(upbeat music) >> Good afternoon everyone. Welcome back to The Cube's live coverage of AWS Reinvent 22 from Vegas. We're at the Venetian Expo Hall, we're hearing north of 50 000 people. I know we've been giving you different numbers but that's kind of what we've settled on here. Hundreds of thousands are watching online. This is a huge event people. John Ferrior and Lisa Martin are ready to be back. >> Yes, it's really great show. A lot of change going on at Amazon. They're continuing the innovation, continuing to grow. The theme this year's Data Security. And their partner ecosystem, which is continuing to grow. Their partners are filling the gaps on solutions. And it's just a whole nother, I think partner friendly cloud. This NextGen wave that's coming is really, the next thing segment I think speaks to that, I'm looking forward to this. >> It does. We're going to be digging into that partner network. We've got two guests, one of them is an alumni, Reza Honarmand SVP Global Cloud at TD Synnex. Great to have you back. >> Yeah. >> Sergio Farache joins us as well the Chief Strategy Officer at TD Synnex. Welcome to the program. >> Thank you. >> Thank you for having us. >> Great to be back in person, isn't it? >> Yeah absolutely. That's great experience. >> Amazing, the energy here at the highest level since we came here Monday night, which is great. Sergio, I want to start with you. Last year when you guys were on the show Tech Data. Tech Data has been around a long time now you're TD Synnex. Talk a little bit about that, what's new, that transformation? >> Yeah, that is correct. It's great to be able now to present it in Synnex as a new merger between Tech Data and Synnex Corporation. And now we are the largest distributor basically across the world with more than $62 billion in a business. And Amazon is obviously an strategic partner with a hyper growth and we have been very focused to working with them to expand that partner ecosystem across solution ISVs and service providers. That has been very nice experience combine these two company and now have the reach and skill that enable more than 140,000 partners across the world. >> Wow. >> And the partner's message here is changing too. The new leader, Ruba is up on stage talking about this new partner paths, a lot of changes in a good way. They're bringing people together. What's your guys take and reaction to AWS's new posture towards partners? Obviously the ecosystem we see going to be doubling and tripling we see in size. And also the value proposition being stronger too and more money making of course. But the new Amazon's posture with partners. What's your reaction? >> Well, (indistinct) just an hour ago. Fantastic. I mean, if I look at the change from when we first got here a few years ago to now, it is beyond comparison. The realization is that technology and especially what we work with Amazon is deflationary force and we need scale to actually drive that across all of our partners to the customers. And yeah, I can only see that accelerating now in terms of what Amazon is doing and actually with the channel and what Ruba is doing. I think this is exactly in the right direction. >> What's your message? >> My message is, this is now channel. This is channel and this is serious. So partners with Amazon equals growth. >> As we've seen so much transformation in the last couple of years, Sergio, with every business having to become digital to survive. Right and then to eventually thrive and succeed and grow in the challenging economic times that we've had. What are some of the, the pivots that TD Synnex has made through your partner program to meet customer needs to accelerate their transformation? >> Yeah, as you said, has been a significant transformation. I think that in the past was clear what was a technology company and what industrial company, et cetera and those frontiers are blending right now. Then as a consequence we have been investing in several elements. Once is to really increase the capability of the partner network in a way that they can on one side provide more solution-oriented activities to those customers to drive either growth or cost optimization. The other element has been verticalization meaning know the industry where you are playing. We have been investing in the healthcare market, of course as a consequence of all the demand that has been generating. But at the same time and we recently announced the competence in the government sector where we expand drastically our capabilities around specifically the federal, and non feral business, but not only in US but across the world with those elements. Then I would say it's a combination of enhancing the skill, enhancing the knowledge on the industry, and finally provide the tools through our platform to enable the partner to operate in a digital way and enable the access of ISVs to digitally and serving the customers end to end. >> Is that the ISV experience project that I heard about? ISV experience with SaaS companies, Is that what you're referring to? >> Yeah, ISVs is one. ISP experience is one of the components that we use, but basically what we are trying to achieve with the ISV is helping in the journey of specification. It's how you transform either a partner that is born in the cloud or a partner that is still in the, in the OnPrem side how you transition to the cloud and enabling how you reach to the end user in a more effective way. And how we expose 140,000 partner across the multiple geographies to help those ISVs to reach more customers. >> It's great distribution. I mean this is, a business model innovation. >> Sorry? >> It's a business model innovation for these ISVs. >> Absolutely. Some of the ISVs, as you can imagine they're incumbent with us. We work with them. So actually it's finding new ways of consuming technology. But there's thousands of them that actually do not understand how to operate with a channel. And this is a part where we help them with the channel, build a program. Coach them through the process, help them access the partners and the customers that Sergio was referring to. >> Let me ask you guys a question. Where's the growth going to come from? I mean you mentioned ecosystem, more growth, Ruba was mentioned that's where the growth is. They are serious. She's going to deliver that keynote now. Where do you guys see your growth coming from? >> Well, to be honest the growth is unlimited in our opinion, right. It's so many areas. >> The wave is still coming. Yeah >> The wave is still there, you know. When you see still the amount of platform that need to be immigrated to the cloud then we have been investing in a significant way in enable capabilities of migration programs from the on-premise to off premise. At the same time, we have been expanding geographically because it's still several segments and markets we operate globally. As an example we recently launched our public sector capability in Latin America and Europe, expanding those segments. And in addition to that again, how we bring more ISVs more solution oriented driven than many spots of growth. And I think that Amazon message recently recognized more and more the value of nobody have all the solutions. You need this ecosystem plan together to bring those solutions to market. >> So if I build on that. If we look at the growth in public cloud last year, was around $40 billion. We expect a similar growth level this year as well. I mentioned about deflationary force, the technology being a deflationary force. Now everybody knows a lot of businesses out there are going under a lot of challenges. So they have to compete, they have to have the insights they have to be efficient and actually they're going to get a lot of that through the technologies that we're talking about here. The key to that is partners with the right skillsets. What we are seeing is the partners with the skillsets who can participate in that $40 billion growth, take a big, big share of it. >> And you guys are providing a great service. I think when I wrote the story on Friday that I published one of my premise was, is that this Next-Gen cloud is going to lift up more ISVs which is kind of a legacy classic, independent software vendor. Create new kinds of partners that have platforms or unique solutions for verticals. So, the ISV classic definition will still exist and new customers are emerging. It's got a new dynamic developing. We're seeing people build clouds on top of the cloud tap the ecosystem, partner distribution, services. It's a whole new way to build and take something to market. What do you guys think about that? >> Yeah, I think that the beauty of our position in the market is that we are in the center of that ecosystem. Again, we have access to thousands of ISVs thousands of hardware vendors, the hyper-scalers then somebody need to put all those pieces together. That is our role in the market. >> It's a good position to be in. >> It's a good place to be. And enabling those partners now to collaborate with all those entities to bring the solution because the customer is not acquiring technology anymore. They're acquiring a solution to a problem now. And that solution require multiple components. >> Last year. No, this year, I'm sorry. You guys were announced as EMEA distributor of the, of the year. Congratulations on that. >> Yeah, thank you. Talk about that in terms of just the evolution of the partnership. >> The partnership in EMEA is now across our entire geo. The growth that we have driven across the EMEA market space, is I think the reason why we have won it. As well as the competencies that we have built. Now you were just talking about ISVs to give you an example, there are many ISVs that sit in EMEA that want to access the US market and vice versa. So where we sit in the middle and enable that access. The frameworks that they need to move. So those are the kind of things that contribute to the strengthened in the relationship and what those awards are coming from. >> Yeah. The other critical factor here is, again how we bring more capillarity in terms of the serve to the market to Amazon. And that has been another component of data that we are very thankful. Again, we has been enabling and bringing numerous new partners and numerous new end customers that now have access, support and services. Including again, the competencies that we already described but including service oriented businesses like migration, like cost optimization of the use, et cetera. That now we through partners serve to the market. >> Reza and Sergio, I want ask you guys a question around trust. Trust. You're a trust broker because you have a lot of services and people and companies to put together. We were just talking about the good position you're in. >> Trust is a big part of your relationship with your customers. You've got two sides of your business, you got one side's the supply side and you got the distribution side and then both sides are working together, requires a lot of trust. What's that look like inside your company? Can you just chip in and explain, take a bit to explain what's that like? The culture of the company and that trust. >> Yeah, absolutely. And that is why the term of trust advisor came to the table right? And again, for more than 40 years we have been building this ecosystem. We have been driving that motion and we have been proving to the market a consistent approach with a strong support to the two tier model. We never, you know get in opposition to our customers and we enable those customers in a consistent way. And I think that trust is something that you earn, not something that you ask for. And that is what we are doing day to day basis. >> Congratulations, it's been great. Great chatting with you. Challenge time? For the challenge time? >> Challenge time. >> Alright guys. >> New challenge on the Cuba new format. We usually say yes at the end of the interview. What's take on the show, what's the bumper sticker? So think of it like an Instagram reel, thought leadership, hot take. Each of you, spend a minute 30 seconds to share a hot take, thought leadership, what you think was going on at Amazon? Why you're here? What's important? What would you say if you were going to do an Instagram reel right now? >> Yeah, the Amazon enable a new way to do business and a new transformation of the digital economy. We are here TD Synnex to expand that capability across the segments. Enhancing partners to reach to their goals and in users to get those transformations. In general we will provide what is needed and we continue investing to continue growing the capacity across all geographies and all the type of solutions that we deliver. >> All right, Sergio you nailed it. Reza you're up. Your hot take your sizzle reel. >> Well, frankly I think Sergio nailed it. It's about covering the geos and taking the competencies and make sure we execute consistently across all of our geos. >> All right, nailed it. Thanks so much. >> Consistent execution. Reza, Sergio. Thank you so much for joining John and me on the program, talking about what TD Synnex has done since we've last seen you. What you're doing with AWS and the partner ecosystem. We really appreciate you stopping by this side. >> Thank you very much. Thank you for the time. >> Alright, our pleasure. For our guests and for John Furrier, I'm Lisa Martin. You're watching theCUBE, the leader at Live Tech coverage.

>> From around the globe. It's theCUBE. With digital coverage of IBM Think 2021. Brought to you by IBM. >> Welcome back to theCUBE's ongoing coverage of IBM Think 2021. The virtual cube. You know, the pandemic has caused us to really rethink this whole concept of operational resilience. So we're going to dig into that and talk about the importance of constructing a holistic resilience plan and get the perspective of some really great domain experts. Allen Downs is the Vice President in Global Cloud Security and Resiliency Services at IBM. And he's joined by Ms. Michelle Weston who is the Director of Cloud Security and Resiliency Offerings at IBM. Folks, welcome to theCUBE. Thanks for coming on. >> Thank you. >> Thank you. >> Now, before we get into it, I said, IBM, but I want to ask you Allen, about an announcement you made last month about Kyndryl, new spinout from IBM. What can you tell us? >> Very excited about the name. I think there's a lot of meaning in the name censored around new growth and censored around partnership and relationship. So if you look at the name that was announced, I think it really does typify what we set out to be as a trusted partner in the industry. All born around new growth, censored around strong partnership and relationship. So very pleased and excited. I look forward to the opportunity we have going forward. >> Yeah. Congratulations on that. Add some clarity, Martin Schroeder, new CEO, Cube alum, great exec. Love it. So good luck. Allen, let me stay with you for a second. I mean, operational resilience it means different things to different people. And we know from speaking with CIOs in our community during the pandemic, it doesn't just mean Disaster Recovery. In fact, a lot of CIO said that their business continuing strategy were too focused on DR. Allen, what does operational resilience mean from your perspective? >> So I'll answer it this way. Operational resiliency risk is defined as the quantifiable steps is defined as the quantifiable steps that any client needs to take in order to respond, recover from an unplanned outage. It sits squarely within operational risk and if you think about it operational risk is the kind of non-financial element of risk and defined within that category, operational resiliency risk is trying to identify those steps, trying to identify those steps, both preactive and reactive both preactive and reactive that a client needs to consider that they would have to take in the event of an unplanned disruption or an unplanned outage that would impact their ability to serve their clients or to serve their organization. That's how I define operational resiliency risk. >> Great. And I wonder Michelle if you can add to that, but I think, you know, I sometimes say that the pandemic was like a forced march to digital and part of that was business resilience but you know, where do we go from here? You know, we had 14 months shoved into our face and now we have some time to think about. So how should clients think about evolving their strategies in this regard? >> Yeah, well certainly with respect to what was called NewCo now, Kyndryl, our approach has been advisory-led. We will help clients along this journey. One thing that I'd like to point out and one of the journeys that we've been taking over the last couple of years is it really is about security and resiliency together. If you think of that planning and how to mitigate your operational risk, if the security and resiliency go hand in hand, they're the same people within the organization that are planning for that and worried about it. And so we had already started about three years ago to pull the two together and to have a unified value proposition for clients around security and resiliency both being advisory-led doing everything for a client from project-based to the digital consumption world, which we know clients live in today to a fully managed service all around security and resiliency together. >> Yeah. So, I mean, it's a really important topic. I mean, you heard Chair Powell last month. He was, he was on 60 Minutes saying, well, yeah, yeah. We're worried about inflation but we're way more worried about the security. So, so Allen, where, let's say you're in the virtual conference room with the board of directors, what's that conversation like? Where does it start? >> I think there is a huge concern right now with regards to security and obviously resiliency as well. But if you just think about what we've all been through and what's transpired in the last 12 months, the, what we call the threat landscape has broadened significantly. And therefore clients have had to go through a rapid transformation not just by moving employees to home base, but also their clients having a much higher expectation in terms of access to systems, access to transactions, which are all digital. So you referred to it earlier but the transformation our clients have had to go on driving a higher dependence on those systems that enable them to serve their clients digitally and enable them to and allow the employees to work remotely in this period has increased the dependencies that they have across the environment that are running many of the critical business processes. So the discussion of the boardroom is very much, are we secure? Are we safe? How do we know? How safe and secure and resilient should we be? And based on that facts about how fit, safe and secure should we be, where are we today as an organization? And I think these are the questions that are at the boardroom. It's basically from a resiliency, security perspective where should we be that supports our strategy, vision and our client expectation? And then the second question is very much, where are we today? How do we know that we are secure? How do we know that we can recover from any unplanned or unforeseen disruption to our environments? >> So Michelle, I mean Allen just mentioned the threat surface is expanding and we're just getting started. Everybody's like crazy about 5G, leaning in the Edge, IoT and that's just going to be orders of magnitude by the end of the decade compared to where it is today. So how do you think about the key steps that organizations should take to ensure operational resilience? You know, not only today, but also putting in a roadmap. >> Yeah. Yeah. And one thing that we do know from our clients is those that have actually planned for resiliency and security at the forefront. They tend to do that more effectively and more efficiently. It's much better to do that than to try to do that after an outage. You'll certainly learn a lot but that's not the experience that you want to go through. You want to have that planning and strategy in the forefront as Allen said. In terms of the threat vector, the pandemic brought that on as well. We saw a surgent of cyber attacks, opportunistic attacks. You know, we saw the best of people in the pandemic as well as the worst in people. Some of those attacks were on agencies that were trying to recover or trying to treat the public with respect to the COVID-19 pandemic. So none of us can let our guard down here. I think we can anticipate that that's only going to increase. And with the emergence of these new technologies like Cloud, we know that there's been such a massive benefit to clients. In fact those that were Cloud-enabled sustained their businesses during the pandemic. Full stop. But with that comes a lot more complexity. Those threat vectors increased, 5G, I expect to be the same. So again, resiliency and security have never been more relevant, more important. We see a lot of our clients putting budget there and those that plan for it with a strategic mindset and understand that whatever they have today may be good enough, but in the future they're going to have to invest and continue to evolve that strategy, are those that have done the best. >> Yeah. The bolt-on strategy doesn't really work that well. But, and I, and I wonder if you think about when when we talk to CSOs for example, and you ask them, what's your biggest challenge? They'll say things like lack of talent. We got too many tools. It's just as we're under the hamsters on wheels. So I would think that's, you know, unfortunately for some, but it's good for your, your business. That's a dynamic that you can help with. I mean, you're a services organization. You've got deep expertise in this. So I wonder if you could talk a little bit about that, that lack of talent that skills gap and how you guys address that. >> I think this is really the fit for managed services providers like Kyndryl. Certainly with some of our largest clients, if we look at Pettus as an example, that notion of phone a friend is really important. When it starts to go down, and you're not sure, you know, what you're going to do next, you want the expertise. You want to be able to phone someone and you want to be able to rely on them to help you recover your most critical data. One of the things clients have also been asking us for is a vaulted capability. Almost like the safe deposit box for your data and your critical applications being able to put them somewhere and then in the event of needing to recover, you certainly could call someone to help you do exactly that. >> Allen, I wonder if you could address this. I mean, I like IBM. I was, I'm a customer. I, I trust IBM, what's your relationship? Are you still going to, you know, be able to allow me to tap the pieces that I like and maybe you guys can be more agile in some respects? Maybe you could talk about that a little bit. >> Yeah, sure Dave. And many of our clients we have a long history with and a very positive experience of delivering, you know, market-leading and high, high quality of services and product. The relationship continues. So we will remain very close to IBM and we will continue to work with many of IBM's customers as well, IBM work with our customers going forward. So the relationship I believe whilst the different dynamic, will continue and I believe engenders an opportunity for growth. And, you know, we mentioned it earlier the very name signifies the fact that it's new growth. And I do think that partnership will continue and will continue together to deliver the type of service, the quality of products and services that our clients have you know, enjoyed from IBM over the last number of years. >> Michelle, I might take one of my takeaways from your earlier comments that you guys are hands on, consultative in nature. And I think about the comment I made about a lot of CIOs said we were way too, DR-focused, but when I think about DR, a lot of times it was a checkbox to the board. Hey, we got it. But when was the last time you tested it? Well, we don't test it because it's too risky to test. We do, we do fail over but we don't want to fail back because it's just too risky. Can I stress test? You know, my environment. Are we at the point now where technology and expertise will allow us to do that is that part of what you bring to the table? >> It is exactly what we bring to the table. So from a first of all, from a compliance and regulatory perspective, you no longer have that option. A lot of the auditors are asking you to demonstrate your DR plan. We have technology and I think we've talked about this before. About the automation that we have in our portfolio with resiliency orchestration that allows you to see the risk in your environment on a day-to-day basis, proactively manage it. I tried to recover this. There's a, there's a failure and then you're able to proactively address it. I also give the example from a resiliency work restoration perspective in this very powerful software automation that we have for DR. We've had clients that have come in scheduled a DR Test. It was to be all day they've ordered in lunch. And the DR Test fail over, fail back, took 22 minutes and lunch was canceled. (Dave laughs) >> I love it. >> So that is very powerful and very powerful with an auditor. >> That's awesome. Okay, guys, we got to leave it there. Really great to get the update. Best of luck to you. And congratulations. Thanks for coming on. >> Thank you. >> Thank you so much. >> All right. And thank you for watching. This is Dave Vellante for theCUBE's continuous coverage of IBM Think 2021. Be right back. (calm music)

>> Narrator: From theCUBE studios in Palo Alto in Boston, connecting with thought leaders around the globe, these are Cloud Native Insights. >> Hi, and welcome to another episode of Cloud Native Insights. I'm your host, Stu Miniman. And when we talk about Cloud Native of course, it's not just moving to the cloud as a location, but how do we take advantage of what's happened in the cloud of the changes that need to happen. And this is not only from a technology standpoint, it's an organizational standpoint. And we're also going to touch on the financial implications and something you've probably heard about FinOps, relatively new last couple of years as a term. Of course, the financial engineering cloud has been around for many years and how that ties into DevOps and to help us understand this movement, what's going on really thrilled that we have a practitioner in this space. I want to welcome Sasha Kipervarg. He's a head, the head of Global Cloud Operations in special projects with LiveRamp. Sasha, thanks so much for joining us. >> Thanks very much too, happy to be here. >> All right, so why don't we start off first for those that don't know LiveRamp, I'm sorry, you're in the ad tech space. Maybe just give us a little bit about, you know, the organization and what your team does there? >> Sure, so LiveRamp is in the advertising technology space, and we help connect companies to their customers and send targeted advertising to them. We're based in San Francisco and have engineering teams across the globe, primarily New York, London, China, all over the map, really. And we're a fast growing company, we've gone from perhaps 400 to maybe 12, 1300 employees over the last year and a half. >> Well, you know that whole space is a whole separate discussion. I like when I looked up a little bit about LiveRamp the discussion point is, you know, cookies for eating not for following you, in looking where are you going all over the company. So your role inside LiveRamp, though. Tell us a little bit... You know, we're cloud bits in New York? >> Sure, so I'm responsible for the engineering teams that help other development teams operate in the cloud. So whereas on premise, it would have been a traditional operations team in the cloud. It's basically an engineering team that are experts in all the different areas that other engineering teams need us to be in so that we can express good practices and help them deliver products. >> Great, you actually had a real forcing function for cloud. You know, right now during the global pandemic we've seen lots of acceleration of people looking at cloud, if you could briefly just bring us back as to one of the things that helped push LiveRamp, you know, to go much heavier into cloud. >> Yeah, so we had some initial plans and we were exploring. But what really pushed us over the edge was we had a three to four day outage at our data center here in San Francisco during a heatwave. And during that time, the data center couldn't control their temperature. We had unusually warm temperatures in San Francisco, they weren't that warm. It was like maybe in the, you know, mid 90s. But for the Bay Area in the summertime, you know, where it's usually 70, it was a big deal. And so we had racks of servers going down because it was too hot. And so if we weren't quite convinced before that we certainly were after that, and that made us realize that there were lots of good reasons to be in the cloud. And so we did it. We put together a migration and over the course of a year, we not only containerized but we migrated our environment into GCP. >> I wonder if you could just bring us inside a little bit that move to the cloud, you talk about adopting containerization. You know, your applications, you know, how much of it did you just kind of move there? How much did you build new? Where there some things that you just said, hey, I can kind of, you know, adopt a SAS equivalent, you know, how did your application portfolio look? >> Yeah, so it's probably good to think of them in terms of the infrastructure services that we use in the cloud, and then the customer facing applications themselves. And what we try to do is essentially containerize all of our infrastructure applications. Actually, let me rephrase that. We took the customer facing applications, and we containerize those. Now the applications themselves, did not change but they swapped out their underlying infrastructure for containers, running on the GCP native container service. On the back end of things we use the native services in GCP up as much as possible. So if we were using a database on premise, we tried to use the native database service in the Cloud with Google. I think the one interesting exception to that which we're changing now, in fact, was we decided to run our hundred petabyte Hadoop cluster in the Cloud using our own native service because of some price concerns. Those price concerns have gotten better since time and we're now migrating to Dataproc, which is Google's native Hadoop service. >> Yeah, it's fascinating when you think about just how fast things change in the cloud, new services can become available and as you're alluding to the finances can change significantly over you know, a couple of months or a quarter. Overall, how's the experience been? You know, moving to cloud, though? >> Well, it's been fantastic in some ways, painful in others because, you know, you discover and maybe this is begin to touch on the FinOp stuff like, you discover that you've gone from quarterly planning cycles where you opt to purchase a whole rack of servers, and you implement them over the next quarter or something like that, to making by the second decisions, to spin up resources via command line by developer and spend unlimitless operating expenses. So, it's quite a big shift. And I think a lot of companies are caught, you know, flat footed by it. We certainly work for a little bit. And there's some financial pain that gets expressed. And you know, the question that I would pose to the audience when they think about the cloud is, you know, we think of the migrations and we only think about their technical success, but if you migrate to the cloud and you do it technically and you containerize and it's on schedule, but then you blow your budget, was it really a success? Because ultimately, you know the business needs to be profitable in order for things to work. >> Yeah, absolutely Sasha. So what I've heard you talk about this before is in the pre-cloud model, you met with the budget team quarterly, and it was mostly a look back function. And of course, when you think about leveraging the cloud, things are changing on a fairly regular basis. And are you able to understand what decisions you're making and what the impact will be on you know, next month and next quarters, billing? So bring us inside a