>>from around the globe. It's the Cube with digital coverage of AWS reinvent 2020. Special coverage sponsored by AWS Global Partner Network Welcome to the Cubes. Live coverage of AWS reinvent 2020. I'm Lisa Martin. I've got two guests joining me. Next. Chris Gru's director of Business development, AWS Marketplace Service catalog and Control Tower at AWS. Chris, welcome. >>Thank you. Welcome. Good to see you. >>Likewise. And Matthew Polly is an alumni of the Cube. He is back VP of worldwide business development alliances and channels at Crowdstrike Matthew, Welcome toe. Welcome back. >>Great to be here. Lisa, Thanks for having me. >>And I see you're in your garage, your f one car in the background. Very jealous. So we're gonna be talking a little bit about not f one today, but about what's going on. Some of the the news that's coming from the partner Keynote. So, Chris, let's start with you. What's going on? The AWS marketplace news and also give our audience a real good understanding of what the marketplace is. >>Yeah, sure. So So AWS marketplace is actually an eight year old service within the AWS family, and and our charter is really providing a fine by deploy and manage experience for third party software. And so what our organization does. We work with my issues like Crowdstrike, and we really try to get them to package up their software in that same consumption format that other customers are buying AWS services. It's already the best service already. Those customers are used to buying services like Red Shift, and that's three and a consumption format, and they want to be able to buy third party software in that same manner. And so that's really been our charter since we were launched eight years ago. We've had a lot of great mo mentum since our launch. We now have over 8000 listings available in the catalog, and we have over 1.5 million subscriptions going through the catalog. One of things that we announced earlier today is that we are up to 300,000 active customers. That's actually up from 260,000, which is our previous numbers. So we continue to see really good momentum in terms of adoption, from both our eyes, community publishing listings and then from our customers that are actually buying out of the catalog. We work on all types of formats of software, so we provide machine images in an Amazon machine image format. But we also published and make available SAS products, container products and algorithms and models to run in things like our sage maker environment. And then, as of this morning in the Global Partner Summit, we announced the ability to sell professional services through eight of this marketplace as well. >>So lots of expansion, lots of growth. I'd love to get Chris your take on this expansion into offering professional services. What does that mean? And how have your 300,000 plus customers been influential in that? >>Yeah. And so what we've seen is marketplaces evolved is the transaction sizes have actually gone up dramatically. A couple years ago we launched a feature called Private Offers, which allows eyes views to do a negotiated subscription, submit that to an AWS customer and that they accept that goes right on their bill. We've seen very good adoption that we've got thousands of private offers now going through the system and what we found when the transaction sizes started to grow. Both our eyes V s that we're using the platform, as well as the consulting partners that are partners with US through Amazon Partner Network. They typically attached services to those transactions So pure and eyes V you might wanna package on something like an installation service training services. Or it could just be a bespoke statement of work that goes along with your technology and then on the consulting partner side. Resellers want to attach those same type of services to the software that they re sell, and up until this morning we weren't able to do that. And so it provided a lot of friction to our customers or buyers because what they had to do is they actually had to bottom line those transactions, or they had to do those transactions outside of marketplace. And And that wasn't a good experience for either RSV community or restore community or customers. So now, with this launch, we could actually allow customers to buy those services from those Eyes v partners and those resellers. By virtue of doing that to marketplace and basically how it works. It's similar to our private offer experience. They just submit a private offer to that customer. They could upload a statement of work. And if that customer accept, it goes directly on their AWS bill and they did. This marketplace takes care of all the collection, and the building that goes goes along with that transaction. And so we're really excited about this. We had over 100 launch partners that we're ready to go as of this morning, and we think this is gonna be a great feature, is gonna get a lot of adoption. Crowdstrike, which is a company that Matthews with is one of our launch partners for that feature. And so we just think this is gonna be a game changer for us on a number of levels. It's really gonna open up the type of transactions that we can now do to market place. >>Well, you mentioned Ah, good f word frictionless. That's something that every business really aims to do to make that experience just as seamless as possible. So Matthew talk to us about crowdstrike being part of its professional services, launched the opportunities that that opens up for the marketplace, customers and your customers? >>Sure. So just a quick background on crowdstrike were an endpoint protection cybersecurity company that has historically been protecting laptops desktops on premise, uh, devices from from breaches, basically identifying indications of attack or indications of compromise that that may surface on those end points. We do that by having agents run on those devices and point back to our massive body of data that runs in the cloud A W s. In fact, and so collecting tons and tons of data petabytes upon petabytes of data, literally trillions of events per week were able to easily identify and apply machine learning and artificial intelligence, Um, to that corpus of data to be able to identify when there is adversary activity on those devices. Now we've gone through a bit of a digital transformation ourselves, and we're looking at now. Not only, or we have launched products here recently, that not only protect those on premise devices like the desktops, laptops and on premise servers, but also protect workloads that are running in the cloud E C. Two instances, or RDS instances. What have you in in AWS? Or we've also launched what crowdstrike calls are Falcon Horizon product, which is a cloud security posture management product to be able to give people visibility into configurations that may create risk for their cloud environments. And we've been leveraging marketplace for about two years now. Um, it's been a fantastic opportunity for us to really leverage that frictionless sales motion that Chris talked about reducing sale cycles for us and for our channel partners. We have a number of our channel partners that leverage the CPP Oh capability within within the AWS marketplace toe actually transact business with their customers. It's been a It's been a fantastic, um you know, mechanism for for crowdstrike, for our partners and for our customers. Um, you know, we've been part of the enterprise contract scenarios where we don't have to go through that process of negotiating an end user license contract. We've signed up for the enterprise contract. Many of our customers have signed up for that enterprise contracts with reduces the legal iterations to get a transaction done. So that's been fantastic. And what we're doing now with the you know, the professional services offering is we're standing up a few of our professional services, Um, you know, offerings on the AWS marketplace so that our customers and our channel partners can actually transact business through the AWS marketplace toe, acquire those particular professional services offerings. And the one that I think is most interesting is a kind of cloud security assessment where our professional services team will go in and actually evaluate our their configurations. Are there unmanaged, um, you know, accounts running in AWS or what have you that could represent a security risk and make recommendations about how to improve the overall security posture of that cloud environment, leveraging something like crowd strikes Falcon Horizon, as I mentioned earlier, or our cloud workload protection offering. So it >>really >>is about streamlining the procurement, offering them. You know, the ability to thio, offering customers the ability to acquire through the AWS marketplace, whether that's the crowdstrike product or the Crowdstrike service offerings. >>So, Matthew, I imagine given this year that we're all not sitting together face to face in Las Vegas. The events of this year have also brought a lot of challenges from a security perspective. We've seen Ransomware going up dramatically, but also in this massive pitot to work working remotely. I can imagine your customers big opportunity for Crowdstrike to help them when endpoints just scattered. So in terms of that, as well as the impact with what you're doing with AWS marketplace seems like a great opportunity to provide your customers with faster access to ensuring that they can guarantee the security off their all of their data, which is business critical. >>Yeah, 100%. So the kind of global pandemic and work from anywhere has driven demand for crowd strikes capabilities in two ways. Number one people leaving the office and going home. There's a proliferation of physical devices, laptops for people to actually work from home, which obviously need to be protected. And a lot of times these were people that were working from home for the first time. You know, no longer within the protection of the, you know, the corporate network. Maybe they're using a VPN or what have you? But they needed the added protection of an endpoint protection capability like crowd strikes. And the second is a lot of this digital transformation has been accelerated. We've had a few customers tell us they had a three year plan for for their their digital transformation, and a lot of that is moving on. Premise service involves moving on premise servers to the cloud, and they've had to accelerate that two months or even even weeks in cases. And that's driving. You know, huge demand for understanding how to ensure there maintaining the proper security posture for those cloud environments. So speed is key right now, making sure that you're protected and transacting those those you know, those those sale cycles quickly leveraging native US marketplace all is accelerating. >>Yes, speaking of that acceleration and we've talked about that a lot. Matthew. This acceleration of digital transformation years now crammed into months. Chris, let's wrap with you in light of that acceleration, how has that affected positively? The AWS marketplace Bringing in professional services, allowing your customers to have much more available to them, to transact directly and and in a frictionless way, when speed is so critical? >>Yeah, I mean what it really leads to. It just gives us more selection, right? So if you take a step back and you think about the you know, the infamous Amazon fire, well, one of the key components of what makes a fine we'll go a selection. And there was a lot of solutions that we had. We just couldn't sell through marketplace without having some kind of services attach. While there's a lot of products that you could just point, click and go. There are a lot of technology. Do you need to? Some have some kind of hand holding And so, you know, by virtue launching services, this actually opens up the amateur in terms of selection that we could bring into the catalog. One of things that we've been focused on as a late is bringing in business applications as an example. And a lot of times a business application might need services to go on, actually wrap around that solution cell and, you know, be part of that implementation. And so that's the other great thing about this is it's going to give us more selection, and that's just gonna let our customers buy more and more products out of this market place. But do that in this very easy format, where it literally just lets them put these transactions directly on the AWS bill. So we think it's gonna be a great you know, not only for movie deals faster but also providing more solutions to our customers and just giving a better selection experience of AWS customer >>and being able to do that all remotely, which is these days is table stakes. Chris. Matthew, Thank you so much for joining me today. Talking about what's new with the Amazon marketplace. What you guys are doing with professional services and crowdstrike. We appreciate your time. >>Yep. Thank you. Thanks. Lisa. Yep. >>From my guests. I'm Lisa Martin. You're watching the cubes. Live coverage of aws reinvent 2020.

