the marketplace, and nobody has stayed on top longer than 10 years and has led in the next market transition. We think about mainframes, IBM clearly the leader there, the mini computers, I'm biased toward Wang, but DEC was there. Then the client server and obviously Microsoft and Intel playing a very key role, followed by the internet where Cisco was very, very successful. And then followed, literally by that, by social media and then the cloud and then what I think will be bigger than any of the prior ones, it's about what happens as the cloud moves to the edge. And we may end up having a different term every time, but that really is what we saw today. And how we came together with a common vision as the cloud moves to the edge, what could an ecosystem of partners do, with a foundation, with Pensando at the core of that, to really take advantage from how do you deliver services to our joint customers in a way that no one else can. And have the courage, really, to go challenge Amazon in terms of their market dominance, but provide choice and say it's a multi cloud world. How do you provide that choice and then how do you differentiate it together with each partner? >> Antonio, you guys have been talking about edge for a long, long time. You've been on this for a while. HP's such a great company. Used to be, I think, one of the great validators if anyone could do a deal with HP. It was really a technology validation and a business validation, and I think that still holds true. So you must have, knocking on your door all day long. What did you see in this opportunity with Pensando? >> Well, first of all, John and I see the world from the same lens. We see a world where the enterprise of the future will be essentially cloud enabled and data-driven. And therefore we have to remove these barriers, call it the cloud in one place or the other one. We are going to live what are calling a edge-to-cloud world where, is a cloudless. Where the cloud experience is distributed everywhere. And where action happens is where we live and work right now, right here. We're having a conversation, we're producing data, and we are transmitting this real time. So, the point is, we believe the edge is a new frontier and that's where the vast majority is being created, 75%. of it created the edge. And this is where it starts by having a common vision and ultimately a same DNA, same culture. John and I share the same values for passion for customers, passion for driving a customer-driven innovation, and ultimately change the world like we have done for decades. And I think Hewlett-Packard Enterprise is uniquely positioned to be the edge-to-cloud platform delivered as a service. And together with Pensando and the great technology I bring about from the silicon side and on the softer side, together with our own knowhow and engineering capabilities, we can change the world again. >> And the fun part is, we can almost finish each other's sentences. (all laughing) We have a little bit different accent. The stability to have a common vision, having never really talked about it, and then a view of the common culture. Because strategic partnerships are really hard. And you said it on stage, but I cannot agree with it more. If you're cultures aren't similar, if you don't think how does your partner win first and how do you win second, this is very hard to do. And we can finish each other's sentences. >> And I think there is another point here that John and I truly believe, because it's part of our values. It's to use technology for good. So, one thing is accelerating the business innovation and what our enterprise customers are going through, but then how apply that technology to deliver some good. And we as a company have a clear purpose in life, which is to advance the way people live and work. So, I think as we go through this massive inflection point, both from the business side and the technology side, not only we can create a better world, but also give back somewhat to the communities as well. >> There are massive changes, and it's a sea-change in infrastructure in the way things are done, but you hit on three really key, simple words in your remarks earlier. Trust, engineering-driven, which is HP's culture from the earliest garage days, and customer-centric. So, we hear about data-driven but in engineering, you don't necessarily want to lead with that. Customer-centric you do have to lead and it's pretty interesting at Pensando, you talk to all these customers, and you're just launching the company today, you've been in stealth for over two years. But all these customers have been engaged with you since the very, very beginning. Pretty interesting approach. >> It is, and we do share a common passion on that. Every company says they're customer-driven, but just ask how the CEO spends his or her time. I just asked their customers, do they replace them first on every issue? We share that common value completely. >> Yeah, I spend 50% of my time on the road talking to customers. That's my goal, because I believe the truth is in the cold face. When you talk to customers, you get the truth, what the challenges and opportunities are. And we need to bring that succinct feedback back into our problem management engineering team to try to solve there's a problem. So take advantage of those opportunities by delivering a better experience. It starts with experience first and technology comes second. >> The other piece you talked about is your team, and diversity and really the power of diversity. And, I think it was, the Lincoln cabinet, band of people that didn't get along with each other and had a bunch of different points of view. But because of that, it surfaces issues and it lets you see multi sides. You said you handpicked that team. What are some of the things you thought about when you handpicked your team when you took the reins a couple years ago from the-- >> Well, it starts by, thought leadership and what, how they see the world, ultimately what the strengths are and how we bring those strengths for the power of one. I agree with John, I believe a team comes first, individual comes second. And if you can bring the best of each individual in a concerted way where you create an environment for debate and ultimately for getting alignment and moving forward with execution. That's what that is all about, leadership. So, I handpicked those people because each of them had that unique quality. Whether it's, you know, being very self-centric in the way you deliver the value proposition or very technology-centric, or very services oriented. So, we have picked those people for a reason and it's not easy to manage a very opinionated team. (all laughing) But once you can get them aligned, is actually incredible fun to watch. >> You know, I would make one tweak to what you just asked the question on. I had a chance to watch his team for the first time in our garage startup at my house. And they are very diverse with different opinions, they are very comfortable with disagreeing with each other. But they have a common set of values and a common end goal. I'm not sure the Lincoln cabinet had that. And that's so important to realize, because what we're about to do together and what each of us are trying to do in our own endeavors, it's so important to have a team that has that type of culture and the ability to move for that. >> The other team that mentioned, that kept coming up throughout the day, was the team that you're working with on Pensando. And how this team has been together for, I think you said the new 20, right? 25 plus years, and have built multiple projects, multiple products over many, many years. And now have this cohesion as you keep saying, they can finish their own sentences. You know, a really specific approach to get this group together that you know is not going to be strategy, it's going to be delivery. >> It is going to be the combination, if I may. And it is very unique that a team works together for over 25 years. It's a team that is a family and we are about as diverse as it gets in our backgrounds, our accents, our countries that our families came from. But it's a team that competes purely on getting market transitions right, that is always driven by our customers and what we need to do and build and put 'em always first in everything we do. And then it's fearless. We outline audacious goals at being number one in everything we do, and out of the eight products that we built together, we are number one in all eight. All of 'em with over 50% market share, and there was no number two. And so the ability to execute with that type of precision, customer-driven and the courage to do it and understand what we know and what we don't know. Coming together one more time, I mean it's really exciting, it will be a new definition of 20 somethings in a startup. >> So, getting you the last word Antonio, as you looked at John's chart with those 10-year blocks and the garage has been around Palo Alto for a long time. >> 82 years. >> You guys have seen a lot, 82 years, you've been through a few of these and you're still here and still doing a great job and still winning. So, as you look at that from your current position as CEO, what goes through your head? How are you making sure you're keeping ahead? How are you avoiding the Clayton Christensen Innovator's Dilemma, to make sure you're killing your own business before somebody else kills kind of the old stuff and making sure you're out in front. >> When I became a CEO, in the transition from Meg to me, I