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

>> Narrator: From theCUBE studios in Palo Alto in Boston, connecting with thought leaders all around the world. This is a CUBE conversation. >> As you know by now, Jeff Bezos, CEO of Amazon, is stepping aside from his CEO role and AWS CEO, Andy Jassy, is being promoted to head all of Amazon. Bezos, of course, is going to remain executive chairman. Now, 15 years ago, next month, Amazon launched it's simple storage service, which was the first modern cloud offering. And the man who wrote the business plan for AWS, was Andy Jassy, and he's navigated the meteoric rise and disruption that has seen AWS grow into a $45 billion company that draws off the vast majority of Amazon's operating profits. No one in the media has covered Jassy more intimately and closely than John Furrier, the founder of SiliconANGLE. And John joins us today to help us understand on theCUBE this move and what we can expect from Jassy in his new role, and importantly what it means for AWS. John, thanks for taking the time to speak with us. >> Hey, great day. Great to see you as always, we've done a lot of interviews together over the years and we're on our 11th year with theCUBE and SiliconANGLE. But I got to be excited too, that we're simulcasters on Clubhouse, which is kind of cool. Love Clubhouse but not since the, in December. It's awesome. It's like Cube radio. It's like, so this is a Cube talk. So we opened up a Clubhouse room while we're filming this. We'll do more live hits in studio and syndicate the Clubhouse and then take questions after. This is a huge digital transformation moment. I'm part of the digital transformation club on Clubhouse which has almost 5,000 followers at the moment and also has like 500 members. So if you're not on Clubhouse, yet, if you have an iPhone go check it out and join the digital transformation club. Android users you'll have to wait until that app is done but it's really a great club. And Jeremiah Owyang is also doing a lot of stuff on digital transformation. >> Or you can just buy an iPhone and get in. >> Yeah, that's what people are doing. I can see all the influences are on there but to me, the digital transformation, it's always been kind of a cliche, the consumerization of IT, information technology. This has been the boring world of the enterprise over the past, 20 years ago. Enterprise right now is super hot because there's no distinction between enterprise and society. And that's clearly the, because of the rise of cloud computing and the rise of Amazon Web Services which was a side project at AWS, at Amazon that Andy Jassy did. And it wasn't really pleasant at the beginning. It was failed. It failed a lot and it wasn't as successful as people thought in the early days. And I have a lot of stories with Andy that he told me a lot of the inside baseball and we'll share that here today. But we started covering Amazon since the beginning. I was as an entrepreneur. I used it when it came out and a huge fan of them as a company because they just got a superior product and they have always had been but it was very misunderstood from the beginning. And now everyone's calling it the most important thing. And Andy now is becoming Andy Jassy, the most important executive in the world. >> So let's get it to the, I mean, look at, you said to me over holidays, you thought this might have something like this could happen. And you said, Jassy is probably in line to get this. So, tell us, what can you tell us about Jassy? Why is he qualified for this job? What do you think he brings to the table? >> Well, the thing that I know about Amazon everyone's been following the Amazon news is, Jeff Bezos has a lot of personal turmoil. They had his marriage fail. They had some issues with the smear campaigns and all this stuff going on, the run-ins with Donald Trump, he bought the Washington post. He's got a lot of other endeavors outside of Amazon cause he's the second richest man in the world competing with Elon Musk at Space X versus Blue Origin. So the guy's a billionaire. So Amazon is his baby and he's been running it as best he could. He's got an executive team committee they called the S team. He's been grooming people in the company and that's just been his mode. And the rise of AWS and the business performance that we've been documenting on SiliconANGLE and theCUBE, it's just been absolutely changing the game on Amazon as a company. So clearly Amazon Web Services become a driving force of the new Amazon that's emerging. And obviously they've got all their retail business and they got the gaming challenges and they got the studios and the other diversified stuff. So Jassy is just, he's just one of those guys. He's just been an Amazonian from day one. He came out of Harvard business school, drove across the country, very similar story to Jeff Bezos. He did that in 1997 and him and Jeff had been collaborating and Jeff tapped him to be his shadow, they call it, which is basically technical assistance and an heir apparent and groomed him. And then that's how it is. Jassy is not a climber as they call it in corporate America. He's not a person who is looking for a political gain. He's not a territory taker, but he's a micromanager. He loves details and he likes to create customer value. And that's his focus. So he's not a grandstander. In fact, he's been very low profile. Early days when we started meeting with him, he wouldn't meet with press regularly because they weren't writing the right stories. And everyone is, he didn't know he was misunderstood. So that's classic Amazon. >> So, he gave us the time, I think it was 2014 or 15 and he told us a story back then, John, you might want to share it as to how AWS got started. Why, what was the main spring Amazon's tech wasn't working that great? And Bezos said to Jassy, going to go figure out why and maybe explain how AWS was born. >> Yeah, we had, in fact, we were the first ones to get access to do his first public profile. If you go to the Google and search Andy Jassy, the trillion dollar baby, we had a post, we put out the story of AWS, Andy Jassy's trillion dollar baby. This was in early, this was January 2015, six years ago. And, we back then, we posited that this would be a trillion dollar total addressable market. Okay, people thought we were crazy but we wrote a story and he gave us a very intimate access. We did a full drill down on him and the person, the story of Amazon and that laid out essentially the beginning of the rise of AWS and Andy Jassy. So that's a good story to check out but really the key here is, is that he's always been relentless and competitive on creating value in what they call raising the bar outside Amazon. That's a term that they use. They also have another leadership principle called working backwards, which is like, go to the customer and work backwards from the customer in a very Steve Job's kind of way. And that's been kind of Jobs mentality as well at Apple that made them successful work backwards from the customer and make things easier. And that was Apple. Amazon, their philosophy was work backwards from the customer and Jassy specifically would say it many times and eliminate the undifferentiated heavy lifting. That was a key principle of what they were doing. So that was a key thesis of their entire business model. And that's the Amazonian way. Faster, cheaper, ship it faster, make it less expensive and higher value. While when you apply the Amazon shipping concept to cloud computing, it was completely disrupted. They were shipping code and services faster and that became their innovation strategy. More announcements every year, they out announced their competition by huge margin. They introduced new services faster and they're less expensive some say, but in the aggregate, they make more money but that's kind of a key thing. >> Well, when you, I was been listening to the TV today and there was a debate on whether or not, this support tends that they'll actually split the company into two. To me, I think it's just the opposite. I think it's less likely. I mean, if you think about Amazon getting into grocery or healthcare, eventually financial services or other industries and the IOT opportunity to me, what they do, John, is they bring in together the cloud, data and AI and they go attack these new industries. I would think Jassy of all people would want to keep this thing together now whether or not the government allows them to do that. But what are your thoughts? I mean, you've asked Andy this before in your personal interviews about splitting the company. What are your thoughts? >> Well, Jon Fortt at CNBC always asked the same question every year. It's almost like the standard question. I kind of laugh and I ask it now too because I liked Jon Fortt. I think he's an awesome dude. And I'll, it's just a tongue in cheek, Jassy. He won't answer the question. Amazon, Bezos and Jassy have one thing in common. They're really good at not answering questions. So if you ask the same question. They'll just say, nothing's ever, never say never, that's his classic answer to everything. Never say never. And he's always said that to you. (chuckles) Some say, he's, flip-flopped on things but he's really customer driven. For example, he said at one point, no one should ever build a data center. Okay, that was a principle. And then they come out and they have now a hybrid strategy. And I called them out on that and said, hey, what, are you flip-flopping? You said at some point, no one should have a data center. He's like, well, we looked at it differently and what we meant was is that, it should all be cloud native. Okay. So that's kind of revision, but he's cool with that. He says, hey, we'll revise based on what customers are doing. VMware working with Amazon that no one ever thought that would happen. Okay. So, VMware has some techies, Raghu, for instance, over there, super top notch. He worked with Jassy, directly in his team Sanjay Poonen when they went to business school together, they cut a deal. And now Amazon essentially saved VMware, in my opinion. And Pat Gelsinger drove that deal. Now, Pat Gelsinger, CEO, Intel, and Pat told me that directly in candid conversation off theCUBE, he said, hey, we have to make a decision either we're going to be in cloud or we're not going to be in cloud, we will partner. And I'll see, he was Intel. He understood the Intel inside mentality. So that's good for VMware. So Jassy does these kinds of deals. He's not afraid he's got a good stomach for business and a relentless competitor. >> So, how do you think as you mentioned Jassy is a micromanager. He gets deep into the technology. Anybody who's seen his two hour, three hour keynotes. No, he has a really fine grasp of the technology across the entire stack. How do you think John, he will approach things like antitrust, the big tech lash of the unionization of the workforce at Amazon? How do you think Jassy will approach that? >> Well, I think one of the things that emerges Jassy, first of all, he's a huge sports fan. And many people don't know that but he's also progressive person. He's very progressive politically. He's been on the record and off the record saying things like, obviously, literacy has been big on, he's been on basically unrepresented minorities, pushing for that, and certainly cloud computing in tech, women in tech, he's been a big proponent. He's been a big supporter of Teresa Carlson. Who's been rising star at Amazon. People don't know who Teresa Carlson is and they should check out her. She's become one of the biggest leaders inside Amazon she's turned around public sector from the beginning. She ran that business, she's a global star. He's been a great leader and he's been getting, forget he's a micromanager, he's on top of the details. I mean, the word is, and nothing gets approved without Andy, Andy seeing it. But he's been progressive. He's been an Amazon original as they call it internally. He's progressive, he's got the business acumen but he's perfect for this pragmatic conversation that needs to happen. And again, because he's so technically strong having a CEO that's that proficient is going to give Amazon an advantage when they have to go in and change how DC works, for instance, or how the government geopolitical landscape works, because Amazon is now a global company with regions all over the place. So, I think he's pragmatic, he's open to listening and changing. I think that's a huge quality >> Well, when you think of this, just to set the context here for those who may not know, I mean, Amazon started as I said back in 2006 in March with simple storage service that later that year they announced EC2 which is their compute platform. And that was the majority of their business, is still a very large portion of their business but Amazon, our estimates are that in 2020, Amazon did 45 billion, 45.4 billion in revenue. That's actually an Amazon reported number. And just to give you a context, Azure about 26 billion GCP, Google about 6 billion. So you're talking about an industry that Amazon created. That's now $78 billion and Amazon at 45 billion. John they're growing at 30% annually. So it's just a massive growth engine. And then another story Jassy told us, is they, he and Jeff and the team talked early on about whether or not they should just sort of do an experiment, do a little POC, dip their toe in and they decided to go for it. Let's go big or go home as Michael Dell has said to us many times, I mean, pretty astounding. >> Yeah. One of the things about Jassy that people should know about, I think there's some compelling relative to the newest ascension to the CEO of Amazon, is that he's not afraid to do new things. For instance, I'll give you an example. The Amazon Web Services re-invent their annual conference grew to being thousands and thousands of people. And they would have a traditional after party. They called a replay, they'd have a band like every tech conference and their conference became so big that essentially, it was like setting up a live concert. So they were spending millions of dollars to set up basically a one night concert and they'd bring in great, great artists. So he said, hey, what's been all this cash? Why don't we just have a festival? So they did a thing called Intersect. They got LA involved from creatives and they basically built a weekend festival in the back end of re-invent. This was when real life was, before COVID and they turned into an opportunity because that's the way they think. They like to look at the resources, hey, we're already all in on this, why don't we just keep it for the weekend and charge some tickets and have a good time. He's not afraid to take chances on the product side. He'll go in and take a chance on a new market. That comes from directly from Bezos. They try stuff. They don't mind failing but they put a tight leash on measurement. They work backwards from the customer and they are not afraid to take chances. So, that's going to board well for him as he tries to figure out how Amazon navigates the contention on the political side when they get challenged for their dominance. And I think he's going to have to apply that pragmatic experimentation to new business models. >> So John I want you to take on AWS. I mean, despite the large numbers, I talked about 30% growth, Azure is growing at over 50% a year, GCP at 83%. So despite the large numbers and big growth the growth rates are slowing. Everybody knows that, we've reported it extensively. So the incoming CEO of Amazon Web Services has a TAM expansion challenge. And at some point they've got to decide, okay, how do we keep this growth engine? So, do you have any thoughts as to who might be the next CEO and what are some of their challenges as you see it? >> Well, Amazon is a real product centric company. So it's going to be very interesting to see who they go with here. Obviously they've been grooming a lot of people. There's been some turnover. You had some really strong executives recently leave, Jeff Wilkes, who was the CEO of the retail business. He retired a couple of months ago, formerly announced I think recently, he was probably in line. You had Mike Clayville, is now the chief revenue officer of Stripe. He ran all commercial business, Teresa Carlson stepped up to his role as well as running public sector. Again, she got more power. You have Matt Garman who ran the EC2 business, Stanford grad, great guy, super strong on the product side. He's now running all commercial sales and marketing. And he's also on the, was on Bezos' S team, that's the executive kind of team. Peter DeSantis is also on that S team. He runs all infrastructure. He took over for James Hamilton, who was the genius behind all the data center work that they've done and all the chip design stuff that they've innovated on. So there's so much technical innovation going on. I think you still going to see a leadership probably come from, I would say Matt Garman, in my opinion is the lead dog at this point, he's the lead horse. You could have an outside person come in depending upon how, who might be available. And that would probably come from an Andy Jassy network because he's a real fierce competitor but he's also a loyalist and he likes trust. So if someone comes in from the outside, it's going to be someone maybe he trusts. And then the other wildcards are like Teresa Carlson. Like I said, she is a great woman in tech who's done amazing work. I've profiled her many times. We've interviewed her many times. She took that public sector business with Amazon and changed the game completely. Outside the Jedi contract, she was in competitive for, had the big Trump showdown with the Jedi, with the department of defense. Had the CIA cloud. Amazon set the standard on public sector and that's directly the result of Teresa Carlson. But she's in the field, she's not a product person, she's kind of running that group. So Amazon has that product field kind of structure. So we'll see how they handle that. But those are the top three I think are going to be in line. >> So the obvious question that people always ask and it is a big change like this is, okay, in this case, what is Jassy going to bring in? And what's going to change? Maybe the flip side question is somewhat more interesting. What's not going to change in your view? Jassy has been there since nearly the beginning. What are some of the fundamental tenets that he's, that are fossilized, that won't change, do you think? >> I think he's, I think what's not going to change is Amazon, is going to continue to grow and develop their platform business and enable more SaaS players. That's a little bit different than what Microsoft's doing. They're more SaaS oriented, Office 365 is becoming their biggest application in terms of revenue on Microsoft side. So Amazon is going to still have to compete and enable more ecosystem partners. I think what's not going to change is that Bezos is still going to be in charge because executive chairman is just a code word for "not an active CEO." So in the corporate governance world when you have an executive chairman, that's essentially the person still in charge. And so he'll be in charge, will still be the boss of Andy Jassy and Jassy will be running all of Amazon. So I think that's going to be a little bit the same, but Jassy is going to be more in charge. I think you'll see a team change over, whether you're going to see some new management come in, Andy's management team will expand, I think Amazon will stay the same, Amazon Web Services. >> So John, last night, I was just making some notes about notable transitions in the history of the tech business, Gerstner to Palmisano, Gates to Ballmer, and then Ballmer to Nadella. One that you were close to, David Packard to John Young and then John Young to Lew Platt at the old company. Ellison to Safra and Mark, Jobs to Cook. We talked about Larry Page to Sundar Pichai. So how do you see this? And you've talked to, I remember when you interviewed John Chambers, he said, there is no rite of passage, East coast mini-computer companies, Edson de Castro, Ken Olsen, An Wang. These were executives who wouldn't let go. So it's of interesting to juxtapose that with the modern day executive. How do you see this fitting in to some of those epic transitions that I just mentioned? >> I think a lot of people are surprised at Jeff Bezos', even stepping down. I think he's just been such the face of Amazon. I think some of the poll numbers that people are doing on Twitter, people don't think it's going to make a big difference because he's kind of been that, leader hand on the wheel, but it's been its own ship now, kind of. And so depending on who's at the helm, it will be different. I think the Amazon choice of Andy wasn't obvious. And I think a lot of people were asking the question who was Andy Jassy and that's why we're doing this. And we're going to be doing more features on the Andy Jassy. We got a tons, tons of content that we've we've had shipped, original content with them. We'll share more of those key soundbites and who he is. I think a lot of people scratching their head like, why Andy Jassy? It's not obvious to the outsiders who don't know cloud computing. If you're in the competing business, in the digital transformation side, everyone knows about Amazon Web Services. Has been the most successful company, in my opinion, since I could remember at many levels just the way they've completely dominated the business and how they change others to be dominant. So, I mean, they've made Microsoft change, it made Google change and even then he's a leader that accepts conversations. Other companies, their CEOs hide behind their PR wall and they don't talk to people. They won't come on Clubhouse. They won't talk to the press. They hide behind their PR and they feed them, the media. Jassy is not afraid to talk to reporters. He's not afraid to talk to people, but he doesn't like people who don't know what they're talking about. So he doesn't suffer fools. So, you got to have your shit together to talk to Jassy. That's really the way it is. And that's, and he'll give you mind share, like he'll answer any question except for the ones that are too tough for him to answer. Like, are you, is facial recognition bad or good? Are you going to spin out AWS? I mean these are the hard questions and he's got a great team. He's got Jay Carney, former Obama press secretary working for him. He's been a great leader. So I'm really bullish on, is a good choice. >> We're going to jump into the Clubhouse here and open it up shortly. John, the last question for you is competition. Amazon as a company and even Jassy specifically I always talk about how they don't really focus on the competition, they focus on the customer but we know that just observing these folks Bezos is very competitive individual. Jassy, I mean, you know him better than I, very competitive individual. So, and he's, Jassy has been known to call out Oracle. Of course it was in response to Larry Ellison's jabs at Amazon regarding database. But, but how do you see that? Do you see that changing at all? I mean, will Amazon get more publicly competitive or they stick to their knitting, you think? >> You know this is going to sound kind of a weird analogy. And I know there's a lot of hero worshiping on Elon Musk but Elon Musk and Andy Jassy have a lot of similarities in the sense of their brilliance. They got both a brilliant people, different kinds of backgrounds. Obviously, they're running different things. They both are builders, right? If you were listening to Elon Musk on Clubhouse the other night, what was really striking was not only the magic of how it was all orchestrated and what he did and how he interviewed Robin Hood. He basically is about building stuff. And he was asked questions like, what advice do you give startups? He's like, if you need advice you shouldn't be doing startups. That's the kind of mentality that Jassy has, which is, it's not easy. It's not for the faint of heart, but Elon Musk is a builder. Jassy builds, he likes to build stuff, right? And so you look at all the things that he's done with AWS, it's been about enabling people to be successful with the tools that they need, adding more services, creating things that are lower price point. If you're an entrepreneur and you're over the age of 30, you know about AWS because you know what, it's cheaper to start a business on Amazon Web Services than buying servers and everyone knows that. If you're under the age of 25, you might not know 50 grand to a hundred thousand just to start something. Today you get your credit card down, you're up and running and you can get Clubhouses up and running all day long. So the next Clubhouse will be on Amazon or a cloud technology. And that's because of Andy Jassy right? So this is a significant executive and he continue, will bring that mindset of building. So, I think the digital transformation, we're in the digital engine club, we're going to see a complete revolution of a new generation. And I think having a new leader like Andy Jassy will enable in my opinion next generation talent, whether that's media and technology convergence, media technology and art convergence and the fact that he digs music, he digs sports, he digs tech, he digs media, it's going to be very interesting to see, I think he's well-poised to be, and he's soft-spoken, he doesn't want the glamorous press. He doesn't want the puff pieces. He just wants to do what he does and he puts his game do the talking. >> Talking about advice at startups. Just a quick aside. I remember, John, you and I when we were interviewing Scott McNealy former CEO of Sun Microsystems. And you asked him advice for startups. He said, move out of California. It's kind of tongue in cheek. I heard this morning that there's a proposal to tax the multi-billionaires of 1% annually not just the one-time tax. And so Jeff Bezos of course, has a ranch in Texas, no tax there, but places all over. >> You see I don't know. >> But I don't see Amazon leaving Seattle anytime soon, nor Jassy. >> Jeremiah Owyang did a Clubhouse on California. And the basic sentiment is that, it's California is not going away. I mean, come on. People got to just get real. I think it's a fad. Yeah. This has benefits with remote working, no doubt, but people will stay here in California, the network affects beautiful. I think Silicon Valley is going to continue to be relevant. It's just going to syndicate differently. And I think other hubs like Seattle and around the world will be integrated through remote work and I think it's going to be much more of a democratizing effect, not a win lose. So that to me is a huge shift. And look at Amazon, look at Amazon and Microsoft. It's the cloud cities, so people call Seattle. You've got Google down here and they're making waves but still, all good stuff. >> Well John, thanks so much. Let's let's wrap and let's jump into the Clubhouse and hear from others. Thanks so much for coming on, back on theCUBE. And many times we, you and I've done this really. It was a pleasure having you. Thanks for your perspectives. And thank you for watching everybody, this is Dave Vellante for theCUBE. We'll see you next time. (soft ambient music)

(upbeat electronic music) >> Narrator: From theCUBE studios in Palo Alto and Boston, connecting with thought leaders all around the world, this is a CUBE conversation. >> Okay, hello everyone. I'm John Furrier with theCUBE. We're here with Meet the Analysts segment Sunday morning. We've got everyone around the world here to discuss a bit of the news around the EU killing the privacy deal, striking it down, among other topics around, you know, data privacy and global commerce. We got great guests here, Ray Wang, CEO of Constellation Research. Bill Mew, founder and CEO of Cyber Crisis Management from the Firm Crisis Team. And JD, CEO of Spearhead Management. JD, I can let you say your name because I really can't pronounce it. How do I (laughs) pronounce it, doctor? >> I wouldn't even try it unless you are Dutch, otherwise it will seriously hurt your throat. (Ray laughing) So, JD works perfect for me. >> Doctor Drooghaag. >> And Sarbjeet Johal, who's obviously an influencer, a cloud awesome native expert. Great, guys. Great to have you on, appreciate it, thanks for comin' on. And Bill, thank you for initiating this, I appreciate all your tweets. >> Happy Sunday. (Bill laughing) >> You guys have been really tweeting up a storm, I want to get everyone together, kind of as an analyst, Meet the Analyst segment. Let's go through with it. The news is the EU and U.S. Privacy Shield for data struck down by the court, that's the BBC headline. Variety of news, different perspectives, you've got an American perspective and you've got an international perspective. Bill, we'll start with you. What does this news mean? I mean, basically half the people in the world probably don't know what the Privacy Shield means, so why is this ruling so important, and why should it be discussed? >> Well, thanks to sharing between Europe and America, it's based on a two-way promise that when data goes from Europe to America, the Americans promise to respect our privacy, and when data goes form America to Europe, the Europeans promise to respect the American privacy. Unfortunately, there are big cultural differences between the two blocks. The Europeans have a massive orientation around privacy as a human right. And in the U.S., there's somewhat more of a prioritization on national security, and therefore for some time there's been a mismatch here, and it could be argued that the Americans haven't been living up to their promise because they've had various different laws, and look how much talk about FISA and the Cloud Act that actually contravene European privacy and are incompatible with the promise Americans have given. That promise, first of all, was in the form of a treaty called Safe Harbor. This went to court and was struck down. It was replaced by Privacy Shield, which was pretty much the same thing really, and that has recently been to the court as well, and that has been struck down. There now is no other means of legally sharing data between Europe and America other than what are being called standard contractual clauses. This isn't a broad treaty between two nations, these are drawn by each individual country. But also in the ruling, they said that standard contractual clauses could not be used by any companies that were subject to mass surveillance. And actually in the U.S., the FISA courts enforce a level of mass surveillance through all of the major IT firms, of all major U.S. telcos, cloud firms, or indeed, social media firms. So, this means that for all of the companies out there and their clients, business should be carrying on as usual apart from if you're one of those major U.S. IT firms, or one of their clients. >> So, why did this come about? Was there like a major incident? Why now, was it in the court, stuck in the courts? Were people bitchin' and moanin' about it? Why did this go down, what's the real issue? >> For those of us who have been following this attentively, things have been getting more and more precarious for a number of years now. We've had a situation where there are different measures being taken in the U.S., that have continued to erode the different protections that there were for Europeans. FISA is an example that I've given, and that is the sort of secret courts and secret warrants that are issued to seize data without anyone's knowledge. There's the Cloud Act, which is a sort of extrajudicial law that means that warrants can be served in America to U.S. organizations, and they have to hand over data wherever that data resides, anywhere in the world. So, data could exist on a European server, if it was under the control of an American company, they'd have to hand that over. So, whilst FISA is in direct conflict with the promises that the Americans made, things like the Cloud Act are not only in controversion with the promise they've made, there's conflicting law here, because if you're a U.S. subsidiary of a big U.S. firm, and you're based in Europe, who do you obey, the European law that says you can't hand it over because of GDPR, or the American laws that says they've got extrajudicial control, and that you've got to hand it over. So, it's made things a complete mess. And to say has this stuff, hasn't really happened? No, there's been a gradual erosion, and this has been going through the courts for a number of years. And many of us have seen it coming, and now it just hit us. >> So, if I get you right in what you're saying, it's basically all this mishmash of different laws, and there's no coherency, and consistency, is that the core issue? >> On the European side you could argue there's quite a lot of consistency, because we uphold people's privacy, in theory. But there have been incidents which we could talk about with that, but in theory, we hold your rights dear, and also the rights of Europeans, so everyone's data should be safe here from the sort of mass surveillance we're seeing. In the U.S., there's more of a direct conflict between everything, including there's been a, in his first week in the White House, Donald Trump signed an executive order saying that the Privacy Act in the U.S., which had been the main protection for people in the U.S., no longer applied to non-U.S. citizens. Which was, if you wanted try and cause a storm, and if you wanted to try and undermine the treaty, there's no better way of doing it than that. >> A lot of ways, Ray, I mean simplify this for me, because I'm a startup, I'm hustlin', or I'm a big company, I don't even know who runs the servers anymore, and I've got data stored in multiple clouds, I got in regions, and Oracle just announced more regions, you got Amazon, a gazillion regions, I could be on-premise. I mean bottom line, what is this about? I mean, and -- >> Bill's right, I mean when Max Schrems, the Austrian. Bill's right, when Max Schrems the Austrian activist actually filed his case against Facebook for where data was being stored, data residency wasn't as popular. And you know, what it means for companies that are in the cloud is that you have to make sure your data's being stored in the region, and following those specific region rules, you can't skirt those rules anymore. And I think the cloud companies know that this has been coming for some time, and that's why there's been announced in a lot of regions, a lot of areas that are actually happening, so I think that's the important part. But going back to Bill's earlier point, which is important, is America is basically the Canary Islands of privacy, right? Privacy is there, but it isn't there in a very, very explicit sense, and I think we've been skirting the rules for quite some time, because a lot of our economy depends on that data, and the marketing of the data. And so we often confuse privacy with consent, and also with value exchange, and I think that's part of the problem of what's going on here. Companies that have been building their business models on free data, free private data, free personally identifiable data information are the ones that are at risk! And I think that's what's going on here. >> It's the classic Facebook issue, you're the product, and the data is your product. Well, I want to get into what this means, 'cause my personal take away, not knowing the specifics, and just following say, cyber security for instance, one of the tenets there is that data sharing is an invaluable, important ethos in the community. Now, everyone has their own privacy, or security data, they don't want to let everyone know about their exploits but, but it's well known in the security world that sharing data with each other, different companies and countries is actually a good thing. So, the question that comes in my mind, is this really about data sharing or data privacy, or both? >> I think it's about both. And actually what the ruling is saying here is, all we're asking from the European side is please stop spying on us and please give us a level of equal protection that you give to your own citizens. Because data comes from America to Europe, whatever that data belongs to, a U.S. citizen or a European citizen, it's given equal protection. It is only if data goes in the other direction, where you have secret courts, secret warrants, seizure of data on this massive scale, and also a level of lack of equivalence that has been imposed. And we're just asking that once you've sorted out a few of those things, we'd say everything's back on the table, away we go again! >> Why don't we merge the EU with the United States? Wouldn't that solve the problem? (Bill laughing) >> We just left Europe! (laughs heartily) >> Actually I always -- >> A hostile takeover of the UK maybe, the 52nd state. (Bill laughing loudly) >> I always pick on Bill, like Bill, you got all screaming loud and clear about all these concerns, but UKs trying to get out of that economic union. It is a union at the end of the day, and I think the problem is the institutional mismatch between the EU and U.S., U.S. is old democracy, bigger country, population wise, bigger economy. Whereas Europe is several countries trying to put together, band together as one entity, and the institutions are new, like you know, they're 15 years old, right? They're maturing. I think that's where the big mismatch is and -- >> Well, Ray, I want to get your thoughts on this, Ray wrote a book, I forget what year it was, this digital disruption, basically it was digital transformation before it was actually a trend. I mean to me it's like, do you do the process first and then figure out where the value extraction is, and this may be a Silicon Valley or an American thing, but go create value, then figure out how to create process or understand regulations. So, if data and entrepreneurship is going to be a new modern era of value, why wouldn't we want to create a rule based system that's open and enabling, and not restrictive? >> So, that's a great point, right? And the innovation culture means you go do it first, and you figure out the rules later, and that's been a very American way of getting things done, and very Silicon Valley in our perspective, not everyone, but I think in general that's kind of the trend. I think the challenge here is that we are trading privacy for security, privacy for convenience, privacy for personalization, right? And on the security level, it's a very different conversation than what it is on the consumer end, you know, personalization side. On the security side I think most Americans are okay with a little bit of "spying," at least on your own side, you know, to keep the country safe. We're not okay with a China level type of spying, which we're not sure exactly what that means or what's enforceable in the courts. We look like China to the Europeans in the way we treat privacy, and I think that's the perspective we need to understand because Europeans are very explicit about how privacy is being protected. And so this really comes back to a point where we actually have to get to a consent model on privacy, as to knowing what data is being shared, you have the right to say no, and when you have the right to say no. And then if you have a value exchange on that data, then it's really like sometimes it's monetary, sometimes it's non-monetary, sometimes there's other areas around consensus where you can actually put that into place. And I think that's what's missing at this point, saying, you know, "Do we pay for your data? Do we explicitly get your consent first before we use it?" And we haven't had that in place, and I think that's where we're headed towards. And you know sometimes we actually say privacy should be a human right, it is in the UN Charter, but we haven't figured out how to enforce it or talk about it in the digital age. And so I think that's the challenge. >> Okay, people, until they lose it, they don't really understand what it means. I mean, look at Americans. I have to say that we're idiots on this front, (Bill chuckling) but you know, the thing is most people don't even understand how much value's getting sucked out of their digital exhaust. Like, our kids, TikTok and whatnot. So I mean, I get that, I think there's some, there's going to be blow back for America for sure. I just worry it's going to increase the cost of doing business, and take away from the innovation for citizen value, the people, because at the end of the day, it's for the people right? I mean, at the end of the day it's like, what's my privacy mean if I lose value? >> Even before we start talking about the value of the data and the innovation that we can do through data use, you have to understand the European perspective here. For the European there's a level of double standards and an erosion of trust. There's double standards in the fact that in California you have new privacy regulations that are slightly different to GDPR, but they're very much GDPR like. And if the boot was on the other foot, to say if we were spying on Californians and looking at their personal data, and contravening CCPA, the Californians would be up in arms! Likewise if we having promised to have a level of equality, had enacted a local rule in Europe that said that when data from America's over here, actually the privacy of Americans counts for nothing, we're only going to prioritize the privacy of Europeans. Again, the Americans would be up in arms! And therefore you can see that there are real double standards here that are a massive issue, and until those addressed, we're not going to trust the Americans. And likewise, the very fact that on a number of occasions Americans have signed up to treaties and promised to protect our data as they did with Safe Harbor, as they did with Privacy Shield, and then have blatantly, blatantly failed to do so means that actually to get back to even a level playing field, where we were, you have a great deal of trust to overcome! And the thing from the perspective of the big IT firms, they've seen this coming for a long time, as Ray was saying, and they sought to try and have a presence in Europe and other things. But the way this ruling has gone is that, I'm sorry, that isn't going to be sufficient! These big IT firms based in the U.S. that have been happy to hand over data, well some of them maybe more happy than others, but they all need to hand over data to the NSA or the CIA. They've been doing this for some time now without actually respecting this data privacy agreement that has existed between the two trading blocks. And now they've been called out, and the position now is that the U.S. is no longer trusted, and neither are any of these large American technology firms. And until the snooping stops and equality is introduced, they can now no longer, even from their European operations, they can no longer use standard contractual clauses to transfer data, which is going to be a massive restriction on their business. And if they had any sense, they'd be lobbying very, very hard right now to the Senate, to the House, to try and persuade U.S. lawmakers actually to stick to some these treaties! To stop introducing really mad laws that ride roughshod over other people's privacy, and have a certain amount of respect. >> Let's let JD weigh in, 'cause he just got in, sorry on the video, I made him back on a host 'cause he dropped off. Just, Bill, real quick, I mean I think it's like when, you know, I go to Europe there's the line for Americans, there's the line for EU. Or EU and everybody else. I mean we might be there, but ultimately this has to be solved. So, JD, I want to let you weigh in, Germany has been at the beginning forefront of privacy, and they've been hardcore, and how's this all playing out in your perspective? >> Well, the first thing that we have to understand is that in Germany, there is a very strong law for regulation. Germans panic as soon as they know regulation, so they need to understand what am I allowed to do, and what am I not allowed to do. And they expect the same from the others. For the record I'm not German, but I live in Germany for some 20 years, so I got a bit of a feeling for them. And that sense of need for regulation has spread very fast throughout the European Union, because most of the European member states of the European Union consider this, that it makes sense, and then we found that Britain had already a very good framework for privacy, so GDPR itself is very largely based on what the United Kingdom already had in place with their privacy act. Moving forward, we try to find agreement and consensus with other countries, especially the United States because that's where most of the tech providers are, only to find out, and that is where it started to go really, really bad, 2014, when the mass production by Edward Snowden came out, to find out it's not data from citizens, it's surveillance programs which include companies. I joined a purchasing conference a few weeks ago where the purchase of a large European multinational, where the purchasing director explicitly stated that usage of U.S. based tech providers for sensitive data is prohibited as a result of them finding out that they have been under surveillance. So, it's not just the citizens, there's mass -- >> There you have it, guys! We did trust you! We did have agreements there that you could have abided by, but you chose not to, you chose to abuse our trust! And you're now in a position where you are no longer trusted, and unless you can lobby your own elected representatives to actually recreate a level playing field, we're not going to continue trusting you. >> So, I think really I -- >> Well I mean that, you know, innovation has to come from somewhere, and you know, has to come from America if that's the case, you guys have to get on board, right? Is that what it -- >> Innovation without trust? >> Is that the perspective? >> I don't think it's a country thing, I mean like, it's not you or them, I think everybody -- >> I'm just bustin' Bill's chops there. >> No, but I think everybody, everybody is looking for what the privacy rules are, and that's important. And you can have that innovation with consent, and I think that's really where we're going to get to. And this is why I keep pushing that issue. I mean, privacy should be a fundamental right, and how you get paid for that privacy is interesting, or how you get compensated for that privacy if you know what the explicit value exchange is. What you're talking about here is the surveillance that's going on by companies, which shouldn't be happening, right? That shouldn't be happening at the company level. At the government level I can understand that that is happening, and I think those are treaties that the governments have to agree upon as to how much they're going to impinge on our personal privacy for the trade off for security, and I don't think they've had those discussions either. Or they decided and didn't tell any of their citizens, and I think that's probably more likely the case. >> I mean, I think what's happening here, Bill, you guys were pointing out, and Ray, you articulated there on the other side, and my kind of colorful joke aside, is that we're living a first generation modern sociology problem. I mean, this is a policy challenge that extends across multiple industries, cyber security, citizen's rights, geopolitical. I mean when would look, and even when we were doing CUBE events overseas in Europe, in North American companies we'd call it abroad, we'd just recycle the American program, and we found there's so much localization value. So, Ray, this is the digital disruption, it's the virtualization of physical for digital worlds, and it's a lot of network theory, which is computer science, a lot of sociology. This is a modern challenge, and I don't think it so much has a silver bullet, it's just that we need smart people working on this. That's my take away! >> I think we can describe the ideal endpoint being somewhere we have meaningful protection alongside the maximization of economic and social value through innovation. So, that should be what we would all agree would be the ideal endpoint. But we need both, we need meaningful protection, and we need the maximization of economic and social value through innovation! >> Can I add another axis? Another axis, security as well. >> Well, I could -- >> I put meaningful protection as becoming both security and privacy. >> Well, I'll speak for the American perspective here, and I won't speak, 'cause I'm not the President of the United States, but I will say as someone who's been from Silicon Valley and the east coast as a technical person, not a political person, our lawmakers are idiots when it comes to tech, just generally. (Ray laughing) They're not really -- (Bill laughing loudly) >> They really don't understand. They really don't understand the tech at all! >> So, the problem is -- >> I'm not claiming ours are a great deal better. (laughs) >> Well, this is why I think this is a modern problem. Like, the young people I talk to are like, "Why do we have this rules?" They're all lawyers that got into these positions of Congress on the American side, and so with the American JEDI Contract you guys have been following very closely is, it's been like the old school Oracle, IBM, and then Amazon is leading with an innovative solution, and Microsoft has come in and re-pivoted. And so what you have is a fight for the digital future of citizenship! And I think what's happening is that we're in a massive societal transition, where the people in charge don't know what the hell they're talkin' about, technically. And they don't know who to tap to solve the problems, or even shape or frame the problems. Now, there's pockets of people that are workin' on it, but to me as someone who looks at this saying, it's a pretty simple solution, no one's ever seen this before. So, there's a metaphor you can draw, but it's a completely different problem space because it's, this is all digital, data's involved. >> We've got a lobbyists out there, and we've got some tech firms spending an enormous amount of lobbying. If those lobbyists aren't trying to steer their representatives in the right direction to come up with law that aren't going to massively undermine trade and data sharing between Europe and America, then they're making a big mistake, because we got here through some really dumb lawmaking in the U.S., I mean, there are none of the laws in Europe that are a problem here. 