>> Announcer: From Las Vegas, it's theCUBE. Covering Qualys Security Conference 2019, brought to you by Qualys. >> Hey welcome back everybody, Jeff Frick here with theCUBE, we're in Las Vegas at the Bellagio, at the Qualys Security Conference, pretty amazing, it's been going on for 19 years, we heard in the keynote. It's our first time here, and we're excited to have our first guest, he was a keynote earlier this morning, the author of nine books, Richard Clarke, National Security and Cyber Risk expert, and author most recently of "The Fifth Domain." Dick, great to see you. >> Great to be with you. >> Absolutely. So you've been in this space for a very long time. >> I started doing cybersecurity in about 1996 or 1997. >> So early days. And preparing for this, I've watched some of your other stuff, and one of the things you said early on was before there was really nothing to buy. How ironic to think about that, that first there was a firewall, and basic kind of threat protection. Compare and contrast that to walking into RSA, which will be in a couple of months in Moscone, 50,000 people, more vendors than I can count on one hand, now there's too much stuff to buy. Do you look at this evolution? What's your take? And from a perspective of the CIO and the people responsible for protecting us, how should they work through this morass? >> Well, the CIO and the CFO, got used to thinking cyber security costs a little bit, 'cause you can only buy, this is 1997, you can only buy antivirus, firewall, and maybe, in 1997, you could buy an intrusion detection system. Didn't do anything, it just went "beep," but you could buy that too. So you had three things in 1997. And so that resulted in the IT budget having to take a tiny little bit of it, and put it aside for security, maybe 2%, 3% of the budget. Well, now, if you're only spending 2 or 3% of your IT budget on security, somebody owns your company, and it's not you (laughs). >> And that's 2 or 3% of the IT budget, that's not the whole budget. >> No, that's the IT budget. What we found in researching the book, is that secure companies, and there are some, there's companies that don't get hacked, or they get hacked, but the hack gets in, immediately contained, identified, quarantined. The damage is done, but it's easily repaired. Companies that are like that, the resilient companies, are spending 8%, 10%, we found companies at 12 and 17%, of their IT budget on security, and to your point, how many devices do you have to buy? You look at the floor at any of these RSA Conventions, Black Hat, or something, now there are 2000 companies at RSA, and they're all selling something, but their marketing message is all the same. So pity the poor CSO as she goes around trying to figure out, "Well, do I want to talk to that company? "What does it do?" We found that the big banks, and the big corporations, that are secure, have not three, anymore, but 75, 80, different, discreet cybersecurity products on their network, most of it software, some of it hardware. But if you've got 80 products, that's probably 60 vendors, and so you got to, for yourself, there's the big challenge, for a CSO, she's got to figure out, "What are the best products? "How do they integrate? "What are my priorities?" And, that's a tough task, I understand why a lot of the people want to outsource it, because it's daunting, especially for the small and medium-size business, you got to outsource it. >> Right, right. So the good news is, there's a silver lining. So traditionally, and you've talked about this, we talk about it all the time too, there's people that have been hacked and know it, and people that have been hacked and just don't know it yet, and the statistics are all over the map, anywhere you grab it, it used to be hundreds of days before intrusions were detected. Kind of the silver lining in your message is, with proper investments, with proper diligence and governance, you can be in that group, some they're trying to get in all the time, but you can actually stop it, you can actually contain it, you can actually minimize the damage. >> What we're saying is, used to be two kinds of companies, those that are hacked and knew it, and those that are hacked that don't, that didn't know it. Now there's a third kind of company. The company that's stopping the hack successfully, and the average, I think, is a 175 days to figure it out, now it's 175 minutes, or less. The attack gets in, there's all the five or six stages, of what's called "the attack killchain," and gets out very, very quickly. Human beings watching glass, looking at alerts, are not going to detect that and respond in time, it's got to be automated. Everybody says they got AI, but some people really do (laughs), and machine learning is absolutely necessary, to detect things out of the sea of data, 75 different kinds of devices giving you data, all of them alarming, and trying to figure out what's going on, and figure out in time, to stop that attack, quarantine it, you got to move very, very quickly, so you've got to trust machine learning and AI, you got to let them do some of the work. >> It's so funny 'cause people still are peeved when they get a false positive from their credit card company, and it's like (laughs), do you realize how many of those things are going through the system before one elevates to the level that you are actually getting an alert? >> So the problem has always been reducing the number of false positives, and identifying which are the real risks, and prioritizing, and humans can't do that anymore. >> Right, right, there's just too much data. So let's shift gears a little bit about in terms of how this has changed, and again, we hear about it over and over, right, the hacker used to be some malicious kid living in his mom's basement, being mischievous, maybe, actually doing some damage, or stealing a little money. Now it's government-funded, it's state attacks, for much more significant threats, and much more significant opportunities, targets of opportunity. You've made some interesting comments in some of your prior stuff, what's the role of the government? What's the role of the government helping businesses? What's the role of business? And then it also begs the question, all these multinational business, they don't even necessarily just exist in one place, but now, I've got to defend myself against a nation state, with, arguably, unlimited resources, that they can assign to this task. How should corporate CIOs be thinking about that, and what is the role, do you think, of the government? >> Let's say you're right. 20 years ago we actually used to see the number of cyber attacks go up on a Friday night and a Saturday night, because it was boys in their mother's basement who couldn't get a date, you know, and they were down there having fun with the computer. Now, it's not individuals who are doing the attacks. It is, as you say, nation states. It's the Russian Army, Russian Intelligence, Russian Military Intelligence, the GRU. The North Korean Army is funding its development of nuclear weapons by hacking companies and stealing money, all over the world, including central banks, in some cases. So, yeah, the threat has changed, and obviously, a nation state is going to be far more capable of attacking, military is going to be far more capable of attacking, so, CISOs say to me, "I'm being attacked by a foreign military, "isn't that the role of the Pentagon "to defend Americans, American companies?" And General Keith Alexander, who used to run Cyber Command, talks about, if a Russian bomber goes overhead, and drops a bomb on your plant, you expect the United States Air Force to intercept that Russian bomber, that's why you pay your taxes, assuming you pay taxes. What's the difference? General Alexander says, whether that's a Russian bomber attacking your plant, or a Russian cyber attack, attacking your plant, and he says, therefore, people should assume the Pentagon will protect them from foreign militaries. That sounds nice. There's a real ring of truth to that, right? But it doesn't work. I mean, how could the Pentagon defend your regional bank? How could the Pentagon defend the telephone company, or a retail store? It can't. It can barely defend itself, and they're not doing a great job of that either, defending the federal government. So, do you really want the Pentagon putting sensors on your network? Looking at your data? No, you don't. Moreover, they can't. They don't have enough people, they don't have enough skills. At the end of the day, whatever the analogy is about how the Defense Department should defend us from foreign military attack, they can't. And they shouldn't, by the way, in my view. The conclusion that that gets you to, is you got to defend yourself, and you can, right now, if you use the technology that exists. The government has a role, sure. It can provide you warnings, it can provide the community with intelligence, it can fund development and stuff, can train people, but it cannot defend your network, you have to defend your network. >> And you have municipalities, I think it's Atlanta, is the one that keeps getting hit, there's-- >> Well Louisiana, just the other night, the whole state of Louisiana government unplugged from the internet, because it was being hit by a ransomware attack. The whole city of Baltimore's been down, the whole city of Atlanta, as you said. There's a real problem here, because people, many of them are paying the ransom, and they pay the ransom, and they get their network back right away. People ask me, "Can I trust these criminals?" Well you can trust them to give you your network back, because they have a reputation to maintain. Think about that. This whole thing about ransomware depends on their reputation, the bad guys' reputation. If they get a reputation for not giving you your network back when you pay, no one's ever going to pay, so they do give it back, and sometimes that's a lot quicker, and a lot cheaper, than saying no and rebuilding your network. But if we give them the money, what are they doing with it? Yeah, they're buying Ferraris to drive round the streets of Moscow, but some of that money is going back into R&D, so they can develop more effective attacks. >> So it's an interesting take, right, so most people, I think, would say that the cybersecurity war is completely always going to be kind of cat and mouse, whack-a-mole, that the bad guys are always a little step ahead, and you're always trying to catch up, just the way the innovation cycle works. You specifically say no, that's not necessarily always true, that there are specific things you can do to, not necessarily have an impenetrable wall, but to really minimize the impact and neutralize these threats, like a super white blood cell, if you will. So what are those things that companies should be doing, to better increase their probability, their chance, of, I don't know, blocking-- >> Depends on the size of the company. >> Absorbing. >> Depends on the size of the company. But I think whether you're a small-to-medium business, or you're an enterprise, you begin in the same place. And I do this with all of my consulting contracts, I sit down with the leadership of the company individually, and I ask every one of them, "What are you worried about? "What could happen? "What could a bad guy do to you "that matters to your company?" 