established three key priorities for myself. One is our customers and partners. Keep them at the center of everything we do. That's one of our core values. Second is innovation, innovation, innovation. Innovation from a customer-driven approach. And third is the culture of the company. And what a great example here with John, you know, leading an iconic company for decades. And so to me, I have been working very aggressive on the three of those aspects. And I'm very pleased with the progress we have made. But, now is about writing the next chapter of this company. And in order to write that next chapter company, you need to have a strong alignment at the top, all the way down, what I call ropes to the ground. So, fun enough, John is going to be in my event here in a couple of weeks. We'll bring the leadership team, the top 400 leaders, talking about how to disrupt yourself and how you pay for the company into the future. And the future, as I said, is we see an enterprise that's edge-centric, cloud-enabled, and data-driven, delivered as a service. So we are going to be the, as a service company with an edge-to-cloud platform that accelerates business from the data. And the combination of Pensando technologies and engineering capabilities, with our vision and our own intellectual property, we think we can deliver those unique experience for the customers in a more agile, cost-effective way and democratize the cloud, as John say, for the world. So, I'm incredibly excited about doing this. And who thought that John Chambers and Antonio Neri would be here, you know. And the reality is it takes leadership, so I value leadership, I value trust, and this partnership is built on trust. And we both have the same values. >> I appreciate you taking the time. I mean, we're going to talk about the products a little bit later. We've got some of the deeper product people. But, you know, I think the leadership thing is so important and I think it's harder. I think it's hard to be a great leader, it's hard to lead through transitions, and the pace of change is only accelerating, so the challenge is only going to increase. But I think communication and trust is such a big piece. I saw Dave Pottruck speak many, many times and he's very, very good. And I asked him, 'cuz we had a thing at school. I said, "Dave, why are you so good?" And he said, "Very simple. "As a CEO, my job is to communicate. "I have three constituents. "I have my customers, I have the street, "and I have my employees. "And so I treat it as a skill, I practice, I got a coach, "and I treat it like any other skill." And it's so hard and so important to provide that leadership, provide that direction, so everybody can pull the rope in the same direction. Nothing but the best to both of you and thanks for taking a few minutes. >> Thank you. >> It was a lot of fun. >> All right. >> It's a pleasure. >> Thank you. >> He's Antonio, he's John, I'm Jeff. You're watching theCUBE, from the top of Goldman Sachs in Manhattan. Thanks for watching, we'll see you next time. (upbeat music)

(bright music) >> Hey welcome back, everybody. Jeff Frick here with theCUBE We are high atop San Francisco in the Sales Force Tower in the new Accenture offices, it's really beautiful and as part of that, they have their San Francisco Innovation Hubs. So it's five floors of maker's labs, and 3D printing, and all kinds of test facilities and best practices, innovation theater, and this studio which is really fun to be at. So we're talking about hybrid cloud and the development of cloud and multi-cloud and continuing on this path. Not only are customers on this path, but everyone is kind of on this path as things kind of evolve and transform. We are excited to have a couple of experts in the field we've got Larry Socher, he's the Global Managing Director of Intelligent Cloud Infrastructure Services growth and strategy at Accenture. Larry, great to see you again. >> Great to be here, Jeff. And Ajay Patel, he's the Senior Vice President and General Manager at Cloud Provider Software Business Unit at VMWare and a theCUBE alumni as well. >> Excited to be here, thank you for inviting me. >> So, first off, how do you like the digs up here? >> Beautiful place, and the fact we're part of the innovation team, thank you for that. >> So let's just dive into it. So a lot of crazy stuff happening in the marketplace. Lot of conversations about hybrid cloud, multi-cloud, different cloud, public cloud, movement of back and forth from cloud. Just want to get your perspective today. You guys have been in the middle of this for a while. Where are we in this kind of evolution? Everybody's still kind of feeling themselves out, is it, we're kind of past the first inning so now things are settling down? How do you kind of view the evolution of this market? >> Great question and I think Pat does a really nice job of defining the two definitions. What's hybrid versus multi? And simply put, we look at hybrid as when you have consistent infrastructure. It's the same infrastructure regardless of location. Multi is when you have disparate infrastructure, but are using them in a collective. So just from a from a level setting perspective, the taxonomy is starting to get standardized. Industry is starting to recognize hybrid is the reality. It's not a step in the long journey. It is an operating model that going to exist for a long time. So it's not about location. It's about how do you operate in a multi-cloud and a hybrid cloud world. And together at Accenture VMware have a unique opportunity. Also, the technology provider, Accenture, as a top leader in helping customers figure out where best to land their workload in this hybrid, multi-cloud world. Because workloads are driving decisions. >> Jeff: Right. >> We are going to be in this hybrid, multi-cloud world for many years to come. >> Do I need another layer of abstraction? 'Cause I probably have some stuff that's in hybrid and I probably have some stuff in multi, right? 'Cause those are probably not mutually exclusive, either. >> We talked a lot about this, Larry and I were chatting as well about this. And the reality is the reason you choose a specific cloud, is for those native differentiator capability. So abstraction should be just enough so you can make workloads portable. To be able to use the capability as natively as possible. And by fact that we now at VMware have a native VMware running on every major hyperscaler and on pram, gives you that flexibility you want of not having to abstract away the goodness of the cloud while having a common and consistent infrastructure while tapping into the innovations that the public cloud brings. So, it is the evolution of what we've been doing together from a private cloud perspective to extend that beyond the data center, to really make it an operating model that's independent of location. >> Right, so Larry, I'm curious your perspective when you work with customers, how do you help them frame this? I mean I always feel so sorry for corporate CIAOs. I mean they got security going on like crazy, they go GDPR now I think, right? The California regs that'll probably go national. They have so many things to be worried about. They go to keep up on the latest technology, what's happening in containers. I thought it was doc, now you tell me it's Kubernetes. It's really tough. So how do you help them kind of, put a wrapper around it? >> It's got to start with the application. I mean you look at cloud, you look at infrastructure more broadly I mean. It's there to serve the applications and it's the applications that really drive business value. So I think the starting point has to be application led. So we start off, we have our intelligent engineering guys, our platform guys, who really come in and look and do an application modernization strategy. So they'll do an assessment, you know, most of our clients given their scale and complexity usually have from 500 to 20,000 applications. You know, very large estates. And you got to start to figure out okay what's my current applications? A lot of times they'll use the six Rs methodology and they say hey okay what is it? I'm going to retire this, I no longer need it. It no longer has business value. Or I'm going to replace this with SaaS. I move it to sales force for example, or service now, etcetera . Then they're going to start to look at their workloads and say okay, hey, do I need to re-fact of reformat this. Or re-host it. And one of the things obviously, VMware has done a fantastic job is allowing you to re-host it using their software to find data center, you know, in the hyperscaler's environment. >> We call it just, you know, migrate and then modernize. >> Yeah, exactly. But the modernized can't be missed. I think that's where a lot of times we see clients kind of get in the trap, hey, i'm just going to migrate and then figure it out. You need to start to have a modernization strategy and then, 'cause that's ultimately going to dictate your multi and your hybrid cloud approach, is how those apps evolve and you know the dispositions of those apps to figure out do they get replaced. What data sets need to be adjacent to each other? >> Right, so Ajay, you know we were there when Pat was with Andy and talking about VMware on AWS. And then, you know, Sanjay is showing up at everybody else's conference. He's at Google Cloud talking about VMware on Google Cloud. I'm sure there was a Microsoft show I probably missed you guys were probably there, too. You know, it's kind of interesting, right, from