'Cause GDPR isn't a great difference, a great deal different from some of the laws that we have already in California and elsewhere. >> Bill, Bill. >> The laws that are at issue here -- >> Bill, Bill! You have to like, back up a little bit from that rhetoric that EU is perfect and U.S. is not, that's not true actually. >> I'm not saying we're perfect! >> No, no, you say that all the time. >> But I'm saying there's a massive lack of innovation. Yeah, yeah. >> I don't, I've never said it! >> Arm wrestle! >> Yes, yes. >> When I'm being critical of some of the dumb laws in the U.S, (Sarbjeet laughing) I'm not saying Europe is perfect. What we're trying to say is that in this particular instance, I said there was an equal balance here between meaningful protection and the maximization of economic and social value. On the meaningful protection side, America's got it very wrong in terms of the meaningful protection it provides to civil European data. On the maximization of economic and social value, I think Europe's got it wrong. I think there are a lot of things we could do in Europe to actually have far more innovation. >> Yeah. >> It's a cultural issue. The Germans want rules, that's what they crave for. America's the other way, we don't want rules, I mean, pretty much is a rebel society. And that's kind of the ethos of most tech companies. But I think you know, to me the media, there's two things that go on with this tech business. The company's themselves have to be checked by say, government, and I believe in not a lot of regulation, but enough to check the power of bad actors. Media so called "checking power", both of these major roles, they don't really know what they're talking about, and this is back to the education piece. The people who are in the media so called "checking power" and the government checking power assume that the companies are bad. Right, so yeah, because eight out of ten companies like Amazon, actually try to do good things. If you don't know what good is, you don't really, (laughs) you know, you're in the wrong game. So, I think media and government have a huge education opportunity to look at this because they don't even know what they're measuring. >> I support the level of innovation -- >> I think we're unreeling from the globalization. Like, we are undoing the globalization, and that these are the side effects, these conflicts are a side effect of that. >> Yeah, so all I'm saying is I support the focus on innovation in America, and that has driven an enormous amount of wealth and value. What I'm questioning here is do you really need to spy on us, your allies, in order to help that innovation? And I'm starting to, I mean, do you need mass surveillance of your allies? I mean, I can see you may want to have some surveillance of people who are a threat to you, but wait, guys, we're meant to be on your side, and you haven't been treating our privacy with a great deal of respect! >> You know, Saudi Arabia was our ally. You know, 9/11 happened because of them, their people, right? There is no ally here, and there is no enemy, in a way. We don't know where the rogue actors are sitting, like they don't know, they can be within the walls -- >> It's well understood I think, I agree, sorry. it's well understood that nation states are enabling terrorist groups to take out cyber attacks. That's well known, the source enables it. So, I think there's the privacy versus -- >> I'm not sure it's true in your case that it's Europeans that's doing this though. >> No, no, well you know, they share -- >> I'm a former officer in the Royal Navy, I've stood shoulder to shoulder with my U.S. counterparts. I put my life on the line on NATO exercises in real war zones, and I'm now a disabled ex-serviceman as a result of that. I mean, if I put my line on the line shoulder to shoulder with Americans, why is my privacy not respected? >> Hold on -- >> I feel it's, I was going to say actually that it's not that, like even the U.S., right? Part of the spying internally is we have internal actors that are behaving poorly. >> Yeah. >> Right, we have Marxist organizations posing as, you know, whatever it is, I'll leave it at that. But my point being is we've got a lot of that, every country has that, every country has actors and citizens and people in the system that are destined to try to overthrow the system. And I think that's what that surveillance is about. The question is, we don't have treaties, or we didn't have your explicit agreements. And that's why I'm pushing really hard here, like, they're separating privacy versus security, which is the national security, and privacy versus us as citizens in terms of our data being basically taken over for free, being used for free. >> John: I agree with that. >> That I think we have some agreement on. I just think that our governments haven't really had that conversation about what surveillance means. Maybe someone agreed and said, "Okay, that's fine. You guys can go do that, we won't tell anybody." And that's what it feels like. And I don't think we deliberately are saying, "Hey, we wanted to spy on your citizens." I think someone said, "Hey, there's a benefit here too." Otherwise I don't think the EU would have let this happen for that long unless Max had made that case and started this ball rolling, so, and Edward Snowden and other folks. >> Yeah, and I totally support the need for security. >> I want to enter the -- >> I mean we need to, where there are domestic terrorists, we need to stop them, and we need to have local action in UK to stop it happening here, and in America to stop it happening there. But if we're doing that, there is absolutely no need for the Americans to be spying on us. And there's absolutely no need for the Americans to say that privacy applies to U.S. citizens only, and not to Europeans, these are daft, it's just daft! >> That's a fair point. I'm sure GCHQ and everyone else has this covered, I mean I'm sure they do. (laughs) >> Oh, Bill, I know, I've been involved, I've been involved, and I know for a fact the U.S. and the UK are discussing I know a company called IronNet, which is run by General Keith Alexander, funded by C5 Capital. There's a lot of collaboration, because again, they're tryin' to get their arms around how to frame it. And they all agree that sharing data for the security side is super important, right? And I think IronNet has this thing called Iron Dome, which is essentially like they're saying, hey, we'll just consistency around the rules of shared data, and we can both, everyone can have their own little data. So, I think there's recognition at the highest levels of some smart people on both countries. (laughs) "Hey, let's work together!" The issue I have is just policy, and I think there's a lot of clustering going on. Clustered here around just getting out of their own way. That's my take on that. >> Are we a PG show? Wait, are we a PG show? I just got to remember that. (laughs) (Bill laughing) >> It's the internet, there's no regulation, there's no rules! >> There's no regulation! >> The European rules or is it the American rules? (Ray laughing) >> I would like to jump back quickly to the purpose of the surveillance, and especially when mass surveillance is done under the cover of national security and terror prevention. I worked with five clients in the past decade who all have been targeted under mass surveillance, which was revealed by Edward Snowden, and when they did their own investigation, and partially was confirmed by Edward Snowden in person, they found out that their purchasing department, their engineering department, big parts of their pricing data was targeted in mass surveillance. There's no way that anyone can explain me that that has anything to do with preventing terror attacks, or finding the bad guys. That is economical espionage, you cannot call it in any other way. And that was authorized by the same legislation that authorizes the surveillance for the right purposes. I'm all for fighting terror, and anything that can help us prevent terror from happening, I would be the first person to welcome it. But I do not welcome when that regulation is abused for a lot of other things under the cover of national interest. I understand -- >> Back to the lawmakers again. And again, America's been victim to the Chinese some of the individual properties, well documented, well known in tech circles. >> Yeah, but just 'cause the Chinese have targeted you doesn't give you free right to target us. >> I'm not saying that, but its abuse of power -- >> If the U.S. can sort out a little bit of reform, in the Senate and the House, I think that would go a long way to solving the issues that Europeans have right now, and a long way to sort of reaching a far better place from which we can all innovate and cooperate. >> Here's the challenge that I see. If you want to be instrumenting everything, you need a closed society, because if you have a free country like America and the UK, a democracy, you're open. If you're open, you can't stop everything, right? So, there has to be a trust, to your point, Bill. As to me that I'm just, I just can't get my arms around that idea of complete lockdown and data surveillance because I don't think it's gettable in the United States, like it's a free world, it's like, open. It should be open. But here we've got the grids, and we've got the critical infrastructure that should be protected. So, that's one hand. I just can't get around that, 'cause once you start getting to locking down stuff and measuring everything, that's just a series of walled gardens. >> So, to JD's point on the procurement data and pricing data, I have been involved in some of those kind of operations, and I think it's financial espionage that they're looking at, financial security, trying to figure out a way to track down capital flows and what was purchased. I hope that was it in your client's case, but I think it's trying to figure out where the money flow is going, more so than trying to understand the pricing data from competitive purposes. If it is the latter, where they're stealing the competitive information on pricing, and data's getting back to a competitor, that is definitely a no-no! But if it's really to figure out where the money trail went, which is what I think most of those financial analysts are doing, especially in the CIA, or in the FBI, that's really what that probably would have been. >> Yeah, I don't think that the CIA is selling the data to your competitors, as a company, to Microsoft or to Google, they're not selling it to each other, right? They're not giving it to each other, right? So, I think the one big problem I studied with FISA is that they get the data, but how long they can keep the data and how long they can mine the data. So, they should use that data as exhaust. Means like, they use it and just throw it away. But they don't, they keep mining that data at a later date, and FISA is only good for five years. Like, I learned that every five years we revisit that, and that's what happened this time, that we renewed it for six years this time, not five, for some reason one extra year. So, I think we revisit all these laws -- >> Could be an election cycle. >> Huh? >> Could be an election cycle maybe. (laughs) >> Yes, exactly! So, we revisit all these laws with Congress and Senate here periodically just to make sure that they are up to date, and that they're not infringing on human rights, or citizen's rights, or stuff like that. >> When you say you update to check they're not conflicting with anything, did you not support that it was conflicting with Privacy Shield and some of the promises you made to Europeans? At what point did that fail to become obvious? >> It does, because there's heightened urgency. Every big incident happens, 9/11 caused a lot of new sort of like regulations and laws coming into the picture. And then the last time, that the Russian interference in our election, that created some sort of heightened urgency. Like, "We need to do something guys here, like if some country can topple our elections, right, that's not acceptable." So, yeah -- >> And what was it that your allies did that caused you to spy on us and to downgrade our privacy? >> I'm not expert on the political systems here. I think our allies are, okay, loose on their, okay, I call it village politics. Like, world is like a village. Like it's so only few countries, it's not millions of countries, right? That's how I see it, a city versus a village, and that's how I see the countries, like village politics. Like there are two camps, like there's Russia and China camp, and then there's U.S. camp on the other side. Like, we used to have Russia and U.S., two forces, big guys, and they managed the whole world balance somehow, right? Like some people with one camp, the other with the other, right? That's how they used to work. Now that Russia has gone, hold on, let me finish, let me finish. >> Yeah. >> Russia's gone, there's this void, right? And China's trying to fill the void. Chinese are not like, acting diplomatic enough to fill that void, and there's, it's all like we're on this imbalance, I believe. And then Russia becomes a rogue actor kind of in a way, that's how I see it, and then they are funding all these bad people. You see that all along, like what happened in the Middle East and all that stuff. >> You said there are different camps. We thought we were in your camp! We didn't expect to be spied on by you, or to have our rights downgraded by you. >> No, I understand but -- >> We thought we were on your side! >> But, but you have to guys to trust us also, like in a village. Let me tell you, I come from a village, that's why I use the villager as a hashtag in my twitter also. Like in village, there are usually one or two families which keep the village intact, that's our roles. >> Right. >> Like, I don't know if you have lived in a village or not -- >> Well, Bill, you're making some great statements. Where's the evidence on the surveillance, where can people find more information on this? Can you share? >> I think there's plenty of evidence, and I can send some stuff on, and I'm a little bit shocked given the awareness of the FISA Act, the Cloud Act, the fact that these things are in existence and they're not exactly unknown. And many people have been complaining about them for years. I mean, we've had Safe Harbor overturned, we've had Privacy Shield overturned, and these weren't just on a whim! >> Yeah, what does JD have in his hand? I want to know. >> The Edward Snowden book! (laughs) >> By Edward Snowden, which gives you plenty. But it wasn't enough, and it's something that we have to keep in mind, because we can always claim that whatever Edward Snowden wrote, that he made it up. Every publication by Edward Snowden is an avalanche of technical confirmation. One of the things that he described about the Cisco switches, which Bill prefers to quote every time, which is a proven case, there were bundles of researchers saying, "I told you guys!" Nobody paid attention to those researchers, and Edward Snowden was smart enough to get the mass media representation in there. But there's one thing, a question I have for Sabjeet, because in the two parties strategy, it is interesting that you always take out the European Union as part. And the European Union is a big player, and it will continue to grow. It has a growing amount of trade agreements with a growing amount of countries, and I still hope, and I think think Bill -- >> Well, I think the number of countries is reducing, you've just lost one! >> Only one. (Bill laughing loudly) Actually though, those are four countries under one kingdom, but that's another point. (Bill chortling heartily) >> Guys, final topic, 5G impact, 'cause you mentioned Cisco, couldn't help think about -- >> Let me finish please my question, John. >> Okay, go ahead. How would you the United States respond if the European Union would now legalize to spy on everybody and every company, and every governmental institution within the United States and say, "No, no, it's our privilege, we need that." How would the United States respond? >> You can try that and see economically what happens to you, that's how the village politics work, you have to listen to the mightier than you, and we are economically mightier, that's the fact. Actually it's hard to swallow fact for, even for anybody else. >> If you guys built a great app, I would use it, and surveil all you want. >> Yeah, but so this is going to be driven by the economics. (John laughing) But the -- >> That's exactly what John said. >> This is going to be driven by the economics here. The big U.S. cloud firms are got to find this ruling enormously difficult for them, and they are inevitably going to lobby for a level of reform. And I think a level of a reform is needed. Nobody on your side is actually arguing very vociferously that the Cloud Act and the discrimination against Europeans is actually a particularly good idea. The problem is that once you've done the reform, are we going to believe you when you say, "Oh, it's all good now, we've stopped it!" Because with Crypto AG scandal in Switzerland you weren't exactly honest about what you were doing. With the FISA courts, so I mean FISA secret courts, the secret warrants, how do we know and what proof can we have that you've stopped doing all these bad things? And I think one of the challenges, A, going to be the reform, and then B, got to be able to show that you actually got your act together and you're now clean. And until you can solve those two, many of your big tech companies are going to be at a competitive disadvantage, and they're going to be screaming for this reform. >> Well, I think that, you know, General Mattis said in his book about Trump and the United states, is that you need alliances, and I think your point about trust and executing together, without alliances, it really doesn't work. So, unless there's some sort of real alliance, (laughs) like understanding that there's going to be some teamwork here, (Bill laughing) I don't think it's going to go anywhere. So, otherwise it'll continue to be siloed and network based, right? So to the village point, if TikTok can become a massively successful app, and they're surveilling, so and then we have to decide that we're going to put up with that, I mean, that's not my decision, but that's what's goin' on here. It's like, what is TikTok, is it good or bad? Amazon sent out an email, and they've retracted it, that's because it went public. I guarantee you that they're talkin' about that at Amazon, like, "Why would we want infiltration by the Chinese?" And I'm speculating, I have no data, I'm just saying, you know. They email those out, then they pull it back, "Oh, we didn't mean to send that." Really, hmm? (laughs) You know, so this kind of -- >> But the TRA Balin's good, you always want to get TRA Balin out there. >> Yeah, exactly. There's some spying going on! So, this is the reality. >> So, John, you were talking about 5G, and I think you know, the role of 5G, you know, the battle between Cisco and Huawei, you just have to look at it this way, would you rather have the U.S. spy on you, or would you rather have China? And that's really your binary choice at this moment. And you know both is happening, and so the question is which one is better. Like, the one that you're in alliance with? The one that you're not in alliance with, the one that wants to bury you, and decimate your country, and steal all your secrets and then commercialize 'em? Or the one kind of does it, but doesn't really do it explicitly? So, you've got to choose. (laughs) >> It's supposed to be -- >> Or you can say no, we're going to create our own standard for 5G and kick both out, that's an option. >> It's probably not as straightforward a question as, or an answer to that question as you say, because if we were to fast-forward 50 years, I would argue that China is going to be the largest trading nation in the world. I believe that China is going to have the upper hand on many of these technologies, and therefore why would we not want to use some of their innovation, some of their technology, why would we not actually be more orientated around trading with them than we might be with the U.S.? I think the U.S. is throwing its weight around at this moment in time, but if we were to fast-forward I think looking in the longterm, if I had to put my money on Huawei or some of its competitors, I think given its level of investments in research and whatever, I think the better longterm bet is Huawei. >> No, no, actually you guys need to pick a camp. It's a village again. You have to pick a camp, you can't be with both guys. >> Global village. >> Oh, right, so we have to go with the guys that have been spying on us? >> How do you know the Chinese haven't been spying on you? (Ray and John laughing loudly) >> I think I'm very happy, you find a backdoor in the Huawei equipment and you show it to us, we'll take them to task on it. But don't start bullying us into making decisions based on what-ifs. >> I don't think I'm, I'm not qualified to represent the U.S., but what we would want to say is that if you look at the dynamics of what's going on, China, we've been studying that as well in terms of the geopolitical aspects of what happens in technology, they have to do what they're doing right now. Because in 20 years our population dynamics go like this, right? You've got the one child policy, and they won't have the ability to go out and fight for those same resources where they are, so what they're doing makes sense from a country perspective and country policy. But I think they're going to look like Japan in 20 years, right? Because the xenophobia, the lack of immigration, the lack of inside stuff coming in, an aging population. I mean, those are all factors that slow down your economy in the long run. And the lack of bringing new people in for ideas, I mean that's part of it, they're a closed system. And so I think the longterm dynamics of every closed system is that they tend to fail versus open systems. So, I'm not sure, they may have better technology along the way. But I think a lot of us are probably in the camp now thinking that we're not going to aid and abet them, in that sense to get there. >> You're competing a country with a company, I didn't say that China had necessarily everything rosy in its future, it'll be a bigger economy, and it'll be a bigger trading partner, but it's got its problems, the one child policy and the repercussions of that. But that is not one of the things, Huawei, I think Huawei's a massively unlimited company that has got a massive lead, certainly in 5G technology, and may continue to maintain a lead into 6G and beyond. >> Oh yeah, yeah, Huawei's done a great job on the 5G side, and I don't disagree with that. And they're ahead in many aspects compared to the U.S., and they're already working on the 6G technologies as well, and the roll outs have been further ahead. So, that's definitely -- >> And they've got a great backer too, the financer, the country China. Okay guys, (Ray laughing) let's wrap up the segment. Thanks for everyone's time. Final thoughts, just each of you on this core issue of the news that we discussed and the impact that was the conversation. What's the core issue? What should people think about? What's your solution? What's your opinion of how this plays out? Just final statements. We'll start with Bill, Ray, Sarbjeet and JD. >> All I'm going to ask you is stop spying on us, treat us equally, treat us like the allies that we are, and then I think we've got to a bright future together! >> John: Ray? >> I would say that Bill's right in that aspect in terms of how security agreements work, I think that we've needed to be more explicit about those. I can't represent the U.S. government, but I think the larger issue is really how do we view privacy, and how we do trade offs between security and convenience, and you know, what's required for personalization, and companies that are built on data. So, the sooner we get to those kind of rules, an understanding of what's possible, what's a consensus between different countries and companies, I think the better off we will all be a society. >> Yeah, I believe the most important kind of independence is the economic independence. Like, economically sound parties dictate the terms, that's what U.S. is doing. And the smaller countries have to live with it or pick the other bigger player, number two in this case is China. John said earlier, I think, also what JD said is the fine balance between national security and the privacy. You can't have, you have to strike that balance, because the rogue actors are sitting in your country, and across the boundaries of the countries, right? So, it's not that FISA is being fought by Europeans only. Our internal people are fighting that too, like how when you are mining our data, like what are you using it for? Like, I get concerned too, when you can use that data against me, that you have some data against me, right? So, I think it's the fine balance between security and privacy, we have to strike that. Awesome. JD? I'll include a little fake check, fact check, at the moment China is the largest economy, the European Union is the second largest economy, followed directly by the USA, it's a very small difference, and I recommend that these two big parties behind the largest economy start to collaborate and start to do that eye to eye, because if you want to balance the economical and manufacturing power of China, you cannot do that as being number two and number three. You have to join up forces, and that starts with sticking with the treaties that you signed, and that has not happened in the past, almost four years. So, let's go back to the table, let's work on rules where from both sides the rights and the privileges are properly reflected, and then do the most important thing, stick to them! >> Yep, I think that's awesome. I think I would say that these young kids in high school and college, they need to come up and solve the problems, this is going to be a new generational shift where the geopolitical landscape will change radically, you mentioned the top three there. And new alliances, new kinds of re-imagination has to be there, and from America's standpoint I'll just say that I'd like to see lawmakers have, instead of a LinkedIn handle, a GitHub handle. You know, when they all go out on campaign talk about what code they've written. So, I think having a technical background or some sort of knowledge of computer science and how the internet works with sociology and societal impact will be critical for our citizenships to advance. So, you know rather a lawyer, right so? (laughs) Maybe get some law involved in that, I mean the critical lawyers, but today most people are lawyers in American politics, but show me a GitHub handle of that congressman, that senator, I'd be impressed. So, that's what we need. >> Thanks, good night! >> Ray, you want to say something? >> I wanted to say something, because I thought the U.S. economy was 21 trillion, the EU is sittin' at about 16, and China was sitting about 14, but okay, I don't know. >> You need to do math man. >> Hey, we went over our 30 minutes time, we can do an hour with you guys, so you're still good. (laughs) >> Can't take anymore. >> No go on, get in there, go at it when you've got something to say. >> I don't think it's immaterial the exact size of the economy, I think that we're better off collaborating on even and fair terms, we are -- >> We're all better off collaborating. >> Yeah. >> Gentlemen -- >> But the collaboration has to be on equal and fair terms, you know. (laughs) >> How do you define fair, good point. Fair and balanced, you know, we've got the new -- >> We did define fair, we struck a treaty! We absolutely defined it, absolutely! >> Yeah. >> And then one side didn't stick to it. >> We will leave it right there, and we'll follow up (Bill laughing) in a later conversation. Gentlemen, you guys are good. Thank you. (relaxing electronic music)

>> Announcer: From the Cube Studios in Palo Alto in Boston, connecting with thought leaders all around the world, this is The Cube Conversation. >> Everyone welcome to this special live stream here in The Cube Studios. I'm John Furrier, your host. We've got a great panel discussion here for one hour, sponsored by Lumina PR, not sponsored but organized by Lumina PR. An authentic conversation around professionals in the news media, and communication professionals, how they can work together. As we know, pitching stories to national media takes place in the backdrop in today's market, which is on full display. The Coronavirus, racial unrest in our country and a lot of new tech challenges from companies, their role in society with their technology and of course, an election all make for important stories to be developed and reported. And we got a great panel here and the purpose is to bridge the two worlds. People trying to get news out for their companies in a way that's relevant and important for audiences. I've got a great panelists here, Gerard Baker Editor at Large with the Wall Street Journal, Eric Savitz, Associate Editor with Barron's and Brenna Goth who's a Southwest Staff Correspondent with Bloomberg Publications. Thanks for joining me today, guys, appreciate it. >> Thank you. >> So we're going to break this down, we got about an hour, we're going to probably do about 40 minutes. I'd love to get your thoughts in this power panel. And you guys are on the front lines decades of experience, seeing these waves of media evolve. And now more than ever, you can't believe what's happening. You're seeing the funding of journalism really challenging at an all time high. You have stories that are super important to audiences and society really changing and we need this more than ever to have more important stories to be told. So this is really a challenge. And so I want to get your thoughts on this first segment. The challenge is around collecting the data, doing the analysis, getting the stories out, prioritizing stories in this time. So I'd love to get your thoughts. We'll start with you, Brenna, what's your thoughts on this as you're out there in Arizona. Coronavirus on the worst is one of the states there. What are your challenges? >> I would say for me, one of the challenges of the past couple months is just the the sheer influx of different types of stories we've had and the amount of news coming out. So I think one of the challenging things is a lot of times we'll get into a bit of a routine covering one story. So early on maybe the Coronavirus, and then something else will come up. So I personally have been covering some of the Coronavirus news here in Arizona and in the Southwest, as well as some of the protests we've seen with the Black Lives Matter movement. And prioritizing that is pretty difficult. And so one thing that I I've been doing is I've noticed that a lot of my routine projects or things I've been working on earlier in the year are off the table, and I'll get back to them when I have time. But for now, I feel like I'm a little bit more on breaking news almost every day in a way that I wasn't before. >> Gerard, I want to get your thoughts on this. Wall Street Journal has been since I could remember when the web hit the scene early on very digital savvy. Reporting, it's obviously, awesome as well. As you have people in sheltering in place, both journalists and the people themselves and the companies, there's an important part of the digital component. How do you see that as an opportunity and a challenge at the same time because you want to get data out there, you want to be collecting and reporting those stories? How do you see that opportunity, given the challenge that people can't meet face to face? >> First of all, thank you very much for having me. I think as we've all discovered in all fields of endeavor in the last three months, it's been quite a revelation, how much we can do without using without access to the traditional office environment. I think one of the things that Coronavirus, this crisis will have done we all agree I think is that it will have fundamentally changed the way people work. There'll be a lot more people quite a bit more working from home. They'll be a lot more remote working. Generally, there'll be a lot less travel. So on the one hand, it's been eye opening. actually how relatively easy, I use that word carefully. But how we've managed, and I think it's true of all news organizations, how we've managed surprisingly well, I think, without actually being at work. At the Wall Street Journal, we have a big office, obviously in midtown Manhattan, as well as dozens of bureaus around the world. Nobody has really been in that office since the middle of March. And yet we've put out a complete Wall Street Journal product, everything from the print edition, obviously, through every aspect of digital media, the website, all of the apps, video, everything, audio, podcasts. We've been able to do pretty well everything that we could do when we were all working in the office. So I think that will be an important lesson and that will clearly induce some change, some long term changes, I think about the way we work. That said, I'd point to two particular challenges that I think we have not properly overcome. Or if you like that we have, the two impediments, that the crisis has produced for us. One is, as you said, the absence of face to face activity, the hive process, which I think is really important. I think that a lot of the best ideas, a lot of the best, the best stories are developed through conversations between people in an office which don't necessarily we can't necessarily replicate through the online experience through this kind of event or through the Zoom meetings that we've all been doing. I think that has inhibited to some extent, some of the more creative activity that we could have done. I think the second larger problem which we all must face with this is that being essentially locked up in our homes for more than three months, which most of us has been I think accentuates a problem that is already that has been a problem in journalism for a long time, which is that journalists tend to cluster in the major metropolitan areas. I think, a couple of years ago, I read a study which said, I think that more than three quarters of journalists work for major news organizations, print, digital TV, radio, whatever, live and work in one of four major metropolises in the US. That's the New York area, the Washington DC area, the San Francisco area and the LA area. And that tends to create a very narrow worldview, unfortunately, because not enough people either come from those areas, but from outside those areas or spend enough time talking to people from outside those areas. And I think the Coronavirus has accentuated that. And I think in terms of coverage, I'm here in New York. I've been in New York continuously for three and a half months now which is quite unusual, I usually travel a lot. And so my reporting, I write columns now, mainly, but obviously I talk to people too. But the reporting, the editing that we're doing here is inevitably influenced by the experience that we've had in New York, which has obviously been, frankly, devastating. New York has been devastated by Coronavirus in a way that no where else in the country has. And I think to some extent, that does, perhaps have undue influence on the coverage. We're all locked up. We're all mindful of our own health. We're all mindful of people that we know who've gone to hospital or have been very, very sick or where we are, we are heavily influenced by our own immediate environment. And I think that has been a problem if we had been, imagine if the journalists in the country, instead of being clustered in New York and LA and San Francisco had been sort of spread over Texas and Missouri and Florida, things like that. I think you'd have a very different overall accounting of this story over the last three months. So I think it's just, it's accentuated that phenomenon in journalism, which I think we're mindful of, and which we all need to do a better job of addressing. >> It's really interesting. And I want to come back to that point around, who you're collaborating with to get this, now we have virtual ground truth, I guess, how you collaborate. But decision making around stories is, you need an open mind. And if you have this, I guess, I'll call it groupthink or clustering is interesting, now we have digital and we have virtual, it opens up the aperture but we still have the groupthink. But I want to get Eric's take first on his work environment, 'cause I know you've lived on both sides of New York and San Francisco area, as well as you've worked out in the field for agencies, as well on the other side, on the storytelling side. How has this current news environment, journalism environment impacted your view and challenges and your opportunities that you're going after the news? >> Well, so there's there's a few elements here. So one, Barron's Of course, covers the world, looks at the world through a financial lens. We cover the stock market every day. The stock market is not the center of story, but it is an important element of what's been unfolding over the last few months and the markets have been incredibly volatile, we change the way that we approach the markets. Because everything, the big stories are macro stories, huge swings in stock prices, huge swings in the price of oil, dramatic moves in almost every financial security that you can imagine. And so there's a little bit of a struggle for us as we try and shift our daily coverage to be a little more focused on the macro stories as we're still trying to tell what's happening with individual stocks and companies, but these bigger stories have changed our approach. So even if you look at say the covers of our magazine over the last few months, typically, we would do a cover on a company or an investor, that sort of thing. And now they're all big, thematic stories, because the world has changed. And world is changing how it looks at the financial markets. I think one thing that that Gerard touched on is the inability to really leave your house. I'm sitting in my little home office here, where I've been working since March, and my inability to get out and talk to people in person to have some, some interface with the companies and people that I cover, makes it tougher. You get story ideas from those interactions. I think Gerard said some of it comes from your interactions with your colleagues. But some of that also just comes from your ability to interact with sources and that is really tougher to do. It's more formalistic if you do it online. It's just not the same to be on a Zoom call as to be sitting in a Starbucks with somebody and talking about what's going on. I think the other elements of this is that there's, we have a lot of attempts, trying new things trying to reach our readers. We'll do video sessions, we'll do all sorts of other things. And it's one more layer on top of everything else is that there's a lot of demands on the time for the people who are working in journalism right now. I would say one other thing I'll touch on, John, which is, you mentioned, I did use, I worked for public communications for a while, and I do feel their pain because the ability to do any normal PR pitching for new products, new services, the kinds of things that PR people do every day is really tough. It's just really hard to get anybody's attention for those things right now. And the world is focused on these very large problems. >> Well, we'll unpack the PR comms opportunities in the next section. But I want to to just come back to this topic teased out from Gerard and Brenna when you guys were getting out as well. This virtual ground truth, ultimately, at the end of the day, you got to get the stories, you got to report them, they got to be distributed. Obviously, the Wall Street Journal is operating well, by the way, I love the Q&A video chats and what they got going on over there. So the format's are evolving and doing a good job, people are running their business. But as journalists and reporters out there, you got to get the truth and the ground truth comes from interaction. So as you have an aperture with digital, there's also groupthink on, say, Twitter and these channels. So getting in touch with the audience to have those stories. How are you collecting the data? How are you reporting? Has anything changed or shifted that you can point to because ultimately, it's virtual. You still got to get the ground truth, you still got to get the stories. Any thoughts on this point? >> I think in a way what we're seeing is in writ large actually is a problem again, another problem that I think digital journalism or the digital product digital content, if you like, actually presents for us today, which is that it's often said, I think rightly, that one of the, as successful as a lot of digital journalism has been and thank you for what you said about the Wall Street Journal. And we have done a tremendous job and by the way, one of the things that's been a striking feature of this crisis has been the rapid growth in subscriptions that we've had at the Journal. I know other news organizations have too. But we've benefited particularly from a hunger for the quality news. And we've put on an enormous number subscriptions in the last three months. So we've been very fortunate in that respect. But one of the