(inspirational music) >> theCUBE's live coverage is made possible by funding from Dell Technologies. Creating technologies that drive human progress. (uplifting electronic music) (crowd chattering in background) >> Hi everybody. We're back at the Fira in Barcelona. Winding up our four day wall-to-wall coverage of MWC23 theCUBE has been thrilled to cover the telco transformation. Dave Vellante with Dave Nicholson. Really excited to have NTT on. Shahid Ahmed is the Group EVP of New Ventures and Innovation at NTT in from Chicago. Welcome to Barcelona. Welcome to theCUBE. >> Thank you for having me over. >> So, really interesting title. You have, you know, people might not know NTT you know, huge Japan telco but a lot of other businesses, explain your business. >> So we do a lot of things. Most of us are known for our Docomo business in Japan. We have one of the largest wireless cellular carriers in the world. We serve most of Japan. Outside of Japan, we are B2B systems, integration, professional services company. So we offer managed services. We have data centers, we have undersea cables. We offer all kinds of outsourcing services. So we're a big company. >> So there's a narrative out there that says, you know, 5G, it's a lot of hype, not a lot of adoption. Nobody's ever going to make money at 5G. You have a different point of view, I understand. You're like leaning into 5G and you've actually got some traction there. Explain that. >> So 5G can be viewed from two lenses. One is just you and I using our cell phones and we get 5G coverage over it. And the other one is for businesses to use 5G, and we call that private 5G or enterprise grade 5G. Two very separate distinct things, but it is 5G in the end. Now the big debate here in Europe and US is how to monetize 5G. As a consumer, you and I are not going to pay extra for 5G. I mean, I haven't. I just expect the carrier to offer faster, cheaper services. And so would I pay extra? Not really. I just want a reliable network from my carrier. >> Paid up for the good camera though, didn't you? >> I did. (Dave and Dave laughing) >> I'm waiting for four cameras now. >> So the carriers are in this little bit of a pickle at the moment because they've just spent billions of dollars, not only on spectrum but the infrastructure needed to upgrade to 5G, yet nobody's willing to pay extra for that 5G service. >> Oh, right. >> So what do they do? And one idea is to look at enterprises, companies, industrial companies, manufacturing companies who want to build their own 5G networks to support their own use cases. And these use cases could be anything from automating the surveyor belt to cameras with 5G in it to AGVs. These are little carts running around warehouses picking up products and goods, but they have to be connected all the time. Wifi doesn't work all the time there. And so those businesses are willing to pay for 5G. So your question is, is there a business case for 5G? Yes. I don't think it's in the consumer side. I think it's in the business side. And that's where NTT is finding success. >> So you said, you know, how they going to make money, right? You very well described the telco dilemma. We heard earlier this week, you know, well, we could tax the OTT vendors, like Netflix of course shot back and said, "Well, we spent a lot of money on content. We're driving a lot of value. Why don't you help us pay for the content development?" Which is incredibly expensive. I think I heard we're going to tax the developers for API calls on the network. I'm not sure how well that's going to work out. Look at Twitter, you know, we'll see. And then yeah, there's the B2B piece. What's your take on, we heard the Orange CEO say, "We need help." You know, maybe implying we're going to tax the OTT vendors, but we're for net neutrality, which seems like it's completely counter-posed. What's your take on, you know, fair share in the network? >> Look, we've seen this debate unfold in the US for the last 10 years. >> Yeah. >> Tom Wheeler, the FCC chairman started that debate and he made great progress and open internet and net neutrality. The thing is that if you create a lane, a tollway, where some companies have to pay toll and others don't have to, you create an environment where the innovation could be stifled. Content providers may not appear on the scene anymore. And with everything happening around AI, we may see that backfire. So creating a toll for rich companies to be able to pay that toll and get on a faster speed internet, that may work some places may backfire in others. >> It's, you know, you're bringing up a great point. It's one of those sort of unintended consequences. You got to be be careful because the little guy gets crushed in that environment, and then what? Right? Then you stifle innovation. So, okay, so you're a fan of net neutrality. You think the balance that the US model, for a change, maybe the US got it right instead of like GDPR, who sort of informed the US on privacy, maybe the opposite on net neutrality. >> I think so. I mean, look, the way the US, particularly the FCC and the FTC has mandated these rules and regulation. I think it's a nice balance. FTC is all looking at big tech at the moment, but- >> Lena Khan wants to break up big tech. I mean for, you know, you big tech, boom, break 'em up, right? So, but that's, you know- >> That's a whole different story. >> Yeah. Right. We could talk about that too, if you want. >> Right. But I think that we have a balanced approach, a measured approach. Asking the content providers or the developers to pay for your innovative creative application that's on your phone, you know, that's asking for too much in my opinion. >> You know, I think you're right though. Government did do a good job with net neutrality in the US and, I mean, I'm just going to go my high horse for a second, so forgive me. >> Go for it. >> Market forces have always done a better job at adjudicating, you know, competition. Now, if a company's a monopoly, in my view they should be, you know, regulated, or at least penalized. Yeah, but generally speaking, you know the attack on big tech, I think is perhaps misplaced. I sat through, and the reason it's relevant to Mobile World Congress or MWC, is I sat through a Nokia presentation this week and they were talking about Bell Labs when United States broke up, you know, the US telcos, >> Yeah. >> Bell Labs was a gem in the US and now it's owned by Nokia. >> Yeah. >> Right? And so you got to be careful about, you know what you wish for with breaking up big tech. You got AI, you've got, you know, competition with China- >> Yeah, but the upside to breaking up Ma Bell was not just the baby Bells and maybe the stranded orphan asset of Bell Labs, but I would argue it led to innovation. I'm old enough to remember- >> I would say it made the US less competitive. >> I know. >> You were in junior high school, but I remember as an adult, having a rotary dial phone and having to pay for that access, and there was no such- >> Yeah, but they all came back together. The baby Bells are all, they got all acquired. And the cable company, it was no different. So I don't know, do you have a perspective of this? Because you know this better than I do. >> Well, I think look at Nokia, just they announced a whole new branding strategy and new brand. >> I like the brand. >> Yeah. And- >> It looks cool. >> But guess what? It's B2B oriented. >> (laughs) Yeah. >> It's no longer consumer, >> Right, yeah. >> because they felt that Nokia brand phone was sort of misleading towards a lot of business to business work that they do. And so they've oriented themselves to B2B. Look, my point is, the carriers and the service providers, network operators, and look, I'm a network operator, too, in Japan. We need to innovate ourselves. Nobody's stopping us from coming up with a content strategy. Nobody's stopping a carrier from building a interesting, new, over-the-top app. In fact, we have better control over that because we are closer to the customer. We need to innovate, we need to be more creative. I don't think taxing the little developer that's building a very innovative application is going to help in the long run. >> NTT Japan, what do they have a content play? I, sorry, I'm not familiar with it. Are they strong in content, or competitive like Netflix-like, or? >> We have relationships with them, and you remember i-mode? >> Yeah. Oh yeah, sure. >> Remember in the old days. I mean, that was a big hit. >> Yeah, yeah, you're right. >> Right? I mean, that was actually the original app marketplace. >> Right. >> And the application store. So, of course we've evolved from that and we should, and this is an evolution and we should look at it more positively instead of looking at ways to regulate it. We should let it prosper and let it see where- >> But why do you think that telcos generally have failed at content? I mean, AT&T is sort of the exception that proves the rule. I mean, they got some great properties, obviously, CNN and HBO, but generally it's viewed as a challenging asset and others have had to diversify or, you know, sell the assets. Why do you think that telcos have had such trouble there? >> Well, Comcast owns also a lot of content. >> Yeah. Yeah, absolutely. >> And I think, I think that is definitely a strategy that should be explored here in Europe. And I think that has been underexplored. I, in my opinion, I believe that every large carrier must have some sort of content strategy at some point, or else you are a pipe. >> Yeah. You lose touch with a customer. >> Yeah. And by the way, being a dump pipe is okay. >> No, it's a lucrative business. >> It's a good business. You just have to focus. And if you start to do a lot of ancillary things around it then you start to see the margins erode. But if you just focus on being a pipe, I think that's a very good business and it's very lucrative. Everybody wants bandwidth. There's insatiable demand for bandwidth all the time. >> Enjoy the monopoly, I say. >> Yeah, well, capital is like an organism in and of itself. It's going to seek a place where it can insert itself and grow. Do you think that the questions around fair share right now are having people wait in the wings to see what's going to happen? Because especially if I'm on the small end of creating content, creating services, and there's possibly a death blow to my fixed costs that could be coming down the line, I'm going to hold back and wait. Do you think that the answer is let's solve this sooner than later? What are your thoughts? >> I think in Europe the opinion has been always to go after the big tech. I mean, we've seen a lot of moves either through antitrust, or other means. >> Or the guillotine! >> That's right. (all chuckle) A guillotine. Yes. And I've heard those directly. I think, look, in the end, EU has to decide what's right for their constituents, the countries they operate, and the economy. Frankly, with where the economy is, you got recession, inflation pressures, a war, and who knows what else might come down the pipe. I would be very careful in messing with this equilibrium in this economy. Until at least we have gone through this inflation and recessionary pressure and see what happens. >> I, again, I think I come back to markets, ultimately, will adjudicate. I think what we're seeing with chatGPT is like a Netscape moment in some ways. And I can't predict what's going to happen, but I can predict that it's going to change the world. And there's going to be new disruptors that come about. That just, I don't think Amazon, Google, Facebook, Apple are going to rule the world forever. They're just, I guarantee they're not, you know. They'll make it through. But there's going to be some new companies. I think it might be open AI, might not be. Give us a plug for NTT at the show. What do you guys got going here? Really appreciate you coming on. >> Thank you. So, you know, we're showing off our private 5G network for enterprises, for businesses. We see this as a huge opportunities. If you look around here you've got Rohde & Schwarz, that's the industrial company. You got Airbus here. All the big industrial companies are here. Automotive companies and private 5G. 5G inside a factory, inside a hospital, a warehouse, a mining operation. That's where the dollars are. >> Is it a meaningful business for you today? >> It is. We just started this business only a couple of years ago. We're seeing amazing growth and I think there's a lot of good opportunities there. >> Shahid Ahmed, thanks so much for coming to theCUBE. It was great to have you. Really a pleasure. >> Thanks for having me over. Great questions. >> Oh, you're welcome. All right. For David Nicholson, Dave Vellante. We'll be back, right after this short break, from the Fira in Barcelona, MWC23. You're watching theCUBE. (uplifting electronic music)

>>Okay, welcome back everyone. This is the Cube's coverage here. Monaco took a trip all the way out here to cover the Monaco crypto summit. I'm John feer, host of the cube, a lot of action happening presented by digital bits and this ecosystem that's coming together, building on top of digital bits and other blockchains to bring value at the application. These new app, super apps are emerging. Almost every category's gonna be decentralized. This is our opinion and the world believes it. And they're here as well. We've got Oscar ballet CEO co-founder of Agora verse ago is a shopping metaverse coming out soon. We'll get the dates, Oscar. Welcome to the cube. >>Thank you very much for having me. >>We were just talking before you came on camera. You're a young gun, young entrepreneur. You're a gamer. Yeah, a little bit too old to miss the eSports windows. You said, you know, like 25. It's great until that's you missed the window. I wish I was 25 gaming the pandemic with remote work, big tailwind acceleration around the idea of this new digital VI virtual hybrid world. We're living in where people want to have experiences that are similar to physical and virtual. You're doing something really cool around shopping. Yeah. Take a explain. What's going on when the, I know it's not out yet. It's in preview. Yeah. Take a minute to explain. >>Absolutely. So a goers really is a way to create those online storefront environments, virtual environments that are really much inspired by video games in their usage and kind of how the experience goes forward. We want to recreate the brand's theme, aesthetic storytelling or the NFT project as well. All of that created in a virtual setting, which is way more interesting than looking at a traditional webpage. And also you can do some crazy stuff that you can't do in real life, in a real life store, you know, with some crazy effects and lighting and stuff. So it's, it's a whole new frontier that we are trying to cover. And we believe that there is a real use case for shopping centric S experiences and to actually make the S a bit more than a buzzword than that. It is at the moment. >>Okay. So a Agora is the shopping. Metaverse a Agora verse is the company name and product name. You're on the Solona blockchain. Got my notes here, but I gotta ask you, I mean, people are trying to do this right now. We see a lot of high end clients like Microsoft showroom, showroom vibes. Yeah. Not so much. E-commerce per se, but more like the big, I mean it's low hanging fruit. Yeah. How do you guys compare to some other apps out there? Other metaverses? >>I think compared to the bigger companies, we are way more flexible and we can act way more quickly than they can. They still have a lot of ground to cover. And a lot of convincing to do with their communities of users metaverse is not really the most popular topic at the moment. It's still very much kind of looked at as a trend, as something that is just passing and they have to deal with this community interaction that is not really favorable for them. There are other questions about the metaverse that are not being talked about as often, but the ecological costs, for example, of running a metaverse like Facebook envisions it, of running those virtual headsets, running those environments. It's very costy on, on, on the ecological side of things and it's not as often mentioned. And I think that's actually their biggest challenge. >>Can you get an example for folks that don't are in the weeds on that? What's the what's what do you mean by that? The cost of build the headsets? Is it the >>Servers? It's more of the servers, really? You need to run a lot of servers, which is really costly on the environment and environmental questions are at the center of public debates. Anyways, and companies have to play that game as well. So they will have to find kind of this balance between, well, building this cool metaverse, but doing it in an ecological friendly manner as well. I think that's their toughest challenge. >>And what's your solution just using the blockchain? Well, an answer to that, cause some people say, Hey, that's not that's, that's not. So eco-friendly either, >>That's part of it. And it's also part of why we're choosing an ecosystem such as Lana as a starter. It's not limited to only Salana, but Salala is, is known as a blockchain. That is very much ecological. Inclined transactions are less polluting. And definitely this problem is, is tackled in the fact that we are offering this product on a case by case scenario brands come to us, we build this environment and we run something that is proper to them. So the scale of it is also way less important that what Facebook is trying to build. >>Yeah. They're trying to build the all encompassing. Yeah. All singing old dancing, as we say system, and then they're not getting a lot of luck. They just got slammed dunked this week on the news, I saw the, you know, FTC moved against them on the acquisition of the exercise app. >>It's it's a tough, it's a tough battle for them. Let's say they >>Still have, they got a headwind. I wouldn't say tailwind. They broke democracy. So they gotta pay for it. Right. Exactly. I always say definitely revenge going on there. I'm not a big fan of what they did. The FTC. I think that's bad move. They shouldn't block acquisitions, but they do buy, they don't really build much. That's well documented. Facebook really hasn't built anything except for Facebook. That's right. Mean what's the one thing Facebook has done besides Facebook. >>I mean, >>It's everything they've tried is failed except for Facebook. Yeah. >>So we'll see what's going on with the Methodist side. >>Well, so successful, not really one trick bony. Yeah. They bought Instagram. They bought WhatsApp, you know, and not really successful. >>That's true. They do have the, the means though, to maybe become successful with something. So >>You're walking out there, John just said, Facebook's not successful. I meant they don't. They have a one product company. They use their money to buy everything. Yeah. And that's some people don't like that, but anyway, the startups like to get bought out. Yeah. Okay. So let's get back to the metaverse it's coming out is the business model to build for others. Are you gonna have a system for users? What's what's the approach? How do you, how are we view viewing this? What's the, the business you're going after? >>So we are very much a B2B type of service where we can create custom kind of tailor made virtual environments for brands, where we dedicate our team to building those environments, which has been what we have been at the start to really kickstart the initiative. But we're also developing the tool that will allow antibody to develop their own shop themselves, using what we give them to do something kind of like the Sims for those that know, building their environment and building their shop, which will they, they, they will then be to put online and for anybody of their user base customers to have a look at. So it's, it's kind of, yeah, the tailor made experience, but also the more broader experience where we want to create this tool, develop this tool, make it accessible to the public with a subscription based model where any individual that has an idea and maybe a product that is interesting for the metaverse be able to create this virtual storefront and upload it directly. >>How long does it take to build an environment? Let's say I was, I wanna do a cube. Yeah. I go to a lot of venues all around the world. Yeah. MOSCON and San Francisco, the San convention center in Las Vegas, we're here in Monaco. How do I replicate these environments? Do I call you up and say, Hey, I need some artists. Do you guys render it? What's the take us through the process. >>Yeah. It's, it's basically a case by case scenario at the moment, very much. We're working with our partners that find brands that are interested in getting into the metaverse and we then design the shops. Well, it depends on the brands. Some have a really clear idea of what they want. Some are a bit more open to it and they're like, well, we have this and this, can you build something? >>I mean, I mean, I can see the apple store saying, Hey, you know, they're pretty standard apple stores. You got cases of iWatches. Yeah. I mean that's easily to, replicateable probably good ROI for them. >>Exactly. It's it's is that what you're thinking? Their team. Exactly. Yeah. It depends. And we, we want to add a layer of something cuz just replicating the store simply. Yeah. It's it's maybe not as interesting, you know, it just, oh, okay. I'm in the store. It's white, everywhere. It's apple. Right. It's like, oh I'm in at the dentist, but we want to add some video game elements to the, to those experiences. But very subtle ones, ones that won't make you feel, oh, I'm playing one of these games, you know? It's yeah. Very supple. >>You can, you can jump into immersive experience as defined by the brand. Yeah. I mean the brand will control the values. So you're say apple and you're at the iWatch table. Yeah. You could have a digital assistant pop in there with an avatar. Exactly. You can jump down a rabbit hole and say, Hey, I want this iWatch. I'm a bike mountain biker. For example, I could get experience of mountain biking with my watch on I fall off, ambulance sticks me up. I mean, all these things that they advertise is what goes >>On. Yeah. And we can recreate these experiences and what they're advertising and into a more immersive experience is what we're trying to our, our goal is to create experiences. We know that, you know, why does someone is someone spend so much at Disneyland? It's like triple the price of whatever, because you know, it's Mickey mouse around you. It's, that's the experience that comes around. And often the experience is more important than the product. Sometimes >>It's hard. It's really hard to get that first class citizen experience with the event or venue physical. Yeah. Which is a big challenge. I know the metaverse are gonna try to solve this. So I gotta ask you what's your vision on solving that? Okay. Cause that's the holy grail. That's what we're talking about here. Yeah. I got a physical event or place. I wanna replicate it in the metaverse but create that just as good first party citizen like experience. >>Yeah. I mean that's the whole event event type of business side of the metaverse is also a huge one. It's one that we are choosing to tackle after the e-commerce one. But it's definitely something that has been asked a lot by the brands where like we want to create, like, we want to release this store for an event that is in real life, but we want to make it accessible to the largest number. That's why we saw with Fortnite as well. All those events, the fashion week in the central land. And >>Sand's a Cub in the Fortnite too. >>There you go. And so the, the event aspect is super important and we want those meta shops to be places where a brand can organize an event. Let's say they want to make the entrance paid. They can do an NFD for that if they want. And then they have to, the user has to connect the NFD to access the event with an idea. Right. But that's definitely possible. And that's how we leverage blockchain as well with those companies and say, you know, you're not familiar with >>This method. You're badging, you know, you're the gaming where we were talking earlier. Yeah. Badging and credentials and access methods. A tech concept can be easily forwarded to NFTs. Yeah, >>Exactly. Exactly. And brands are interested in that. >>Sure. Of course. Yeah. By being the NFT. That's cool. Yeah. Yeah. So I gotta ask you the origination story. Take me through the, the, how this all started. Yeah. Was it a seat of an idea you and your friends get together? Yeah. It was an it scratch. And when you're really into this, what's the origination story and where you're at now. >>So we started off in January really with a, quite a, a different idea. It was called the loft business club. It's an NFT collection on the Salina blockchain. And the whole idea beyond it is that NFT holders would have access to their virtual apartments that we called the lofts. It got very popular. We got a really big following at the start. It was really the trend back in January, February. And we managed to, to sell out successfully the whole collection of 5,000 NFTs. And yeah, we started as a group of friends, really like-minded friends from my hometown in, in, met in France who are today, the co-founders and the associates with different backgrounds. Leo has the marketing side of things. A club has the 3d designing. We had all our different skills coming into it. Obviously my English was quite helpful as well cause French people in English it's, it's not often the best French English. Yeah. And I was, the COO has been doing amazing on the kind of the serious stuff. You know, the taxis lawyers >>Operational to all of trains running on time. >>Exactly >>Sure. People get their jobs done. >>Yeah, exactly. So >>It's well too long of a lunch cuz you know, French would take what, two hour lunches. Yeah. You >>Have to enjoy it. Yeah. >>Coffee and stuff. That's wine, you know about creative, >>But yeah, it's, it's a friend stuff that started as a, as a passion project and got so quick. And today I'm here talking to you in this setting. It's like, >>You're pretty excited. >>I mean it's super excited. It's such a we're you know, we feel like we're building something that's new and our developer team, we're now a team of 15 in total with developers based in Paris, mostly. And everybody is, is feeling like, you know, they're contributing to something new and that's, what's exciting about it. You know, it's something that's not really done or it's trying to be done, but nobody really knows the way >>It's pioneering days. But the, but the pandemic has shifted the culture faster because people like certainly the gen Zs are like, I don't wanna reuse that old stuff. Yeah. And, but they still want to go to like games or events or go to stores. Yeah. But once to go to a store, I mean, I go to apple store all the time where I live in Palo Alto, California. And it's like, yeah, I love that store. And I know it by heart. I don't, I don't have to go there. Yeah. Walking into the genius bar virtually I get the same job done. Yeah, >>Exactly. That's that's what we want to do. And the other pandemic is just it's it's been all about improving, you know, people's condition, life conditions at home, I think. And that's what kind of boosted the whole metaverse conversation and Facebook really grabbing onto it as well. It's just that people were stuck at home and for gamers, that's fine. We used to be stuck at home playing video games all day. Yeah. We survived the pandemic fine. But for other people it was a bit more of a new >>Experience. Well, Oscar, one of the cool things is that you said like mind you and your founding team, always the secret to success. But now you see a lot of old guys like me and gals coming in too, your smart people are like-minded they get it. Especially ones that have seen the ways before, when you have this kind of change, it's a cultural shift and technology shift and business model shift at the same time. Yeah. And to me there's gonna be chaos, but at the end of the day, >>I mean there's fun and >>Chaos. That's opportunity. There's a fun and fun and opportunity. >>It's fun and chaos, you know, and yeah. Likeminded people and the team has really been the driving factor with our company. We are all very much excited about what we're doing and it's been driving us forward. >>Well, keep in touch. Thanks for coming on the cube and sharing, sharing a story with us in the world. We really appreciate we'll keep in touch with you guys. Do love what you do. Oscar ballet here inside the cube Argo verse eCommerce shop. The beginning of this wave is happening. The convergence of physical virtual is a hybrid mode. It's a steady state. It is not gonna go away. It's only gonna get bigger, more cooler, more relevant than ever before. Cube covering it like a blanket here in Monaco, crypto summit. I'm John furrier. We'll be right back after this short break.