the outside looking in, you guys are not a public cloud, per se, and yet you've come up with this great strategy to give customers the options to adopt VMware in a public cloud and then now we're seeing where even the public cloud providers are saying, "Here, stick this box in your data center". It's like this little piece of our cloud floating around in your data center. So talk about the evolution of the strategy, and kind of what you guys are thinking about 'cause you know you are clearly in a leadership position making a lot of interesting acquisitions. How are you guys see this evolving and how are you placing your bets? >> You know Pat has been always consistent about this and any strategy. Whether it's any cloud or any device. Any workload, if you will, or application. And as we started to think about it, one of the big things we focused on was meeting the customer where he was at in his journey. Depending on the customer, they may simply be trying to figure out working out to get on a data center. All the way, to how to drive an individual transformation effort. And a partner like Accenture, who has the breadth and depth and sometimes the vertical expertise and the insight. That's what customers are looking for. Help me figure out in my journey, first tell me where I'm at, where am I going, and how I make that happen. And what we've done in a clever way in many ways is, we've created the market. We've demonstrated that VMware is the only, consistent infrastructure that you can bet on and leverage the benefits of the private or public cloud. And I often say hybrid's a two-way street now. Which is they are bringing more and more hybrid cloud services on pram. And where is the on pram? It's now the edge. I was talking to the Accenture folks and they were saying the metro edge, right? So you're starting to see the workloads And I think you said almost 40 plus percent of future workloads are now going to be in the central cloud. >> Yeah, and actually there's an interesting stat out there. By 2022, seventy percent of data will be produced and processed outside the cloud. So I mean the edge is about to, as we are on the tipping point of IOT finally taking off beyond smart meters. We're going to see a huge amount of data proliferate out there. So the lines between between public and private have becoming so blurry. You can outpost, you look at, Antheos, Azure Stack for ages. And that's where I think VMware's strategy is coming to fruition. You know they've-- >> Sometimes it's great when you have a point of view and you stick with it against the conventional wisdom. And then all of a sudden everyone is following the herd and you are like, "This is great". >> By the way, Anjay hit on a point about the verticalization. Every one of our clients, different industries have very different paths there. And to the meaning that the customer where they're on their journey. I mean if you talk to a pharmaceutical, you know, GXP compliance, big private cloud, starting to dip their toes into public. You go to Mians and they've been very aggressive public. >> Or in manufacturing with Edge Cloud. >> Exactly. >> So it really varies by industry. >> And that's a very interesting area. Like if you look at all the OT environments of the manufacturing. We start to see a lot of end of life of environments. So what's that next generation of control systems going to run on? >> So that's interesting on the edge because and you've brought up networking a couple times while we've been talking as a potential gate, right, when one of them still in the gates, but we're seeing more and more. We were at a cool event, Churchill Club when they had psy links, micron, and arm talking about shifting more of the compute and store on these edge devices to accommodate, which you said, how much of that stuff can you do at the edge versus putting in? But what I think is interesting is, how are you going to manage that? There is a whole different level of management complexity when now you've got this different level of distributing computing. >> And security. >> And security. Times many, many thousands of these devices all over the place. >> You might have heard recent announcements from VMware around the Carbon Black acquisition. >> Yeah. >> That combined with our workspace one and the pulse IOT, we are now giving you the management framework whether it's for people, for things, or devices. And that consistent security on the client, tied with our network security with NSX all the way to the data center security. We're starting to look at what we call intrinsic security. How do we bake security into the platform and start solving these end to end? And have our partner, Accenture, help design these next generation application architectures, all distributed by design. Where do you put a fence? You could put a fence around your data center but your app is using service now and other SaaS services. So how do you set up an application boundary? And the security model around that? So it's really interesting times. >> You hear a lot about our partnership around software defined data center, around networking. With Villo and NSX. But we've actually been spending a lot of time with the IOT team and really looking and a lot of our vision aligns. Actually looking at they've been working with similar age in technology with Liota where, ultimately the edge computing for IOT is going to have to be containerized. Because you're going to need multiple modalware stacks, supporting different vertical applications. We were actually working with one mind where we started off doing video analytics for predictive maintenance on tires for tractors which are really expensive the shovels, et cetera. We started off pushing the data stream, the video stream, up into Azure but the network became a bottleneck. We couldn't get the modality. So we got a process there. They're now looking into autonomous vehicles which need eight megabits load latency band width sitting at the edge. Those two applications will need to co-exist and while we may have Azure Edge running in a container down doing the video analytics, if Caterpillar chooses Green Grass or Jasper, that's going to have to co-exist. So you're going to see the whole containerization that we are starting to see in the data center, is going to push out there. And the other side, Pulse, the management of the Edge, is going to be very difficult. >> I think the whole new frontier. >> Yeah absolutely. >> That's moving forward and with 5G IntelliCorp. They're trying to provide value added services. So what does that mean from an infrastructure perspective? >> Right, right. >> When do you stay on the 5G radio network versus jumping on a back line? When do you move data versus process on the edge? Those are all business decisions that need to be there into some framework. >> So you guys are going, we can go and go and go. But I want to follow up on your segway on containers. 'Cause containers is such an important part of this story and an enabler to this story. And you guys made and aggressive move with Hep TO. We've had Craig McLuckie on when he was still at Google and Dan, great guys. But it's kind of funny right? 'Cause three years ago, everyone was going to DockerCon right? That was like, we're all about shows. That was the hot show. Now Docker's kind of faded and Kubernetes is really taking off. Why, for people that aren't familiar with Kubernetes, they probably hear it at cocktail parties if they live in the Bay area. Why is containers such an important enabler and what's so special about Kubernetes specifically? >> Do you want to go on the general or? >> Why don't your start off? >> I brought my products stuff for sure. >> If you look at the world its getting much more dynamic. Particularly as you start to get more digitally decoupled applications, you're starting, we've come from a world where a virtual machine might have been up for months or years to all the sudden you have containers that are much more dynamic, allowed to scale quickly, and then they need to be orchestrated. And that's essentially what Kubernetes does, is really start to orchestrate that. And as we get more distributed workloads, you need to coordinate them. You need to be able to scale up as you need for performance etcetera So Kubernetes is an incredible technology that allows you really to optimize the placement of that. So just like the virtual machine changed how we compute, containers now gives us a much more flexible, portable, you can run on any infrastructure at any location. Closer to the data etcetera to do that. >> I think the bold move we made is, we finally, after working with customers and partners like Accenture, we have a very comprehensive strategy. We announced Project Tanzu at our last VM World. And Project Tanzu really focused on three aspects of containers, How do you build applications, which is what Pivotal and the acquisition of Pivotal was driven around. How do we run these on a robust enterprise class run time? And what if you could take every vSphere ESX out there and make it a container platform. Now we have half a million customers. 