challenges that people always say, one of the one of the drawbacks that people always draw attention to about digital content is that there's a lack of, for want of a better words, serendipity about the experience. When you used to read a newspaper, print newspapers, when may be some of us are old enough to remember, we'd get a newspaper, we'd open it up, we'd look at the front page, we look inside, we'd look at what other sections they were. And we would find things, very large number of things that we weren't particularly, we weren't looking for, we weren't expecting to, we're looking for a story about such. With the digital experience, as we know, that's a much it's a much less serendipitous experience. So you tend to a lot of search, you're looking, you find things that you tend to be looking for, and you find fewer things that, you follow particular people on social media that you have a particular interest in, you follow particular topics and have RSS feeds or whatever else you're doing. And you follow things that, you tend to find things that you were looking for. You don't find many things you weren't. What I think that the virus, the being locked up at home, again, has had a similar effect. That we, again, some of the best stories that I think anybody comes across in life, but news organizations are able to do are those stories that you know that you come across when you might have been looking for something else. You might have been working on a story about a particular company with a particular view to doing one thing and you came across somebody else. And he or she may have told you something actually really quite different and quite interesting and it took you in a different direction. That is easier to do when you're talking to people face to face, when you're actually there, when you're calling, when you're tasked with looking at a topic in the realm. When you are again, sitting at home with your phone on your computer, you tend to be more narrowly so you tend to sort of operate in lanes. And I think that we haven't had the breadth probably of journalism that I think you would get. So that's a very important you talk about data. The data that we have is obviously, we've got access broadly to the same data that we would have, the same electronically delivered data that we would have if we'd been sitting in our office. The data that I think in some ways is more interesting is the non electronically delivered data that is again, the casual conversation, the observation that you might get from being in a particular place or being with someone. The stimuli that arise from being physically in a place that you just aren't getting. And I think that is an important driver of a lot of stories. And we're missing that. >> Well, Gerard, I just want to ask real quick before I go to Brenna on her her take on this. You mentioned the serendipity and taking the stories in certain directions from the interactions. But also there's trust involved. As you build that relationship, there's trust between the parties, and that takes you down that road. How do you develop trust as you are online now? Is there a methodology or technique? Because you want to get the stories out fast, it's a speed game. But there's also the development side of it where a trust equation needs to build. What's your thoughts on that piece? Because that's where the real deeper stories come from. >> So I wasn't sure if you're asking me or Gerard. >> Gerard if he wants can answer that is the trust piece. >> I'll let the others speak to that too. Yeah, it is probably harder to... Again, most probably most people, most stories, most investigative stories, most scoops, most exclusives tend to come from people you already trust, right? So you've developed a trust with them, and they've developed a trust with you. Perhaps more importantly, they know you're going to treat the story fairly and properly. And that tends to develop over time. And I don't think that's been particularly impaired by this process. You don't need to have a physical proximity with someone in order to be able to develop that trust. My sources, I generally speak to them on the phone 99% of the time anyway, and you can still do that from home. So I don't think that's quite... Obviously, again, there are many more benefits from being able to actually physically interact with someone. But I think the level of, trust takes a long time to develop, let's be honest, too, as well. And I think you develop that trust both by developing good sources. and again, as I said, with the sources understanding that you're going to do the story well. >> Brenna, speed game is out there, you got to get stories fast. How do you balance speed and getting the stories and doing some digging into it? What's your thoughts on all this? >> I would say, every week is looking different for me these days. A lot of times there are government announcements coming out, or there are numbers coming out or something that really does require a really quick story. And so what I've been trying to do is get those stories out as quick as possible with maybe sources I already have, or really just the facts on the ground I can get quickly. And then I think in these days, too, there is a ton of room for following up on things. And some news event will come out but it sparks another idea. And that's the time to that when I'm hearing from PR people or I'm hearing from people who care about the issue, right after that first event is really useful for me to hear who else is thinking about these things and maybe ways I can go beyond the first story for something that more in depth and adds more context and provides more value to our readers. >> Awesome. Well, guys, great commentary and insight there on the current situation. The next section is with the role of PR, because it's changing. I've heard the term earned media is a term that's been kicked around. Now we're all virtual, and we're all connected. The media is all virtual. It's all earned at this point. And that's not just a journalistic thing, there's storytelling. There's new voices emerging. You got these newsletter services, audiences are moving very quickly around trying to figure out what's real. So comms folks are trying to get out there and do their job and tell a story. And sometimes that story doesn't meet the cadence of say, news and/or reporting. So let's talk about that. Eric, you brought this up. You have been on both sides. You said you feel for the folks out there who are trying to do their job. How is the job changing? And what can they do now? >> The news cycle is so ferocious at the moment that it's very difficult to insert your weigh in on something that doesn't touch on the virus or the economy or social unrest or the volatility of the financial markets. So I think there's certain kinds of things that are probably best saved for another moment in time, If you're trying to launch new products or trying to announce new services, or those things are just tougher to do right now. I think that the most interesting questions right now are, If I'm a comms person, how can I make myself and my clients a resource to media who are trying to tell stories about these things, do it in a timely way, not overreach, not try insert myself into a story that really isn't a good fit? Now, every time one of these things happen, we got inboxes full of pitches for things that are only tangentially relevant and are probably not really that helpful, either to the reporter generally or to the client of the firm that is trying to pitch an idea. But I will say on the on this at the same time that I rely on my connections to people in corporate comms every single day to make connections with companies that I cover and need to talk to. And it's a moment when almost more than ever, I need immediacy of response, accurate information access to the right people at the companies who I'm trying to cover. But it does mean you need to be I think sharper or a little more pointed a little more your thinking about why am I pitching this person this story? Because the there's no time to waste. We are working 24 hours a day is what it feels like. You don't want to be wasting people's time. >> Well, you guys you guys represent big brands in media which is phenomenal. And anyone would love to have their company mentioned obviously, in a good way, that's their goal. But the word media relations means you relate to the media. If there's no media to relate to, the roles change, and there's not enough seats at the table, so to speak. So getting a clip on in the clip book that gets sent to management, look, "We're on Bloomberg." "Great, check." But is at it? So people, this is a department that needs to do more. Is there things that they can do, that isn't just chasing, getting on your franchises stories? Because it obviously would be great if we were all on Barron's Wall Street Journal, and Bloomberg, but they can't always get that. They still got to do more. They got to develop the relationships. >> John, one thing I would be conscious of here is that many of our publications, it's certainly true for journalists, true for us at Barron's and it's certainly true for Bloomberg. We're all multimedia publishers. We're doing lots of things. Barron's has television show on Fox. We have a video series. We have podcasts and newsletters, and daily live audio chats and all sorts of other stuff in addition to the magazine and the website. And so part of that is trying to figure out not just the right publication, but maybe there's an opportunity to do a very particular, maybe you'd be great fit for this thing, but not that thing. And having a real understanding of what are the moving parts. And then the other part, which is always the hardest part, in a way, is truly understanding not just I want to pitch to Bloomberg, but who do I want to pitch at Bloomberg. So I might have a great story for the Wall Street Journal and maybe Gerard would care but maybe it's really somebody you heard on the street who cares or somebody who's covering a particular company. So you have to navigate that, I think effectively. And even, more so now, because we're not sitting in a newsroom. I can't go yell over to somebody who's a few desks away and suggest they take a look at something. >> Do you think that the comm-- (talk over each other) Do you think the comms teams are savvy and literate in multimedia? Are they still stuck in the print ways or the group swing is they're used to what they're doing and haven't evolved? Is that something that you're seeing here? >> I think it varies. Some people will really get it. I think one of the things that that this comes back to in a sense is it's relationship driven. To Gerard's point, it's not so much about trusting people that I don't know, it's about I've been at this a long time, I know what people I know, who I trust, and they know the things I'm interested in and so that relationship is really important. It's a lot harder to try that with somebody new. And the other thing is, I think relevant here is something that we touched on earlier, which is the idiosyncratic element. The ability for me to go out and see new things is tougher. In the technology business, you could spend half your time just going to events, You could go to the conferences and trade shows and dinners and lunches and coffees all day long. And you would get a lot of good story ideas that way. And now you can't do any of that. >> There's no digital hallway. There are out there. It's called Twitter, I guess or-- >> Well, you're doing it from sitting in this very I'm still doing it from sitting in the same chair, having conversations, in some ways like that. But it's not nearly the same. >> Gerard, Brenna, what do you guys think about the comms opportunity, challenges, either whether it's directly or indirectly, things that they could do differently? Share your thoughts. Gerard, we'll start with you? >> Well, I would echo Eric's point as far as knowing who you're pitching to. And I would say that in, at least for the people I'm working with, some of our beats have changed because there are new issues to cover. Someone's taking more of a role covering virus coverage, someone's taking more of a role covering protests. And so I think knowing instead of casting a really wide net, I'm normally happy to try to direct pitches in the right direction. But I do have less time to do that now. So I think if someone can come to me and say, "I know you've been covering this, "this is how my content fits in with that." It'd grab my attention more and makes it easier for me. So I would say that that is one thing that as beats are shifting and people are taking on a little bit of new roles in our coverage, that that's something PR and marketing teams could definitely keep an eye on. >> I agree with all of that. And all everything everybody said. I'd say two very quick things. One, exactly as everybody said, really know who you are pitching to. It's partly just, it's going to be much more effective if you're pitching to the right person, the right story. But when I say that also make the extra effort to familiarize yourself with the work that that reporter or that editor has done. You cannot, I'm sorry to say, overestimate the vanity of reporters or editors or anybody. And so if you're pitching a story to a particular reporter, in a field, make sure you're familiar with what that person may have done and say to her, "I really thought you did a great job "on the reporting that you did on this." Or, "I read your really interesting piece about that," or "I listened to your podcast." It's a relatively easy thing to do that yields extraordinarily well. A, because it appeals to anybody's fantasy and we all have a little bit of that. But, B, it also suggests to the reporter or the editor or the person involved the PR person communications person pitching them, really knows this, has really done their work and has really actually takes this seriously. And instead of just calling, the number of emails I get, and I'm sure it's the same for the others too, or occasional calls out of the blue or LinkedIn messages. >> I love your work. I love your work. >> (voice cuts out) was technology. Well, I have a technology story for you. It's absolutely valueless. So that's the first thing, I would really emphasize that. The second thing I'd say is, especially on the specific relation to this crisis, this Coronavirus issue is it's a tricky balance to get right. On the one hand, make sure that what you're doing what you're pitching is not completely irrelevant right now. The last three months has not been a very good time to pitch a story about going out with a bunch of people to a crowded restaurant or whatever or something like that to do something. Clearly, we know that. At the same time, don't go to the other extreme and try and make every little thing you have seen every story you may have every product or service or idea that you're pitching don't make it the thing that suddenly is really important because of Coronavirus. I've seen too many of those too. People trying too hard to say, "In this time of crisis, "in this challenging time, what people really want to hear "about is "I don't know, "some new diaper "baby's diaper product that I'm developing or whatever." That's trying too hard. So there is something in the middle, which is, don't pitch the obviously irrelevant story that is just not going to get any attention through this process. >> So you're saying don't-- >> And at the same time, don't go too far in the other direction. And essentially, underestimate the reporter's intelligence 'cause that reporter can tell you, "I can see that you're trying too hard." >> So no shotgun approach, obviously, "Hey, I love your work." Okay, yeah. And then be sensitive to what you're working on not try to force an angle on you, if you're doing a story. Eric, I want to get your thoughts on the evolution of some of the prominent journalists that I've known and/or communication professionals that are taking roles in the big companies to be storytellers, or editors of large companies. I interviewed Andy Cunningham last year, who used to be With Cunningham Communications, and formerly of Apple, better in the tech space and NPR. She said, "Companies have to own their own story "and tell it and put it out there." I've seen journalists say on Facebook, "I'm working on a story of x." And then crowdsource a little inbound. Thoughts on this new role of corporations telling their own story, going direct to the consumers. >> I think to a certain extent, that's valuable. And in some ways, it's a little overrated. There are a lot of companies creating content on their websites, or they're creating their own podcasts or they're creating their own newsletter and those kinds of things. I'm not quite sure how much of that, what the consumption level is for some of those things. I think, to me, the more valuable element of telling your story is less about the form and function and it's more about being able to really tell people, explain to them why what they do matters and to whom it matters, understanding the audience that's going to want to hear your story. There are, to your point, there are quite a few journalists who have migrated to either corporate communications or being in house storytellers of one kind or another for large businesses. And there's certainly a need to figure out the right way to tell your story. I think in a funny way, this is a tougher moment for those things. Because the world is being driven by external events, by these huge global forces are what we're all focused on right now. And it makes it a lot tougher to try and steer your own story at this particular moment in time. And I think you do see it Gerard was talking about don't try and... You want to know what other people are doing. You do want to be aware of what others are writing about. But there's this tendency to want to say, "I saw you wrote a story about Peloton "and we too have a exercise story that you can, "something that's similar." >> (chuckles) A story similar to it. We have a dance video or something. People are trying to glam on to things and taking a few steps too far. But in terms of your original question, it's just tougher at the moment to control your story in that particular fashion, I think. >> Well, this brings up a good point. I want to get to Gerard's take on this because the Wall Street Journal obviously has been around for many, many decades. and it's institution in journalism. In the old days, if you weren't relevant enough to make the news, if you weren't the most important story that people cared about, the editors make that choice and you're on the front page or in a story editorially. And companies would say, "No, but I should be in there." And you'd say, "That's what advertising is for." And that's the way it seemed to work in the past. If you weren't relevant in the spirit of the decision making of important story or it needs to be communicated to the audience, there's ads for that. You can get a full page ad in the old days. Now with the new world, what's an ad, what's a story? You now have multiple omni-channels out there. So traditionally, you want to get the best, most important story that's about relevance. So companies might not have a relevant story and they're telling a boring story. There's no there, there, or they miss the story. How do you see this? 'Cause this is the blend, this is the gray area that I see. It's certainly a good story, depending on who you're talking to, the 10 people who like it. >> I think there's no question. We're in the news business, topicality matters. You're going to have a much better chance of getting your story, getting your product or service, whatever covered by the Wall Street Journal, Barron's or anywhere else for that matter, if it seems somehow news related, whether it's the virus or the unrest that we've been seeing, or it's to do with the economy. Clearly, you can have an effect. Newspapers, news organizations of all the three news organizations we represent don't just, are not just obviously completely obsessed with what happened this morning and what's going on right now. We are all digging into deeper stories, especially in the business field. Part of what we all do is actually try to get beyond the daily headlines. And so what's happening with the fortunes of a particular company. Obviously, they may be impacted by they're going to be impacted by the lockdown and Coronavirus. But they actually were doing some interesting things that they were developing over the long term, and we would like to look into that too. So again, there is a balance there. And I'm not going to pretend that if you have a really topical story about some new medical device or some new technology for dealing with this new world that we're all operating in, you're probably going to get more attention than you would if you don't have that. But I wouldn't also underestimate, the other thing is, as well as topicality, everybody's looking at the same time to be different, and every journalist wants to do something original and exclusive. And so they are looking for a good story that may be completely unrelated. In fact, I would also underestimate, I wouldn't underestimate either the desire of readers and viewers and listeners to actually have some deeper reported stories on subjects that are not directly in the news right now. So again, it's about striking the balance right. But I wouldn't say that, that there is not at all, I wouldn't say there is not a strong role for interesting stories that may not have anything to do what's going on with the news right now. >> Brenna, you want to add on your thoughts, you're in the front lines as well, Bloomberg, everyone wants to be on Bloomberg. There's Bloomberg radio. You guys got tons of media too, there's tons of stuff to do. How do they navigate? And how do you view the interactions with comms folks? >> It looks we're having a little bit of challenge with... Eric, your thoughts on comm professionals. The questions in the chats are everything's so fast paced, do you think it's less likely for reporters to respond to PR comms people who don't have interacted with you before? Or with people you haven't met before? >> It's an internal problem. I've seen data that talks about the ratio of comms people to reporters, and it's, I don't know, six or seven to one or something like that, and there are days when it feels like it's 70 to one. And so it is challenging to break through. And I think it's particularly challenging now because some of the tools you might have had, you might have said, "Can we grab coffee one day or something like that," trying to find ways to get in front of that person when you don't need them. It's a relationship business. I know this is a frustrating answer, but I think it's the right answer which is those relationships between media and comms people are most successful when they've been established over time. And so you're not getting... The spray and pray strategy doesn't really work. It's about, "Eric, I have a story that's perfect for you. "And here's why I think you you should talk to this guy." And if they really know me, there's a reasonable chance that I'll not only listen to them, but I'll at least take the call. You need to have that high degree of targeting. It is really hard to break through and people try everything. They try, the insincere version of the, "I read your story, it was great. "but here's another great story." Which maybe they read your story, maybe they didn't at least it was an attempt. Or, "if you like this company, you'll love that one." People try all these tricks to try and get get to you. I think the highest level of highest probability of success comes from the more information you have about not just what I covered yesterday, but what do I cover over time? What kinds of stories am I writing? What kinds of stories does the publication write? And also to keep the pitching tight, I was big believer when I was doing comms, you should be able to pitch stories in two sentences. And you'll know from that whether there's going to be connection or not, don't send me five or more pitches. Time is of the essence, keep it short and as targeted as possible. >> That's a good answer to Paul Bernardo's question in the chat, which is how do you do the pitch. Brenna, you're back. Can you hear us? No. Okay. We'll get back to her when she gets logged back in. Gerard, your thoughts on how to reach you. I've never met you before, if I'm a CEO or I'm a comms person, a company never heard of, how do I get your attention? If I can't have a coffee with you with COVID, how do I connect with you virtually? (talk over each other) >> Exactly as Eric said, it is about targeting, it's really about making sure you are. And again, it's, I hate to say this, but it's not that hard. If you are the comms person for a large or medium sized company or even a small company, and you've got a particular pitch you want to make, you're probably dealing in a particular field, a particular sector, business sector or whatever. Let's say it says not technology for change, let's say it's fast moving consumer goods or something like that. Bloomberg, Brenna is in an enormous organization with a huge number of journalist you deal and a great deal of specialism and quality with all kinds of sectors. The Wall Street Journal is a very large organization, we have 13, 1400 reporters, 13 to 1400 hundred journalist and staff, I should say. Barron's is a very large organization with especially a particularly strong field coverage, especially in certain sectors of business and finance. It's not that hard to find out A, who is the right person, actually the right person in those organizations who's been dealing with the story that you're trying to sell. Secondly, it's absolutely not hard to find out what they have written or broadcast or produced on in that general field in the course of the last, and again, as Eric says, going back not just over the last week or two, but over the last year or two, you can get a sense of their specialism and understand them. It's really not that hard. It's the work of an hour to go back and see who the right person is and to find out what they've done. And then to tailor the pitch that you're making to that person. And again, I say that partly, it's not purely about the vanity of the reporter, it's that the reporter will just be much more favorably inclined to deal with someone who clearly knows, frankly, not just what they're pitching, but what the journalist is doing and what he or she, in his or her daily activity is actually doing. Target it as narrowly as you can. And again, I would just echo what Eric and I think what Brenna was also saying earlier too that I'm really genuinely surprised at how many very broad pitches, again, I'm not directly in a relative role now. But I was the editor in chief of the Journal for almost six years. And even in that position, the number of extraordinarily broad pitches I get from people who clearly didn't really know who I was, who didn't know what I did, and in some cases, didn't even really know what Wall Street Journal was. If you can find that, if you actually believe that. It's not hard. It's not that hard to do that. And you will have so much more success, if you are identifying the organization, the people, the types of stories that they're interested in, it really is not that difficult to do. >> Okay, I really appreciate, first of all, great insight there. I want to get some questions from the crowd so if you're going to chat, there was a little bit of a chat hiccup in there. So it should be fixed. We're going to go to the chat for some questions for this distinguished panel. Talk about the new coffee. There's a good question here. Have you noticed news fatigue, or reader seeking out news other than COVID? If so, what news stories have you been seeing trending? In other words, are people sick and tired of COVID? Or is it still on the front pages? Is that relevant? And if not COVID, what stories are important, do you think? >> Well, I could take a brief stab at that. I think it's not just COVID per se, for us, the volatility of the stock market, the uncertainties in the current economic environment, the impact on on joblessness, these massive shifts of perceptions on urban lifestyles. There's a million elements of this that go beyond the core, what's happening with the virus story. I do think as a whole, all those things, and then you combine that with the social unrest and Black Lives Matter. And then on top of that, the pending election in the fall. There's just not a lot of room left for other stuff. And I think I would look at it a little bit differently. It's not finding stories that don't talk on those things, it's finding ways for coverage of other things whether it's entertainment. Obviously, there's a huge impact on the entertainment business. There's a huge impact on sports. There's obviously a huge impact on travel and retail and restaurants and even things like religious life and schooling. I have the done parents of a college, was about to be a college sophomore, prays every day that she can go back to school in the fall. There are lots of elements to this. And it's pretty hard to imagine I would say to Gerard's point earlier, people are looking for good stories, they're always looking for good stories on any, but trying to find topics that don't touch on any of these big trends, there's not a lot of reasons to look for those. >> I agree. Let me just give you an example. I think Eric's exactly right. It's hard to break through. I'll just give you an example, when you asked that question, I just went straight to my Wall Street Journal app on my phone. And of course, like every organization, you can look at stories by sections and by interest and by topic and by popularity. And what are the three most popular stories right now on the Wall Street Journal app? I can tell you the first one is how exactly do you catch COVID-19? I think that's been around since for about a month. The second story is cases accelerate across the United States. And the third story is New York, New Jersey and Connecticut, tell travelers from areas with virus rates to self isolate. So look, I think anecdotally, there is a sense of COVID fatigue. Well, we're all slightly tired of it. And certainly, we were probably all getting tired, or rather distressed by those terrible cases and when we've seen them really accelerate back in March and April and these awful stories of people getting sick and dying. I was COVID fatigued. But I just have to say all of the evidence we have from our data, in terms of as I said earlier, the interest in the story, the demand for what we're doing, the growth in subscriptions that we've had, and just as I said, little things like that, that I can point you at any one time, I can guarantee you that our among our top 10 most read stories, at least half of them will be COVID-19. >> I think it's safe to say general interest in that outcome of progression of that is super critical. And I think this brings up the tech angle, which we can get into a minute. But just stick with some of these questions I just want to just keep these questions flowing while we have a couple more minutes left here. In these very challenging times for journalism, do byline articles have more power to grab the editors attention in the pitching process? >> Well, I think I assume what the questioner is asking when he said byline articles is contributed. >> Yes. >> Contributed content. Barron's doesn't run a lot of contributing content that way in a very limited way. When I worked at Forbes, we used to run tons of it. I'm not a big believer that that's necessarily a great way to generate a lot of attention. You might get published in some publication, if you can get yourself onto the op ed page of The Wall Street Journal or The New York Times, more power to you. But I think in most cases-- >> It's the exception not the rule Exception not the rule so to speak, on the big one. >> Yeah. >> Well, this brings up the whole point about certainly on SiliconANGLE, our property, where I'm co founder and chief, we basically debate over and get so many pitches, "hey, I want to write for you, here's a contributed article." And it's essentially an advertisement. Come on, really, it's not really relevant. In some case we (talk over each other) analysts come in and and done that. But this brings up the question, we're seeing these newsletters like sub stack and these services really are funding direct journalism. So it's an interesting. if you're good enough to write Gerard, what's your take on this, you've seen this, you have a bit of experience in this. >> I think, fundamental problem here is that is people like the idea of doing by lines or contributed content, but often don't have enough to say. You can't just do, turn your marketing brochure into a piece of an 800 word with the content that that's going to be compelling or really attract any attention. I think there's a place for it, if you truly have something important to say, and if you really have something new to say, and it's not thinly disguised marketing material. Yeah, you can find a way to do that. I'm not sure I would over-rotate on that as an approach. >> No, I just briefly, again, I completely agree. At the Journal we just don't ever publish those pieces. As Eric says, you're always, everyone is always welcome to try and pitch to the op ed pages of the Journal. They're not generally going to I don't answer for them, I don't make those decisions. But I've never seen a marketing pitch run as an op ed effectively. I just think you have to know again, who you're aiming at. I'm sure it's true for Bloomberg, Barron's and the Journal, most other major news organizations are not really going to consider that. There might be organizations, there might be magazines, digital and print magazines. There might be certain trade publications that would consider that. Again, at the Journal and I'm sure most of the large news organizations, we have very strict rules about what we can publish. And how and who can get published. And it's essentially journal editorials, that journal news staff who can publish stories we don't really take byline, outside contribution. >> Given that your time is so valuable, guys, what's the biggest, best practice to get your attention? Eric, you mentioned keeping things tight and crisp. Are there certain techniques to get your attention? >> Well I'll mention just a couple of quick things. Email is better than most other channels, despite the volume. Patience is required as a result because of the volume. People do try and crawl over the transom, hit you up on LinkedIn, DM you on Twitter, there's a lot of things that people try and do. I think a very tightly crafted, highly personalized email with the right subject line is probably still the most effective way, unless it's somebody you actually, there are people who know me who know they have the right to pick up the phone and call me if they really think they have... That's a relationship that's built over time. The one thing on this I would add which I think came up a little bit before thinking about it is, you have to engage in retail PR, not not wholesale PR. The idea that you're going to spam a list of 100 people and think that that's really going to be a successful approach, it's not unless you're just making an announcement, and if you're issuing your earnings release, or you've announced a large acquisition or those things, fine, then I need to get the information. But simply sending around a very wide list is not a good strategy, in most cases, I would say probably for anyone. >> We got Brenna back, can you hear me? She's back, okay. >> I can hear you, I'm back. >> Well, let's go back to you, we missed you. Thanks for coming back in. We had a glitch on our end but appreciate it, bandwidth internet is for... Virtual is always a challenge to do live, but thank you. The trend we're just going through is how do I pitch to you? What's the best practice? How do I get your attention? Do bylines lines work? Actually, Bloomberg doesn't do that very often either as well as like the Journal. but your thoughts on folks out there who are really trying to figure out how to do a good job, how to get your attention, how to augment your role and responsibilities. What's your thoughts? >> I would say, going back to what we said a little bit before about really knowing who you're pitching to. If you know something that I've written recently that you can reference, that gets my attention. But I would also encourage people to try to think about different ways that they can be part of a story if they are looking to be mentioned in one of our articles. And what I mean by that is, maybe you are launching new products or you have a new initiative, but think about other ways that your companies relate to what's going on right now. So for instance, one thing that I'm really interested in is just the the changing nature of work in the office place itself. So maybe you know of something that's going on at a company, unlimited vacation for the first time or sabbaticals are being offered to working parents who have nowhere to send their children, or something that's unique about the current moment that we're living in. And I think that those make really good interviews. So it might not be us featuring your product or featuring exactly what your company does, but it still makes you part of the conversation. And I think it's still, it's probably valuable to the company as well to get that mention, and people may be looking into what you guys do. So I would say that something else we are really interested in right now is really looking at who we're quoting and the diversity of our sources. So that's something else I would put a plug in for PR people to be keeping an eye on, is if you're always putting up your same CEO who is maybe of a certain demographic, but you have other people in your company who you can give the opportunity to talk with the media. I'm really interested in making sure I'm using a diverse list of sources and I'm not just always calling the same person. So if you can identify people who maybe even aren't experienced with it, but they're willing to give it a try, I think that now's a really good moment to be able to get new voices in there. >> Rather than the speed dial person you go to for that vertical or that story, building out those sources. >> Exactly. >> Great, that's great insight, Everyone, great insights. And thank you for your time on this awesome panel. Love to do it again. This has been super informative. I love some of the engagement out there. And again, I think we can do more of these and get the word out. I'd like to end the panel on an uplifting note for young aspiring journalists coming out of school. Honestly, journalism programs are evolving. The landscape is changing. We're seeing a sea change. As younger generation comes out of college and master's programs in journalism, we need to tell the most important stories. Could you each take a minute to give your advice to folks either going in and coming out of school, what to be prepared for, how they can make an impact? Brenna, we'll start with you, Gerard and Eric. >> That's a big question. I would say one thing that has been been encouraging about everything going on right now as I have seen an increased hunger for information and an increased hunger for accurate information. So I do think it can obviously be disheartening to look at the furloughs and the layoffs and everything that is going on around the country. But at the same time, I think we have been able to see really big impacts from the people that are doing reporting on protests and police brutality and on responses to the virus. And so I think for young journalists, definitely take a look at the people who are doing work that you think is making a difference. And be inspired by that to keep pushing even though the market might be a little bit difficult for a while. >> I'd say two things. One, again, echoing what Brenna said, identify people that you follow or you admire or you think are making a real contribution in the field and maybe directly interact with them. I think all of us, whoever we are, always like to hear from young journalists and budding journalists. And again, similar advice to giving to the advice that we were giving about PR pitches. If you know what that person has been doing, and then contact them and follow them. And I know I've been contacted by a number of young journalists like that. The other thing I'd say is and this is more of a plea than a piece of advice. But I do think it will work in the long run, be prepared to go against the grain. I fear that too much journalism today is of the same piece. There is not a lot of intellectual diversity in what we're seeing There's a tendency to follow the herd. Goes back a little bit to what I was saying right at the opening about the fact that too many journalists, quite frankly, are clustered in the major metropolitan areas in this country and around the world. Have something distinctive and a bit different to say. I'm not suggesting you offer some crazy theory or a set of observations about the world but be prepared to... To me, the reason I went into journalism was because I was always a bit skeptical about whenever I saw something in any media, which especially one which seemed to have a huge amount of support and was repeated in all places, I always asked myself, "Is that really true? "Is that actually right? "Maybe there's an alternative to that." And that's going to make you stand out as a journalist, that's going to give you a distinctiveness. It's quite hard to do in some respects right now, because standing out from the crowd can get you into trouble. And I'm not suggesting that people should do that. Have a record of original storytelling, of reporting, of doing things perhaps that not, because look, candidly, there are probably right now in this country, 100,00 budding putative journalists who would like to go out and write about, report on Black Lives Matter and the reports on the problems of racial inequality in this country and the protests and all of that kind of stuff. The problem there is there are already 100,000 of those people who want to do that in addition to probably the 100,000 journalists who are already doing it. Find something else, find something different. have something distinctive to offer so that when attention moves on from these big stories, whether it's COVID or race or politics or the election or Donald Trump or whatever. Have something else to offer that is quite distinctive and where you have actually managed to carve out for yourself a real record as having an independent voice. >> Brenna and Gerard, great insight. Eric, take us home close us out. >> Sure. I'd say a couple things. So one is as a new, as a young journalist, I think first of all, having a variety of tools in your toolkit is super valuable. So be able to write long and write short, be able to do audio, blogs, podcast, video. If you can shoot photos and the more skills that you have, a following on social media. You want to have all of the tools in your toolkit because it is challenging to get a job and so you want to be able to be flexible enough to fill all those roles. And the truth is that a modern journalist is finding the need to do all of that. When I first started at Barron's many, many years ago, we did one thing, we did a weekly magazine. You'd have two weeks to write a story. It was very comfortable. And that's just not the way the world works anymore. So that's one element. And the other thing, I think Gerard is right. You really want to have a certain expertise if possible that makes you stand out. And the contradiction is, but you also want to have the flexibility to do lots of different stories. You want to get (voice cuts out) hold. But if you have some expertise, that is hard to find, that's really valuable. When Barron's hires we're always looking for people who have, can write well but also really understand the financial markets. And it can be challenging for us sometimes to find those people. And so I think there's, you need to go short and long. It's a barbell strategy. Have expertise, but also be flexible in both your approach and the things you're willing to cover. >> Great insight. Folks, thanks for the great commentary, great chats for the folks watching, really appreciate your valuable time. Be original, go against the grain, be skeptical, and just do a good job. I think there's a lot of opportunity. And I think the world's changing. Thanks for your time. And I hope the comms folks enjoyed the conversation. Thank you for joining us, everyone. Appreciate it. >> Thanks for having us. >> Thank you. >> I'm John Furrier here in the Cube for this Cube Talk was one hour power panel. Awesome conversation. Stay in chat if you want to ask more questions. We'll come back and look at those chats later. But thank you for watching. Have a nice day. (instrumental music)