>>Hey everyone. Welcome to this cube conversation featuring Sendbird. I'm your host, Lisa Martin, John Kim joins me next, the CEO of Sendbird John, welcome to the program. Talk to the audience about Sendbird. What is it that you guys do? What gaps in the market did you see back in 2013? >>Yeah. Well thank you for so much and I'm excited to be here. So just to give you a quick introduction about Sendbird, we started a company back in 2013, and then we first started out as a consumer based product building social network for moms, but around 2015, when the world was really moving towards messaging, we kind of looked at as an opportunity to build a message feature for our own application. That's when we kind of realized a problem that we, there weren't really modern SDK or API products that can enable modern messaging experience for other applications. So we decided to kind of build that and then actually launched on the side, which actually became the main business. So we applied a wide Combinator with that idea and launched to the world in 2016 and then kind of fast forward, you know, good six years. We're now powering over a quarter billion users on a monthly basis, sending billions of billions of messages, cross different vertical site, online community site credit like door C. So it's kinda where we're today. >>And you're now valued at 1 billion. So a lot of evolution, a lot of momentum since 2013, especially since 2016, but also during the last couple of years. Talk to me about some of the philosophies and the approaches that Sendbird has applied to be driving such momentum during such volatile times. >>Yeah, I think over the years, what we're all came to realize is that more and more and more businesses are becoming mobile first. So by focusing on the mobile basic experiences, conversations really became one of the most efficient and effective ways to build relationship between the users as well as the relationship with the brands. So by incorporating experiences like messaging, people were able to increase the engagement and the retention and ultimately conversion within the applications. And that's kind of where we come in because more and more it's, it's becoming harder and harder for developers and the business operators to build modern messaging experience. So we really want to make sure that all of the developers and all of the businesses can harness the power of in a messaging as easily as possible, getting all the, you know, feature richness plus the scalability that you need. So we really try to build the best in class product so that you can have those know messaging within your application. >>Let's talk about that. So B building relationships in a digital world today is table stakes for any business consumers, patience was quite thin. The last couple of years, it probably still is to some extent, but building relationships in today's omnichannel world, whereas consumers, we expect we can go to many different applications, apps, and complain, or raise issues with technologies or products or services. How is that table stakes for an organization to be able to have that in-app experience to retain the customers, the data, the insights. >>Yeah. Today, if you think about how a businesses are engaging with customers, there are a lot of different channels, right? There's SMS, there's, you know, phone calls, direct mailing emails, and also a messaging. If you think about as a user, what is the best experience you want to have with the, with the brands it's usually through the mobile applications. That's why the entire mobile economy has really grew and exploded over the years. One thing that if you think about again as a user, what are the experience that you don't like to have is if you think about SMSs SM now plagued with like phishing and scams issues, FTC reported that they're more than hundreds of millions of dollars that are costing us consumers last year, and that's more than 50% growth from the previous year. So more and more of these kind of other external channels are becoming a channel for again, for like fishing and scams and really disrupting the user experience. >>But if you think about the, a messaging becoming your default mode of engaging with the brands and other users is secure more reliable, and also as businesses you get, you, you get to control the user experience, plus actually owning the data. So you can actually improve your products and services on top of that. So that's some of the approaches that we've seen over the years. More and more businesses are using in a messaging as the default mode of communication, and then using other channels as a, kind of like a last mile delivery in case, you know, users, miss certain kind of conversation, they may rely on those other channels as all that option. Just to touch a little bit on the, just to touch a little bit on the messaging side of things. So if you think about how the world is using messaging today, you might, you know, think of missing apps like yo meta facing messenger, or, you know, WhatsApp and all of this, this other kind of consumer applications, consumer mobile messaging is kind of really dominating the world. But if you think about individual businesses, you really don't really want to hand over those experiences and the user data to other kind of social media networks. So what you want to do is actually have that similar level, if not better experience within your application, but also be able to, again, own those data, control this, those data and make sure that your users and your customers are having a very clean and secure experience on your application. >>Absolutely. Without secure clean experience is critical for brands. Talk to me about how your customer conversations have evolved over the last few years as brand loyalty, customer satisfaction, scores, churn. All of these things are very impactful to organizations. Has the conversation risen up the C-suite? Is it, is it that impactful these days? >>Yeah. So B really based on the brands that you are operating again, like the customer engagement and customer retention, and sometimes the conversations turning into business outcomes through convergence, all of these things are really impacted a lot by the conversations or in a messaging. So what we've seen over the years is anywhere from the user acquisition perspective, from the marketing also within the user engagement retention, that's happening in your application, whether it be user to user or your sales team, having conversations with the customers, ultimately to like customer support measuring CS, and how do you keep the customers? Sure that customers never hit a dead end. All of this entire customer journey now can be mapped through messaging. So because that's becoming more and more important and critical for your business, now's the, if you think about our buyers today, we are talking to CEOs and CTOs, as well as chief digital officers in some of these enterprises companies. >>That makes sense. I mean, some of the, the benefits that you've mentioned, increasing retention, driving I'm direct sales cross sale up sale, brand loyalty that impacts every aspect of an organization, customer success, et cetera. Let's talk now about some customer examples. I know you mentioned Reddit. I know hinge is another great customer example. Give me a couple examples that really showcase the value that Sunbird delivers. >>Yeah. So Reddit has been one of our earliest customers, even when you're like just a C stage company. If you think about Reddit, red has successfully trans trans transformed from the web based company to a mobile first company. And by incorporating a messaging to a modern experiences, just like, again, once you have on WhatsApp, they're able to increase the user engagement and ultimately the retention on the application. So more and more users are coming back to the application in any given month. So that's one, one example. And again, keeping the community safe and secure is very, very important for a community like Reddit. So offering powerful and moderation capabilities for the community MOS. Those are also very important factors why Reddi decided to work with us. Some of the other examples, like, you know, Crafton pub, one of the world's most successful and largest games today now, they able, they were able to increase their user engagement and ultimately the overall, you know, session time within the game by incorporating messaging that powers the users online communities through lobby chat, as well as, you know, client chat. >>So how to keep the users more engaged in return to game and stay there for a longer period of time, ultimately increasing the lifetime value of the gamers. And then a few other like business industry use cases like keep trucking recently rebranded as motive, drastically improved the collaboration between this, you know, operations control and, and it's truck drivers. So those kind of communication capabilities obviously increase the safety of the drivers as well as the trust and then openness and overall collaboration within the businesses. So those are some of the examples. And I think we mentioned like hinge before, how do you kind of bring all of those conversations to stay within the applications? So the users don't have to reveal their, you know, personal information so that the conversation become, again, stays on the application, keep the user happy, more secure and safe for the, all the users. >>That security is something that keeps jumping out to me. We have seen the threat landscape change dramatically in the last couple of years. It is so amorphous, but you mentioned the SMS security issues that it has. And I, I think a staff that you guys provided to me was that the FTC reported that tech scams cost us consumers 131 million last year in 2021, which as you mentioned, is a huge increase from 2020. Talk a little bit more about the importance of being able to abstract some of that personal information as consumers. We give it out so freely and it's, it's a it's risk. >>Absolutely. So again, some of the most common fishing scams that we all as the consumers receive these days are, you know, pretending to be another businesses telling you, Hey, click here to, you know, get a refund on, on, on a credit card charge or, you know, there's a fraudulent cases. Like there's something that makes you either call a number or, you know, go to a certain link and you kind of have to trust and try to figure out is this a messaging that's really that brand that you are engaging with? Or is this something someone else that's pretending to that, to be that brand? So is the burden is on the end customers, unfortunately, all the fishings and everything's like a law, large, large number. So the more people you send out those messages, ultimately someone will get tricked into those messages and ultimately costing a lot of money for the end consumers. >>Now, the benefit of having enough conversations is that your users are secure when the users get a push notification or in a message, you know, where that's exactly happening, cuz you have full context of the business and the application you're in. And then whenever someone, somebody sends you a message, you know, the sender and the receiver's already authenticated. So those users are secure from the get go. And because of the contextual rich experience you have within the messaging, plus all those extra security layers they're bake to the user experience, the, the end benefit for the customers are incredible. Cuz again, you can trust the conversation that you're having with the brand and then the messages tend to be a lot more richer and better user experience, also better latency and just overall more frictionless experience for the end customers. So that gives a lot more safety and more benefit for the end customer as well as the business brands. >>Absolutely two things that you just said that really jumped out at me. Trust and authenticity. We think of the five generations that are in the workforce today, engaging with companies via apps that, that trust and authenticity and that security is. It just, it gets more important every day. Talk to me about when you're in customer conversations or you're talking with analysts, what are some of the things that you describe as the key differentiators that makes Sendbird in-app messaging really stand out about the competition? >>Yeah. One of the things that we really focus on was can we actually serve the world? So scalability is one of the key important aspects, how we were able to win customers like Reddit, you know, DoorDash and even like incredible customers like Paytm, one of the largest FinTech application in India. So being able to provide us scalability so that your customers, our customers, and the developers can go to sleep at night without having to worry about will this work now, but also other on top of top of those things, the feature richness cuz ultimately what our customer want is how can they engage with their customers in a modern and ale way. So by offering the features that are up in the latest, in the greatest that you'd expect out of other consumer application, again like WhatsApp, Facebook messenger, or even things like slack, we offer a lot of those features from get go. >>So by having those feature richness out of the box, you can implement a modern missing experience from day one. So you can go to market much faster, but also give more trust for the users cuz ultimately end customers are already used to using the best missing experiences out there. So as soon as they kind of feel the experience are a little bit, you know, outdated, they'll stop trusting the brand. So how do you kind of give them moderate and trusting and, and secure experience for the user is very, very critical for the businesses. So you can offer those again from out of the box, >>Out of the box, absolutely table stakes for businesses in every industry. John, thank you so much for coming on the queue today. Talking to me about Sendbird in-app messaging, the values, the benefits, the what's in it for customers and businesses. We appreciate your insights. >>Thanks. So >>John Kim I'm Lisa Martin, you're watching this conversation.