little bit as to, you know, that interaction and what that meant to your teams and how they had to think about you know, engineering and finance together? >> Yeah, it's a fantastic question. So, I guess the first thing is, let me let me zoom out for a moment and just make sure that the audience understands that you know, typically it's just engineering leadership, and a fairly small number of maybe high level developers, maybe an architect that get together with finance once a quarter and have a conversation about what they want to spend and how much they want to spend, and where it should be implemented. And that is a fairly regular thing that's been going on for many years. When you move to the cloud, all of a sudden that decision needs to happen on a real time basis. And typically, companies are not set up for that kind of a conversation. There's usually like a large wall between finance and engineering. And it's because you want the engineering teams to be engineers and the finance folks to be doing finance related things. And the two don't really mix all that often. But when you give a developer an API to spend money essentially right, that's what you've done. They don't just spend up resources, they spend money by API. You need to have a real time conversation where they can make trade offs, where you can track the budget, and those expenses shift from something called CapEx to OpEx. And that's treated in a very different way, on the books. Where we are today is we've created what a team, we call it a FinOps practice. But it's a team that's cross functional by nature that sits within engineering that's made up of a FinOps practitioner, person dedicated to the role. And then members of the finance team. And then many other members of engineer and they work together to first, express the cost by helping developers understand what they're actually spending and where they're spending it. And then the system also makes, recommendations about how to optimize and then the developers absorb that information and figure out what they should optimize, do that work. And then the system re-represents the information for them, and lets them know that their optimizations make sense or not from a financial perspective. The way that we've talked to developers, we've discovered that they care about efficiency. They care about efficiency in different ways. They care about CPU efficiency, they care about RAM efficiency. And it turns out, they care about how efficient their application is from a cost perspective to, right? And you can either tell them directly to care about it, or help them become aware. Or you can use proxies, like what I just mentioned about CPU, RAM, disk, network. If they understand how efficient their application is. They have a natural instinct to want to make it better on a daily and weekly basis. It's just sort of baked into their deep engineering persona. And we try to harness that. We try to position things in such a way that they can do the right thing, because most developers want to do the right. >> Yeah, it's really interesting to me Sasha I remember back, you know you go back seven, eight years ago and I looked at cloud models, and how cloud providers were trying to give more visibility and even give guidance to customers as to how they could adjust things to make them more financially reasonable. I've come from the infrastructure side, when I think about you know, deployments in a data center. It was very well understood you had systems engineer work with a customer, they deploy something, they understand what the growth of is expected to be, and if you needed more, more computer, more storage, what the cost of that would be, you understand the you know, how many years you will be writing that off for, but everything's well understood, and as you said, like developers often they've got, n minus one technology, okay, here's some gear you could work on. But finances were clearly written, they were put into some spreadsheet or understood as opposed to the cloud. There is much more burden on the user to understand what they're doing. Because you have that limitless capability as opposed to some fixed asset that you're writing it off. We're huge proponents of ledger than the cloud. And often there are, cost savings by going to the cloud. But it feels like they're also some of this overhead of having to do the financial engineering is an overhead cost that might not be considered in the overall movement to the cloud. >> Yeah, and maybe now is a good time to swing back to the concept of DevOps, right? Because I want to frame FinOps in this concept of having the budget overhead and I want to link it to the Agile, okay. So, part of the reason we moved to DevOps which is an Agile movement that essentially, puts the responsibility of owning infrastructure and deploying it into the hands of the engineers themselves. The reason that it existed was because we had a problem deploying, we had two different teams typically operations and engineering. And one of them would write the code, and they would throw it over the wall to the operations team that will deploy the code. And because they were two different teams, and they didn't necessarily sit together or sometimes even report into the same leadership, they had different goals, right. And when there was a problem, the problem had to cross both of the team boundaries. And so it was slower to resolve issues. And so, people had the bright idea to essentially put the teams together, right. And allow the developers themselves to deploy the code. And of course, depending on the size of the company was structured--or it is structured slightly differently this idea of DevOps. And, essentially what you had was a situation that worked beautifully because if you had two separate teams that all of a sudden became one team that was fully responsible for writing the code, writing the tests and deploying the code, they saw each other's pain, they understood the problem really well. And it was an opportunity for them to go faster, and they could see the powerful thing. And I think that's essentially what made the DevOps movement incredibly successful. It was the opportunity to be able to control their own destiny, and move faster that made it successful. I view FinOps in a similar fashion. It is an opportunity for developers to understand their cost efficiency and deploy in the cloud by API, and do it in a fully responsible way. Everything that we've been talking about related to DevOps, there is a higher goal here. And that is the goal of unit economics, which is figuring out precisely what your application actually costs being deployed and used by the consumer on a unit basis, right. And that is the thing we're all trying to get to. And this FinOps gets us one step closer to that sort of financial nirvana. Now if you can achieve it, or even if you can achieve the basics of it. You can structure your contracts in a different way, you can create products that take better advantage of your financial model. You can destroy certain products that you have, that don't really make sense to operate in the cloud. You can fire customers. You can do a whole variety of things, if you know what your full costs are, and FinOps allows us to do that. And FinOps allows developers to think of their applications in a way that perhaps they never have in a fully transparent, holistic way. Like there's no sense to build a Ferrari, if it costs too much to operate, right. And FinOps helps you get there. >> It's such an important point Sasha. I'm so glad you brought that up, back in the traditional infrastructure data center world, we spent decades talking about Showback and Chargeback and what visibility you had? And of course for the most part, it was, oh well you know, that sunk costs or something that facilities takes care of. I'm not going to work at it and therefore, we did not have a clear picture of IT and how it really impacted the bottom line of business. So FinOps as you said, help move us towards that ultimate goal that we know we've had for years. I want to tease on that thing that you mentioned there, speed. We understand that, absolutely speed is one of the most important things, how do we react to the business? How to react to the customer, as close to real time as possible? How do you make sure that FinOps doesn't slow things down? If I'm an engineer, and I need to think about oh, wait. I've been told that, the best code to write is no code. But, I have to constantly think about, am I being financially sound? Am I doing that? How do we make sure that this movement doesn't slow me down, but actually enables me to move forward faster? >> Yeah I mean, let me mention a couple of things there. The first is that, what I alluded to before, which is that if you don't think about this as a developer, it's possible that the finance folks in the company could decide well hey, operating the cloud doesn't make financial sense for us. And so we're not going to do it and we're going to go back to data center and you maybe that's the right business move for some businesses who aren't growing rapidly, for whom speed and flexibility isn't as important. Maybe they stay in the data center or they go back to a data center. And so like, I would think a developer has stakes in the game, if they want to be flexible, if they want to continue to be flexible. And from a company perspective, like we... You know, this idea still being sort of fleshed out and even within the FinOps movement, like there is a question of how much time should a developer spend thinking about costs stuff? I'll tell you what my answer is, and perhaps I can touch on what other people think about it as well. My answer is that it's best to be transparent with developers as much as possible and share with them as much data as we possibly can, the right kind of data, right? Not overwhelm them with statistics, that help them understand their applications and applications efficiency. And if when you are implementing a FinOps practice within your org, if you get the sense that people are very touchy, and they're not used to this idea of talking about cost directly, you can talk about it in terms of proxies, right. And as I mentioned before, CPU, RAM, disk, network. Those are all good proxies for cost. So if you tell them hey, your application is efficient or inefficient on these different dimensions, go do something about it, right. Like, when you build your next architecture for your application, incorporate efficiencies across these particular dimensions. That will resonate and that will ensure that developers don't feel like it's hampering their speed. I think the cultural shift that FinOps emphasizes is key. This, helping developers get the high level understanding of why we're doing what we're doing and why it's important and embedding it into their not only their architectural design, but their daily operations. That is the key, like FinOps has multiple pieces to it. I think it's successful because it emphasizes a system that's made up of governance practices, rules that tell you how you should behave within the system. Tools like a CMP, and we can talk about that in a bit. But essentially, it's a cost management platform which is a tool that is designed to figure out what you're spending and express it back to you. It's designed to create anomalies and there's a whole segment in the marketplace of these different kinds of tools. And then of course, the cultural shift. If you can do all three at your organization whether you want to call it a FinOps or not, you're going to be set up for success and it will solve that problem for you. >> So Sasha, one of the things I've really enjoyed the last decade or so is it used to be that IT organizations thought what they were doing was, the differentiator and therefore, they were a bit guarded about what they would share. And of course, these days leveraging cloud leveraging open source, there is much more collaboration out there. And LiveRamp, not only is using FinOps, but you're a member of the FinOps Foundation, which has over 1500, individual members participating in that oversaw by the Linux Foundation, maybe bring us in a little bit as to, why LiveRamp decided to join this group. And, for final word on really kind of the mission of the FinOps Foundation. >> Yeah, I mean as members of the audience might know, the FinOps Foundation recently moved to the Linux Foundation, and I think part of that move was to express the independence of the FinOps Foundation, it was connected to a company in a CMP space before and I think J.R and the team made a wonderful decision in doing so. And I wanted to give a shout out to them. I'm very excited about the shift, and we look forward to contributing to the codebase and all the conversations. In terms of how we discovered it. I was feeling the pain of all these different problems of being, over my budget in the cloud. And, I had arrived at like this idea of like, I needed a dedicated person, a dedicated team that was cross-functional in order to solve the problem. But, on a whim, I attended a FinOps course at a conference and Mike Fuller, who was the author or one of the authors of the FinOps book, along with J.R. was teaching it and I spent eight hours just in like, in literal wonder thinking holy crap this guy and whoever came up with this concept put together and synthesized all of the pain that I had felt and all the different things I thought about in order to solve the problem in a beautiful, holistic manner. And they were just presenting it back to me on a platter, back to everyone on a platter and I thought that was beautiful. And the week that I got back to work from the conference, I put together a presentation for the executives to position a FinOps practice as the solution for LiveRamps budgetary cloud pain. We went for it, and we... It's helped us, it's helped lots of other companies. And, I'm here today partly because I want to give back because there's so much that I learned from being in the Slack channel. There's so much that I learned by reading the book, things that I hadn't thought of that I hadn't experienced yet. So I didn't have the pain. But you know, J.R and Mike, they had all interviewed, hundreds of different folks for the book, got lots of input, and they were talking about things that I hadn't experienced yet, that I was going to. And so I want to give back, they clearly want to give back. And I think it's, a wonderful, a wonderful practice, a wonderful book, a wonderful Slack channel. I would recommend that anyone facing the budgetary challenge in the cloud, join the organization There is a monthly conversation, where someone presents and you learn a lot from doing it. You learn problems and solutions that you perhaps wouldn't have thought of, so I would highly recommend it. >> All right, well Sasha thank you so much for sharing your story with our community and everything that you've learned and best of luck going forward. >> Thanks very much Stu. It's great to talk. >> Alright, and if you want to learn more about what Sasha was talking about, Linux Foundation it is this finops.org is their website. Linux Foundation, of course theCUBE. Cloud Native, big piece of what happens and what we're doing will be at theCUBEcon, CloudNativeCon shows this year. Look for more interviews in this space. I'm Stu Miniman. And look forward to hearing more about your Cloud Native Insights. (upbeat music)

>>live from Las Vegas. It's the Q covering AWS executive. Something brought to you by extension. >>Welcome back, everyone to the cubes. Live coverage of the ex Center Executive Summit here at AWS reinvent I'm your host, Rebecca Knight. I'm joined by Marum Best Aerobic. He is the managing director Global Cloud and Infrastructure Attic Center. Thank you so much for coming on the show again. We met last year. So you're a Cuba Lem. >>Yes, I am. >>So we're talking today about moving a $43 billion company to the Cloud X Century. This is X Center as its own as its own use cases. But Accenture has been engaged in a major move to the public Cloud moving a company of the size and heft of ex center. Must have been intimidating. How did you even sort of wrap your brain around the challenges? Walk? Walk us through this. >>So you know, the tough part about working at Accenture is you have 480,000 people that work for Accenture or at least 1/2 a 1,000,000 let's say, and those half a 1,000,000 people all think they can do the job better and differently than you do, right. So the first challenge is our own our own organization. But I would tell you I say that, you know, just in a joking way. They're very supportive. It was. We're telling our clients the cloud is the future. So when we told our organization we're going to the cloud, it was massive support. It was what's taking so long? Let's do this. And now, granted, this was over a little over four years ago when we started the journey. So the cloud providers in the world was very different. So today we run, you know, tens of thousands of workloads on Amazon. We run all kinds of the capability to do cloud native. We do platform service's. We consume so much cloud service that, in my opinion, we're never going back to a data center. Never. >>So what Ex center is really well known as a big advocate of the public cloud? First of all, why? Why the public club? Well, the public cloud is >>the future. I really think when you think about how especially somebody like Amazon, if you listen to Andy Jassy this morning, right, it's they are innovating at a scale and a pace that that's just truly exceptional, and it gives us opportunity to take those things and implement them to change the way we run our business. So the weak and implement a lot of these capabilities toe help enable our business and then through that, by enabling our business be a credential for not only ourselves but to our clients to say, Hey, we do this to ourselves and way can help you do it as well. >>We're walking the walk >>or totally walking the walk and we push very hard on that angle because for us, it's very important for me personally to say, you know, I started my career client service. So I know serving our clients is one of the key things for us in our business. So I want to be able to solve these things, these air hard things itself so we can solve them faster for our clients ourselves. It makes it easier for them on their journey, >>and you also understand the pain points and the challenges A CZ you said your employees, your workforce was very supportive of it, but that's not always the case. >>No, it's not. It's not in But I'll tell you, our own teams in the early days they struggled with this. To be honest, right? It was a It was a change because we were heavily, heavily virtualized. We were great at running our infrastructure. We were doing all those things. Those are the things you did back then. So then when we said the team's Hey, we're going to the cloud They said, Well, we're not so sure. Do we really think we're going to save money? And in the early days we said We're doing this because this is the right thing to do But in the end, we actually did save a lot of money going to the cloud because we learn toe work differently and I think that's one of the key messages I would convey back is you are not going to work in the cloud the same way you work in a data center. You are going to shut things off. When you don't use them, you're going to have an opportunity to optimize them. You will have an opportunity to spend new capabilities up sooner, used them for what you need and faster and then you know things you can't do in a data center. You can't spend up. You can't use Dynamo. You can't use lambda. You can't. You can't use these. Micro service is in the data center, but in a cloud you can. So now you leave yourself in a situation where you have so much capability you can turn on to enable In enterprise is just mind boggling and exciting and exciting. >>So the time table t make this transformation was ambitious, to say the least. How aggressive did you need to beating? This is a journey. You said you started a little over four years ago. >>Yeah, it took the entire program for us. Took us about three years. But the real aggressive part of the journey was we said, you know, we can't We're dabbling a little bit in it. So let's just say our starting point was around 9%. You know, one of the big things we said is, how do we get the 50% in one year? And it was like, Okay, how do we do that? So we put a program in place and we got the team organized, and we did, you know, kind of like what Andy Jesse was talking about today at the keynote. We set some top down goals. We said to the teams were going to do this. This is the future. We're not kidding. We're going to do it. We have full support and we work with the business. And we explain what it was what was going to be. And you know what? One of the first things we took the public cloud, like three months into this program, was accenture dot com. I mean, we literally three months into the program, took our market facing capability of what our clients look at. People look at to think about us. They moved into the public cloud. >>We've described as a very disciplined approach and also one that was led from the top brass. So how talk a little bit about how the transformation started? >>Yes. So the transformation was really I will tell you, in the early days it was a function of we're going to start to take thes workloads and move them to the cloud. How do you do that? We made a decision to say, Let's take this. Let's take it a data center approach perspective. We're going to shut down an actual data center one at a time. And that's how we do migrations now. A lot of clients think about it from a different perspective. From our point of view, it made the most sense of Shut down the data center and get out of that location because then you're not maintaining all these things twice the fastest you can do it. The better way to do it is to do that. So that's kind of how we approach that. We said all the workloads in the data center go now. We took on our North American workloads first because we didn't make it easy for ourselves, right, because that's where all of our production work clothes where it wasn't just the test environments. It wasn't just a, you know, development environment. It was the real deal, everything it takes to run and support Accenture And we said we're gonna move those first. And so from a transformation perspective, that was our key. And then the other one is we had this. We had this notion of cloud first and cloud only. So any new capability also, we said here on out the minute we started the program. We said no more data center. We are anything you need now is going to be provisioned in the cloud. >>And what about digitally native applications? Yes. So when you think >>about like, um, a clown native capability. So now you start to get into another. You're into cloud, You go. Oh, man, what else can I do? And then So our previous CEO announced to the world extension was no wonder going to do performance reviews. And we're like, Okay, this is great. What we gonna >>do >>about this? And we need it implemented in three or four months. So when our HR business team came to work with us, one of the things we said is, Hey, this >>is the >>time because at that point we were about six or seven months into the program of Cloud. We said, Well, you can't spend up of'em. You're gonna go into the cloud. So we built a capability to does performance achievement for 405 100,000 people globally that runs it with Lambda and Dynamo. And it's been there for a little over now, four years, believe it or not. >>Amazing. So we talk about other challenges that you face because I mean, the way you're describing it, It sounds as though it people were supportive and you had a lot of winds along the way. But of course, there there were. I'm sure there were some dark days to weigh, had some >>growing pains. I think you know, when you think about it a lot of times because a lot of work loads we did pick up. We did a lot of lifting shift. Um, and I hate that term because what we learned as we went is we could actually lift, configure and run for less. So I don't know if there's an industry term for I haven't coined one yet. If somebody here is one that they want to share with us, I'd love to hear it. But lift and shift itself is a bad. It's a misnomer because that's not how you do this right. You have to touch a little bit of something. But what happened is in the early days we weren't quite sure how to size these environments, so when we would pick them up and we would say, Well, let's let's let's kind of give it some more capability. Let's let's throw some more CPU at it. But what we learned very quickly was that costs a lot of money. And we started applying some tools that would love, help us see what the utilization needed to be. And then we learned very quickly that Oh, you know what this environment that used to exist in the data center? Well, that's >>kind of >>on a couple of generations ago. CPU a couple of generations ago, memory a couple of generations ago storage because all the stuff in the cloud is all newer, all new or CPU on your memory. So then very quickly it's not even a like for like it's a like for less. So we figured out very quickly that we can actually take a workload. Let's say they had eight CPU use and we can run in the cloud with two. And so, But it was. It was. It was growing pains through that process that we learned to say, How do we do it then? Frankly, I think a lot of times we talked about this with our clients who is how do you get the team along the way? Because it's it's and When we set the edict, the team realized they had to go do this stuff. But, you know, we thought we'd have a little bit of resistance. What we found instead was a team very eager to learn and very eager to be part of this program and part of this capability. Because they see it. They saw that it was this new stuff that we were doing. So a little bit of the early growing pains around who's gonna work on what? How do we How do we focus our training? You know, how do we get these teams to help us really drive some of this capability and as we started, enabled them or that helped us get momentum. And I think the other one is just when you start to get all these workloads and how do you actually manage this stuff? How do you manage this capability? And for us? You know, we spent a lot of time with our eccentric cloud platform friends because we needed a capability to said, How do I actually manage all this building? How do I discover all the capabilities that are out there? How do I track my compliance How do I make sure all these things are aligned to my security? Construct that in, You know, info SEC is asking us to drive. So we need to do all do all those things that we didn't have it perfect in the beginning and we learned along the way. >>So talk about some of the other benefits you've described cutting some costs. And you've also described this new mindset that so many of your employees have adopted a rials learning minds, a growth mindset, one of embracing innovation. What are some other of the benefits that you've seen? >>You know, the benefits that are to me today is just this art of the possible is just mind bogglingly so much more open to whatever you want to do. It's almost scary how much is out there. You actually have to kind of pull back a little bit and say, How do I apply some guardrails around us? And I think when I think about the other benefits are we have more capability now than ever to spin workloads up. I'll give an example, like on Amazon spot instances are one of the things that they offer. We spend up 700,000 spot instances a year to do work along the way. And it's unfathomable to even think about doing some of those things in the data center. So the flexibility that you get if you want to test the release sometimes some of these big systems you might have to bring in hardware to test that in the data center. But in the cloud I >>don't have >>to buy hardware. I could just spend up more excuse. So it's just the benefits of flexibility, the agility, the speed that not waiting on and also, I think, the other one that I think sometimes gets overlooked as Excuse me. Sometimes that gets overlooked as I don't have a capacity management team that's worried about the capacity in the data center. I don't have AH team managing the vendor. Providing the data center service is right. It's all these things. You start to turn off that you didn't know that you don't need in a cloud anymore because they're managing those things. So even even if you're some, I think some clients get lost and waiting too long to do this. But there's all these other costs around there that you're spending money on anyway, you may not realize is you think about this business case, so I think the benefits are just tremendously there. But you really have to look at it holistically. >>So this morning, on the main stage we heard Andy Jassy describes a dizzying number of new products and service is that eight of the U. S. Is coming out with How how are you thinking about those and integrating them into what you're doing at Accenture with this initiative? And what's the energy that you're taking away from? I mean, he's certainly a very dynamic leader. >>Well, the energy the energy is great at this event. Every single year, the amount of innovation that comes out, it's fantastic. I think one of the great things that came out today is this concept of we're gonna take the hyper visor. We're actually gonna move it into a chip set to help you give you more processing power on the computer. I think on the server is huge. That's a huge capability. Lets us think about how do we manage things differently? I think some of this, uh, you know, uh, capabilities run enterprise, search enterprise, search is very hard, very difficult, right? This ml capability that, you know, it's very appealing. What am I gonna do with that? How do I help my organization think about search differently? That's very appealing. And I think the other one that's you know, there are a lot of other ones around the ML and the Data Lake stuff and everything else, but I think some of these things that get overlooked sometimes the pure review with ML was awesome, right? It's like, How do I help? How do I help them? Has the machine helped me do a code peer review with my people? So those were just, you know, real quick things that come to mind. But it's just great to see all this innovation, and it becomes available so quickly, right? So you've got you have an opportunity to get into these things very fast. >>So as you look back on this journey, this transformation, what are you most proud of? And what are you most excited about in the future? I'm most >>proud of the bold bets. Not only that, we all individually took, but the team's I'm so proud of our team in taking the journey onto trusting us, tow working and pushing and learning themselves to really take this on and it's it's it's just this magical. It's like it's a compound ing thing that just infested everybody else writes. Everybody's been excited about the cloud and how do we do it? How do we do this stuff? I think you know. And then from a future perspective, I'm really interested in MAWR in As the capabilities evolve and they get announced, I think the benefit we have is as we're there. It's easy for us to see some of these things. I think the container landscape is going to be huge. All the kubernetes stack and everything else that's that's out there. We need to think about. How does that help me continue to evolve? The service's I provide either more custom cost, effectively arm or efficiently back to the business and turn on more capability faster and try stuff faster and turn it off faster. And that's the great part of the cloud, right? You get the try stuff, you get to play >>with it, >>and if you don't like it, you turn it off. You don't have to wait three years for this equipment toe. Appreciate you move on with life. And that, to me, is exciting because there's just so much innovation that's coming. There's so much opportunity for us to really just jump out there and, uh, have fun. >>Excellent old Merrin. Best aerobic. Thank you so much for coming on. The cubic pleasure talking to you too. I'm Rebecca. Night. Stay tuned for more of the cubes. Coverage of the ex center Executive Summit coming up tomorrow. We'll see you here right now. Early.