70 million VM's. All the sudden, that run time we are container enabling with a Project Pacific. So vSphere 7 becomes a common place for running containers and VMs. So that debate of VMs or containers? Done, gone. One place or just spend up containers and resources. And then the more important part is how do I manage this? As you have said. Becoming more of a platform, not just an orchestration technology. But a platform for how do I manage applications. Where I deploy them where it makes more sense. I've decoupled my application needs from the resources and Kubernetes is becoming that platform that allows me to portably. I'm the Java Weblogic guy, right? So this is like distributed Weblogic Java on steroids, running across clouds. So pretty exciting for a middleware guy, this is the next generation middleware. >> And to what you just said, that's the enabling infrastructure that will allow it to roll into future things like edge devices. >> Absolutely. >> You can manage an Edge client. You can literally-- >> the edge, yeah. 'Cause now you've got that connection. >> It's in the fabric that you are going to be able to connect. And networking becomes a key part. >> And one of the key things, and this is going to be the hard part is optimization. So how do we optimize across particularly performance but even cost? >> And security, rewiring security and availability. >> So still I think my all time favorite business book is Clayton Christensen, "Innovator's Dilemma". One of the most important lessons in that book is what are you optimizing for? And by rule, you can't optimize for everything equally. You have to rank order. But what I find really interesting in this conversation and where we're going and the complexity of the size of the data, the complexity of what am I optimizing for now just begs for plight AI. This is not a people problem to solve. This is AI moving fast. >> Smart infrastructure going to adapt. >> Right, so as you look at that opportunity to now apply AI over the top of this thing, opens up tremendous opportunity. >> Absolutely, I mean standardized infrastructure allows you, sorry, allows you to get more metrics. It allows you to build models to optimize infrastructure over time. >> And humans just can't get their head around it. I mean because you do have to optimize across multiple dimensions as performance, as cost. But then that performance is compute, it's the network. In fact the network's always going to be the bottleneck. So you look at it, even with 5G which is an order magnitude more band width, the network will still lag. You go back to Moore's Law, right? It's a, even though it's extended to 24 months, price performance doubles, so the amount of data potentially can exponentially grow our networks don't keep pace. So that optimization is constantly going to have to be tuned as we get even with increases in network we're going to have to keep balancing that. >> Right, but it's also the business optimization beyond the infrastructure optimization. For instance, if you are running a big power generation field of a bunch of turbines, right, you may want to optimize for maintenance 'cause things are running in some steady state but maybe there's an oil crisis or this or that, suddenly the price rises and you are like, forget the maintenance right now, we've got a revenue opportunity that we want to tweak. >> You just talked about which is in a dynamic industry. How do I real time change the behavior? And more and more policy driven, where the infrastructure is smart enough to react, based on the policy change you made. That's the world we want to get to and we are far away from that right now. >> I mean ultimately I think the Kubernetes controller gets an AI overlay and then operators of the future are tuning the AI engines that optimize it. >> Right, right. And then we run into the whole thing which we talked about many times in this building with Dr. Rumman Chowdhury from Accenture. Then you got the whole ethics overlay on top of the business and the optimization and everything else. That's a whole different conversation for another day. So, before we wrap I just want to give you kind of last thoughts. As you know customers are in all different stages of their journey. Hopefully, most of them are at least off the first square I would imagine on the monopoly board. What does, you know, kind of just top level things that you would tell people that they really need just to keep always at the top as they're starting to make these considerations? Starting to make these investments? Starting to move workloads around that they should always have at the top of their mind? >> For me it's very simple. It's really about focus on the business outcome. Leverage the best resource for the right need. And design architectures that are flexible that give you choice, you're not locked in. And look for strategic partners, whether it's technology partners or services partners that allow you to guide. Because if complexity is too high, the number of choices are too high, you need someone who has the breadth and depth to give you that platform which you can operate on. So we want to be the ubiquitous platform from a software perspective. Accenture wants to be that single partner who can help them guide on the journey. So, I think that would be my ask is start thinking about who are your strategic partners? What is your architecture and the choices you're making that give you the flexibility to evolve. Because this is a dynamic market. Once you make decisions today, may not be the ones you need in six months even. >> And that dynanicism is accelerating. If you look at it, I mean, we've all seen change in the industry, of decades in the industry. But the rate of change now, the pace, things are moving so quickly. >> And we need to respond to competitive or business oriented industry. Or any regulations. You have to be prepared for that. >> Well gentleman, thanks for taking a few minutes and great conversation. Clearly you're in a very good space 'cause it's not getting any less complicated any time soon. >> Well, thank you again. And thank you. >> All right, thanks. >> Thanks. >> Larry and Ajay, I'm Jeff, you're watching theCUBE. We are top of San Francisco in the Sales Force Tower at the Accenture Innovation Hub. Thanks for watching. We'll see you next time.

>> Narrator: Live from San Francisco celebrating 10 years of high tech coverage it's theCUBE. Covering VMworld 2019 Brought to you by VMware and it's ecosystem partners. >> Welcome back everyone to The Cube's live coverage here in San Francisco, California for VMworld 2019. We are here in the broadcast booth. We have two sets going on all day for three days. The last day of winding down VMworld of our coverage. I'm John Furrier, my co-host Dave Vellante. Stu Miniman is holding down on the other set. But here we are going to analyze what's happened at VMworld 2019. We've assembled the top industry analysts. My co-host Dave Vellante, Peter Burris and David Floyer with Wikibon who have been in the analyst sessions in the hallways, doing briefings, digging getting all the data. Let's analyze it. Guys welcome to theCUBE, welcome back to theCUBE. Good to see you. >> Thank you. >> All right so what's the analysis. VMworld 2019. >> What's the core of it? I believe that the core of it is that they're taking their centralized and data center platform and extending it. Extending it to the edge, extending it to every aspect. Extending it to multiple clouds not just AWS but a whole number of clouds. Extending it right the way down to the edge even with ARM processor capabilities, and extending the interoperability, the hybrid nature of those offerings. And trying to establish themselves as one of the core platforms for distributed hybrid processing. >> Peter what's your take? How should the business model with Pivotal, they got security in there. What's your analysis of VMworld 2019, what's happening? >> The analysis of the show is, it's, I'd say it's interesting. It's not as strong as it could've been. But let's start here, per what David said, look, these guys made a major bet three years ago that a lot of, it was like on a knife's edge, which way is going to go. And it went the right way. And we observed last year that it went the right way not just cause it was a good idea but because Gelsinger built the team that could execute. And what I would say out of David's stuff cause I think you're a little bit, you're getting ahead a little bit on some of the edge stuff and there's still a lot of work that's got to get done but I think what users should walk away from the show with is they made a bet, it turned out to be the right bet and this is a team that can execute. And the promises that they had been making they have been realizing. And that's where I say that it's kind of what's, it's almost a weird thing because in many respects VMware could be screaming from the rooftops at this point in time that they are Switzerland with teeth. They can work with everybody but do so in a way that actually does have manifest impacts on how digital businesses work. And so I think in almost a weird way VMworld 2019 was more subdued than it could have been. The industry is still looking for that thought leader that company that's going to provide that kind of central, that kind of center piece of what's going to happen. And a lot of folks don't want it to be AWS. And it's almost like VMware could have been a little bit more forceful, a little bit stronger in how they talked about the success that they're having. >> So you're saying they're a little bit humble. They could have been louder and prouder about their accomplishments. >> Or you know, sometimes I almost wondered do they really know the tiger that they're riding right now because they're a lot of enterprises out there that are truly starting to bank on these guys and their success is being increasingly tied to VMware's success. >> Peter