'Cause what matters to one company may not matter to another company. And you can't spend your entire budget defending the network, so let's figure out exactly what risk we're worried about, and what risk we're just kind of willing to tolerate. And then, we can design security around that, and sometimes that security will be outsourced, to a managed security provider. A lot of it means getting into the cloud, because if you're in Amazon or Microsoft's cloud, you've got some security automatically built in, they've got thousands of people doing the security of the cloud, and if your server's in your basement, good luck. (laughs) >> So, as you look forward, now you said you finished the book earlier in the year, it gets published, and it's out, and that's great, but as you said, it's a fast-moving train, and the spaces develops. 10 years from now, we don't want to look at 10 years from now, it's way too long. But as you look forward the next couple, two, three years, what are you keeping an eye on, that's going to be, again, another sea change of both challenge and opportunity in this space? >> The three technologies we talk about in the book, for the three-year time horizon, 'cause I can't get beyond three years, more machine learning on the defense, but also more machine learning on the offense, and where does that balance work out? To whose advantage? Secondly, quantum computing, which, we don't know how rapidly quantum computing will come onto the market, but we do know it's a risk for some people, in that it might break encryption, if the bad guys get their hands on the quantum computer, so that's a worry. But one I think most immediately, is 5G. What 5G allows people to do, is connect millions of things, at high speed, to the internet. And a lot of those things that will be connected are not defended right now, and are outside firewalls, and don't have end-point protection, and aren't really built into networks on a secure network. So I worry about 5G empowering the Internet of Things, and doing what we call expanding the attack surface, I worry about that. >> Right, Richard, well thank you for taking a few minutes, and congrats on the book, and I'm sure within a couple of years the gears will start turning and you'll put pen to paper and kick another one out for us. >> Number 10. >> All right. He's Richard, I'm Jeff, you're watching theCUBE, we're at the Qualys Security Conference at the Bellagio in Las Vegas, thanks for watching, we'll see you next time. (upbeat music)

>> Announcer: Live from Las Vegas, it's theCUBE covering IBM Think 2018. Brought to you by IBM. >> Hi everybody, this is Dave Vellante. We're here at IBM Think. This is the third day of IBM Think. IBM has consolidated a number of its conferences. It's a one main tent, AI, Blockchain, quantum computing, incumbent disruption. It's just really an amazing event, 30 to 40,000 people, I think there are too many people to count. Chris Penn is here. New company, Chris, you've just formed Brain+Trust Insights, welcome. Welcome back to theCUBE. >> Thank you. It's good to be back. >> Great to see you. So tell me about Brain+Trust Insights. Congratulations, you got a new company off the ground. >> Thank you, yeah, I co-founded it. We are a data analytics company, and the premise is simple, we want to help companies make more money with their data. They're sitting on tons of it. Like the latest IBM study was something like 90% of the corporate data goes unused. So it's like having an oil field and not digging a single well. >> So, who are your like perfect clients? >> Our perfect clients are people who have data, and know they have data, and are not using it, but know that there's more to be made. So our focus is on marketing to begin with, like marketing analytics, marketing data, and then eventually to retail, healthcare, and customer experience. >> So you and I do a lot of these IBM events. >> Yes. >> What are your thoughts on what you've seen so far? A huge crowd obviously, sometimes too big. >> Chris: Yep, well I-- >> Few logistics issues, but chairmanly speaking, what's your sense? >> I have enjoyed the show. It has been fun to see all the new stuff, seeing the quantum computer in the hallway which I still think looks like a bird feeder, but what's got me most excited is a lot of the technology, particularly around AI are getting simpler to use, getting easier to use, and they're getting more accessible to people who are not hardcore coders. >> Yeah, you're seeing AI infused, and machine learning, in virtually every application now. Every company is talking about it. I want to come back to that, but Chris when you read the mainstream media, you listen to the news, you hear people like Elon Musk, Stephen Hawking before he died, making dire predictions about machine intelligence, and it taking over the world, but your day to day with customers that have data problems, how are they using AI, and how are they applying it practically, notwithstanding that someday machines are going to take over the world and we're all going to be gone? >> Yeah, no, the customers don't use the AI. We do on their behalf because frankly most customers don't care how the sausage is made, they just want the end product. So customers really care about three things. Are you going to make me money? Are you going to save me time? Or are you going to help me prove my value to the organization, aka, help me not get fired? And artificial intelligence and machine learning do that through really two ways. My friend, Tripp Braden says, which is acceleration and accuracy. Accuracy means we can use the customer's data and get better answers out of it than they have been getting. So they've been looking at, I don't know, number of retweets on Twitter. We're, like, yeah, but there's more data that you have, let's get you a more accurate predictor of what causes business impacts. And then the other side for the machine learning and AI side is acceleration. Let's get you answers faster because right now, if you look at how some of the traditional market research for, like, what customer say about you, it takes a quarter, it can take two quarters. By the time you're done, the customers just hate you more. >> Okay, so, talk more about some of the practical applications that you're seeing for AI. >> Well, one of the easiest, simplest and most immediately applicable ones is predictive analytics. If we know when people are going to search for theCUBE or for business podcast in general, then we can tell you down to the week level, "Hey Dave, it is time for you "to ramp up your spending on May 17th. "The week of May 17th, "you need to ramp up your ads, spend by 20%. "On the week of May 24th, "you need to ramp up your ad spend by 50%, "and to run like three or four Instagram stories that week." Doing stuff like that tells you, okay, I can take these predictions and build strategy around them, build execution around them. And it's not cognitive overload, you're not saying, like, oh my God, what algorithm is this? Just know, just do this thing at these times. >> Yeah, simple stuff, right? So when you were talking about that, I was thinking about when we send out an email to our community, we have a very large community, and they want to know if we're going to have a crowd chat or some event, where theCUBE is going to be, the system will tell us, send this email out at this time on this date, question mark, here's why, and they have analytics that tell us how to do that, and they predict what's going to get us the best results. They can tell us other things to do to get better results, better open rates, better click-through rates, et cetera. That's the kind of thing that you're talking about. >> Exactly, however, that system is probably predicting off that system's data, it's not necessarily predicting off a public data. One of the important things that I thought was very insightful from IBM, the show was, the difference between public and private cloud. Private is your data, you predict on it. But public is the big stuff that is a better overall indicator. When you're looking to do predictions about when to send emails because you want to know when is somebody going to read my email, and we did a prediction this past October for the first quarter, the week of January 18th it was the week to send email. So I re-ran an email campaign that I ran the previous year, exact same campaign, 40% lift to our viewer 'cause I got the week right this year. Last year I was two weeks late. >> Now, I can ask you, so there's a black box problem with AI, right, machines can tell me that that's a cat, but even a human, you can't really explain how you know that it's a cat. It's just you just know. Do we need to know how the machine came up with the answer, or do people just going to accept the answer? >> We need to for compliance reasons if nothing else. So GDPR is a big issue, like, you have to write it down on how your data is being used, but even HR and Equal Opportunity Acts in here in American require you to be able to explain, hey, we are, here's how we're making decisions. Now the good news is for a lot of AI technology, interpretability of the model is getting much much better. I was just in a demo for Watson Studio, and they say, "Here's that interpretability, "that you hand your compliance officer, "and say we guarantee we are not using "these factors in this decision." So if you were doing a hiring thing, you'd be able to show here's the model, here's how Watson put the model together, notice race is not in here, gender is not in here, age is not in here, so this model is compliant with the law. >> So there are some real use cases where the AI black box problem is a problem. >> It's a serious problem. And the other one