(upbeat music) >> Hello, and welcome to our Palo Alto studios in California. I'm John Furrier, host of theCUBE. This is a CUBE conversation with Jason Zintak, CEO of 6sense. This is part of our next gen conversation series. We talk about the technologies and the news and the people making it happen for the next generation technologies, clouds, and solutions. Jason, welcome to theCUBE conversation. Thanks for coming on. >> Thanks, happy to be here. >> So you guys got some news. So you got a couple weeks ago you announced $40 million in funding, which we'll talk about. I want to get that out right away. But I think, more importantly, we're seeing a trend where this next gen blank is happening. You know, I'm watching just the Super Bowl next gen stats is for NFL. You got next gen cloud, you got next gen data. The world of the technology is kind of shifting to a new architecture. You're starting to see visibility into what this next gen looks like. Your company is squarely in the middle of this next gen sales and marketing platform, solutions in the new model. Cloud-scale, data first, this is a core, major shift and it's a huge market. Look at Salesforce, look at all these companies that've been around. And they're incumbents now, you're the new guard. >> Jason: Yeah, yeah. >> Tell us, what's going on with you guys? >> Sure, well you're right. We just raised $40 million. It's our Series C from Insight Partners. Went through a lengthy evaluation process and compete and happy to have announce that last month. And as far as next generation, you're correct. I grew up in a world of email platforms and then big data platforms, marketing automation. And this is a data first strategy, where we allow, we now have compute power that allows us to process huge amounts of data sets. So it's our belief that it should all be data first and driven from AI and ML on top of data that drives a next generation marketing tactic or sales tactic, an email, or a display ad. >> What's interesting is that you mentioned you worked in previous old school technology. You were CEO of Responsys, which was sold to Oracle. That was a great wave that brought in the marketing technology stack. We saw the sales and marketing solutions from Salesforce.com obviously. That was the first wave that you were part of. Now the new wave is going to that next level. This is really the fundamental shift. And it's not so much they're being replaced, but they're just being abstracted away with new capabilities, in some cases being replaced. What's the core problem that customers are having, or the core problem that you're solving because some of these old solutions can't scale. >> Jason: Sure. >> Some of them are because they're big, but what's the core problem in the industry? >> The core problem is that these systems were designed to be contact first, or lead first. And as you know today, no one likes an abundance of emails in their inbox. And so companies have said, hey I want to have a relationship with my customer or prospect. I want it to be a cycle of engagement, an infinity loop. Which means we don't blast emails. We monitor a relationship, what that's like, how we might engage. And the data allows us to do that. We can see what's going on with the activity, and based on that engagement, AI tells us what tactic might be the most appropriate. Which is actually send less but more effective and more targeted. So it's a data-driven approach. It's an account based focus in B2B world, as opposed to old generation which is lead and actually rule based. And so we used to write these, call them journey maps, these if then statements, which were manual. And the second we got done doing weeks of if then statements, they become stale. And so now data helps us and AI helps us understand real time behavior with intent and then the tactic. >> Love the name 6sense. Obviously you want to get a sense of what's going on around you, six degrees of separation. You got network effect. We're seeing a new reality and that is organic kind of user experience is different happening outside the funnel, sometimes inside the funnel, as they talk about in the sales and marketing. But users, at the end of the day, they're downloading Brave browser. They don't necessarily want the ads, and so they're making these decisions based on their experience that they want. So this is changing some of the tactics. >> Jason: Absolutely. >> So talk about that dynamic because the old way was based on see an ad, click on it, go to a landing page, get a lead, throw it in the funnel, matriculate down, and sell them something. And time's not on your side. It's not real time. It's slow, antiquated, you know how to quit. >> Exactly right, so if you don't look at Forrester or Gartner, they'll give you stats that 80% of the B2B sales cycle is done anonymously today. Meaning, they don't want to contact the vendor. There's an abundance of data on the web. And so we appreciate that. We want to actually enable an engagement through learning. We call it the actual dark funnel. This is all the research where it's happening without the vendor being contacted, without someone raising their hand and saying I want a vendor message. Because of this activity that we're able to see and be patient with, we're allowed to engage when the prospect or customer says they want to. But in a nurture format, so it's more respectful of their time. And all the while, this engagement idea is we're giving them content when they want it, when it's on demand, and when it's appropriate. >> And there's all kinds of new data laws coming, so you got to navigate that kind of regulatory environment. But we've been saying on theCUBE, this is our 10th year, and you know the old way and now we got a new way that you're on with company is that people are connected. Everything can be instrumented. This is the big data revelation that started about 10 years ago when the big data movement, and when people said hey data's going to be a big part of it. But with the internet, everyone's kind of connected, so you can technically measure everything. So as a company, how do you look at data? I mean data's fundamental to your vision and your execution. How is that ingrained into the culture and your product? >> Good question and first like to say we respect privacy in the data and personal and companies. So we are GDPR compliant, SOC 2, CCPA, the new California laws as you know. And that is part and parcel to our strategy, respect it. But at the same time, today's consumers generally want to be known in some way, shape or form because they understand the experience of engagement, whether it's an account or an individual customer. The experience is that much richer, if it's personalized and done with taste. Meaning, it's not spam. It's not a thousand emails. It's a meaningful, purposeful, time-based engagement,' content's relative to when they want to know something. >> Well I like what you guys are doing. I like this next gen architecture. It's definitely been valid. You've seen the rise of Amazon. Microsoft's shifted their business model to the cloud. And you're starting to see other ones, other people shifting. IBM shifting to the cloud. So they're all shifting to this new business model. So for you guys, 6sense, talk about and tell me about your target market. What market are you going after? Is it the marketing automation? Is it like the sales platform? What's the market that you're in now, and what market are you expanding into? >> Interesting you say that, so we're classically B2B. We obviously have a bunch of tech customers as our, in the account universe. But also manufacturers, service businesses. We are going after the entire B2B organization because the world as you know it, relative to marketing and sales, is changing. And so it's not just marketing automation that we're replacing, or a next generation of, it's customer success. It's the sellers. Our customers' sales organizations use it with their sales people to understand insights of their accounts and how to engage. So I'd say it's that whole universe, and it's that infinity loop across customer, sellers, marketers. >> You know, I want to just before I get into some of the business model questions and target audience, the buyer, you mentioned customer success. We're seeing a lot of energy around what that is. It used to be customer success was like customer satisfaction, support organization. You're seeing companies bring customer success much further forward into the sales and marketing process for pre-sales and or ongoing engagement as some of these SaaS environments evolve. >> Jason: Yep. >> Are you seeing that, and what's going on with this customer success? I'm seeing a lot more other than lip service. It's pretty integral with companies, organizations these days. What's your thoughts on that? >> I think all of us drive to be customer first, customer happiness, loyalty. Sure, why not? I mean, that's what we should do as organizations. Our software actually, interestingly enough, allows customers to monitor how their customers are engaging with the vendor. And for instance, they may be, if we see a spike in looking at a competitor, the customer will say, hey are you happy? Or product telemetry and usage. We help companies track that usage and see spikes and based on that intent, you might engage with your customer differently, high or low propensity to actually churn. We help with churn mitigation and churn management. >> Okay, let's get in to the product. We're kind of teasing around the product. What is the product? What's the core jewel? What's the IP? What's the main platform look like? What's the product? >> So as mentioned, we're a big data company first. Meaning, we believe it all starts with the data. Because of the compute power available, we're analyzing data, which is your first party data. So all your historical sales and marketing outbound, maybe your CRM system, your marketing automation system, some of the systems that will continue to evolve. And we'll match that data with behavioral data. So what's happening on the web, what's happening through maybe it's cookies, email hashes, display account ID, advertising ID. And we've patented an approach called a company ID graph. And this ID graph is essentially this marriage of people, personas, and accounts and what's going on. Based on the insight that comes from this monitoring, you can create audiences or segments to market to, to sell to. So the insights would be on the marketing side, relative to how do I parse my total addressable market. Or on the seller's side, Oh, I can understand what my count or my prospect might be doing today, therefore I want to execute XYZ tactic, and all led by AI. >> And so I got a, good point there about sales and marketing. In the old way you had a marketing tech, and a sales tech. The lines have blurred, almost seem to be fully integrated now, they're one in the same now, seems like that's the way you guys look at it. Is that true? >> Absolutely, I grew up in sales and marketing and the old world they didn't talk to each other. Today this is absolutely the glue, the connective tissue for sales and marketing so you can start with, whether it's marketing or sales ops, you start with a central plan around your account universe, and then parse from there and segment from there. And so, marketers and sellers will come up with the annual strategy, but allows the conversation. So it's no longer is my lead any good. We've got data around the lead, is the customer responding to an ad campaign. We've got data that it's true. It's not, you know, maybe. >> Yeah, it's always the sales guys always tripping about the leads, these are good leads. The leads are from Glen Gary, Glen Ross, always great quote, good quote that in there. All kidding aside, at the end of the day it's about customer satisfaction. No one wants to be marketed to, so it's a wave of personalization coming. And we're starting to see that now with Big Data, kind of set the tone on that. How are you seeing this new account based marketing and company selling platform. To deliver this kind of personalization it adds value. How do you orchestrate all that? So this is the big challenge, how do you bring that all together? What's your thoughts? >> So, actually our platform allows for that. So as you might imagine, you mentioned the sales funnel, and start with you know customer having initial curiosity, or maybe down at the bottom of the funnel there, actual buying stages through procurement. Based on where we detect someone is in the funnel, you would personalize the content. So if we detect through ID graph, that the company or person might be interested in general awareness, awareness content. If they're down in the buying cycle, far down into the funnel, then it's more related to transactional, meaningful clips that would be more relevant. And that is the personalization, so it's stage appropriate as someone would want to consume it. As there engaging with us. >> Jason give us some of the top use cases that you guys are seeing, as you start to see visibility, you got $40 million in funding, third round venture. You got customer growth, good growth. What's the visibility, what do you see in front of you, what are the use cases? >> Great, so for the capital, I assume you mean. We've had two great years, we've doubled the company two years in a row. We're expanding, so it's actually going to be sort of broad brush, we're expanding our field organization, we're expanding the engineering. We're looking for acquisitions that are strategic, and so our growth will be both organic and inorganic, but it's because of the success and the growth. We want to build the product better to make the customer happier. And that is the general use, of our international expansion. >> So I'm a customer, sell me on this, what's the pitch? >> So-- >> I'm a big tech company, I've got five tons of data. People, internal knife fights going on, I got this platform, we got to get the ROI out of it. How do you, what's the, what's in it for me, pitch me? >> Hey, John is your sales organization happy with the leads? Do they think it's quality? >> The leads are shit. (John laughs) >> The leads are shit, we can help you there, we actually have you know AI helping us understand your account prospects of whose high propensity to buy. We help your sellers. Does marketing talk to sales, John? >> They have meetings, no one want to attend them, I mean this is the kind of thing that goes on. I mean we're talking about, kind of role playing here, but in real time, Hey, no, we're good. It's the sales guys fault, they're not good enough. >> Yeah, exactly, so-- >> The leads are terrible. So there's obviously, again, this is the kind of thing, the tension that goes on. >> Yes, so from the marketers perspective they're looking for a more data driven approach to, and again data helps, data doesn't lie. You know it's sort of math. And so it's no longer speculative, it's we can see the engagement if we run a campaign, whether it be email, ads, social posts, chat bots. All this is collecting data, and showing data relative to efficacy, and that is actually what the marketer wants, and candidly the CEO wants to the see the result of those joint selling and marketing efforts. >> All right, so you got me hooked. Let's do something. How do your clients engage with you? What do they do? A POC? Do they just have a sandbox, is there kind of a freemium tier? can you explain some of the business model and engagement? >> Sure, yeah. We do POC's, we do sandbox. But interestingly enough, we can turn the data on in an hour, an actually a prospect can see what's happening in their universe, they're competitive universe or their own. website, for instance. And so that's a very easy way, tell-tale sign to see data at work. We have low entry points, where companies can come in at 30K at 20K, and start. Or we have million dollar plus contracts that you know span the breadth of sales, marketing and customer success. So it's an easy entry point, you can grow with data, you can grow with users, or you can grow with models. >> So Facebook, and LinkedIn are on, and Twitter, but mainly Facebook and LinkedIn are showing micro targeting as highly valuable. I mean the election train wreck that's happened this past few years, and even this year, I see Facebook has their own issues, but LinkedIn, a lot of people from a B2B standpoint, like LinkedIn. It's network effect kind of distribution, you got targeting, you got a lot of metadata in there. So it's kind of brought up the conversation around micro-targeting. Why can't you just go at the people? You guys do an account based marketing and sales orchestration platform, and you've got these little walled garden organizations out there like LinkedIn. I'm not sure they're selling the data, do they do that? Do you work with LinkedIn, so will there be more LinkedIn? Nope, we got our data, we're going to keep it? Data becomes the key, but if they're going to hoard the data, it's a problem. How do you address that? First of all, do they hoard the data or not? And if so, how do you guys get around that? >> Well you know LinkedIn's got a wonderful business, and they, to agree some of this wall, are a partner of ours, and actually we'll have some announcements pending. So I'll save that for later, but -- >> So they are engaging with platforms, LinkedIn from a data standpoint. >> Very much so, we're an active talks with LinkedIn. And I think we all want to share for the benefit of the ultimate customer experience. And we believe that because we have the Big Data, and we also allow for that micro-segmenting. LinkedIn's another channel, and we want to activate every channel through our platform and that is our strategy. So we allow you as mentioned before, email, display, social sites. >> Do you guys have a program or approach or posture to the marketplace in terms of, if I have a platform, do I engage with you. Can I be a partner or am I a customer? How do you look at the biz dev or partner side of it? >> You know part of the $40 million funding is going to allow us to build out the partner ecosystem that's already in play. We work with agencies, ad agencies. We work with professional service organizations. We work with complimentary software products. We want it to be an open system. We want to be able to bring your own data, and we'll carry it for you to make the AI that much smarter. >> Awesome, great stuff, quick plug of the company, we're you guys at in terms of head count? What are some of your goals this year? And what are you guys looking for, obviously hiring, you said, you mentioned earlier? Give a quick plug for the company. >> Yeah, thank you for that. As I mentioned we doubled the company two years in a row. We've tripled our head count. You know we're hiring everyday in every single segment, looking for people. We'd love to talk to you. We've also tripled our customer base in that same period. So, things are going well, we're happy and I think the big challenge is just keep doing it, and deliver delightful experience for customers. >> Interesting, companies can be very successful Jason if they have a certain you know view. You guys are data first, you got to a horizontal view of the data, but yet providing a specific unique solution to differentiate off that. We're video first, that's our angle. A lot of people having virtual first. Your starting to see this new kind of scale with companies. So I want to ask you about your vision for the next few years. As you look out as the wave is coming in, it's very clear. Cloud-scale, the roll of data, machine learning and AI. It's going to build this Application Layer that has to be horizontally scalable, but yet vertically specialized, for the use cases. Which requires a very dynamic data intensive environment. What's your vision of the next few years? How do you see the world evolving? Because there's a lot of big companies, and start-ups that have been around doing a lot of these point solutions that are features. How do you see this next wave go in the next five years? >> I had a thesis three years ago, I joined the company that these point solutions would go away because they weren't data driven. The hard work is in the large data, the applying the ML and AI on top of that and then doing something with that. We surfaced in applications for the last two years, we've been building the apps that allow marketers, sellers, and customer success organizations to prosecute that data, understand the data and let AI recommend a tactic. So I think it'll just be more of the same but specialized by use case. So where some of our applicability is generic use cases, we'll get specific to telecom on that use case, we'll get more specific in customer success enabling turn mitigation as opposed to just sellers and marketers. >> That's awesome. And if you look at the current events, I got to get your expert opinion. Donald Trump, the Democrats, they've been using social platforms, political ads are being kicked off, but there is a lot more innovation that they're actually doing. So with all that they had actors out there, there's actually an innovation story that's going on under the covers. What's your view of that, I mean the bad stuff's out there, but they're leveraging the new architecture. Facebook's on record saying that Donald Trump ran the best campaign ever. Mentions why he's winning. >> That's the story and back story is sort of history unfolds when we understand it. Is that these election cycles have leveraged data to run their campaigns and it's the new world. And so while there may be bad actors, I think hopefully the world is majority good. And much like our story, we tryna bring a data solution and help decisioning. Obviously, the political campaigns are leveraging it to. >> Yeah, it's disastrous to see the applications fail like they did in Iowa, but the data's there, I mean it's about time. I always say it's going to be on block chain, and Andrew Yang is, just recently came out and said, All the voting should be on block chain. Maybe that's going to happen someday, we'll see. Jason thanks for coming, I appreciate the conversation. >> I appreciate the opportunity, thanks John. >> Jason Zintak, here the CEO of 6sense, industry veteran. Big pedigree, big company with $40 million in fresh funding. We're talking about next generation platforms, I'm John Furrier, thanks for watching. (upbeat music)

>> Is and who we are today as as a country, as a universe. >> Narrator: Congratulations Reggie Jackson, (inspirational music) you are a CUBE alumni. (upbeat music) >> Announcer: Live from Las Vegas it's theCUBE covering Splunk.Conf19. Brought to you by Splunk. >> Okay, welcome back everyone it's theCUBE's live coverage here in Las Vegas for Splunk.Conf19. I am John Furrier host of theCUBE. It's the 10th Anniversary of Splunk's .Conf user conference. Our 7th year covering it. It's been quite a ride, what a wave. Splunk keeps getting stronger and better, adding more features, and has really become a powerhouse from a third party security standpoint. We got a C-SO in theCUBE on theCUBE today. Chief Information Security, John Frushour Deputy Chief (mumbles) New York-Presbyterian The Award Winner from the Data to Everywhere Award winner, welcome by theCube. >> Thank you, thank you. >> So first of all, what is the award that you won? I missed the keynotes, I was working on a story this morning. >> Frushour: Sure, sure. >> What's the award? >> Yeah, the Data Everything award is really celebrating using Splunk kind of outside its traditional use case, you know I'm a security professional. We use Splunk. We're a Splunk Enterprise Security customer. That's kind of our daily duty. That's our primary use case for Splunk, but you know, New York Presbyterian developed the system to track narcotic diversion. We call it our medication analytics platform and we're using Splunk to track opioid diversion, slash narcotic diversions, same term, across our enterprise. So, looking for improper prescription usage, over prescription, under prescription, prescribing for deceased patients, prescribing for patients that you've never seen before, superman problems like taking one pill out of the drawer every time for the last thirty times to build up a stash. You know, not resupplying a cabinet when you should have thirty pills and you only see fifteen. What happened there? Everything's data. It's data everything. And so we use this data to try to solve this problem. >> So that's (mumbles) that's great usage we'll find the drugs, I'm going to work hard for it. But that's just an insider threat kind of concept. >> Frushour: Absolutely. >> As a C-SO, you know, security's obviously paramount. What's changed the most? 'Cause look at, I mean, just looking at Splunk over the past seven years, log files, now you got cloud native tracing, all the KPI's, >> Frushour: Sure. >> You now have massive volumes of data coming in. You got core business operations with IOT things all instrumental. >> Sure, sure. >> As a security offer, that's a pretty big surface area. >> Yeah. >> How do you look at that? What's your philosophy on that? >> You know, a lot of what we do, and my boss, the C-SO (mumbles) we look at is endpoint protection and really driving down to that smaller element of what we complete and control. I mean, ten, fifteen years ago information security was all about perimeter control, so you've got firewalls, defense and depth models. I have a firewall, I have a proxy, I have an endpoint solution, I have an AV, I have some type of data redaction capability, data masking, data labeling capability, and I think we've seen.. I don't think security's changed. I hear a lot of people say, "Oh, well, information security's so much different nowadays." No, you know, I'm a military guy. I don't think anything's changed, I think the target changed. And I think the target moved from the perimeter to the endpoint. And so we're very focused on user behavior. We're very focused on endpoint agents and what people are doing on their individual machines that could cause a risk. We're entitling and providing privilege to end users today that twenty years ago we would've never granted. You know, there was a few people with the keys to the kingdom, and inside the castle keep. Nowadays everybody's got an admin account and everybody's got some level of privilege. And it's the endpoint, it's the individual that we're most focused on, making sure that they're safe and they can operate effectively in hospitals. >> Interviewer: What are some of the tactical things that have changed? Obviously, the endpoint obviously shifted, so some tactics have to change probably again. Operationally, you still got to solve the same problem: attacks, insider threats, etc. >> Frushour: Yeah. >> What are the tactics? What new tactics have emerged that are critical to you guys? >> Yeah, that's a tough question, I mean has really anything changed? Is the game really the game? Is the con really the same con? You look at, you know, titans of security and think about guys like Kevin Mitnick that pioneered, you know, social engineering and this sort of stuff, and really... It's really just convincing a human to do something that they shouldn't do, right? >> Interviewer: Yeah. >> I mean you can read all these books about phone freaking and going in and convincing the administrative assistant that you're just late for meeting and you need to get in through that special door to get in that special room, and bingo. Then you're in a Telco closet, and you know, you've got access. Nowadays, you don't have to walk into that same administrative assistant's desk and convince 'em that you're just late for the meeting. You can send a phishing email. So the tactics, I think, have changed to be more personal and more direct. The phishing emails, the spear phishing emails, I mean, we're a large healthcare institution. We get hit with those types of target attacks every day. They come via mobile device, They come via the phishing emails. Look at the Google Play store. Just, I think, in the last month has had two apps that have had some type of backdoor or malicious content in them that got through the app store and got onto people's phones. We had to pull that off people's phones, which wasn't pretty. >> Interviewer: Yeah. >> But I think it's the same game. It's the same kind to convince humans to do stuff that they're not supposed to do. But the delivery mechanism, the tactical delivery's changed. >> Interviewer: How is Splunk involved? Cause I've always been a big fan of Splunk. People who know me know that I've pretty much been a fan boy. The way they handle large amounts of data, log files, (mumbles) >> Frushour: Sure. >> and then expand out into other areas. People love to use Splunk to bring in their data, and to bring it into, I hate to use the word data leg but I mean, Just getting... >> Yeah >> the control of the data. How is data used now in your world? Because you got a lot of things going on. You got healthcare, IOT, people. >> Frushour: Sure, sure. >> I mean lives are on the line. >> Frushour: Lives are on the line, yeah. >> And there's things you got to be aware of and data's key. What is your approach? >> Well first I'm going to shamelessly plug a quote I heard from (mumbles) this week, who leads the security practice. She said that data is the oxygen of AI, and I just, I love that quote. I think that's just a fantastic line. Data's the oxygen of AI. I wish I'd come up with it myself, but now I owe her a royalty fee. I think you could probably extend that and say data is the lifeline of Splunk. So, if you think about a use case like our medication analytics platform, we're bringing in data sources from our time clock system, our multi-factor authentication system, our remote access desktop system. Logs from our electronic medical records system, Logs from the cabinets that hold the narcotics that every time you open the door, you know, a log then is created. So, we're bringing in kind of everything that you would need to see. Aside from doing something with actual video cameras and tracking people in some augmented reality matrix whatever, we've got all the data sources to really pin down all the data that we need to pin down, "Okay, Nurse Sally, you know, you opened that cabinet on that day on your shift after you authenticated and pulled out this much Oxy and distributed it to this patient." I mean, we have a full picture and chain of everything. >> Full supply chain of everything. >> We can see everything that happens and with every new data source that's out there, the beauty of Splunk is you just add it to Splunk. I mean, the Splunk handles structured and unstructured data. Splunk handles cis log fees and JSON fees, and there's, I mean there's just, it doesn't matter You can just add that stream to Splunk, enrich those events that were reported today. We have another solution which we call the privacy platform. Really built for our privacy team. And in that scenario, kind of the same data sets. We're looking at time cards, we're looking at authentication, we're looking at access and you visited this website via this proxy on this day, but the information from the EMR is very critical because we're watching for people that open patient records when they're not supposed to. We're the number five hospital in the country. We're the number one hospital in the state of New York. We have a large (mumbles) of very important people that are our patients and people want to see those records. And so the privacy platform is designed to get audit trails for looking at all that stuff and saying, "Hey, Nurse Sally, we just saw that you looked at patient Billy's record. That's not good. Let's investigate." We have about thirty use cases for privacy. >> Interviewer: So it's not in context of what she's doing, that's where the data come in? >> That's where the data come in, I mean, it's advanced. Nurse Sally opens up the EMR and looks at patient Billy's record, maybe patient Billy wasn't on the chart, or patient Billy is a VIP, or patient Billy is, for whatever reason, not supposed to be on that docket for that nurse, on that schedule for that nurse, we're going to get an alarm. The privacy team's going to go, "Oh, well, were they supposed to look at that record?" I'm just giving you, kind of, like two or three uses cases, but there's about thirty of them. >> Yeah, sure, I mean, celebrities whether it's Donald Trump who probably went there at some point. Everyone wants to get his taxes and records to just general patient care. >> Just general patient care. Yeah, exactly, and the privacy of our patients is paramount. I mean, especially in this digital age where, like we talked about earlier, everyone's going after making a human do something silly, right? We want to ensure that our humans, our nurses, our best in class patient care professionals are not doing something with your record that they're not supposed to. >> Interviewer: Well John, I want to hear your thoughts on this story I did a couple weeks ago called the Industrial IOT Apocalypse: Now or Later? And the provocative story was simply trying to raise awareness that malware and spear phishing is just tactics for that. Endpoint is critical, obviously. >> Sure. >> You pointed that out, everyone kind of knows that . >> Sure. >> But until someone dies, until there's a catastrophe where you can take over physical equipment, whether it's a self-driving bus, >> Frushour: Yeah. >> Or go into a hospital and not just do ransom ware, >> Frushour: Absolutely. >> Actually using industrial equipment to kill people. >> Sure. >> Interviewer: To cause a lot of harm. >> Right. >> This is an industrial, kind of the hacking kind of mindset. There's a lot of conversations going on, not enough mainstream conversations, but some of the top people are talking about this. This is kind of a concern. What's your view on this? Is it something that needs to be talked about more of? Is it just BS? Should it be... Is there any signal there that's worth talking about around protecting the physical things that are attached to them? >> Oh, absolutely, I mean this is a huge, huge area of interest for us. Medical device security at New York Presbyterian, we have anywhere from about eighty to ninety thousand endpoints across the enterprise. Every ICU room in our organization has about seven to ten connected devices in the ICU room. From infusion pumps to intubation machines to heart rate monitors and SPO2 monitors, all this stuff. >> Interviewer: All IP and connected. >> All connected, right. The policy or the medium in which they're connected changes. Some are ZP and Bluetooth and hard line and WiFi, and we've got all these different protocols that they use to connect. We buy biomedical devices at volume, right? And biomedical devices have a long path towards FDA certification, so a lot of the time they're designed years before they're fielded. And when they're fielded, they come out and the device manufacturer says, "Alright, we've got this new widget. It's going to, you know, save lives, it's a great widget. It uses this protocol called TLS 1.0." And as a security professional I'm sitting there going, "Really?" Like, I'm not buying that but that's kind of the only game, that's the only widget that I can buy because that's the only widget that does that particular function and, you know, it was made. So, this is a huge problem for us is endpoint device security, ensuring there's no vulnerabilities, ensuring we're not increasing our risk profile by adding these devices to our network and endangering our patients. So it's a huge area. >> And also compatible to what you guys are thinking. Like I could imagine, like, why would you want a multi-threaded processor on a light bulb? >> Frushour: Yeah. >> I mean, scope it down, turn it on, turn it off. >> Frushour: Scope it down for its intended purpose, yeah, I mean, FDA certification is all about if the device performs its intended function. But, so we've, you know, we really leaned forward, our CSO has really leaned forward with initiatives like the S bomb. He's working closely with the FDA to develop kind of a set of baseline standards. Ports and protocols, software and services. It uses these libraries, It talks to these servers in this country. And then we have this portfolio that a security professional would say, "Okay, I accept that risk. That's okay, I'll put that on my network moving on." But this is absolutely a huge area of concern for us, and as we get more connected we are very, very leaning forward on telehealth and delivering a great patient experience from a mobile device, a phone, a tablet. That type of delivery mechanism spawns all kinds of privacy concerns, and inter-operability concerns with protocol. >> What's protected. >> Exactly. >> That's good, I love to follow up with you on that. Something we can double down on. But while we're here this morning I want to get back to data. >> Frushour: Sure. >> Thank you, by the way, for sharing that insight. Something I think's really important, industrial IOT protection. Diverse data is really feeds a lot of great machine learning. You're only as good as your next blind spot, right? And when you're doing pattern recognition by using data. >> Frushour: Absolutely. >> So data is data, right? You know, telecraft, other data. Mixing data could actually be a good thing. >> Frushour: Sure, sure. >> Most professionals would agree to that. How do you look at diverse data? Because in healthcare there's two schools of thought. There's the old, HIPAA. "We don't share anything." That client privacy, you mentioned that, to full sharing to get the maximum out of the AI or machine learning. >> Sure. >> How are you guys looking at that data, diverse data, the sharing? Cause in security sharing's good too, right? >> Sure, sure, sure. >> What's your thoughts on sharing data? >> I mean sharing data across our institutions, which we have great relationships with, in New York is very fluid at New York Presbyterian. We're a large healthcare conglomerate with a lot of disparate hospitals that came as a result of partnership and acquisition. They don't all use the same electronic health record system. I think right now we have seven in play and we're converging down to one. But that's a lot of data sharing that we have to focus on between seven different HR's. A patient could move from one institution to the next for a specialty procedure, and you got to make sure that their data goes with them. >> Yeah. >> So I think we're pretty, we're pretty decent at sharing the data when it needs to be shared. It's the other part of your question about artificial intelligence, really I go back to like dedication analytics. A large part of the medication analytics platform that we designed does a lot of anomaly detections, anomaly detection on diversion. So if we see that, let's say you're, you know, a physician and you do knee surgeries. I'm just making this up. I am not a clinician, so we're going to hear a lot of stupidity here, but bare with me. So you do knee surgeries, and you do knee surgeries once a day, every day, Monday through Friday, right? And after that knee surgery, which you do every day in cyclical form, you prescribe two thousand milligrams of Vicodin. That's your standard. And doctors, you know, they're humans. Humans are built on patterns. That's your pattern. Two thousand milligrams. That's worked for you; that's what you prescribe. But all of the sudden on Saturday, a day that you've never done a knee surgery in your life for the last twenty years, you all of a sudden perform a very invasive knee surgery procedure that apparently had a lot of complications because the duration of the procedure was way outside the bounds of all the other procedures. And if you're kind of a math geek right now you're probably thinking, "I see where he's going with this." >> Interviewer: Yeah. >> Because you just become an anomaly. And then maybe you prescribe ten thousand milligrams of Vicodin on that day. A procedure outside of your schedule with a prescription history that we've never seen before, that's the beauty of funneling this data into Splunk's ML Toolkit. And then visualizing that. I love the 3D visualization, right? Because anybody can see like, "Okay, all this stuff, the school of phish here is safe, but these I've got to focus on." >> Interviewer: Yeah. >> Right? And so we put that into the ML Toolkit and then we can see, "Okay, Dr. X.." We have ten thousand, a little over ten thousand physicians across New York Presbyterian. Doctor X right over here, that does not look like a normal prescriptive scenario as the rest of their baseline. And we can tweak this and we can change precision and we can change accuracy. We can move all this stuff around and say, "Well, let's just look on medical record number, Let's just focus on procedure type, Let's focus on campus location. What did they prescribe from a different campus?" That's anomalous. So that is huge for us, using the ML Toolkit to look at those anomalies and then drive the privacy team, the risk teams, the pharmacy analytics teams to say, "Oh, I need to go investigate." >> So, that's a lot of heavy lifting for ya? Let you guys look at data that you need to look at. >> Absolutely. >> Give ya a (mumbles). Final question, Splunk, in general, you're happy with these guys? Obviously, they do a big part of your data. What should people know about Splunk 2019, this year? And are you happy with them? >> Oh, I mean Splunk has been a great partner to New York Presbyterian. We've done so much incredible development work with them, and really, what I like to talk about is Splunk for healthcare. You know, we've created, we saw some really important problems in our space, in this article. But, we're looking, we're leaning really far forward into things like risk based analysis, peri-op services. We've got a microbial stewardship program, that we're looking at developing into Splunk, so we can watch that. That's a huge, I wouldn't say as big of a crisis as the opioid epidemic, but an equally important crisis to medical professionals across this country. And, these are all solvable problems, this is just data. Right? These are just events that happen in different systems. If we can get that into Splunk, we can cease the archaic practice of looking at spreadsheets, and look up tables and people spending days to find one thing to investigate. Splunk's been a great partner to us. The tool it has been fantastic in helping us in our journey to provide best in-class patient care. >> Well, congratulations, John Frushour, Deputy Chief Information Security Officer, New York Presbyterian. Thanks for that insight. >> You're welcome. >> Great (mumbles) healthcare and your challenge and your opportunity. >> Congratulations for the award winner Data to Everything award winner, got to get that slogan. Get used to that, it's two everything. Getting things done, he's a doer. I'm John Furrier, here on theCube doing the Cube action all day for three days. We're on day two, we'll be back with more coverage, after this short break. (upbeat music)