brings up a great point, I want to get your thoughts on this because you've been digging into the numbers. I think they actually have a great team, they got all these business units they seem to be kind of getting them into formation. It's almost as if they don't want to brag too much because they got more work to do. As you mentioned the edge. >> Peter: Yes a lot of work to do. >> And I think you laid it out perfectly in terms of what they're trying to do. I think Peter you bring the reality to it but they've still got to beaver away on some things. They got work to do. What's your take on this? >> Well, so I want to pick up on something that Peter said, so Pat said the strengths lie in the differences not the similarities. There's a lot of differences between the bets the VMware is making and the bets that Amazon is making. Now, can they both payoff, yeah they probably can but we've noted the differences. Amazon doesn't talk about multicloud. Amazon says cloud security is great. Don't say it's broken, that's a bad narrative. Amazon says that they want to be or they are the platform for developers and the future of the best infrastructure in developers company. That's what VMware wants to be. So I see those two at odds. >> Well aren't they different animals though. Amazon's in the cloud business. >> They are different animals except when it comes to the large enterprises that this year have actually put stakes in the ground about how they're going to move forward with cloud. >> John: What are those stakes? >> Well, first off they're saying, where the data goes, that's where the service needs to go. They're starting to acknowledge that the relationship between data and IP is very real. They have fully acknowledged it's going to be hybrid cloud or it's going to be multicloud and that SAAS applications are going to be still, as bet with our analysis, is going to be the dominant feature of that. And I don't mean to cut you off Dave. >> Dave: No it's all right. >> But that's where the enterprise is going. The enterprise doesn't want to spend a lot of time talking about S3 and object stored. They want to talk about how the services are going to get to the data where they want the services to be. >> John: Good point. >> I think there's one other point that we should add to that what VM's capability is, is that you don't have to migrate the applications. VMware owns those applications and the cost of migration is huge. >> Peter: If the application's in VMware. >> If the applications in VMware. So they're offering ... >> John: Which many are. >> Peter: Many are. >> Many are yes. So they're offering a lower cost way of getting to the cloud if they can execute on the capabilities of putting containers into their platform and to make it a microservices platform. So if they deliver that and maintain that continuity with their existing base that is a powerful place to come from. >> Although David, I think you'd agree with this that even in the cloud today things like microservices are not really the as is position. It's definitely ahead and it's moving forward but so VMWare can show, we can get you to that cloud experience. We may lag a little bit when it comes to containers but it's going to be a few years before containers are the default way of doing things. >> Guys Pat Gelsinger, I want to get your reaction to this cause this is, you have to add some color to this because he left it just hanging out there. His last comment was, looking forward 10 years, and look back for 10 years of theCUBE coverage, he said networking, security and Kubernetes are the three waves that you need to be on. >> Networking, security, and Kubernetes. Not networking security. >> John: No, networking as a ... Networking needs to solved, security and Kubernetes. Three waves, you got to be on those waves. What does he mean by that? What do you think he means by that? Networking in terms of on premise networking. >> Well I think that, I'll start David. But I think the first thing to note is that, and Dave and I have talked about this a lot in some of the segments we've done. The cloud was miscast as a centralization trend. What the cloud really is, is a framework for how you think about distributing data, and distributing the work that's going performed against that data closer to where it's actually required and where it's actually created and consumed. And that's really how we should be thinking about the cloud, is it's a way of distributing work and distributing data to where it needs to be. That means networking is essential because, and we're starting to hear this from large users, in many respects they're wondering how their networking strategy and their cloud strategy are going to fold in and be the same strategy. On the security front, yeah you got to have end to end but how do you put a perimeter around a cloud. That's not clear. And we're thinking about going towards data security you know, data security and zero trust security but perimeter still, stuff is still very important. There's some very new technologies and interesting technologies that are trying to bring some of that perimeter stuff to that notion. Networking, security, and the last one was Kubernetes. The thing that's interesting and I could see why Pat would say that because it's very true for VMware. >> They're betting on Kubernetes. Is that another knife edge bet? >> Well no it really isn't. See, it is, maybe you could say it is but look, a virtual machine virtualizes hardware. A container platform virtualizes the operating system. And so is it possible the containers are going to end up virtualizing VMware and what does that mean for VMware? So VMware has to reach up and be a phenomenal place for containers, otherwise the value propositions going to move up and beyond them. >> And the Kubernetes has been picked because that is an open source. It means it has the potential of being a standard across multiple clouds, and offers that ability to automate and orchestrate across in a way that no other set of software can do. It's a long way to go. He's putting a bet on it and I think it's the correct bet to do there. But it's a long way to go before you will see if that's the right bet. >> What about networking and security honestly, IoT's in there. Peter mentions these use cases that requires data. The original Cloud 1.0 definition was, I'm building it out, I'm a startup. I'm going to just build my app in the cloud and I'm not delivering, the data's in the cloud. >> Peter: And all my users are going to connect to the cloud. >> Now Cloud 2.0 is really going down what you're saying so networking becomes fundamental. >> Networking becomes fundamental not just to move data around but to move code to data as well. >> Well to your point the cloud is this massively scalable distributed system. >> That's right. It is the massively distributed, scalable distributed system and the other thing that I'd say about Kubernetes, networking and security is Kubernetes is a cluster, a way of describing or thinking about application from a clustering standpoint which is inherently networking. And so Kubernetes in many respects is describing how application networking's going to look in a few years. But the other thing that's interesting about it, is because it's virtualizing that operating system, challenges associated with distribution of code, of versions, of all that other stuff about how you handle software life cycle, with Kubernetes, it's going to be that much more cloud like in the future. And I think as we go forward it would be interesting to imagine a security model that is built on top of Kubernetes that allows you to literally take elements of containers and vary those containers in just like every 36 hours so no part of your code base is older than 36 hours. Think about how much more secure that would be than what we have today. >> I'm a big fan of Kubernetes. I think it's a great bet. I don't think it's a knife edge. I think it's pretty obvious and it's either go one way or the other. The cloud guys are either going to fork it and slow it down >> They'll fork it and slow it down but it's still going to go. >> That's job number one. Job's not done so Kubernetes doesn't run. >> Let's put it this way, John, that in 10 years 80% of software is not going to be based in Kubernetes. >> John: Guys switch topics here. >> Dave: I think that's a safe bet. >> Yeah. >> Let's switch topics. I want to get analysis on VMware as a software company. Pat mentioned Nicira, which was SDN which became software-defined data center. Obviously big moves with 5G which I think is more of a telegraph of the future. Service provider narrative. Kind of sounds like going after Cisco to me. So Cisco's value proposition, again to your point about directionally correct, VMware makes these statements. Their most product direction with a demo, they show a little directions, some clarity and then they got to fill in the blanks. That's been their move. Cisco's up and running, they have a network of devices. They have UCS, ACI. Is there a collision course with VMware and Cisco? >> Pat said on theCUBE, we've got a multi billion dollar networking business. He said in the past that Cisco's a great hardware company. We want to do to networking and storage what we did to compute. I think it's no question. And then the data from ETR, the Enterprise Technology Research guys, the guys that do the panel, show that very clearly NSX is slowly negatively impacting Cisco hardware sales. So, yes, there's absolutely no question in my mind. Having