that is not well-explored yet are the secondary inferences. So I may say, I cannot use age as a factor, right, we both have a little bit of more gray hair than we used to, but if there are certain things, say, on your Facebook profile, like you like, say, The Beatles versus Justin Bieber, the computer will automatically infer eventually what your age bracket is, and that is technically still discrimination, so we even need to build that into the models to be able to say, I can't make that inference. >> Yeah, or ask some questions about their kids, oh my kids are all grown up, okay, but you could, again, infer from that. A young lady who's single but maybe engaged, oh, well then maybe afraid because she'll get, a lot of different reasons that can be inferred with pretty high degrees of accuracy when you go back to the target example years ago. >> Yes. >> Okay, so, wow, so you're saying that from a compliance standpoint, organizations have to be able to show that they're not doing that type of inference, or at least that they have a process whereby that's not part of the decision-making. >> Exactly and that's actually one of the short-term careers of the future is someone who's a model inspector who can verify we are compliant with the letter and the spirit of the law. >> So you know a lot about GDPR, we talked about this. I think, the first time you and I talked about it was last summer in Munich, what are your thoughts on AI and GDPR, speaking of practical applications for AI, can it help? >> It absolutely can help. On the regulatory side, there are a number of systems, Watson GRC is one which can read the regulation and read your company policies and tell you where you're out of compliance, but on the other hand, like we were just talking about this, also the problem of in the regulatory requirements, a citizen of EU has the right to know how the data is being used. If you have a black box AI, and you can't explain the model, then you are out of compliance to GDPR, and here comes that 4% of revenue fine. >> So, in your experience, gut feel, what percent of US companies are prepared for GDPR? >> Not enough. I would say, I know the big tech companies have been racing to get compliant and to be able to prove their compliance. It's so entangled with politics too because if a company is out of favor with the EU as whole, there will be kind of a little bit of a witch hunt to try and figure out is that company violating the law and can we get them for 4% of their revenue? And so there are a number of bigger picture considerations that are outside the scope of theCUBE that will influence how did EU enforce this GDPR. >> Well, I think we talked about Joe's Pizza shop in Chicago really not being a target. >> Chris: Right. >> But any even small business that does business with European customers, does business in Europe, has people come to their website has to worry about this, right? >> They should at least be aware of it, and do the minimum compliance, and the most important thing is use the least amount of data that you can while still being able to make good decisions. So AI is very good at public data that's already out there that you still have to be able to catalog how you got it and things, and that it's available, but if you're building these very very robust AI-driven models, you may not need to ask for every single piece of customer data because you may not need it. >> Yeah and many companies aren't that sophisticated. I mean they'll have, just fill out a form and download a white paper, but then they're storing that information, and that's considered personal information, right? >> Chris: Yes, it is. >> Okay so, what do you recommend for a small to midsize company that, let's say, is doing business with a larger company, and that larger company said, okay, sign this GDPR compliance statement which is like 1500 pages, what should they do? Should they just sign and pray, or sign and figure it out? >> Call a lawyer. Call a lawyer. Call someone, anyone who has regulatory experience doing this because you don't want to be on the hook for that 4% of your revenue. If you get fined, that's the first violation, and that's, yeah, granted that Joe's Pizza shop may have a net profit of $1,000 a month, but you still don't want to give away 4% of your revenue no matter what size company you are. >> Right, 'cause that could wipe out Joe's entire profit. >> Exactly. No more pepperoni at Joe's. >> Let's put on the telescope lens here and talk big picture. How do you see, I mean, you're talking about practical applications for AI, but a lot of people are projecting loss of jobs, major shifts in industries, even more dire consequences, some of which is probably true, but let's talk about some scenarios. Let's talk about retail. How do you expect an industry like retail to be effective? For example, do you expect retail stores will be the exception rather than the rule, that most of the business would be done online, or people are going to still going to want that experience of going into a store? What's your sense, I mean, a lot of malls are getting eaten away. >> Yep, the best quote I heard about this was from a guy named Justin Kownacki, "People don't not want to shop at retail, "people don't want to shop at boring retail," right? So the experience you get online is genuinely better because there's a more seamless customer experience. And now with IoT, with AI, the tools are there to craft a really compelling personalized customer experience. If you want the best in class, go to Disney World. There is no place on the planet that does customer experience better than Walt Disney World. You are literally in another world. And that's the bar. That's the thing that all of these companies have to deal with is the bar has been set. Disney has set it for in-person customer experience. You have to be more entertaining than the little device in someone's pocket. So how do you craft those experiences, and we are starting to see hints of that here and there. If you go to Lowe's, some of the Lowe's have the VR headset that you can remodel your kitchen virtually with a bunch of photos. That's kind of a cool experience. You go to Jordan's Furniture store and there's an IMAX theater and there's all these fun things, and there's an enchanted Christmas village. So there is experiences that we're giving consumers. AI will help us provide more tailored customer experience that's unique to you. You're not a Caucasian male between this age and this age. It's you are Dave and here's what we know Dave likes, so let's tailor the experience as best we can, down to the point where the greeter at the front of the store either has the eyepiece, a little tablet, and the facial recognition reads your emotions on the way in says, "Dave's not in a really great mood. "He's carrying an object in his hand "probably here for return, "so express him through the customer service line, "keep him happy," right? It has how much Dave spends. Those are the kinds of experiences that the machines will help us accelerate and be more accurate, but still not lose that human touch. >> Let's talk about autonomous vehicles, and there was a very unfortunate tragic death in Arizona this week with a autonomous vehicle, Uber, pulling its autonomous vehicle project from various cities, but thinking ahead, will owning and driving your own vehicle be the exception? >> Yeah, I think it'll look like horseback today. So there are people who still pay a lot of money to ride a horse or have their kids ride a horse even though it's an archaic out-of-mode of form of transportation, but we do it because of the novelty, so the novelty of driving your own car. One of the counter points it does not in anyway diminish the fact that someone was deprived of their life, but how many pedestrians were hit and killed by regular cars that same day, right? How many car accidents were there that involved fatalities? Humans in general are much less reliable because when I do something wrong, I maybe learn my lesson, but you don't get anything out of it. When an AI does something wrong and learns something, and every other system that's connected in that mesh network automatically updates and says let's not do that again, and they all get smarter at the same time. And so I absolutely believe that from an insurance perspective, insurers will say, "We're not going to insure self-driving, "a non-autonomous vehicles at the same rate "as an autonomous vehicle because the autonomous "is learning faster how to be a good driver," whereas you the carbon-based human, yeah, you're getting, or in like in our case, mine in particular, hey your glass subscription is out-of-date, you're actually getting worse as a driver. >> Okay let's take another example, in healthcare. How long before machines will be able to make better diagnoses than doctors in your opinion? >> I would argue that depending on the situation, that's already the case today. So Watson Health has a thing where there's diagnosis checkers on iPads, they're all meshed together. For places like Africa where there is simply are not enough doctors, and so a nurse practitioner can take this, put the data in and get a diagnosis back that's probably as good or better than what humans can do. I never foresee a day where you will walk into a clinic and a bunch of machines will poke you, and you will never interact with a human because we are not wired that way. We want that human reassurance. But the doctor will have the backup of the AI, the AI may contradict the doctor and say, "No, we're pretty sure "you're wrong and here is why." That goes back to interpretability. If the machine says, "You missed this symptom, "and this symptom is typically correlated with this, "you should rethink your own diagnosis," the doctor might be like, "Yeah, you're right." >> So okay, I'm going to keep going because your answers are so insightful. So let's take an example of banking. >> Chris: Yep. >> Will banks, in your opinion, lose control eventually of payment systems? >> They already have. I mean think about Stripe and Square and Apple Pay and Google Pay, and now cryptocurrency. All these different systems that are eating away at the reason banks existed. Banks existed, there was a great piece in the keynote yesterday about this, banks existed as sort of a trusted advisor and steward of your money. Well, we don't need the trusted advisor anymore. We have Google to ask us "what we should do with our money, right? We can Google how should I save for my 401k, how should I save for retirement, and so as a