>> From Boston, Massachusetts, it's the cube. covering LiveWorx 18, brought to you by PTC. (upbeat music) >> Welcome back to the Boston Seaport everybody. My name is David Vellante, I'm here with my co-host Stu Miniman and you're watching the cube, the leader in live tech coverage. We're at LiveWorx PTC's big IOT conference. Jaron Lanier is here, he's the father of virtual reality and the author of Dawn of the New Everything. Papa, welcome. >> Hey there. >> What's going on? >> Hey, how's it going? >> It's going great. How's the show going for you? It's cool, it's cool. It's, it's fine. I'm actually here talking about this other book a little bit too, but, yeah, I've been having a lot of fun. It's fun to see how hollow lens applied to a engines and factories. It's been really cool to see people seeing the demos. Mixed reality. >> Well, your progeny is being invoked a lot at the show. Everybody's sort of talking about VR and applying it and it's got to feel pretty good. >> Yeah, yeah. It seems like a VR IoT blockchain are the sort of the three things. >> Wrap it all with digital transformation. >> Yeah, digital transformation, right. So what we need is a blockchain VR IoT solution to transform something somewhere. Yeah. >> So tell us about this new book, what it's called? >> Yeah. This is called the deleting all your social media accounts right now. And I, I realize most people aren't going to do it, but what I'm trying to do is raise awareness of how the a psychological manipulation algorithms behind the system we're having an effect on society and I think I love the industry but I think we can do better and so I'm kind of agitating a bit here. >> Well Jaron, I was reading up a little bit getting ready for the interview here and people often will attack the big companies, but you point at the user as, you know, we need to kind of take back and we have some onus ourselves as to what we use, how we use it and therefore can have impact on, on that. >> Well, you know, what I've been finding is that within the companies and Silicon Valley, a lot of the top engineering talent really, really wants to pursue ethical solutions to the problem, but feels like our underlying business plan, the advertising business plan keeps on pulling us back because we keep on telling advertisers we have yet new ways to kind of do something to tweak the behaviors of users and it kind of gradually pulls us into this darker and darker territory. The thing is, there's always this assumption, oh, it's what users want. They would never pay for something the way they pay for Netflix, they would never pay for social media that way or whatever it is. The thing is, we've never asked users, nobody's ever gone and really checked this out. So I'm going to, I'm kind of putting out there as a proposition and I think in the event that users turn out to really want more ethical social media and other services by paying for them, you know, I think it's going to create this enormous sigh of relief in the tech world. I think it's what we all really want. >> Well, I mean ad-based business models that there's a clear incentive to keep taking our data and doing whatever you want with it, but, but perhaps there's a better way. I mean, what if you're, you're sort of proposing, okay, maybe users would be willing to pay for various services, which is probably true, but what if you were able to give users back control of their data and let them monetize their data. What are your thoughts on that? >> Yeah, you know, I like a lot of different solutions, like personally, if it were just up to me, if I ran the world, which I don't, but if I ran the world, I can make every single person of the world into a micro-entrepreneur where they can package, sell and price their data the way they want. They can, they can form into associations with others to do it. And they can also purchase data from others as they want. And I think what we'd see is this flowering of this giant global marketplace that would organize itself and would actually create wonders. I really believe that however, I don't run the world and I don't think we're going to see that kind of perfect solution. I think we're going to see something that's a bit rougher. I think we might see something approximating that are getting like a few steps towards that, but I think we are going to move away from this thing where like right now if two people want to do anything on online together, the only way that's possible is if there's somebody else who's around to pay them, manipulate them sneakily and that's stupid. I mean we can be better than that and I'm sure we will. >> Yeah, I'm sure we will too. I mean we think, we think blockchain and smart contracts are a part of that solution and obviously a platform that allows people to do exactly what you just described. >> And, and you know, it's funny, a lot of things that sounded radical a few years ago are really not sounding too radical. Like you mentioned smart contracts. I remember like 10 years ago for sure, but even five years ago when you talked about this, people are saying, oh no, no, no, no, no, this, the world is too conservative. Nobody's ever going to want to do this. And the truth is people are realizing that if it makes sense, you know, it makes sense. And, and, and, and so I think, I think we're really seeing like the possibilities opening up. We're seeing a lot of minds opening, so it's kind of an exciting time. >> Well, something else that I'd love to get your thoughts on and we think a part of that equation is also reputation that if you, if you develop some kind of reputation system that is based on the value that you contribute to the community, that affects your, your reputation and you can charge more if you have a higher reputation or you get dinged if you're promoting fake news. That that reputation is a linchpin to the successful community like that. >> Well, right now the problem is because, in the free model, there's this incredible incentive to just sort of get people to do things instead of normal capitalist. And when you say buy my thing, it's like you don't have to buy anything, but I'm going to try to trick you into doing something, whatever it is. And, and, and if you ever direct commercial relationship, then the person who's paying the money starts to be a little more demanding. And the reason I'm bringing that up is that right now there's this huge incentive to create false reputation. Like in reviews, a lot of, a lot of the reviews are fake, followers a lot of them are fake instance. And so there's like this giant world of fake stuff. So the thing is right now we don't have reputation, we have fake reputation and the way to get real reputation instead of think reputation is not to hire an army of enforcing us to go around because the company is already doing that is to change the financial incentives so you're not incentivizing criminals, you know I mean, that's incentives come first and then you can do the mop up after that, but you have to get the incentives aligned with what you want. >> You're here, and I love the title of the book. We interviewed James Scott and if you know James Scott, he's one of the principals at ICIT down PTC we interviewed him last fall and we asked him, he's a security expert and we asked them what's the number one risk to our country? And he said, the weaponization of social media. Now this is, this is before fake news came out and he said 2020 is going to be a, you know, what show and so, okay. >> Yeah, you know, and I want to say there's a danger that people think this is a partisan thing. Like, you know, if you, it's not about that. It's like even if you happen to support whoever has been on, on the good side of social media manipulation, you should still oppose the manipulation. You know, like I was, I was just in the UK yesterday and they had the Brexit foot where there was manipulation by Russians and others. And you know, the point I've made over there is that it's not about whether you support Brexit or not. That's your business, I don't even have an opinion. It's not, I'm an American. That's something that's for somebody else. But the thing is, if you look at the way Brexit happened, it tore society apart. It was nasty, it was ugly, and there have been tough elections before, but now they're all like that. And there was a similar question when the, the Czechoslovakia broke apart and they didn't have all the nastiness and it's because it was before social media that was called the velvet divorce. So the thing is, it's not so much about what's being supported, whatever you think about Donald Trump or anything else, it's the nastiness. It's the way that people's worst instincts are being used to manipulate them, that's the problem. >> Yeah, manipulation denial is definitely a problem no matter what side of the aisle you're on, but I think you're right that the economic incentive if the economic incentive is there, it will change behavior. And frankly, without it, I'm not sure it will. >> Well, you know, in the past we've tried to change the way things in the world by running around in outlying things. For instance, we had prohibition, we outlawed, we outlawed alcohol, and what we did is we created this underground criminal economy and we're doing something similar now. What we're trying to do is we're saying we have incentives for everything to be fake, everything to be phony for everything to be about manipulation and we're creating this giant underground of people trying to manipulate search results or trying to manipulate social media feeds and these people are getting more and more sophisticated. And if we keep on doing this, we're going to have criminals running the world. >> Wonder if I could bring the conversation back to the virtual reality. >> Absolutely. >> I'm sorry about that. >> So, but you know, you have some concerns about whether virtual reality will be something you for good or if it could send us off the deep end. >> Oh yeah, well. Look, there's a lot to say about virtual reality. It's a whole world after all. So you can, there is a danger that if the same kinds of games are being played on smartphones these days were transferred into a virtual reality or mixed reality modalities. Like, you could really have a poisonous level of mind control and I, I do worry about that I've worried about that for years. What I'm hoping is that the smartphone era is going to force us to fix our ways and get the whole system working well enough so that by the time technologies like virtual reality are more common, we'll have a functional way to do things. And it won't, it won't all be turned into garbage, you know because I do worry about it. >> I heard, I heard a positive segment on NPR saying that one of the problems is we all stare at our phones and maybe when I have VR I'll actually be talking to actual people so we'll actually help connections and I'm curious to hear your thoughts on that. >> Well, you know, most of the mixed reality demos you see these days are person looking at the physical world and then there's extra stuff added to the physical world. For instance, in this event, just off camera over there, there's some people looking at automobile engines and seeing them augmented and, and that's great. But, there's this other thing you can do which is augmenting people and sometimes it can be fun. You can put horns or wings or long noses or something on people. Of course, you still see them with the headsets all that's great. But you can also do other stuff. You can, you can have people display extra information that they have in their mind. You can have more sense of what each other are thinking and feeling. And I actually think as a tool of expression between people in real life, it's going to become extremely creative and interesting. >> Well, I mean, we're seeing a lot of applications here. What are some of your favorites? >> Oh Gosh. Of the ones right here? >> Yes. >> Well, you know, the ones right here are the ones I described and I really like them, there's a really cool one of some people getting augmentation to help them maintain and repair factory equipment. And it's, it's clear, it's effective, it's sensible. And that's what you want, right? If you ask me personally what really, a lot of the stuff my students have done, really charms me like up, there was just one project, a student intern made where you can throw virtual like goop like paint and stuff around in the walls and it sticks and starts running down and this is running on the real world and you can spray paint the real world so you can be a bit of a juvenile delinquent basically without actually damaging anything. And it was great, it was really fun and you know, stuff like that. There was this other thing and other student did where you can fill a whole room with these representations of mathematical objects called tensors and I'm sorry to geek out, but you had this kid where all these people could work together, manipulating tensors and the social environment. And it was like math coming alive in this way I hadn't experienced before. That really was kind of thrilling. And I also love using virtual reality to make music that's another one of my favorite things, >> Talk more about that. >> Well, this is something I've been doing forever since the '80s, since the '80s. I've been, I've been at this for awhile, but you can make an imaginary instruments and play them with your hands and you can do all kinds of crazy things. I've done a lot of stuff with like, oh I made this thing that was halfway between the saxophone and an octopus once and I'll just >> Okay. >> all this crazy. I love that stuff I still love it. (mumbling) It hasn't gotten old for me. I still love it as much as I used to. >> So I love, you mentioned before we came on camera that you worked on minority report and you made a comment that there were things in that that just won't work and I wonder if you could explain a little bit more, you know, because I have to imagine there's a lot of things that you talked about in the eighties that, you know, we didn't think what happened that probably are happening. Well, I mean minority report was only one of a lot of examples of people who were thinking about technology in past decades. Trying to send warnings to the future saying, you know, like if you try to make a society where their algorithms predicting what'll happen, you'll have a dystopia, you know, and that's essentially what that film is about. It uses sort of biocomputer. They're the sort of bioengineered brains in these weird creatures instead of silicon computers doing the predicting. But then, so there are a lot of different things we could talk about minority report, but in the old days one of the famous VR devices which these gloves that you'd use to manipulate virtual objects. And so, I put a glove in a scene mockup idea which ended up and I didn't design the final production glove that was done by somebody in Montreal, but the idea of putting a glove a on the heroes hand there was that glove interfaces give you arm fatigue. So the truth is if you look at those scenes there physically impossible and what we were hoping to do is to convey that this is a world that has all this power, but it's actually not. It's not designed for people. It actually wouldn't work in. Of course it kind of backfired because what happened is the production designers made these very gorgeous things and so now every but every year somebody else tries to make the minority report interface and then you discover oh my God, this doesn't work, you know, but the whole point was to indicate a dystopian world with UI and that didn't quite work and there are many other examples I could give you from the movie that have that quality. >> So you just finished the book. When did this, this, this go to print the. >> Yeah, so this book is just barely out. It's fresh from the printer. In fact, I have this one because I noticed a printing flaw. I'm going to call the publisher and say, Oh, you got to talk to the printer about this, but this is brand new. What happened was last year I wrote a kind of a big book of advert triality that's for real aficionados and it's called Dawn of the new everything and then when I would go and talk to the media about it they'd say, well yeah, but what about social media? And then all this stuff, and this was before it Cambridge Analytica, but people were still interested. So I thought, okay, I'll do a little quick book that addresses what I think about all that stuff. And so I wrote this thing last year and then Cambridge Analytica happened and all of a sudden it's, it seems a little bit more, you know, well timed >> than I could have imagined >> Relevant. So, what other cool stuff are you working on? >> I have to tell you something >> Go ahead. >> This is a real cat. This is a black cat who is rescued from a parking lot in Oakland, California and belongs to my daughter. And he's a very sweet cat named Potato. >> Awesome. You, you're based in Northern California? >> Yeah, yeah, yeah. >> Awesome And he was, he was, he was an extra on the set of, of the Black Panther movie. He was a stand-in for like a little mini black panthers. >> What other cool stuff are you working on? What's next for you? >> Oh my God, there's so much going on. I hardly even know where to begin. There's. Well, one of the things I'm really interested in is there's a certain type of algorithm that's really transforming the world, which is usually called machine learning. And I'm really interested in making these things more transparent and open so it's less like a black box. >> Interesting. Because this has been something that's been bugging me you know, most kinds of programming. It might be difficult programming, but at least the general concept of how it works is obvious to anyone who's program and more and more we send our kids to coding camps and there's just a general societal, societal awareness of what conventional programming is like. But machine learning has still been this black box and I view that as a danger. Like you can't have society run by something that most people feel. It's like this black box because it'll, it'll create a sense of distrust and, and, I think could be, you know, potentially quite a problem. So what I want to try to do is open the black box and make it clear to people. So that's one thing I'm really interested in right now and I'm, oh, well, there's a bunch of other stuff. I, I hardly even know where to begin. >> The black box problem is in, in machine intelligence is a big one. I mean, I, I always use the example I can explain, I can describe to you how I know that's a dog, but I really can't tell you how I really know it's a dog. I know I look at a dog that's a dog, but. Well, but, I can't really in detail tell you how I did that but it isn't AI kind of the same way. A lot of AI. >> Well, not really. There's, it's a funny thing right now in, in, in the tech world, there are certain individuals who happen to be really good at getting machine language to work and they get very, very well paid. They're sort of like star athletes. But the thing is even so there's a degree of almost like folk art to it where we're not exactly sure why some people are good at it But even having said that, we, it's wrong to say that we have no idea how these things work or what we can certainly describe what the difference is between one that fails and that's at least pretty good, you know? And so I think any ordinary person, if we can improve the user interface and improve the way it's taught any, any normal person that can learn even a tiny bit of programming like at a coding camp, making the turtle move around or something, we should be able to get to the point where they can understand basic machine learning as well. And we have to get there. All right in the future, I don't want it to be a black box. It doesn't need to be. >> Well basic machine learning is one thing, but how the machine made that decision is increasingly complex. Right? >> Not really it's not a matter of complexity. It's a funny thing. It's not exactly complexity. It has to do with getting a bunch of data from real people and then I'm massaging it and coming up with the right transformation so that the right thing spit out on the other side. And there's like a little, it's like to me it's a little bit more, it's almost like, I know this is going to sound strange but it's, it's almost like learning to dress like you take this data and then you dress it up in different ways and all of a sudden it turns functional in a certain way. Like if you get a bunch of people to tag, that's a cat, that's a dog. Now you have this big corpus of cats and dogs and now you want to tell them apart. You start playing with these different ways of working with it. That had been worked out. Maybe in other situations, you might have to tweak it a little bit, but you can get it to where it's very good. It can even be better than any individual person, although it's always based on the discrimination that people put into the system in the first place. In a funny way, it's like Yeah, it's like, it's like a cross between a democracy and a puppet show or something. Because what's happening is you're taking this data and just kind of transforming it until you find the right transformation that lets you get the right feedback loop with the original thing, but it's always based on human discrimination in the first place so it's not. It's not really cognition from first principles, it's kind of leveraging data, gotten from people and finding out the best way to do that and I think really, really work with it. You can start to get a two to feel for it. >> We're looking forward to seeing your results of that work Jared, thanks for coming on the cube. You're great guests. >> Really appreciate it >> I really appreciate you having me here. Good. Good luck to all of you. And hello out there in the land that those who are manipulated. >> Thanks again. The book last one, one last plug if I may. >> The book is 10 arguments for deleting your social media accounts right now and you might be watching this on one of them, so I'm about to disappear from your life if you take my advice. >> All right, thanks again. >> All right. Okay, keep it right there everybody. We'll be back with our next guest right after this short break. You're watching the cube from LiveWorx in Boston. We'll be right back. (upbeat music)

>> Announcer: Live from San Juan, Puerto Rico, it's theCUBE, covering Blockchain Unbound. Brought to you by Blockchain Industries. (Caribbean music) >> Welcome back, everyone. We're here for exclusive CUBE coverage in Puerto Rico for Blockchain Unbound, a great conference where entrepreneurs and leaders are all here, coming together at a global level. You've got investors, you've got entrepreneurs, you've got the ecosystem developing. We've got it covered for you, I'm John Furrier, your host of theCUBE. Next guest, Joe Mohen, CEO of Chimes, industry executive, a lot of experience doing an ICO, doing some great work, Joe welcome to theCUBE. >> Thank you, it's a pleasure to be here. >> So, tell us first what Chimes is doing. You've got an interesting approach with music. What are you guys doing? Is there an ICO in the future? Have you done an ICO? Give the quick update. >> Okay, sure. Chimes is a digital media company, and we are consolidating music-related search results on Google in a similar way to what Amazon did with IMDB, consolidating film and television results many years ago. Amazon built an audience of about quarter of a billion to half a billion monthly users, and we expect we can create an audience on that order of magnitude over time. Just like IMDB is the third largest entertainment website in the world, it is our objective to create the fourth largest one. >> What's the value proposition there? Acquire audience, use that audience to tokenize? How does the token economics fit into all this? >> Well, first, like any media company, the first thing you have to get is an audience, right? I remember I interviewed for a job at CBS when I was out of college, and in the interview they said, "Do you know what we make here?" And I said, "You make TV shows." They go, "No, we make audiences." So we have to make an audience with a good product. The audience will be driven primarily by search, okay? But we also do have a double ICO in our future. First, we monetize the big audience. You can monetize with advertising, but that's not enough to make big money anymore, right, we all know that. So we have a layer of crypto products over and above that that we're going to be launching, including, for example, inter-country commerce, hiring producers in another country, hiring songwriters, et cetera, but automating that so we can do it on scale with smart contract. So we are creating a micro-currency that we can use on the website. We're doing an ICO for that but that's not for the purpose of raising capital. >> That's more part of the business model. >> That's part of the business model. >> That's not the financial aspect of it. >> Correct, and that's done so we can scale international commerce with automation. We're doing an actual ICO for the equity, for securities tokens as well. I've done a full IPO myself. My first company, I had Microsoft and Novell as my shareholders and it was a full S1, full registration. >> Interviewer: You went through the whole process. >> Yeah, but I also did a Form 10 once, ten years ago, for another reason. So what we're doing is possibly the first, certainly one of the first, but I think the first registration with the SEC of a company actually doing an ICO. And we're doing that using, I don't want to call it a loophole in securities laws, but there is a provision in the 1934 Securities Act called Section 12G. And what this does is it allows us basically to go public by telling the SEC we're doing it without having to delay it to wait for their permission. A Form 10 looks just like an S1, but when you file it, it's automatically effective 60 days after you file it, period. And so what we're doing is-- >> Period, full stop, no issues, no questions. >> Joe: No issue, right. >> So do you have to fill out all the same paperwork, the S1, >> Correct. >> the normal format, do the business plan, the normal paperwork? >> Joe: No, right, in 1930-- >> But there's no comments coming back? You just chip it to them? >> Comments come back and you have to clear them, just like with a prospectus, just like with an S1, however that doesn't delay it becoming effective. It's effective 60 days later. >> So they can be commenting during the 60 day time clock going on, but after 60 days, you're in. >> It's effective. So we'll continue to clear comments, but the thing is, with tokens, who knows how long that'll take? Is the SEC going to shepherd something through with crypto, or are they going to make it take five years? I don't know! Who knows? So, the thing is, we are complying with all of the laws for registration, but 60 days after we file it, it's effective. What we're doing is, in the pre-sale for the tokens, we're not issuing the tokens themselves to the buyers of the pre-sale for six months. The reason for that is they will have met the statutory holding period. So once the Form 10 is effective, those buyers can sell freely on token exchanges-- >> And what's the statutory holding period, six months? >> Generally six months. There's a few exceptions for affiliates, like an insider like me. >> I'm confused, a holding period kicks in before or after six months? >> After six months, the statutory holding period is satisfied. >> So you're going to wait to delay them anyway six months. >> Joe: Yes. >> So that covers the holding period. >> Correct, and then we file the Form 10, and 60 days later, they can trade and anybody can buy them. >> So do you file a Form 10 before the six month holding period? >> It'll be at about the same time. The reason being is because we have to get all the ducks in a row to be a public company. >> Cutting edge advice here, this is fantastic. So you're basically going to be the first ICO that actually files with the SEC. >> Correct. >> I mean, who does that, nobody. You! >> Watch us! >> John: That's awesome. >> Basically, we're using a provision, it's like we went back in time to 1934, got them to put something in the 1934 Securities Act for the purposes of ICO's, and then we came back to 2018 with the time machine-- >> Are you from the future? Back to the future! You went back and jerry rigged it. Hey, we should put this Form 10 in there! >> Joe: There you go! That's right. >> It could come in handy some day during the crypto bubble. >> Joe: That's right. >> So let's back to the cryptocurrency thing. I think you're onto something that I think is a tell sign that I haven't seen yet. I've been seeing some formation of it. You are using two types of tokens. Your business model is do security token for funding, trade that puppy through the Form 10. Utility token, a separate ICO for the product, and that's going to have one token, two tokens? >> There's one utility token, so to speak, one currency token, and that has its own regulations that you have to manage to also. But that's designed to appreciate, but not to go up 17 times. >> Okay, I want to dig into that for a second, because you mentioned scale. You're going to scale your business model with the utility token. That's the purpose of the utility token. So let's get into how you're going to do these smart contracts. Let's just say that a producer in Europe somewhere, in Italy, says, "Hey, I'm going to do something "with Joe in the UK." And they form a collaboration. >> Joe: That's right. >> Do they use that utility token or a new token gets created? >> No, that utility token. It's called a Chime, the Chime token. And what happens with that token is you can build in the contract administration through the token. Right now, you can do international deals. People do them every day. The difficulty is if you've got an audience of a half a billion people a month, for example, to do that on scale and automate it... Right now, if you do a deal with somebody in Japan, you, the American, has to have an American lawyer and a Japanese lawyer. And if there's a dispute, good luck suing. I, one time, a customer in Hong Kong, owed me a million and a half bucks and he's like, "Sue me." I'm in New York, he's in Hong Kong, and good luck. >> Did you do the New York thing? I'm flying over there and going to break your legs! >> We bitched and complained, threatened them, and ultimately we settled on 30 cents on the dollar, so we did, that's exactly what happened. With a situation like this, with smart contracts, neither side has to hire two sets of lawyers in the other country-- >> So Chime takes care of that. You want Chime to take care of that administrative inefficiency? >> Correct. The company might still get involved in administering exceptions but not everyone single one. What the smart contract does is it allows you to scale international business. The key is international business, and that's a new efficiency into the market, and that's a great-- >> And in the business model, what does that scale mean to you for operationalizing it? More people, do you have to hire them? >> More cash. No, less people and more cash because there's more automation, right? It means more software development-- >> Where's the cash coming from? >> We have a lot of revenue products. Like the obvious, like every other website, we have subscription revenue and advertising revenue. Subscription revenue comes from like... You know how IMDB is the LinkedIn of the TV and film business? So we'll have that too. >> It's not really large, though. It can be. >> Amazon could make it larger if they wanted to. They have their reasons for doing it the way they do it. But, in our case, I'll give you an example of some revenue products. Let's say you want to crowdfund a project. So let's say you want a bunch of Taylor Swift fans to crowdfund a project for her to do a duet with Kanye West. Sounds preposterous, but it's goofy enough. You'd be amazed, Stormy Daniels is crowdfunding a project for her legal bills with Donald Trump, and I betcha it's going to get funded, right? >> John: I would agree. >> So there's a lot of nutty stuff that gets crowdfunded. >> The wisdom of the crowd is actually efficient. >> Yes, that's right, and the whims of the crowd. But also, I'll give you another example. Let's say people want, if they go to a webpage about an artist, the band All American Rejects, for example, and Wheeler, one of the band members... Ten years ago, you could have given your niece a gift of a CD of All American Rejects. Well, good luck now. They wouldn't even know what a CD is in many cases, right? But what you could do is say, "Hey, you know what? "I'll give you a gift of a Google Hangouts chat with him, "And I'll pay $200 for that, or $500 for it." >> It's probably a bot, but anyway, how do you make this happen? This is really important. You're creating value by allowing people to collaborate in a way that's different, so that scales. Is that going to be done in the Chime contract or it's all going to be part of one currency? >> One currency, that's right. We're very careful. We brought in as an advisor, Rod Garrett, who gave one of the keynotes here yesterday. Rod Garrett is the money supply economist from UCSB, but he was also former VP of the New York Fed, he was the leader at the New York Fed for cryptocurrency. Rod is one of the smartest people I've ever met. >> You know him? >> Very well now, and you know what, Rod can explain the most complex things in simple words, which means he actually understands them. So we've actually used Fisher's equation to help model the utility token value over time. And, again, it's designed to appreciate, but we don't want nutty appreciation because then it'll be useless as a currency, right? We have fixed supply, the Bitcoin principle, the fixed supply and stable market so we can keep it reasonably stable. >> You're using the utility token to create value on your network so the creators can capture that value. >> Correct. >> That's what you're doing with the utility. The security is the money making side. How are you backing the security token, with equity or cash flow? >> Equity, and very important, really important, if you did a percentage of revenue or royalties, it wouldn't work, and I'll tell you why. It wouldn't scale, because we're looking five years out, 10 years out, for this to be a good investment. We want investors to buy it. And if you, let's say you need to do a secondary, because an acquisition becomes available, because you're low on money or whatever. Then how do you do a secondary if you've already given away 20% of your revenue to token holders. What if you have to do a secondary or tertiary capital round? How many rounds were necessary for Spotify, I happen to know Spotify, it was six, right? Facebook, Google, how many founds of financing did they do? A lot, and by the way, they still might do more. >> So basically the revenue share is hair on the deal. It really puts a lot of hair on the deal. >> Destroys it, in my opinion, destroys it. It's a dressing thing, but look, if you're really going to grow to a major company and have, be it five or 10 year success, it kills it. This is my opinion. >> What percentage of equity, say they're going to do a 50 million dollar raise, hard cap, soft cap, say 25, that's what seems to be the norm right now, what would be a percentage of equity converting to tokens that you'd see? >> In Chimes' case, we have a Common A class of stock. We're creating a preferred class of stock called a Series T which, if fully sold, would be about 43% of the equity of the company. They had to do it preferred stock, because there's too many, in Delaware Corporate Law, which all the tech companies are all Delaware, common stock would be very difficult to make a token. You can do whatever you want with preferred. So the preferred is more flexible, so it's actual equity, actual shares, it's not a derivative, it's not a rev share, it's not a royalty, it's actual equity. >> It's paper that converts nicely and it scales on the business side. >> So you say, "What's the evaluation?" >> We're selling 100 million dollars worth of the equity, or we're offering 100 million dollars of the equity, the pre-sale evaluation is a little over 200 million. In Chimes' cases, that's because we're not a startup, we're an early stage company. >> How old is the company? >> Pardon me? >> How old is the company? >> Three and a half years. >> So you weren't born yesterday. >> We acquired music databases that were built at a cost of tens of millions of dollars in Europe, funded by the richest guy in Europe, who built it out and then got tired of it, tired of funding it, and then we were able to pick it up basically for equity deals. We picked it up and we're buying a second music database also that's a very big one. So it's not like we're a startup with an idea and a business plan. >> No, you've got assets, and you've got momentum, good management, you obviously know what you're doing. It's awesome. You've got a great scalability mindset. You've got a nicely packaged, clear target. >> That's right, so we're probably a little bit different than a lot of crypto startups, in that, a lot of brilliant entrepreneurs that you see here, but we've been around the block with having to do IPO's, having to do exits, having to do... And you know, I'm a contrarian, right? I was getting a lot of advice yesterday from a lot of really smart people saying, "Hey, raise the money overseas through a foundation." >> "Everyone's doing it!" >> Look, I'm going to take a contrarian approach. >> I'm just going to comply with the law, by doing the registration. And they say, "What if your utility token has to comply "with money transfer laws?" Then we'll comply with them! It's like look, the contrarian approach is, whatever the law is, follow it! It gives us the flex-- >> The thing is you're actually doing what they want you to do, notifying them of what you're doing, and you have a utility! >> By separating out the token into two, one that has the attributes of currency, one that has the attributes of an equity, neither one is screwing up the other. >> I agree, that's really smart, and very novel. A lot of smart people are going down that road because it's actually known things people can understand. Security token is paperwork that you can do. >> Yes, but I'll tell you the other thing that feels very important, a pretty important point to make. By doing registration, the resale can go to anybody. My personal opinion, is you know these second market type of approaches that you can only resale them to accredited investors or to foreign investors or whatever, I think that's mistake. I think what happens is people who take that approach are going to find that the resale value of the token, or the token that has securities is going to be about 10% of what it would have been otherwise. >> If they only do accredited? >> Well yeah, because here's the thing. First, it's not only that they got to be accredited-- >> How do you get around the security token? >> Because it's registered. The waitress working the bar here can buy a publicly traded equity if it's registered, right? She can buy a publicly traded token-- >> That's the Form 10 that you were talking about. >> Right, Form 10 registers the company. The initial batch of trading will be done under 144 because the token holds will evolve over six months, so they can sell them at their leisure, right? There are exceptions, by the way, like an affiliate might have to do some form filing. I would have to file a Form 3, you know, the usual stuff. But, a regular token investor, he can do whatever he wants. And I can call them investors. I can do business in the United States. I don't have to pretend I'm domiciled in a country you've never heard of, right? So it's like look, I'm an American, my staff is mostly American, we do business in America, let's follow American law instead of-- >> Joe, this is a great conversation. We're getting down and dirty under the hood, capital structure, business models, Chimes' really interesting approach. Joe, thanks for sharing that great data here on theCUBE. Section 12G of the 1934 Securities Act. Form 10 is the secret weapon that was built by aliens before us to allow us to get this special clause in there for crypto. I'd love to continue this conversation another time. I think there's four or five things we just identified, great great topics, thanks for sharing. It's theCUBE's coverage here in Puerto Rico, I'm John Furrier, we'll be back with more after this short break. (digital jingle)

>> Announcer: Live from Las Vegas, it's the Cube! Covering NAB 2017, brought to you by HGST. >> Hey welcome back everybody Jeff Rick here with The Cube, We are getting towards the end of day three at NAB 2017, and we've talked to a ton of people from security, and storage, and applications, and now we get to talk to a creator. And really excited to have Victoria Nece on, she's a project manager for adobe After Effects, welcome. >> Thank you it's great to be here. >> Absolutely, been getting a little background on you, you were just really an animator and Adobe was smart enough to say "Hey this girl's got her shit together, we should bring her inside and have her help with the team at a bigger level." Instead of all the little things you were doing. >> Yeah so I was a motion designer mostly for documentary for a long time. And I got really into writing my own scrips and extensions and I used to say I like to make After Effects do stuff it wasn't supposed to do, and now it's my job to help make it do those things. >> Okay so what are some of the new things you said that you know, luckily we're past the official release date, you can actually talk about things >> Yes. >> So what are some of the new things? >> Uh, so we have a great new release, just came out last week, last Wednesday we're super proud of it, it's available to anyone who has creative cloud subscription. And a big thing, and this is across After Effects and Premier, is a new thing called the essential graphics panel. It allows you to make really elaborate- anything you want to do in After Effects you can go fully advanced motion graphics, and then choose the properties in editor you want to be able to change. So I can say, I'm designing something but it's on brand, I don't want you to change the color, but you can change the text, you can reposition something on the screen, we can change the background color, do all of those kind of things, and I can add those controls in After Effects and when I save those as a motion graphics template, it gets packed up and someone can use it in Premier and change those things live in the timeline with no rendering, so. >> It's really interesting just the whole collaboration, you know, kind of aspect. It used to be so much, you know, an individual sitting down on their hopefully very big machine with a lot of memory and compute, you know, working on Adobe. But now, it's really more of a collaborative effort. There's not a lot of people just working independantly all by themselves on the machine. >> True. >> Especially with Cloud and some of these really higher performance applications. >> Yeah it's actually been really interesting to watch what's happened. We have a beta service called Team Projects and I've been doing press demos where I'm in Seattle and one of my colleagues is in Germany and we're collaborating live on the same projects, I'm on After Effects, he's in Premier, I make a change, it shows up right in his timeline he doesn't even have to open After Effects, doesn't have to import anything, and it's all really seemless. And we've actually, we've all been collaborating the whole time but now you can do it without all those extra steps of rendering, and sending a file, and downloading the file, and importing it, and then adding it. Now that can all just happen in one click. >> It's like Google Docs versus Word. >> Yeah, right. >> Save and attach a file and send, hopefully you remember to save the file. >> Alright and the other thing you're really excited about is character animator. >> Yes. >> So what's going on there? >> So for people who don't know, character animator is a new application from the original creators of After Effects. It's a separate application that allows you to do real time live animation using your webcam and your microphone and also even use a touch screen, keyboard, mouse, basically hardware you already have, to power a character that starts off as a Photoshop or Illustrator file, and character animator brings it to life. We've seen some really amazing stuff people are doing with it. >> So real time live animation, so that seems like completely impossible, cause back in the day that's all we would hear about, is you know you have to render render render render render to get this animations stuff going. But now you're saying you've got it broken down so that we can do it live. >> There's this great line from The Simpsons that animation is rarely done live, it's a terrible strain on the animators wrists, and we're working to change that (laughs). It's a lot of fun and also you look at the screen and your character looks back at you, it's this really amazing experience working in it. And we've been working to make it easier to use, easier to get started, we've added workspaces so now it actually walks you through the process of getting characters set up and rigged and then a different space for performing. But it's, character animation's fun. >> And then now you're bolting that onto all these various live video distribution services. >> Mhm, we've added Mercury transmit support, which means you can go out to broadcast hardware, you can connect to absolute stream, to Facebook live, Youtube live, we're seeing things like Steven Colbert's The Late Show they use character animator to do cartoon Trump and he's improving live with a cartoon character and it's all happening in real time. >> (laughs) So as you look back and this is all fascinating and it's great, now you've got the power of the whole company to kind of make many of your visions come true. Where does it go next? It just seems like the creative opportunity, or the tools for the creator, are just exploding. >> I think there's a lot of cool stuff we can do, but for me one of the biggest things is anything we can do to save people time, and to save people doing the boring stuff, I want to give people more space to create. >> Right. >> So, don't have to think about verging, you don't have to think about all those outputs, but all the stuff about- get that out of the way, get the data entry out of the way so you can actually focus on the stuff you really want to be doing. >> And what about 360 and VR and all those crazy new technologies which are all over these halls. >> It's everywhere. Premier's got some really cool stuff this release, they've got Ambisonic audio so you can actually do VR, 360 footage and the sound comes from the right place in the shot as you turn your head. >> Ambisonic v- >> Ambisonic audio. >> Ambisonic audio. >> So there's some really cool stuff happening there. And then on the After Effects side we have some amazing partners who have been doing super cool stuff with VR, their tools are really evolving, and it's a really nice seemless workflow working with them. >> (laughs) So where does it go next? >> Oof. >> Anywhere, right? >> Anywhere really. >> No it's just amazing how again these tools that really put everything in the power of basically anybody's hands. It's kind of this whole democratization theme which we continue to hear over and over again. >> We've really focused a lot on trying to get just the tools you need right now to get you most of the way there, super simple, and then when you need to go deep, you can go deep. We're not limiting you to the simple tools, but everything's right in context, right in front of you, the stuff you change the most is right there. And then when you need to go in and tweak and get to the pro level it's another step down. And so we're trying to really build that kind of a workflow so that you have sound and graphics and color all right in edit and then you have the big pro apps for when you need to do the fancy stuff. >> The heavy lifting. And I wonder, Victoria, you talked about the community, cause Adobe's got a really active community, you guys have a huge show that brings everybody together, you obviously came out of that community into the mothership. How important is this, you know, kind of an active community around the creative process, tools you mentioned you even wrote your own scripts. >> Mhm it's, I love the After Effects community in particular they're my friends and a show like this, I see people I have really great friends that I only see once or twice a year at these kind of shows, but it's such a great strong global community that we stay in touch throughout the year, and our users really drive where we're going with things. A lot of the features in this release of After Effects, I could tell you by name who's been asking for them for years and who's super excited to see something in there. >> Okay, so if I see you again in 2018 can you give us a hint as to maybe what we'll see? Don't get in trouble. >> I might get in trouble. But we've got some really cool stuff under way. >> Alright, well we'll keep an eye, and you guys over on the table, you got to learn how to do this talking creative animator thing. I could think of some people that we might want to chin up not the real Donald Trump, but some other people. (laughs) >> Alright Victoria, well thanks for spending a few minutes with us and again, congrats on the new relase. >> Thank you, it's really great to be here. >> Alright Victoria Nece, I'm Jeff Rick you're watching the Cube from NAB 2017. Thanks for watching.