>> From "theCUBE" studios in Palo Alto, in Boston, bringing you data driven insights from "theCUBE" and ETR. This is "Breaking Analysis" with Dave Vellante. >> There are very few political issues that get bipartisan support these days, nevermind consensus spanning geopolitical boundaries. But whether we're talking across the aisle or over the pond, there seems to be common agreement that the power of big tech firms should be regulated. But the government's track record when it comes to antitrust aimed at big tech is actually really mixed, mixed at best. History has shown that market forces rather than public policy have been much more effective at curbing monopoly power in the technology industry. Hello, and welcome to this week's "Wikibon CUBE" insights powered by ETR. In this "Breaking Analysis" we welcome in frequent "CUBE" contributor Dave Moschella, author and senior fellow at the Information Technology and Innovation Foundation. Dave, welcome, good to see you again. >> Hey, thanks Dave, good to be here. >> So you just recently published an article, we're going to bring it up here and I'll read the title, "Theory Aside, Antitrust Advocates Should Keep Their "Big Tech" Ambitions Narrow". And in this post you argue that big sweeping changes like breaking apart companies to moderate monopoly power in the tech industry have been ineffective compared to market forces, but you're not saying government shouldn't be involved rather you're suggesting that more targeted measures combined with market forces are the right answer. Can you maybe explain a little bit more the premise behind your research and some of your conclusions? >> Sure, and first let's go back to that title, when I said, theory aside, that is referring to a huge debate that's going on in global antitrust circles these days about whether antitrust should follow the traditional path of being invoked when there's real harm, demonstrable harm to consumers or a new theory that says that any sort of vast monopoly power inevitably will be bad for competition and consumers at some point, so your best to intervene now to avoid harms later. And that school, which was a very minor part of the antitrust world for many, many years is now quite ascendant and the debate goes on doesn't matter which side of that you're on the questions sort of there well, all right, well, if you're going to do something to take on big tech and clearly many politicians, regulators are sort of issuing to do something, what would you actually do? And what are the odds that that'll do more good than harm? And that was really the origins of the piece and trying to take a historical view of that. >> Yeah, I learned a new word, thank you. Neo-brandzian had to look it up, but basically you're saying that traditionally it was proving consumer harm versus being proactive about the possibility or likelihood of consumer harm. >> Correct, and that's a really big shift that a lot of traditional antitrust people strongly object to, but is now sort of the trendy and more send and view. >> Got it, okay, let's look a little deeper into the history of tech monopolies and government action and see what we can learn from that. We put together this slide that we can reference. It shows the three historical targets in the tech business and now the new ones. In 1969, the DOJ went after IBM, Big Blue and it's 13 years later, dropped its suit. And then in 1984 the government broke Ma Bell apart and in the late 1990s, went after Microsoft, I think it was 1998 in the Wintel monopoly. And recently in an interview with tech journalist, Kara Swisher, the FTC chair Lena Khan claimed that the government played a major role in moderating the power of tech giants historically. And I think she even specifically referenced Microsoft or maybe Kara did and basically said the industry and consumers from the dominance of companies like Microsoft. So Dave, let's briefly talk about and Kara by the way, didn't really challenge that, she kind of let it slide. But let's talk about each of these and test this concept a bit. Were the government actions in these instances necessary? What were the outcomes and the consequences? Maybe you could start with IBM and AT&T. >> Yeah, it's a big topic and there's a lot there and a lot of history, but I might just sort of introduce by saying for whatever reasons antitrust has been part of the entire information technology industry history from mainframe to the current period and that slide sort of gives you that. And the reasons for that are I think once that we sort of know the economies of scale, network effects, lock in safe choices, lot of things that explain it, but the good bit about that is we actually have so much history of this and we can at least see what's happened in the past and when you look at IBM and AT&T they both were massive antitrust cases. The one against IBM was dropped and it was dropped in as you say, in 1980. Well, what was going on in at that time, IBM was sort of considered invincible and unbeatable, but it was 1981 that the personal computer came around and within just a couple of years the world could see that the computing paradigm had change from main frames and minis to PCs lines client server and what have you. So IBM in just a couple of years went from being unbeatable, you can't compete with them, we have to break up with them to being incredibly vulnerable and in trouble and never fully recovered and is sort of a shell of what it once was. And so the market took care of that and no action was really necessary just by everybody thinking there was. The case of AT&T, they did act and they broke up the company and I would say, first question is, was that necessary? Well, lots of countries didn't do that and the reality is 1980 breaking it up into long distance and regional may have made some sense, but by the 1990 it was pretty clear that the telecom world was going to change dramatically from long distance and fixed wires services to internet services, data services, wireless services and all of these things that we're going to restructure the industry anyways. But AT& T one to me is very interesting because of the unintended consequences. And I would say that the main unintended consequence of that was America's competitiveness in telecommunications took a huge hit. And today, to this day telecommunications is dominated by European, Chinese and other firms. And the big American sort of players of the time AT&T which Western Electric became Lucent, Lucent is now owned by Nokia and is really out of it completely and most notably and compellingly Bell Labs, the Bell Labs once the world's most prominent research institution now also a shell of itself and as it was part of Lucent is also now owned by the Finnish company Nokia. So that restructuring greatly damaged America's core strength in telecommunications hardware and research and one can argue we've never recovered right through this 5IG today. So it's a very good example of the market taking care of, the big problem, but meddling leading to some unintended consequences that have hurt the American competitiveness and as we'll talk about, probably later, you can see some of that going on again today and in the past with Microsoft and Intel. >> Right, yeah, Bell Labs was an American gem, kind of like Xerox PARC and basically gone now. You mentioned Intel and Microsoft, Microsoft and Intel. As many people know, some young people don't, IBM unwillingly handed its monopoly to Intel and Microsoft by outsourcing the micro processor and operating system, respectively. Those two companies ended up with IBM ironically, agreeing to take OS2 which was its proprietary operating system and giving Intel, Microsoft Windows not realizing that its ability to dominate a new disruptive market like PCs and operating systems had been vaporized to your earlier point by the new Wintel ecosystem. Now Dave, the government wanted to break Microsoft apart and split its OS business from its application software, in the case of Intel, Intel only had one business. You pointed out microprocessors so it couldn't bust it up, but take us through the history here and the consequences of each. >> Well, the Microsoft one is sort of a classic because the antitrust case which was raging in the sort of mid nineties and 1998 when it finally ended, those were the very, once again, everybody said, Bill Gates was unstoppable, no one could compete with Microsoft they'd buy them, destroy them, predatory pricing, whatever they were accusing of the attacks on Netscape all these sort of things. But those the very years where it was becoming clear first that Microsoft basically missed the early big years of the internet and then again, later missed all the early years of the mobile phone business going back to BlackBerrys and pilots and all those sorts of things. So here we are the government making the case that this company is unstoppable and you can't compete with them the very moment they're entirely on the defensive. And therefore wasn't surprising that that suit eventually was dropped with some minor concessions about Microsoft making it a little bit easier for third parties to work with them and treating people a little bit more, even handling perfectly good things that they did. But again, the more market took care of the problem far more than the antitrust activities did. The Intel one is also interesting cause it's sort of like the AT& T one. On the one hand antitrust actions made Intel much more likely and in fact, required to work with AMD enough to keep that company in business and having AMD lowered prices for consumers certainly probably sped up innovation in the personal computer business and appeared to have a lot of benefits for those early years. But when you look at it from a longer point of view and particularly when look at it again from a global point of view you see that, wow, they not so clear because that very presence of AMD meant that there's a lot more pressure on Intel in terms of its pricing, its profitability, its flexibility and its volumes. All the things that have made it harder for them to A, compete with chips made in Taiwan, let alone build them in the United States and therefore that long term effect of essentially requiring Intel to allow AMD to exist has undermined Intel's position globally and arguably has undermined America's position in the long run. And certainly Intel today is far more vulnerable to an ARM and Invidia to other specialized chips to China, to Taiwan all of these things are going on out there, they're less capable of resisting that than they would've been otherwise. So, you thought we had some real benefits with AMD and lower prices for consumers, but the long term unintended consequences are arguably pretty bad. >> Yeah, that's why we recently wrote in Intel two "Strategic To Fail", we'll see, Okay. now we come to 2022 and there are five companies with anti-trust targets on their backs. Although Microsoft seems to be the least susceptible to US government ironically intervention at this this point, but maybe not and we show "The Cincos Comas Club" in a homage to Russ Hanneman of the show "Silicon Valley" Apple, Microsoft, Google, and Amazon all with trillion dollar plus valuations. But meta briefly crossed that threshold like Mr. Hanneman lost a comma and is now well under that market cap probably around five or 600 million, sorry, billion. But under serious fire nonetheless Dave, people often don't realize the immense monopoly power that IBM had which relatively speaking when measured its percent of industry revenue or profit dwarf that of any company in tech ever, but the industry is much smaller then, no internet, no cloud. Does it call for a different approach this time around? How should we think about these five companies their market power, the implications of government action and maybe what you suggested more narrow action versus broad sweeping changes. >> Yeah, and there's a lot there. I mean, if you go back to the old days IBM had what, 70% of the computer business globally and AT&T had 90% or so of the American telecom market. So market shares that today's players can only dream of. Intel and Microsoft had 90% of the personal computer market. And then you look at today the big five and as wealthy and as incredibly successful as they've been, you sort of have almost the argument that's wrong on the face of it. How can five companies all of which compete with each other to at least some degree, how can they all be monopolies? And the reality is they're not monopolies, they're all oligopolies that are very powerful firms, but none of them have an outright monopoly on anything. There are competitors in all the spaces that they're in and increasing and probably increasingly so. And so, yeah, I think people conflate the extraordinary success of the companies with this belief that therefore they are monopolist and I think they're far less so than those in the past. >> Great, all right, I want to do a quick drill down to cloud computing, it's a key component of digital business infrastructure in his book, "Seeing Digital", Dave Moschella coined a term the matrix or the key which is really referred to the key technology platforms on which people are going to build digital businesses. Dave, we joke you should have called it the metaverse you were way ahead of your time. But I want to look at this ETR chart, we show spending momentum or net score on the vertical access market share or pervasiveness in the dataset on the horizontal axis. We show this view a lot, we put a dotted line at the 40% mark which indicates highly elevated spending. And you can sort of see Microsoft in the upper right, it's so far up to the right it's hidden behind the January 22 and AWS is right there. Those two dominate the cloud far ahead of the pack including Google Cloud. Microsoft and to a lesser extent AWS they dominate in a lot of other businesses, productivity, collaboration, database, security, video conferencing. MarTech with LinkedIn PC software et cetera, et cetera, Googles or alphabets of business of course is ads and we don't have similar spending data on Apple and Facebook, but we know these companies dominate their respective business. But just to give you a sense of the magnitude of these companies, here's some financial data that's worth looking at briefly. The table ranks companies by market cap in trillions that's the second column and everyone in the club, but meta and each has revenue well over a hundred billion dollars, Amazon approaching half a trillion dollars in revenue. The operating income and cash positions are just mind boggling and the cash equivalents are comparable or well above the revenues of highly successful tech companies like Cisco, Dell, HPE, Oracle, and Salesforce. They're extremely profitable from an operating income standpoint with the clear exception of Amazon and we'll come back to that in a moment and we show the revenue multiples in the last column, Apple, Microsoft, and Google, just insane. Dave, there are other equally important metrics, CapX is one which kind of sets the stage for future scale and there are other measures. >> Yeah, including our research and development where those companies are spending hundreds of billions of dollars over the years. And I think it's easy to look at those numbers and just say, this doesn't seem right, how can any companies have so much and spend so much? But if you think of what they're actually doing, those companies are building out the digital infrastructure of essentially the entire world. And I remember once meeting some folks at Google, and they said, beyond AI, beyond Search, beyond Android, beyond all the specific things we do, the biggest thing we're actually doing is building a physical infrastructure that can deliver search results on any topic in microseconds and the physical capacity they built costs those sorts of money. And when people start saying, well, we should have lots and lots of smaller companies well, that sounds good, yeah, it's all right, but where are those companies going to get the money to build out what needs to be built out? And every country in the world is trying to build out its digital infrastructure and some are going to do it much better than others. >> I want to just come back to that chart on Amazon for a bit, notice their comparatively tiny operating profit as a percentage of revenue, Amazon is like Bezos giant lifestyle business, it's really never been that profitable like most retail. However, there's one other financial data point around Amazon's business that we want to share and this chart here shows Amazon's operating profit in the blue bars and AWS's in the orange. And the gray line is the percentage of Amazon's overall operating profit that comes from AWS. That's the right most access, so last quarter we were well over a hundred percent underscoring the power of AWS and the horrendous margins in retail. But AWS is essentially funding Amazon's entrance into new markets, whether it's grocery or movies, Bezos moves into space. Dave, a while back you collaborated with us and we asked our audience, what could disrupt Amazon? And we came up with your detailed help, a number of scenarios as shown here. And we asked the audience to rate the likelihood of each scenario in terms of its likelihood of disrupting Amazon with a 10 being highly likely on average the score was six with complacency, arrogance, blindness, you know, self-inflicted wounds really taking the top spot with 6.5. So Dave is breaking up Amazon the right formula in your view, why or why not? >> Yeah, there's a couple of things there. The first is sort of the irony that when people in the sort of regulatory world talk about the power of Amazon, they almost always talk about their power in consumer markets, whether it's books or retail or impact on malls or main street shops or whatever and as you say that they make very little money doing that. The interest people almost never look at the big cloud battle between Amazon, Microsoft and lesser extent Google, Alibaba others, even though that's where they're by far highest market share and pricing power and all those things are. So the regulatory focus is sort of weird, but you know, the consumer stuff obviously gets more appeal to the general public. But that survey you referred to me was interesting because one of the challenges I sort of sent myself I was like okay, well, if I'm going to say that IBM case, AT&T case, Microsoft's case in all those situations the market was the one that actually minimized the power of those firms and therefore the antitrust stuff wasn't really necessary. Well, how true is that going to be again, just cause it's been true in the past doesn't mean it's true now. So what are the possible scenarios over the 2020s that might make it all happen again? And so each of those were sort of questions that we put out to others, but the ones that to me by far are the most likely I mean, they have the traditional one of company cultures sort of getting fat and happy and all, that's always the case, but the more specific ones, first of all by far I think is China. You know, Amazon retail is a low margin business. It would be vulnerable if it didn't have the cloud profits behind it, but imagine a year from now two years from now trade tensions with China get worse and Christmas comes along and China just says, well, you know, American consumers if you want that new exercise bike or that new shoes or clothing, well, anything that we make well, actually that's not available on Amazon right now, but you can get that from Alibaba. And maybe in America that's a little more farfetched, but in many countries all over the world it's not farfetched at all. And so the retail divisions vulnerability to China just seems pretty obvious. Another possible disruption, Amazon has spent billions and billions with their warehouses and their robots and their automated inventory systems and all the efficiencies that they've done there, but you could argue that maybe someday that's not really necessary that you have Search which finds where a good is made and a logistical system that picks that up and delivers it to customers and why do you need all those warehouses anyways? So those are probably the two top one, but there are others. I mean, a lot of retailers as they get stronger online, maybe they start pulling back some of the premium products from Amazon and Amazon takes their cut of whatever 30% or so people might want to keep more of that in house. You see some of that going on today. So the idea that the Amazon is in vulnerable disruption is probably is wrong and as part of the work that I'm doing, as part of stuff that I do with Dave and SiliconANGLE is how's that true for the others too? What are the scenarios for Google or Apple or Microsoft and the scenarios are all there. And so, will these companies be disrupted as they have in the past? Well, you can't say for sure, but the scenarios are certainly plausible and I certainly wouldn't bet against it and that's what history tells us. And it could easily happen once again and therefore, the antitrust should at least be cautionary and humble and realize that maybe they don't need to act as much as they think. >> Yeah, now, one of the things that you mentioned in your piece was felt like narrow remedies, were more logical. So you're not arguing for totally Les Affaire you're pushing for remedies that are more targeted in scope. And while the EU just yesterday announced new rules to limit the power of tech companies and we showed the article, some comments here the regulators they took the social media to announce a victory and they had a press conference. I know you watched that it was sort of a back slapping fest. The comments however, that we've sort of listed here are mixed, some people applauded, but we saw many comments that were, hey, this is a horrible idea, this was rushed together. And these are going to result as you say in unintended consequences, but this is serious stuff they're talking about applying would appear to be to your point or your prescription more narrowly defined restrictions although a lot of them to any company with a market cap of more than 75 billion Euro or turnover of more than 77.5 billion Euro which is a lot of companies and imposing huge penalties for violations up to 20% of annual revenue for repeat offenders, wow. So again, you've taken a brief look at these developments, you watched the press conference, what do you make of this? This is an application of more narrow restrictions, but in your quick assessment did they get it right? >> Yeah, let's break that down a little bit, start a little bit of history again and then get to Europe because although big sweeping breakups of the type that were proposed for IBM, Microsoft and all weren't necessary that doesn't mean that the government didn't do some useful things because they did. In the case of IBM government forces in Europe and America basically required IBM to make it easier for companies to make peripherals type drives, disc drives, printers that worked with IBM mainframes. They made them un-bundle their software pricing that made it easier for database companies and others to sell their of products. With AT&T it was the government that required AT&T to actually allow other phones to connect to the network, something they argued at the time would destroy security or whatever that it was the government that required them to allow MCI the long distance carrier to connect to the AT network for local deliveries. And with that Microsoft and Intel the government required them to at least treat their suppliers more even handly in terms of pricing and policies and support and such things. So the lessons out there is the big stuff wasn't really necessary, but the little stuff actually helped a lot and I think you can see the scenarios and argue in the piece that there's little stuff that can be done today in all the cases for the big five, there are things that you might want to consider the companies aren't saints they take advantage of their power, they use it in ways that sometimes can be reigned in and make for better off overall. And so that's how it brings us to the European piece of it. And to me, the European piece is much more the bad scenario of doing too much than the wiser course of trying to be narrow and specific. What they've basically done is they have a whole long list of narrow things that they're all trying to do at once. So they want Amazon not to be able to share data about its selling partners and they want Apple to open up their app store and they don't want people Google to be able to share data across its different services, Android, Search, Mail or whatever. And they don't want Facebook to be able to, they want to force Facebook to open up to other messaging services. And they want to do all these things for all the big companies all of which are American, and they want to do all that starting next year. And to me that looks like a scenario of a lot of difficult problems done quickly all of which might have some value if done really, really well, but all of which have all kinds of risks for the unintended consequence we've talked before and therefore they seem to me being too much too soon and the sort of problems we've seen in the past and frankly to really say that, I mean, the Europeans would never have done this to the companies if they're European firms, they're doing this because they're all American firms and the sort of frustration of Americans dominance of the European tech industry has always been there going back to IBM, Microsoft, Intel, and all of them. But it's particularly strong now because the tech business is so big. And so I think the politics of this at a time where we're supposedly all this great unity of America and NATO and Europe in regards to Ukraine, having the Europeans essentially go after the most important American industry brings in the geopolitics in I think an unavoidable way. And I would think the story is going to get pretty tense over the next year or so and as you say, the Europeans think that they're taking massive actions, they think they're doing the right thing. They think this is the natural follow on to the GDPR stuff and even a bigger version of that and they think they have more to come and they see themselves as the people taming big tech not just within Europe, but for the world and absent any other rules that they may pull that off. I mean, GDPR has indeed spread despite all of its flaws. So the European thing which it doesn't necessarily get huge attention here in America is certainly getting attention around the world and I would think it would get more, even more going forward. >> And the caution there is US public policy makers, maybe they can provide, they will provide a tailwind maybe it's a blind spot for them and it could be a template like you say, just like GDPR. Okay, Dave, we got to leave it there. Thanks for coming on the program today, always appreciate your insight and your views, thank you. >> Hey, thanks a lot, Dave. >> All right, don't forget these episodes are all available as podcast, wherever you listen. All you got to do is search, "Breaking Analysis Podcast". Check out ETR website, etr.ai. We publish every week on wikibon.com and siliconangle.com. And you can email me david.vellante@siliconangle.com or DM me @davevellante. Comment on my LinkedIn post. This is Dave Vellante for Dave Michelle for "theCUBE Insights" powered by ETR. Have a great week, stay safe, be well and we'll see you next time. (slow tempo music)