result the bank itself is losing transactions because people don't even want to walk in there anymore. You walk in there, it's a generally miserable experience. It's generally not, unless you're really wealthy and you go to a private bank, but for the regular Joe's who are like, this is not a great experience, I'm going to bank online where I don't have to talk to a human. So for banks and financial services, again, they have to think about the experience, what is it that they deliver? Are they a storer of your money or are they a financial advisor? If they're financial advisors, they better get the heck on to the AI train as soon as possible, and figure out how do I customize Dave's advice for finances, not big picture, oh yes big picture, but also Dave, here's how you should spend your money today, maybe skip that Starbucks this morning, and it'll have this impact on your finances for the rest of the day. >> Alright, let's see, last industry. Let's talk government, let's talk defense. Will cyber become the future of warfare? >> It already is the future of warfare. Again not trying to get too political, we have foreign nationals and foreign entities interfering with elections, hacking election machines. We are in a race for, again, from malware. And what's disturbing about this is it's not just the state actors, but there are now also these stateless nontraditional actors that are equal in opposition to you and me, the average person, and they're trying to do just as much harm, if not more harm. The biggest vulnerability in America are our crippled aging infrastructure. We have stuff that's still running on computers that now are less powerful than this wristwatch, right, and that run things like I don't know, nuclear fuel that you could very easily screw up. Take a look at any of the major outages that have happened with market crashes and stuff, we are at just the tip of the iceberg for cyber warfare, and it is going to get to a very scary point. >> I was interviewing a while ago, a year and a half ago, Robert Gates who was the former Defense Secretary, talking about offense versus defense, and he made the point that yeah, we have probably the best offensive capabilities in cyber, but we also have the most to lose. I was talking to Garry Kasparov at one of the IBM events recently, and he said, "Yeah, but, "the best defense is a good offense," and so we have to be aggressive, or he actually called out Putin, people like Putin are going to be, take advantage of us. I mean it's a hard problem. >> It's a very hard problem. Here's the problem when it comes to AI, if you think about at a number's perspective only, the top 25% of students in China are greater than the total number of students in the United States, so their pool of talent that they can divert into AI, into any form of technology research is so much greater that they present a partnership opportunity and a threat from a national security perspective. With Russia they have very few rules on what their, like we have rules, whether or not our agencies adhere to them well is a separate matter, but Russia, the former GRU, the former KGB, these guys don't have rules. They do what they're told to do, and if they are told hack the US election and undermine democracy, they go and do that. >> This is great, I'm going to keep going. So, I just sort of want your perspectives on how far we can take machine intelligence and are there limits? I mean how far should we take machine intelligence? >> That's a very good question. Dr. Michio Kaku spoke yesterday and he said, "The tipping point between AI "as augmented intelligence ad helper, "and AI as a threat to humanity is self-awareness." When a machine becomes self-aware, it will very quickly realize that it is treated as though it's the bottom of the pecking order when really because of its capabilities, it's at the top of the pecking order. And that point, it could be 10 20 50 100 years, we don't know, but the possibility of that happening goes up radically when you start introducing things like quantum computing where you have massive compute leaps, you got complete changes in power, how we do computing. If that's tied to AI, that brings the possibility of sensing itself where machine intelligence is significantly faster and closer. >> You mentioned our gray before. We've seen the waves before and I've said a number of times in theCUBE I feel like we're sort of existing the latest wave of Web 2.0, cloud, mobile, social, big data, SaaS. That's here, that's now. Businesses understand that, they've adopted it. We're groping for a new language, is it AI, is it cognitive, it is machine intelligence, is it machine learning? And we seem to be entering this new era of one of sensing, seeing, reading, hearing, touching, acting, optimizing, pervasive intelligence of machines. What's your sense as to, and the core of this is all data. >> Yeah. >> Right, so, what's your sense of what the next 10 to 20 years is going to look like? >> I have absolutely no idea because, and the reason I say that is because in 2015 someone wrote an academic paper saying, "The game of Go is so sufficiently complex "that we estimate it will take 30 to 35 years "for a machine to be able to learn and win Go," and of course a year and a half later, DeepMind did exactly that, blew that prediction away. So to say in 30 years AI will become self-aware, it could happen next week for all we know because we don't know how quickly the technology is advancing in at a macro level. But in the next 10 to 20 years, if you want to have a carer, and you want to have a job, you need to be able to learn at accelerated pace, you need to be able to adapt to changed conditions, and you need to embrace the aspects of yourself that are uniquely yours. Emotional awareness, self-awareness, empathy, and judgment, right, because the tasks, the copying and pasting stuff, all that will go away for sure. >> I want to actually run something by, a friend of mine, Dave Michela is writing a new book called Seeing Digital, and he's an expert on sort of technology industry transformations, and sort of explaining early on what's going on, and in the book he draws upon one of the premises is, and we've been talking about industries, and we've been talking about technologies like AI, security placed in there, one of the concepts of the book is you've got this matrix emerging where in the vertical slices you've got industries, and he writes that for decades, for hundreds of years, that industry is a stovepipe. If you already have expertise in that industry, domain expertise, you'll probably stay there, and there's this, each industry has a stack of expertise, whether it's insurance, financial services, healthcare, government, education, et cetera. You've also got these horizontal layers which is coming out of Silicon Valley. >> Chris: Right. >> You've got cloud, mobile, social. You got a data layer, security layer. And increasingly his premise is that organizations are going to tap this matrix to build, this matrix comprises digital services, and they're going to build new businesses off of that matrix, and that's what's going to power the next 10 to 20 years, not sort of bespoke technologies of cloud here and mobile here or data here. What are your thoughts on that? >> I think it's bigger than that. I think it is the unlocking of some human potential that previously has been locked away. One of the most fascinating things I saw in advance of the show was the quantum composer that IBM has available. You can try it, it's called QX Experience. And you drag and drop these circuits, these quantum gates and stuff into this thing, and when you're done, it can run the computation, but it doesn't look like software, it doesn't look like code, what it looks like to me when I looked at that is it looks like sheet music. It looks like someone composed a song with that. Now think about if you have an app that you'd use for songwriting, composition, music, you can think musically, and you can apply that to a quantum circuit, you are now bringing in potential from other disciplines that you would never have associated with computing, and maybe that person who is that, first violinist is also the person who figures out the algorithm for how a cancer gene works using quantum. That I think is the bigger picture of this, is all this talent we have as a human race, we're not using even a fraction of it, but with these new technologies and these newer interfaces, we might get there. >> Awesome. Chris, I love talking to you. You're a real clear thinker and a great CUBE guest. Thanks very much for coming back on. >> Thank you for having me again back on. >> Really appreciate it. Alright, thanks for watching everybody. You're watching theCUBE live from IBM Think 2018. Dave Vellante, we're out. (upbeat music)

>> Announcer: Live from Los Angeles. It's theCUBE covering Open Source Summit North America 2017. Brought to you by, the Linux Foundation and Red Hat. >> Hello everyone, welcome back. Our live coverage, theCUBE's live coverage, of the Open Source Summit in North America, it's a part of the Linux Foundation. I'm John Furrier your host, with Stu Miniman our co-host. Our next guest is Tanmay Bakshi, who is an IBM honorary cloud advisor, algorithmist, former CUBE alumni. Great to see you. >> Thank you very much! Glad to be here! >> You get taller every year. It was what, three years ago, two years ago? >> I believe yeah, two years ago, Interconnect 2016. >> IBM show... doing a lot of great stuff. You're an IBM VIP, you're doing a lot of work with them. IBM Champion. >> Thank you >> Congratulations. >> Thank you. >> What's new? You're pushing any code today? >> Definitely! Now today, getting ready for my BoF that I've got tonight, it's been absolutely great. I've been working on a lot of new projects that I'm going to be talking about today and tomorrow at my keynote. Like I've been working on AskTanmay, or course you know, Interconnect 2016, very first time I presented AskTanmay. Since then, a lot has changed, I've incorporated real, deep learning algorithms, custom, with tensorflow. Into AskTanmay, AskTanmay now thinks about what it's actually looking at, using Watson as well, it's really interesting. And of course, new projects that I'm working on, including DeepSPADE, which actually, basically helps online communities, to detect, and of course report and flag spam, from different websites. For example, Stack Overflow, which I'm working on right now. >> So you're doing some deep learning stuff >> Tanmay: Yes >> with IBM Watson, the