>> Narrator: Live from Las Veags, it's theCube, Covering NAB 2017. Brought to you by HGST. >> Welcome back everybody, Jeff Frick here with theCube. We're at NAB 2017 with 100,000 of our closest friends. Talking all about media, entertainment and technology. The theme this year is MET, cause the technology is so mixed in with everything else that you can't separate it anymore. And we're really excited to do a deep dive into kind of the customer, or not the customer, excuse me, the consumer side of this whole world with Yves Bergquist. He's the project director, Data and Analytics Entertainment Technology Center at USC. So Yves welcome. >> Thank you, thanks for having me. >> So when I was doing some research on your segment, really interesting to see that you're involved very much in trying to figure out what people like to watch how they like to watch and get a bunch of data because now the choices for the consumers of media and entertainment are giant, like never before. >> Yeah. There's a, very very basic question that I think not a lot of people in media and entertainment can answer. Is that why are people watching your stuff? And they have sort of surface level answers, but there's ways that the content out there, that we watch, resonates cognitively with us, that is really important, is very fundamental in how we consume media and entertainment. And even the decision making of why we decide to go watch a show on Netflix, or play a mobile game, or watch a Youtube video. Why do we make these specific choices? What drives those choices? All these questions don't have a lot of really good answers right now, and that's where I, where we're focus all of our work at ETC. Is to really understand people's drive to entertain themselves or decisions to entertain themselves at a very deep level. And really understand how various narrative structures in film and trailers and brands and advertising resonate with people at a cognitive level. >> So it's pretty intersting, it really goes with the whole big data theme and the AI theme. Because now you can capture, collect, measure data in ways, and consumption in ways you couldn't ever do before. >> Yeah, that's a good point. So, you know, there's three things that are really impacting the media and entertainment industry and every industry, really. It's, number one, the ability to think in systems, right? We used to think about problems in a very sort of siloed manner, right, we think about a problem in isolation with other forces. Like we look at the flu in isolation with the environment that we're in, so like that. There's another way to look at things, in a more holistically, it's a system called systems thinking. And the ability to think of audiences as a system, just like your body's a system inside a system, right, is really revolutionizing the way we're looking at entertainment and media. The second thing thing is the availability of data, just there's an enormous amount of data out there. A lot of it is unstructured, but there's, the good thing about entertainment and media is that it drives passion and drives conversation. And anything that drives passion and conversations get very rich in data. And the third thing that is impacting the industry is machine living and AI. And the ability to really look at all of these data points across the system holistically in a very intelligent more semantic manner. And make sure that you're measuring the right things. For a very very long time the media and entertainment industry has been measuring the wrong things. And it's really now catching up very very fast and making sure that it's measuring the right things. For example, how do we measure how specific narrative structures in film resonate with people cognitively in a way that translates into the box office? Is there a specific character journey that resonates better in an action movie with males versus females. How does that matter for how a story's being told? Where do you innovate in script, right? Interesting point is the entertainment industry is very unique in that it has two major problems. Number one, its clients, its customers are absolute experts in the product. Because if you're 25 or 35, how many movies have you watched? Thousands of movies, right? So you're an expert in movies. >> Jeff: Certainly the ones you like. >> Exactly. If you're 25 you haven't bought hundreds or thousands of cars, right? So, but on the other hand the supplier of the content doesn't know as much of the customer as the customer knows about the product. So you have two problems. You have a really really really highly expert client, and, but you don't know a lot about that client as a studio, right, or a network or a media company. So that's very very unique distinct challenge that they're starting to get very very smart and very advanced in thinking about. >> The other thing is, that I see in the movie industry and I'm no expert by any stretch of the imagination but it seems like the compression pressure is huge. The budgets have grown to be giant. And the number of available weekends for your release are small. And the competition for attention and eyeballs around those weekends, it just seems to really have a really high kind of risk reward profile that's getting more and more extreme. And is that driving people more to kind of the known? Or is it just my perception that they're taking less risks on modifications from the script or modifications of kind of the norm especially around these big budget? I mean just the fact that you've got version 1,2,3,4,5,6, pick your favorite theme seems to be a trend that continues and gets even more, I mean Superman. How many Superman movies are there, or Spiderman? >> So you know, that's really interesting right? So the very natural tendency of the media and entertainment industry is when it doesn't know, as I was mentioning, it doesn't know as much as it could or should know about who its audience is. The tendency is then becomes to just take less and less risk in telling stories exactly the same way that's why you see a lot of really really formative very formulaic movies. What we're trying to do is, and the challenge with that is that, again you have an audience of experts and so if every single movie looks like the same one, look like the other one, you're going to have a problem. People aren't going to go see, going to go gravitate towards another kind of entertainment or some of your competitors. So you have to know where do you meet peoples expectations in a movie and where do you innovate? Deadpool is a really interesting example. Deadpool has the structure of a basic superhero movie but it has a lot of innovation underneath that. And so for the studios knowing where do you stick to the formula and where do you innovate in telling a story when you make a billion dollar movie, is going to become more and more interesting. Because if you innovate too much you're going to turn people off. If you don't innovate enough, you're going to turn people off. So we actually have some research looking at the mathematical definition of why we think certain things are interesting and certain things are not interesting so we can separate. These are the things you need in your movies, this is some aspects, if you go back to Deadpool, there's some aspects of Deadpool as a movie that are very traditional to the superhero genre. And a lot of other aspects that are very very innovative. So you have to innovate in certain areas and you have to no innovate areas. And that's a real challenge, and so that's why we're really applying our work to looking at narrative structure in storytelling at ETC is because that's where a lot of the revenue opportunities and the de-risking opportunities are. >> And it's interesting before we went live you were talking about thinking of storytelling and narrative as a little bit less art and a little bit more science in terms of of thinking at in terms of algorithms and algorithmically. Because there are patterns there, there is data there. So what does some of the data that you measure to get there? You mentioned earlier that in the past people were measuring the wrong thing. What are the right things to measure? What are some of the things you guys are measuring now? >> Yeah, so you know, it is still very much an art, right? It's making it, making art a little bit more optimal, and optimizing art is what we're doing, but it's, it will remain art for a very long time. I think for, and since we're at NAB, sort if in a broadcasting environment, I think a lot of the measurements and systems that have been in place for decades now are looking at demographics. And demographics, whether you're a male or female, Your age, your ethnicity, or your income, used to predict what you would watch. It doesn't do that anymore, and if you have kids, you know like me, you watch the same thing that they're watching, you're playing the same video games that they're playing. I think there's a new way to measure things more cognitively and semantically and neuroscience is starting to get into the issue of why do we think certain stories are more interesting or more appealing than others. Why do certain stories lead us to make actual decisions more than others? And so I think at a very very basic level you have to unpack this notion of why do people go see this movie? And it's a system, you know, that decision happens in a system where some of the system is demographics, demographics aren't going to go away they're still predictive to a certain extent. But it's also, you know, cast, it's also who has recommended this movie. And what are the systems of influence in driving certain people to see a movie? And all these things, and of course, what we're focusing on, which is storytelling and narrative structure and how that, sort of translates to making decisions to see this movie. A lot, you know, we're still in the infancy of measuring all of the system in a very scientific granular way, but we're making very very quick progress. And so even things like understanding the ecosystem of influence around why certain communities are influenced to go see certain movies by other communities and what happens there, right. So I'll give you an example, we did, we pulled months of data on Reddit about where supporters of Hillary Clinton and where supporters of Donald Trump would engage on that topic. Are they talking about that amongst each other or are they really going out there and trying to convince other people to vote for Trump or to vote for Hillary Clinton? And we saw some, two radically different patterns. So pattern number one, the Clinton people would mostly engage with each other on Reddit. So that's cool and that has very little value because you're not being an ambassador. On the other hand, the Trump people were engaging far outside of the Trump subReddit and trying to convince people to join the movement, to donate, to vote for Trump. So we think there's a model there that can be ported to the entertainment industry, where if your fans, if your fan base is mostly engaging with each other it has less value than if your fan base is really going out there and really trying to get other people excited about your movie. And why do certain people get excited and how do your fans, what argument do your fans use out there to convince others to go see your movie. All these things we're looking at, and it's brand new world now for media because of all of these data points. >> The systems conversation is so interesting because it's not only the system, but the individual. But it's like you said, it's all these systems of influence today. Look at the Yahoo reviews, the Rotten Tomato reviews, you know, what are there, Reddit, you know, as a system of influence, who would have ever thought? >> Yeah and we're getting it, we're going into a world very quickly, we're going to be able to understand entertainment and storytelling and narrative and it's cognitive power almost on a neural network base. In looking at what kind of neural network in our brains get fired when we are exposed to this type of character, or this type of storyline, or this type of narrative mechanics. And so this is a really exciting time. >> The other thing that's interesting, we talked again a little bit before we turned the cameras on, is about the trailers. Because that's kind of the story within the story. And depending on your objectives, and the budget, you know, they can make all kinds of number of trailers, in very different way, to approach or to target very specific audiences. I wonder if you can get into that a little bit. >> Yeah so, you know in the media and entertainment industry decisions have been made, and if you think about it it's amazing that the media and entertainment industry has made so much money, so I think it's a testament of the enormous creative talent that's involved. But, you know, especially for trailers a lot of the decisions about trailers are made sort of looking what's worked in the past in a very sort of haphazard way. There really isn't a lot of data and analytics and science applied to, hey what kind of trailer, what structure of trailer do we need to put out there in each channel for each target audience to get them really excited about the movie? Because there's many different ways you can present a movie, right, and we've seen, we've all seen many different types of trailers for many different types of movies. What we're doing, and nobody's really worried about hey let's analyze, for example, the pace, right, the edit cuts, the structure of the edits for the trailer and how that resonates with people. And now we have the ability to do that because people, you know, we will count views on YouTube for example, or there will be a way to measure how popular a trailer is. So what we're doing is we're just measuring everything that we can measure about a trailer. Is it a complete story? What is the percentage of the trailer is the main character in? What is the percentage of the trailer that the influence character is in? We're looking at cast. Does a trailer with Ben Affleck, you know, work better if Ben Affleck is a lot in the trailer, or not a lot in the trailer? And what kind of trailer types work better for specific genres, specific target audience, specific channels? So we're really unpacking that into a nice little spreadsheet. And measuring all the things that we can measure. And the thing about this is, if you think about the amount of money that's involved in making these decisions, you know if you're a studio and you're spending 3,4,5 billion dollars a year in marketing expense, and my work can make it even 10 percent more efficient, that's like half a billion dollars in savings. >> That's a real number. >> That's enormous right? So it's a really exciting time for media and entertainment because there are all these things on the horizon to help them make better decisions, more data driven decisions. And really free up creators, because if we can tell the people who tell the stories in film every, you can innovate so much more now because we've, we know that we've boiled it down to a science, and we know that in this, if you have these four or five things in your script, everywhere else you can innovate, go nuts. I think it's going to free up a lot of creative talent. We're going to see a lot more interesting movies out there. >> The other piece I think, I mean obviously a trailer for a movie's one thing, but take that little genre of creative that's purely built to drive behavior and that's a commercial. And I always joke with my kids, I watch a lot of sports, and there'll be a car ad and I'm like, just think if you're the poor guy that gets the assignment to make another car ad, I mean, how many car ads have been made, and you've got to think creatively. But the data that you're talking about, in terms of the narrative, what types of shots, the cutting, based on the demographic that you're trying to go after for that specific ad. That must be tremendously valuable information. >> Yeah it is really valuable. So you know, our philosophy is that everything is story. You're tie is a story, your haircut's a story, you're cereal's a story, your cars, everything. We make decisions based on the narratives that other other people tell us and that we tell ourselves about how to represent the world. Simply because the universe out there and the reality out there is too complex for our brains to really represent as it is, so we have to simplify, compress it into a set of a behavioral script that says, okay I'm, it's sort of an executive summary of their reality. And though that executive summary is a story. And so it's especially powerful in driving how what we buy and how we consume things. And so, I've build a platform that looks at, that extracts very very structured data from conversations about what is the narrative structure about a specific brand. You know, is it focused more on, you know,emotions? Is it focused more on ethics? Is it focused more on the, sort of the utility of the product? And trying to correlate that to look at what kind of narrative structure's around your brand? What kind of story around your brand, drives more sales? And so that's really really interesting, in sort of understanding, again, that cognitive relationship between stories and how efficient they are in driving specific behavior. That is exactly what my research is about. >> Yves, we could go on all day, but unfortunately we are out of time. So thank you for spending a few minutes and dropping by. Fascinating conversation. Alright, he's Yves Bergquist from USC, where all the film stuff's happening. I'm Jeff Frick, you're watching theCube. We'll be back NAB 2017 after this short break. Thanks for watching. (uptempo rock music)

(techno music) >> Announcer: Live, from Silicon Valley, it's "the Cube," covering Mobile World Congress 2017. Brought to you by Mintel. >> Okay, welcome back everyone. We're here live in Palo Alto, California, covering Mobile World Congress, which is later in Spain right now, in Barcelona, it's gettin' close to bedtime, or, if you're a night owl, you're out hittin' the town, because Barcelona stays out very late, or just finishing your dinner. Of course, we'll bring in all theCube coverage here. News analysis, commentary, and of course, reaction to all the big mega-trends. And our next two guests is Guy Churchward who is the President and CEO of Data Torrent, formerly of EMC. You probably recognize him from theCube, from the EMC world, the many times he's been on. Cube alumni. And Phu Hoang, who's the co-founder and Chief Strategy Officer of Data Torrent. Co-founder, one of the founders. Also one of the early, early Yahoo engineers. I think he was the fourth engineer at Yahoo. Going way back on the 90s. Built that to a large scale. And Yahoo is credited for the invention of Hadoop, and many other great big data things. And we all know Yahoo was data-full. Guys, welcome to theCube's special coverage. Great to see you. >> Thank you so much. So I'm psyched that you guys came in, because, two things. I want to talk about the new opportunity at Data Torrent, and get some stories around the large scales experience that you guys have dealing with data. 'Cause you're in the middle of where this is intersecting with Mobile World Congress. Right now, Mobile World Congress is on the collision course between cloud-ready, classic enterprise network architectures with consumer, all happening at the same time. And data, with internet of things, is that going to be at the center of all the action? So, (laughing) these are not devices. So, that's the core theme. So, Guy, I want to get your take on, what attracted you to Data Torrent? What was the appeal for the opportunity? >> You mean, why am I here, why have I just arrived? >> I've always data-obsessed. You know this. From the days of running the storage business on their data protection, before that I was doing data analytics and security forensics. And if you look at, as you said, whether it's big data, or cloud, and the immersion of IOT, one thing's for sure, for me. It was never about big data, as in a big blob of stuff. It was all about small data sprawl. And the world's just getting more diverse by the second, and you can see that by Mobile World, right? The challenge then you have is, companies, they need to analyze their business. In other words, data analytics. About 30 years ago, when I was working for BA Systems, I remember meeting a general of the army. And he said the next war will be one in the data center, not on the battlegrounds. And so you really understand-- >> He's right about that. >> Yeah. And you have to be very, very close. So in other words, companies have started to obsess about what I call the do loop. And that really means, when data is created, and then ingesting the data, and getting insight from the data, and then actioning on that. And it's that do loop. And what you want to do, is you want to squeeze that down into a sub-second. And if you can run your analytics at the pace of your business, then you're in good shape. If you can't, you lose. And that means from a security perspective, or you're not going to win the bids. In any shape or form. That's not a business-- >> John: So speed is critical. >> Yeah, and people say, speed and accuracy. Because what you don't want to do is to run really really fast and fall off a cliff. So you really need to make sure that speed is there and accuracy is there. In the good old days, when I was running security forensics, you could either do complex end processing, which was a very small amount of information coming in and then querying it like crazy, or things like log management, where you would store data at rest, and then look at it afterwards. But now with the paradigm of all the technology catching up, so whether that's the disk space that you get, and the storage and the processing, and things like Hadoop with the clustering, you now break that paradigm. Where you can collect all the information from a business and process it before you land the data, and then get the insight out of it, and then action. So that was my thing, of looking and saying, look, this whole thing's going to happen. In last year -- >> And at large scale, too. I mean, what you're talking about in the theoretical side makes a lot of sense, but also putting that into large scale, is even more challenging. >> Yeah, we had, when I was going through the processes, dating, you know, to see whether was a company that made sense, I chatted one of our investors. And they're also a customer. And I said, why did you choose Data Torrent? And they said, "We tested everything in production, we tested all the competitive products out there, and we broke everything except Data Torrent. And actually, we tested you in production up to a billion events per second, and you didn't break. And we believe that that quantity is something that you need as a stepping stone to move forward." >> And what use cases does that fit for? Just give me some anecdotal (snaps fingers) billion transactions. At that speed, what's some use cases that really take advantage of that? >> They were mastering in, what I would call, industrialization of IT. So in other words, once you get into things like turbines, wind generation, train parts. We're going to be very very soon, looking out of a window and seeing -- >> John: So is it flow data? Is it the speed of the flow? Is it the feed of all the calculations, or both? >> It's a bit of both. And what I'll do, is I'll give Phu a chance, otherwise, we'll end up chatting about it. >> John: Phu, come on, you're the star. (laughing) When you founded this company, you had a background at Yahoo, which you built from scratch, but that was a first-mover opportunity, Web 1.0, as they say. That evolved up and then, everyone used Yahoo Finance. Everyone used Yahoo Search as a directory early on. And then everything just got bigger and bigger and bigger, and then you had to build your own stuff with Hadoop. >> Yeah. >> So you lived it. The telcos don't have the same problem. They actually got backed into the data, from being in the voice business, and then the data business. The data came after the voice. So what's the motivation behind Data Torrent? Tell us a little bit more. >> It's exactly what you say, actually. Going through the 12 years at Yahoo, and really, we learned big data the hard way. Making mistakes month after month, about how to do this thing right. We didn't have the money, and then we found out that, actually, proprietary systems of the shelf system that we thought were available, really couldn't do their jobs. So we had to invent our own technology, to deal with the kind of data processing that we had. At some point, Yahoo had a billion users using Yahoo at any given point in time, right? And the amount of impressions, the amount of clicks, the amount of activity, that a billion users have, onto the system. And all of the log files that you have to process to understand what's going on. On the other side of that, we need to be able to understand all of those activities in order to sell to our advertisers. Slice and dice behaviors and users, and so on. We didn't have the technology to do that. The only thing we knew how to do was, to have these cheap racks of cheap servers, that we were using to serve webpages. And we turned to that to say, this is what we're going to need to do, to solve these big data problems. And so, the idea of, okay we need to take this big problem and divide it into smaller pieces, so that we can run on these cheap servers, sort of became the core tenant of how we do distributor processing that became Hadoop, at the end of the day, right? >> You had big data come in because you were, big data-full, as we say. You weren't building software to solve someone else's problem. You had your own problem, you had a lot of data. You were full with data. >> Exactly. >> Had to go on a data diet, to your point. (crosstalk) >> And no one to turn to. >> And no one to turn to. >> All right. So let's spin this around or Mobile World Congress. 'Cause the big theme is, obviously, we all know what device is. In fact, we just released here on theCube early this morning Peter Burris pre-announced our new research initiative called IOTP. Which stands for Internet Of Things And People. And so now you add the complexity of people devices, whether that's going to be some sort of watch, phones, anything around them. That adds to the industrial aspect of turbines and what not. Internet of Things is a new edge architecture. So the data tsunami coming, besides the challenges of telcos to provision these devices, are going to be very challenging. So the question I want to ask you guys is, how do you see this evolving, because you have certainly connectivity. Yeah, you know, low latency, small little data coming from the windmills or whatever. Versus big high-dense bandwidth, mobility. And then you got network core issues, right. So how does this going to look like? Where does the data piece fit in? Because all aspects of this have data. What's your thoughts on this, and architecture. Tell us about your impressions, and the conversations you've had. >> First of all, I think data will exist everywhere. On the fringe, in the middle, at the center. And there's going to be data analytics and processing in every path of that. The challenge will be to kind of figure out what part of processing do you put on the fringe, what part do you put at the center. And I think that's a fluid thing that is going to be constantly changing. Going back to the telcos. We've had numbers of conversationw with telcos. And, yes we're helping them right now with their current set of issues around capacity management and billing, all those things. But they are also looking to the next step in their business. They're making all this money from provisioning, but they know they sit on top of this massive amount of really valuable data, from their customers. Every cellphone is sending them all of this data. And so there's a huge opportunity for them to monetize, or really produce value, back to their customers. And that could come in form of offers, to customers. But now you're talking about massive analytics targeting. That is also real-time, because if you're sending an offer to someone at a particular location, if you do that slowly, or in batch, and you give them an offer 10 minutes later, they're no longer where they are. They're 10 minutes away, right? >> Well, first two questions to follow up on that. One, do they know they have a data advantage opportunity here? Do they know that data is potentially a competitive advantage? >> From our conversation, they absolutely do. They're just trying to figure out, so what do we do here? It's new to them. >> I want to get both your perspectives. Guy, I want you to weigh in on this one, 'cause this is another theme that's coming out of the reporting and analysis from Mobile World Congress. This has come also from the cloud side as well. Integration now, is more important than ever, because, for instance, they might have an Oracle there, there might be Oracle databases outside their network. That they might want to tap into. So tapping other people's data. Not just what they can get, the telcos. It's going to be important. So how do you guys see the integration aspect, how we, top of the first inning, national anthem going on. I mean, where are we in this integration? There's a pregame, or, what inning are we in on this? >> Yeah, we're definitely not on the home run on it. I think our friend, and your friend Steve Manly, I sat down with him, and I gave him a brief, you know, what we were doing, and he was blown away by the technology and the opportunity, but he was certainly saying, but the challenge is the diversity of the data types. And then where they're going to be. Autonomic cars. You know each manufacturer will tell the car behind it, what it just experienced, but the question is, when will a Tesla tell a Range Rover, or tell a BMW? So you have actually -- >> They're different platforms, just different stats, it's a nightmare. >> Right. So in other words, >> And trackability. And whether it's going to be open APIs, whether it's technologies like Kafka. But the integration of that, and making sure that you can do transformation and then normalize it and drive it forward. It's kind of interesting, you know. You mentioned the telco space, and do they understand it. In some respects, what Phu went through with Yahoo, in other words, you go to a webpage, you pull it up, it knows you because of a cookie and it figures out, and then sells advertising to you on that page. Now think about you as a location, and you're walking past a Starbucks, and they want to sell you a coffee for ten cents less than they would normally do. They need to know you're there then. And this is the thing, and this is why real-time is going to be so critical. And similarly, like you said, you look out the window and you see DHL, or UPS, or FedEx drones out the window. You not only have an insight issue. You also have a security issue, you have a compliance issue, you have a locational issue. >> I think you're onto something. And I think I actually had this talk today with Steve Manly EMC World last year, around time series data. So this is interesting. Everyone wants to store everything, but it actually might not be worth anything anymore. If the drone is delivering your package, or whatever realtime data is in realtime, it's really important right there in realtime, or near realtime. It might not be worth anything after. But yet a purchase at a store, at a time, might be worth knowing that as a record to pull in. You get what I'm saying? So there's a notion of data that's interesting. >> And I think, and again, Phu's the expert. I'm still running up onto it. It's just a pet hobby, an obsession of mine. But the market has this term ETL. In other words, Extract, Transform, Land. Or load. But in essence, it's always talked about in that (mumbles) batch. In other words, I get the data, transform it, drop it, and then I have a look at it. We're going upside-down. So the idea now is to actually extract, transform, insight, action, then landing. So in other words, get the value at the fresh data, before it's the data late. Because if you set the data late, by default, it's actually stale. And actually, then there's the fascination of saying, if you're delivering realtime data to a person, you can't think fast enough to actually make a live decision. So therefore, you've almost got any information that comes to you, has to tier out. So it comes to a process. You get that fresh use of it, and then it drops into a data lake. And so I think there's using both, but I think what will you see in the market, and, again, you've experienced the disk flash momentum that happened last year. You're going to see that from a data source from at-rest, advanced, to real-time data streams on our applications next year. So I think the issue is, the formative year, and back to your, you know, get it right, get the integration, but make sure your APIs are there, talking to the right technologies. I think everything's going to be exciting this year and new and fresh and people really want to do it. Next year is going to be the year where you're going to see an absolute changing of the guards. >> And then also the SLA requirements, they'll start to get into this when you start looking at integration. >> You're absolutely right. Actually, the SLA part is actually very very important here. Because, as you move analytics from this back world, where it has, you do it once a day, and if it dies, it's okay, you just do it again. To where it is now continuous, 24 by 7, giving you insight continuously about your business, your people, your services, and so on. Then all of a sudden, it has to have the same characteristics as your business. Which is, it's 24 by 7, it can never go down, it can never lose data. So, all of a sudden you're putting tremendous requirements on an analytics system, which has, all the way from the beginning of history 'til now, been a very relaxed batch thing, to all of a sudden being something that is enterprise-grade, 24 by 7. And I think that that's actually where it's going to be the toughest nut to crack. >> So tell about some of the things that you've learned. And pretend for a second, let's pretend that you, as a co-founder at Data Torrent, and Guy, and you are teamed up. You guys run this telco. Let's just make one up, Verizon. Or AT&T, or pick one. And you sit there saying, okay, you've got the keys to the kingdom. And you can do whatever you want (laughing). You can be Donald Trump, or you can be whoever you want. You can fire everybody, or you can pick it over and run it. What would you do? You know you've got IOT. So this is business model innovation opportunities. I want you to put the technical hat on, plus knowing what you know around the business model opportunities. What do you do? You know IOT's an opportunity. Amazon is going after that heavily. Do you bolt a cloud together? Do you go after Amazon? Do you co-op with Amazon? Do you co-integrate? Do you grab the IOT? Do you use the data? I mean, given where we are today, what's the best move if we were consulting with this. >> You know, I will be the last person to be talking about giving advice to a telco. But since we are, we own our own telco here, and then we're pretending, I would say the following. IOT is going to happen, right? Earlier, when I say a billion people, that's just human beings. Once you now talk about censoring, you can program how many times they can send you data per second, then the growth in volume is immense, right? I think there's a huge opportunity, as a telco, in terms of the data that they have available and the insight that they could have about what's going on. That is not easy. I don't think that, as a telco, in the current DNA of a telco, I can go ahead and do all that analytics and really open up my business to the data insight layer. I would partner, and find a way-- >> Well, we're consulting, we're going to sit around and say hey, what do we have? We have relationship with the consumer, big marketing budgets. We can talk to them directly, we have access to their device. >> But you'll bifurcate the business. We're in the boardroom here, this is nothing more than that. But I would look at it and say look, you've got a consumer business, the same as in IOT. There's really, for me, there's three parts of IOT. There is the bit that I love which, you can geek out, which is basically the consumer market, which, there's no money in for a large-scale tenant, right, enterprise. And then you have the industrialization of IOT, which is I've got a leaky pipe, and I want a hardened device, ruggedized, which is wifi, so, now as a telco, I could create a IOT cloud, that allows me to put these devices out there, and in fact, I use Arlo, the little cameras. And they've got one now, where I can basically float it with its own cellular signal. So it's its own cellphone. That's a great use of IOT for that. And then you step to the consumer side of, I've got a cellphone, and then what I'll do is literally, in essence, riff off what Yahoo did in the early days and say, I'm now the new browser. The person's the browser. So in other words, follow the location, follow where he is, and then basically do locational-based advertising. >> By the way, you have to license the patent from our earlier guest, he'll say will he leak, 'cause he's got th6e patent on personal firewall for personal server. He's built a mobile personal server. >> Yeah. >> But this is the opportunity around wireless. Why I love the confusion, but the opportunity around wireless right now is, you can get bandwidth at high capacity. You have millimeter wave four, that doesn't go through walls, but you have other diverse frequencies and spectrum for instance, you can blend it all together to have that little drip signal, if you will, going into the cloud from the leaky pipe. Or if you need turbine, full-fat pipe, you maybe go somewhere. So, I think this is an interesting opportunity. >> And they're going to end up watching the data centers as well. There's still the gamut of saying our customer is going to continue to support their own data centers, or are there going to be one to a hundred data centers out there? And then how does selling a manufacturer or a telco play into that, and do they want to be that guy or not? >> Guy, Phu, thanks for coming in. I want to give you guys a chance to put a plug in for Data Torrent. Thanks for sharing some great commentary on the industry. So, what's up with you guys? Give us the update. Are you hiring? You growing? What are you guys doing? Customers? What's the update? Technology, innovations? >> So we've got a release coming out tomorrow which is a momentum release. I can't talk too much about the numbers, but in essence, from a fact base, we have a thing called a patchy apex. So it's open sourced, so you can use our product for free. But that's growing like gangbusters. From a top-level project, that's actually the fastest-growing one, and it's only been out for seven months. We just broke through 50,000 users on it. From our product, we're doing very well on the back of it. So we actually have subscription for the production side. >> So revenue is a subscription model. >> Yeah, and we meet both sides. So in other words, for the engineer who writes it, you've got the open source. And then when you put it into production, from the operations side, you can then license our products to enable you to manage an easy-- >> So when it gets commercialized, you pay as you go, when you use it. >> And you don't have to, if you don't want to. You've got all the tools to do it. But, we focus for our products group of, time to value, total cost of ownership. We're trying to bring Hadoop and real scale, realtime streaming to the masses. So what's the technology innovation? What's the disruptive enabler for you guys? >> I think we talked about it, right? You've got two really competing trends going on here. On one side, data is getting more and more and more massive. So it's going to take longer and longer to process it. Yet at the other side, business wants to be able to get data, have insight, and take action sub-second. So how do you get both at the same time? That's really the magic of the technology. >> Thanks for coming in. Great to meet you, Phu. I'd love to talk about the old Yahoo days, a total throwback, Web 1.0, a great time in history, pre-bubble bursting. Greatness happening in the valley and all around the world, and I remember those days clearly. Guy, great to see you. Congratulations on your new CEO committee. And great to have you on theCube. This is theCube bringing the coverage, and commentary, and reaction of Mobile World Congress here, in California. As everyone goes to bed in Barcelona, we're just gettin' down to the end of our day here in the afternoon in California. Be right back with more after this short break. (techno music)