>>live from Miami, Florida It's the Q covering IBM is data in a I forum brought to you by IBM. >>We're back in Miami and you're watching the cubes coverage of the IBM data and a I forum. Tony hi. Amiss here is a distinguished engineer for Ditch the Digital and Cloud Business Analytics at IBM. Tony, first of all, congratulations on being a distinguished engineer. That doesn't happen often. Thank you for coming on the Cube. Thank you. So your area focus is on the B I and the Enterprise performance management space. >>Um, and >>if I understand it correctly, a big mission of yours is to try to modernize those make himself service, making cloud ready. How's that going? >>It's going really well. I mean, you know, we use things like B. I and enterprise performance management. When you really boil it down, there's that's analysis of data on what do we do with the data this useful that makes a difference in the world, and then this planning and forecasting and budgeting, which everyone has to do whether you are, you know, a single household or whether you're an Amazon or Boeing, which are also some of our clients. So it's interesting that we're going from really enterprise use cases, democratizing it all the way down to single user on the cloud credit card swipe 70 bucks a month >>so that was used to be used to work for Lotus. But Cognos is one of IBM's largest acquisitions in the software space ever. Steve Mills on his team architected complete transformation of IBM is business and really got heavily into it. I think I think it was a $5 billion acquisition. Don't hold me to that, but massive one of the time and it's really paid dividends now when all this sort of 2000 ten's came in and said, Oh, how Duke's gonna kill all the traditional b I traditional btw that didn't happen, that these traditional platforms were a fundamental component of people's data strategies, so that created the imperative to modernize and made sure that there could be things like self service and cloud ready, didn't it? >>Yeah, that's absolutely true. I mean, the work clothes that we run a really sticky were close right when you're doing your reporting, your consolidation or you're planning of your yearly cycle, your budget cycle on these technologies, you don't rip them out so easily. So yes, of course, there's competitive disruption in the space. And of course, cloud creates on opportunity for work loads to be wrong, Cheaper without your own I t people. And, of course, the era of digital software. I find it myself. I tried myself by it without ever talking to a sales person creates a democratization process for these really powerful tools that's never been invented before in that space. >>Now, when I started in the business a long, long time ago, it was called GSS decision support systems, and they at the time they promised a 360 degree view with business That never really happened. You saw a whole new raft of players come in, and then the whole B I and Enterprise Data Warehouse was gonna deliver on that promise. That kind of didn't happen, either. Sarbanes Oxley brought a big wave of of imperative around these systems because compliance became huge. So that was a real tailwind for it. Then her duke was gonna solve all these problems that really didn't happen. And now you've got a I, and it feels like the combination of those systems of record those data warehouse systems, the traditional business intelligence systems and all this new emerging tech together are actually going to be a game changer. I wonder if you could comment on >>well so they can be a game changer, but you're touching on a couple of subjects here that are connected. Right? Number one is obviously the mass of data, right? Cause data has accelerated at a phenomenal pace on then you're talking about how do I then visualize or use that data in a useful manner? And that really drives the use case for a I right? Because A I in and of itself, for augmented intelligence as we as we talk about, is only useful almost when it's invisible to the user cause the user needs to feel like it's doing something for them that super intuitive, a bit like the sort of transition between the electric car on the normal car. That only really happens when the electric car can do what the normal car can do. So with things like Imagine, you bring a you know, how do cluster into a B. I solution and you're looking at that data Well. If I can correlate, for example, time profit cost. Then I can create KP eyes automatically. I can create visualizations. I know which ones you like to see from that. Or I could give you related ones that I can even automatically create dashboards. I've got the intelligence about the data and the knowledge to know what? How you might what? Visualize adversity. You have to manually construct everything >>and a I is also going to when you when you spring. These disparage data sets together, isn't a I also going to give you an indication of the confidence level in those various data set. So, for example, you know, you're you're B I data set might be part of the General ledger. You know of the income statement and and be corporate fact very high confidence level. More sometimes you mention to do some of the unstructured data. Maybe not as high a confidence level. How our customers dealing with that and applying that first of all, is that a sort of accurate premise? And how is that manifesting itself in terms of business? Oh, >>yeah. So it is an accurate premise because in the world in the world of data. There's the known knowns on the unknown knowns, right? No, no's are what you know about your data. What's interesting about really good B I solutions and planning solutions, especially when they're brought together, right, Because planning and analysis naturally go hand in hand from, you know, one user 70 bucks a month to the Enterprise client. So it's things like, What are your key drivers? So this is gonna be the drivers that you know what drives your profit. But when you've got massive amounts of data and you got a I around that, especially if it's a I that's gone ontology around your particular industry, it can start telling you about drivers that you don't know about. And that's really the next step is tell me what are the drivers around things that I don't know. So when I'm exploring the data, I'd like to see a key driver that I never even knew existed. >>So when I talk to customers, I'm doing this for a while. One of the concerns they had a criticisms they had of the traditional systems was just the process is too hard. I got to go toe like a few guys I could go to I gotta line up, you know, submit a request. By the time I get it back, I'm on to something else. I want self serve beyond just reporting. Um, how is a I and IBM changing that dynamic? Can you put thes tools in the hands of users? >>Right. So this is about democratizing the cleverness, right? So if you're a big, broad organization, you can afford to hire a bunch of people to do that stuff. But if you're a startup or an SNB, and that's where the big market opportunity is for us, you know, abilities like and this it would be we're building this into the software already today is I'll bring a spreadsheet. Long spreadsheets. By definition, they're not rows and columns, right? Anyone could take a Roan Collin spreadsheet and turn into a set of data because it looks like a database. But when you've got different tabs on different sets of data that may or may not be obviously relatable to each other, that ai ai ability to be on introspect a spreadsheet and turn into from a planning point of view, cubes, dimensions and rules which turn your spreadsheet now to a three dimensional in memory cube or a planning application. You know, the our ability to go way, way further than you could ever do with that planning process over thousands of people is all possible now because we don't have taken all the hard work, all the lifting workout, >>so that three dimensional in memory Cuba like the sound of that. So there's a performance implication. Absolutely. On end is what else? Accessibility Maw wraps more users. Is that >>well, it's the ability to be out of process water. What if things on huge amounts of data? Imagine you're bowing, right? Howdy, pastors. Boeing How? I don't know. Three trillion. I'm just guessing, right? If you've got three trillion and you need to figure out based on the lady's hurricane report how many parts you need to go ship toe? Where that hurricane reports report is you need to do a water scenario on massive amounts of data in a second or two. So you know that capability requires an old lap solution. However, the rest of the planet other than old people bless him who are very special. People don't know what a laugh is from a pop tart, so democratizing it right to the person who says, I've got a set of data on as I still need to do what if analysis on things and probably at large data cause even if you're a small company with massive amounts of data coming through, people click. String me through your website just for example. You know what if I What if analysis on putting a 5% discount on this product based on previous sales have that going to affect me from a future sales again? I think it's the democratizing as the well is the ability to hit scale. >>You talk about Cloud and analytics, how they've they've come together, what specifically IBM has done to modernize that platform. And I'm interested in what customers are saying. What's the adoption like? >>So So I manage the Global Cloud team. We have night on 1000 clients that are using cloud the cloud implementations of our software growing actually so actually Maur on two and 1/2 1000. If you include the multi tenant version, there's two steps in this process, right when you've got an enterprise software solution, your clients have a certain expectation that your software runs on cloud just the way as it does on premise, which means in practical terms, you have to build a single tenant will manage cloud instance. And that's just the first step, right? Because getting clients to see the value of running the workload on cloud where they don't need people to install it, configure it, update it, troubleshoot it on all that other sort of I t. Stuff that subtracts you from doing running your business value. We duel that for you. But the future really is in multi tenant on how we can get vast, vast scale and also greatly lower costs. But the adoptions been great. Clients love >>it. Can you share any kind of indication? Or is that all confidential or what kind of metrics do you look at it? >>So obviously we look, we look a growth. We look a user adoption, and we look at how busy the service. I mean, let me give you the best way I can give you is a is a number of servers, volume numbers, right. So we have 8000 virtual machines running on soft layer or IBM cloud for our clients business Analytics is actually the largest client for IBM Cloud running those workloads for our clients. So it's, you know, that the adoption has been really super hard on the growth continues. Interestingly enough, I'll give you another factoid. So we just launched last October. Cognos Alex. Multi tenant. So it is truly multi infrastructure. You try, you buy, you give you credit card and away you go. And you would think, because we don't have software sellers out there selling it per se that it might not adopt as much as people are out there selling software. Okay, well, in one year, it's growing 10% month on month cigarette Ally's 10% month on month, and we're nearly 1400 users now without huge amounts of effort on our part. So clearly this market interest in running those softwares and then they're not want Tuesdays easer. Six people pretending some of people have 150 people pretending on a multi tenant software. So I believe that the future is dedicated is the first step to grow confidence that my own premise investments will lift and shift the cloud, but multi tenant will take us a lot >>for him. So that's a proof point of existing customer saying okay, I want to modernize. I'm buying in. Take 1/2 step of the man dedicated. And then obviously multi tenant for scale. And just way more cost efficient. Yes, very much. All right. Um, last question. Show us a little leg. What? What can you tell us about the road map? What gets you excited about the future? >>So I think the future historically, Planning Analytics and Carlos analytics have been separate products, right? And when they came together under the B I logo in about about a year ago, we've been spending a lot of our time bringing them together because, you know, you can fight in the B I space and you can fight in the planning space. And there's a lot of competitors here, not so many here. But when you bring the two things together, the connected value chain is where we really gonna win. But it's not only just doing is the connected value chain it and it could be being being vice because I'm the the former Lotus guy who believes in democratization of technology. Right? But the market showing us when we create a piece of software that starts at 15 bucks for a single user. For the same power mind you write little less less of the capabilities and 70 bucks for a single user. For all of it, people buy it. So I'm in. >>Tony, thanks so much for coming on. The kid was great to have you. Brilliant. Thank you. Keep it right there, everybody. We'll be back with our next guest. You watching the Cube live from the IBM data and a I form in Miami. We'll be right back.

>> fly from San Francisco. It's the Cube covering Google Cloud next nineteen Tio by Google Cloud and its ecosystem partners. >> Run. Welcome to the Cube here, live in San Francisco on Mosconi South were on the floor at Google. Next twenty nineteen. Hashtag Google Next nineteen. I'm John for my co host this week for three days and wall to wall coverage of Google's cloud conference is with Dave. Alonso Has too many men. Guys day one of three days of wall to wall coverage. We got Thomas Curry in the new CEO on the job for ten weeks. Took the realm from Diane Green. Thirty five thousand attendees. It's packed. It's definitely a developer crowd. It feels a lot like a WS, not a corporate show like Microsoft or IBM or others or Oracle. It's really more about developers. We just heard the Kino. Google's making some moves. The new CEO is gonna put on a show. He saw two customers you see in the positioning. Soon DARPA Kai, the CEO of Google, came out really kind of. Ah, interesting keynote Feels like Thomas's that's gonna shake that Oracle off, but he's guns blaring. Some new announcements. Guys, let's do a round upon the keynote. >> Yeah. So, John, as you said, a great energy here that this place is bustling sitting here where we are, we could see everybody is going through the Expo Hall. As you said. Is Google serious about this? This whole cloud activity? Absolutely. There's no better way than to have your CEO up. There we go, The Amazon show. You don't see Jeff Bezos there into the Microsoft shows? You know, you don't usually see you know their CEO. There you have the Cloud Group does the cloud thing, but absolutely. Cloud is a critical piece of what Google is doing. And it's interesting because I actually didn't feel as geeky and his developer focused as I would expect to see at a Google show. Maybe they've heard that feedback for years that, you know, Google makes great stuff, but they're too smart in there, too geeky When you go to the Amazon show, they're announcing all of the different, you know, puting storage pieces and everybody's hooting and hollering. Here it was a little bit more business. It was high level. They had all these partners out on stage and customers out on stage. Many of them, you know, you talk about retail and health care and all these other ones where you say, Okay, Amazons, a major competitor there. So, you know, can Google stake their claim as to how they're going to move up from the number three position and gain more market share? You know, as they fit into the multi cloud, which we know we're going to spend a lot of time on, wears their position in this cloud space today. >> What your thoughts. >> Well, first of all, there's a big show. I mean, it's we're here at IBM thick in February. This feels like a much, much larger event, Number one Stew said. It's really much more developer heavy, I think. John, there's no question people don't question Googles Global Cloud Presence. Soon Dar talked about two hundred countries, ninety cloud regions fifty eight plus two new data centers. So no question there. But there are questions as to whether or not Google could move beyond search and maps and Gmail and really be a big cloud player for Enterprise Cloud that really is to the elephant in the room. Can Google innovate and attractive CEOs? They showed a number of customers, not nearly, of course, as many as what Amazon or even Microsoft would show. They're talking about ecosystem. To me, that ecosystem slide. It's got a cord truthful this year to really show some progress. But you've got new leadership as we talked about last year, John and love to get your thoughts on this. Google's playing the long game. They've got the best tech and you know they've got great data. Great. Aye, aye. I want to take >> into the new rebranding of the Google Cloud platform, which is now called Antos, which is a Greek word for flour. We kind of had visibility into This would kind of start coming. But before we get into that, I want to just kind of point out something that we've reported on looking angle, some that we've been saying on Twitter on DH about Diane Greene. It's been reported that she was fired from Google for missing on red hat. All these rumors, but interesting Thomas Koreans first words, a CEO on stage. It was a direct shout out to Diane Greene. I think this validates our reporting and our analysis that Diane Green absolutely helped hire curry and work with the boy workers Sundar And essentially, because she was the architect of rebuilding Google Clouds Enterprise chops the team there that she recruited we've been following and covering. Diane Green built that foundation. She passed the torch. Thomas Curry. This was not a Diane Green firing, so I think I think Thomas Carrion nice gesture on Diane Green kind of sets the table and validates and preserves her legacy as the rebuilder re architect of Google Cloud. >> Pretty interesting. Yeah. I mean, you know, I think this where there's some smoke, there's fire that don't think Diana Corning court fired. I think you know that she was under a lot of pressure. She was here for seven years. I think they probably felt like Okay, now it's time to really bring somebody in. Who wants to take this to the next level? And I'll die unnecessarily had the stomach for that >> John Really great points there. But it does talk about you know what is the culture of Google? You know, the elephant The room is what is Google? Google makes you know most of their money on advertising. That's not what Google Cloud is. It doesn't fit into the additional model. You know, Google's culture is not geared for the enterprise. As you know that the critique on Google for years has been We make really great stuff and you need to be Google E. And you need to do things the way we do Thomas Koreans out there. We need to meet customers where they are today. That's very much what we hear in the Enterprise. That that's what you hear. You know when you talk about Amazon or Microsoft, they're listening to their customers. They're meeting them at their business applications there, helping them build new environment. So, you know, will Google be a little less googly on DH? Therefore, you know, meet customers and help work them, and that leads to the multi clouding the anthros discussed. >> We heard a lot about that today. I mean, John, you've pointed out many, many times that Cooper Netease is the linchpin to Google strategy. It's really you know, that was the kind of like a Hail Mary relative Tae Ws and that's what we heard today. Multi cloud, multi cloud, multi cloud, where is with a W s. And certainly to a lesser extent, Oracle. It's Unit Cloud Multi Cloud is more expensive is what they tell us. Multi cloud is less secure. A multi cloud is more complex. Google's messaging is exactly the opposite of >> that. So, Dave, just to poke it that a little bit, is great to see Sanjay *** Inn up on stage with VM wear. But where we last cvm were to cloud show. It's an Amazon. They've got a deep partnership here. Cooper Netease is not a differentiator for Google. Everybody's doing it. Even Amazon is being, you know, forced to be involved in it. Cisco was up on stage. This guy's got a deep partnership with Amazon and a ks. So you know, Cooper Netease is not a magic layers. Good job, Ada said on the Cube. Q. Khan. It is something that you know Google, that management layer and how I live in a multi cloud environment. Yes, Google might be further along with multi cloud messaging, then say Amazon is, But you know, Amazons, the leader in this space and everybody that has multiple clouds, Amazons, one of them, even the keynote >> This morning aboard Air Force right eight, I was forced into Cooper days you're not CNW s run demos that show, you know, a target of the Google clouded the Microsoft. You saw that today from Google >> while we see how the Amazon demos with our oracle. But that's the result. Let's let's hold off on the partisan saying, Let's go through the Kino So the Diane Green comment also AOL came out. Who runs VP of Engineer. He's the architect. One. This Antos product. Last year, they announced on G. C. P s basically a hybrid solution G a general availability of Antos, which has security built in out of the box. Multi cloud security integrated for continues integration, confused development, CCD pipeline ing very key news and that was really interesting. This is such a their new platform that they've rebranded called Antos. This is a way for them to essentially start posturing from just hybrid to multi cloud. This is the shift of of Google. They want to be the on premise cloud solution and on any cloud, your thoughts. >> You know, the demo said it all. The ability to take V m movement two containers and move them anywhere right once and move anywhere and that, I think, is is the key differentiator right now. Relative to certainly eight of us. Lesser extent Microsoft, IBM right there with red hat. That's to me The interesting angle >> Here. Look, Google has a strong history with Ken Containers. If you if you scroll back to the early days of doctor twenty fourteen, twenty, fifty, Google's out there as to how many you know, it just so many containers that they're building up and tearing down. However you go to the Microsoft. So you go to the Amazon show. We're starting to talk a lot more about server list. We're gonna have the product lead for surveillance on today. I'm excited to dig into that because on a little bit concerned that Google is so deep in the containers and how you Burnett eases, they're looking for, like a native to connect the pieces, but that they are a little bit behind in some of the next generation architectures built on journalists for death. >> I want to make a point here if you're not the leader in cloud which, you know in Enterprise Cloud, which Google is not, you know, IBM is not or, you know, Oracle is not okay, fine, but if you don't have a cloud like Cisco or Dell or VM, where you have to go after multi cloud. Amazon's not in a rush to go after multi cloud. There's no reason down the road. Amazon can't go after that opportunity. To the extent that it's a real tam, it's There's a long way to go. Talk about early innings were like having started the game of Outpost >> hasn't even been spect out. Yes, sir, there has not been relieved. So we're seeing what Amazon's got knowing they are the clouds. So they're the incumbent. Interesting enough on Jennifer Lin. You mention the demo. Jennifer Lin Cube alumni. We gonna interview her later. She introduced on those migrate Kind of reminds me of some of the best shows we have the migration tools and that migrates work clothes from PM wears into containers running in containers. As you mentioned. A. This is an end and no modified co changes. That's a big deal, >> John. Exactly on Twitter, people are going. Is this the next emotion? You know, those of us who've been in the industry while remember how powerful that was able to seamlessly migrate? You know, the EMS and containers at, You know, I shouldn't have to think about Colin building it where it lives. That was the promise of has for all those years and absolutely things like uber Netease what Google's doing, chipping away at that. They're partnering with Cisco, there partner with pivotal parting with lots of companies so that that portability of code isa lot of >> Master Jack is a cloud of emotion. I mean, we know what the motion did in the Enterprise. >> To me, that's the star. The keynote is actually the rebranding associate positioning thing. But the star of the show is the Jennifer Lin demo, because if anthems migrate actually works, that's going to tell. Sign to me on how fast Google can take territory now. What's interesting also with the announcements, was, I want to get you guys thoughts on this because we cover ecosystems, we cover how Cloud and Enterprise have been pardoning over the years. Enterprise is not that easy. Google has found out the hard way Microsoft is done really well. They've installed base. Google had stand this up from the beginning again. Diane Greene did a great job, but now it's hard. It's a hard nut to crack. So you see Cisco on stage. Cisco has huge enterprise. Cloud the em Where comes on stage? David Gettler Gettler, the VP of engineering of Cisco, one of their top executives on stage. And he has Sanjay *** and keep alumni came on. Sanjay had more time. Francisco. So you have two companies who kind of compete? NSX. We have suffered a fine Cisco both on stage. Cisco, absolutely integrating into We covered on silicon angle dot com just posted it live where Cisco is actually laying down their container platform and integrating directly into Google's container platform to offer a program ability End to end. I think that's something that didn't get teased out on the keynotes doing, because this allows for Google to quickly move into the enterprise and offer true program ability of infrastructure. This is the nirvana of infrastructure is code. This is what Dev Ops has been waiting for. Still your thoughts on this because this could be a game changer. Hydro, what's an A C I. This could put pressure on VM, where with the containers running in platform and the Cisco relationship your thoughts. >> So John Cisco has a broad portfolio. When you talk about multi cloud, it's not just the networking components, it's the eyes, absolutely apiece. But that multi cloud management, uh, is a layer that Cisco has, you know, been adding two and working on for a lot of years, and they've got very key partnerships. So making sure, you know, seeing right seeing David vehicular onstage here. Proof, Cisco, lot of enterprise customers him where, Of course, six hundred thousand customers. They're So Google wants to get into these accounts. You look at, you know, Microsoft strength of their enterprise agreements that they have. So how will Google get into some of these big accounts? Get into the procurement, get into the environment? And there's lots of different methods and partnerships We said our credit >> David vehicular undersold the opportunity here. I mean, when it comes to he did at working Inter Cloud. Sisko is in the poll possession position to basically say we got the best network, the highest performance networks, the most secure networks, and we're in a position to connect all these clouds. And to me, that didn't come out today. So when you think about multi cloud, each of these companies is coming at it from a position of strength. Cisco. Very clearly dominant networking VM wear in virtual ization and I think that came through. And Sanjay *** ins, you know, keynote. I think again Gettler undersold it, but it's a great opportunity for Cisco and Google. >> Well, I think Google has a huge opportunity. It Cisco because if they have a go to market joint sales together, that could really catapult Google sails again. If I get really was kind of copy, we're we're Cisco. But Cisco look, a bm was on stage with them. I thought that was going to be a Hail Mary for for Sisko to kind of have bring that back. But then watching Sanjay Putin come on saying, Hey, we're okay, it's going to be a V m World And Pat Kelsey has been on the record saying, Coo Burnett eases the dial tone of the Internet stew. This is an interesting matchup between Cisco and BM, where your thoughts >> Yeah, so so right. There's so many pieces here, a cz to where their play way. No, there's competitive competition and, you know, partnerships. In a lot of these environments, Google actually has a long history of partnering. You know, I can't even think how many years ago, the Google and GM or Partnership and Cisco. If I can't actually, Dave, there's There's something I know you've got a strong viewpoint on. You know, Thomas Kurian left Oracle and it was before he had this job. Every he says, you know, is T. K going to come in here and bring, you know, oracles, you know, sales methodology into Google. You know, What does he bring? What's his skill set on? You know >> what exact community? I think it's the opposite, right? I think that's why you left Oracle because he didn't want every database to run in the Oracle, Cloudy realised is a huge opportunity out there. I think the messaging that I heard today is again it's completely I saw something on Twitter like, Oh, this is just like organ. It's nothing like Oracle. It's the It's the polar opposite opposite of what Oracle is doing. >> I think I think curry and can really define his career. This could be a nice swan song for him. As he takes Google with Diane Greene did builds it out, does the right deals if he can build on ecosystem and bring the tech chops in with a clear go to market. He's not going to hire the salespeople and the SCS fast enough. In my opinion, that's gonna be a really slow boat. Teo promised land. He's got to do some deals. He's gotta put Some Corp Devin Place has gotta make some acquisitions will be very in the sin. DARPA Kai, the CEO, said. We are investing heavily in cloud. If I'm Amazon, I'm worried about Google. I think they are dark horse. They have a lot of they have a clean sheet of paper. Microsoft, although has legacy install base. Google's got, I think, a lot more powder, if you will. Dave, >> what One little sign? I agree without John, I think you're absolutely right. The clean sheet of paper and deep pockets, you know, and the long game in the great tech. Uh, you have a son should be worried about Google. One little side note, it's still you. And I talked about this. Did you hear? Uh uh, Thomas asked Sanjay Putin about Dell, Dell Technologies, and Sunday is an executive. Dell was talking about the whole Del Technologies portfolio. I thought it was a very interesting nuance that we had previously seen from VM wear when they were owned by himself. >> Dave, you know, we see Delon Veum where are almost the same company these days that they're working together? But John, as you said, I actually like that. You know, we didn't have some big announcement today on an acquisition. Thomas Kurian says. He's got a big pocket book. He's going to be inquisitive, and it'LL be interesting to see, do they? By some company that has a big enterprise sales force. It can't just be old legacy sales trying to go into the cloud market. That won't work, but absolutely the lot of opportunities for them to go out. They didn't get get, huh? They didn't get red hat. So who will? Google Page? You >> guys are right on man. Sales Force is still a big question mark, And how can they hire that fast? That's a >> And again, he's only been on the job for ten weeks. I think is going to get his sea legs. I think it's him. He's going to come in. He's gonna ingratiating with culture. It'Ll be a quick decision. I think Google culture will accept or reject Thomas Curry and based upon his first year in operations, he's going to get into the team, and I think the Wall Street Journal kind of comment on that. Will he bring that Oracle? I thought that was kind of not a fair assessment, but I think he's got the engineering chops toe hang with Google. He kind of gets the enterprise mark one hundred percent been there, done that. So I think he's got a good shot. I think you could make the right moves. Of course we're here making the moves on the Cube here live for day, one of three days of wall to wall coverage. I'm sorry, David. Lock These two minute men here in Google, next in Mosconi in San Francisco Live will be back with more coverage after this short break.