said that, when you talk to customers, and I've talked to several this week and I've asked them that question. How is NSX affecting your Cisco spend. These are Cisco customers, and they say, oh we're sticking with Cisco. We're going with ACI. because that's the majority of Cisco customers to your point David, aren't going to just migrate off and throw away their Cisco gear. It's not going to happen. >> It's the same thing. They've invested a huge amount of money in doing that. It works and as long as Cisco ... >> Who's they, Cisco? >> No the customers have invested that huge amount of money in all of that infrastructure all of that way it works and they will, as long as Cisco continues to invest and continues to invest in software as well for that platform. >> If you're advising the CEO of Cisco what would your advice be to him? Get your thinking cap on, you're coming next. Hold on I want David to go. >> He's dying to jump in. >> The core that Cisco has to manage is finding solutions to multicloud and hybrid cloud issues. There has to be an end to end. They have to provide more of the data planes, more of the control planes, and more software to enable this connectivity across these different clouds. >> Can Cisco move up the stack as fast as VMware because one's a software company one is a hardware company but it's software now. >> That is the challenge that Cisco has is putting in place the people the resources and the techniques to actually drive that. >> Your thoughts, your advising the CEO. >> So before I advise the CEO I'm going to make one quick observation about the collision course. I was trying to think about this Dave. I can't think of, just off the top of my head, I can't think of a single hardware company that was driven out of business by VMware when they virtualized systems. Maybe there were some, maybe there were some that would say, oh I'm gone because of VMware. I think it made it more productive, it probably took some of the capacity out. But at the end of the day the stuff doesn't run on hamsters right. It's an interesting question. >> Sun? >> I don't think it was VMware. >> Not directly but it certainly gave a lot of tail wind to X86 [John] Linux and Intel killed Sun. >> Right, gave a big tail wind to X86. That was a different set of trends, right. It was related, your right. >> Dave: Definitely related. >> But the point it, I'm not sure that NSX is going to drive networking companies or network hardware companies out of business. >> No I didn't say they'd drive them out of business but would you not agree that VMware made the server business a lot less interesting? >> It changed the value, it changed the degree to which the hardware itself was regarded as the asset around which the IT Organization had to create it's value proposition, it's organization it's worth closing center. VMware became much more strategic than ... >> No question about it. >> Than HP, Lenovo. And Dell servers. >> We should talk about this more. >> Right now you're advising the CEO. >> So here's my advice to the CEO of Cisco. Your networking guys are killing innovation in your company. Right now the networking guys have an absolute stranglehold on how Cisco behaves, where Cisco does. We've all encountered these really great ideas bubbling up out of Cisco and they emerge and they're there for about six weeks or eight weeks or six months and then they suddenly disappear and you go and you do the forensics on the crime that was committed and it turns out that the networking hardware guys ended up rising up and affectively launching the antibodies on every new innovation virus. >> You mean internally in Cisco? >> Dave: That's a really interesting point. >> They have a Clayton Christensen innovators dilemma problem that they got to fix. >> And Chuck Robbins I think understands this and this is why he's putting so much emphasis on DevNet. Because he see's that the DevNet opportunity to create infrastructure that's programmable is a way potentially out of that innovation lock. >> If I was advising the CEO of Cisco I would kind of take the same cultural thing. I think you're right on the money on the culture. Gelsinger has a team, you point that out that's really good insight. My advice is simple. Double down on DevNet. Turn the networking guys, by the way, who have the keys to the kingdom in every single enterprise so they're running and operating enterprise networks and data centers. The network guys are the most powerful people in the companies in IT. Turn them into active coders. That's what DevNet is doing. That is totally the right move. Change the culture within your customer base, If that's not going to work internally then you know. >> But the whole of the cloud thing has brought together storage, networking and compute as a single object, a single distributed object. And one of the things that VMware has done with NSX is reflect what AWS and ITO were doing beforehand which is lowering the cost of storage very, very significantly, and putting the functionality into software as opposed to hardware. >> If I was Cisco, I would be looking hard at doing something big with Google. Because Amazon is VMware's preferred partner. I would figure out a way to get belly up to Google and figure out something bigger. It's not going to happen with Microsoft. They don't really need Cisco. Google needs someone like Cisco. >> I'm sorry from a customer engagement standpoint? >> From a customer engagement standpoint and to help Cisco's cloud relevance. Cause right now even in the multicloud world, no one even knows. What you just said David, that's exactly what Cisco's doing and nobody even knows about it. >> That's right. >> Well they could be the backbone of the Cloud 2.0. Go back in history, coaxial cables had many computers attached to them. Then you had Cat 5, Cat 3 wiring, you had hubs. Then you had subnetworks, you had internetworking. Campus building. That became the network. Cisco is the same kind of option for cloud to be the on ramp. That's what VMware wants to do. Dell wants to be the on ramp, VMware wants to be on ramp. Cisco's running the networks ... >> And another piece for Cisco, and you've said this before Peter, is security. You talk about VMware being the cloud security company, if I were Cisco those would be fighting words. Cisco is in a strong position from it networking base to be a leader in security. >> And I think you got a good point Dave. The thing I'd say John, and you guys have all heard me say this, but I'll say it again. What killed mini computers was not just the microprocessor. It was that DEC had DECnet and DG had digital whatever it was. And along came Ethernet and along came IP and along came Cisco and it flattened all those networks. Networks want to be flat. And AWS, if you start to talk about Kubernetes, all these little proprietary tweaks to Kubernetes which fundamentally is how you think about doing a programmable network, physics and everything else, technology is going to want to flatten that stuff as much as possible. And Cisco should be participating in that and they're not because their networking guys are saying, no, no, no, nobody gets into our sales organization except us networking hardware guys. And that's a problem. >> They got to go back. When VMware went back to their roots that made them stronger. Cisco's got to go back to their networks thinking it differently, I agree with you. They could be the backbone for multicloud. That's their opportunity. >> But it's got to be a flat network to do that. They've got this entrenched North, South mentality even though they see the trends. >> Okay, final summary guys, let's wrap this up. Let's go around the horn, start with Peter. Take-away's from 2019 VMworld, our 10th year theCUBE coverage. What's your thoughts? >> The machinations, two I'd say. The organizational machinations inside Dell Technologies have got a long ways to go. There's a lot more coming as Michael figures out he wants to institutionalize all this thing. But he's got two great executives. Pat Gelsinger has turned into a pretty darn good CEO. So I'd say that VMware is seeing the market good, they've got a great team, they're executing really well. They're at least putting bets where they need to but here's, I think the biggest weakness, and this came up in one of the session in the analyst thing, we all know how VMware expects things to come to VMware and how VMware is going to be effectively the manager of record, the cloud of record for all clouds. Okay good. But it's not going to be. The reality is VMware is going to emerge as an extremely important on premise and cloud technology if that's what you want to do, that allows companies to have those options about where they put stuff. But how is VMware going to express itself to other clouds? From a management standpoint, from a control plane standpoint, from a data standpoint. That's not clear, and big enterprises are going to start pushing them pretty soon to say, okay great, but we're not just going to do you. How are you going to be managed by the stuff that we want? How are you going to be a resource where we want our management points to be. >> John: Dictate terms. >> Right. >> The customers going to dictate terms. That's a great point. David Floyer you're up. >> All right, so the biggest challenge for VMware is that is making themselves successful in the public cloud. AWS owns that business. They are very, very cost effective. They are driving very, very hard, and the clash is going to be when AWS goes into the distributed side and