>> From theCUBE Studios in Palo Alto in Boston, bringing you data-driven insights from theCUBE and ETR, this is "Breaking Analysis" with Dave Vellante. >> If it weren't for Pat Gelsinger, Intel's future would be a disaster. Even with his clear vision, fantastic leadership, deep technical and business acumen, and amazing positivity, the company's future is in serious jeopardy. It's the same story we've been telling for years. Volume is king in the semiconductor industry, and Intel no longer is the volume leader. Despite Intel's efforts to change that dynamic With several recent moves, including making another go at its Foundry business, the company is years away from reversing its lagging position relative to today's leading foundries and design shops. Intel's best chance to survive as a leader in our view, will come from a combination of a massive market, continued supply constraints, government money, and luck, perhaps in the form of a deal with apple in the midterm. Hello, and welcome to this week's "Wikibon CUBE Insights, Powered by ETR." In this "Breaking Analysis," we'll update you on our latest assessment of Intel's competitive position and unpack nuggets from the company's February investor conference. Let's go back in history a bit and review what we said in the early 2010s. If you've followed this program, you know that our David Floyer sounded the alarm for Intel as far back as 2012, the year after PC volumes peaked. Yes, they've ticked up a bit in the past couple of years but they pale in comparison to the volumes that the ARM ecosystem is producing. The world has changed from people entering data into machines, and now it's machines that are driving all the data. Data volumes in Web 1.0 were largely driven by keystrokes and clicks. Web 3.0 is going to be driven by machines entering data into sensors, cameras. Other edge devices are going to drive enormous data volumes and processing power to boot. Every windmill, every factory device, every consumer device, every car, will require processing at the edge to run AI, facial recognition, inference, and data intensive workloads. And the volume of this space compared to PCs and even the iPhone itself is about to be dwarfed with an explosion of devices. Intel is not well positioned for this new world in our view. Intel has to catch up on the process, Intel has to catch up on architecture, Intel has to play catch up on security, Intel has to play catch up on volume. The ARM ecosystem has cumulatively shipped 200 billion chips to date, and is shipping 10x Intel's wafer volume. Intel has to have an architecture that accommodates much more diversity. And while it's working on that, it's years behind. All that said, Pat Gelsinger is doing everything he can and more to close the gap. Here's a partial list of the moves that Pat is making. A year ago, he announced IDM 2.0, a new integrated device manufacturing strategy that opened up its world to partners for manufacturing and other innovation. Intel has restructured, reorganized, and many executives have boomeranged back in, many previous Intel execs. They understand the business and have a deep passion to help the company regain its prominence. As part of the IDM 2.0 announcement, Intel created, recreated if you will, a Foundry division and recently acquired Tower Semiconductor an Israeli firm, that is going to help it in that mission. It's opening up partnerships with alternative processor manufacturers and designers. And the company has announced major investments in CAPEX to build out Foundry capacity. Intel is going to spin out Mobileye, a company it had acquired for 15 billion in 2017. Or does it try and get a $50 billion valuation? Mobileye is about $1.4 billion in revenue, and is likely going to be worth more around 25 to 30 billion, we'll see. But Intel is going to maybe get $10 billion in cash from that, that spin out that IPO and it can use that to fund more FABS and more equipment. Intel is leveraging its 19,000 software engineers to move up the stack and sell more subscriptions and high margin software. He got to sell what he got. And finally Pat is playing politics beautifully. Announcing for example, FAB investments in Ohio, which he dubbed Silicon Heartland. Brilliant! Again, there's no doubt that Pat is moving fast and doing the right things. Here's Pat at his investor event in a T-shirt that says, "torrid, bringing back the torrid pace and discipline that Intel is used to." And on the right is Pat at the State of the Union address, looking sharp in shirt and tie and suit. And he has said, "a bet on Intel is a hedge against geopolitical instability in the world." That's just so good. To that statement, he showed this chart at his investor meeting. Basically it shows that whereas semiconductor manufacturing capacity has gone from 80% of the world's volume to 20%, he wants to get it back to 50% by 2030, and reset supply chains in a market that has become important as oil. Again, just brilliant positioning and pushing all the right hot buttons. And here's a slide underscoring that commitment, showing manufacturing facilities around the world with new capacity coming online in the next few years in Ohio and the EU. Mentioning the CHIPS Act in his presentation in The US and Europe as part of a public private partnership, no doubt, he's going to need all the help he can get. Now, we couldn't resist the chart on the left here shows wafer starts and transistor capacity growth. For Intel, overtime speaks to its volume aspirations. But we couldn't help notice that the shape of the curve is somewhat misleading because it shows a two-year (mumbles) and then widens the aperture to three years to make the curve look steeper. Fun with numbers. Okay, maybe a little nitpick, but these are some of the telling nuggets we pulled from the investor day, and they're important. Another nitpick is in our view, wafers would be a better measure of volume than transistors. It's like a company saying we shipped 20% more exabytes or MIPS this year than last year. Of course you did, and your revenue shrank. Anyway, Pat went through a detailed analysis of the various Intel businesses and promised mid to high double digit growth by 2026, half of which will come from Intel's traditional PC they center in network edge businesses and the rest from advanced graphics HPC, Mobileye and Foundry. Okay, that sounds pretty good. But it has to be taken into context that the balance of the semiconductor industry, yeah, this would be a pretty competitive growth rate, in our view, especially for a 70 plus billion dollar company. So kudos to Pat for sticking his neck out on this one. But again, the promise is several years away, at least four years away. Now we want to focus on Foundry because that's the only way Intel is going to get back into the volume game and the volume necessary for the company to compete. Pat built this slide showing the baby blue for today's Foundry business just under a billion dollars and adding in another $1.5 billion for Tower Semiconductor, the Israeli firm that it just acquired. So a few billion dollars in the near term future for the Foundry business. And then by 2026, this really fuzzy blue bar. Now remember, TSM is the new volume leader, and is a $50 billion company growing. So there's definitely a market there that it can go after. And adding in ARM processors to the mix, and, you know, opening up and partnering with the ecosystems out there can only help volume if Intel can win that business, which you know, it should be able to, given the likelihood of long term supply constraints. But we remain skeptical. This is another chart Pat showed, which makes the case that Foundry and IDM 2.0 will allow expensive assets to have a longer useful life. Okay, that's cool. It will also solve the cumulative output problem highlighted in the bottom right. We've talked at length about Wright's Law. That is, for every cumulative doubling of units manufactured, cost will fall by a constant percentage. You know, let's say around 15% in semiconductor world, which is vitally important to accommodate next generation chips, which are always more expensive at the start of the cycle. So you need that 15% cost buffer to jump curves and make any money. So let's unpack this a bit. You know, does this chart at the bottom right address our Wright's Law concerns, i.e. that Intel can't take advantage of Wright's Law because it can't double cumulative output fast enough? Now note the decline in wafer starts and then the slight uptick, and then the flattening. It's hard to tell what years we're talking about here. Intel is not going to share the sausage making because it's probably not pretty, But you can see on the bottom left, the flattening of the cumulative output curve in IDM 1.0 otherwise known as the death spiral. Okay, back to the power of Wright's Law. Now, assume for a second that wafer density doesn't grow. It does, but just work with us for a second. Let's say you produce 50 million units per year, just making a number up. That gets you cumulative output to $100 million in, sorry, 100 million units in the second year to take you two years to get to that 100 million. So in other words, it takes two years to lower your manufacturing cost by, let's say, roughly 15%. Now, assuming you can get wafer volumes to be flat, which that chart showed, with good yields, you're at 150 now in year three, 200 in year four, 250 in year five, 300 in year six, now, that's four years before you can take advantage of Wright's Law. You keep going at that flat wafer start, and that simplifying assumption we made at the start and 50 million units a year, and well, you get to the point. You get the point, it's now eight years before you can get the Wright's Law to kick in, and you know, by then you're cooked. But now you can grow the density of transistors on a chip, right? Yes, of course. So let's come back to Moore's Law. The graphic on the left says that all the growth is in the new stuff. Totally agree with that. Huge term that Pat presented. Now he also said that until we exhaust the periodic table of elements, Moore's Law is alive and well, and Intel is the steward of Moore's Law. Okay, that's cool. The chart on the right shows Intel going from 100 billion transistors today to a trillion by 2030. Hold that thought. So Intel is assuming that we'll keep up with Moore's Law, meaning a doubling of transistors every let's say two years, and I believe it. So bring that back to Wright's Law, in the previous chart, it means with IDM 2.0, Intel can get back to enjoying the benefits of Wright's Law every two years, let's say, versus IDM 1.0 where they were failing to keep up. Okay, so Intel is saved, yeah? Well, let's bring into this discussion one of our favorite examples, Apple's M1 ARM-based chip. The M1 Ultra is a new architecture. And you can see the stats here, 114 billion transistors on a five nanometer process and all the other stats. The M1 Ultra has two chips. They're bonded together. And Apple put an interposer between the two chips. An interposer is a pathway that allows electrical signals to pass through it onto another chip. It's a super fast connection. You can see 2.5 terabytes per second. But the brilliance is the two chips act as a single chip. So you don't have to change the software at all. The way Intel's architecture works is it takes two different chips on a substrate, and then each has its own memory. The memory is not shared. Apple shares the memory for the CPU, the NPU, the GPU. All of it is shared, meaning it needs no change in software unlike Intel. Now Intel is working on a new architecture, but Apple and others are way ahead. Now let's make this really straightforward. The original Apple M1 had 16 billion transistors per chip. And you could see in that diagram, the recently launched M1 Ultra has $114 billion per chip. Now if you take into account the size of the chips, which are increasing, and the increase in the number of transistors per chip, that transistor density, that's a factor of around 6x growth in transistor density per chip in 18 months. Remember Intel, assuming the results in the two previous charts that we showed, assuming they were achievable, is running at 2x every two years, versus 6x for the competition. And AMD and Nvidia are close to that as well because they can take advantage of TSM's learning curve. So in the previous chart with Moore's Law, alive and well, Intel gets to a trillion transistors by 2030. The Apple ARM and Nvidia ecosystems will arrive at that point years ahead of Intel. That means lower costs and significantly better competitive advantage. Okay, so where does that leave Intel? The story is really not resonating with investors and hasn't for a while. On February 18th, the day after its investor meeting, the stock was off. It's rebound a little bit but investors are, you know, they're probably prudent to wait unless they have really a long term view. And you can see Intel's performance relative to some of the major competitors. You know, Pat talked about five nodes in for years. He made a big deal out of that, and he shared proof points with Alder Lake and Meteor Lake and other nodes, but Intel just delayed granite rapids last month that pushed it out from 2023 to 2024. And it told investors that we're going to have to boost spending to turn this ship around, which is absolutely the case. And that delay in chips I feel like the first disappointment won't be the last. But as we've said many times, it's very difficult, actually, it's impossible to quickly catch up in semiconductors, and Intel will never catch up without volume. So we'll leave you by iterating our scenario that could save Intel, and that's if its Foundry business can eventually win back Apple to supercharge its volume story. It's going to be tough to wrestle that business away from TSM especially as TSM is setting up shop in Arizona, with US manufacturing that's going to placate The US government. But look, maybe the government cuts a deal with Apple, says, hey, maybe we'll back off with the DOJ and FTC and as part of the CHIPS Act, you'll have to throw some business at Intel. Would that be enough when combined with other Foundry opportunities Intel could theoretically produce? Maybe. But from this vantage point, it's very unlikely Intel will gain back its true number one leadership position. If it were really paranoid back when David Floyer sounded the alarm 10 years ago, yeah, that might have made a pretty big difference. But honestly, the best we can hope for is Intel's strategy and execution allows it to get competitive volumes by the end of the decade, and this national treasure survives to fight for its leadership position in the 2030s. Because it would take a miracle for that to happen in the 2020s. Okay, that's it for today. Thanks to David Floyer for his contributions to this research. Always a pleasure working with David. Stephanie Chan helps me do much of the background research for "Breaking Analysis," and works with our CUBE editorial team. Kristen Martin and Cheryl Knight to get the word out. And thanks to SiliconANGLE's editor in chief Rob Hof, who comes up with a lot of the great titles that we have for "Breaking Analysis" and gets the word out to the SiliconANGLE audience. Thanks, guys. Great teamwork. Remember, these episodes are all available as podcast wherever you listen. Just search "Breaking Analysis Podcast." You'll want to check out ETR's website @etr.ai. We also publish a full report every week on wikibon.com and siliconangle.com. You could always get in touch with me on email, david.vellante@siliconangle.com or DM me @dvellante, and comment on my LinkedIn posts. This is Dave Vellante for "theCUBE Insights, Powered by ETR." Have a great week. Stay safe, be well, and we'll see you next time. (upbeat music)

from the cube studios in palo alto in boston bringing you data-driven insights from the cube and etr this is breaking analysis with dave vellante you know we've often said that the next 10 years in cloud computing won't be like the last ten cloud has firmly planted its footprint on the other side of the chasm with the momentum of the entire multi-trillion dollar tech business behind it both sellers and buyers are leaning in by adopting cloud technologies and many are building their own value layers on top of cloud in the coming years we expect innovation will continue to coalesce around the three big u.s clouds plus alibaba in apac with the ecosystem building value on top of the hardware saw tooling provided by the hyperscalers now importantly we don't see this as a race to the bottom rather our expectation is that the large public cloud players will continue to take cost out of their platforms through innovation automation and integration while other cloud providers and the ecosystem including traditional companies that buy it mine opportunities in their respective markets as matt baker of dell is fond of saying this is not a zero sum game welcome to this week's wikibon cube insights powered by etr in this breaking analysis we'll update you on our latest projections in the cloud market we'll share some new etr survey data with some surprising nuggets and drill into this the important cloud database landscape first we want to take a look at what people are talking about in cloud and what's been in the recent news with the exception of alibaba all the large cloud players have reported earnings google continues to focus on growth at the expense of its profitability google reported that it's cloud business which includes applications like google workspace grew 45 percent to five and a half billion dollars but it had an operating loss of 890 billion now since thomas curion joined google to run its cloud business google has increased head count in its cloud business from 25 000 25 000 people now it's up to 40 000 in an effort to catch up to the two leaders but playing catch up is expensive now to put this into perspective let's go back to aws's revenue in q1 2018 when the company did 5.4 billion so almost exactly the same size as google's current total cloud business and aws is growing faster at the time at 49 don't forget google includes in its cloud numbers a big chunk of high margin software aws at the time had an operating profit of 1.4 billion that quarter around 26 of its revenues so it was a highly profitable business about as profitable as cisco's overall business which again is a great business this is what happens when you're number three and didn't get your head out of your ads fast enough now in fairness google still gets high marks on the quality of its technology according to corey quinn of the duck bill group amazon and google cloud are what he called neck and neck with regard to reliability with microsoft azure trailing because of significant disruptions in the past these comments were made last week in a bloomberg article despite some recent high-profile outages on aws not surprisingly a microsoft spokesperson said that the company's cloud offers industry-leading reliability and that gives customers payment credits after some outages thank you turning to microsoft and cloud news microsoft's overall cloud business surpassed 22 billion in the december quarter up 32 percent year on year like google microsoft includes application software and sas offerings in its cloud numbers and gives little nuggets of guidance on its azure infrastructure as a service business by the way we estimate that azure comprises about 45 percent of microsoft's overall cloud business which we think hit a 40 billion run rate last quarter microsoft guided in its earning call that recent declines in the azure growth rates will reverse in q1 and that implies sequential growth for azure and finally it was announced that the ftc not the doj will review microsoft's announced 75 billion acquisition of activision blizzard it appears ftc chair lena khan wants to take this one on herself she of course has been very outspoken about the power of big tech companies and in recent a recent cnbc interview suggested that the u.s government's actions were a meaningful contributor back then to curbing microsoft's power in the 90s i personally found that dubious just ask netscape wordperfect novell lotus and spc the maker of harvard presentation graphics how effective the government was in curbing microsoft power generally my take is that the u s government has had a dismal record regulating tech companies most notably ibm and microsoft and it was market forces company hubris complacency and self-inflicted wounds not government intervention these were far more effective than the government now of course if companies are breaking the law they should be punished but the u.s government hasn't been very productive in its actions and the unintended consequences of regulation could be detrimental to the u.s competitiveness in the race with china but i digress lastly in the news amazon announced earnings thursday and the company's value increased by 191 billion dollars on friday that's a record valuation gain for u.s stocks aws amazon's profit engine grew 40 percent year on year for the quarter it closed the year at 62 billion dollars in revenue and at a 71 billion dollar revenue run rate aws is now larger than ibm which without kindrel is at a 67 billion dollar run rate just for context ibm's revenue in 2011 was 107 billion dollars now there's a conversation going on in the media and social that in order to continue this growth and compete with microsoft that aws has to get into the sas business and offer applications we don't think that's the right strategy for amp from for amazon in the near future rather we see them enabling developers to compete in that business finally amazon disclosed that 48 of its top 50 customers are using graviton 2 instances why is this important because aws is well ahead of the competition in custom silicon chips is and is on a price performance curve that is far better than alternatives especially those based on x86 this is one of the reasons why we think this business is not a race to the bottom aws is being followed by google microsoft and alibaba in terms of developing custom silicon and will continue to drive down their internal cost structures and deliver price performance equal to or better than the historical moore's law curves so that's the recent news for the big u.s cloud providers let's now take a look at how the year ended for the big four hyperscalers and look ahead to next year here's a table we've shown this view before it shows the revenue estimates for worldwide is and paths generated by aws microsoft alibaba and google now remember amazon and alibaba they share clean eye ass figures whereas microsoft and alphabet only give us these nuggets that we have to interpret and we correlate those tidbits with other data that we gather we're one of the few outlets that actually attempts to make these apples to apples comparisons there's a company called synergy research there's another firm that does this but i really can't map to their numbers their gcp figures look far too high and azure appears somewhat overestimated and they do include other stuff like hosted private cloud services but it's another data point that you can use okay back to the table we've slightly adjusted our gcp figures down based on interpreting some of alphabet's statements and other survey data only alibaba has yet to announce earnings so we'll stick to a 2021 market size of about 120 billion dollars that's a 41 growth rate relative to 2020 and we expect that figure to increase by 38 percent to 166 billion in 2022 now we'll discuss this a bit later but these four companies have created an opportunity for the ecosystem to build what we're calling super clouds on top of this infrastructure and we're seeing it happen it was increasingly obvious at aws re invent last year and we feel it will pick up momentum in the coming months and years a little bit more on that later now here's a graphical view of the quarterly revenue shares for these four companies notice that aws has reversed its share erosion and is trending up slightly aws has accelerated its growth rate four quarters in a row now it accounted for 52 percent of the big four hyperscaler revenue last year and that figure was nearly 54 in the fourth quarter azure finished the year with 32 percent of the hyper scale revenue in 2021 which dropped to 30 percent in q4 and you can see gcp and alibaba they're neck and neck fighting for the bronze medal by the way in our recent 2022 predictions post we said google cloud platform would surpass alibaba this year but given the recent trimming of our numbers google's got some work to do for that prediction to be correct okay just to put a bow on the wikibon market data let's look at the quarterly growth rates and you'll see the compression trends there this data tracks quarterly revenue growth rates back to 20 q1 2019 and you can see the steady downward trajectory and the reversal that aws experienced in q1 of last year now remember microsoft guided for sequential growth and azure so that orange line should trend back up and given gcp's much smaller and big go to market investments that we talked about we'd like to see an acceleration there as well the thing about aws is just remarkable that it's able to accelerate growth at a 71 billion run rate business and alibaba you know is a bit more opaque and likely still reeling from the crackdown of the chinese government we're admittedly not as close to the china market but we'll continue to watch from afar as that steep decline in growth rate is somewhat of a concern okay let's get into the survey data from etr and to do so we're going to take some time series views on some of the select cloud platforms that are showing spending momentum in the etr data set you know etr uses a metric we talked about this a lot called net score to measure that spending velocity of products and services netscore basically asks customers are you spending more less or the same on a platform and a vendor and then it subtracts the lesses from the moors and that yields a net score this chart shows net score for five cloud platforms going back to january 2020. note in the table that the table we've inserted inside that chart shows the net score and shared n the latter metric indicates the number of mentions in the data set and all the platforms we've listed here show strong presence in the survey that red dotted line at 40 percent that indicates spending is at an elevated level and you can see azure and aws and vmware cloud on aws as well as gcp are all nicely elevated and bounding off their october figures indicating continued cloud momentum overall but the big surprise in these figures is the steady climb and the steep bounce up from oracle which came in just under the 40 mark now one quarter is not necessarily a trend but going back to january 2020 the oracle peaks keep getting higher and higher so we definitely want to keep watching this now here's a look at some of the other cloud platforms in the etr survey the chart here shows the same time series and we've now brought in some of the big hybrid players notably vmware cloud which is vcf and other on-prem solutions red hat openstack which as we've reported in the past is still popular in telcos who want to build their own cloud we're also starting to see hpe with green lake and dell with apex show up more and ibm which years ago acquired soft layer which was really essentially a bare metal hosting company and over the years ibm cobbled together its own public cloud ibm is now racing after hybrid cloud using red hat openshift as the linchpin to that strategy now what this data tells us first of all these platforms they don't have the same presence in the data set as do the previous players vmware is the one possible exception but other than vmware these players don't have the spending velocity shown in the previous chart and most are below the red line hpe and dell are interesting and notable in that they're transitioning their early private cloud businesses to dell gr sorry hpe green lake and dell apex respectively and finally after years of kind of staring at their respective navels in in cloud and milking their legacy on-prem models they're finally building out cloud-like infrastructure for their customers they're leaning into cloud and marketing it in a more sensible and attractive fashion for customers so we would expect these figures are going to bounce around for a little while for those two as they settle into a groove and we'll watch that closely now ibm is in the process of a complete do-over arvin krishna inherited three generations of leadership with a professional services mindset now in the post gerschner gerstner era both sam palmisano and ginny rometty held on far too long to ibm's service heritage and protected the past from the future they missed the cloud opportunity and they forced the acquisition of red hat to position the company for the hybrid cloud remedy tried to shrink to grow but never got there krishna is moving faster and with the kindred spin is promising mid-single-digit growth which would be a welcome change ibm is a lot of work to do and we would expect its net score figures as well to bounce around as customers transition to the future all right let's take a look at all these different players in context these are all the clouds that we just talked about in a two-dimensional view the vertical axis is net score or spending momentum and the horizontal axis is market share or presence or pervasiveness in the data set a couple of call-outs that we'd like to make here first the data confirms what we've been saying what everybody's been saying aws and microsoft stand alone with a huge presence many tens of billions of dollars in revenue yet they are both well above the 40 line and show spending momentum and they're well ahead of gcp on both dimensions second vmware while much smaller is showing legitimate momentum which correlates to its public statements alibaba the alibaba in this survey really doesn't have enough sample to make hardcore conclusions um you can see hpe and dell and ibm you know similarly they got a little bit more presence in the data set but they clearly have some work to do what you're seeing there is their transitioning their legacy install bases oracle's the big surprise look what oracle was in the january survey and how they've shot up recently now we'll see if this this holds up let's posit some possibilities as to why it really starts with the fact that oracle is the king of mission critical apps now if you haven't seen video on twitter you have