>> Live from Las Vegas it's theCUBE, covering the AWS Accenture Executive Summit, brought to you by Accenture. >> Welcome back everyone to theCUBE's live coverage of the AWS Executive Summit here at the Venetian in Las Vegas. I'm your host, Rebecca Knight. We have three guests for this segment, we have Merim Becirovic he is the Managing Director of Accenture's Global Cloud Initiative. Matt Lancaster, Associate Director of Technology, Architecture, Science, and Miha Kralj, Managing Director of Cloud Strategy at Accenture, thank you so much for coming on the show. >> Pleasure. >> Thank you. >> Thank you for returning, I should say, Miha, you're a veteran. We're talking today about event-driven architecture. Before we get into the nuts and bolts of it, I need a definition, so what is event-driven architecture? >> Sure, so event-driven architecture, I think the simplest way to think about it is when we're doing complex series of transactions it's actually breaking it down into its constituent pieces and treating all of the segments of a transaction as separate events that can be reacted to as they happen. So if you're shopping and you're putting something in the cart, that's an event. If you're going to the next page, that's another event, if you're checking out, that's another event, right? And as opposed to treating those all as one step follows the other, right, a lot of times there are sequences and things that can happen in between there. If there's a next best offer or a product marketing interstitial that needs to be put in those things can be reacted to and composed much more simply than actually writing all the logic to put them in a big sequence. >> So on a high level I would say it's an architectural style, right, it's a style of putting systems together, which is an evolution of the most common styles that we used so far, and we went through several evolutions, about every decade we get a new and better architectural style, so a reactive event-driven style is just the one that is currently shaping to be the one that is going to replace the older architectural style called microservices. >> So why would an organization implement this event-driven architecture what kind of business challenges would the organization be looking to solve? >> Well if you want I'll start there, I mean just think so, you have a world where today I believe we're in the slowest time we're ever going to be from a technology perspective. >> Which is mind boggling. >> And what we saw this morning, right gentlemen, the amount of innovation that everyone is doing including AWS is going to be mind-numbing, so the question is going to be, how can we and what tools can we use to help us adapt for those capabilities in the future? So I think that's really one of the things is, Matt'll say I think it's easier than ever now, it was harder before but it's getting easier as the providers and everyone else is making their services more readily available for consumption. >> I think in a lot of ways as an industry, we're almost forced to move to this paradigm, whether we like it or not because I think everyone understands that every company has now become a software company once again, whether they like it or not and that means major changes to the organization model, the way people deliver. We need to be much more product-focused, and teams need to own their product and things like that, right, which is becoming the common business model that successful companies are operating around. If the architecture is still a traditional command and control architecture, two years later they're going to be back to that old work style, and frankly the market is going to punish them out of existence. So we need something where all of these wonderful, complex components that we saw in the sessions today can be decomposed into one team doing one thing with one set of components and they don't necessarily need to be aware of what all the other teams are doing because they just need to react to one another's events when they're interested in them. >> So the system, business systems always grow to the largest possible extent of what is still manageable and controllable, and using traditional architectures on top of this modern technology that allows us now to make way more complex systems, we already having clients that we see that the governance control and transparency is at its limit. So if we want to go beyond that barrier of complexity and not fear that suddenly systems will become chaotic, we need a new architectural style and we see already those limits happening, and that's why we already have an answer, we have an answer that is after microservice architecture which is reactive event-driven. >> Would you say that moving to this kind of architecture is difficult? >> It's a great question and I think it's gotten a bit easier. There's definitely some magic to actually taking a step back and decomposing the business systems and saying this component or this piece of the transaction or this piece of the organization fundamentally does this, these business events are what they really need to focus on and then make the components, functions, and systems actually emit and perform the business logic of those events and do more demand-driven design, then get into picking and choosing which, whether it's serverless functions or micro-nano-service some Kubernetes, the components allow us to cleanly separate and stream out events and react to each other but if we don't do that initial stuff on the business side, then it becomes really difficult to know who gets value where. >> I think the art of the possible in this space is very much anything can happen, and I think about things like we run a lot of our Cloud footprint, we're already 93% of the public Cloud for Accenture's IT, and I think about how we consume those things, what can we optimize, how can we do things differently, even on the concept of running infrastructure, if I have better event-driven capabilities, I can react more efficiently, I can really make a consumable service more utility service than I've ever had before, so I think that's one of the draws for me. >> When you say difficult, here is if developers that are writing code today and they already went through a couple of waves of reinventing themselves, if they already know that they need to do that again, then it's not difficult. For the developers that feel that they arrived and they already can code for the Cloud and that's it it's a difficult reinvention when they realize that although yes, their existing knowledge of procedural programming of traditional way of coding systems in the Cloud, they need to throw lots of that knowledge away and relearn how the systems are properly composed so they use Cloud the way that Cloud was intended to be used. >> And just to add to that a little bit, there's a lot of folks that will take a very traditional imperative programming paradigm and try to jam it into things like AWS Lambda and Kinesis streaming and what they end up with the end is sort of a tortured circus freak of an architecture. It doesn't help anyone and ultimately people spend six months and then get super discouraged on doing this stuff when they could have taken a step back and done it right the first time which I think is why it's important to understand that's only a few code composable components, the more layers you put in, the more complexity you're adding, the more you horizontally grow the better off you are. And if you're streaming events, you have functions that react to those events, microservices that react to those events and then gateways that can actually stream those out to interfaces, that's all you need. We don't need to overcomplicate this like we have every other generation of architecture. >> I'm trying to picture that tortured circus freak of an architecture, it's ugh, in terms of Accenture's own experience in this area I know that your company is already leveraging event-driven architecture. Can you tell our viewers a little bit more about your own experience? >> So let's start with our clients first. We serve a very broad spectrum of clients. And luckily not everybody is at the forefront and also not everybody is at the tail-end, right. We have lots of clients in the high tech industry in communications and media where the needs for the leading edge is very clear, and we are focusing particularly when it comes to that latest innovation, event-driven included, particularly on those industries. We kind of belong in the front part of there, and that's why Merim and his organization is extremely versed in those modern styles. >> I think just to add to that a little bit, since I play in a slightly different space than you most of the time, I work with a lot of banks, insurance companies, capital markets, and the adoption that I see in those industries of this stuff is massive. The problem with most banks is that they've tried to change core banking systems now two or three times, they're still sitting on mainframe stuff that they built in the 70's and 80's and most of what they with payments and with different financial services and stuff they can't actually add that stuff to the speed and convenience that their customers are determining and so there's a lot of fintech startups that are disrupting that market. And if they don't change those core systems and they don't become more event-driven and we don't decouple, decompose and then eventually rebuild we're going to find folks really fall behind in the marketplace, and I think they realize that. The real magic of this is that we can, it's not a big bang three year transformation anymore, right we can build the core and then realize value within the first six months and then continually iterate and evolve and hollow out those legacy systems and eventually turn them off which is very opposed to the old way of saying we're going to do this three to five year transformation, after five years, you probably maybe kind of will realize some technology value. And to Merim's point earlier, no CEO is going to go in front of his board or her board and pitch a five year transformation, that's a really good way to get fired. >> Yeah even in our own internal environments one of the things we always think about is what are we trying first, what are we failing fast at, 'cause that's one of the key things for us and all of these capabilities and the other thing, what's happening with this space, Cloud, microservices, event-driven architectures, everything is enabling this powerful change of making for the first time I would say in a long time the network engineer, the app architect, the technical architect, the infrastructure engineer, every one of them working together to start to think about this, all of these things are happening in my environment, these events are happening, what should I do differently? How does this help me automate my capabilities? How do I react to things differently? How do I make sure that I'm catching my infrastructure before it fails, my application before it fails, there's many many levers that you could use in this space, and we're frankly trying all of them because I think the goal to me that helps is I want an automated IT experience that has less people managing it but more people reacting to the events and we're creating the world where this event-driven architecture you could say eventually is going to evolve into all this AI stuff, we're going to be the managers of AI in the future. The AI's going to run our infrastructure and I think that's the most fun part part about this. >> I think two additional points to that, I think it was very well said, one of the things the really excites me about this space is that it becomes very understand... The technology piece, the software piece becomes very understandable to the folks who understand the business side and the marketing side, et cetera. If what you're doing is just sending out events which are a piece of business functionality or marketing functionality or whatever it becomes explicable in plain English, you're reacting to one another's simple business events, and then all of those composed together can create the same value chain that before had to take six months and only a math PhD could understand. (laughing) >> It's approachable to much broader businesspeople, not just to arcane, unique eyes. >> Yeah and to the AI point I think one of the most disappointing things to me in our industry is that most of the AI projects have boiled down to a shitty chat bot that nobody actually likes to interact with. >> I know and this is the part we're missing, right. >> Because they can't actually do anything, when you finally get to a person they have none of the same knowledge, so if we democratize that information, it all gets streamed out to all interfaces all at once, and they can say okay, if you didn't get your room in time the system will go ahead and rectify that and it creates a great customer service experience instead of an IVR in text, which nobody likes. >> And I like the point, I think you hit on the point that's very near and dear for me is, as IT practitioners we've dealt a long time with the siloed ownership of data, this democratization of data is a very powerful tool I think that helps gets enabled by some of this event-driven capability because so many times people feel that oh, I own the data, I can't share this with you or I need to understand what you're doing with it, expose your data, give your teams a chance, give them the events, let them react because you don't know what you're going to create coming from it. >> Set your data free, we heard that this morning from Andy Jassy. >> There's very relatable examples of this, right, I mean how many of us have gotten off a flight, the gate has changed, it shows that on your mobile app, you walk up to the gate agent, you're in an unfamiliar airport, where do I go? And they say oh your gate hasn't changed, it's not updated on my screen. You go to the board in the airport, oh it's not updated here either, right. Then you go to the original gate, they say what are you doing here, you have five minutes to get over to the new gate, right? And then you book it all the way over there, you look at the defibrillators on the wall, you're thinking I'm really glad those are here. You get to the gate and they haven't even started boarding yet and you finally get the late boarding announcement, right? It's three bad customer services experience in one, and if all that data goes to all those interfaces all at once you have none of those bad experiences. >> Well if event-driven architecture can solve that problem, I'm all for it. >> You're in? >> Merim, Matt and Miha thank you so much for coming on theCUBE. >> Thanks for having us. - Absolutely, pleasure. >> I'm Rebecca Knight, we will stay tuned for more of theCUBE's live coverage of the AWS Executive Summit coming up in just a little bit. (digital music)

>> Live from Las Vegas. It's theCUBE. Covering VMworld 2018. Brought to you by VMware and its ecosystem partners. >> Welcome to theCUBE. We are live at VMworld 2018. Day one, VMware's 20th anniversary. I am Lisa Martin, very excited to be joined by Dave Vellante. Hey, Dave! >> Hey, Lisa, good to see you again. >> Good to see you, too. We are welcoming back to theCUBE, an alumni, Geoff Waters, the VP of Global Cloud Sales for Vmware, hi, Geoff. >> Hi, great to be here, guys. Last year, we talked about the buzz, VMware getting the buzz back. Boy, this is a sonic boom this year. >> Yeah, it's a lot of buzz. >> Superpower infused. And we've also got David Wigglesworth, the Chief Revenue Officer for OVH. David, welcome to theCUBE. >> Thank you very much, both of you, Dave and Lisa. >> So, I have to ask first, do you have the VMware tattoo that Pat Gelsinger sported this morning? >> I don't have VMware, but I do have OVHcloud. Okay, so, speaking of OVH, David give our viewers an overview of what you guys are doing and what momentum you have created with VMware. >> Yeah, you know, it's an exciting time for us, especially to be here, as a Global Diamond sponsor, right? This is our second year, as OVHcloud, to be here. Last year, when we came, it was right after the vCloud Air acquisition of the asset from Vmware. Which is where our partnership just continued to grow more and more. And, so, for the last year, what we've been doing is we've really been focusing on deploying our data centers here, as well as getting our products ready to go to market. I always joke that OVHcloud is, probably, the best-kept secret in the US because that, when we acquired vCloud Air's assets, is when we kind of launched in the US. But, as Geoff can tell you in a few minutes, we've been a partner with VMware for years, right? And it's been really exciting. >> Yeah, I wonder if you could talk about that, Geoff, a little bit, I mean, the signal on vCloud Air early on, you guys kept having to tune the radio station, so to speak. >> Yep. >> Yep. >> And then, boom, finally it hit the OVH acquisition and then AWS deal, of course, IBM and other cloud service providers. Talk about how that all came about, and the track that you're on now. >> Yes, so, I mean, we've been partnering with OVH for actually nine years, I went back and I researched it. >> Did you? >> Yeah, back in Europe. So, they've actually been a seven-time Service Provider of the Year award winner. So, our relationship with OVH is nothing new. And we've been working with them for years. The other thing is the breadth of the portfolio adoption, the full SDDC stack, so not just vSphere, NSX, vSAN, the entire stack. So, you know, OVH is right in the forefront of our overall cloud strategy, and it has been for years. >> Yeah, and as a global infrastructure provider, we have almost a million 500 thousand customers, in 138 different countries. We have 28 data centers, three here in North America. We've got the breadth to go to the market in a big way. So, it's exciting to be here. >> So, lay out the options that you have for OVH customers. What services can they get from you? What are the platforms? >> No, it's a great question. So, obviously, have a very purpose-felt solution built on VMware, right, with our Hybrid Private Cloud. It's all built on the SDDC stack. So vSphere, vSAN, NSX, everything that Geoff mentioned. We also offer a bare metal solution. And then we also have a public cloud offering that's built on our relationship that we have with OpenStack. So, we give our customers three different choices on what they want to go to the market with. >> So, what do you make of, what's the AWS-VMware partnership mean for OVH? How do you guys take advantage of that? >> Well, I mean, you know, look. I think Pat, in his keynote this morning, talked about that eight out of every 10 customers is using cloud today, multi-cloud strategy. The average large customer is using, what did he say, eight clouds? >> Yep. >> He said that they're forecasting that there would be 10 clouds by the end of 2019. I'd like to take one of those two spots, if you don't mind. So, no, we think there's huge opportunity. I mean, Amazon's built a business on, and has created kind of the standard. We think there's plenty of room to play in a very large market. >> Well, the services market has always been highly fragmented. >> Yep. >> And it's always been local in nature. Maybe not as to the degree and scale, but, so, you've got, what did you say, a million and a half customers? >> Globally. >> So what are they telling you about their cloud strategy? >> Well, what our customers are asking for is they're asking for agility. They're looking for low cost. You know, we announced a partner program earlier this morning, where we're launching that. And our partners are coming to us saying, David, give us choice, give us flexibility, and help us save a little bit of money. I mean, all of our partners are dealing with margin erosion, as well as everybody else in the industry. So, if we can come to market and actually help them go acquire a customer, and help them do that in a way that's cost-effective, they're very excited about that. >> So, what's the conversation that you're having with customers? You know, we were, a lot of press, a lot of news came out this morning. A lot of great announcements made by Pat and team on stage. Customers talking about migrating from on-prem to the cloud, from public back to on-premises, for security compliance reasons. What are some of the things that you guys are hearing from customers, when you're having those business-level discussions about being able to execute a successful cloud strategy? >> You want to hit that first, and I'll come over. >> Go ahead. Well, I can. So, what our customers are talking about is simplicity. One of the things that we're excited to work about, to work with VMware on, is that our customers, when they move their solution on-prem to our hybrid cloud, they use the exact same resources that they use on-prem today. They don't have to go hire new people. It's all of the exact same economics that they've built to an on-prem solution, is in their off-prem solution with OVHcloud. That's what makes this so unique, right? I mean, look, part of the vCloud Air acquisition, what are we doing? We're migrating VMware customers, right, that are using VMware technology, that we're setting on vCloud Air into OVH data centers, using VMware technology to do it. And, so, it's. >> Just to add to that, the beauty is reducing day two complexity onto the operations, day two operations. So, instead of customers having to build out all themselves and integrating it, OVH is doing that already. Right out of the gate, in a hosted managed environment. >> That's because it is a like to like homogeneous, and you guys have laid that vision out years ago. >> Yep, yep. >> We sure did. >> When Maritz was running the company. But how does that actually manifest itself? So, a customer says, look, I'm sick of the heavy lifting, I want to get to the cloud. Alright, so they come to you guys, what are the steps that they take to get there? >> Well, there's, you know, the first thing you'll do is you'll sit down with the client. And some clients know exactly what they want to do and how they want to do it. And some customers say, hey, I think I need to be in the cloud, please help me. So we'll have that conversation, right, first of all. Yeah, exactly, it's from A to Z, soup to nuts, whatever you want to say. So, you know, a lot times we'll sit down and we'll walk them through that journey to the cloud. And then, once we determine what applications or workloads we want to move, then we'll back into, okay, well here's the best way to move that, right, and whatever technologies we then decide to do. And if it's vSphere based, it makes it real simple, right? >> And you hit the nail on the head. It starts with the application. It's always about the application. What is the end goal? Right, once you identify that, you start looking at the use cases, a lot of it's app migration, a lot of data center evacuation. A lot of these data centers, as the different leases are coming up, they want to get out of there. Right, and that's the opportunity to then have the discussion. There's also tools that we got. HDX, which allows for bulk migration of workloads and it reduces, you know, the complexity of going to another cloud and another hypervisor from, like, years down to months and weeks. We've had some customers that have done that, migrated hundreds of VMs over a weekend. >> Oh sure. And we're in the process of that right now. >> So, go ahead, please. >> Oh, thank you, I was going to say, could you give us an example of a customer, whether they're in Europe, where you guys have really had a lot success, or here in the Americas, that have really demonstrated substantial business outcomes, revenue, et cetera, leveraging the joint service? >> Well, sure, I mean, you know, we've got customers both in the U.S. and in EMEA, but, you know, I'm thinking about a customer in particular that's based in the U.K.. That, they're a MNA company, right? And, at one time, they had 97 data centers that they were trying to manage. The complexity of that. And, so, they originally went to vCloud Air because they were like, help us with this complexity, we're built on VMware, but we've got to close these data centers, right, we need to go to more of an asset-like model, and we need to be able to manage it effectively with the staff that I have that's already overworked. So that's how we won them as a client with vCloud Air. What's exciting is, is when we come in and we start talking about what we're doing with OVH, and some of the new technology that we're building, on the VMware stack, right, plus the fact that we own our own network. I don't charge ingress and egress charges, right. A lot of the things that we do, We've got 33 points of presence, you know, globally. Then we start having a conversation and they're like, listen I already had a great solution in vCloud Air on VMware, now I've got that on steroids. I've got the benefit of both companies coming together for a solution for my client. >> So how do you get the data from point A to point B? Do you back up the Chevy truck and load it on? >> You can do it that way. >> You talked about your network. What's the kind of best practice? >> Yeah, so the best practice is to come in and understand the actual environment we're working with. What is the tolerance to take that workload up or down? But, if we use technology like HDX, I don't have to take that workload down at all. I'm able to basically, essentially, and don't let me get over my skis, VMware guy, but I am going to essentially do a Vmotion over my network, right, no cost to the customer, into my data center, and the customer can continue to use the app while that's happening. >> And the time that takes is a function of, obviously, the volume of the data, >> Sure, of course. The bandwidth. >> The number of VMs, the complexity of that. >> So you'll schedule that out over a period of, what, days, weeks, months? >> Exactly Years, even, I mean, maybe not years but, maybe I have a multi-year strategy, right? So that's how you're seeing people do it? It's sort of a planned approach. >> Weeks and months is sort of. >> I would say, typically. >> It's project based, yeah. >> So, within months, I can get an entire data center from my on-premises into your platform. Is that a fair statement? >> And if you ever wanted to bring it back, we can do that real easy too. >> You see that happening? >> We see customers moving workloads back and forth, it depends on seasonality. I mean, you take the retail industry, right? There's a lot of times where, during the retail industry, they'll send things to us, they'll flip it around, and, after the holidays are over, they'll bring there on-prem or what have you. >> And, more importantly, I think having network access back into the on-prem data center, with HDX, allows you to have a network connection. So it does need a talk back. The whole workload may not move back, but you need to have communications back into the network. And that's what HDX, their technology, allows. >> Right. >> So it allows me to leave whatever component of my workload I want to keep there. >> Yep, that's right. >> When I'm talking to each other. >> That's right. >> Okay, so for years at VMware, we heard this theme, any app, any workload, really anywhere in the world. >> Exactly. >> Now, you guys, right, you guys have an open source based public cloud. Vmware, obviously, like, hey, some of these cloud native apps, we'd like a piece of that action. You hear