comes into full contact with Dell and VMware in that space. So the race is on between the efficiency that they can create for this network and the efficiency that AWS can create by getting better and better at distributed computing. They will go into multicloud, they will go into. >> John: Dave your thoughts. >> I've talked a lot this week about multicloud and what I think is real and what's BS. I've talked about VMware's acquisitions. I want to change it up a little bit. When you come to these events, the big picture of how we're changing the world and we're changing society, tech for good, all that stuff, I just want to make a point for historical context. I think it's indisputable that the first 50 years of last century from the early 1900s to 1950s were far more remarkable than the last 50 years of IT. And I think sometimes we sit out here in Silicon Valley and smoke our own, you know, whatever, >> It's legal here actually. >> And how we're changing the world. And I'm not saying we're not changing the world but Pat Gelsinger said there's never been a more important time to be a technologist. Well he may be right, and I'm not saying this to disparage the statement but I'm just, again trying to provide some historical context. You're up against telephones, planes, automobiles, the electrical grid itself. So I leave you with this question, what's more impactful from a society standpoint, and from an economics standpoint, the move from automobiles to autonomous vehicles or the move from horses to cars? And I think that as an industry we have a long way to go in terms of being the most important time to be a technologist. >> I think I agree with Gelsinger. It's the most important time to be a technologist now cause more than change is required. I think if you look at the data, I think this shows all about Cloud 2.0. I think some of the things that Peter, Dave you pointed out points right to it. Customers are dictating terms and the infrastructure's evolving and the enablement of what that system looks like is going to spin in favor of the customer. And they're going to start making those changes because to change society, it's not going to come from the vendors. That's just philanthropy. It's going to come from people building applications. I think the Cloud 2.0 equation has to fill out. >> I think you're right. If in fact this is going to be the most important time for technologists, it absolutely has to come from the buyers of technology and the people applying technology not the vendor community. No doubt. >> It's a great question though Dave. Great question. >> We're going to take that question to our power panels in the studio, Palo Alto and Boston. Of course theCUBE studios. Check it out. We are here wrapping up VMworld 2019. Want to do a shout out to VMware for allowing us to be part of their ecosystem for 10 years. It's been a great run from 2010 when we had cameras that we turned and we thought they'd work, they did. The system got better every year and that's to the generous support of our ecosystem partners who sponsored theCUBE so we can create content editorially and co-create with the sponsors for the betterment of the audiences. And thanks to that we get better equipment every year. And shout out to the great team we have here. Amazing execution. Two full sets. And thanks to my co-hosts and the teams. Stu's not here, he's on the other set. Jeff Frick who's running it all. What a great team. I want to thank VMware and the entire community for 10 years. That's a sign off for theCUBE. 10 at Vmworld 2019. Thanks for watching. (upbeat music)

>> From Palo Alto, California, it's theCUBE, covering the Conference Board's Sixth Annual Innovation Master Class. (fast techno music) >> Hey, welcome back everybody. Jeff Frick here with theCUBE. We are at the Innovation Master Collab at Xerox PARC. It's put on by the Conference Board, a relatively small event, but really, a lot of high-caliber individuals giving really great presentations. And we're excited about our next guest, he kicked the whole thing off this morning, and we could go for hours. We won't go for hours, we'll go about 10 minutes. But Peter Coffee, he's the VP of Strategic Research for Salesforce. Been there a long time, but you were a media guy before that for many, many years? So Peter, great to see you. >> It's good to be with you, thanks. >> So, you talk about so many things. So many things in your opening statement, and I have a ton of notes. But let's just jump into it, I think. One of the big things is you know, the future happens faster than we expect it. And we as humans have a really hard time with exponential growth, because it's not built that way. That's the way things move. >> So how do you as a businessperson kind of deal with that reality? Because the issue is you're never going to be ready for when they come. >> Yeah, well, it's not just humans as individuals, but the institutions and processes we've built. If you look at the process of getting a college degree, it's really seriously misaligned with the timeframe of change. By the time you're a senior, half of the subject matter in your field may be new since your freshman year, and conversely four years after you've graduated, perhaps a third of what you were taught will no longer be considered to be current information. Someone at Motorola once said, "a batch process "no matter how much you accelerate it "doesn't become a continuous flow process". You have to rethink what does a continuous flow look like, and that's useful conversation to have getting back to your actual opening question. When we're talking with customers, we say what are your unvoiced assumptions about the manner in which you have succession of technology, succession of product, and so on? Can we try to see what it would look like if that were a continuous process and not a project process? Many of our partners will tell us that their most difficult conversations with their customers are about getting away from a project mentality, a succession of Big Bang changes, into a process in which transformation is a way of life and not a bold initiative that will take a big sigh of relief and congratulate yourself on having transformed. No, dude, you've gotten your running shoes tied now you can begin to run. But now the hard part begins. >> Right, and the sun comes up tomorrow and you start to run again. You talked on big shifts count on new abundance and use horsepower. >> George Gilder's phrase, "errors are punctuated "by a dramatic change from a scarcity "to an abundance" so for example, horsepower or bandwidth or intelligence. >> So now we're coming into the era of massive big data we are asymptotically approaching free compute, free storage, and free networking. So how do you get business leaders to kind of rethink in an era where they have basically infinite resources, and it always goes back, so what would you build then? Because we're heading that way even if we're not there today. >> A Jedi mind trick that I often use with them is to say, let's not talk about the next couple of quarters, I want you to imagine the next Winter Olympics. When they light the torch four years from now I want you to try to visualize the world you're pretty sure you'll be living in four years from now and work backwards from that and say well if we all agree that within four years that's going to get done, well there's some implications about things we should be doing now and some things that we should stop doing now if we know that four years from now, the world is going to look like this. It helps free your mind from the pressures of incremental improvement and meeting next quarterly goals. And instead saying, ya know, that's not going to be a thing in four years and we should stop getting better at doing something that's simply not going to be relevant in that short of a time. >> So hard though, right? Innovators still, I mean, that's the classic conundrum especially if it's something that you have paying customers and you're driving great revenue to, it's hard to face the music that that may not be so important down the path. >> The willingness to acknowledge that someone will disrupt you, so it might as well be you, you might as well disrupt yourself, the conversation was had with IBM back in the days of the IBM PC, that they thought that that might be a quarter of a million machines they would sell, but whatever you do, don't touch the bread and butter of the 3270 terminal business, right? And they did not ultimately succeed in visualizing the impact of what they had done. Ironically, because they didn't think it was that important, they opened all the technology, and so things like Microsoft becoming what it is and the fact that the bios was open and allowed the compatibles industry like Compact to emerge was a side effect of IBM failing to realize how big of a door they were opening for the world. You can start off a spinoff operation. At Salesforce we have a product line called Essentials which is specifically tasked with create versions of Salesforce that are packaged and priced and supported in a way that's suitable to that small business. And that way you can kind of uncouple from that Clayton Christensen innovators dilemma thing by acknowledging it's a separate piece of the business, it can be measured differently, rewarded differently, and it's going to convey itself maybe even through a genuinely different brand. This is an example that was used once with Disney which when it decided it wanted to get away from family and children's