>> Announcer: Live from Silicon Valley, it's theCube, covering Mobile World Congress 2017, brought to you by Intel. >> Okay, welcome back, everyone. Here, live, in Palo Alto, California, the Silicon Angle Studio for the Silicon Valley coverage of Mobile World Congress 2017. I'm John Furrier. We're in theCube. We're here with Cube alumni and one of our favorite guests, Alan Cohen, the Chief Commercial Officer of Illumio, hot security startup, coming in to share his commentary on Mobile World Congress. Alan's a veteran in the industry. Great to have you. Been in the Silicon Valley Friday Show a few weeks ago. Great to see you. >> Thrilled to be back. Beautiful environment. You know, party. >> It was great to see you on the Silicon Valley Friday Show because after our segment the New York Times ran that story Friedman had that the cross where they took our content. >> We're going to Freeport next. >> Exactly. (laughing) And great content, we're serving it up. So I want to say thank you, it was great coverage. Thanks to the New York Times for picking up our content, taking it to the next level. Always great to have a conversation. You've got a good way to put the finger on the pulse. Mobile World Congress, two days of coverage for us. I'll just give you a quick Reader's Digest summary of what we're seeing. It's a bipolar show. It's a device show and a telco trying-to-figure-things-out show. Then in the middle is a lot of money to be had by whoever can help sort out the counseling of the telco business. Intel certainly is a big player in that with 5G. And there's a lot of under the covers stuff. SDN, NFV, new networks and new paradigms of how to configure these architectures. Not much mention of security, but that's essentially what's going on. You've got everyone's working out the devices, the new LG, the Yahweh, all this stuff's going on. Then you get the telcos well speeds and feeds and build out and business models. So what's your assessment? >> I've been to the Mobile World Congress 10 times. We never talked about this, but I actually worked the cellular carrier in the 90s. To me the show is the same every year. It's drones, clones, and phones. That's what people really focus on, right? So the 11,000 versions of the Android phone, even though Apple's still taking 89% of the profit at the industry so it actually only one phone you have to pay attention to on one side. Then more bits, less money side of being on the carrier, because what is being an ISP, wireless ISP or a wired ISP. Every year I give you more bits and I make less money. I'm going to make it up in volume. And I keep pouring all this capital into this. So to me, they haven't really yet completely broken out of that paradigm. The key thing is that the mobile network is the primary network. So all the profitability in telco is in the mobile network. Nobody says hey, I'm going to get up and build a wired network and pull some more copper to your house, right? So that is the principle way that people are using it and we have now an entire generation that don't know you can actually plug a phone into a wall or an ethernet connection. I think that's the kind of competitive dynamics that people go with. >> And that's under pressure though, because now the carrier's always in the operating, always controlled the relationship to the user via the contract. Did you buy an iPhone lately? There's no more relationship. You just buy whatever device you want. The subsidy ended ... I'm not talking about subsidy. I'm talking about like I have a contract with AT and T, I can certainly change it to Verizon, so I can certainly swap. But for the most part the carrier views me as a subscriber. Pretty much that's it. They bill me, I'm not really getting anything extra from AT and T. Maybe I'll get some hotspots. But I mean come on, what value? >> You are just our poo. >> Where does it go from here? We had the guys from Datatron on who had an interesting proposition. They had a ton of data. So there really has been this struggle institutionally, as you know, I mean core competency has been provisioning, truck roll, and billing. So what else can they do? What's your thoughts, okay let's change the mental, here's the exercise. We get elected to be the CEO of the biggest telco. >> You're Verizon, I'm A T and T. >> We own the telcos, and what do we do? Do we fire everybody? Do we do what Donald Trump does and just fire everyone and run it the way we want to run it? Or do we build it? What would we do seriously, what would we do if we were telcos and we want to put our business hat on? >> I think you have to kind of deconstruct the value chain of that. So what telcos do is they offer up content, for the most part. These devices, I've had to teach my kids that you can make a call with it. But aside from a call mostly what people do is use some form of internet application. They don't get any other money for the internet application. They don't get any money for hosting it, they don't get any money for managing it. They don't get very much money for making it perform. So to me, the biggest challenge of the telcos is actually Amazon because if you think about it, Amazon is now becoming the supply chain for so much internet delivery content. If the telco wants to be something other than the last mile and the wires connecting that last mile, it takes a lot of wires to build a wireless network, people forget that. They're going to have to start to figure out can I, whether it's cash and data center, can I turn profitable services to the people who are all competing at the edge of that universe and applications. I don't think they really have done that. I mean they are some of the largest data center operators in the world, but they haven't really thought it through. I was in a studio in L.A. a couple weeks ago and it's one of the large national studios. It's an Illumio customer and they've now moved all their content distribution into Amazon. So they don't send the content from their network to the affiliates. They put it in Amazon, and Amazon delivers it. How much longer is it going to before there's actually studio that works out of Amazon? >> Yeah, I mean the head end's dead. This cable is kind of changing. That's the media piece, but also you have all these new use cases, the fantasy autonomous driving cars which you can say it's a data center on wheels, yes I could buy that. Is it going to be uploading data every half mile? Where's the wire? So you have this new construction. Smart cities is another one, smart homes is an echo in there. >> I made my living out of making data centers more secure. But the data center is going to completely evolve. The share perfusion of data that's going to come out of these devices, and a lot of people have talked about the edge architecture, is going to blow up the idea of back hauling it to a centralized server. Process it in a bunch of ways and spit it back out. For me, if I wanted to write a smart or autonomous car management system, let's say I was the city of Palo Alto and I'm responsible for now instead of just the traffic lights, I'm also responsible for how autonomous cars go through Palo Alto, I'm not sending something back to some data center in Virginia for Amazon. I'm going to have to figure out how to process all that data closest to where those cars are. Make intelligent decisions about them while at local, and then send back out instructions. What I think you're going to do is you're going to see a shift from this central model to a much more distributed model and I'm going to have to have mini data centers. So instead of having 10 mega data centers I might have 1,000 mini mega data centers that's going to make all of these things happen. I don't think a lot of people have paid attention to that architectural shift. If you're in the process of, business of selling server networks you're still thinking client-server back haul it into the giant data center next to the nuclear power plant. But it's all going to have to move a lot closer to where something, because I only care about that decision right now with the 50 cars coming down middle field and the streets that feed into it. >> But there's a bigger architecture thing that the Mobile World Congress is trying to point at, which is an ecosystem. Let me take a step back. Is Mobile Congress a relevant show, or is it becoming a CES sideshow, Biz Dev show? I mean Cy Gerli was on yesterday saying look, it's where everyone goes, who's who goes there. It's essentially a Biz Dev show that happens to have a trade show running with it. >> It's the agora, right? The Greek term for marketplace. You go there to do business with people. It's like RSA two weeks ago, right? You guys were up at RSA. It's like is it really fun to walk through 14,000 vendor booths, or is it like everybody who make decisions on buying and selling security stuff happened to be in the same two-square miles of San Francisco. I don't think that part goes away, but I do think ... >> It's a super important part. >> Yeah, but I think the architecture of who plays is going to change. The the question you've got to ask is who's going to be the Amazon of the mobile world and disrupt the network model? The network is now just something glued together with software. I mean years ago they had the same thing, it didn't really work out, that they called the cloud where I would rent my access point in London to people and I'd use their wifi. The stuff that glues it together is always much more important than the infrastructure itself. So if Mobile World Congress can be important there's going to be a track on the people actually glue all of that stuff all together. >> All right, so I've got to get your take on the business conversation, the marketplace that runs there. What are some of the conversations that you could imagine that was happening at Mobile World Congress? I know we're not there, I mean we've been seeing and hearing some of the hallway conversations. Obviously 5G's the big story. What are some of the marketplace hallway conversations or business meetings that are going on in your mind's eye if you had to make a guess on what's happening? >> What are the most important content that people like to use today? Pop quiz, do you know this? >> Yeah, video. >> Video, right? So to me, one of the conversation Netflix was having and Amazon Prime was having because they're not just waiting for you to be in your TV, to consume, right? People are consuming increasing amounts of video content on mobile devices. So I think there's the Hollywood influence or the studio or what is it? The National Association of Programming Executives, NAPE right? What you're doing, if you're a content producer you're looking for eyeballs and people to pay for it. There's nothing more ubiquitous than that piece of glass we're all carrying in front of our nose 17 hours a day. I think that's a big set of business discussions. Your partner was talking about this, is okay, is there just a dramatically different way to build this network? 5G is going to give you the promise, more is a lot of work. The physics are I'm getting a lot more bandwidth. What am I going to do with it? Well people are going to fill it up. >> There's different use cases. There's the mobility and then with dense areas. Then things that are moving at a hundred miles an hour, 50 miles and hour, planes, trains. >> I think there's an element of that. I think there's the internet of things discussion. I still think five years will take the internet whatever things, right? I call the IOWT, right, because it's like nobody's, it's not really about connecting your lightbulb to the network, but there are a lot of things in motion that people want to better manage. >> We just introduced a research agenda this morning with Peter Burroughs, IOT, IOT people. Things and people. >> Have you gone back to the Furrier family and counted up how many IP addresses you have as a family? The Cohen family has 111 IP addresses. >> John: IPV6 for you. (laughing) >> Yeah, we need a gateway man for the network router that comes into the house. But that is actually ... >> We just bought the new Google access points, the ones that have that little mesh instrument. >> But yes, I'm just kidding you. So there are a lot of things. The other thing is that there is the interaction of the mobile, actually I think Google is a great example. If you think about Google produces the wifi at Starbucks and a lot of retail. They're interested in what's going on. Today we think about the mobile network as a mobile network and we think about the broadband fixed network as a different network. And like the interplay between those two, it's like there's a lot more than Foursquare and Facebook. >> Sure fibers of the home is very capital intensive. We knew it would cost us to do a truck roll, the trench, and connect to the home which we did. Overlay wireless, fixed wireless would be fantastic there. >> So you have the overlay and then when I know that you're coming by, right, because the fixed network is now actually a wifi network, I mean it has wires. So you have the mobile network, you have the wifi network, and you have people moving in and out of those environments. I think I'm seeing a lot of companies getting funded. People actually trying to say how do we monetize that experience? This is obviously was Foursquare and those other location guys started years ago. I mean, look at something like Wayce. Wayce went from a GPS app with social interaction to a car sharing, ride sharing going after Uber, this Google company. >> Well we had an NTD Delcomo VC, Chris McCoo, talk about mapping as a huge app for these telcos. >> Mapping is the killer app. Almost everything on your phone local works off a map which, by the way, is paid for by us as taxpayers. The GPS comes from the United States government. It's free. The most powerful utility in mobility is location, and GPS is free. >> All right, final question. Bumper sticker from Mobile World Congress from your perspective this year. Yawner, golf clap, or standing ovation? >> I say golf clap because more bandwidth is good and I think there's an insatiable demand. We're a long way from ending the bandwidth drought, and there is a bandwidth drought. I think the other thing is there aren't camps anymore. I think people will coalesce very quickly on 5G. So good time to be in that business. One hand clap maybe. >> Yeah, not a hole in one. Certainly more golf analogies coming on theCube. Alan Cohen here, Chief Commercial Officer, Illumio. We didn't get to security, but we'll do that next time. I'm John Furrier, I'll be right back with more Mobile World Congress coverage after this short break. (upbeat instrumental music)

(upbeat music) >> Narrator: Live from Palo Alto. It's theCUBE, covering Women Transforming Technology 2017. Brought to you by VMware. >> Welcome back to theCUBE's coverage of the Woman Transforming Technology conference held at VMware here in beautiful Palo Alto, California. I'm your host, Rebecca Knight. I am joined by Nicola Acutt, she is the vice president of sustainability strategy here at VMware. Nicola, thanks so much for joining us. >> My pleasure, Rebecca, it's great to be with you. >> So I want to start out by talking to you about how VMware is thinking differently about sustainability and devising its strategy. >> Yeah, great. Well, you know, sustainability is something that's not really new at VMware. We've been doing sustainability for many many years, but what is new is we've rethought our strategy and we've rethought how we frame and think about it. And that starts with the business and what we actually do in the world. This is what's really exciting to me, you know. We've done a lot of very responsible things, from the design of the campus here in Palo Alto, which you've seen, our LEED certified buildings and the work that we do in philanthropy and community. And now what we're doing is pulling it all together under this concept of collective impact, and for us, that's about the sum of the parts, and really about ultimately how we leave a legacy and impact as a business, but starting with what we do. >> And I think that that's... What you're saying is so important in this sense of, for corporate social responsibility, that has to start with a business case of why you're doing this, but then there's also this legacy part to it too. So talk a little bit about what you're thinking there. >> Yeah, well, glad you asked, it's a large part of why we have, as we rethought sustainability, we put this role in our office of the CTO. And for that exact reason, because it's about, you know, what is the legacy we create? Not just in our industry, but for the world. So we talk about, you know, my role, in the office of the CTO, it's very much about helping to inspire engineering for impact, so that we, you know, our mission is about creating not just the most innovative software in the world, but for the world. So we think about the impact, the legacy impact VMware has had in the data center, which is one thing I can talk about, you know, the environmental impact of that. But then also looking forward at how we enable access to technology, the platforms really to change the world, whether it's providing solutions for farmers in rural parts of India of Africa or down the street. It's this view of how does VMware's technology help create a better place, a better world. >> Well, just the fact that you were in the office of the CTO is such a dramatic change from so many companies. I mean, when you think about the bad rap that sustainability gets, corporate green washing and things like that, but to put it at the core of VMware's business, that is a very dramatic difference. What was the impetus for that? >> That's a great question. You know, I think before we were talking about, I've been at VMware for several years, and been on a journey myself and what we do, and started working in the foundation. And I've moved into this role in the CTO office. And part of that was about how we came to this perspective of what is the impact that we want to create, and how do we want to go beyond sustainability to collective impact, and that was about this idea of net positive. How do we create a legacy where the sum of the parts are greater than the pieces. And I'll tell you a little story, you know, when I first joined VMware, I remember people describing the impact from an efficiency point of view in the data center, and I was always fascinated by that question. And finally last year we did a piece of work together with IDC to actually quantify that impact, and so for the first time, we were able to get the data and look at the legacy impact that we've had, and the numbers are astounding. When you look at what VMware and our customers have done over the last 13 years, it's the equivalent of avoiding 340 million metric tons of CO2 going into the atmosphere. That's a pretty astounding number, right? So what does that mean? It's the equivalent, we worked it out, it's the equivalent of powering 43 million homes, which is about 43% of US households for a year. >> Rebecca: A year? >> For a year. Isn't that incredible? >> Yes. >> And it was that, so that piece of work was really what helped shift this perspective and our collective realization that, yes, we can do all these great things, from social responsibility, environmental responsibility, in terms of how we run our business and how we treat our people in communities, but probably the most important and powerful impact that we can have is how we use our technology, and the impact that we have on the lives that we change as a result through our technology. >> You are in a panel here at the Women Transforming Technology conference that's all about design thinking. And it's about design thinking in terms of leadership, and your approach to management. But also, your approach to your job and devising, in your case, a sustainability strategy. Talk about design thinking and how it's changed the way you go about things. >> Right, I'm personally a big fan of design thinking, and it's one of those methodologies or experiences, where when you experience it, you really see the power of it. And when we were working in the foundation, the beginning of this work, we pulled in some design thinking experts to help us just frame a problem that we were trying to solve. And that experience really resonated with me, and it stuck with me, and these ideas of how you go from brainstorm big picture thinking to actually impact and outcome. >> So just break it down for our viewers, design thinking, elevator pitch, what is it? >> Sure. So it starts with sort of four key principles. It's about empathy, starting with empathy. Thinking about the problem that you're trying to solve. Thirdly, implementing, so rapid prototyping and then testing again, so lots of testing, before you come to the impact and the outcome. And it's this iterative process, kind of building something, testing it, going back and building it again. But I think the biggest takeaway for me and what I learned about it that I applied to leadership is this idea of empathy. And I think we often think of empathy as feeling sorry for, but it's not, it's really to me, empathy is radical questioning and radically asking yourself, challenging your assumptions and trying to see what others see, and I think it's that, that shift of mindset that's so powerful, and for me, applying that to my work shows up all the time, whether I'm in a meeting, whether I am running a team, whether we were doing the strategy for sustainability, it's constantly asking the questions, asking why. I think that for me is the thing that I really appreciate about design thinking and I try to bring it to everything that I do. >> From a product standpoint, the empathy is for the end user, for the customer, the person who is going to be using the product. But when it comes to creating a sustainability strategy, who are you empathizing with? >> Yeah, that's a... So, you know, again, that this word empathy, I think, is-- >> Rebecca: It trips people up! >> Yeah, because we think it means feeling sorry for, right? But no, it's about seeing the other. Because what we were doing is taking this much wider angle view on sustainability, in other words, it's not about the real estate organization or about turning off the lights in our operations, it's about the whole business. So for me, empathy is about trying to step into other people's shoes, and working with stakeholders across the business, so not just in our real estate operations, but in the business, in HR, in legal, across all of the functions. And asking questions and listening to stakeholders, and really trying to understand their point of view on the business so that I can connect what they care about to, ultimately, the sustainability strategy. >> Talk about design thinking in an approach to leadership. Particularly in light of why we're here, Women Transforming Technology. How does it work when you're on a team? >> Yeah. >> You know, I think it starts with that individual, it starts with empathy always, and the why, and really trying to understand others, the people that you're working with. When I say empathy, I think about trying to see others. And part of seeing others is knowing what their strengths are and knowing what they're uniquely placed to do. So in working with the team, I think that is a great leadership skill, is to really know and understand your team, to build a team that functions really well together. That skill, I think, is irreplaceable in leadership. >> And what about for the person who's being led? So the person who's not quite the manager yet, maybe earlier in her career. How can she use design thinking and empathize both with her colleagues and her customers, but also perhaps her manager too, in terms of not only moving the product forward, but also moving her career forward? >> Yeah, you know, the speaker in the panel we just listened to, Lynn Christensen, talked about the importance of understanding the needs of others and how powerful that can be when you're trying to get work done and have an influence. So she gave an example which I loved about, often where we're trying to prove ourselves, right, especially as young women in the workforce. And there is an important element of confidence and all of those good things that we're talking about here, but I think the other element of what she was getting at is understanding when you're giving a presentation or you're talking about a product or an idea, to think about who you're talking to. And to make sure that, when you think about your message and your presentation, to be designing your talk, to use design thinking, designing your talk with that person in mind, and that can be a really powerful way to have yourself seen as a potential or as a future leader. >> In terms of how you are thinking about VMware sustainability strategy and the way other companies are, what, and I don't want this to turn into a school where other companies should follow VMware's lead, but at the same time, what would your advice be to other companies that are seeing what you're doing and, for example, putting sustainability in the office of the CTO? What other differences in terms of how you approach sustainability could other companies mimic, for the good of all of us? >> For the good of all, absolutely. I think that's a really important question because, you know, I think there's a role for corporate social responsibility and philanthropy and sustainability, and I think every company is unique, depending on their market and their industry, but ultimately, when we think about trying to create a positive impact on the world, and frankly, to address some of the world's most pressing challenges, it really does require the combination of what I talk about, this collective impact, and the skills and competencies a business can bring to that really are in what they offer to the world, and often that isn't necessarily just philanthropy, it could be a combination of those things. My perspective on this is really thinking about where your unique competencies as a company and a business overlap with the world's great needs? And finding that sweet spot is where I believe companies can have the biggest impact. >> One of the other elements of sustainability strategy is making sure that companies are committed to diversity and inclusion, and is there a way that you're working on that here at VMware as part of the sustainability strategy, or is that more of an HR function? I mean, how does it all work together? >> Yeah, you know, the work that we're doing at VMware on diversity and inclusion is very much part of this ethos of collective impact, because it's really pulling and connecting these elements of the work that we're doing inside the company, in different departments, into this legacy of what I call net positive, the net positive impact. So diversity and inclusion is part of that in a really important way, and this is what this conference today is really all about, bringing a community of women together who are passionate and committed to making an impact in technology, and leaving that positive legacy. And so for me personally, today's really quite poignant, actually. I'm a mom, and I'm also the daughter of a farmer, and I'm going to get choked up. (laughter) And a school teacher. >> And you're going to meet Gloria Steinem later today, Nicola. I don't know if I can pile on, but-- >> Well, this is what's so poignant for me, is I grew up in the shadow of apartheid, and I think, and a very patriarchal society by my mom, was very influenced by Gloria Steinem. And her fierceness about education for girls was really ultimately, I think, had an impact on me not only finishing high school, but going on to get a four year degree and a PhD, and ultimately, you know, South African woman finding herself in Silicon Valley today. >> Right. >> Is a testament to Gloria and to my mom, and all the women who have forged this path for us. And so today is an opportunity, I think, in some ways to say thank you, me personally to say thank you to Gloria and those women who have forged the path, but I think today's also important in the recognition that there is this community that is growing, a community of women who are having an impact in technology. But I think the other element is that we realize that our work is not done. And that's what today is all about, is this community of women who are carrying the torch because our work isn't done. >> So yes, I mean, there is that balance. There's this gratitude, on one hand, of our forebears and what they've sacrificed for us to be where we are. But then at the other hand, particularly as you said, you grew up in the shadow of apartheid, and now you have Donald Trump as president, and we're hearing a lot of... (laughs) Of scary notions coming from the White House right now. So there is also this other side to it, which is feeling anger and a real mobilization to rise up. >> Yeah, Kara was really eloquent about that this morning, and I think it's complex, right? This is multiple facets and multiple forces at play. But at the end of the day, I think it is really really important to be clear about our values, and to be clear about the impact that we want to leave in the world, and finding a community of people around which to focus our energies. >> Perfect words to end on. Nicola Acutt, thank you so much for joining us. >> My pleasure! >> I'm your host, Rebecca Knight, we'll return with theCUBE's coverage of Women Transforming Technology here at VMware. (upbeat music) (ominous music)

>> We're here, about to go live, here in a selfie on the pre Silicon Valley Friday Show, about to go live for our show, for some live Friday. We've got a great lineup, it's on my Twitter. Donald Trump and all his viral tweets and now there's an algorithm out there that creates a shorting stock called Trump and Dump, we're going to be talking to the inventor of that new app. Bunch of other great stuff, controversy around Silicon Valley and Intel, controversy on Google, and we'll be watching a great show, well, hopefully you'll be watching. >> Male Announcer: Live, from Cube headquarters in Palo Alto, California it's the Silicon Valley Friday Show, with John Furrier. (serene techno music) >> Hello, everyone, and welcome to the Silicon Valley Friday Show, I'm John Furrier, we are here live in Palo Alto, California for the Silicon Valley Friday Show every Friday morning we broadcast what's going on in Silicon Valley, what's going on in the streets, we call up people and find out what's going on, this show we've got a great lineup. We're going to talk about, I'll say, the news, Twitter, but we've got this fun segment where we have an algorithm, a bot, an AI bot that goes out there and takes all of Donald Trump's tweets and creates a shorting of the stock and creates making money, apparently, Donald Trump's tweets do move the market. We're going to talk about Snapchat, Snap Inc's IPO, and a refiling and some controversy going around that. Also, controversy around Intel Corporation that just announced a fab plant in Arizona and the CEO is in the White House making the announcement, giving the impression that Donald Trump was all behind this, turns out the CEO is a Republican and supports Donald Trump, when apparently this has been in the works for multiple years, so, not sure that's going to be a game changer for Trump but certainly Intel's taking advantage of the schmooze factor and the PR stunt that has people in Silicon Valley up in arms. Obviously, Intel is pro-immigration, bringing people in, obviously, Andy Grove was an immigrant, legend of Intel. And we have also tons of stuff going on, we're going to preview Mobile World Congress the big show in Barcelona at the end of the month. We're doing a two day special here, live in Pal Alto, we're going to do a special, new Silicon Valley version of Mobile World Congress. We'll give you a preview, we're going to talk to some analysts. And also, the fake news, fake accuracy, and all the stuff that's going on, what is fake news? What is inaccurate news? Is there a difference? Does it matter? It certainly does, we have an opinion on that so, great show lineup. First, is actually Twitter earnings are out and they kind of missed and hit their up on the monthly active uniques by two million people. A total of I think 300 million people are using the number here, just on my notes here says, that there are up to 319 million active, monthly active users. And of course, Trump has been taking advantage of Twitter and the Trump bump did not happen for Twitter, although some say Trump kept it alive. But Trump is using Twitter. And he's been actively on Twitter and is causing a lot of people, we've talked about it many times on the show, but the funniest thing that we've seen, and probably the coolest thing that's interesting is that there's an entrepreneur out there, an agency guy named Brian, Ben Gaddis, I'm sorry, president of T3. He's a branding guy, created viral videos on NPR, all over the news, went viral, he created an AI chatbot that essentially takes Donald Trump's tweets, analyzes any company mentioned and then instantly shorts the stock of that company. And apparently it's working, so we're going to take a look at that. We're also going to talk to him and find out what's going on. We're going to have Ben Rosenbaum on, we're going to have someone from Intel on, we have a lot of great guests, so let's take a look at this clip of the Trump and Dump and then we're going to talk to Ben right after. >> Announcer: T3 noticed something interesting about Twitter lately, particularly when this guy gets hold of it. Anytime a company mentions moving to Mexico or overseas or just doing something bad, he's on it, he tweets, the stock tanks. Tweet, tank. Tweet, tank. Tweet, tank. Everyone's talking about how to make sense of all this. T3 thought the unpredictability of it created a real opportunity. Meet the Trump and Dump automated trading platform. Trump and Dump is a bot powered by a complex algorithm that helps us short stocks ahead of the market. Here's how. Every time he tweets, the bot analyzes the tweet to see if a publicly traded company is mentioned. Then, the algorithm runs an instant sentiment analysis of the tweet in less than 20 milliseconds. It figures, positive or negative. A negative tweet triggers the bot to short the stock. Like earlier this month, his Toyota tweet immediately tanked the stock. But the Trump and Dump bot was out ahead of the market. It shorted the second after his tweet. As the stock tanked, we closed our short and we made a profit, huge profit. Oh, and we donated our profits here. So now, when President Trump tweets, we save a puppy. It's the Trump and Dump automated trading platform. Twitter monitoring, sentiment analysis, complex algorithms, real time stock trades. All fully automated, all in milliseconds. And all for a good cause. From your friends at T3. >> Okay, we're back here in Silicon Valley Friday Show, I'm John Furrier and you just saw the Trump and Dump, Trump and Dump video and the creator, that is Ben Gaddis on the phone, president of T3, a privately owned think tank focused on branding. Ben, thanks for joining us today. >> Thanks for having me, John. Excited to talk with you. >> So, big news NPR had on their page, which had the embed on there and it went viral. Great video, but first talk about the motivation, what's going on behind this video? This is very cool, explain to the folks out there what this Trump and Dump video is about, why did you create it, and how does it work? >> So, we had just like, I think, almost everyone in the United States, we were having a conversation about what do you do with the fact that President Trump is tweeting and tweeting about these companies, and in many cases negatively. So we saw articles talking about it and actually one day a guy in our New York office came up with this idea that we ought to follow those tweets in real time and if he mentions a publicly traded company negatively, short the stock. And so, we kicked that idea around over slack and in about 30 minutes we had an idea for the platform. And about two days later one of our engineers had actually built it. And so what the platform does is it's really actually simple yet complex. It listens to every tweet that the president puts out and then it does two things: it determines if there's a publicly traded company mentioned and if there is, and it actually does sentiment analysis in real time, so, in about 20 milliseconds, it can tell if the tweet is positive or negative. If it's negative, we've seen the stocks typically go down and we short sell that stock. And so, the profit that we develop from that, then we donate it to the ASPCA and then hopefully we save a puppy or two in the process. >> Yeah, and that's key, I think that's one thing I liked about this was you weren't arbitraging, you weren't like a real time seller like these finance guys on Wall Street, which by the way, have all these complex trading algorithms. Yours is very specific, the variables are basically Donald Trump, public company, and he tends to be kind of a negative Tweeter so, mostly to do with moving to Mexico or some sort of you know, slam or bullying kind of Tweet he does. And which moves the market, and this is interesting though, because you're teasing out something clever and cool on the AI kind of side of life and you know, some sort of semantic bot that essentially looks at some context and looks at the impact. But this is kind of the real world we're living in now, these kinds of statements from a president of the United States, or anyone who's in a position of authority, literally moves the market, so you're not doing it to make money you're doing it to prove a point which is that the responsibility here is all about getting exposed in the sense that you got to be careful of what you say on Twitter when you're the president of the United States. I mean, if it was me saying it, I mean, I'm not going to move the market but certainly, you know, the press who impact large groups of people and certainly the president does that so, did you guys have that in mind when you were thinking about this? >> Well, we did. I mean, I think, you know, our goal was, this is what we do for a living, we help big brands monitor all their digital presences and build digital strategy. So, we're already monitoring sentiment around Twitter and around social platforms so, it's pretty core to what we do. But we're also looking at things that are happening in pop culture and societally, what kind of impact social might have on business. And so, the fact that we're able to take an action and deliver a social action, and deliver a real business outcome is pretty core to what we do. What's different here and what's so unique is the fact that we've never really seen things like, policy, whether it's monetary policy, or just general policy be distributed through one platform like Twitter and have such a big impact. So, we think it's kind of a societal shift that is sort of the new norm. That, I don't know that if everyone has figured out what to do with yet and so our goal is to experiment and decide one, can we consume the information fast enough to take an action? And then how do we build through AI platforms that allow us to be smarter in the world that we're living in today that is very, very unpredictable. >> We have Ben Gaddis, as president of T3 also part of the group that did the Trump and Dump video but he brings out a great point about using data and looking at the collective impact of information in real time. And this interesting, I was looking at some of the impact last night in this and Nordstrom's had a tweet about Ivanka Trump and apparently Nordstrom's stock is up so, is there a flaw in the algorithm here? What's the take on that? Because in a way, that's the reverse of the bullying, he's defensive on that one so, is there a sentiment of him being more offensive or defensive? >> It's pretty standard. So, we're starting to see a pattern. So, what happens is that actually, the Nordstrom stock actually did go down right after the tweet. And so, we saw that that's a pattern that's typical when the president tweets negatively. When he tweets positively, we don't see that much of a bump. When he tweets negatively, typically the stock drops anywhere between one and four percent, sometimes even greater than that. But it rebounds very quickly. So, a big part of what we're trying to do with the bot and the algorithm is understand how long do we hold, and what is that timeframe before people actually come back to more of a rational state and start to buy back a stock that's valuable. Now what's really interesting, you mentioned, you know, the algorithm and whether there's a flaw in it, we learned something very interesting yesterday about Nordstrom's. So, the president tweeted and in that tweet he talked negatively about Nordstrom's, but he also talked very positively about his daughter, Ivanka. And so, the algorithm actually picked up that tweet and registered it as 61.5% positive. So, it didn't trade. So, we actually got kind of lucky on that one. >> You bring up a good point, and this is something that I want to get your thoughts on. You know, we live in an era of fake news, and it's just Snapchat just filed IPO filing to make a change in their filing to show that Amazon is going to be a billion dollar partner as well, which wasn't in the filing. So, there's a line between pure, fake news, which is essentially just made up stuff, and inaccurate news, so what you're kind of pointing out is a new mechanism to take advantage of the collective intelligence of real time information. And so this is kind of a new concept in the media business. And brands, who used to advertise with big media companies, are now involved in this so, as someone who's, you know, an architect for brand and understanding data, how are brands becoming more data driven? >> Well, I think what brands are realizing is that they live in this world that is more real time, that's such a buzzword. But more real time than I think they even thought would ever be possible, the fact that someone like the president can tweet and have literally cut off billions of dollars in market cap value in a moment's time is something that they have to figure out. So, I think the first thing is having the tools in place to actually monitor and understand, and then having a plan in place to react to things that are really quite unpredictable. So, not only, I don't think that you can have a plan for everything but you have to at least have a plan for understanding how you get legal approval on a response. Who would be responsible for that. You know, who do you work with, either through partners or inside of your organization to, you know, to be able to respond to something when you need to get back in promoting, you know, minutes versus hours. The thing that we don't hear people talk near as much about is, our goal was to see how close we can get to the information so we can zoom the data from Twitter's fire hose, so we get it hopefully when everyone else does. And then our goal is to take an action on that quicker than anybody else, and that delta is where we'll make a profit. What's really interesting to me is that the only person closer to that information than the president is Twitter. >> Ben, great to have you on, appreciate it, love to get you back on as a guest. We love to talk about is our model here, it's looking angle, it's extracting the signal from the noise. And certainly the game is changing, you're working with brands and the old model of ad agencies, this is a topic we love to cover here, the old ad agency model's certainly becoming much more platform oriented with data, these real time tools really super valuable, having a listening engine, having some actionable mechanisms to go out there and be part of and influence the conversation with information. Seems to be a good trend that you guys are really riding. Love to have you back on. >> We'd love to be back on, and thanks for the time, we enjoyed it. >> That was Ben Gaddis, who's the president of T3, the firm behind the Trump and Dump, but more importantly highlighting a really big megatrend which is the use of data, understanding its impact, having some analysis, and trying to figure out what that means for people. Be right back with more after this short break. >> [Female Announcer] Why wait for the future? The next evolution in IT infrastructure is happening now. 