Pat talking about Kubernetes and containers. So what's that conversation like, between you guys, I mean you want some of that, right? Are you talking about Edge? Is that more integration? You guys got some work to do there to really compete in the that space? >> Well, I mean, it's your solution. But I'll start off of on the Edge. So, the announcement on Edge today, I don't know if you guys have heard it yet, but really exciting. We've actually announced a lot of different solutions around automation of the data center. I mean, this whole cloud operations is becoming sort of a major problem, as we have eight to 10 global service providers in most enterprises. So, reducing the complexity of that down is incredibly important. All the pieces that we're announcing, a VMware as a service, we're going to roll to our service providers in a managed service environment. So all these new technologies that we just announced, right, David and OVH are going to get access to that and have the same capability. >> That's right. >> I'll let you guys speak, specifically on your OpenStack. >> Well, I mean, listen, the beautiful thing about OpenStack is it's open, right, so, I mean, it doesn't really matter what cloud's out there, we can interface with it, right? So, that's the beauty of it, right? And it doesn't change at all the way that we go to market. It's just, really, we're giving the customers choice. What do you want? And it depends on the app, right? That's what's beautiful about it, is when we've sit down and meet with customers or partners, it's, like, what do you want to do, what workload would you want to move? And we've got choice for you. >> Yeah, I remember when we talked to Pat about this, years ago, when OpenStack was kind of the hot new toy, and he said, OpenStack, we like OpenStack, that's cool, we'll embrace it, no problem, and we're like, really? Yeah, I mean, that's kind of exactly what's happened. I mean, you're seeing the same thing with Kubernetes, and containers, and the like. But, again, you guys still got some work to do to really earn their business for those types of workloads, and I presume you're hard at work. >> We are. I don't know if you wanted to hit on some of the announcements that you. >> Yeah, I'd love to. >> Yeah, let's do that. >> So, the real thing I'm excited about is this morning we announced the announcement of our partner program at OVHcloud. It's an exciting day for us on that because, if you'll remember a few minutes ago, I was talking about all of the things we've been doing for the last year, right, getting our data centers ready, and, also, building out our product stack to be able to go to market, and migrating our customers. Well, the fourth thing we were doing, for the last nine to 12 months, is we've been meeting with partners. And I'm fortunate, from my years at EMC-Vmware, and my team, we have a lot of relationships out there. And so we were able to go meet with these partners and say, listen, here's what we're thinking, what do you guys think, what are you looking for, right? We've got all these big players out there, obviously we know all the names, but what differentiation could we bring to your business to help you go grow revenue? And, you know, they came back to us and they said, Wiggs, what we really want to be able to do is we want to be able to come in slowly, expand that as much as we can, make big commitments, make small commitments, we want the ability to be agile, we want to be able to, help us figure out a way that we can save money and worry about that. Help us resolve that issue of that margin erosion. That's a big thing that a lot of the channel's dealing with today. And, so, that's what we did. We came up with a program of four different levels, right? You can dip your toe in, and with a very minimum commitment, the higher commitment you make, not only do you get a better price, but you also get a ton of support on the backend. So, I actually come in and work with you on your messaging. I have sales teams that can actually go out and help them sell the solution, with us as the infrastructure layer in the underpinning, right, and, so far, it's been really good. >> So these are, don't hate me for saying this, these are sort of traditional box sellers, now trying to transform their business, right, and add more value, or their value added supply. Maybe they're SAP. >> Well, you've got manage service providers. You've got manage service providers. >> Okay, so hosting. >> You've got the SI's and the OS's, right? So, you know, some of these guys they either want a private label, right? Or white label your solution? Some guys just want to go to mark up their solution and they just need an asset like model, right? They're just exhausted with, you know, investing in infrastructure, right? So, they're like, "Listen >> And bodies. >> And body, you take that over and let us worry about that. >> You see, from VMware's perspective, that's exactly what we're seeing. We've got an ecosystem of 42 hundred global service providers. They build their own data centers, have a VMwares based hosted solution of some type. A lot of different flavors. They want to get out of the hardware space and out of the data center management space. This is why it's a great solution for OVH, they want to focus on, and, again, we call this asset light, they want to focus on high margin trusted value. Things that they're good at, where they can make a lot of money. >> Which is what? Like, I always see there's a consulting piece up front, security. >> It could be security specialist. >> Yep, security security services. >> Patching monitor, you know, automation, migration services, I mean, the exact discussion we just talked about, right? Customers need that journey. So OVH abstracts a way, the need to do hardware, and that allows them to go focus on the rich or higher margin services that they offer. >> And how are they making it sticky? Because, obviously, they want that, right? So what do you see there and how are you helping them? >> I think anytime you're adding a value added service, if you add that value it is sticky, right? >> Yeah. >> I mean, for an example, to help our relationship with Vmware, and just how strong it is, you know, FusionStormers was one of the partners that we had announced today, right? And they had a quote in there. And I was just sitting in Pat's keynote, next to our customer. You know, and I'm like, so, you know, I get this, it makes sense, you're looking for this, you know, infrastructure as a service play. He's like, David, what we're trying to do is help our customers that love the VMware stack, we're trying to help them to get to the Cloud, right? They don't care about the infrastructure, all they want is great service, right, and great support. And he said, that's my secret sauce, that I am able to offer that. And he goes, you guys handle the infrastructure. He said, it's perfect. >> Last question, David, for you. What are people going to be able to see and feel and touch at the OVH booth here at VMWorld? >> Oh, that's a great question. So, you're going to be able to go over, and you're going to be able to learn about some of our other announcements, with VMwares. Specifically, around what we're doing on the whole SCDC as a stack, right? In the VMware Cloud foundation, and the announcement we had on that this morning. Or, actually, I think that was Friday. You're actually going to be able to go over and they'll pull up and they'll show you some demos, and be able to see the technology live. I think they have a show every hour, and you go over there. And if you go over, you might win a Yeti mug. I think they're giving a Yeti mug to whoever pays the most attention. (Lisa and Dave ooh) So, go over there and learn about that. >> Can always use another Yeti, yeah, I love the Yeti. >> Yeah >> You can't have too many Yeti's. >> Does it come with caffeine? Because that, I'm all over it. >> No, well, we'll leave it clean, yes, maybe caffeine. >> Okay, awesome. David, Geoff, thanks so much for joining Dave and me this morning. >> Thank you so much, we really enjoyed it. >> You're watching theCUBE, live from VMWorld 2018. Day one, Lisa Martin for Dave Vellante, stick around, we'll be right back. (electronic music)

>> Live, from Toronto Canada, it's the CUBE! Covering Blockchain Futurist Conference 2018. Brought to you by the CUBE. >> Hello everyone and welcome back. This is the CUBE's exclusive coverage here in Toronto for the Blockchain Futurist Conference, we're here all week. Yesterday we were at the Global Cloud and Blockchain Summit put on by DigitalBits and the community, here is the big show around thought leadership around the future of blockchain and where it's going. Certainly token economics is the hottest thing with blockchain, although the markets are down the market is not down when it comes to building things. I'm John Furrier with Dave Vellante, here with CUBE alumni and special guest Hartej Sawhney who is the founder of Hosho doing a lot of work on security space and they have a conference coming up that the CUBE will be broadcasting live at, HoshoCon this coming fall, it's in October I believe, welcome to the CUBE. >> Thank you so much for having me. >> Always great to see you man. >> What's the date of the event, real quick, what's the date on your event? >> It's October 9th to the 11th, Hard Rock Hotel & Casino, we rented out the entire property, we want everyone only to bump into the people that we're inviting and they're coming. And the focus is blockchain security. We attend over 130 conferences a year, and there's never enough conversation about blockchain security, so we figured, y'know, Defcon is still pure cybersecurity, Devcon from Ethereum is more for Ethereum developers only, and every other conference is more of a traditional blockchain conference with ICO pitch competitions. We figured we're not going to do that, and we're going to try to combine the worlds, a Defcon meets Devcon vibe, and have hackers welcome, have white hat hackers host a bug bounty, invite bright minds in the space like Max Keiser and Stacy Herbert, the founder of the Trezor wallet, RSA, y'know we've even invited everyone from our competitors to everyone in the media, to everyone that are leading the blockchain whole space. >> That's the way to run an event with community, congratulations. Mark your calendar we've got HoshoCon coming up in October. Hartej, I want to ask you, I know Dave wants to ask you your trip around the world kind of questions, but I want to get your take on something we're seeing emerging, and I know you've been talking about, I want to get your thoughts and reaction and vision on: we're starting to see the world, the losers go out of the market, and certainly prices are down on the coins, and the coins are a lot of tokens out there, >> Too many damn tokens! (laughing) >> The losers are the only ones who borrowed money to buy bitcoin. >> (laughs) Someone shorted bitcoin. >> That's it. >> But there's now an emphasis on builders and there's always been an entrepreneurial market here, alpha entrepreneurs are coming into the space you're starting to see engineers really building great stuff, there's an emphasis on builders, not just the quick hit ponies. >> Yep. >> So your thoughts on that trend. >> It's during the down-market that you can really focus on building real businesses that solve problems, that have some sort of foresight into how they're going to make real money with a product that's built and tested, and maybe even enterprise grade. And I also think that the future of fundraising is going to be security tokens, and we don't really have a viable security exchange available yet, but giving away actual equity in your business through a security token is something very exciting for sophisticated investors to participate in this future tokenized economy. >> But you're talking about real equity, not just percentage of coin. >> Yeah, y'know, actual equity in the business, but in the form of a security token. I think that's the future of fundraising to some extent. >> Is that a dual sort of vector, two vectors there, one is the value of the token itself and the equity that you get, right? >> Correct, I mean you're basically getting equity in the company, securitized in token form, and then maybe a platform like Securitize or Polymath, the security exchanges that are coming out, will list them. And so I think during the down-markets, when prices are down, again I said before the joke but it's also the truth: the only people losing in this market are the ones who borrowed to buy bitcoin. The people who believe in the technology remain to ignore the price more or less. And if you're focused on building a company this is the time to focus on building a real business. A lot of times in an up-market you think you see a business opportunity just because of the amount of money surely available to be thrown at any project, you can ICO just about any idea and get a couple a million dollars to work on it, not as easy during a down-market so you're starting to take a step back, and ask yourself questions like how do we hit $20,000 of monthly recurring revenue? And that shouldn't be such a crazy thing to ask. When you go to Silicon Valley, unless you're two-time exited, or went to Stanford, or you were an early employee at Facebook, you're not getting your first million dollar check for 15 or 20 percent of your business, even, until you make 20, 25K monthly recurring revenue. I say this on stage at a lot of my keynotes, and I feel like some people glaze their eyes over like, "obviously I know that", the majority are running an ICO where they are nowhere close to making 20K monthly recurring and when you say what's your project they go, "well, our latest traction is that we've closed about "1.5 million in our private pre-sale." That's not traction, you don't have a product built. You raised money. >> And that's a dotcom bubble dynamic where the milestone of fundraising was the traction and that really had nothing to do with building a viable business. And the benefit of blockchain is to do things differently, but achieve the same outcome, either more efficient or faster, in a new way, whether it's starting a company or achieving success. >> Yep, but at the same time, blockchain technology is relatively immature for some products to go, at least for the Fortune 500 today, for them to take a blockchain product out of R&D to the mainstream isn't going to happen right now. Right now the Fortune 500 is investing into blockchain tech but it's in R&D, and they're quickly training their employees to understand what is a smart contract?, who is Nick Szabo?, when did he come up with this word smart contracts? I was just privy to seeing some training information for multiple Fortune 500 companies training their employees on what are smart contracts. Stuff that we read four or five years ago from Nick Szabo's essays is now hitting what I would consider the mainstream, which is mid-level talent, VP-level talent at Fortune 500 companies, who know that this is the next wave. And so when we're thinking about fundraising it's the companies who raise enough money are going to be able to survive the storm, right? In this down-market, if you raised enough money in your ICO, for this vision that you have that's going to be revolutionary, a lot of times I read an ICO's white paper and all I can think is well I hope this happens, because if it does that's crazy. But the question is, did they raise enough money to survive? So that's kind of another reason why people are raising more money than they need. Do people need $100 million to do the project? I don't know. >> It's an arm's race. >> But they need to last 10 years to make this vision come true. >> Hey, so, I want to ask you about your whirlwind tour. And I want to ask in the context of something we've talked about before. You've mentioned on the CUBE that Solidity, very complex, there's a lot of bugs and a lot of security flaws as a result in some of the code. A lot of the code. You're seeing people now try to develop tooling to open up blockchain development to Java programmers, for example, which probably exacerbates the problem. So, in that context, what are you seeing around the world, what are you seeing in terms of the awareness of that problem, and how are you helping solve it? >> So, starting with Fortune 500 companies, they have floors on floors around the world full of Java engineers. Full Stack Engineers who, of course, know Java, they know C#, and they're prepared to build in this language. And so this is why I think IBM's Hyperledger went in that direction. This is why even some people have taken the Ethereum virtual machine and tried to completely rebuild it and rewrite it into functional programming languages like Clojure and Scala. Just so it's more accessible and you can do more with the functional programming language. Very few lines of code are equivalent to hundreds of lines of code in linear languages, and in functional programming languages things are concurrent and linear and you're able to build large-scale enterprise-grade solutions with very small lines of code. So I'm personally excited, I think, about seeing different types of blockchains cater more towards Fortune 500 companies being able to take advantage, right off the bat, of rooms full of Java engineers. The turn to teaching of Solidity, it's been difficult, at least from the cybersecurity perspective we're not looking for someone who's a software engineer who can teach themselves Solidity really fast. We're looking for a cybersecurity, QA-minded, quality-assurance mindset, someone who has an OPSEC mindset to learn Solidity and then audit code with the cybersecurity mindset. And we've found that to be easier than an engineer who knows Java to learn Solidity. Education is hard, we have a global shortage of qualified engineers in this space. >> So cybersecurity is a good cross-over bridge to Solidity. Skills matters. >> If you're in cybersecurity and you're a full sec engineer you can learn just about any language like anyone else. >> The key is to start at the core. >> The key is to have a QA mindset, to have the mindset of actually doing quality assurance, on code and finding vulnerabilities. >> Not as an afterthought, but as a fundamental component of the development process. >> I could be a good engineer and make an app like Angry Birds, upload it, and even before uploading it I'll get it audited by some third party professional, and once it's uploaded I can fix the bugs as we go and release another version. Most smart contracts that have money behind them are written to be irreversible. So if they get hacked, money gets stolen. >> Yeah, that's real. >> And so the mindset is shifting because of this space. >> Alright, so on your tour, paint a picture, what did you see? >> First of all, how many cities, how long? Give us the stats. >> I just did about 80 days and I hit 10 countries. Most of it was between Europe and Asia. I'll start with saying that, right now, there's a race amongst smaller nations, like Malta, Bermuda, Belarus, Panama, the island nations, where they're racing to say that "we have clarity on regulation when it comes to "the blockchain cryptocurrency industries," and this is a big deal, I'd say, mainly for cryptocurrency exchanges, that are fleeing and navigating global regulation. Like in India, Unocoin's bank has been shutdown by the RBI. And they're going up against the RBI and the central government of India because, as an exchange, their banks have been shut down. And they're being forced to navigate waters and unique waves around the world globally. You have people like the world's biggest exchange, at least by volume today is Binance. Binance has relocated 100 people to the island of Malta. For a small island nation that's still technically a part of the European Union, they've made significant progress on bringing clarity on what is legal and what is not, eventually they're saying they want to have a crypto-bank, they want to help you go from IPO to ICO from the Maltese stock exchange. Similarly also Gibraltar, and there's a law firm out there, Hassans, which is like the best law firm in Gibraltar, and they have really led the way on helping the regulators in Gibraltar bring clarity. Both Gibraltar and Malta, what's similar between them is they've been home to online gambling companies. So a lot of online casinos have been in both of their markets. >> They understand. >> They've been very innovative, in many different ways. And so even conversations with the regulators in both Malta and Gibraltar, you can hear their maturity, they understand what a smart contract is. They understand how important it is to have a smart contract audited. They already understand that every exchange in their jurisdiction has to go through regular penetration testing. That if this exchange changes its code that the code opens it up to vulnerabilities, and is the exchange going through penetration testing? So the smaller nations are moving fast. >> But they're operationalizing it faster, and it's the opportunity for them is the upside. >> My only fear is that they're still small nations, and maybe not what they want to hear but it's the truth. Operating in larger nations like the United States, Canada, Germany, even Japan, Korea, we need to see clarity in much larger nations and I think that's something that's exciting that's going to happen possibly after we have the blueprint laid out by places like Malta and Gibraltar and Bermuda. >> And what's the Wild West look like, or Wild East if you will in Asia, a lot of activity, it's a free-for-all, but there's so much energy both on the money-making side and on the capital formation side and the entrepreneurial side. Lay that out, what's that look like? >> By far the most exciting thing in Asia was Korea, Seoul, out of all the Asian tiger countries today, in August 2018, Seoul, Korea has a lot of blockchain action going on right now. It feels like you're in the future, there's actually physical buildings that say Blockchain Academy, and Blockchain Building and Bitcoin Labs, you feel like you're in 2028! (laughs) And today it's 2018. You have a lot of syndication going on, some of it illegal, it's illegal if you give a guarantee to the investor you're going to see some sort of return, as a guarantee. It's not illegal if you're putting together accredited investors who are willing to do KYC and AML and be interested in investing a couple of hundred ETH in a project. So, I would say today a lot of ICOs are flocking to Korea to do a quick fundraising round because a lot of successful syndication is happening there. Second to Korea, I would say, is a battle between Singapore and Hong Kong. They're both very interesting, It's the one place where you can find people who speak English, but also all four of the languages of the tiger nations: Japanese, Mandarin, Cantonese, Korean, all in one place in Hong Kong and Singapore. But Singapore, you still can't get a bank account as an ICO. So they're bringing clarity on regulation and saying you can come here and you can get a lawyer and you can incorporate, but an ICO still has trouble getting a bank account. Hong Kong is simply closer in proximity to China, and China has a lot of ICOs that cannot raise money from Chinese citizens. So they can raise from anybody that's not Chinese, and they don't even have a white paper, a website, or even anybody in-house that can speak English. So they're lacking English materials, English websites, and people in their company that can communicate with the rest of the world in other languages other than Mandarin or Cantonese. And that's a problem that can be solved and bridges need to be built. People are looking in China for people to build that bridge, there's a lot of action going on in Hong Kong for that reason since even though technically it's a part of China it's still not a part of China, it's a tricky gray line. >> Right, in Japan a lot going on but it's still, it's Japan, it's kind of insulated. >> The Japanese government hasn't provided clarity on regulation yet. Just like in India we're waiting for September 11th for some clarity on regulation, same way in Japan, I don't know the exact date but we don't have enough clarity on regulation. I'm seeing good projects pop up in Korea, we're even doing some audits for some projects out of Japan, but we see them at other conferences outside of Japan as well. Coming up in Singapore is consensus, I'm hoping that Singapore will turn into a better place for quality conferences, but I'm not seeing a lot of quality action out of Singapore itself. Y'know, who's based in Singapore? Lots of family funds, lots of new exchanges, lots of big crypto advisory funds have offices there, but core ICOs, there was still a higher number of them in Korea, even in Japan, even. I'm not sure about the comparison between Japan and Singapore, but there is definitely a lot more in Korea. >> What about Switzerland, do you have any visibility there? Did you visit Switzerland? >> I was Zug, I was in Crypto Valley, visited Crypto Valley labs... >> What feels best for you? >> I don't know, Mother Earth! (laughs) >> All of the above. >> The point of bitcoin is for us to start being able to treat this earth as one, and as you navigate through the crypto circuit one thing as that is becoming more visible is the power of China partnering up with the Middle East and building a One Belt, One Road initiative. I feel like One Belt, One Road ties right into the future of crypto, and it's opening up the power of markets like the Philippines, Thailand, Malaysia, Singapore. >> What Gabriel's doing in the Caribbean with Barbados. >> Gabriel from Bit, yeah. >> Yeah, Bit, he's bringing them all together. >> Yeah, I mean the island nations are open arms to companies, and I think they will attract a lot of American companies for sure. >> So you're seeing certainly more, in some pockets, more advanced regulatory climates, outside of the United States, and the talent pool is substantial. >> So then, when it comes to talent pools, I believe it was in global commits for the language of Python, China is just on the verge of surpassing the United States, and there's a lot of just global breakthroughs happening, there's a large number of Full Stack engineers at a very high level in countries like China, India, Ukraine. These are three countries that I think are outliers in that a Full Stack Engineer, at the highest level in a country like India or Ukraine for example, would cost a company between $2,000 to $5,000 a month, to employ full time, in a country where they likely won't take stock to work for your company. >> Fifteen years ago those countries were outsource, "hey, outsource some cheap labor," no, now they're product teams or engineers, they're really building value. >> They're building their own things, in-house. >> And the power of new markets are opening up as you said, this is huge, huge. OK, Hartej, thanks so much for coming on, I know you got to go, you got your event October 9th to 11th in Las Vegas, Blockchain Security Conference. >> The CUBE will be there. >> I look forward to having you there. >> You guys are the leader in Blockchain security, congratulations, hosho.io, check it out. Hosho.io, October 9th, mark your calendars. The CUBE, we are live here in Toronto, for the Blockchain Futurist Conference, with our good friend, CUBE alumni Hartej. I'm John Furrier, Dave Vellante, be right back with more live coverage from the Untraceable event here in Toronto, after this short break.