to check it out it's it's hilarious we're not going to run the video here but the link will be in our post but i'll give you the short version some really creative person they overlaid a data migration narrative on top of this one tooth guy who speaks in spanish gibberish but the setup is he's a pm he's a he's a a project manager at a bank and aws came into the bank this of course all hypothetical and said we can move all your apps to the cloud in 12 months and the guy says but wait we're running mission critical apps on exadata and aws says there's nothing special about exadata and he starts howling and slapping his knee and laughing and giggling and talking about the 23 year old senior engineer who says we're going to do this with microservices and he could tell he was he was 23 because he was wearing expensive sneakers and what a nightmare they encountered migrating their environment very very very funny video and anyone who's ever gone through a major migration of mission critical systems this is gonna hit home it's funny not funny the point is it's really painful to move off of oracle and oracle for all its haters and its faults is really the best environment for mission critical systems and customers know it so what's happening is oracle's building out the best cloud for oracle database and it has a lot of really profitable customers running on-prem that the company is migrating to oracle cloud infrastructure oci it's a safer bet than ripping it and putting it into somebody else's cloud that doesn't have all the specialized hardware and oracle knowledge because you can get the same integrated exadata hardware and software to run your database in the oracle cloud it's frankly an easier and much more logical migration path for a lot of customers and that's possibly what's happening here not to mention oracle jacks up the license price nearly doubles the license price if you run on other clouds so not only is oracle investing to optimize its cloud infrastructure it spends money on r d we've always talked about that really focused on mission critical applications but it's making it more cost effective by penalizing customers that run oracle elsewhere so this possibly explains why when the gartner magic quadrant for cloud databases comes out it's got oracle so well positioned you can see it there for yourself oracle's position is right there with aws and microsoft and ahead of google on the right-hand side is gartner's critical capabilities ratings for dbms and oracle leads in virtually all of the categories gartner track this is for operational dvms so it's kind of a narrow view it's like the red stack sweet spot now this graph it shows traditional transactions but gartner has oracle ahead of all vendors in stream processing operational intelligence real-time augmented transactions now you know gartner they're like old name framers and i say that lovingly so maybe they're a bit biased and they might be missing some of the emerging opportunities that for example like snowflake is pioneering but it's hard to deny that oracle for its business is making the right moves in cloud by optimizing for the red stack there's little question in our view when it comes to mission critical we think gartner's analysis is correct however there's this other really exciting landscape emerging in cloud data and we don't want it to be a blind spot snowflake calls it the data cloud jamactagani calls it data mesh others are using the term data fabric databricks calls it data lake house so so does oracle by the way and look the terminology is going to evolve and most of the action action that's happening is in the cloud quite frankly and this chart shows a select group of database and data warehouse companies and we've filtered the data for aws azure and gcp customers accounts so how are these accounts or companies that were showing how these vendors were showing doing in aws azure and gcp accounts and to make the cut you had to have a minimum of 50 mentions in the etr survey so unfortunately data bricks didn't make it just not enough presence in the data set quite quite yet but just to give you a sense snowflake is represented in this cut with 131 accounts aws 240 google 108 microsoft 407 huge [ __ ] 117 cloudera 52 just made the cut ibm 92 and oracle 208. again these are shared accounts filtered by customers running aws azure or gcp the chart shows a net score lime green is new ads forest green is spending more gray is flat spending the pink is spending less and the bright red is defection again you subtract the red from the green and you get net score and you can see that snowflake as we reported last week is tops in the data set with a net score in the 80s and virtually no red and even by the way single digit flat spend aws google and microsoft are all prominent in the data set as is [ __ ] and snowflake as i just mentioned and they're all elevated over the 40 mark cloudera yeah what can we say once they were a high flyer they're really not in the news anymore with anything compelling other than they just you know took the company private so maybe they can re-emerge at some point with a stronger story i hope so because as you can see they actually have some new additions and spending momentum in the green just a lot of customers holding steady and a bit too much red but they're in the positive territory at least with uh plus 17 percent unlike ibm and oracle and this is the flip side of the coin ibm they're knee-deep really chest deep in the middle of a major transformation we've said before arvind krishna's strategy and vision is at least achievable prune the portfolio i.e spin out kindrel sell watson health hold serve with the mainframe and deal with those product cycles shift the mix to software and use red hat to win the day in hybrid red hat is working for ibm's growing well into the double digits unfortunately it's not showing up in this chart with little database momentum in aws azure and gcp accounts zero new ads not enough acceleration and spending a big gray middle in nearly a quarter of the base in the red ibm's data and ai business only grew three percent this last quarter and the word database wasn't even mentioned once on ibm's earnings call this has to be a concern as you can see how important database is to aws microsoft google and the momentum it's giving companies like snowflake and [ __ ] and others which brings us to oracle with a net score of minus 12. so how do you square the momentum in oracle cloud spending and the strong ratings and databases from gartner with this picture good question and i would say the following first look at the profile people aren't adding oracle new a large portion of the base 25 is reducing spend by 6 or worse and there's a decent percentage of the base migrating off oracle with a big fat middle that's flat and this accounts for the poor net score overall but what etr doesn't track is how much is being spent rather it's an account based model and oracle is heavily weighted toward big spenders running mission critical applications and databases oracle's non-gaap operating margins are comparable to ibm's gross margins on a percentage basis so a very profitable company with a big license and maintenance in stall basin oracle has focused its r d investments into cloud erp database automation they've got vertical sas and they've got this integrated hardware and software story and this drives differentiation for the company but as you can see in this chart it has a legacy install base that is constantly trying to minimize its license costs okay here's a little bit of different view on the same data we expand the picture with the two dimensions of net score on the y-axis and market share or pervasiveness on the horizontal axis and the table insert is how the data gets plotted y and x respectively not much to add here other than to say the picture continues to look strong for those companies above the 40 line that are focused and their focus and have figured out a clear cloud strategy and aren't necessarily dealing with a big install base the exception of course is is microsoft and the ones below the line definitely have parts of their portfolio which have solid momentum but they're fighting the inertia of a large install base that moves very slowly again microsoft had the advantage of really azure and migrating those customers very quickly okay so let's wrap it up starting with the big three cloud players aws is accelerating and innovating great example is custom silicon with nitro and graviton and other chips that will help the company address concerns related to the race to the bottom it's not a race to zero aws we believe will let its developers go after the sas business and for the most part aws will offer solutions that address large vertical markets think call centers the edge remains a wild card for aws and all the cloud players really aws believes that in the fullness of time all workloads will run in the public cloud now it's hard for us to imagine the tesla autonomous vehicles running in the public cloud but maybe aws will redefine what it means by its cloud microsoft well they're everywhere and they're expanding further now into gaming and the metaverse when he became ceo in 2014 many people said that satya should ditch xbox just as an aside the joke among many oracle employees at the time was that safra katz would buy her kids and her nieces and her nephews and her kids friends everybody xbox game consoles for the holidays because microsoft lost money for everyone that they shipped well nadella has stuck with it and he sees an opportunity to expand through online gaming communities one of his first deals as ceo was minecraft now the acquisition of activision will make microsoft the world's number three gaming company by revenue behind only 10 cent and sony all this will be powered by azure and drive more compute storage ai and tooling now google for its part is battling to stay relevant in the conversation luckily it can afford the massive losses it endures in cloud because the company's advertising business is so profitable don't expect as many have speculated that google is going to bail on cloud that would be a huge mistake as the market is more than large enough for three players which brings us to the rest of the pack cloud ecosystems generally and aws specifically are exploding the idea of super cloud that is a layer of value that spans multiple clouds hides the underlying complexity and brings new value that the cloud players aren't delivering that's starting to bubble to the top and legacy players are staying close to their customers and fighting to keep them spending and it's working dell hpe cisco and smaller predominantly on-plan prem players like pure storage they continue to do pretty well they're just not as sexy as the big cloud players the real interesting activity it's really happening in the ecosystem of companies and firms within industries that are transforming to create their own digital businesses virtually all of them are running a portion of their offerings on the public cloud but often connecting to on-premises workloads and data think goldman sachs making that work and creating a great experience across all environments is a big opportunity and we're seeing it form right before our eyes don't miss it okay that's it for now thanks to my colleague stephanie chan who helped research this week's topics remember these episodes are all available as podcasts wherever you listen just search breaking analysis podcast check out etr's website at etr dot ai and also we publish a full report every week on wikibon.com and siliconangle.com you can get in touch with me email me at david.velante siliconangle.com you can dm me at divalante or comment on my linkedin post this is dave vellante for the cube insights powered by etr have a great week stay safe be well and we'll see you next time [Music] you

>>Welcome everyone to the cubes presentation of the AWS startup showcase open cloud innovations. This is season two episode one of the ongoing series and we're covering exciting and innovative startups from the AWS ecosystem. Today. We're going to focus on the open source community. I'm your host, Dave Vellante. And right now we're going to talk about open source security and mitigating risk in light of a recent discovery of a zero day flaw in log for J a Java logging utility and a related white house executive order that points to the FTC pursuing companies that don't properly secure consumer data as a result of this vulnerability and with me to discuss this critical issue and how to more broadly address software supply chain risk is Don Fisher. Who's the CEO of tide lift. Thank you for coming on the program, Donald. >>Thanks for having me excited to be here. Yeah, pleasure. >>So look, there's a lot of buzz. You open the news, you go to your favorite news site and you see this, you know, a log for J this is an, a project otherwise known as logged for shell. It's this logging tool. My understanding is it's, it's both ubiquitous and very easy to exploit. Maybe you could explain that in a little bit more detail. And how do you think this vulnerability is going to affect things this year? >>Yeah, happy to, happy to dig in a little bit in orient around this. So, you know, just a little definitions to start with. So log for J is a very widely used course component that's been around for quite a while. It's actually an amazing piece of technology log for J is used in practically every serious enterprise Java application over the last 10 going on 20 years. So it's, you know, log for J itself is fantastic. The challenge that organization organizations have been facing relate to a specific security vulnerability that was discovered in log for J and that has been given this sort of brand's name as it happens these days. Folks may remember Heartbleed around the openness to sell vulnerability some years back. This one has been dubbed logged for shell. And the reason why it was given that name is that this is a form of security vulnerability that actually allows attackers. >>You know, if a system is found that hasn't been patched to remediate it, it allows hackers to get full control of a, of a system of a server that has the software running on it, or includes this log for J component. And that means that they can do anything. They can access, you know, private customer data on that system, or really do anything and so-called shell level access. So, you know, that's the sort of definitions of what it is, but the reason why it's important is in the, in the small, you know, this is a open door, right? It's a, if, if organizations haven't patched this, they need to respond to it. But one of the things that's kind of, you know, I think important to recognize here is that this log for J is just one of literally thousands of independently created open source components that flow into the applications that almost every organization built and all of them all software is going to have security vulnerabilities. And so I think that log for J is, has been a catalyst for organizations to say, okay, we've got to solve this specific problem, but we all also have to think ahead about how is this all gonna work. If our software supply chain originates with independent creators across thousands of projects across the internet, how are we going to put a better plan in place to think ahead to the next log for J log for shell style incident? And for sure there will be more >>Okay. So you see this incident as a catalyst to maybe more broadly thinking about how to secure the, the digital supply chain. >>Absolutely. Yeah, it's a, this is proving a point that, you know, a variety of folks have been making for a number of years. Hey, we depend, I mean, honestly these days more than 70% of most applications, most custom applications are comprised of this third party open source code. Project's very similar in origin and governance to log for J that's just reality. It's actually great. That's an amazing thing that the humans collaborating on the internet have caused to be possible that we have this rich comments of open source software to build with, but we also have to be practical about it and say, Hey, how are we going to work together to make sure that that software as much as possible is vetted to ensure that it meets commercial standards, enterprise standards ahead of time. And then when the inevitable issues arise like this incident around the log for J library, that we have a great plan in place to respond to it and to, you know, close the close the door on vulnerabilities when they, when they show up. >>I mean, you know, when you listen to the high level narrative, it's easy to point fingers at organizations, Hey, you're not doing enough now. Of course the U S government has definitely made attempts to emphasize this and, and shore up in, in, in, in, in push people to shore up the software supply chain, they've released an executive order last may, but, but specifically, I mean, it's just a complicated situation. So what steps should organizations really take to make sure that they don't fall prey to these future supply chain attacks, which, you know, are, as you pointed out are inevitable. >>Yeah. I mean, it's, it's a great point that you make that the us federal government has taken proactive steps starting last year, 2021 in the fallout of the solar winds breach, you know, about 12 months ago from the time that we're talking, talking here, the U S government actually was a bit ahead of the game, both in flagging the severity of this, you know, area of concern and also directing organizations on how to respond to it. So the, in May, 2021, the white house issued an executive order on cybersecurity and it S directed federal agencies to undertake a whole bunch of new measures to ensure the security of different aspects of their technology and software supply chain specifically called out open source software as an area where they put, you know, hard requirements around federal agencies when they're acquiring technology. And one of the things that the federal government that the white house cybersecurity executive order directed was that organizations need to start with creating a list of the third-party open source. >>That's flowing into their applications, just that even have a table of contents or an index to start working with. And that's, that's called a, a software bill of materials or S bomb is how some people pronounce that acronym. So th the federal government basically requires federal agencies to now create Nessbaum for their applications to demand a software bill of materials from vendors that are doing business with the government and the strategy there has been to expressly use the purchasing power of the us government to level up industry as a whole, and create the necessary incentives for organizations to, to take this seriously. >>You know, I, I feel like the solar winds hack that you mentioned, of course it was widely affected the government. So we kind of woke them up, but I feel like it was almost like a stuck set Stuxnet moment. Donald were very sophisticated. I mean, for the first time patches that were supposed to be helping us protect, now we have to be careful with them. And you mentioned the, the bill of its software, bill of materials. We have to really inspect that. And so let's get to what you guys do. How do you help organizations deal with this problem and secure their open source software supply chain? >>Yeah, absolutely happy to tell you about, about tide lift and, and how we're looking to help. So, you know, the company, I co-founded the company with a couple of colleagues, all of whom are long-term open source folks. You know, I've been working in around commercializing open source for the last 20 years that companies like red hat and, and a number of others as have my co-founders the opportunity that we saw is that, you know, while there have been vendors for some of the traditional systems level, open source components and stacks like Linux, you know, of course there's red hat and other vendors for Linux, or for Kubernetes, or for some of the databases, you know, there's standalone companies for these logs, for shell style projects, there just hasn't been a vendor for them. And part of it is there's a challenge to cover a really vast territory, a typical enterprise that we inspect has, you know, upwards of 10,000 log for shell log for J like components flowing into their application. >>So how do they get a hand around their hands around that challenge of managing that and ensuring it needs, you know, reasonable commercial standards. That's what tide lifts sets out to do. And we do it through a combination of two elements, both of which are fairly unique in the market. The first of those is a purpose-built software solution that we've created that keeps track of the third-party open source, flowing into your applications, inserts itself into your DevSecOps tool chain, your developer tooling, your application development process. And you can kind of think of it as next to the point in your release process, where you run your unit test to ensure the business logic in the code that your team is writing is accurate and sort of passes tests. We do a inspection to look at the state of the third-party open source packages like Apache log for J that are flowing into your, into your application. >>So there's a software element to it. That's a multi-tenant SAS service. We're excited to be partnered with, with AWS. And one of the reasons why we're here in this venue, talking about how we are making that available jointly with AWS to, to drink customers deploying on AWS platforms. Now, the other piece of the, of our solution is really, really unique. And that's the set of relationships that Tyler has built directly with these independent open source maintainers, the folks behind these open source packages that organizations rely on. And, you know, this is where we sort of have this idea. Somebody is making that software in the first place, right? And so would those folks be interested? Could we create a set of aligned incentives to encourage them, to make sure that that software meets a bunch of enterprise standards and areas around security, like, you know, relating to the log for J vulnerability, but also other complicated parts of open source consumption like licensing and open source license, accuracy, and compatibility, and also maintenance. >>Like if somebody looking after the software going forward. So just trying to basically invite open source creators, to partner with us, to level up their packages through those relationships, we get really, really clean, clear first party data from the folks who create, maintain the software. And we can flow that through the tools that I described so that end organizations can know that they're building with open source components that have been vetted to meet these standards, by the way, there's a really cool side effect of this business model, which is that we pay these open source maintainers to do this work with us. And so now we're creating a new income stream around what previously had been primarily a volunteer activity done for impact in this universe of open source software. We're helping these open source maintainers kind of GoPro on an aspect of what they do around open source. And that means they can spend more time applying more process and tools and methodology to making that open source software even better. And that's good for our customers. And it's good for everyone who relies on open source software, which is really everyone in society these days. That's interesting. I >>Was going to ask you what's their incentive other than doing the right thing. Can you give us an example of, of maybe a example of an open source maintainer that you're working with? >>Yeah. I mean, w we're working with hundreds of open source maintainers and a few of the key open source foundations in different areas across JavaScript, Java PHP, Ruby python.net, and, you know, like examples of categories of projects that we're working with, just to be clear, are things like, you know, web frameworks or parser libraries or logging libraries, like a, you know, log for J and all the other languages, right? Or, you know, time and date manipulation libraries. I mean, they, these are sort of the, you know, kind of core building blocks of applications and individually, they, you know, they may seem like, you know, maybe a minor, a minor thing, but when you multiply them across how many applications these get used in and log for J is a really, really clarifying case for folks to understand this, you know, what can seemingly a small part of your overall application estate can have disproportionate impact on, on your operations? As we saw with many organizations that spent, you know, a weekend or a week, or a large part of the holidays, scrambling to patch and remediate this, a single vulnerability in one of those thousands of packages in that case log. >>Okay, got it. So you have this two, two headed, two vectors that I'm going to call it, your ecosystem, your relationship with these open source maintainers is kind of a, that just didn't happen overnight, and it develop those relationships. And now you get first party data. You monetize that with a software service that is purpose built as the monitor of the probe that actually tracks that third, third party activity. So >>Exactly right. Got it. >>Okay. So a lot of companies, Donald, I mean, this is, like I said before, it's a complicated situation. You know, a lot of people don't have the skillsets to deal with this. And so many companies just kind of stick their head in the sand and, you know, hope for the best, but that's not a great strategy. What are the implications for organizations if they don't really put the tools and processes into place to manage their open source, digital supply chain. >>Yeah. Ignoring the problem is not a viable strategy anymore, you know, and it's just become increasingly clear as these big headline incidents that happened like Heartbleed and solar winds. And now this logged for shell vulnerability. So you can, you can bet on that. Continuing into the future and organizations I think are, are realizing the ones that haven't gotten ahead of this problem are realizing this is a critical issue that they need to address, but they have help, right. You know, the federal government, another action beyond that cybersecurity executive order that was directed at federal agencies early last year, just in the last week or so, the FTC of the U S federal trade commission has made a much more direct warning to private companies and industry saying that, you know, issues like this log for J vulnerability risk exposing private, you know, consumer data. That is one of the express mandates of the FTC is to avoid that the FTC has said that this is, you know, bears on both the federal trade commission act, as well as the Gramm-Leach-Bliley act, which relates to consumer data privacy. >>And the FTC just came right out and said it, they said they cited the $700 million settlements that Equifax was subject to for their data breach that also related to open source component, by the way, that that had not been patched by, by Equifax. And they said the FTC intents to use its full legal authority to pursue companies that failed to take reasonable steps, to protect consumer data from exposure as a result of log for J or similar known vulnerabilities in the future. So the FTC is saying, you know, this is a critical issue for consumer privacy and consumer data. We are going to enforce against companies that do not take reasonable precautions. What are reasonable precautions? I think it's kind of a mosaic of solutions, but I'm glad to say tide lift is contributing a really different and novel solution to the mix that we hope will help organizations contend with this and avoid that kind of enforcement action from FTC or other regulators. >>Well, and the good news is that you can tap a tooling like tide lift in the cloud as a service and you know, much easier today than it was 10 or 15 years ago to, to resolve, or at least begin to demonstrate that you're taking action against this problem. >>Absolutely. There's new challenges. Now I'm moving into a world where we build on a foundation of independently created open source. We need new solutions and new ideas, and that's a, you know, that's part of what we're, we're, we're showing up with from the tide lift angle, but there's many other elements that are going to be necessary to provide the full solution around securing the open source supply chain going forward. >>Well, Donald Fisher of tide lift, thanks so much for coming to the cube and best of luck to your organization. Thanks for the good work that you guys do. >>Thanks, Dave. Really appreciate your partnership on this, getting the word out and yeah, thanks so much for today. >>Very welcome. And you are watching the AWS startup showcase open cloud innovations. Keep it right there for more action on the cube, your leader in enterprise tech coverage.