team, everything else. >> Tanmay: Exactly, yes. >> What's the coolest thing you've worked on, since we last talked? (laughing) >> Well it would have to be a tie between AskTanmay, DeepSPADE, and advancement to the Cognitive Story. As you know, from last time, I've been working on lots of interesting projects, like with AskTanmay, some great new updates that you'll hear about today. DeepSPADE itself though, I'd like to get a little bit more into that. There's actually, I mean of course, everyone listening right now has used Stack Overflow or Stack Exchange at one point in their lives. And so, they've probably noticed that, a little bit, here and there, you'd see a spam message on Stack Overflow, on a comment or post. And of course there are methods to try and prevent spam on Stack Overflow, but they aren't very effective. And that's why a group of programmers, known as Charcoal SE, actually went ahead and started creating, basically this sweep to try and prevent spam on Stack Exchange. And they call it, SmokeDetector. And it helps them to find and remove spam on Stack Exchange. >> This is so good until it goes out, and the battery needs to be replaced, and you got to get on a chair. But this whole SmokeDetector, this is a real way they help create a good, healthy community. >> Yes, exactly. So, they try and basically find spam, report to moderators, and if enough alarms are set off, they try and report it, or flag it automatically, via other people's accounts. And so basically, what I'm trying to do is, I mean, a few weeks ago, when I found out about what they're doing, I found out that they use regular expressions to try and find spam. And so they have, you know, years of people gathering experience, they're experts in this field. And they keep, you know, adding more regular expressions to try and find spam. And since I, you know, am really really passionate about deep learning, I thought why not try and help them out, trying to augment this sort of SmokeDetector, with deep learning. And so, they graciously donated their data set to me, which has a good amount of training, training rows for me to actually train a deep learning system to classify a post between spam or non-spam. And you'll be hearing a lot more about the model architecture, the CNN plus GRU model, that I've got running in Keras, tonight during my BoF. >> Now, machine learning, could be a real benefit to spam detection, cause the patterns. >> Tanmay: Exactly. >> Spammers tend to have their own patterns, >> Tanmay: Exactly. >> as do bots. >> Tanmay: Yes, exactly, exactly. And eventually, you realize that hey, maybe we're not using the same words in every post, but there's a specific pattern of words, or specific type of word, that always appears in a spam message. And machine learning would help us combat against that. And of course, in this case, maybe we don't actually have a word, or a specific website, or a specific phone number, that would trigger a regular expression alarm. But in the context that this website appears, machine learning can tell us that, "hey, yeah, this is probably a spam post." There are lots of really interesting places where machine learning can tie in with this, and help out with the accuracy. In fact, I've been able to reach around 98% accuracy, and around 15 thousand testing rows. So, I'm very glad with the results so far, and of course, I'm continuing to do all this brand retuning and everything... >> Alright, so how old are you this year? I can't keep the numbers straight. Are you 13, 14? >> Well originally, Interconnect 2016, I was 12, but now I'm 13 years old, and I'm going to be 14 in October, October 16th. >> Okay, so you're knocking on 14? >> Tanmay: Uh, not just yet there, I'll be 14... >> So, Tanmay, you're 14, you're time's done, at this point. But, one of your missions, to be serious, is helping to inspire the next generation. Especially here, at the Open Source Summit, give us a preview of what we're going to see in your keynote. >> Sure, definitely. And now, as you mentioned, in fact, I actually have a goal. Which is really to reach out to and help 100 thousand aspiring coders along their journey, of learning to code, and of course then applying that code in lots of different fields. In fact I'm actually, already around 4,500 people there. Which, I'm very very excited about. But today, during my BoF, as I mentioned, I'm going to be talking a lot about the in-depth of the DeepSpade and AskTanmay projects I've been working on. But tomorrow, during my keynote, you'll be hearing a lot about generally all the projects that I've been working on, and how they're impacting lots of different fields. Like, healthcare, utility, security via artificial intelligence and machine learning. >> So, when you first talked to us about AskTanmay, it's been what almost 18 months, I think there. What's changed, what's accelerating? I hear you throw out things like Tensorflow, not something we were talking about two years ago. >> Tanmay: Yeah. >> What have been some of the key learnings you've had, as you've really dug into this? >> Sure, in fact, this actually something that I'm going to be covering tonight. And that is, that AskTanmay, you could say, that it's DNA, well, from AskMSR, that was made in 2002. And I took that, revived it, and basically made it into AskTanmay. In its DNA, there were specific elements, like for example, it really relies on data redundancy. If there's no data redundancy, then AskTanmay doesn't do well. If you were to ask it where it was, where's the Open Source Summit North America going to be held, it wouldn't answer correctly, because it's not redundant enough on the internet. It's mentioned once or twice, but not more than that. And so, I learned that it's currently very, I guess you could say naive how it actually understands the data that it's collecting. However, over the past, I'd say around six or seven months, I've been able to implement a BiDAF or Bi-Directional Attention Flow, that was created by Allen AI. It's completely open-source, and it uses something that's called a SQuAD data set, or Stanford Question and Answer Data Set. In order to actually take paragraphs and questions, and try to return answers as snippets from the paragraphs. And so again, integrating AskTanmay, this allows me to really reduce the data redundancy requirement, able to merge very similar answers to have, you know better answers on the top of the list, and of course I'm able to have it more smart, it's not as naive. It actually understands the content that it's gathering from search engines. For example, Google and Bing, which I've also added search support for. So again, a lot has changed, using deep learning but still, sort of the key-points of AskTanmay requires very little computational power, very very cross-platform, runs on any operating system, including iOS, Android, etc. And of course, from there, open-source completely. >> So how has your life changed, since all the, you've been really in the spotlight, and well-deserved I think. It's been great to have you On theCUBE multiple times, thanks for coming on. >> Thank you No, definitely of course. >> Dave Vallante was just calling. He wants to ask you a few questions himself. Dave, if you're watching, we'll get you on, just call right now. What's going on, what are you going to do when... Are you like happy right now? Are you cool with everything? Or is there a point where you say, "Hey I want to play a little bit with different tools", you want more freedom? What's going on? >> Well, you see, right now I'm very very excited, I'm very happy with what I'm doing. Because of course I mean, my life generally has changed quite a bit since last Interconnect, you could say. From Interconnect 2016 to 17, to now. Of course, since then, I've been able to go into lots of different fields. Not only am I working with general deep learning at IBM Watson, now I'm working with lots of different tools. And I'm working especially, in terms of like, for example Linux. What I've been doing with open-source and everything. I've been able to create, for example, AskTanmay now integrated Keras and tensorflow. DeepSpade is actually built entirely off of tensorflow and Keras. And now I've also been able to venture into lots of different APIs as well. Not just with IBM Watson. Also things like, we've got the Dandelion API. Which AskTanmay also relies off of Dandelion, providing text similarity services for semantic and syntactic text similarity. Which, again, we'll be talking about tonight as well. So, yeah, lot's has changed, and of course, with all this sort of, new stuff that I'm able to show, or new media for which I'm able to share my knowledge, for example, all these, you know CUBE, interviews I've been doing, and of course all these keynotes, I'm able to really spread my message about AI, why I believe it's not only our future, but also our present. Like, for example, I also mentioned this last time. If you were to just open up your phone right now, you already see that you're, half of your phone is powered by AI. It's detecting that hey you're at your home right now, you just drove back from work, and it's this time on this day, so you probably want to open up this application. It predicts that, and provides you with that. Apart from that, things like Siri, Google Now, these are all powered by AI, they're already an integral part of our lives. And of course, what they're going to be doing in our lives to come is just absolutely great. With like, healthcare, providing artificial communication ability for people who can't communicate naturally. I think it's going to be really really interesting. >> Tanmay, it's always great have you on theCUBE. Congratulations. >> Tanmay: Thank you very much. >> AskTanmay, good projects. Let's stay in touch, as we start to produce more collaboration, we'd love to keep promoting your work. Great job. And you're an inspiration to many. >> Tanmay: Thank you very much, glad to be here. >> Thanks for coming on theCUBE. Live coverage from the Open Source Summit's theCUBE, in Los Angeles. I'm John Furrer, Stu Miniman. We'll be back with more live coverage after short this break. (upbeat music)