>> Live from Toronto, Canada, it's theCUBE, covering Global Cloud and Blockchain Summit 2018. Brought to you by theCUBE. >> Hello everyone, welcome to the live coverage here in Toronto for the Global Cloud and Blockchain Summit here put on as prior to the big event this week called the Futurist Conference. TheCUBE will be here all week with live coverage. I'm John Furrier with Dave Vellante as we expand our coverage with theCUBE into the blockchain and crypto token economics world. We're here on the ground. We're covering the best events. We started in 2018 initiating CUBE coverage on the sector. Of course we've been covering Bitcoin and blockchain going back to 2011 on SiliconANGLE.com. Dave, we're here to kick off what is the first inaugural event of its kind, combining cloud computing coverage with blockchain, and as we had on our fireside chat last night, we discussed this in detail. Cloud computing and blockchain, either going to be a collision course or it's going to be a nice integration. And we discussed that. This is what this show is all about, is it's really about connecting the dots to the future. The role that cloud computing will play with blockchain and token economics, a variety of different perspectives, but again, this is the first time we in the industry are starting to unpack the mega-trend of cloud computing, which we know is like a freight train powering and disrupting, and we cover it in detail. But blockchain is certainly transforming and reimagining business and process coming together. >> Well, we're here in Toronto, which of course is the birthplace of Ethereum, and it's interesting to see how Toronto has attracted so many developers in the software and engineering space, and there's a huge crypto community here. I'll give you my take on the cloud and blockchain. I don't see them on a collision course. I see blockchain, and we've talked about this, and crypto as a part of this other layer that's emerging. You had the internet, you had the web. On top of that you had cloud, mobile, social, big data, and it was essentially a cloud of remote services. What we're seeing now is this ubiquitous set of digital services of which blockchain is one. And to me it's all about automation, machine intelligence, blockchain being able to do things without middle man. You made that point last night on the fireside chat. And I think it's complementary. You need cloud for scale. Everything's digital, which means data. And you need machine intelligence for automation. And that is the new era that we're entering, and blockchain is playing a big part of that because of its inherent encryption, its immutability, and its ability to show proof of work. So it's a key component of a number of different digital services that are going to transform virtually every industry. >> Certainly, then, that's a tailwind for the industry, and certainly we see that. All the alpha entrepreneurs, alpha geeks, and a lot of the business pros see blockchain and token economics as a dynamic that will certainly change things. Today in Toronto this week, certainly not a good week for pricing of currencies. The crypto market is down, Ethereum and Ripple are at yearly lows. And communities are kind of getting scared. We talked with Matt Roszak, an early investor and founder of BloQ, last night about the price declines, and he said, "I've seen this pattern before. "These price selloffs also kick off "the next wave of growth." So there's a kind of a weeding out, was his perspective. But you can't deny that over the past 24 hours, 30 billion has been erased from the crypto market caps, and the greatest decline is happening under Bitcoin's dominance, and still increased over, still 56% over the year. So Bitcoin seems to be holding more value than, say, Ethereum. Ethereum and Ripple really under a lot of pressure. So the insiders, some are scared, some are like, hey, we've seen this movie before. Waves are a little bit rough right now, but they're in for the long game. So this is a long game going on and then there's also money being lost. >> Well, Matt was saying bet the farm now. He said he's seen this before. Take everything, the mortgage, the house. I'm not sure I would advise doing that, but this is the time, buy low. So just for the numbers, Bitcoin's high last November/December was 19,000, it's down at 6,000 now. So as you say, it's still up almost 50% for the year, but if you compress that timeframe to nine months, it's down 60%, so very, very volatile. Ethereum, on the other hand, last September was trading at around 240, 250, and today it's in the 260s. So back to where it was last September. The curve on Ethereum sort of looks like it did end of last summer, whereas Bitcoin is still almost 70% up from where it was last September. So quite a bit of difference between the two cryptocurrencies. And you mentioned Ripple, IOTA, many of the cryptocurrencies-- >> Ripple's dropping 90% from its 2018 highs. 90%. (both laugh) Some money was made and lost on that one, so again, we always say when the music stops you better be sitting in a chair. Otherwise this is bubble behavior, but you know Matt and others and the insiders are saying they're still bullish because of the pattern. Even though it's a selloff, it's a weeding out process and they see still good deals going on. And again, this is going to come fundamentally down to whose technology's going to be adopted, what kind of application can be written on blockchain, which is seeing some promise in the enterprise. Just yesterday Microsoft announced a blockchain as a service kind of thing with proof of authority and new concepts. IBM, we've been covering IBM with blockchain, their work with the Hyperledger standards. You've got the enterprises. Amazon has kind of telegraphed, they actually put a professional service note out where they are doing some blockchain. The big clouds are getting into the game, so the question is, will the clouds suck all the oxygen out of the blockchain room, and will there be room for other blockchains? Again, this is the big debate. Is it going to be a fragmentation of a series of blockchains, or will there be some sort of set of standards? Again, we don't know what the stack's going to look like because the best thing about blockchain is you could roll it out and implement a portion of the stack and still coexist with whatever standards emerge. So again, these are the questions. >> Well, one of the conversations that of course is going on is actually, the number of transactions that's occurring with Bitcoin is way down, it's probably down 20% year to date. The other conversation is we all know that Bitcoin and Ethereum, the transaction volumes can't really support what we do with Visa or even Amazon. There's a discussion in the industry going around about what if Amazon shows some other coin? Like Ripple, for example, which has much higher transaction volumes. Or what if Amazon tokenized its own business, came up its own cryptocurrency? What would that do to the price of Bitcoin, if all of a sudden you could transact in Prime using AmazonCoin or something like that? And we know that Amazon understands how to scale, it obviously understands cloud. That's why I do see cloud and blockchain as complementary. It's very difficult to predict the future. There are those who say Bitcoin is the standard, it's got the brand. There are those who say that Ethereum, because it's much more flexible and you can program distributed apps with it, have a great future. And then everybody points to the transaction volumes and says, this is just a Petri dish for the future where new technologies will emerge that scale better and can produce. >> What's interesting last night on the, we had a fireside chat with Al Burgio, serial entrepreneur, founder of DigitalBits, and Matt Roszak, obviously founder of BloQ and investor, he's on the Forbes billionaire list, super active, very engaged on a lot of advisors, Binance is one and many other deals he's done, it's interesting, you got two perspectives. Al is the networking guy who knows plumbing, knows how networks work, and Matt's a token economics genius. So the two have interesting perspectives and the battle royal going on right now, in my opinion, is two things. I think token economics is a wonderful thing that's going to happen no matter what the standards are, 'cause token economics really is the value to me of the cryptocurrency that can be applied to new business models and efficiencies. The blockchain is a land grab, and here's why. I think whoever can nail the plumbing and the pipes of the infrastructure reminds me of the early days of the dial-up web, when you had points of presence and you had the infrastructure had to be laid down. Although slow, people can dial up and get the internet, then obviously the internet got faster and faster. Blockchain's struggling from that scalability performance issues, and so the question is, on a public blockchain, you got to have the supernodes, you got to have the core infrastructure plumbing nailed. I think Al Burgio takes that perspective. Then everything else just will flourish from there. So the question is, what do those hurdles look like? And this is where the cloud guys could either be an enabler or they could be a foe against the core community. Like you said, Amazon could just snap their fingers tomorrow and take out the entire industry with one move. Just, we're going to do our own blockchain as a service. Everyone uses it, here's our token, and then a set of sub-tokens would have to be coexisting with that. And that could be a good thing, we don't know. This is the discussion. >> And governments around the world could do the same. US government could do Fedcoin, the Chinese government could do Chinacoin. I mean, what would that do to the prices of cryptocurrencies? I mean, it would send it into a tailspin, you would presume. And it was interesting. Matt Roszak on your panel last night, I asked the question, well, traditional banks lose control of the payment systems. And granted, he's biased, and he was definitive. Yes, absolutely. But the counterargument to that, John, and I'd love your thoughts on this, is the US government and the banks have a lot to lose. And they're kind in bed together and always have been. So one would think, with the backing of the US, its might, its military, et cetera, that they're not just going to let the banks lose control. Now, to his point is, why do you need to pay transaction fees to a bank? But you're paying transaction fees to somebody, even in crypto. >> I think our government in the United States is really asleep at the wheel on this one. And here's why. One of the beautiful things about the internet was it was started through collaboration in the universities in the United States. The United States enabled the internet to happen, and the Department of Commerce managed it. The Domain Name System was managed in a very community-oriented way. Again, community, keyword. As opposed to all this, that history is well-documented. If people aren't familiar with the history of the Domain Name System, DNS, go check out the Wikipedia, research it. It was run by a bunch of people who managed the database of website names. And that became sacred and was distributed. >> And funded by the US government. >> Funded by the US government, but the community managed it. The problem with the US government today is that they are meddling in areas that they actually shouldn't be even playing in. You got the SEC, it's shutting down everything right now just by the threat of subpoenas in the ICO market, which puts the overall country into a handicapped position, because now the innovation of blockchain and the entrepreneurial innovation that's happening is stunted, and it's just shifting outside the United States. So what's happening is the money flow and the energy and the activity is so high that incubation's not happening in the United States, although a lot of people are working on it. There's no funding mechanism. The capital formation of blockchain's different than venture. It's not super different, but somewhat different, but it's happening outside the United States. Certainly the Chinese will be in benefit of this. And if the Chinese wanted to shut down blockchain they would have done it by now. They're actually fostering it, and it's an opportunity for someone on the international stage to get a lever in the United States. So that's one. The second thing is they can enable crypto if they wanted to and I think they really should look at that and I think the banks are central organizations, the World Bank, they're under a lot of pressure. They don't know what to do. So when I talk to people, that's the same answer in so many words, is the government and the regulators really just don't know what to do. >> Well, and Matt made the point last night, Matt Roszak, that when he talks to these banks they're talking about using blockchain and they're very excited because they're going to take hundreds of millions of dollars of cost out of their, you know, infrastructure and their processes that are just not very efficient, and that's going to drop right to the bottom line. And of course they're in the money business, so that gets them very excited. His point was that's really not what it's about. Yeah, that's nice, but it's really about transforming the businesses, and that's why I asked the question about banks losing control of the payment systems. Opens up a whole new opportunities, whether it's financial services, healthcare, automotive. And again, to me, it comes back to digital, which is data, plus machine intelligence plus cloud for scale. You called it. I think at IBM Think, you coined it the innovation sandwich. Data plus machine intelligence plus cloud for scale. Put that together, that is the innovation engine for the next decade plus. >> The innovation sandwich, unlike a wish sandwich, where you wish you had some meat in the middle. You know, this is a good point. Let's end this kickoff and get into some of the interviews here with these really early thought leaders in this new conference. This is the first of its kind, cloud and blockchain, and we're going to certainly continue this in Silicon Valley with theCUBE summit coming up and our events that we do. But let's get some predictions out, because remember, this is theCUBE. Everything's going to be out there, it's going to be on the record, so we can look back and say, hey Dave, remember in 2018 when I asked you what's going to happen? So let's get into a prediction. What do you think's going to happen? I'll start and you can think up an answer. So here's my prediction on this whole blockchain world. Not so much crypto or token economics. It's really two predictions. With respect to blockchain, I think you're going to see an exact movement that the cloud market took, and I think it's going to happen in three phases. Phase one is all the energy's going to go into public blockchain, and public blockchain will be figured out first, and people are going to get excited by the new operation models of blockchain, specifically the decentralization of how that works and the benefits of decentralized blockchain, immutability, no central authority, and all the benefits of blockchain. I think it's going to be very rapid growth in the fixing of blockchain. Speed, scale, that's going to happen very quickly. And it's going to happen publicly. Then you're going to see private blockchains. You're going to see on premises kind of like blockchain. Kind of like the cloud, people have onsite, private. And then you're going to see a hybrid. The hybrid will look like multi-chain solutions. This is almost an exact trajectory that cloud computing took, because blockchain feels like a cousin of cloud or a brother or a sister. So it's related, but not exactly, but I think it's kind of the same trajectory. Public, private, hybrid, which is a multi-chain model, and I think that's going to be the standards. That's going to be the market track. On the token side, I think you're going to see a couple key tokens, like certainly Bitcoin's not going away. I'd be doubling down on Bitcoin under 6,000, like everything on that. That should hit 20,000, in my opinion, over the next timeframe. But there's going to be a lot of token integrations. My token integrates with your token and almost natives and secondary tokens kind of blending together where people with coexist tokens on one platform. So it's just too powerful not to have that happen. So that's my prediction. What do you think? >> I think as it relates to blockchain, I think blockchain becomes, in the enterprise I think it becomes an invisible component of virtually every industry. 'Cause every industry has waste, can improve efficiencies, and blockchain becomes a way to, whether it's supply chain or settlements or shared ledgers, I mean, there's dozens of applications for them and I think blockchain becomes a fundamental component of a digital infrastructure, and it's starting now and I think it's here to stay for many decades and beyond. And you won't even see it. It's just going to be there. It's going to become a fundamental part of how we do business. On the token side, very interesting, obviously, hard to predict. I think that you're going to see continued volatility, of course, I think that's a safe bet. But I also think it's potentially going to get worse before it gets better. I think there's going to be a shakeout. I think you're going to see, there continues to be pump and dump scams going on, the US government's getting more aggressive, a bunch of subpoenas went out, and people are still trying to understand what that all means. So I think it's going to be rocky roads for a while. I think you're going to see a big shakeout, like a big dip, and then I think it's going to power back. I think the crypto is here to stay. And it's very, very hard to time these markets, so my advice is just buy, trickle buys on the way down and hold. HODL, as they say in this world. And I think 10 years from now it's going to be worth a lot. >> Alright, you got it here, theCUBE. We are in Toronto for the first inaugural Global Cloud and Blockchain Summit. Of course, part of the big event here in Toronto, Futurist Conference, which we'll be there live. Wednesday and Thursday, the kickoff is Tuesday night for the opening reception. It's theCUBE coverage continuing for blockchain and crypto markets. I'm John Furrier with Dave Vellante. Stay with us for more live coverage here in Toronto.

(upbeat music) >> Live from Toronto, Canada, it's theCUBE. Covering Global Cloud and Blockchain Summit 2018. Brought to you by theCUBE. >> Hello everyone and welcome back to theCUBE's live coverage in Toronto for the Blockchain Cloud Summit, part of the Blockchain Futurist event happening tomorrow and Thursday here in Toronto. I'm John Furrier with Dave Vellante. We're here with Gabriel Abed who's the founder of Bitt and also the Digital Asset Fund. Great story he's been there from the beginning. President at creation in the movement that's now changing the world. Blockchain and cryptocurrency certainly. Infrastructure and token economics, changing how things are doing. And rolling out, reimagining everything from infrastructure to value exchanges. Gabriel welcome to theCUBE. >> Thank you it's great to be here. >> So we were just talking on camera, you like to go after the big changes. You're an entrepreneur, you have that fire in your belly. You've been very successful. Where are we? I mean, you've been part of the movement, we're now on the cusp of mainstream adoption, there's still work to do. >> Oh, plenty of work. Lots of infrastructure still to build, many regulators and legislators still to educate, lots of laws still to be amended and changed. And, at the end of the day, it's happening and it's happening quickly and beautifully right now. The entire industry is changing. >> One of the things that you've done, you've taken on some big projects and you've made change happen. Regulation is one of the hottest topics we're hearing certainly in the United States, it affects innovation and there's so much entrepreneurial activity happening right now. There's so many entrepreneurs, alpha entrepreneurs really want to do great things, and regulation is just a blocker. It's an antibody for innovation. And you've busted through that. And it's probably going to continue. The old guard is either going to be replaced or adapting to the technology. You've done that, and a lot of people want to do what you've done. What's the secret? What's the secret of your success? How have you taken on these big, incumbent positions and taken them over >> But you're not running from regulators, you're embracing them. >> No, no, I think regulators are important to a responsible and sophisticated market. When my partner and I started Bitt in 2013, 2014, we immediately realized that if we wanted to build a product for the monetary authorities around the world, we needed to have the buy-in from the regulators. So from day one we were regulator-friendly. And it's not to say that we don't believe in a decentralized future, I'm as big of an advocate for decentralization and the freedom of information as anyone else, but I'm also a big believer in if you're a product for a market in the traditional world you have to involve the regulators in order to ensure that product does its job, keeps the consumers safe, and ensures that the economy around it doesn't collapse. So regulators are critical in this field. >> Talk about what you guys have done. Take a minute to explain the project you did, how it worked out, the tenacity, but also, what was the outcome? What were you trying to do in the project and where is it right now? >> It depends on the project you're referring to >> Maybe start at the beginning >> The Caribbean >> Let's start at the beginning. >> Yeah, yeah. >> Okay, so, Gabriel Abed, born, raised, educated in Barbados, around the age of 19, I decided I was going to take my computer science education a bit further. I went to Canada, I did a Bachelor of IT, where I majored in network security. In Ontario, the University of Ontario. And, unlike the rest of of my peers, who usually stay in Canada, I decided to go back to my little nation with the education that I had just received. And I took that education home, and started one of the world's first blockchain companies, but at the time I didn't understand blockchain per se, I understood it as a commodity, as a cool investment, I didn't understand the true nature behind the protocol itself. It was only until 2013 that my partner and I ran one of the larger mining operations in the world, that we realized a commodity was actually a protocol. A network tool. A system that you could build on top of. So in 2014, we actually created one of the world's first blockchain assets, on Bitcoin's blockchain. And that a representation of a digital dollar for a central bank. And the notion behind Bitt.com in 2014 was, let's compete with cash, because it's inefficient, it's costly, and it slows down the movement of society. So what we wanted to do is create a digital version of that, that would save economies hundreds of millions of dollars. Cash is expensive to to create, that linen, plastic, paper money, it's easily forged, it can be counterfeited, it's hard to transport, it has an expense to transport, it has an expense to count, it has an expense to secure, and then it has overheads around the entire ecosystem of accountability. Whereas, a blockchain-based digital dollar eliminates all of those efficiencies, and increases the ability for a monetary authority to trace, track, and have a better form of anti-money laundering, counter-terrorism financing and a better overview of their entire society. So that all, we took that notion, went to the central bank of Barbados, who at the time was being led by Dr. DeLisle Worrell, and our very first meeting he had asked me to excuse his office. And 13 meetings later, and a whole two years, lots of development, building out infrastructure around compliance, around finance, around security, and around regulation, we finally got the nod of approval from Dr. DeLisle Worrell to operate a fiat example of a digital dollar in Barbados. And since then, we have been working with several central banks around the world, bitt.com today is the leading central bank provider for digital dollars. A lot has changed, I've developed other tools since, and other businesses, but bitt.com continues to be the best friend for central banks looking to move and transition into the digital arena. >> Why, I mean other than a closed mindset, why wouldn't every government around the world want to move in this direction? Initiate some kind of FedCoin, for example. >> Education, education, it's the fear that the system may not be scalable, it's the fear that the system could be hacked, it's the fear that they could be cut out, their control, at the end of the day, monetary authorities, like the Federal Reserve, they have a control on the money supply. Whereas, something like decentralized cryptographic currencies, there is nobody in control of the money supply. Hence, inflation versus deflation systems. Then there's the issue of hacking and the threat of digital and cybersecurity. Typically, the head of these monetary authorities are older gentlemen who are traditionally conservative. And who are not (mumbles) with cybersecurity. So the fear of hacking is very real for someone like them, whereas someone like me who is trained as a network security expert, those fears can be mitigated with good policy and procedure, cold wallets, and the right process, to ensuring the environment can run without the risk or the fear of malicious attacks. So it really boils down to education. The educated governors of central banks, like there's one, for example, Timothy Antoine. Dr. Antoine is the governor of the Eastern Caribbean Central Bank. And they govern and mandate the currency union of eight islands below them. St. Lucia, Grenada, Antigua, et cetera. Now, he's a governor that gets this and has wrapped his head around it, and understands that this is the future. He gets it so much that he signed an agreement with bitt.com to begin exploring a pilot for his currency union to have a digital dollar implemented in it. You also have governors and presidents like that of Curacao. Or the central bank of Curacao, where we've just signed an agreement to move forward with a phase of looking at the implications of rolling out a digital dollar in a society like Curacao and St. Maarten. What is the ramifications? What is the feasibility study behind that? So, to answer your question, it's not every single regulator, governor, and central bank manager is going to head toward this technology tomorrow. But with more education, and more lobbying, you will see more and more central bank governors moving in this direction, because it's better, cheaper, faster, makes their job easier, gives them more control, gives them more oversight, and provides all the things that they would want as a central bank to continue to do their job for their society. Which is to protect their dollar from alien threats. And to ensure that the dollar remains stable, and to just generally ensure that the society is functioning the way it should. >> Gabriel, what's your vision on what this will enable for the citizens? What's the impact that you see happening? If this continues down the trajectory, what is the adoption look like, impact to people's lives on a everyday basis. >> Well, for a very starting point, you democratize payment. Right now, if I want to make a payment, I have to go through a utility company called a bank. And this bank typically has frictional costs, and frictional overheads and time. That's one of the biggest problems, is that these monopolistic infrastructures hinder the ability for the average participation of a free-flowing payment system. So what you end up having is rather than me being able to make a digital payment in seconds, with no cost, I have to wait days, I have to use manual-based systems whether it's check, cash or the bank's Visa Mastercard system. And then it has frictional costs. So right off the bat, you democratize payment. What does that do for a society in a developing nation? It empowers people. And you're empowered because now as a developer, I can build on this payment system. As an entrepreneur, I can tap in to this payment system. As a merchant, I can utilize this low-cost payment system. As a society, I now have GDP growth because of financial inclusion. The underbanked, who do not have access to banking facilities for one reason or another, maybe they don't like the bank, maybe the banks don't like them. Maybe they don't have two proofs of ID. Maybe they don't have a fixed place of abode. Maybe they don't have the minimum deposit amount. All of these features keep the poor and the underbanked out of the system. Whereas, in developed nations, we have mobile penetration rates that are through the roof. In some cases, like Barbados, over 100 percent. So if you have 100 percent penetration rate of this mobile platform, this thing in my pocket, but I cannot access the banking system, well flip that around, democratize the payment system, allow payments to exist on this mobile phone, and watch how quickly society becomes banked. So what you end up having is full adoption. Why would we not have full adoption when it's cheaper, it's faster, it's more inclusive. >> And the data from that collective intelligence only creates a digital nation >> A more responsible environment. >> Wealth creation environment. >> It creates a more traced, tracked, and accountable society so that the monetary authorities in the government can now start making educated decisions on data. They now know who's buying milk, who's gambling, who's paying their taxes and who's not. >> The downstream benefits of this are massive. >> The downstream benefits are massive, enormous. They're disruptive. This is a brand new fiscal tool, a monetary tool, being given to central banks to start eroding the field of private e-money systems, and to start bringing about a uniform standard towards payments. Plain and simple. We're going to the central banks and introducing a new monetary instrument, that they're in control of. That now the commercial banks, the financial institutions, the corporatocracies, the citizens, and the merchants can all fall under one roof issued by their monetary authority. And this is not a cell phone company or a bank building their own private system that I have to jump through some hoops and some red tape and sign away my first born and give away my left arm to enter. This is a free and open source standard system. >> And it's networked, as you said, penetration is 100 percent on mobile or roughly that, it's a network society that now has digital fabric built into it. This is the future. >> But I played this out in terms of, when you talked about this in your panel, now every device, every thing, every physical asset will be instrumented. >> Yes. >> And as a result, theory can be coconuts. >> You're building the deep infrastructure. I remember we met with World Bank back in 2014 and they coined this term for me. Because they were saying we want to help entrepreneurs and it's important to help entrepreneurs in developing nations because they're the lifeblood of it. But what we are building is the deep infrastructure. And that's exactly what it is. It's the infrastructure that would allow the entrepreneur and the developer to now have a framework that they can build against to provide more uplift. So in essence, it's really going to be exponential growth once systems like this are implemented. The stock market can move digital, and people could buy stocks using digital dollars. E-commerce can occur because I can now buy things online or sell things online with digital dollars. I can now be part of a global, financial ecosystem, with my smartphone and my wallet. >> That's a great use case, congratulations on amazing success, so much is on your plate, you've had great success in this new era, what's on your plate now, what are you working on, what's happening in your world now? >> So in 2017, we realized Bitt was entering a new growth phase. It was no longer a battle of trying to convince regulators and central banks, our product had been proven. Our reputation had been proven. It was time now to scale the company into a professional level of dealing with these regulators around the world. At the end of the day, we would like to digitize cash, wherever cash exists. And to provide those tools for central banks around the world. That would require professional management, and that is not I. >> (laughs) >> So, our investors and shareholders were quite comfortable with our proposal of bringing on that professional management, so in 2017 I resigned as CEO, retained a board position and still single largest shareholder, but with the idea of what other types of infrastructure can I build, now that a deep infrastructure had been put in place. So I've been attacking three major markets, the banking sector, an actual commercial banking enterprise working with a group from the United States towards looking at deploying the future of where we think commercial banking is going. I think that the community, the crypto community in general, there's a lot of noise happening in the chats. And therefore we built a machine learning chat bot to start looking at market sentiments and aggregating market information and of course building common tools for community members. So we've launched a agent called Gabby, the form to gab. My name's Gabriel and my mom calls me Gabby, so it works out quite well. >> You have the gift of gab that's for sure. >> And then I launched a mutual fund with a very sophisticated former managing director of JPMorgan. A guy named Richard Galvin. And we launched the world's first protocol-only fund. We focus only on protocols. And that's called Digital Asset Fund. And we launched that in late 2017 and got full regulatory approval to become a professional fund, that handles 100 percent, solely crypto. And that's basically been my ride, and then outside of that, just your standard consulting, because everybody from World Bank, to IADB, to some government agency to some private organization wants to know about blockchain they want advice, and they need a team of people to give them that advice. So it's just been, all around, looking at how I can be an entrepreneur in this space, while finding great leaders, and partnering with those leaders to build out great companies. While still focusing on ensuring bitt.com becomes the solution for dollars, digital dollars, worldwide. >> Got a great mission, entrepreneur, builder, congratulations. >> Thank you. >> Industry's lucky to have you, congratulations. >> Thanks for coming on. >> Thanks for coming on theCUBE. >> Thank you guys. >> CUBE coverage here, live in Toronto for the first Global Cloud and Blockchain Summit in concert with the Blockchain Futures Conference happening in the next two days after today. More coverage from theCUBE we're live here, stay with us for more great coverage after this short break. (upbeat electronic music)