>> Announcer: Live, from Copenhagen, Denmark, it's theCUBE! Covering Nutanix.NEXT 2019. Brought to you by Nutanix. >> Welcome back everyone to theCUBE's live coverage of Nutanix.NEXT. We are at the Bella Center in Copenhagen, Denmark. I'm your host, Rebecca Knight, alongside of Stu Miniman, of course. We are joined by a good friend of theCUBE, Ray Wang, principal analyst and CEO of Constellation Research. Thank you so much for returning to theCUBE. >> Hey, how you doing? Good morning! >> Good morning, good morning! >> Good morning! (laughing) >> Good morning! >> I don't know. I get all my accents wrong out here. >> (laughing) So, you got a shout out on the main stage this morning, from Monica Kumar, congratulations on that. She talked about you and your research on the infinite role of computing. You also do a lot with the future of work. I know that that is really right in your wheelhouse right now. What are you hearing, what are you seeing, what kinds of conversations are you having that are interesting you? >> Yeah, so, this infinite computing option, it's one of the that we're talking about, the fact that you can scale out forever, right? And the problem that's holding us back has been technical debt, right? So all that legacy that everyone's got to figure out. It's like, my connections, my server, my disk-rack recovery, my disaster recovery, my backup, everything. It's a pain in the butt. And I'm still trying to get onto the cloud. So on that end, we're like, okay, all this stuff is holding us back, how do we get there? Now, the future of work is a little bit different. We're seeing a very very different set of work. People have talked about where we are the gig economy, but that's just one aspect of it. Everything is being decomposed into microservices. Large processes are becoming smaller and smaller microservices, they're being reusable, well our work and tasks are following the same way. We're getting smaller and smaller tasks, some are more repetitive, some are going to be automated, and it's really about where we actually find the difference between augmentation of humanity, and full automation, and that's where the next battle's going to be. >> Yeah, Ray, some of the discussions we've been having this week, is how do we really simplify the environment? The balance I hear from customers, on the one hand, they're always like, I don't have enough money, I don't have enough personnel, on the other hand, oh my gosh, that full automation sounds like you're going to put me out of a job. We know we're not putting everybody out of work in the next couple of years. There are challenges; we worry about the hollowing out of the center of the economy, but here, what Nutanix is trying to do, of course, is, I don't want to have to thrive in that complexity anymore, I want to be able to drive innovation, keep up with that, take advantage of that unlimited resources out there, so, where do you see, you've been here at the show, what are you hearing from the customers here? Anything different in Europe versus back in North America that you'd share about that journey onto the changing roles? >> Oh it's a great point. It's about simplifying everything where you can, it's about areas of automation where they make sense. Here in Europe it's slightly different because a lot of the focus in Europe has been about cost and efficiency, followed by of course regulatory. Those have been the two drivers. And they've been battling that in order to be, even they will look at some level of innovation. Where in the US, people are head on doing innovation, regulatory and operational efficiency at the same time. So that creates a very very different environment. But what we have noticed are some patterns, especially when we look at automation and AI; there are four areas out of seven where we see a lot more automation that's happening. The first one is massively repetitive tasks, those are things, yeah, got to get that out of the way, we don't do this very very well. The second one is really thinking about massive nodes of interaction. When you're connected to multiple places, multiple organizations, multiple instances, that's something where we start to get overwhelmed, and then of course, there's lots of volume. If you've got lots of volume or requests that are coming through, you can't possibly handle that, and that's a place where we see a lot of machine scale. And the last piece is really when you have to scale, humans don't scale very well. However, it's actually not a hollowing out of the middle; it's actually a hollowing out of the ends in a very, very real end, because really really simple tasks go away, super complex tasks go away, and the middle actually remains, and the middle is things that are complex that cannot be recreated by math, they're also areas that require a lot of creativity, humans make the rules, we break the rules, and then the last part is really fine motor skills and presence, the machines still aren't as good. So we still have some hope. So the middle stays, it's the hollowing out of the ends, the high end jobs and the low end jobs are the ones where we're going to see a lot of risk. >> So what does that mean? So we have, leaving the middle there, and as you said, the high end jobs and the low end jobs go away, but what does that mean in terms of the skills? In terms of what employers are looking for, in terms of what they need in their prospective applicants and hirees. >> That's a great point. Soft skills are important; it's the qualitative skills that become even more important, it's also being able to manage and orchestrate the hard skills; because you don't necessarily have to know how to do the calculation, you have to just know which algorithm to apply. >> Okay, and then also, these soft skills of managing people, I'm assuming too? Because computers are not so good at that either. >> Yes. Soft skills are managing people, but also manage the human and machine equation that's going to happen. Because we have to train the machines, the machines aren't going to know that level of intuition, and there's a large amount of training that's going to happen over time. >> All right. So, Ray, one of the things Nutanix is doing is, as they've been transforming to not only subscription, software's always been at their core, but they're starting to do not just infrastructure software, but application software. I know you live in that world quite a lot, so when you hear Nutanix talking about building databases, delivering these services, it's something that I look at, Amazon does some of that, but for the most part they're infrastructure and build on top of us. How do you think, how is Nutanix doing, what are some of the challenges for them, going up against some of the bellwethers out there in tech, and all the open source projects that are out there. >> So the challenge is always going to be, there is a one dominant player in every market. And what they're providing is an alternative to allow the orchestration of not having that, not only that dominant player, but a choice. So in every single market, they're focused on giving users choice, and giving the ability to aggregate, and bring everything into one single plane. That is tough to do, right? And the fact that they see that as their big hairy audacious goal, that's impressive. If you said they were going to do this three years ago, I wouldn't have believed them. >> Well yeah, I think back to, remember almost 10 years ago, VMware tried to get into applications, they bought Zimbra, they bought a few others. Cisco did like 26 adjacencies, they were going to take over video and do all these things, and we've seen lots of failures over the years. They refocused on their core, was a big thing that I heard, that the users seem to be excited about. Are there areas that you're find especially interesting as to where Nutanix is poking? >> So, I would say that Nutanix three years ago was a little bit sleepy. They got comfortable, they did the stuff that they did really well, and it feels like, maybe about 12 months ago, Dheeraj had a different vision. Like something snapped, something hit, he said this isn't working, we're going to change things, and we've seen a whole bunch of new talent come into play. We've also seen a huge expansion of what they're trying to do, and a cleanup of all those side projects that were all going on before. So I think they've actually honed in on, okay, if we can simplify this piece, this is a money-winning business for some time, and they're talking about 80% margins last quarter, I mean that's huge, and that's just trying to save customers money, and make their lives simpler. >> Do you think that they have the messaging right? Because, I mean, they're going to this Thoreauvian/Emersonian idea of simplify, simplify, simplify, and it does resonate, of course! What customer doesn't want a simpler computing experience? But do you think that they are reaching the right people, and they have obviously very passionate customers, but are they getting into new businesses. >> I think they're getting to the businesses that their customers are asking them to, those adjacencies are huge, I think and when you think about cleaning up technical debt, all that legacy debt that you actually have to fix, I mean, this is where you begin. It's so hard to make that cloud journey to begin with, it's even harder to carry all that legacy with you. And we're going to see a lot more of this going forward. >> All right. So, Ray, talk a little bit about, I loved an event you did last year, the people's centered digital future. Help explain to our audience what this is about, and where you're taking it again this year. >> So that event was a one-time event. We were celebrating the 70th anniversary of the United Nations founding, we were celebrating almost 50 years of the internet, and 50% of the world being connected to the internet. And part of the reason that was an important event was, we really felt that there was a need to get back to the roots of where the internet had begun, and more importantly, talk about where we are today in the world of privacy. One of the biggest challenges we have in the a digital world is that your personal data, your genomics, all this information about you is being brokered for free. And what we have to do is take that back. And by taking that back, what I mean is, we've got to make all these rights, property right. If we can make that a property right, we can leverage the existing rules and legislation that's there, and we can actually start paying people for that data through consent, and giving people that ability, on consent to data, could create lots of things, from universal basic income, to a brand new set of data economy that equalizes the playing field, while keeping the large tech giants. >> There's some of those big journeys that we went on, you talk about the internet, this year's 50th anniversary of the first walking on the moon, and you look at how entire countries rallied together, so much technology was-- >> Yeah, look at India. >> Spun off of what they've done there, it's like we need some rallying cries in today's day and age to solve some of these big day and age. Is that AI? Where are some of the big areas that you see tech needing to drive forward in the next decade? >> I think the big area's going to be around decentralization, giving individuals more empowerment. We've got large, big tech companies, that are, I'd say, imbalanced. We start companies right away, building monopolies on day one, and we don't open up those markets. And the question is, how do we create a level playing field for the individual to be to compete, to bring a new idea, and to innovate, if that's continuously stifled by big technology companies without an opportunity, we're in trouble. And so that starts by making data a property right, to the personal data. It starts by also creating marketplaces for that data, and those marketplaces have to have regulations, similar to capital market flows. The way treat exchanges, we treat marketplaces, we need to do the same thing with the way we do with data, and then the third piece, there has to be some level of a tax, that goes to all these data economies, so that they can fund the infrastructure and the watch dogs that are there. Now this is coming from a free market, I'm a free market capitalist, okay? I can't stand regulation, but I also realize that it's so important that we have a fair market. >> But do you, we know so much about how Americans are so much more cavalier about their privacy than even Europeans, what will it take to galvanize Americans to care about those little crumbs that they're leaving on the internet, that is the data that you say should be a property right, that we should be paid for? >> I think it's going to start with companies actually take, and do the right thing, where they actually give them that opportunity to monetize that information. >> Will they do that? >> I think the new set of startups are starting to do that, because they're looking at the risk that's being posed, at Facebook and Google and Amazon, on the anti-trust, DOJ, FCC, they're all coming in at the same time, the FTC, they're all wondering, do we break these companies up or not? The short answer is, I don't think they're going to, because we're competing with China, and when you're looking at that scale of data, where Amazon's transactions are only 1/10 of Ali Baba's? That's huge. So the consolidation has to happen, but we need to create a layer that actually democratizes and creates a fair trading play. >> And those startups, you think, can compete with established players? >> I think once we set the roles, and the ground rules, I think people are going to be able to do that, but once you free that data, what are we competing on now? You have to pay for my consent, you have to earn my business, you can't trade it for free, or just say, "Hey look, you are the product." That changes everything. >> Rebecca: Yeah, that's a good point. >> Ray, I know you spend a lot of time talking to, and giving advice to some of the leaders in technology, you're welcome to get into some specifics about Nutanix, or some of the cloud players, but what are some of the key themes, what are people getting right, and what are they still doing wrong? >> Okay, so theme number one, this is going to be a multicloud hybrid world for a long time. Anybody that's bucking the multicloud trend, they've missed the point, right? Because we want portability in data, there's only two or three players in every single market, if I can't move my data, my workloads, and my IO in and out, then you've actually created vendor lock-in from hell. And I think customers are going to protest against that. The second one, and you guys are probably following this trend a lot, is really about AI ethics and design principles for AI. So what is ethical AI? We've got five things that are important: The first one is make sure it's transparent. See the algorithms, see what they write. Second one, make sure it's explainable. Hey, bias is not a bad thing, so if I'm discriminating against redheads, with, left-handed, and that happened to like, I don't know, Oracle, fine. But, if that was unintended, and you're discriminating against that, then we have to get rid of that, right? And so we have to figure out how to reduce that kind of bias, if it's unwanted bias. If you discover that you're discriminating, and not being inclusive, you've got to make sure that you address that. So then the next part is, it's got to be reversible. And once you have that reversibility, we also make sure that we can train these systems over time. And then the last piece is, Musk could be right! Musk could be right, the machines might take over, but if you insert a human at the beginning of the process, and at the end of the process, you won't get taken over. >> I want to hear about what the future of work looks like for Ray Wang. You are on the road constantly, you are (laughs) you are moving your data from one place, you are everywhere, all the time. So what do you have on next, what's exciting you about your professional life? >> I think the challenge's that we are living in a world where there's too much information, too much content. And you guys say this all the time, right? Separating the signal from the noise. And people are willing to pay for that signal. But that is a very very tough job, right? It's about the analysis, the insights, and when you have that, people don't want to read through your reports. They don't want to watch through the videos. They just want to call you up and say, "Hey, what's going on?" And get the short version of it. And that's what's making it very interesting, because you would expect this would be in a chat bot, it'd be in a robo advisor, doesn't work that way. People still want the human connection, especially given all that data out there, they want the analysis and insights that you guys provide, that's very very important, but even more important right now, it's really about getting back to those relationships. I think people are very careful about the relationships they're keeping, they're also curating those relationships, and coming back to spending more time. And so we're seeing a lot more of in-person meetings, in-person events, very very small, curated conversations, and I think that's coming back. I mean that's why we do our conference every year, as well, we try to keep 200 to 300 people intimately together. >> Those human connections, not going away. (laughs) >> Nope, not going away, in an automated, AI, digital world! This is our post-digital future. >> That's excellent. Well Ray, thanks you so much for coming on theCUBE, it's always so much fun to talk to you. >> Hey, thanks a lot. >> High energy guy (laughs). >> Low energy. >> I'm Rebecca Knight for Stu Miniman, we will have more from the Bella Center at Nutanix.NEXT coming up in just a little bit. (upbeat music)

>> from Cambridge, Massachusetts. It's the Cube covering M I T. Chief data officer and information quality Symposium 2019. Brought to you by Silicon Angle Media. >> Welcome back to M I. T. In Cambridge, Massachusetts. Everybody. You're watching the cube. The leader in live tech coverage. This is M I t CDO I Q the chief data officer and information quality conference. Someday Volonte with my co host, Paul Galen. Professor Dr Stewart, Mad Nick is here. Longtime Cube alum. Ah, long time professor at M i. T soon to be retired, but we're really grateful that you're taking your time toe. Come on. The Cube is great to see you again. >> It's great to see you again. It's been a long time. She worked together and I really appreciate the opportunity to share our spirits. Hear our mighty with your audience. Well, it's really been fun >> to watch this conference evolved were full and it's really amazing. We have to move to a new venue >> next year. I >> understand. And data we talk about the date explosion all the time, But one of the areas that you're focused on and you're gonna talk about today is his ethics and privacy and data causes so many concerns in those two areas. But so give us the highlight of what you're gonna discuss with the audience today. We'll get into >> one of things that makes it so challenging. It is. Data has so many implications. Tow it. And that's why the issue of ethics is so hard to get people to reach agreement on it. We're talking people regarding medicine and the idea big data and a I so know, to be able to really identify causes you need mass amounts of data. That means more data has to be made available as long as it's Elsa data, not mine. Well, not my backyard. If he really So you have this issue where on the one hand, people are concerned about sharing the data. On the other hand, there's so many valuable things would gain by sharing data and getting people to reach agreement is a challenge. Well, one of things >> I wanted to explore with you is how things have changed you back in the day very familiar with Paul you as well with Microsoft, Department of Justice, justice, FTC issues regarding Microsoft. And it wasn't so much around data was really around browsers and bundling things today. But today you see Facebook and Google Amazon coming under fire, and it's largely data related. Listen, Liz Warren, last night again break up big tech your thoughts on similarities and differences between sort of the monopolies of yesterday and the data monopolies of today Should they be broken up? What do you thought? So >> let me broaden the issue a little bit more from Maryland, and I don't know how the demographics of the audience. But I often refer to the characteristics that millennials the millennials in general. I ask my students this question here. Now, how many of you have a Facebook account in almost every class? Facebook. You realize you've given away a lot of nation about yourself. It it doesn't really occurred to them. That may be an issue. I was told by someone that in some countries, Facebook is very popular. That's how they cordoned the kidnappings of teenagers from rich families. They track them. They know they're going to go to this basketball game of the soccer match. You know exactly what I'm going after it. That's the perfect spot to kidnap them, so I don't know whether students think about the fact that when they're putting things on Facebook than making so much of their life at risk. On the other hand, it makes their life richer, more enjoyable. And so that's why these things are so challenging now, getting back to the issue of the break up of the big tech companies. One of the big challenges there is that in order to do the great things that big data has been doing and the things that a I promises do you need lots of data. Having organizations that can gather it all together in a relatively systematic and consistent manner is so valuable breaking up the tech companies. And there's some reasons why people want to do that, but also interferes with that benefit. And that's why I think it's gonna be looked at real Kim, please, to see not only what game maybe maybe breaking up also what losses of disadvantages we're creating >> for ourselves so example might be, perhaps it makes United States less competitive. Visa VI China, in the area of machine intelligence, is one example. The flip side of that is, you know Facebook has every incentive to appropriate our data to sell ads. So it's not an easy, you know, equation. >> Well, even ads are a funny situation for some people having a product called to your attention that something actually really want. But you never knew it before could be viewed as a feature, right? So, you know, in some case of the ads, could be viewed as a feature by some people. And, of course, a bit of intrusion by other people. Well, sometimes we use the search. Google, right? Looking >> for the ad on the side. No longer. It's all ads. You know >> it. I wonder if you see public public sentiment changing in this respect. There's a lot of concerns, certainly at the legislative level now about misuse of data. But Facebook user ship is not going down. Instagram membership is not going down. Uh, indication is that that ordinary citizens don't really care. >> I know that. That's been my I don't have all the data. Maybe you may have seen, but just anecdotally and talking to people in the work we're doing, I agree with you. I think most people maybe a bit dramatic, but at a conference once and someone made a comment that there has not been the digital Pearl Harbor yet. No, there's not been some event that was just so onerous. Is so all by the people. Remember the day it happened kind of thing. And so these things happen and maybe a little bit of press coverage and you're back on your Facebook. How their instagram account the next day. Nothing is really dramatic. Individuals may change now and then, but I don't see massive changes. But >> you had the Equifax hack two years ago. 145,000,000 records. Capital one. Just this week. 100,000,000 records. I mean, that seems pretty Pearl Harbor ish to me. >> Well, it's funny way we're talking about that earlier today regarding different parts of the world. I think in Europe, the general, they really seem to care about privacy. United States that kind of care about privacy in China. They know they have no privacy. But even in us where they care about privacy, exactly how much they care about it is really an issue. And in general it's not enough to move the needle. If it does, it moves it a little bit about the time when they show that smart TVs could be broken into smart. See, TV sales did not Dutch an inch. Not much help people even remember that big scandal a year ago. >> Well, now, to your point about expects, I mean, just this week, I think Equifax came out with a website. Well, you could check whether or not your credentials were. >> It's a new product. We're where we're compromised. And enough in what has been >> as head mind, I said, My wife says it's too. So you had a choice, you know, free monitoring or $125. So that way went okay. Now what? You know, life goes >> on. It doesn't seem like anything really changes. And we were talking earlier about your 1972 book about cyber security, that many of the principles and you outlined in that book are still valid today. Why are we not making more progress against cybercriminals? >> Well, two things. One thing is you gotta realize, as I said before, the Cave man had no privacy problems and no break in problems. But I'm not sure any of us want to go back to caveman era because you've got to realize that for all these bad things. There's so many good things that are happening, things you could now do, which a smartphone you couldn't even visualize doing a decade or two ago. So there's so much excitement, so much for momentum, autonomous cars and so on and so on that these minor bumps in the road are easy to ignore in the enthusiasm and excitement. >> Well and now, as we head into 2020 affection it was. It was fake news in 2016. Now we've got deep fakes. Get the ability to really use