entertainment, and start making movies aimed at more adult audiences, fine, they created the Touchstone brand so they could do that without getting in the way of, or maybe even polluting, a brand that they spent so much time building. So branding is important. A brand is a set of promises, and if you want to make different promises to different people, have a different brand. >> Right, so I'm shifting gears 'cause you touched on so many great things. A really popular thing that's going on now is the conversion of products to services. And repackaging your product as a service. And you talked about the don't taze me bro story which has so many elements of fun and interesting but I thought the best part of it, though, was now they took it to the next step. And we're only a stones throw away from Tesla, a lot of innovation but I think one of the most kind of not reported on benefits of these connected devices and a feedback loop back to the manufacturer is how people are actually using these things, checking in from home, being able to do these updates. And you talk about how the TASER company now is doing all the services, it's not even a service, it's a process. I thought it's awesome. >> Taking a product and selling it at a subscription price does not turn it into a service, even though some people will say, well see now we're moving to a services model. If you're still delivering a product in a lumpy, change-it-every-couple-of-years way, you haven't really achieved that transformation. So you have to go back into more of a sense of I mean, look at the expectation people have of the apps on their smartphones, that they just get better all the time, that the update process is low-burden, low-complexity, low-risk, and you have to achieve that same fluidity of continuous improvement. So that's one of the differences. You can't just take the thing you sell, bill for it on a monthly subscription, and think that you achieved that transition. The thing that they folks who were once TASER and now are Axon, of which TASER is a sub-brand, they managed to elevate their view from the device in a police officer's hand to a process of which that device is a part. Which is the incident that begins, is concluded, results in a report, maybe results in a criminal prosecution, and they broadened the scope of the Axon services package to the point that now it is selling the proposition of increased peace officer productivity rather than merely the piece of hardware that's part of that. So being able to zoom out and really see the environment in which your product is used, and this relates to yet another idea which is that people are saying you got to think outside your box. It doesn't help if you get outside your box, but all of the people with whom you might want to collaborate are all still inside their boxes. And so you may actually have to invest in the transformation and interface development of partners or maybe even competitors, and isn't that a wild idea. Elon Musk at Tesla open sourced a lot of their technology with the specific goal of growing that whole ecosystem of charging stations and other things so Tesla could be a great success. And the comment that I once made is it doesn't help if you're a perfect drop of artisanal oil in a world of water. You have to make the world capable of interacting with you and supporting you if you really want to grow. Or else you're an oddity, you're Betamax, which might have been technically superior but by failing to really build the ecosystem around it, wound up losing big time to VHS for a while. I may have to explain to all of your viewers under the age of 30 what VHS and Betamax even mean. >> I was sellin' those, I could tell you the whole Panasonic factory optimization story, which is whole 'nother piece of that puzzle. So that's good, so I'm going to shift gears again. >> You have to look a big perspective, you have to be prepared to forget that your excellence is your product, and start thinking of that as just the kernel of what needs to be your real proposition which is the need you meet, the pain you address, the process of which you become an inseparable part instead of a substitutable chunk of hardware. >> Well and I think too it's embracing the ongoing relationship as part of the process, versus selling something to your distribution and off it goes you cash the check and you build another one. >> Well that's another aspect, we've got whole industries where there's been a waterfall model. Automobiles were a particular example. Where manufacturers wholesaled cars to distributors who gave them the small markup to dealers who owned the buyer customer. And dealers would be very hostile to manufacturers trying to get involved in that relationship. But now because of the connected vehicles the manufacturer may know things about the manner of use of the vehicle and about the preliminary engagement of the prospective buyer with the manufacturers website. And so improving that relationship from a futile model, or a waterfall model, into a collaborative model is really necessary if all these great digital aspects are to have any value. >> Right, right, right. And as a distribution of information that desire to get a level of knowledge is no longer the case, there's so much more. >> Well it's scary how easy it is to do it wrong. IDC just did a study about the use in retail banking of technology like apps and websites. Which that industry was congratulating itself on adopting in ways that reduce the cost of things like bank office hours. And yet J.D. Power has found that the result is that customers no longer see differentiation among banks, are less loyal, more easily seduced by $50 to open a new bank account with direct deposit. And so innovation's a vector, and if you aim it at cost reduction, you'll get one set of results. And if you aim it at customer satisfaction improvement, you'll innovate differently, and ultimately I think much more successfully. >> Right, right, so we're almost out of time here. I want to go down one more path with you which I love. You talked a lot about visualization, you brought up some old NOPs, really talked about context, right? In the right context, this particular visualization is of value. And there's a lot of conversation about visualization especially with big data. And something I've been looking for, and maybe you've got an answer is, is there a visualization of a billion data point dataset that I can actually look at the visualization and see something, and see the insight. 'Cause most of the ones we see that are examples, they're very beautiful and there's a lot of compound shapes going on, but to actually pinpoint an actionable something out of that array, often times I don't see, I wonder if you have any good examples that you've seen out there where you can actually use visualization to drive insight from a really, really big dataset. >> Well if a big data exercise produces a table of numbers, then someone's going to have to apply an awful lot of understanding to know which numbers look odd. But a billion points, to use your initial question, well what is that? That's an array that's 1,000 by 1,000 by 1,000. We look at 1,000 by 1,000 two-dimensional screens all the time, visualizing a three-dimensional 1,000 by 1,000 cube is something we could do. And if there is use of color, use of motion, superposition of one over another with highlighting of what's changed, what people need most is for their attention to be drawn to what's changing or what's out of a range. And so it's tremendously important that people who are presenting the output of a big data exercise go beyond the high-resolution snapshot, if you will, and construct at least some sense of A B. Back in the ancient days of astronomy, they had a thing called the Blink Camera which would put two pictures side-by-side and simply let you flip back-and-forth between the images, and the human eye turned out to be amazingly good. There could be thousands of stars in that picture, the one dot that's moving and represents some new object, the one dot that suddenly appears, the human brain is very good at doing that. And there's a misperception that the human eye's just a camera. The eye does a lot of pre-processing before it ever sends stuff to the brain. And understanding what human vision does, it impressed the heck out of me the first time I had a consultation on the big data program at a university where the faculty waiting to meet with me turned out to be from the schools of Computer Science, Mathematics, Business, and Visual Arts. And having people with a sense of visual understanding and human perception in the room is going to be that critical link between having data and having understanding of opportunity threat or change. And that's really where it has to go. So if you just ask yourself, how can I add an element of color, or motion, or something else that the human eye and brain have millennia of evolution to get good at detecting, do that. And you will produce something that changes behavior and doesn't just give people facts >> Right, right. Well, Peter, thank you for taking a few minutes. We could go on, and on, and on. >> Happy to do chapters two, three, and four any time you like, yeah. >> We'll do chapter two at the new tower downtown. >> Any old time, thanks so much. >> Thanks for stoppin' by. >> My pleasure. >> He's Peter, I'm Jeff, you're watching theCUBE. We're at the Master Innovation Class at Xerox PARC put on by the Conference Board. Thanks for watching. (fast techno music)