>> Live from Toronto, Canada, it's the theCUBE, covering Global Cloud and Blockchain Summit 2018. Brought to you by theCUBE. >> Hey, everyone. Welcome back to CUBE's coverage in Toronto for the Global Cloud and Blockchain Summit, part of the big event also happening for two days, Wednesday and Thursday, the Blockchain Futurist Conference, here in Canada. I'm John Furrier, Dave Vellante here. Next guest is the founder and CEO of DigitalBits.io as well as Fusechain and serial entrepreneur and also the mastermind behind this inaugural event. First time a cloud blockchain conference has come together, bringing the two communities together. Al, great to see you. Thanks for coming on. >> Thank you for having me. Thank you for coming to Toronto, Canada. >> It's our pleasure. Certainly as you know, we love cloud. We cover all the big cloud shows. We're dominating that market in terms of coverage and access. And we just started covering blockchain in 2018 with theCUBE, although on SiliconANGLE since 2011 with the written word in journalism. But this is interesting. You are the brainchild behind this event, and I want you to explain why you came up with this event idea because this is the first time that you got two worlds coming together. You're bringing in the cloud DNA, and that can go back to like, classic networking and think big hosting providers, the Exodus and the Equinox of the world. These guys are the same guys who built YouTube's back end and Facebook. Large scale network guys with this new emerging blockchain world because there's some connections points, and it's super important, and no one's ever done that before. What's the motivation behind a cloud and blockchain summit? >> Well, if you think of the internet, all that data, all that traffic, substantial majority of it is flowing through data centers, infrastructure providers globally. And within many of those data centers you have cloud providers, whether it's cloud computing, SaaS, Software as a Service, cloud providers, you name it. And now we have upon us this emerging blockchain technology. Many are referring to it as Web3.0. And I'm obviously a big believer in that this is the next evolution of the internet. We got Internet1.0 in the 90's. We had Web2.0 with social sharing economy and so forth, and along the way, each step you had your first movers, your willing followers, and then the unwilling followed. It's been that powerful the last two occurrences that we saw with the evolution of the internet. Web3.0 is that next thing. First movers, willing followers, the unwilling. Every time you have this something very innovative, obviously there's a big engineering initially starts amongst, you know, a community of engineers, and then it starts to go mainstream. Obviously a lot happens in between conception and going mainstream. And if we look at the 90's, Linux played a substantial role in the acceleration of innovation. It really extracted, you know, it took a different approach to software, really leading open-source. >> It took down some proprietary incumbents - Unix. >> Absolutely, absolutely. And free and open-source software, but it still needed to be supported. Which version of Linux should enterprises embrace? And at that time, it was very important with what we saw emerge with things like Intel, IBM, Dell, HP, and so forth getting behind organizations like Red Hat and their version of Linux, now known as Red Hat Enterprise Linux. >> IBM put in a billion dollars into it. >> Yeah, exactly. >> Steve Woz, yeah. >> So with regard to that, you know, it was all about the hardware validating, right? These trusted vendors to the enterprise. And them kind of validating a company, or endorsing a company, in effect, like Red Hat, really helped provide a guiding light to the enterprise. Now it's not about hardware, it's about the cloud, right? Cloud computing providers and so forth. And in that ecosystem, it's not just AWS. It's not just Microsoft. There are many data center providers that have built a cloud computing offering that are supporting substantial financial institutions, substantial organizations within healthcare space insurance, and many, many other industries. So they play a very important role in supporting an enterprise, whether implementation, integration, and consumption of technologies, including new and emerging technologies. And so as we have, sort of, before us, this emergence of blockchain, obviously having lived in the cloud and infrastructure community for a number of years with that last company I had founded, know a lot of the key stakeholders. And even though I'm all in on blockchain, you know, I pop in every now and then in that world. What I found was two different extremes. You have CTO's and even CEO's of cloud computing organizations, and others within those organizations, totally high "Get It" factor. And you had the other extreme, multi-billion dollar cloud computing organizations, you know, data center organizations, where again, the leadership is still trying to figure it out, in some respects, not fully paying attention yet. And I saw that this is definitely emerging. Again, you'll have first movers, willing followers, and the unwilling. They're all going to get there. But it hadn't gotten there yet. And so with regards to this event, I saw a huge opportunity to really put something out there, allow it to ultimately take a life of it's own. There's a new organizer that's going to be coming forward and driving the ship with this event. But ultimately, there needed to be a forum, not just here in North America, but in every corner of the world, the Global Cloud and Blockchain Summit, providing this opportunity for that convergence, and for both communities to really share knowledge and accelerate, fill that gap. And I saw it's there. It is there. There's amazing things being spoken on stage as we sort of are sitting here, with leading innovators, and so forth, from both sides. There was an amazing keynote today by Anthony Di Iorio, one of the co-founders of Ethereum and founder and CEO of Decentral and Jaxx, really helping support the event today and making a contribution. His talk was phenomenal. That's kind of the thought behind it, and it's, you know, here we are. >> I want to pick up on something you said, for our audience, you know. I mean, for guys like you, Al, that are deep into it, you understand this very well. But you talked about Linux, and how, essentially, the Web was built on Linux. So if you were a Linux developer back in the day, and you wanted to "invest" in Linux, you didn't have a vehicle to do that. You could put your time in, you know? You could maybe join a company and maybe get some stock. But there was no way to directly invest in Linux. Well today, there is. With blockchain and cryptoeconomics, you actually can, whether it's tokenize your business or participate, you can buy tokens. And so it's a whole different incentive structure. And many in our audience are sort of new to this, kind of the unwilling, if you will. >> Yeah. >> And that's an amazing new way to create capital structures. >> And very powerful. I mean, prior to this tokenized revolution we're seeing here, it was a cool open-source project that as an engineer you wanted to be part of this, contribute your time, and quite often you would ask your employer to permit you to have 10%, 20% of your time to commit to these projects. Maybe you would even ask for that in your job interview. And you'd maybe get the thumbs up, you know? And so, your employer's, in effect, subsidizing your time to really contribute to projects and code that you're very passionate about. But if they got busy, economic cycles and what have you, and it's like, "You know what? We need you at 100% focus on your day job." All of a sudden, that community, that open-source community is losing perhaps a very valuable contributor, right? And there's really no way for that direct incentive from that project. And that's really what that is now. Projects can be created. You think of, you know, some blockchain's like an operating system, you now have an, you know, to use the Linux comparison, now let's say an operating system can have it's own incentive, a reward or compensation structure to really help attract engineers and other valuable contributors to not just give birth to a project, but help make it sustainable. >> Yeah. >> And, you know, eventually maybe you're quitting the day job because it's able to be free, open-source, and providing an enlightening self-interest. >> I'm getting some messages here, direct messages, listening to you talk. So I want to share them with you. One guy says, "Hey, Al. What's the deal with the different blockchains? How do I tell?" So I'm not an unwilling. I'm a wanna-believe. I'm not the front-end, but what do I pay attention to? And there's so many different chains. You got people promoting certain things. I don't know whose stats are real. You got two kids in a garage, >> Yeah. >> who just did an ICS. So the question is essentially what's the difference between all these chains? What do I have to look for? Is it latency? Who's solving these problems? What's the big deal, and how do I determine better chain from another chain? Are they all going to work together? >> Yeah. >> What's your thoughts? >> Things are moving incredibly fast right now. And it is difficult to keep up to speed. You know, maybe it was just bitcoin at one time and one chain to focus on. Then there was Ethereum and all these others. Now there's many, many more. So ultimately, it is about information, staying current with that information, doing your due diligence. But you really need to have a community that you're a part of, that you can, kind of, share in your evaluation and monitoring of what's new and emerging. >> So community's important. >> Very important, very important. Just say trusted advisors, trusted peers, and you kind of take a collective approach at this. Nonetheless, we're in this pioneering era, mass innovation happening. What's winning today, you know, may not necessarily be continuing to win tomorrow. But you really need to maintain a discipline, and take a peer approach to staying current. In terms of public chain, private chain, they're all going to play a role, and they are playing a role, in different use cases. There's clearly a use case for private chain within enterprise, within say, you know, trusted circle of supply chain participants. Maybe you want to bring some efficiencies to all that. >> So use case drives the chain. >> Yeah, absolutely. But public chain is a phenomenal phenomenon. Among other things that we hear a lot about it, it's given birth to the ICO. The new way of capital formation that is unbelievably awesome. The world has never seen anything like this, where. >> Explain that. Capital formation dynamic that you're referring to. >> Yeah, so the traditional way, whether it's in Silicon Valley or any other part of the world, you have an entrepreneur that maybe they haven't had a big exit where they can fund their own next venture on their own. You know. Smart intelligent people with a brilliant idea, and they're doing that friends and family route, right? The due diligence checklist isn't that long. It's like, you know what? Love my son. He's the smartest kid on the planet. You know, you give him a few dollars and a few other friends and family, this new emerging entrepreneur. And if there's evolution there, things are picking up traction and so forth, then maybe you're doing an angel round. And there's this sort of structured process that history's sort of define for us. And then from an angel round, you know, you have this early stage company emerging, and new milestones being reached, and then maybe there's a Series A venture capital round, and what have you. And then you have the, you know, the Series A, Series B, and so forth, right? The typical approach to things. A very regimented Silicon Valley has been a dominating force of the venture capital community, and that form of competition >> But the dynamics are different than the venture capital. >> Yeah, so that's the way that we've always, sort of, known, right? Many early stage companies, the process they go through. Many, many meetings behind closed doors, and so forth. >> Cloak and dagger, black box. >> Yeah, so concept of crowdsourcing, still beholden to the financial systems that're up there. How do you really foster community up there? And raise maybe a few million dollars? >> So what you're saying is is that it's easier to raise money now? Easier? >> It absolutely is. You have this new meeting of exchange where you have cryptocurrencies like Ether. And you're basically sharing your idea with the world, and all of a sudden, saying, "Hey, here's our token economics. We'd like to reach some capital." And then whether it's minutes, hours, or even weeks, you have capital coming to you from different corners of the world, and it's coming to you in seconds. Highly efficient. You have these universal currencies now emerging, and it's an amazing sensation, and it's a new form of capital formation, and with capital formation, you have innovation. So I believe that, you know, we're just going to continue to see an acceleration of innovation, globally happening, and not just in certain pockets of the world now, in many, many corners of the world. I mean what's happening in Asia's absolutely phenomenal in the blockchain space as well. It's not just interesting here in North America. In fact, in some respects even more interesting, depending on how you look at it. >> Describe what's happening in Asia. You guys talked about this last night in the fireside chat. >> Well, I mean some of the publicly available information is that you can just simply see, on many of the cryptocurrency exchanges out there, an insane amount of volume, more so than in any other corner of the world. And so you have a very active investor community up there, a trading community, token-buyer community, what have you. >> And where are the pockets? >> Very healthy. >> So it was China, and then things sort of shifted to Japan. >> Well, >> Where do you see the action? >> maybe where the centralized exchange in happening, but I think it's still a lot of the same people. It's not like it got shut down in a country, and those people just lost their desire. They just found an alternative means to continue to participate. >> Right. >> You know, South Korea, it's phenomenal. You have Hong Kong. You have Japan. You have Singapore, among many of the pockets. But then it's everywhere. I mean, you're meeting people from Vietnam, Thailand, India. They're all very active investor communities and utility token buyer communities. And it's very healthy. Yes, you have, you know, a correction every now and then in this market. But you have that with any sort of new, exciting innovation. But it continues to thrive up there. It's phenomenal. >> Yeah, you're seeing one of the main uses of bitcoin to buy alternative currencies. >> Yep. >> That's sucking huge amounts of volume. >> It's an easier currency. I mean, in a matter of seconds or minutes, you can have a currency go from a bedroom in Florida, you know, here in Toronto, to a project in Singapore, or vice versa, without going through bank. >> So again some more couple questions from the crowd. If you want to reach us, tweet us, either direct message or tweet @Furrier @DVellante. Happy to take your questions for the guest. But one says, "Do we buy now?" >> (laughs) >> Second was, "Do this side step the tariffs of the China, Japan, U.S. thing?" Obviously outside of the United States, we're the world power in the United States. But now that power is shifting. You see China and here in Canada, a lot of crypto-DNA here. So interesting. Your thoughts on buying? (chuckles) On the dip? Or crash? Or however you look at it? And then the international dynamic with China and Japan and others? >> So many are seeing it as a dip. I mean, the reality is, if this is new form of capital formation, it does share similar characteristics, nonetheless still to traditional or early-stage investing and venture capital, in many respects. Not every start-up succeeds. In fact, you know, over 90% traditionally don't make it. Even if they make it to a Series A round, they may not make it to a B round, right? And so, the fact that you have, some people kind of are referring to the Wild Wild West. I don't necessarily see it that way. It's just finding it's way, right? And it's going to get to a mature state. >> Well I think people look at the bubble, and they think Wild Wild West, but the interesting thing about it, you know, we talked about it off camera last night, around international is, and no one really knows what the STEEMs will be. This is going to be a completely different landscape than anything we've seen before, whether it's standards or execution. And I hear the argument all the time of "Oh, it's unregulated!" It's really the United States that's taking a more regulatory approach, you know, the SEC is essentially scaring straight everybody and saying, >> Well they're trying to figure it out. >> Well they're trying to figure it out, but also they've kind of slows things down, the process. But that being said, it might not have to be formally regulated. Because you mentioned Linux. The role of self-governing communities is a very interesting dynamic. No one's actually said and analyzed what a regulatory regime, globally, would look like, if you factor in, kind of, the open source concepts, with self governance because communities are very efficient, and we got money involved. >> Yeah. >> It can be even more efficient. That's called a marketplace. >> You know, people have disposable income, and they decide what they want to do with that disposable income. You go to a restaurant, you go buy some groceries, you invest, you maybe buy some commodities, right? And where we put that money, the value we had that we wish we could exchange for something else, some of it goes into some regulatory worlds and some doesn't. I want to go buy some you commodities at the grocery store. I mean, it's a free and open transaction. There's no KYC or AML per se and that happens. >> But food has to get to the supermart. My point is. >> Marketplaces don't require regulation. >> Exactly my point. That's my point. >> Or additional red tape, right? But where we put other capital deaths. So whether you're buying share certificate, early stage investing. There's SEC filings, perhaps. >> Who regulated Linux? >> Who regulated Linux? I mean-- >> (laughs) >> It was self governing. >> Benevolent dictatorship with Torvalds. >> But the capital formation was different in the Linux industry. >> Yeah. >> It was the more traditional path that you just described, and so those were-- >> But I guess what I'm saying is that, you know, have a token. Some token could represent a commodity. Some token could represent a security. So there needs to be that distinction and a framework of clarity so that we understand what needs to be regulated and going on that path. And so I think that's, kind of, part of finding it's way over the past 12 months or so is this distinction. Some countries were very quick to say, "Here's a framework.", like Switzerland. That clarity here is taking some time here in Canada and the U.S. >> Yeah, and I think they should let things foster and incubate a bit because you don't know the gestation period of real technology, and I think I'm cool with community-oriented governance Because people will lose a boatload of case; some will gain. But that'll all sort itself out. And with good community involvement, it'll happen faster. I just find that a better path. I mean, some people can't stay with that tension. They overreact. Some people can't handle the risk. But you got to see how it plays out at some level. >> You definitely do. But there's also an opportunity for self-governance. You know, you have-- There's the regional internet registries, right? So you have ARIN RIPE in Europe and so forth. You know, if you want an IP address and so forth, there's a self-governing body that defines policy and how these things are going to be deseminated here in North America. The government, kind of, sets off with that. >> The DNS system. >> You know, absolutely. This is valuable-- >> Yeah. You know, you have national security with internet, but how IP's are deseminated, it's self-regulated. So at the end of the day, if the community doesn't decide to say, "Hey, some of these things, well let's define self-governing bodies." And if they can play a great role in it all, fanastic. Otherwise, then maybe the government steps in" If that's the type of country it is where they like to engage. >> Al, everyone's reimagining new opportunities with blockchain and crypto. You've certainly got good venture with DigitalBits. We'll certainly have a conversation later here this week about that. I know you got to get back for a panel that you're going to go on now. So thanks for coming on. And congratulations on the inaugural Global Cloud and Blockchain Summit. Looking forward to talking more about it. So theCUBE live in Toronto for coverage of the Global Blockchain event here with cloud. And then tomorrow kicks off the big show here, the Blockchain Futurist, about 2,000 attendees. That's really going to be connecting the dots of the future. TheCube will be there as well. Stay with us for more live coverage after this break.

>> Live from Toronto, Canada, it's theCUBE, covering Global Cloud and Block Chain Summit 2018. Brought to you by theCUBE. >> Hello everyone, welcome back to theCUBE live coverage in Toronto for the Block Chain-Cloud Convergence Show. This is the Global Cloud Block Chain Summit part of the Futurist Event that's going on the next two days after this. Our next guest is Kesem Frank, AION co-founder and CEO of MavenNet. Doing a lot of work in the enterprise and also block chain space around the infrastructure, making it really interoperable. Of course, Jenna Pilgrim, co-founder and COO of a new opportunity called Network Effects. Welcome to the cube, thanks for joining us. >> Thanks, thanks for having us. >> Thanks, John. >> You guys were just on a panel, The Real World Applications of Block Chain. IBM was on it, which, been doing a lot of work there. This is real world, low hanging fruit, block chain, everyone's pretty excited about. A lot of people get it, and some don't. Some are learning. So you've got the believers, the I want to believe, and then the nonbelievers. Let's talk about the I want to believe and the believers in block chain. Some real world applications going on. As it's evolving, so there's evolution of the standards, technology, but people are putting it to use. What's going on in the sector around some of the real world cases you guys talked about? >> I think we're seeing a lot of collaboration as far as real world applications go, because I think people are sort of starting to understand that if a distributed network is going to work or is going to be secure, it needs diversity and it needs mass scale. If lots of different parties can work together, then they can actually form a community that's really working. As far as real world applications, there's some really interesting one as far as supply chain. Kathryn Harrison at IBM talked about their pilot about shipping, bringing together the global supply chain of distribution. There's a bunch of interesting ones about food providence and bringing together different parties just to make sure that people know what they're eating and that they are able to keep themselves safe, so I think those are two definitely interesting ones. >> Kesem, block chain, supply chain, value chains, these are kind of key words that mean something together. >> Right. >> Making things work in a new way, making things more efficient, seems to be a trend. You're kind of in that world. Is it efficient? (laughing) How's the tech working? What are some of the core threshold issues that people have to get over? >> So you know, John, that's exactly the question to ask. A lot of folks out there are looking at block chain and the promise it represents, and the one big question that keeps echoing over and over is when is this going mainstream? When are we going to see something, a domain, a use case, that is actually natively on a block chain? I think that, essentially, we kind of owe it to ourselves and to everyone that cares about this stuff to ask what's working today, August 2018 and what is still kind of pending? I co-founded a project called AION. For us, interoperability is really one of the key facets that you need to be able to solve for to make block chains real. And again, here's the 60 second argument. If you're going to grow all these solutions that are centric around the use case, they solve for different pinpoints and different stakeholders care about them. They don't really create the cohesive kind of ecosystem until they can all talk to each other, and then you have to ask yourself is the original hypothesis where it's going to be one main net, one chain that's going to rule them all, and everybody gets to play on it and everybody deploys their Dapps on stuff like Fabric or R3 or Ethereum, or whatever it might be. That is absolutely not the way we're seeing enterprise actually shaping into this domain of block chain. What we're seeing is big consortiums that already have value, tangible today, out of doing stuff on chain, and the biggest thing to solve is how do I take, to Jenna's point around supply chain or food providence, whatever it is, how do I actually open it so I can now start writing insurance events, payment events, banking, underwriting, auditing, regulation? There's this gigantic ecosystem that needs to be enabled, and again we are actively saying it's not going to be by an organic model where you and I do everything on top of a single solution. There will be a multitude of solutions, and what we need to solve for is how do we convert them from disparate islands that don't talk to each other into a cohesive ecosystem? >> This is a great point. We were talking on our intro, and we talked last night on our panel, about standards. If you look at all the major inflection points where wealth was created and value was created around innovation and entrepreneurship and industry inflection points, there's always some sort of standard thing that happened. >> Right. >> Whether it's the OSI model during the early days of the internet to certain protocols that made things happen with the internet. Here, it's interesting because if you have one chain and rule the world, it's got to be up and running. >> Yeah. >> It's not. There's no one thing yet, so I see that trend the cloud has, private cloud, public cloud, but public cloud was first but people had data centers. >> Right. >> Both not compatible, now the trend is multi-cloud. You can almost connect the dots of saying multi-chain >> Right. >> Might be a big trend. >> Right. >> This is kind of what you're teasing out here. >> That's exactly what we're about, and I think it's very interesting, the point you're making about dissimilarities between the two domains. We are in a cloud convention, and to me it means two things. One, we absolutely see the mainstream people, the mainstream players in industry, starting to take this seriously. It used to be a completely disparate world where you guys are a bunch of crazies with your Bitcoin and ether and what not. They're definitely taking this seriously now. The second thing, when you think of cloud as a model, how cloud evolved, we used to have these conversations around are you crazy, you're telling me that my data is not going to be on premise? >> It's not secure, now it's the most secure. >> Oh my God! It's in the cloud, what's a cloud? (laughing) You think of the progression model that was applicable back then, right? 