video in new ways. Do you see a way out of that problem? A lot of people looking a Blockchain You wrote an article recently, and Blockchain you think it's on hackable? Well, think again. >> What are you seeing? I think one of things we always talk about when we talk about improving privacy and security and organizations, the first thing is awareness. Most people are really small moment of time, aware that there's an issue and it quickly pass in the mind. The analogy I use regarding industrial safety. You go into almost any factory. You'll see a sign over the door every day that says 520 days, his last industrial accident and then a sub line. Please do not be the one to reset it this year. And I often say, When's the last time you went to a data center? And so assign is at 50 milliseconds his last cyber data breach. And so it needs to be something that is really front, the mind and people. And we talk about how to make awareness activities over companies and host household. And that's one of our major movements here is trying to be more aware because we're not aware that you're putting things at risk. You're not gonna do anything about it. >> Last year we contacted Silicon Angle, 22 leading security experts best in one simple question. Are we winning or losing the war against cybercriminals? Unanimously, they said, we're losing. What is your opinion of that question? >> I have a great quote I like to use. The good news is the good guys are getting better than a firewall of cryptographic codes. But the bad guys are getting batter faster, and there's a lot of reasons for that well on all of them. But we came out with a nautical talking about the docking Web, and the reason why it's fascinating is if you go to most companies if they've suffered a data breach or a cyber attack, they'll be very reluctant to say much about unless they really compelled to do so on the dock, where they love to Brent and reputation. I'm the one who broke in the Capital One. And so there's much more information sharing that much more organized, a much more disciplined. I mean, the criminal ecosystem is so much more superior than the chaotic mess we have here on the good guys side of the table. >> Do you see any hope for that? There are service's. IBM has one, and there are others in a sort of anonymous eyes. Security data enable organizations to share sensitive information without risk to their company. You see any hope on the collaboration, Front >> said before the good guys are getting better. The trouble is, at first I thought there was an issue that was enough sharing going on. It turns out we identified over 120 sharing organizations. That's the good news. And the bad news is 120. So IBM is one and another 119 more to go. So it's not a very well coordinated sharing. It's going just one example. The challenges Do I see any hope in the future? Well, in the more distant future, because the challenge we have is that there'll be a cyber attack next week of some form or shape that we've never seen before and therefore what? Probably not well prepared for it. At some point, I'll no longer be able to say that, but I think the cyber attackers and creatures and so on are so creative. They've got another decade of more to go before they run out of >> Steve. We've got from hacktivists to organized crime now nation states, and you start thinking about the future of war. I was talking to Robert Gates, aboutthe former defense secretary, and my question was, Why don't we have the best cyber? Can't we go in the oven? It goes, Yeah, but we also have the most to lose our critical infrastructure, and the value of that to our society is much greater than some of our adversaries. So we have to be very careful. It's kind of mind boggling to think autonomous vehicles is another one. I know that you have some visibility on that. And you were saying that technical challenges of actually achieving quality autonomous vehicles are so daunting that security is getting pushed to the back burner. >> And if the irony is, I had a conversation. I was a visiting professor, sir, at the University of Niece about a 12 14 years ago. And that's before time of vehicles are not what they were doing. Big automotive tele metrics. And I realized at that time that security wasn't really our top priority. I happen to visit organization, doing really Thomas vehicles now, 14 years later, and this conversation is almost identical now. The problems we're trying to solve. A hider problem that 40 years ago, much more challenging problems. And as a result, those problems dominate their mindset and security issues kind of, you know, we'll get around him if we can't get the cot a ride correctly. Why worry about security? >> Well, what about the ethics of autonomous vehicles? Way talking about your programming? You know, if you're gonna hit a baby or a woman or kill your passengers and yourself, what do you tell the machine to Dio, that is, it seems like an unsolvable problem. >> Well, I'm an engineer by training, and possibly many people in the audience are, too. I'm the kind of person likes nice, clear, clean answers. Two plus two is four, not 3.94 point one. That's the school up the street. They deal with that. The trouble with ethic issues is they don't tend to have a nice, clean answer. Almost every study we've done that has these kind of issues on it. And we have people vote almost always have spread across the board because you know any one of these is a bad decision. So which the bad decision is least bad. Like, what's an example that you used the example I use in my class, and we've been using that for well over a year now in class, I teach on ethics. Is you out of the design of an autonomous vehicle, so you must program it to do everything and particular case you have is your in the vehicle. It's driving around the mountain and Swiss Alps. You go around a corner and the vehicle, using all of senses, realize that straight ahead on the right? Ian Lane is a woman in a baby carriage pushing on to this onto the left, just entering the garage way a three gentlemen, both sides a road have concrete barriers so you can stay on your path. Hit the woman the baby carriage via to the left. Hit the three men. Take a shop, right or shot left. Hit the concrete wall and kill yourself. And trouble is, every one of those is unappealing. Imagine the headline kills woman and baby. That's not a very good thing. There actually is a theory of ethics called utility theory that says, better to say three people than to one. So definitely doing on Kim on a kill three men, that's the worst. And then the idea of hitting the concrete wall may feel magnanimous. I'm just killing myself. But as a design of the car, shouldn't your number one duty be to protect the owner of the car? And so people basically do. They close their eyes and flip a coin because they don't want anyone. Those hands, >> not an algorithmic >> response, doesn't leave. >> I want to come back for weeks before we close here to the subject of this conference. Exactly. You've been involved with this conference since the very beginning. How have you seen the conversation changed since that time? >> I think I think it's changing to Wei first. As you know, this record breaking a group of people are expecting here. Close to 500 I think have registered s o much Clea grown kind of over the years, but also the extent to which, whether it was called big data or call a I now whatever is something that was kind of not quite on the radar when we started, I think it's all 15 years ago. He first started the conference series so clearly has become something that is not just something We talk about it in the academic world but is becoming main stay business for corporations Maur and Maur. And I think it's just gonna keep increasing. I think so much of our society so much of business is so dependent on the data in any way, shape or form that we use it and have >> it well, it's come full circle. It's policy and I were talking at are open. This conference kind of emerged from the ashes of the back office information quality and you say the big date and now a I guess what? It's all coming back to information. >> Lots of data. That's no good. Or that you don't understand what they do with this. Not very healthy. >> Well, doctor Magic. Thank you so much. It's a >> relief for all these years. Really Wanna thank you. Thank you, guys, for joining us and helping to spread the word. Thank you. Pleasure. All right, keep it right, everybody. Paul and >> I will be back at M I t cdo right after this short break. You're watching the cue.

>> live from Boston, Massachusetts. It's the Cube covering A W s reinforce 2019. Brought to you by Amazon Web service is and its ecosystem partners. >> Hey, welcome back and run cubes. Live coverage of A W S Amazon Webster's reinforced their inaugural conference around security here in Boston. Messages. I'm John for a day. Volante Day we've been talking about Blockchain has been part of security, but no mention of it here. Amazon announced a Blockchain intention, but was more of a service model. Less of a pure play infrastructure or kind of a new game changes. So we thought we would get our friends to come on, the Cuban tell. Tell us about it. Val Birch, Avicii CEO and founder. A pencil day that Cube alumni formerly of NetApp, among other great companies, and Ed You, founder and CEO of Strong Salt. Welcome to the Q. Tell us why aren't we taught him a Blockchain at a security conference on cloud computing, where they always resource is different. Paradigm is decentralized. What's your take? >> So maybe having been in this world for about 18 24 months now, Enterprise lodging reinvents about six months ago and jazz he mentioned that he finally understood US enterprise an opportunity, and it was the integrity value, finest complex, even announced a specific product announced database available, >> maybe bythe on cryptographic verifiability of transactions minus the complexity of smart contract wallets. Wait, you party with Amazon way too. Versions right? One for distributed use cases. When I call, everyone rises. Never like you need to know what >> the Amazon wants to be that hard on top like complexity. But the reality is, they're they're They're world is targeting a new generation star 14 show is the new generation of developing >> a >> new generation of David. They were. Some of those are in trouble, and I'm hard core on this because it's just so obvious. >> I just can't get him behind myself if you don't >> see this out quicker. The new developers are younger and older systems people. There's a range of ages doing it. They're they're seeing the agility, and it's a cultural shift, not just the age thing. Head this. They're not here right now. This is the missing picture of this show, and my criticism of reinforces big, gaping hole around crypto and blocks, >> and I actually know that people I don't see anything here because it is difficult to currency. >> Blocking is very important that people understand way. Launch strong allows you to see the launching. I don't think that works. Basically, Just like Well, well said everything you do, you always have a single source. I think that's something that people doing this thing here. You want to get your thoughts on this because you made a comment >> about security native being the team here and security native implying that Dev ops what they did for configuration hardening the infrastructures code. You have to consider this token economic business model side of it with the apple cases, a decision application is still an application. Okay. Blockchain is still in infrastructure dynamic their software involved. I mean, we're talking about the same thing is they're lost in translation. In your opinion? >> Well, yeah, I think that you know, to your point, Val, if you can abstract that complexity away, But the fundamentals of of cryptography and software engineering and game theory coming together is what always has fascinated me about this space. And so you're right. I think certainly enterprise customers don't wanna you know, they hear crypto, though no, although it's interesting it was just a conference IBM yesterday. They talk a lot about Blockchain. Don't talk about crypto to me. They go together. Of course, IBM. They don't like to talk a lot about job loss and automation, but But the reality is it's there and it's it's it's has a lot of momentum, which is why you started the company. >> Yeah, we're actually seeing it all over right now. And again, our thing is around reducing, If not eliminating the friction towards adopting Blockchain so less is more. In our case, we're explicitly choosing not to do crypto wallets or currency transactions. It's that Andy Jassy observation the integrity value, the core integrity, value for financial reconciliation, for detecting supply chain counterfeiting for tracking assets and inventory across to your distribution. Unifying multiple source systems of record into a shared state. Those are the kinds of applications received >> culture, and there's so many different use cases, obviously, so >> an Amazon likes to use that word. Words raised the bar, which is more functionality, but on the other, phrases undifferentiated, heavy lifting. There's a lot of details involved in some of those complexity exactly what you're talking about that can be automated away. That's goodness. But you still have a security problem of mutability, which is a beautiful thing with Blockchain. >> Actually, a lot of times people actually forgot to mention one thing that blotchy and all you do that's actually different before was Actually privacy is actually not just security is also privacy, which actually is getting bigger and bigger. As we know, it's something that people feel very strongly about because it's something they feel personal about. And that's something that, in fact, took economics encourages a lot of things that enables privacy that was not able to do before. >> Well, look at Facebook. What do you think about >> face? I'm wonder that you know, I'm a public face book critic. I think they've been atrocious job on the privacy front so far in protecting our data. On the other hand, if you know it's kind of like the mullahs report, if you actually read Facebook's white paper, it's a it's not a launch. It's an announcement. That's a technical announcement. It's so well written, designed so far, and it's Facebook doesn't completely control it. They do have a vision for program ability. They're evolving it from being a permissions toe, ultimately a permission less system. So on paper, I like what I read. And I think it will start to, you know, popularizing democratize the notion of crypto amongst the broader population. I'm going to take a much more weight see approach. Just you know, >> I always love Facebook. I think the den atrocious job. But I'm addicted. I have all my stuff on there, um, centralized. They're bringing up, they bring in an education. Bitcoin is up for a reason. They're bringing the masses. They're showing that this is real market. This is kind of like when the web was still viewed as Kitty Playground for technologists say, Oh, well, it's so slow. And that was for dummies. And you had the Web World Wide Web. So when that hit, that same arguments went down right this minute, crypto things for years. But with Facebook coming, it really legitimizes that well, you bring 2,000,000,000 people to the party. Exactly a lot of good. Now the critics of Facebook is copied pass craft kind of model and there's no way they're gonna get it through because the world's not gonna let Facebook running run commerce and currents. It's like it's like and they don't do it well anyway. So I think it's gonna be a game changing market making move. I think they'll have a play in there, but I don't think that's not gonna have a global force. Says a >> lot that you get 100 companies to put up 10 >> 1,000,000 Starship is already the first accomplice. >> They don't need any more money. We have my dear to us, but >> still the power but the power of that ecosystem to me. I was a big fan of this because I think it gives credibility. So many companies get get interested in it, and I'm not sure exactly what's gonna come out of it. It's interesting that, you know, Bitcoins up. They said, Oh, cell, you're becoming like No, no, no, this is This is a very mature >> Well, I I think open is gonna always win. If you look at you know, the Web's kind of one example of kind of maturity argument. I think the rial analog for me, at least my generation value probably relate to this. David, you as well, you know, I've been born yet you are But, you know, T c p I p came after S n a which IBM on the deck net was the largest network at that time to >> not serious. Says >> mammal. Novell was land all three proprietary network operating systems. So proprietary Narcisse decimated by T c p i p. So to me, I think even their Facebook does go in there. They will recognize that unless they stay open, I think open will always win. I think I think this is the beginning of the death of the closed platform. >> Yeah, they're forced her. I think they have to open it up because if you didn't open up, people won't trust them, and people will use them. And if a Blockchain if you don't have a community behind it, there will be nothing. >> Well, so the thing about the crypto spraying everywhere with crypto winter, But but to your point d c p i p h t t p d >> N s SMTP >> Those were government funded or academic funded protocols. People stop spending money on him, and then the big Internet companies just co opted. No, no, that's what G mails built on. >> Well, I've always said >> so But when you finish the thought, is all this crypto money that came in drove innovation? Yeah, So you're seeing, you know, this new Internet emerge, and I think it's it's really think people, you know, sort of overlooked a lot of the innovation that's >> coming. I have always said, Dave, that Facebook is what the Web would look like if Tim Berners Lee took venture financing. Okay, because what they had at the time was a browser and the way that stand up websites for self service information. They kept it open and it drives. Facebook became basically the Web's version of a, well, lengthen does the same Twitter has opened. They have no developer community. So yeah, I think it is the only company in my opinion, actually does a good job opening up their data. Now they charge you for that. It brings up way still haven't encrypt those. The only community that's entire ethos is based on openness and community you mentioned. And that is a key word >> in traditional media. Of course, focus on the bad stuff that happens, but you know those of us in the business who will pay attention to it, see There's a lot of goodness to is a lot of mission driven, a lot of openness, and it's a model for innovation. What do you guys think about the narrative now to break up big tech? You know you're hearing Facebook, Amazon, Google coming under fire. What are your thoughts on that? >> So I wrote a block, maybe was ahead of its time about 18 months ago. Is coincided with Ginny Rometty, a Davos and 2018 2019 talking about data responsibility. Reason we're having this conversation is at the tech industry. By and large and especially the fang stocks or whatever we're calling them now have been irresponsible with our data. The backlash is palpable in Europe. It's law in Europe. Backlash we knew was going to start at the state level here. There's already ahead of my personal schedule. Federal discussions, FTC DOJ is in a couple weeks ago, so it's inevitable that this sort of tech reckoning is coming in. Maur responsibility is gonna have to be demonstrated by all the custodians of our data, and that's why we're positioning. Check it as a chain of custody is a service to demonstrate to the regulators your customers, your partners, suppliers, you know, transparency, irrefutable transparency, using Blockchain for how you're handling data. You know, if you don't have that, transparency can prove it. Or back to the same old discussions were back Thio Uninformed old legislators making you know Internet, his tubes type regulations. So here, here >> and DOJ, you could argue that they may be too slow to respond to Microsoft back in the nineties. I'm not sure breaking up big tech is the right thing, because I think it's almost like a t. The little Tex will become big checks again, but they should not be breaking the law. >> I think there's a reason why is there's actually a limitation off. What is possible in technology because they understand and also Facebook understands well, is that it's actually very, very hard to have data that's owned by your customers. But you are the one who's keeping track over everything, and you are the one using the data right. It's like a no win, because if you think about encryption cryptography, yes, you can make the data encrypted. That way, the customer has the key. They control it, but then Facebook can offer the service is. So now you have a Congress thinking, Well, if there's no technological way of doing this, what can you do in a legal perspective on a, you know, on the law perspective, toddy make it so that the customer actually owned the data. We actually think that is a perfect reason why you have to actually fix the book. Actually, technical should be built on our platform because we actually allow them to have a day that's encrypted and stupid able to operations holiday tha if the customer give them the permission to do so. And I think that's the perfect word way to go forward. And I think Blockchain is the fundamental thing that brings everybody together, you know, way that actually benefits everyone knows >> and take him into explain strong salt your project. What's it about? What's the mission? Where you >> so so we see strong saw as actually privacy. First, we literally are beauty, a platform where developers including Facebook linked and salesforce can't you build on top of platform, right? So what happens when you do this is that they actually give the data governess to the customers, customers Mashona data. But because our cryptography they actually can offer service is to the customers. When a customer allowed them to do so, for example, we have something. All search of encryption allows you to encrypt the data and still give the search. Aubrey on the data without decrypting the data. First, by giving the power to developers and also the community there, you can have our abstract you currently use. But they're not hard to use that frictionless and still offer the same service that Frank Facebook or sell stolen offer the favor. >> You could do some discovery on it. >> You can't do things >> some program ability around >> exactly, even though the data is encrypted. But custom owns the day. So the customer has to give them permission to do so Right this way. Actually, in fact, launched the first app that I told you it's called strong vote. You can Donald ios or Andrew it And you can't you see the Blockchain play little You can see the rocking your fingerprint. I think a fingertip to see what happens to a data. You see everything that happens when Sheriff I or you open a fire or something, I guess. >> Congratulations, Val. Give a quick plug for your project chain kid into the new branding. They're like it. Pencil data. Where are you on your project? >> So after nine months of hard selling, we're finding out what customers actually paying for right now. In our case, it's hardening their APS, their data and their logs and wrapping the chain of custody around those things. And the use case of the security conference like this is actually quite existential When you think about it, One of the things that the industry doesn't talk enough about is that every attack we read about in the headlines was three privilege escalation. So the attackers somehow hacked. Your Web server managed to get administrative credentials and network or domain administrative credentials. And here's what professional attackers do once they have godlike authority on your network. They identify all the installed security solutions, and they make themselves invisible because they can. After that, they operate with impunity. Our technology, the security use case that we're seeing a lot of traction is, is we can detect that we're applying Blockchain. We're agnostic, so bring your own Blockchain in our case. But we're able >> chain kit a product. Is it a development environment >> globally. Available service Jose on AWS rest ful AP eyes and fundamentally were enabling developers to harden their app stuff to wrap a chain of custody around key data or logs in their laps so that when the attacker's attempt a leverage at administrative authority and tamper with locks tamper >> with service, not a software, >> it's a apply. It's a developer oriented service, but >> this is one of the biggest problems and challenges security today. You see the stat after you get infiltrated. It takes 250 or 300 days to even detect, and I have not heard that number shrink. I've heard people aspire number streaking this. >> We can get it down to realize a crime tip of the spear. That's what we're excited to be here. We're excited to talk about One of the dirty secrets of the security industry is that it shouldn't take a year to detect in advance attack. >> Guys, Thanks for coming on. Cuban sharing your insight. Concussions in your head. Well, great to see you. >> Likewise. And thank you, j for having us on here, and we're looking forward to coming back and weigh. Appreciate. Absolutely >> thankful. Spj Thanks for you. >> It was always paying it forward. Of course, really the most important conversation, that security is gonna be a Blockchain type of implementation. This is a reality that's coming very soon, but we're here. They do is reinforce. I'm talking about the first conference with Amazon Web sources dedicated to sightsee. So's Cee Io's around security jumper. Develop the stables for more coverage. After this short break, >> my name is David.