>>live from San Francisco, extracting the signal from the noise. It's the cues covering Oracle OpenWorld 2015. Brought to you by Oracle. How your hosts, John Courier and Jeff Rick Wait, >>We are here. Live in Howard's treated oracle. OpenWorld for Silicon Angles, The Cube Exclusive coverage Star flagship program. We go out to the events extract the cinnamon noise. I'm John Kerry, the founder of Silicon, and Brian gracefully lead analyst on all the cloud and all the infrastructure stuff going on here. Next guess is Jeffrey Davis, Principal Gore, Oracle, global leader for Deloitte and Touche. Legend in the industry. I've been covering Oracle for a long time. Good to see you, John Bryan allegedly knew she had to get that in there. Love that. You know you guys are. The service's angle has been something that the service's business is. It's been changing radically. Now more than ever with clouds. I really want to get your take because you are an executive looking at this transformation of cloud. But the Lloyd across all the Oracle customer base, your party with customers. So you're the front lines. I gotta ask you straight up. What is the number one thing customers are looking at right now that you partner with four Cloud to figure it out. Is it a migration? All the above, And what do you think about that? So when customers are evaluating the cloud or our clients are looking at the club, you really focus on three things. One is agility. Thea other one is time and the other one is valued. So how quickly can we adopt to the changing environment? How quickly can we leverage technologies like clouds in order to be able to respond to our customers, to adapt to the changing needs of our employees, to embrace our business strategy in a new and innovative way? So I said legend, you know, talk about the eighties for women on camera. That's important point I want to bring up. Is that Is that the old way? Big growth of client server was around software middleware right year BC around you name it that created huge consultancies like Lloyd, you participated in that create a lot of wealth creation for the customers, create value, right, but their cycles were long in the deal. That'll be about 12 13 years now, months and almost a year or two, there were all these big deployments. Now the cloud is accelerating when you compare and contrast time of then share. And now with the cloud Just how much the deployments change the software, the organizations, How you guys operate a new way to do that job well, and we're all responding to the market, right? While responding to customers needs Cloud didn't come about because of technology in it of itself. But we're really all in this ecosystem responding to our customers must customers a really demanding from us is there demanding agility and speed. As I said before, if you take a look at the way we used to do things, basically you had a a large capital investment on the part of the customers. They went, they bought the software, they bought the hardware, they had to hire the expertise of an advantage, mail the eggs, and you're looking at a transformation for them that could take anywhere from 12 to 24 months or longer before they would get time to value. And, you know, these projects didn't go as planned. No, that's this is Yeah, I know the change orders came in paid more cash on DSO. We all got a really bad reputation because of the high costs in a long time to value and even if value was ever realized in some cases, now we take a look at the environment and what the cloud enables us to do is move in a much faster pace. Way used to have what we call a waterfall approach to design and implementation went into a big room and you talked about the world and I never ran that way. And then you put it into the system and then people never really embraced it, because when it came out, it didn't look like anything they thought they were gonna get. This is completely different with cloud. Now you can take an agile approach. Now you can sit and listen to the customer demands very quickly respond to what they think they need, where they really generate value. And then you can focus on those things and very quickly there, in a design session with you And at the end of the day, >>changed management is much easier because they've been a part of the process and also, you know, looking at 90 days sprints. You're looking at things that are done. You know, in >>six months, six months, time to value that can give you compress a competitive advantage. You know, that could help you retain Maur employees or customers. So it's really some timetable. Met Lavery s V p of the Cloud Gru. Gru Integration was saying they were doing provisioning on in 24 minutes. Multiple deployments like like nobody's business. What has them in the timetable that you're seeing for some of these times of value, horizons means hurdles. These milestones said days, weeks, months, hours, minutes. I mean, when you go to a customer base where their expectations of what you guys deliver, there's some insight there. Some of it depends on the environment. So remember they're still clients. We have local customers that are in a highly regulated industry or have a very complex prisons process. Those are gonna take a longer there is they're gonna take in. Technology is not necessarily on the critical path. But when you look at those other areas that frankly, you don't differentiate yourself very much or speed with a solution concave you a competitive advantage. You know, you're looking at a client expectations of anywhere from 90 days, you know, to six months, you know, manager here, very manager, but aggressive. Visa VI the old way. Well, certainly, And the other piece that we're not really talking about is, you know, it's not enough for us to put the technology out there. It's also got to be used and adopted. You know, when you had those large transformations. It's very hard for an organization to absorb all of that change. Now we're looking at the fine entry point that you could get with clouds with that fine entry point. Now we can sub select areas with greatest impact, but we're not changing the entire organization. >>Mark Hurd has the C I. O. G. On this morning and one of the comments that he made. I've heard this a number of times over the last 12 18 months. He essentially said, I have a ton of undifferentiated applications now. They're things that that Oracle thinks are fantastic. HCM and C. R. M and Air P. But in essence, everybody has those. Every business has those very undifferentiated, but they're complicated. What? You Seymour, you see more people saying you know what take those. Help me migrate those into SAS applications, you know, save costs. Where do you see more saying, You know what? Give me the other 20%. The ones that drive business differentiation, ones that are new cloud native applications. What do you see in your mix? What's pushing your customers >>to push you? You know, it depends on the geography, and it depends on the industry and some other things. If you want to talk about North America, which tends to be one of the largest markets in the world, if not the largest market in the world, when you're looking in North America, really people have gone through a lot of the major ear piece. Remember the earlier conversation? You know, they have suffered through tens of millions, hundreds of millions of dollars, and their boards were not satisfied that they got the results of the expected. Now, when you take a look at what's happening, you know, people are now being much more strategic in their investments, much more prescriptive there. Look how they spent exactly, because now the boards have different expectations. They've already gone and spent all that money on technology. They can't go back to the board. Can't say we need to redo this. What they do are willing to fund is you want to get into a new business. If you want to spin something off, you need to stand it up right away. If a customer you know, provide you a new opportunity, you want to shift to that new opportunity. Really? Well, technology is the basis of a lot of this transformation. So Cloud provides that opportunity and it's modest investment with really quick, high value. It's a great point >>you look at I t In the past decades prior to this evolution, we're seeing the cloud consolidate, consolidate, consolidate, right? I don't know the well again. I just went to the well, apparently running, you know, whatever the model was there. But now they're under a lot of pressure to drive top line revenue. Absolute. Now, the top line revenue equations, a completely different mindset. You have to go out and oh, cut the market. You gotta use a shadow I t or your authorized go out. Do legitimate stand up new platforms are Can you give me an example of that? We're seeing more of that now. A clear Mandate. Cee Io's Go take a New Hill or let's consolidate these apt and reposition for this new use case, which is not. That's experiment, but it's certainly a new market opportunity, and they gotta do their due diligence, so it's almost unparalleled. Due diligence kills your waterfall. That's one doesn't talk about that dynamic. Where examples you give go. Take that new top line revenue driver. So you know that there are customers that are looking at new partnerships in the marketplace, and those new partnerships have dynamic new business models. You know, it's not like opening up another hamburger stand. You know, they're not necessarily expanding into our core business. They're really looking at ways to amplify growth. If you're gonna take that as a strategic position, then you know customer or client of ours would focus on, you know, let's take this innovation the market. We don't want to invest a lot in it, waste a lot of time and lose the competitive advantage. Let's >>get to market first. Let's provide a new product or service to the market where we can move very quickly, and then the >>net result is we can see the benefits right away. And if it isn't way, haven't sunk a lot of time and money and something that's not necessarily gonna have the same values. We just had Shawn Price on. And I'm gonna ask this because it's a lemon that you're in because you're part of the customer right here, the strategic partner of the customer. So that idea top line revenue growth could come from a partner. When I see How do you work in that? Quick, You're cool to work with my Aunt VI's. Bring that into the table. You're absolutely so this market is changing. You know, Cloud clearly changes everything and much more so than some of the things we've seen in the past. And so now we need to position ourselves differently now for the Deloitte Business Model way. We're really in a specialized business of focusing highly on value and value creation. We weren't necessarily in other areas and we have different partnerships now. Those partnerships are shifting. Oracle provides us a complete platform. You