10 years, 15 years back, where we started privately and we tell them OK, we'll take this side step of hybrid and then fully public. Took them a while, took them almost 20 years to get their heads around it. >> There's no one trajectory. What's interesting about block chain and crypto with token economics, there's no one trend you can map an analog to, you can't say this is going to be like this trend of the past. It's almost developing it's own kind of trajectory. A lot of organic community involvement. Different tech involvement. >> Totally. >> Different engineering mindsets coming together. You're seeing an engineering-led culture big time going on. That's propelling it up to the conversations of let's lay down the pipes, let's start running apps, but I'll do it within a two year window (laughing). >> I think the big thing to understand about that is yes, you need a whole host of developer talent to build distributed systems, but at the end of the day those systems still have to be used by people. They still have to be used by society, you still have to understand how to talk to your chief executives about what's happening within your company or what your tech teams are doing. There's a growing need for marketers, for PR people, for people who speak, I don't want to say plain English, but people who understand how-- >> Translate it to the real world. >> Yeah, they need to translate it, and how to bridge the gap between legacy systems and how do you take what you were doing before and transform it to a distributed ledger system? How do you do that without just paving the cow path? >> It's interesting, it's almost intoxicating, 'cause you got two elements that get people excited. You got the token economics, which gets people to go, "Whoa," the economics and the liquidity of money and/or value creation capture equations completely changing some of the business model stuff, which could be translated to software and Dapps and software general stuff or SaaS, et cetera. Then you got the plumbing or the networking side of it where things like latency, interoperability, absolutely matter, so with all that going on in real time, it's kind of happening at 30,000 feet and trying to change the airplane engine out. People are failing, and so there's some false promises, there's also false hopes that have not been achieved, so this clouds up the real big picture which is this is an innovative environment. We're seeing that trend. But when you get to the end of the day, what are people working on, to me, is the tell sign. Kesem, what's your project, talk about AION and the work you're doing, specifically give some examples of some of the things that you're doing in the trenches. >> Sure. >> What are you trying to solve, what are some examples you're running into and how does that relate to how things might evolve going forward? >> Sure, so there is a multitude of different problems that we work on but if you want to stick just to the fundamentals? Let's take one gigantic issue that everyone's kind of tackling from different perspectives, let's talk about scale. Scale is, especially in block chains especially challenging just because of how the technology works. How decentralized can you get before you're faced with gigantic latencies and before transaction cost are kind of through the roof? When you think about it, that is all a result of how we kind of contemplate these early stage networks. It was always the one network that is going to scale to infinity. Absolutely not the way it's going to work out. So from my perspective, again, sticking to this one issue, if you could actually give me a decentralized rail that maintains consensus throughout two networks, I can now actually have two trusted kind of go-tos instead of always putting the full brunt of the throughput on one single network. For us, that's kind of a no brainer application to interoperability. If you could actually give me all these trusted networks that work in tandem, I could now start splicing throughputs across many different parallel kind of rails. Not to similar than how we can solve for super computing. We understood there is a limit on how fast can a single CPU go and we started going wide. >> That's an interesting point, I want to just double click on that for a second because if you think about it, why would I have multiple rails and multiple systems? Maybe the use cases are different for them. >> Correct. >> You don't want to have to pick one cloud or one chain to rule them all because it's not optimized. We saw that with monolithic systems and cloud is all about levels of granularity and micro service and micro everything, right? >> Correct. >> And I would also say that gets into a security issue as well, right? You're talking about multiple layers but you also will have multiple layers of permission. You'll have multiple layers of how much information someone can see and what I think is emerging, if data is the new oil, then what's emerging is for the first time we're now able to trust data that we do not own. For corporations who say, "I don't know to market to you "if I don't know everything about you." But at the end of the day, they want to be able to leverage your data but they don't need to secure it and I think that cybersecurity issue is a huge, huge thing that's definitely coming. >> I want to get both of your thoughts on this, because we were talking about this last night. We were riffing on the notion that with cloud compute and data really drove scale. So Amazon is a great example and their value now is things like Kinesis and Aurora, some of their fastest growing services. You got SageMaker, probably will be announced at re:Invent coming up as the fastest growing service, right now it's Aurora. All data concepts. So the dataization really made cloud, great. >> True. >> Okay what's the analog for crypto and block chain? Tokenization is an interesting concept. There's almost an extension of cloud where you're saying, hey, with tokenization, the tokenization phase, how do you explain that to a common person? You say, is token going to be the token and the money aspect of and the economics the killer app? How's it transverse the infrastructures, plural? >> Yeah, or is the wallet going to be the browser? Or how are all of these things happening? >> How do you make sense of this? What's your reaction to that trend? >> So I actually get excited when I think about what token, on the most profound level, actually means. When you kind of think of where value happens in the context of these gigantic enterprises, right? You think of Apple, Amazon, Google, Facebook, any of them, and you kind of think of what the product is, it's all about the data and it's all about how do you convince people to give up data so they can monetize on it. And then you have two distinct, like literally gigantic groups of stakeholders at play. You have the users, that essentially get something free, right? I get to post on Facebook or I get to write an e-mail on Gmail. Then you have the stakeholders that actually extract all that value from my activities. A token, I think most profoundly represents, how do we actually get to a unified group where the user himself is the stakeholder that gets to extract the data? And again, the proposition is pretty straightforward. The more you use a network and the more the network becomes valuable and grows, the more value the token that drives at it. >> So it changes the value capture equation? >> Correct, different model altogether. >> The value creators get to capture the value and obviously network effects plays a big part in this? >> Yes. >> Which is your wheelhouse. (laughing) >> Yeah, definitely. I think it really comes down to core principles. Now you're able to really get down, to what Kesem was talking about, about when you're designing a token or if you're designing an incentive mechanism, you're really going down to the sort of deep game theory of why people do specific things and if we can financially incentivize people to do good rather than punish them or fine them for doing bad then we can actually create value for everyone. We're designing a new economy that now has the ability to propel itself in a fair and prosperous way, if done correctly, obviously that's the disclaimer afterwards, but. >> I love what you're saying there because if you look at collective intelligence a lot of the AI concepts came around from collective intelligence, predictive analytics, prescriptive analytics all came around using data to create value. I always talk about fake news because we have a cloud of media business that's kind of tokenized now but fake news it two things, it's payload, fake news, the fake content and then the infrastructure dynamics that they arbitraged, with network effects. They targeted specific people, fake payload, but the distribution was a network effect. Again, this was the perverse incentive that no one was monitoring, there was no- >> Well and I think in that case, yes there is news that is inherently false information but then there's also a whole spectrum of trueness, if you want to call it that so now we have this technology that allows us to overlay on top of that and say, "Well what is the providence of my information?" And with different layers of block chain systems you're actually able to prove the providence of your information without exposing the user's privacy and without exposing the whole supply chain of the media because there's like media buyers, go through all kinds of hands. >> And we believe the answer to fake news, frankly, is data access, collective intelligence and something like a block chain where you have incentive systems to filter out the fake news. >> Totally. >> Exactly. >> Reputation systems, these things are not new concepts. >> It's all about stake at the end of the day, right? It's how do you keep a stakeholder accountable for their action? You need backing so I think we're definitely on the same page. >> I love, I could talk about fake news all day because we think we can solve that with our CUBEcoin token coming out soon. I want to shift gears and talk about some of the examples we've seen with cloud. >> Sure. >> And try to map that to some navigation for people in how to get through the block chain token world. One of the key things about the cloud was something they called shadow IT. Shadow IT was people who said, hey, you know what? I could just put my credit card down and move this non core thing out in this cloud and prove to my boss, show them, not pitch 'em on the Power Point deck, to say look it, I just did this for that cost in this timeframe, and that started around 2009/2010 timeframe, the early digerati or the clouderati kind of did that but around 2012 it became, wow, this shadow IT is actually R and D practice. >> Mm-hmm. >> Right. >> You started to see that now, so the question that we see for people evaluating in the enterprise is how do you judge what's a good project? Certainly people are kicking the tires and doing a little bit, I won't call it shadow IT, but they're taking on some projects as you were talking about on the panel. How should they, the enterprises in general, the large companies, start thinking about how to enable a shadow IT-like dynamic and how should they evaluate the kind of projects? I think that's an area people just don't know what to look for. Your thoughts? >> I want to add a premise to that, because I think that's absolutely the right question to ask. We also need to add the why. Why should we, as people that do native crypto currency, even care about enterprises? A lot of people kind of theorized when Bitcoin was created to say it was anti institutional is an understatement, right? Aren't we meant to kill enterprise? The thing is, I don't think it's going to be a big bang. I don't think it's going be we wake up and nobody's using banking anymore or nobody's using the traditional healthcare or government and you know whatever insurance policies. We care about block chain in the context of enterprise because we think block chain is a fundamentally better model of doing things. It kind of does away with the black box where I need to be in business, I need to blindly trust you and it introduces a much more transparent and democratic model of doing things. We absolutely want to introduce and make block chain mainstream because that's important for us. When you think of how we do it, to your question, AION is all about interoperability, right? We create a solution that helps scale and helps different networks, decentralized networks, communicate to each other. What we also do with MavenNet, the company I run, is essentially make that enterprise friendly. It's extremely hard to do adoption and implementation within an enterprise, they're very immune to change. >> Antibodies as they say. >> Oh. >> The antibodies to innovation, they kill innovation. >> Totally, so going back to your original question, it all starts with a P and L. If somebody is going to authorize, you know, an actual production system in enterprise for block chain, it needs to create a tangible value, a tangible return, quickly and that's the key. The model that actually scales is you start by flushing out inefficiency plate. You show the enterprise how you could actually achieve, I don't know 20%/30%, that's the order of magnitude that they care about, efficiency by moving some part of your value chain on top of a block chain. >> It has to have an order of magnitude difference or so. I mean cloud was a great example, too, it changes the operating model. >> Yeah. >> They achieve what they wanted to achieve faster and more efficiently and operated it differently. >> Correct. >> And people were starting at it like a three headed monster like what is this thing, right? The cloud thing. And throwing all kinds of fud out there, but ultimately at the end of the day, it's a new operating model for the same thing that they're trying to do with the old stuff. >> Mm-hmm. >> I mean, it's almost that simple. >> Yeah, I think in some cases you need to really, in my previous life at the Block Chain Research Institute, we encouraged a lot of our clients to really take a step back and say, well will I actually, A, will I have this problem in eight years or seven years or 20 years or 50 years, if we're really fundamentally building a new financial system or a new way of doing things that is fundamentally different? Are we building it on old technology? We need to make sure that, and that's why you've seen banks were the first in the door to say, "Yeah, payments, that sounds great, that sounds great." But the real applications that we're seeing from banks are in loyalty, they're in AMLKYC, they're in the sort of fringe operations. Something like payments is going to take a really long time to push through because of those legacy systems because payments is the fundamentals of what banks do. >> This is an interesting point, I want to get your thoughts to end the segment because I think one of the things that we've certainly seen with cloud that over the generational shifts that have happened, the timeframe for innovation is getting shorter and shorter, so timeframe is critical so if the communities are fumbling around hitting that time to value, it seems to be trending to faster and we don't want to hear slower because these systems are inadequate, they're antiquated. >> Mm-hmm. >> These are the systems that are disrupted so the timing of, whether it's standards, or interoperability or business models, operating models, they got to be faster. >> Yeah. >> That's the table stakes. >> I think it all comes down to collaborative governance. >> People have to figure out block chain faster. >> Yeah. >> What's holding us back? Or what's accelerating us? What's the key for the community at large from the engineering community and the business community to make it go faster? Your thoughts? >> Right, so I think we're still searching for the next killer app. If Bitcoin is the reason we're all sitting here today and I profoundly believe that. >> Yeah. >> What is the next thing that drives change on a global scale? That's kind of what we're trying, collectively as an industry, to figure out. Sure, many kind of roadblocks on the way. Some of them educational, perceptional, regulation, technology, but the next big wave that's going to accelerate us to the next ten years of block chain is that next killer app. Organizations such as myself, Jenna, that's our day job, we wake up and that's what we do. >> I mean I've always said, and Dr. Wong, who's the founder of Alibaba Cloud agreed with me, I've been saying that the TCPIP protocol, that standard really enabled a lot of interoperability and created lots of diverse value up the stacks of the OSI model, Open Systems Interconnect, seven layer model, actually never got standardized. It's kind of stopped at TCPIP and that was good, everyone snapped at the line, that created massive value. >> But that's a collaborative governance thing. That's people coming together and saying that these are the standards that we wish to adhere to. >> We need the moment right now. >> Yeah, so you see organizations like the Enterprise Ethereum Alliance coming out with a prospective list of standards that they think the community should adhere here. You know you have the ERC20 standard, you have all these different organizations, the World Economic Forum is playing a role in that and the UN is playing a role, especially when it comes to identity and those kind of really big, societal issues but I think that it comes down to that everyone plays a role that I'm doing my best, I think it's going to be somewhere in the realm of data so that's where I've chosen to sort of make my course. >> I think this is a good conversation to have, and I think we could continue it. I mean, I read on Medium, everyone's reading these fat protocols, thin protocols but at the end of the day what does that matter if there's no like scale? >> Yeah. >> You can have all the fat protocols you want, more of a land grab I would say but there's certainly models but is that subordinate or is that the cart before the horse? This is the conversation I think is in the hallways. >> Totally agree, totally agreed. >> Guys, thanks so much for coming on theCUBE, really appreciate it. Breaking down real world applications of block chain we're at the Global Cloud and Block Chain Summit. It's an inaugural event and think it's going to be the kind of format we're going to see more of, cloud and block chain coming together. Collision course or is it going to come in nicely and land together and work together? We'll see, of course theCUBE's covering it. Thanks for watching. Stay with us for more all day coverage. Part of the Futurist Conference coming up the next two days. We're in Toronto, we'll be back with more after this short break. (theCUBE theme music)

>> Live from Toronto Canada, it's The Cube, covering Global Cloud and Blockchain Summit 2018, brought to you by The Cube. >> Hello, everyone welcome back to The Cube's live coverage here in Toronto for the first Global Cloud and Blockchain Summit in conjunction with the Blockchain futurist happening this week it's run. I'm John Fourier, my cohost Dave Vellante, we're here with Cube alumni, Bradley Rotter, pioneer Blockchain investor, seasoned pro was there in the early days as an investor in hedge funds, continuing to understand the impacts of cryptocurrency, and its impact for investors, and long on many of the crypto. Made some great predictions on The Cube last time at Polycon in the Bahamas. Bradley, great to see you, welcome back. >> Thank you, good to see both of you. >> Good to have you back. >> So I want to just get this out there because you have an interesting background, you're in the cutting edge, on the front lines, but you also have a history. You were early before the hedge fund craze, as a pioneer than. >> Yeah. >> Talk about that and than how it connects to today, and see if you see some similarities, talk about that. >> I actually had begun trading commodity futures contracts when I was 15. I grew up on a farm in Iowa, which is a small state in the Midwest. >> I've heard of it. >> And I was in charge of >> Was it a test market? (laughing) >> I was in charge of hedging our one corn contract so I learned learned the mechanisms of the market. It was great experience. I traded commodities all the way through college. I got to go to West Point as undergrad. And I raced back to Chicago as soon as I could to go to the University of Chicago because that's where commodities were trading. So I'd go to night school at night at the University of Chicago and listen to Nobel laureates talk about the official market theory and during the day I was trading on the floor of the the Chicago Board of Trade and the Chicago Mercantile Exchange. Grown men yelling, kicking, screaming, shoving and spitting, it was fabulous. (laughing) >> Sounds like Blockchain today. (laughing) >> So is that what the dynamic is, obviously we've seen the revolution, certainly of capital formation, capital deployment, efficiency, liquidity all those things are happening, how does that connect today? What's your vision of today's market? Obviously lost thirty billion dollars in value over the past 24 hours as of today and we've taken a little bit of a haircut, significant haircut, since you came on The Cube, and you actually were first to predict around February, was a February? >> February, yeah. >> You kind of called the market at that time, so props to that, >> Yup. >> Hope you're on the right >> Thank you. >> side of those shorts >> Thank you. >> But what's going on? What is happening in the capital markets, liquidity, why are the prices dropping? What's the shift? So just a recap, at the time in February, you said look I'm on short term bear, on Bitcoin, and may be other crypto because all the money that's been made. the people who made it didn't think they had to pay taxes. And now they're realizing, and you were right on. You said up and up through sort of tax season it's going to be soft and then it's going to come back and it's exactly what happened. Now it's flipped again, so your thoughts? >> So my epiphany was I woke up in the middle of the night and said oh my God, I've been to this rodeo before. I was trading utility tokens twenty years ago when they were called something else, IRUs, do you remember that term? IRU was the indefeasible right to use a strand of fiber, and as the internet started kicking off people were crazy about laying bandwidth. Firms like Global Crossing we're laying cable all over the ocean floors and they laid too much cable and the cable became dark, the fiber became dark, and firms like Global Crossing, Enron, Enron went under really as a result of that miss allocation. And so it occurred to me these utility tokens now are very similar in characteristic except to produce a utility token you don't have to rent a boat and lay cable on the ocean floor in order to produce one of these utility tokens, that everybody's buying, I mean it takes literally minutes to produce a token. So in a nutshell it's too many damn tokens. It was like the peak of the internet, which we were all involved in. It occurred to me then in January of 2000 the market was demanding internet shares and the market was really good at producing internet shares, too many of them, and it went down. So I think we're in a similar situation with cryptocurrency, the Wall Street did come in, there were a hundred plus hedge funds of all shapes and sizes scrambling and buying crypto in the fall of last year. It's kind of like Napoleon's reason for attacking Russia, seemed like a good idea at the time. (laughing) And so we're now in a corrective phase but literally there's been too many tokens. There are so many tokens that we as humans can't even deal with that. >> And the outlook, what's the outlook for you? I mean, I'll see there's some systemic things going to be flushed out, but you long on certain areas? What do you what do you see as a bright light at the end of the tunnel or sort right in front of you? What's happening from a market that you're excited about? >> At a macro scale I think it's apparent that the internet deserves its own currency, of course it does and there will be an internet currency. The trick is which currency shall that be? Bitcoin was was a brilliant construct, the the inventor of Bitcoin should get a Nobel Prize, and I hope she does. (laughing) >> 'Cause Satoshi is female, everyone knows that. (laughing) >> I got that from you actually. (laughing) But it may not be Bitcoin and that's why we have to be a little sanguine here. You know, people got a little bit too optimistic, Bitcoin's going to a hundred grand, no it's going to five hundred grand. I mean, those are all red flags based on my experience of trading on the floor and investing in hedge funds. Bitcoin, I think I'm disappointed in Bitcoins adoption, you know it's still very difficult to use Bitcoin and I was hoping by now that that would be a different scenario but it really isn't. Very few people use Bitcoin in their daily lives. I do, I've been paying my son his allowance for years in Bitcoin. Son of a bitch is rich now. (laughing) >> Damn, so on terms of like the long game, you seeing the developers adopted a theory and that was classic, you know the decentralized applications. We're here at a Cloud Blockchain kind of convergence conference where developers mattered on the Cloud. You saw a great developer, stakeholders with Amazon, Cloud native, certainly there's a lot of developers trying to make things easier, faster, smarter, with crypto. >> Yup. >> So, but all at the same time it's hard for developers. Hearing things like EOS coming on, trying to get developers. So there's a race for developer adoption, this is a major factor in some of the success and price drops too. Your thoughts on, you know the impact, has that changed anything? I mean, the Ethereum at the lowest it's been all year. >> Yup. Yeah well, that was that was fairly predictable and I've talked about that at number of talks I've given. There's only one thing that all of these ICOs have had in common, they're long Ethereum. They own Ethereum, and many of those projects, even out the the few ICO projects that I've selectively been advising I begged them to do once they raised their money in Ethereum is to convert it into cash. I said you're not in the Ethereum business, you're in whatever business that you're in. Many of them ported on to that stake, again caught up in the excitement about the the potential price appreciation but they lost track of what business they were really in. They were speculating in Ethereum. Yeah, I said they might as well been speculating in Apple stock. >> They could have done better then Ethereum. >> Much better. >> Too much supply, too many damn tokens, and they're easy to make. That's the issue. >> Yeah. >> And you've got lots of people making them. When one of the first guys I met in this space was Vitalik Buterin, he was 18 at the time and I remember meeting him I thought, this is one of the smartest guys I've ever met. It was a really fun meeting. I remember when the meeting ended and I walked away I was about 35 feet away and he LinkedIn with me. Which I thought was cute. >> That's awesome, talk about what you're investing-- >> But, now there's probably a thousand Vitalik Buterin's in the space. Many of them are at this conference. >> And a lot of people have plans. >> Super smart, great ideas, and boom, token. >> And they're producing new tokens. They're all better improved, they're borrowing the best attributes of each but we've got too many damn tokens. It's hard for us humans to be able to keep track of that. It's almost like requiring a complicated new browser download for every website you went to. We just can't do that. >> Is the analog, you remember the dot com days, you referred to it earlier, there was quality, and the quality lasted, sustained, you know, the Amazon's, the eBay's, the PayPal's, etc, are there analogs in this market, in your view, can you sniff out the sort of quality? >> There are definitely analogs, I think, but I think one of the greatest metrics that we can we can look at is that utility token being utilized? Not many of them are being utilized. I was giving a talk last month, 350 people in the audience, and I said show of hands, how many people have used a utility token this year? One hand went up. I go, Ethereum? Ethereum. Will we be using utility tokens in the future? Of course we will but it's going to have to get a whole lot easier for us humans to be able to deal with them, and understand them, and not lose them, that's the big issue. This is just as much a cybersecurity play as it is a digital currency play. >> Elaborate on that, that thought, why is more cyber security playing? >> Well, I've had an extensive background in cyber security as an investor, my mantra since 9/11 has been to invest in catalyze companies that impact the security of the homeland. A wide variety of security plays but primarily, cyber security. It occurred to me that the most valuable data in the world used to be in the Pentagon. That's no longer the case. Two reasons basically, one, the data has already been stolen. (laughing) Not funny. Two, if you steal the plans for the next generation F39 Joint Strike Force fighter, good for you, there's only two buyers. (laughing) The most valuable data in the world today, as we sit here, is a Bitcoin private key, and they're coming for them. Prominent Bitcoin holders are being hunted, kidnapped, extorted, I mean it's a rather extraordinary thing. So the cybersecurity aspect of if all of our assets are going to be digitized you better damn well keep those keys secure and so that's why I've been focused on the cybersecurity aspect. Rivets, one of the ICOs that I invested in is developing software that turns on the power of the hardware TPM, trusted execution environment, that's already on your phone. It's a place to hold keys in hardware. So that becomes fundamentally important in holding your keys. >> I mean certainly we heard stories about kidnapping that private key, I mean still how do you protect that? That's a good question, that's a really interesting question. Is it like consensus, do you have multiple people involved, do you get beaten up until you hand over your private key? >> It's been happening. It's been happening. >> What about the security token versus utility tokens? A lot of tokens now, so there's yeah, too many tokens on the utility side, but now there's a surge towards security tokens, and Greg Bettinger wrote this morning that the market has changed over and the investor side's looking more and more like traditional in structures and companies, raising money. So security token has been a, I think relief for some people in the US for sure around investing in structures they understand. Is that a real dynamic or is that going to sustain itself? How do you see security tokens? >> And we heard in the panel this morning, you were in there, where they were predicting the future of the valuation of the security tokens by the end of the year doubling, tripling, what ever it was, but what are your thoughts? >> I think security tokens are going to be the next big thing, they have so many advantages to what we now regard as share certificates. My most exciting project is that I'm heavily involved in is a project called the Entanglement Institute. That's going to, in the process of issuing security infrastructure tokens, so our idea is a public-private partnership with the US government to build the first mega quantum computing center in Newport, Rhode Island. Now the private part of the public-private partnership by the issuance of tokens you have tremendous advantages to the way securities are issued now, transparency, liquidity. Infrastructure investments are not very liquid, and if they were made more liquid more people would buy them. It occurred to me it would have been a really good idea if grandpa would have invested in the Hoover Dam. Didn't have the chance. We think that there's a substantial demand of US citizens that would love to invest in our own country and would do so if it were more liquid, if it was more transparent, if the costs were less of issuing those tokens. >> More efficient, yeah. >> So you see that as a potential way to fund public infrastructure build-outs? >> It will be helpful if infrastructure is financed in the future. >> How do you see the structure on the streets, this comes up all the time, there's different answers to this. There's not like there's one, we've seen multiple but I'm putting a security token, what am i securing against, cash flow, equity, right to convert to utility tokens? So we're starting to see a variety of mechanisms, 'cause you have to investor a security outcome. >> Yeah, so as an investor, what do you look for? >> Well, I think it's almost limitless of what these smart securities, you know can be capable of, for example one of the things that were that we're talking with various parts of the government is thinking about the tax credit. The tax credit that have been talked about at the Trump administration, that could be really changed on its head if you were able to use smart securities, if you will. Who says that the tax credit for a certain project has to be the same as all other projects? The president has promised a 1.5 trillion dollar infrastructure investment program and so far he's only 1.5 trillion away from the goal. It hasn't started yet. Wilbur Ross when, in the transition team, I had seen the white paper that he had written, was suggesting an 82% tax credit for infrastructure investment. I'm going 82%, oh my God, I've never. It's an unfathomable number. If it were 82% it would be the strongest fiscal stimulus of your lifetime and it's a crazy number, it's too big. And then I started thinking about it, maybe an 82% tax credit is warranted for a critical infrastructure as important as quantum computing or cyber security. >> Cyber security. >> Exactly, very good point, and maybe the tax credit is 15% for another bridge over the Mississippi River. We already got those. So a smart infrastructure token would allow the Larry Kudlow to turn the dial and allow economic incentive to differ based on the importance of the project. >> The value of the project. >> That is a big idea. >> That is a big idea. >> That is what we're working on. >> That is a big idea, that is a smart contract, smart securities that have allocations, and efficiencies, and incentives that aren't perverse or generic. >> It aligns with the value of the society he needs, right. Talk about quantum computing more, the potential, why quantum, what attracted you to quantum? What do you see as the future of quantum computing? >> You know, you don't you don't have to own very much Bitcoin before what wakes you up in the middle of the night is quantum computing. It's a hundred million times faster than computing as we know it today. The reason that I'm involved in this project, I believe it's a matter of national security that we form a national initiative to gain quantum supremacy, or I call it data supremacy. And right now we're lagging, the Chinese have focused on this acutely and are actually ahead, I believe of the United States. And it's going to take a national initiative, it's going to take a Manhattan Project, and that's that's really what Entanglement Institute is, is a current day Manhattan Project partnering with government and three-letter agencies, private industry, we have to hunt as a pack and focus on this or we're going to be left behind. >> And that's where that's based out of. >> Newport, Rhode Island. >> And so you got some DC presence in there too? >> Yes lots of DC presence, this is being called Quantum summer in Washington DC. Many are crediting the Entanglement Institute for that because they've been up and down the halls of Congress and DOD and other-- >> Love to introduce you to Bob Picciano, Cube alumni who heads up quantum computing for IBM, would be a great connection. They're doing trying to work their, great chips to building, open that up. Bradley thanks for coming on and sharing your perspective. Always great to see you, impeccable vision, you've got a great vision. I love the big ideas, smart securities, it's coming, that is, I think very clear. >> Thank you for sharing. >> Thank you. The Cube coverage here live in Toronto. The Cube, I'm John Furrier, Dave Vellante, more live coverage, day one of three days of wall-to-wall coverage of the Blockchain futurist conference. This is the first global Cloud Blockchain Summit here kicking off the whole week. Stay with us for more after this short break.