>> Live from San Francisco, California, it's theCUBE covering the IBM Chief Data Officer Summit. Brought to you by IBM. >> Hi everybody, welcome back to theCUBE's coverage of the IBM Chief Data Officer Event. We're here at Fisherman's Wharf in San Francisco at the Centric Hyatt Hotel. This is the 10th anniversary of IBM's Chief Data Officer Summits. In the recent years, anyway, they do one in San Francisco and one in Boston each year, and theCUBE has covered a number of them. I think this is our eighth CDO conference. I'm Dave Vellante, and theCUBE, we like to go out, especially to events like this that are intimate, there's about 140 chief data officers here. We've had the chief data officer from AstraZeneca on, even though he doesn't take that title. We've got a panel coming up later on in the day. And I want to talk about the evolution of that role. The chief data officer emerged out of kind of a wonky, back-office role. It was all about 10, 12 years ago, data quality, master data management, governance, compliance. And as the whole big data meme came into focus and people were realizing that data is the new source of competitive advantage, that data was going to be a source of innovation, what happened was that role emerged, that CDO, chief data officer role, emerged out of the back office and came right to the front and center. And the chief data officer really started to better understand and help companies understand how to monetize the data. Now monetization of data could mean more revenue. It could mean cutting costs. It could mean lowering risk. It could mean, in a hospital situation, saving lives, sort of broad definition of monetization. But it was really understanding how data contributed to value, and then finding ways to operationalize that to speed up time to value, to lower cost, to lower risk. And that required a lot of things. It required new skill sets, new training. It required a partnership with the lines of business. It required new technologies like artificial intelligence, which have just only recently come into a point where it's gone mainstream. Of course, when I started in the business several years ago, AI was the hot topic, but you didn't have the compute power. You didn't have the data, you didn't have the cloud. So we see the new innovation engine, not as Moore's Law, the doubling of transistors every 18 months, doubling of performance. Really no, we see the new innovation cocktail as data as the substrate, applying machine intelligence to that data, and then scaling it with the cloud. And through that cloud model, being able to attract startups and innovation. I come back to the chief data officer here, and IBM Chief Data Officer Summit, that's really where the chief data officer comes in. Now, the role in the organization is fuzzy. If you ask people what's a chief data officer, you'll get 20 different answers. Many answers are focused on compliance, particularly in what emerged, again, in those regulated industries: financial service, healthcare, and government. Those are the first to have chief data officers. But now CDOs have gone mainstream. So what we're seeing here from IBM is the broadening of that role and that definition and those responsibilities. Confusing things is the chief digital officer or the chief analytics officer. Those are roles that have also emerged, so there's a lot of overlap and a lot of fuzziness. To whom should the chief data officer report? Many say it should not be the CIO. Many say they should be peers. Many say the CIO's responsibility is similar to the chief data officer, getting value out of data, although I would argue that's never really been the case. The role of the CIO has largely been to make sure that the technology infrastructure works and that applications are delivered with high availability, with great performance, and are able to be developed in an agile manner. That's sort of a more recent sort of phenomenon that's come forth. And the chief digital officer is really around the company's face. What does that company's brand look like? What does that company's go-to-market look like? What does the customer see? Whereas the chief data officer's really been around the data strategy, what the sort of framework should be around compliance and governance, and, again, monetization. Not that they're responsible for the monetization, but they responsible for setting that framework and then communicating it across the company, accelerating the skill sets and the training of existing staff and complementing with new staff and really driving that framework throughout the organization in partnership with the chief digital officer, the chief analytics officer, and the chief information officer. That's how I see it anyway. Martin Schroeder, the senior vice president of IBM, came on today with Inderpal Bhandari, who is the chief data officer of IBM, the global chief data officer. Martin Schroeder used to be the CFO at IBM. He talked a lot, kind of borrowing from Ginni Rometty's themes in previous conferences, chapter one of digital which he called random acts of digital, and chapter two is how to take this mainstream. IBM makes a big deal out of the fact that it doesn't appropriate your data, particularly your personal data, to sell ads. IBM's obviously in the B2B business, so that's IBM's little back-ended shot at Google and Facebook and Amazon who obviously appropriate our data to sell ads or sell goods. IBM doesn't do that. I'm interested in IBM's opinion on big tech. There's a lot of conversations now. Elizabeth Warren wants to break up big tech. IBM was under the watchful eye of the DOJ 25 years ago, 30 years ago. IBM essentially had a monopoly in the business, and the DOJ wanted to make sure that IBM wasn't using that monopoly to hurt consumers and competitors. Now what IBM did, the DOJ ruled that IBM had to separate its applications business, actually couldn't be in the applications business. Another ruling was that they had to publish the interfaces to IBM mainframes so that competitors could actually build plug-compatible products. That was the world back then. It was all about peripherals plugging into mainframes and sort of applications being developed. So the DOJ took away IBM's power. Fast forward 30 years, now we're hearing Google, Amazon, and Facebook coming under fire from politicians. Should they break up those companies? Now those companies are probably the three leaders in AI. IBM might debate that. I think generally, at theCUBE and SiliconANGLE, we believe that those three companies are leading the charge in AI, along with China Inc: Alibaba, Tencent, Baidu, et cetera, and the Chinese government. So here's the question. What would happen if you broke up big tech? I would surmise that if you break up big tech, those little techs that you break up, Amazon Web Services, WhatsApp, Instagram, those little techs would get bigger. Now, however, the government is implying that it wants to break those up because those entities have access to our data. Google's got access to all the search data. If you start splitting them up, that'll make it harder for them to leverage that data. I would argue those small techs would get bigger, number one. Number two, I would argue if you're worried about China, which clearly you're seeing President Trump is worried about China, placing tariffs on China, playing hardball with China, which is not necessarily a bad thing. In fact, I think it's a good thing because China has been accused, and we all know, of taking IP, stealing IP essentially, and really not putting in those IP protections. So, okay, playing hardball to try to get a quid pro quo on IP protections is a good thing. Not good for trade long term. I'd like to see those trade barriers go away, but if it's a negotiation tactic, okay. I can live with it. However, going after the three AI leaders, Amazon, Facebook, and Google, and trying to take them down or break them up, actually, if you're a nationalist, could be a bad thing. Why would you want to handcuff the AI leaders? Third point is unless they're breaking the law. So I think that should be the decision point. Are those three companies, and others, using monopoly power to thwart competition? I would argue that Microsoft actually did use its monopoly power back in the '80s and '90s, in particular in the '90s, when it put Netscape out of business, it put Lotus out of business, it put WordPerfect out of business, it put Novell out of the business. Now, maybe those are strong words, but in fact, Microsoft's bundling, its pricing practices, caught those companies off guard. Remember, Jim Barksdale, the CEO of Netscape, said we don't need the browser. He was wrong. Microsoft killed Netscape by bundling Internet Explorer into its operating system. So the DOJ stepped in, some would argue too late, and put handcuffs on Microsoft so they couldn't use that monopoly power. And I would argue that you saw from that two things. One, granted, Microsoft was overly focused on Windows. That was kind of their raison d'etre, and they missed a lot of other opportunities. But the DOJ definitely slowed them down, and I think appropriately. And if out of that myopic focus on Windows, and to a certain extent, the Department of Justice and the government, the FTC as well, you saw the emergence of internet companies. Now, Microsoft did a major pivot to the internet. They didn't do a major pivot to the cloud until Satya Nadella came in, and now Microsoft is one of those other big tech companies that is under the watchful eye. But I think Microsoft went through that and perhaps learned its lesson. We'll see what happens with Facebook, Google, and Amazon. Facebook, in particular, seems to be conflicted right now. Should we take down a video that has somewhat fake news implications or is a deep hack? Or should we just dial down? We saw this recently with Facebook. They dialed down the promotion. So you almost see Facebook trying to have its cake and eat it too, which personally, I don't think that's the right approach. I think Facebook either has to say damn the torpedoes. It's open content, we're going to promote it. Or do the right thing and take those videos down, those fake news videos. It can't have it both ways. So Facebook seems to be somewhat conflicted. They are probably under the most scrutiny now, as well as Google, who's being accused, anyway, certainly we've seen this in the EU, of promoting its own ads over its competitors' ads. So people are going to be watching that. And, of course, Amazon just having too much power. Having too much power is not necessarily an indication of abusing monopoly power, but you know the government is watching. So that bears watching. theCUBE is going to be covering that. We'll be here all day, covering the IBM CDO event. I'm Dave Vallente, you're watching theCUBE. #IBMCDO, DM us or Tweet us @theCUBE. I'm @Dvallente, keep it right there. We'll be right back right after this short break. (upbeat music)

(soft click) >> Hey, welcome back everybody, Jeff Frick here with theCUBE. We're at downtown San Francisco, at Twitter's World Headquarters. It's a beautiful building. Find a reason to get up here and check it out. But they have Data Privacy Day here today. It's an all day seminar session, series of conversations about data privacy. And even though Scott McNealy said, "Data privacy is dead, get over it." Everyone here would beg to differ. So we're excited to have our next guest Eva Velasquez. Shes' the President and CEO of ITRC, welcome. >> Thank you, thank you for having me and for covering this important topic. >> Absolutely, so what is ITRC? >> We are the Identity Theft Resource Center. And the name, exactly what it is. We're a resource for the public when they have identity theft or fraud, privacy data breach issues, and need help. >> So this begs an interesting question. How do people usually find out that their identity has been compromised? And what is usually the first step they do take? And maybe what's the first step they should take? >> Well, it's interesting because there isn't one universal pathway that people discover it. It's usually a roadblock. So, they're trying to move forward in their lives in some manner. Maybe trying to rent an apartment, get a new job, buy a car or a house. And during that process they find out that there's something amiss. Either in a background check or a credit report. And at that point it creates a sense of urgency because they must resolve this issue. And prove to whoever they're trying to deal with that actually wasn't me, somebody used my identity. And that's how they find out, generally speaking. >> So, you didn't ask their credit scores. Something in a way that they had no idea, this is how they. What usually triggers it? >> Right, right, or a background check. You know, appearing in a database. It's just, when we think about how pervasive our identity is out there in the world now. And how it's being used by a wide swath of different companies. To do these kind of background checks and see who we are. That's where that damage comes in. >> Talking about security and security breaches at a lot of shows, you know. It's many hundred of days usually before companies know that they've been breached. Or a particular breach, I think now we just assume they're breached all the time. And hopefully they'd minimize damage. But an identity theft, what do you find is kind of the average duration between the time something was compromised before somebody actually figures it out? Is there kind of an industry mean? >> It's really wildly inconsistent from what we see. Because sometimes if there is an issue. Let's say that a wallet is stolen and they're on high alert, they can often discover it within a week or 10 days. Because they are looking for those things. But sometimes if it's a data breach that they were unaware of or have no idea how their information was compromised. And especially in the case of child identity theft, it can go on for years and years before they find out that something's amiss. >> Child identity theft? >> Mhmm. >> And what's going with? I've never heard of child identity theft. They usually don't have credit cards. What's kind of the story on child identity cut theft? Which is their PayPal account or their Snapchat account (laughs). >> Well, you're right, children don't have a credit file or a credit history. But they do have a social security number. And that is being issued within the first year of their life because their parents need to use it on their tax returns and other government documents. Well, because the Social Security Administration and the credit reporting agencies, they don't interface. So, if a thief gets ahold of that social security number. That first record that's created is what the credit bureaus will use. So they don't even need a legitimate name or date of birth. Obviously, the legitimate date of birth isn't going to go through those filters because it is for someone who's under 18. So, kid goes all through life, maybe all through school. And as they get out and start doing things like applying for student loans. Which is one of the really common ways we see it in our call center. Then they come to find out, I have this whole credit history. And guess what? It's a terrible credit history. And they have to clean that up before they can even begin to launch into adulthood. >> (chuckles) Okay, so, when people find out. What should they do? What's the right thing to do? I just get rejected on a credit application. Some weird thing gets flagged. What should people do first? >> There's a couple things and the first one is don't panic. Because we do have resources out there to help folks. One of them is the Identity Theft Resource Center. All of our services are completely free to the public. We're a charity, non-profit, funded by grants, donations, and sponsorships. They should also look into what they might have in their back pocket already. There are a lot of insurance policy writers for things like your home owners insurance, sometimes even your renters insurance. So, you might already have a benefit that you pay for in another way. There are a lot of plans within employee benefit packages. So, if you work for a company that has a reasonable robust package, you might have that help there as well. And then the other thing is if you really feel like you're overwhelmed and you don't have the time. You can always look into hiring a service provider and that's legitimate thing to do as long as you know who you're doing business with. And realize you're going to be paying for that convenience. But there are plenty of free resources out there. And then the last one is the Federal Trade Commission. They have some wonderful remediation plans online. That you can just plug in right there. >> And which is a great segway, 'cause you're doing a panel later today, you mentioned, with the FTC. Around data privacy and identity theft. You know, what role does the federal government have? And what is cleaning up my identity theft? What actually happens? >> Well, the federal government is one of the many stakeholders in this process. And we really believe that everybody has to be involved. So, that includes our government, that includes industry, and the individual consumers or victims themselves. So, on the government end, things like frameworks for how we need to treat data, have resources available to folks, build an understanding in a culture in our country that really understands the convenience versus security conundrum. Of course industry needs to protect and safeguard that data. And be good stewards of it, when people give it to them. And then individual consumers really need to pay attention and understand what choice they're making. It's their choice to make but it should be an educated one. >> Right, right. And it just, the whole social security card thing, is just, I find fascinating. It's always referenced as kind of the anchor data point of your identity. At the same time, you know, it's a paper card that comes after your born. And people ask for the paper card. I mean, I got a chip on my ATM card. It just seems so archaic, the amount of times it's asked in kind of common everyday, kind of customer service engagements with your bank or whatever. Just seems almost humorous in the fact that this is supposed to be such an anchor point of security. Why? You know, when is the Social Security Administration or that record, either going to come up to speed or do you see is there a different identity thing? With biometrics or a credit card? Or your fingerprint or your retina scan? I mean, I have clear, your Portican, look at my... Is that ever going to change or is it just always? It's such a legacy that's so embedded in who we are that it's just not going to change? It just seems so bizarre to me. >> Well, it's a classic case of we invented a tool for one purpose. And then industry decided to repurpose it. So the social security number was simply to entitle you to social security benefits. That was the only thing it was created for. Then, as we started building the credit and credit file industry, we needed an initial authenticator. And hey, look at this great thing. This is a number, it's issued to one individual. We know that there's some litmus test that they have to pass in order to get one. There's a great tool, let's use it. But nobody started talking about that. And now that we're looking at things like other type, government benefits being offered. And now, you know, credit is issued based on this number. It really kind of got away from everybody. And think about it, it used to be your military ID. And you would have your social security number painted on your rucksack, there for the world to see. It's still on our Medicare cards. It used to be on our checks. Lot of that has changed. >> That's right it was on our checks. >> It was, it was. So, we have started shifting into this. At least the thought process of, "If we're going to use something as an initial authenticator, we probably should not be displaying it, ready for anyone to see." And the big conversation, you know, you were talking about biometrics and other ways to authenticate people. That's one of the big conversations we're having right now is, "What is the solution?" Is it a repurposing of the social security number? Is it more sharing within government agencies and industry of that data, so we can authenticate people through that? Is it a combination of things? And that's what we're trying to wrestle with and work out. But it is moving forward, I'll be it, very very slowly. >> Yeah, they two factor authentication seems to have really taken off recently. >> Thankfully. >> You get the text and here's your secret code and you know, at least it's another step that's relatively simple to execute. >> Something you are, something you have, something you know. >> There you go. >> That's kind of the standard we're really trying to push. >> So, on the identity theft bad guys, how is their behavior changed since you've been in this business? Has it changed dramatically? Is the patterns of theft pretty similar? You know, how's that world evolving? 'Cause generally these things are little bit of an arm race, you know. And often times the bad guys are one step ahead of the good guys. 'Cause the good guys are reacting to the last thing that the bad guys do. How do you see that world kind of changing? >> Well, I've been in the fraud space for over 20 years. Which I hate to admit but it's the truth. >> Jeff: Ooh, well, tell me about it. >> And we do look at it sort of like a treadmill and I think that's just the nature of the beast. When you think about the fact that the thieves are they're, you know, they're doing penetration testing. And we, as the good guys, trying to prevent it. Have to be right a hundred percent of the time. The thieves only have to be right once, they know it. They also spend an extraordinary amount of time being creative about how they're going to monetize our information. The last big wave on new types of identity theft, was tax identity theft. And the federal government never really thought that that would be a thing. So when we went to online filing, there really weren't any fraud analytics. There wasn't any verification of it. So, that first filing was the one that was processed. Well, fast forward to now, we've started to address that it's still a huge problem and the number one type of identity theft. But if you had asked me ten years ago, if that would be something, I don't think I would have said yes. It seems, you know, so, you know. How do you create money out of something like that? And so, to me, what is moving forward is that I think we just have to be really vigilant for when we leave that door unlocked, the thieves are going to push it open and burst through. And we just have to make sure we notice when it's cracked. So that we can push it closed. Because that's really I think the only way we're going to be able to address this. Is just to be able to detect and react much more quickly than we do now. >> Right, right, 'cause going to come through, right? >> Exactly they are. >> There's no wall thick enough, right? Right and like you said they only have to be right once. >> Nothings impenetrable. >> Right, crazy. Alright Eva, we're going to leave it there and let you go off to your session. Have fun at your session and thanks for spending a few minutes with us. >> Thank you. >> Alright, she's Eva Velasquez, President and CEO of the ITRC. I'm Jeff Frick, you're watching theCUBE. Catch you next time. (upbeat electronic music)