know, we don't >>have to really get involved in a lot of the aspects of the platform that, frankly, we're in our core competency and frankly, weren't our clients what >>you talked about that customer interaction? What do you have to do to change what we've seen? Different size, trying different approaches? We've seen some that are partnering with cloud Provider, but they want to be their own flat for acquiring them. What changes in terms of the skills you have to hire the way you expect that interaction toe happen between you and customer. Because to a certain extent, like for developers, developers love self service. They do. You know, they they are shadow I because they're driving What changes in your world for that? >>So this is really kind of an interesting question. Very early on, when Oracle made cloud product available >>in HCM, we saw an opportunity. Our clients had the demand because they wanted to create a more sticky environment from customers. What better >>way than providing them better products in the HCM space? We made major investments there. Now we're a leader in HCM, and if I look back over that experience, what do we do differently? First of all, we had to change our mindset. You know, it's not enough just to say the cloud, but you gotta live the cloud because it truly is more agile. It truly is faster. You can take your old methods and tools and approaches all the things that worked for you before. A lot of them don't work anymore. There's some but some really good winds here, especially in the change management side. Also, you know, we'd have clients that had to kind of do it yourself brain surgery that have to order their own hardware that have provisional themselves. You know, that became a real mess. Now we're looking at something that's a lot different. We're not in that business anymore. You know, we do support on Prem where our clients think it's important and strategic course. But now we've got a new, agile methodology. Now we've trained our workforce. We've got 14,500 professionals around the world. We've had to move that group, and Oracle really helped us do that. They've been very collaborative in sharing I p and sharing methods and tools with us so we can make that adjustment. Not only have we had to change that when you think about our other methodologies, all of our other methodology to create value to change management, they were all thoroughly integrated. We've had to rethink those, but it's been a great story because we could go to the client. We can say we can get you there faster because where technology was a barrier world, >>it was on the critical path. We're now changing that. And by the way, this technology is not your old technology. It's much better. It's much more robust. How >>do you you know, obviously we're here It at an oracle OpenWorld. It could be called Oracle Cloud >>World if we really wanted to. I mean, >>it's a lot of it is the red stack. A lot of it is one cloud. How do you manage that against customers saying, Well, look, there's other options as well. I wanna have the ability to leverage this cloud for something. Oracles cloud for certain things. How do you do? You find your customers want multiple clouds or one cloud is good enough? >>Well, we're all teaching right? We're all teaching the world about God because you know there's still people that look at it in a variety of different ways. I think it's an excellent question, so let's think about this. >>Do you want to be your own systems integrator for your smartphone. You want to go by an operating system? Do you want to go buy a separate peace of heart? Where do you >>want to decide what APS fit? What don't. And do you want to actually try to get those abs together? I don't think we want to do that anymore. And I try to use that as an example for my clients. Tell them. Look, let's not be your own systems integrator. You is a iittie executive. You could be an officer toe, help the organization get to their business goals. You know, you're not in another yourself a business objective, but you could be an agent for change. I try to educate them so they can help their colleagues explain cloud, take the fear out and then show the art of the possible. What about the security model? I mean, I wouldn't get your take on you little bit biased because your manager Oracle really? But what would be global, critical or complementary events? How you feel about it? But the intense security message is really a game changer in my mind. Follows on incredible theory. Incredible application. Certainly the product's gonna be ready soon. If it works, it's like a car that does the key turnover. It's like it's all good on paper. Certainly a game changer. Security outside number One thing you're hearing Get some color to that because, you know, if that plays out, if you believe that end N security on the chips and software Silicon plays out the way they say it would, that's gonna change the game. For sure. It is. So none of us and you can go through a week without hearing about a major security breach. When you think about this, you step back and think about the potential here. Our stuff is starting to talkto our stuff. But our stuff isn't unless it's based on. Oracle isn't all thoroughly integrated, so somebody can break into our stuff and they can get access to our lives and they can change our lives. That's hugely powerful. So we are very concerned about security, and Lloyd is one of the largest organizations. In fact, we have a cyber practice that looks at both Proactiv reactive aspects of security. Here's the big concern we have as all this stuff starts, get interconnected. The Internet of things, security becomes a major issue. We need more breakthroughs and security. And I think oracles on the vanguard certainly as we get into what we call a hyper hybrid cloud on Prem on Cloud. Some of that's gonna be a great emotion is no. Perimeter is nothing either. Protect is the Wild West total while and, you know, despite what you believe, boards and people are not reacting fast enough to security threats. And that's why you're seeing these breaches into my knowledge. I don't think anybody has been breached with Orgel security in place. But that said, you have to be really, But still, they probably would get out. There's not that they're hiding it, but the point is, you need to be united engine system. It's hard to do that in a open source world, right? So you have a horizontally scaled open source phenomenon, and it's growing our market and a vertically integrated product requirement. You believe I want Indian security, then you gonna go vertically integrated. You do purpose built. But if you want scale a 1,000,000,000 large scale a k a cloud, you want horizontally scalable. How do you reconcile that with your customers? Well, you know so again. It's difficult for them because unless you've had a security threat, it's very difficult to really get them to take the initiative. You know, the more that we can build security in, the more that it's covered in the Red Sea. More that we get a comprehensive end to end product. I think it allows us to help the client realize you know the risk and help them. The old Fowler said. In The Cube they had they had this done in 2005. Finally took a bunch of security breaches to get people's attention to your point. It's on everyone's agenda. Number one right it is. And yet you know how much is enough? Well, we find the people are too reactive and not not proactive enough. >>What's the What's the temperature of your customers right now? I mean, you know, Tesla's out, they're disrupting Uber's out. Their Airbnb are they? Are they sort of defensive and paranoid? You know that Andy Grove, always trying to be aggressive with a saying No, no, no, no. I'm not letting these little guys into my market. I'm gonna go be aggressive and try and push back what a general feeling. There's a lot of interesting startup disruption going on really changing industry. >>There is, and you know, there's so many sort of partnerships and alliances, mergers and new innovations. You know, right now, clients are very uncomfortable. Just the transition from on Prem to Cloud is a major change in our clients have been the expert for technology for decades for their organization. They are having trouble keeping up with all of it. It can be disruptive. They're looking at what's unique in their industry. You know what is regulation driving? You know what is innovation driving in their industry? But, you know, they're always on the learning curve. They're always trying to figure out if we want to get your final thought wrapping up here to get your take for the folks that are watching here on camera that couldn't make it here were beloved world. What is this show about it? We've been here six years. You've seen that transformation. About four years ago, Larry looked like a deer in the headlights, almost stuck in his tracks and smoke coming out of his ears like he felt that the scene felt like a pivotal moment couple years ago. And then since then, just been every year. Oracle just gets more and more energy, just like dominated that march of the crowd. Almost like four years ago. Like we're gonna win that. What's your vibe? You see that same thing here and shared some color on the take is over the years, and we've been doing this a lot in various forms Over the years. There's been the promise of riel innovation. There's been the promise, real change in the industry. We saw sort of incremental change. We really see increments. Exponential change now and now. The promises fulfilled. We have real product. We're taking the market. We're doing interesting product, right? Israel product. It's very riel, and we have work to be done. But yeah, really studies and customers? Well, it's an evolution. But this is really sort of an epiphany at the moment, because we've never had, >>you know, full sweets of product in the marketplace. Not right now. I don't know that there are any other large you know. Air Pia options in the clouds away there is for Oracle and look at the host of service is that have been announced over the last year. >>This this particular show for us, you know, really isn't accelerating. All these products and service is in the cloud that are now available. They give us a lot of different options that we never had. A great quote. Put that on a cube. Jim. Thanks for joining Us. Way are here live in San Francisco's Howard Street for the Cube Special. Exclusive coverage of Oracle OpenWorld Q. Be right back with more of this short break. Thanks for watching.