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Unify your data center with Cisco UCS. >> Male Announcer: You're listening to Cube Fridays, brought to you by Silicon Angle Media. Now, here's John Furrier. >> Okay, welcome back to the Silicon Valley Friday Show, I'm John Furrier, great show today. Our next guest is Dan Rosenbaum, who is the editor of Wearable Tech Insider, Media Probe, been around the industry for years, been a journalist, reporter, editor, variety through his career, knows the tech business certainly on the infrastructure level with the device. Okay, welcome to the show, great to have you, thanks for being available, he's in New York so, Palo Alto, New York connection here. >> Yeah, we got about maybe an hour or so of snow left. But you know, it's February, it does this in New York. >> Great to have you on, we were just talking on our earlier segment before the break about the guy who created the Trump and Dump video which is a chat bot that goes out, looks at Donald Trump's tweets, and then identifies if there's a public company, shorts the stock, and donates to save puppies. So, they're not doing it for profit but they're, you know, they have their intelligence and listening, and we were just riffing on the concept of that there's been fake news and inaccuracy and a new dynamic that's impacting the media business, which is real time information, data, and certainly the world that you're in with Wearables, this new internet of things, which is hard to understand for most common people but it's really the AI new connected network. It's really impacting things, certainly how people get information, how fast they create data, and it's changing the industry landscape certainly from a media standpoint. You get on TV and the mainstream... >> It really is. When the press secretary stood up and said that that the administration sees the media as the adversary, you know, everyone got sort of upset about it but you know, in a lot of ways it's true. That's a fitting way that the media and any administration, any power structure should be facing each other. There's been such a hop in the media to report the truth as best as it can determine and as accurately as it can. Now, there are differing impacts depending on which sphere you're in, and in politics there's always going to be sort of the tension, well, we think, we look at these facts and we think that and we look at those facts and think the other. >> I think ultimately this new formats that are developing really comes back down to I would add to that as trust. This is a collision course of a complete re-transformation of the media landscape and technology's at the heart of it and, you know, you're in the middle of it. With Wearables, you're seeing that at the edge of the network, these are new phenomenons. What's your take on this new trend of, you know, of computing? And I'm not saying singularity, as Ray Kurzweil would say, but you know, ultimately, it is going down to the point now where it's on your body, potentially in your body, but this is a new form of connection. What's your thoughts on this? >> 12 years ago, I was at the party where they launched MSNBC, and I ran into Andrew Lack, who's the CEO of MSNBC at the time, and asked him, why NBC was cutting this collaboration deal with Microsoft, because remember that's how it was started, when there wasn't any means for the news to go upwards. There was no way for citizen news gathering to be represented on this Microsoft-NBC co-venture. And Andrew actually looked down his nose at me, sneered, and goes, "Who in the world would want "people to be contributing to the news?" Well, now we're 10 or 12 years later and as you say, Snapchat and Skype, and all these mobile technologies have just transformed how people get their information, because they're now witnesses, and there are witnesses everywhere. One of the big transformations in, or about wearable technology is that computing infrastructure has moved from islands of stand-alone, massive computers, to networks of massive computers to stand-alone PCs, to networks to PCs, and now the model for computing and communication is the personal area network, the idea of sensor-based technologies is going to change, or already has changed the world of news, it's in the process of changing the world of medicine, it's in the process of changing the way we build houses, the construction business, with the smartphone, the way that we build and relate to cities. >> So, we're here with Dan Rosenbaum, he's the editor of Wearable Tech Insider, but more importantly he's been a tech insider in media going way back, he's seen the cycles of innovation. Love your point about the flowing conversations coming out of the MSNBC kind of executive in the old broadcast models. I mean, I have four kids, my oldest is 21, they don't use, they don't really care about cable TV anymore so, you know, this is now a new narrative so, those executives that are making those comments are either retired or will be dinosaurs. You now have Amazon, you have Netflix, you have, you know, folks, trying to look at this internet TV model where it's fully synchronous so, now you have collective intelligence of vertical markets that have real time ability to surface information up to bigger outlets. So, this collective media intelligence is happening, and it's all being driven by mobile technology. And with that being said, you know, you're in the business, we've got Mobile World Congress coming up, what is that show turning into? Because it's not about the mobile device anymore, the iPhone's 10 years old, that's a game changer. It's growing up. The impact of mobile is now beyond the device. >> Mobile World Congress is all about wireless infrastructure. It goes from everything from a one millimeter square sensor to the national grade wireless network. But what's really cool about Mobile World is that it's the place where communications or telecom ministers get together with infrastructure carriers, get together with the hardware manufacturers, and they hash out the problems that won't resolve five, 10, 15 years down the road in new products and new services. This is the place where everyone comes together. The back rooms at Mobile World Congress are the hottest place, and the back rooms are the places that you can't get into. >> We're here with Dan Rosenbaum, who's an industry veteran, also in the media frontlines in wireless technology, I mean, wearable technology and among other things, good view of the landscape. Final point, I want to just get a quick comment from ya, I was watching on Facebook, you had a great post around Facebook is feeding you an ad for a $19 million staid-in, let's feel Connecticut. And then you said, "One of us as the wrong idea, so you must be really loaded." This retargeting bullshit on Facebook is just ridiculous, I mean, come on, this bad, big data, isn't it? >> (laughing) Yeah, I mean, the boast of Google is that they want to make, you know, ads so relevant that they look like content. Well, in the process to getting there, there's going to be misses. You know, if this real estate agent decides that they want to hit everyone in my zip code, or everyone in my county, or whatever, and they wanted pay the five dollars so that I'd see that video, god bless 'em, let 'em do it, it's not going to make me, it's not going to overcome any kind of sales resistance. I don't know that I wanted to move up to Litchfield, Connecticut anyway, but if I did, sure, a $19 million house would be really nice. >> You could take a chopper into Manhattan, you know, just drop into Manhattan with a helicopter. >> They would want to take it. >> Alright, we can always take the helicopter in from Litchfield, you know, right at the top of your building. Dan, thanks so much for spending the time, really appreciate it, and we'll have to bring, circle back with you on our two day Mobile World Congress special in Palo Alto we'll be doing, so appreciate the time. Thanks a lot. >> Love to do it, thanks for having me. >> Okay, that was Dan Rosenbaum, really talking about, going down in the weeds a little bit but really more importantly, this Mobile World Congress, what's going on with this new trend, digital transformation really is about the impact to the consumer. And what's going on Silicon Valley right now is there's some hardcore tech that is changing the game from what we used to know as a device. The iPhone's only 10 years old, yet 10 years old, before the iPhone, essentially it was a phone, you made phone calls, maybe surf the Web through some bad browser and do text messages. That's now completely transforming, not just the device, it's the platform, so what we're going to see is new things that are happening and the tell signs are there. Self driving cars, autonomous vehicles, drones delivering packages from Amazon, a completely new, digitized world is coming. This is the real trend and we're going to have an executive from Intel on next to tell us kind of what's going on because Intel is at the ground zero of the innovation with Moore's Law and the integrated circuit. But they're bringing their entire Intel inside as a global platform, and this is really going to be driven through a ton of 5G, a new technology so, we're going to dig in on that, and we're going to have a call-in from her, she's going to be coming in from Oregon and again, we're going to get down to the engineers, the people making the chips under the hood and bringing that to you here on the Silicon Valley Friday Show, I'm John Furrier, we'll be right back after this short break. >> My name is Dave Vellante, and I'm a long-time industry analyst. So, when you're as old as I am you've seen a lot of transitions. Everybody talks about industry cycles and waves, I've seen many, many waves. I've seen a lot of industry executives and I'm a little bit of an industry historian. When you interview many thousands of people, probably five or six thousand people as I have over the last half of the decade, you get to interact with a lot of people's knowledge. And you begin to develop patterns so, that's sort of what I bring is an ability to catalyze a conversation and, you know, share that knowledge with others in the community. Our philosophy is everybody is an expert at something, everybody's passionate about something and has real deep knowledge about that something. Well, we want to focus in on that area and extract that knowledge and share with our communities. This is Dave Vellante, and thanks for watching the Cube. (serene techno music) >> Male Announcer: You're listening to the Silicon Valley Friday Show with John Furrier. >> Okay, welcome back to the Silicon Valley Friday Show, I'm John Furrier, we're here in Palo Alto for this Friday Show, we're going to go under the hood and get into some technology impact around what's going on in the industry, specifically kind of as a teaser for Mobile World Congress at the end of the month, it's a big show in Barcelona, Spain where the whole mobile and infrastructure industry comes together, it's kind of like CES, Consumer Electronics Show, in the mobile world but it's evolved in a big way and it's certainly impacting everyone in the industry and all consumers and businesses. This is Intel's Lynn Comp and this is Intel who, we know about Moore's Law, we know all about the chips that make everything happen, Intel has been the engine of innovation of the PC revolutions, it's been the engine of innovation now in the Cloud and as Intel looks at the next generation, they are the key player in this transformation that we are seeing with AI, wearable computers, internet of things, self driving cars, AI, this is all happening, new stuff's going on. Lynn, welcome to the program. >> Thank you so much, it's great to be here. >> So, you're up in Oregon, thanks for taking the time to allow us to talk via phone, appreciate it. Obviously, Intel, we've been following you guys, and I've been a big fan since 1987, when I almost worked there right out of college. Went to Hewlett Packard instead, but that's a different story but, great, great innovation over the years, Intel has been the bell weather in the tech industry, been a big part of the massive change. But now, as you look at the next generation, I mean, I have four kids and they don't watch cable TV, they don't like, they don't do the things that we used to do, they're on the mobile phone all the time. And the iPhone is now 10 years old as of this year, this early winter part of this, Steve Jobs announced it 10 years ago. And what a change has it been, it's moved from telephone calls to a computer that happens to have software that makes telephone calls. This is a game changer. But now it seems that Mobile World Congress has changed from being a telephone centric, voice centric, phone device centric show to a software show, it seems to be that software is eating the world just like CES is turning into an automotive show. What is Mobile World Congress turning into? What's the preview from Intel's perspective? >> You know, it's a really fascinating question because many years ago, you would only see a bunch of very, very intense base station design, you know, it was very, very oriented around wireless, wireless technology, and radios, and those are really important because they're an engine of fabric that you can build capabilities onto. But last year, just as a reference point for how much it's changed, we have Facebook giving one of the main keynotes. And they're known for their software, they're known for social media, and so you'll see Facebook and Google with an exhibitor there last year as well, so you're not just seeing suppliers into the traditional wireless industry for equipment and the operators who are the purchaser, you're seeing many, many different players show up very much like how you said CES has a lot of automotives there now. >> Yeah, we've seen a lot of revolutions in the computer industry, Intel created a revolution called the Computer Revolution, the PC Revolution, and then it became kind of an evolution, that seems to be the big trends you see, that cycle. But it seems now that we are, kind of been doing the evolution of mobile computing, and my phone gets better, 10 years down to the iPhone, 3G, 4G, LT, okay, I want more bandwidth, of course, but is there a revolution? Where can you point to? Where is the revolution, versus just standard evolutionary kind of trends? Is there something coming out of this that we're going to see? >> That is such a great question because when you look at the first digital wireless technologies that came out and then you had 2G, and 3G, and 4G, those really were evolutionary. And what we're finding with 5G that I believe is going to be a huge theme at Mobile World Congress this year is it is a completely different ballgame, I would say it's more of an inflection point or very revolutionary. And there's a couple reasons for that, both tie up in how ITU is specifying the use cases, it's licensed and unlicensed spectrum which is kind of unusual for how it's been done if you will get 2, 3, and 4G. The other thing that's really interesting about 5G, that it's an inflection point is there's a lot more intelligence assumed in the network and it helps address some of the challenges I think that the industry is seeing a different industry with some of the IoT promise we'll roll out where some of the macro design networks that we'd seen in the past, the ability to have the right latency, the right bandwidth, and the right cost matched to the needs of a specific IoT use case was much more limited in the past and I think we'll see a lot more opportunities moving forward. >> Great, great stuff, we're with Lynn Comp with the Network Platforms Group at Intel. You know, you bring up some, I like the way you're going with this, there's so much like, impact to society going on with these big, big trends. But also I was just having a conversation with some young folks here in Palo Alto, high school kids and some college kids and they're all jazzed up about AI, you can almost see the... I don't want to say addiction but fascination and intoxication with technology. And there's some real hardcore good tech going on here, could you just share your thoughts on, you know, what are some of those things that are going to, 'cause I mean, 5G to wireless, I get that, but I mean, you know, these kids that we talked to and folks that are in the next generation, they love the autonomous vehicles. But sometimes I can't get a phone signal, how are cars going to talk to each other? I mean, how does this, I mean, you've got to pull this together. And these kids are like, and it's into these new careers. What's your thoughts on what are some of the game changing tech challenges that are coming out of this? >> Let's just start with something that was a great example this year 'cause I think I have kids a similar age. And I had been skeptical of things like even just virtual reality, a augmented or virtual reality. And then we had this phenomena last summer that really was just a hint, it wasn't really augmented reality, but it was a hint of the demand that could be met by it and it's Pokemon Go. And so, an example with that, I mean, it really wasn't asking a significantly higher amount of data off the network, but it did change the use profile for many of the coms service providers and many of the networks where they realized I actually have to change the architecture, not just of what's at the edge but in my core network, to be more responsive and flexible, you are going to see something even more so with autonomous driving, even if it's just driver assist. And similar to how the auto pilot evolution happened, you're still going to have these usage patterns where people have too many demands, too much information coming at them, they do want that assistance, or they do want that augmented experience to interact with a brand, and it's going to really stress the network and there's going to have to be a lot of innovation about where some of these capabilities are placed and how much intelligence is close to the user as opposed to just a radio, probably going to need a lot more analytics and a lot more machine learning capabilities there as well. >> We had a segment earlier in the show, it was the entrepreneur who created the Trump and Dump chat bot that would go out and read Donald Trump's tweets and then short all public companies that were mentioned because the trend is, they would do that, but this is an example of some of these chat bots and some of this automation that's going on and it kind of brings the question up to some of the technology challenges that we're looking out at the landscape that we're discussing is the role of data really is a big deal and software and data now have an interaction play where you got to move data around the networks, networks are now ubiquitous, networks are now on people, networks are now in cars, networks are now part of all this, I won't say unstructured networks, but omni-connected fabric. So, data can really change what looks like an optimal architecture to a failed one, if you don't think about it properly. So, how do you guys at Intel think about the role of data? I mean, how do you build the new chips and how do you look at the landscape? And it must be a big consideration, what's your thoughts about the role of data? Because it can happen at any time, a tsunami of data could hit anything. >> Right, the tsunami of data. So for us, it's any challenge, and this is just in Intel's DNA, historically, we'll get challenges as opportunities because we love to solve these really big problems. And so, when you're talking about data moving around a network you're talking about transformation of the network. We've been having a lot of discussions with operators where they see the data tsunami, they're already seeing it, and they realized, I have got to reconfigure the architecture of my network to leverage these technologies and these capabilities in a way that's relevant for the regulatory environment I'm in. But I still have to be flexible, I have to be agile, I have to be leveraging programmability instead of having to rewrite software every generation or every time a new app comes out. >> Lynn, thanks so much for coming on. Like we always say, you know, engine room more power, you can never have enough compute power available in network bandwidth, as far as I'm concerned. You know, we'd love to increase the power, Moore's Law's been just a great thing, keeps on chugging along. Thanks for your time and joining us on the Silicon Valley Friday Show, appreciate it. Thanks so much. >> Thank you. >> Alright, take care. Okay, this is Silicon Valley Friday Show, I'm John Furrier, thanks so much for listening. I had Ben Gaddis on, Dan Rosenbaum, and Lynn Comp from Intel really breaking it down and bringing you all the best stories of the week here on the Silicon Valley, thanks for watching. (techno music) (bright instrumental music)

>> Narrator: The Wynn resort in Las Vegas It's theCUBE. Covering .NEXT conference 2016 brought to you by Nutanix. Now here are your hosts, Dave Vellante and Stu Miniman. >> Welcome back everybody. Professor Deepak Malhotra here. He's with the Harvard Business school and author of Negotiating the Impossible: How to Break Deadlocks and Resolve Ugly Conflicts. Parenthetical without money or muscle end parenthetical. Deepak, welcome to theCUBE, great to see you. Thanks for having me here. Happy to be here. So what do you do in here? Well among the other things that I do with my time, I happen to be on the board of advisors for Nutanix. And I've been working with Nutanix for the last, a little over two years on various aspects of negotiation, deal making, training, etcetera. And so I attend a few of their conferences a few of the sessions. I talk at a few of their conferences as well. So that's what brings me here. >> So it's somewhat odd, right to have a negotiations expert come and talk to customers about negotiations. But I guess the angle would be if you're stuck in sort of a legacy world. You need to negotiate your way out is that. >> Well there's a couple of things going on there, right. So under one hand I think it shows a little bit about Nutanix's perspective. That it isn't a zero sum game. It's not we're going to train the Nutanix people so they can get an advantage over customers. I think the company really is focused on creating as much value as possible for the end user. And when you take that mind set it actually makes sense to be inclusive. And bring everybody in the ecosystem into the room. So it's not just, "Hey Professor Malhotra can you train our sales people?" It's you know we want to share your ideas with everybody. And I think that's really a good sign when a company is willing to do that. The second thing is as you just eluded to, a lot of the folks that are coming here and a lot of the people that are customers were thinking about moving in the direction of Nutanix. Or have bought into the idea. They still may need to sell it internally. They still may need to negotiate internally how do we change our organization or how do we move our organization from what its been doing to what it wants to be doing or it should be doing. And they're also many of the same skills can be useful. So why not educate them about some of the things they might not have thought about yet. >> So let's talk about your book a little bit. The premise. I guess I told you I haven't read it yet but I do have it. In the book you talked about a three thousand year old Treaty of Kadesh. And things that we can learn from three thousand years ago. Give us the basics and the premise. >> So this was. The books starts out with this story of the Treaty of Kadesh which I don't think is something that many business books start out talking about. Certainly, I hadn't seen it before I started researching it. And one of the interesting thing that happens is that there's a lesson embedded in the story of the Treaty of Kadesh that I think is as relevant today in negotiations of just about every kind in the business world and outside that, that's worth telling. And the basic story goes as follows. The Treaty of Kadesh is the most ancient peace treaty known to man kind. As far as we know it's as old a peace treaty as we have evidence of. And it was between the Egyptians and the Hittites. And these two parties were at war. And at some point they must of decided enough of this we need to put an end to this. There's too many cost internally and externally. Too many other threats. We need to find a way to resolve this kind of conflict. What often happens in these situations is that nobody wants to look weak. Nobody wants to be the one asking for peace because that might just embolden the other side. So what ends up happening is that somehow they overcome these hesitations. They reach this agreement. Now what's interesting is that we actually have access to both language's version of the treaty. So we have the Arcadian and the hieroglyphics. The hieroglyphics being the Egyptian version and the Arcadian being the one from the Hittites. And if you were to read both of these or if you were to first learn how to read these and then to read both of these. What you find is as you'd expect, they have a lot of the kinds of things that you would normally expect in a peace treaty. You know exchanging prisoners of war. Mutual assistance packs and things like this. And they're basically identical as they should be because they're the same peace treaty. But there is one difference. When you compare the two peace treaties the one difference that sort of stands out is that in the Egyptian version it says it's the Hittites who came asking for peace. And in the Hittite version it says it's the Egyptians who came asking for peace. And what it goes to show I think is that no matter how far back you go this need for every side to declare victory at the end of a negotiation at the end of a conflict. That need for every side to declare victory is as old as human beings themselves. When you understand that. I think it actually changes the way in which you try and negotiate these deals. How you think about what stands in the way of getting the deal done. Sometimes it's not the substance of the deal. You're already proposing something that's good enough. You're already have something on the table that's rich enough, valuable enough. They should say yes. But they might be other reasons they can't say yes. For example they might lose face. Or they may look bad. And when you recognize that I think you come at it a different way. >> Looking at your research. One of things you focus on is trust. And one of the challenges we have in technology is you know, people are entrenched with the way they do things. They're not likely to you know be first or go there. We've now got thousands of people using Nutanix but you know. How does Nutanix or others that are new get a proper seat at the table and be able to be part of a discussion that you know when you've got (mumbles) in there and the old ways of doing things. >> You know the way I see it. You have to get the economics right and you have to get the psychology right. The economics is you have to have a good product. It needs to be price appropriate. You need to be bringing value to the table. And be pricing based on that value proposition. So that's sort of basic business stuff. The problem is as I mentioned earlier. You may have the right product. You may have something that people, quote should be using. It is better than the alternative. But they might be these psychological hurdles that you need to get over. A prominent one being what you just eluded to which is when nobody else is doing it, nobody feels the urgency to do it. If you get the sense that you know there's not a mass of folks running after your product. They sort of feel like, well maybe that means something. Maybe it means it's not a big deal. Maybe it means it's not so urgent. Maybe it's not that good of a product. So the early hurdles that companies like these face are really big ones. You don't have a long list of customers that you can use to prove to other people that this is the way you should be going. There's always a risk that somebodies going to take a bet on this and if something goes wrong. It's sort of the old nobody lost their job buying IBM kind of mentality. And so as a negotiator and as a company that's starting out as an early stage company, especially in technology where you're doing something disruptive, you need to start thinking a little bit about how do we get them over that. How do we get them to start understanding that you know what. Here is a list of customers that are using it. And here's the testimonials, etcetera. You think about the pricing. The most common thing that happens when you walk into the room with a new disruptive technology is that the person on the other side says, "Are you crazy? "You're charging ten times what your competitor is charging. "You know you're sitting here telling me "to pay x. "If I do nothing I have to pay zero." Alright. "Nobody pays this kind of money for this kind of thing." That is a very common response sales people get when they are in an environment like this. And one of the things I advise people to do in that situation. Is to make sure they don't make the worst mistake a sales person can make in a moment where somebody says, "You're price is ten x what everybody else "is charging. "Nobody pays this much." The worst mistake a sales person can make is to apologize for the price being too high. Now they don't always do it by saying, "Oh my god I'm so sorry." But they seem apologetic. You know they're very quick to say, "Oh yeah I know it's high." >> "Let's see if we can do something." >> "I'm sure we can work something out. "But yeah you know I know it's a lot of money." The moment you go in that direction what you're basically doing is you're giving the other side a license to haggle with you. 'Cause what you're telling them is even you don't think the price is appropriate. A better response in a situation like this is for the sales person to say, "Listen I think the question you're asking me is, "how is it that despite our price being ten x "what some other people are charging, "we have a long list of people wanting to buy our product. "What kind of value must we be bringing to the table "for so many people wanting to buy this product? "Now I'm happy to talk about that value "because at the end of the day we all know nobody's "going to pay more for something than it's worth. "Nobody would do that, you're not going to do that. "So why don't we figure out what it's worth "and then you can make the right decision." And what you're doing there is you're shifting the conversion from price to value. You're shifting the frame of this conversation from how much am I having to pay and what's the cost to me to what is the value proposition. >> Stu's laughing. I mean your price is too high is the best sales objection ever. Right, you love to hear that as a sales person. Much better than your product sucks. (chuckles) Now the answer of this question is probably it depends. But when you advise your clients and your friends. When I go into a negotiation am I trying to get the best deal or am I trying to find common ground and get a win-win? >> Actually I don't think it depends. I think. (exhales loudly) Well I would. I would articulate the question slightly differently. Because in my experience it is possible to get a great deal and a great relationship. It's also possible to get neither. And so what you're trying to do is you're trying to optimize on both. What's interesting is that very often we assume it's a zero sum game enough. That the only way for me to get a good deal is for me to sacrifice the relationship in some way. That's not how it works in most sort of richer context, more complicated deal scenarios. Because what people evaluate when they walk away from the table isn't just did I get a quote, good economic deal. When people think back and say, "Do I want to work with this person again? "Do I like this person? "Did I get a good deal?" Often what they're thinking about is not so much of the substance of what they got. What's in the agreement. But the process they went through. For example. You know did the negotiation go as long as should of or did it drag on too long or end too abruptly? Was my voice heard? Did both sides move away from their opening positions? Did the person haggle with me on every little thing, even though they knew and I knew it's not a big deal to them and is a big deal to me? Those sort of process elements if you navigate the process more effectively you can often get to a point where you get the deal that you think is right for you and you get a relationship that both sides can walk away feeling good about. And from my perspective you know what does depend in, on it. It depends on the situation is what kind of feeling do you want them to have walking away. You don't always need to have them love you. But at the very least they should respect you. Right? And I think it's perfectly fair even in a very contentious negotiation to keep as one of your objectives. You know when the deal ends I want them to be able to walk away saying, "You know what, I maybe didn't agree with this person. "It didn't go exactly the way I wanted it to go. "But you know I can respect this person "for the way they handled the situation. "And if I were them I hope I would do it the same way." >> So I wonder. If I look at the society as a whole, it seems as if we kind of retreated to our sides and I find that lots of people aren't open for debate. They're intractable in what's going on. How do I get beyond that? >> How do we change society, is that the question? >> Stu: Yeah. >> How much time do we have? >> Am I wrong. (laughs) Is it only ten percent of the people that are intractable or are most people reasonable? >> So I think what happens is, there's a few interesting dynamics. Now I wouldn't have the precise numbers. What I can say is that it is certainly the case that even a minority of people being in those entrenched positions, they get a lot more of the media. They get a lot more of the attention. They tend to be louder, etcetera. And they can often drive our sense of what's actually happening. And it can drive the narrative. Now that doesn't mean there aren't real differences. Like strong differences. You know what's interesting is if you take people that are not on the extremes. You take the moderates. Sometimes the way in which we engage with people on the other side of the argument pushes them to be more extreme. See when we ourselves show up, thinking of ourselves as relatively moderate, enlightened people who have a set of point of view. But you know what I'm very open to other peoples perspective. But then we get into the conversation. And we end up challenging people in a way they don't find particularly useful. We start poking holes. We start making it's about a winning and a losing and a debate. And there's going to be at the end of the day points, score based on who wins the argument. Then people end up getting more and more entrenched. Even in ways that they otherwise wouldn't be. So the question is can we get to a point where at least those people on each side. And I find on any political issue I can find people on both sides that I think are trying to do the right thing and have perhaps limited information but they're trying to do the best they can with that information. They have good intentions and they're reasonably smart people. In my experience, you don't need two people one of whom is either evil, or crazy, or irrational to have conflict. You just need two people. You see good, smart, reasonably well-intentioned people getting into conflict all the time. Which then becomes the question of this book, which is how do we manage those situations? How do we get people to back away from these entrenched positions? How do we overcome deadlock that allows both sides to walk away feeling a little bit better about the situation? >> So examples are instructive. So let's talk about some great negotiators. Who are they? Let's start with sports. Scott Boras. You know you think of him as an agent. I mean grinding the teams, the general managers. Is he a good negotiator? >> So I don't follow many of the sports deal making and negotiations enough to be able to really elaborate on who would be a good negotiator in sports. But I can say this. That in a context where it's really just about things like price. Just about the money. And a sports agent often is, it's not really all about that but it is the most (mumbles). It is the most (mumbles) issue. You're going to go at it a certain way. And it would be similar to a negotiation in the business world where all you care about is price. You're buying or selling a house. You're buying or selling a car. And from my perspective there are people who are very good at haggling. There's people who can hold their cards to the chest and they can be aggressive when they need to be. And they can be persuasive in certain things. But when you look at negotiation as a whole. I think of haggling as a very, very thing slice of what negotiation is about. That's sort of the easy stuff. You may not be naturally good at it. But what it takes to be good at it is not so hard. We teach that on sort of day one of class. Day one of class is the price haggle. It's the you know there's two sides and you want opposite things. And how do you frame it in the right way and what kind of concession rate should you make or not make. How do you justify your proposal etcetera. We cover that on day one. And the problem is there is in our owner president program where I teach there's 15 more days left. In our MBA program there's like 27 more days left. And there the question becomes how do we get past just being a good haggler. Somebody who can just put fist to the table and say take it or leave it. And all that kind of stuff. Which will work in certain defined contexts but will not carry over to more important deals. >> You're right. That is a narrow context in sports because the agent has all the leverage of the players performed. How 'about Donald Trump? He's negotiating isn't he when he says Mexico's going to build the wall. He wrote the book, Art of the Deal. >> He did write that book. Yeah we co-authored that book actually. So is he negotiating when he says that. In the broader sense of the word negotiation which is basically how do we interact with other human beings who see things differently than we do. He absolutely is negotiating. If the question then becomes is he doing it effectively. My view would be that, that he is not. (chuckles) And I think if you actually were to look at the evidence and then stack it up. I think you would find that he's not a very effective negotiator. >> We don't have to go there. That's good. >> Deepak: That's okay I don't mind. >> We'll leave it there. But how 'about (mumbles), right. I mean you've had like an epic negotiation to bring those two. Is that an example? I mean even though it ended in tragedy on both sides is that an example of a successful negotiation? >> So it's an example of a, it is an example of a successful negotiation. And I think even more instructively it's an example of one of the biggest barriers in conflicts like this. The hardest part is often to bring your own side with you. And that is a challenge for leadership. It's not just in the bubble of negotiation. This is about leadership generally. To be able to have someone who can not only personally be willing to do the kinds of things that make the kinds of sacrifices but to be able to move a group of folks who for years, sometimes decades or centuries have been thinking differently. And to your point what often happens with these peace makers is you know the risk is you do one of these things and you're going to get killed. And usually you get killed by your own side. And exactly in the context you're talking about that's usually what happens. And so here what we see is not only an impressive set of events that led to negotiation and the negotiation itself but you see a certain amount of courage that leaders don't often enough show. And again some leaders aren't placed well. They don't have the support going in. Or they just don't have the ability to do it. But even those that do. The question is are you willing to expend the social and political capital necessary and put yourself on the line to be able to do something that you think is worth doing? >> I said I wasn't going to ask you but I am going to ask you 'cause your answer is so good. The Iran Deal. Good deal, not a good deal? You see to your point about getting killed by your own side. >> So I was not involved with the Iran deal. I do work with sometimes governments negotiating difficult conflicts and such. But I was not in any way involved with the Iran deal. What I can say is, based on the folks I've talk to leading up to the Iran deal and then after the Iran deal. It is my sense looking at what was accomplished that is actually a phenomenal deal for when it was done. Could a better deal have been done ten years earlier? Yes. One of the hardest things to negotiate against in the real world is the status quo. It's a lot easier to negotiate don't create center (mumbles) when there are none than it is to negotiate remove the center (mumbles) you have already created. So if you could go back in time which I have not met anybody yet who's able to do effectively it would be possible to get a better deal. Where things were last year and the year before I can say that pretty much everybody you talk to before the deal was announced on either side of the political spectrum, Republicans, Democrats, left, right, Hawkish, Dovish, you name it. Nobody would of expected a deal this good for the American side at the time. Now you may still not like it. You may be against any deal and that's okay. You can certainly have that perspective but if you're going to get a deal in this environment and what was being said leading up to this. I think both sides were pretty surprised and I would even say impressed. Until it came time to start talking about it publicly at which point of course you have to go back to your narrative. So you know again, I had nothing to do with it. But when you look at it, it surprised most people in terms of what it came out to be. >> So what are you working on? Next projects? Things that are exciting you these days. >> So I have sort of three areas where my attention is going. One is on ethnic conflict and armed conflict. As I was eluding to earlier I do some work with governments that are dealing with insurgency and conflict. And looking at what we know and what do we not know about resolving these kind of things. And how we can maybe push forward in that direction. So that's an area of advisory work but also research that I'm doing. Second area is I'm working with doctors. Thinking about how they can be more effective in prescribing a course of action to patients. How they can have more effective kind of conversations when a patient comes in and has a strong set of beliefs about what they should and shouldn't do. Or they're resistant to change. Or they're unwilling to do things. How can you be more effective in the time you spend with patients. And I do work on gun violence. And we've been looking at mass shootings. And we just had some research that got a lot of coverage unfortunately because of the tragedy that took place in Orlando not so long ago. Looking at whether mass shootings really have any impact on gun laws. And we find some interesting results there. So in a sense I'm sort of looking at insurgency and dealing with cancer patients and then gun violence. >> Interesting topics. >> Deepak: All of the darkest stuff we can find. >> It's a tragic but timely. And then there's another sequence there. Do gun laws have an impact on mass shooting. >> Deepak: And that's basically the next set of projects. >> Excellent. Well thank you very much. (mumbles) >> Deepak: It was great. >> Fantastic. >> Deepak: Absolutely. >> Alright keep right there everybody. Stu and I will be back with our next guest. We're live this is theCUBE SiliconANGLE's flagship production from .NEXT in Vegas. Be right back.