>> Woman: From theCUBE studios in Palo Alto in Boston, connecting with thought leaders all around the world, this is a CUBE conversation. >> Okay welcome back already Jeff Frick here with theCUBE. We're in our Palo Alto Studios here. Can't believe we just turned the calendar on September the 1st of 2020. What a year, it's cruising by. And one of the big topics obviously is working from home, we're seeing more and more companies telling everybody to expect to work from home through the end of the year or into next year, some are even saying indefinitely. And we've got an expert coming on the show that we're excited to have back. It's Dr. Karen Sobel Lojeski. She is the founder and CEO and author of "Virtual Distance and the Virtual Distance Company". Karen, great to see you. >> Great to see you too Jeff, thanks for having me. >> Absolutely, so I wanted to get you back on for a couple reasons. One is we first met at the ACGSV, Association for Corporate Growth Silicon Valley 2018 Awards, about two years ago was summer of 2018. And at that point, you introduced me to the concept and our audience, to the concept of virtual distance, which if I can summarize is basically communicating through devices versus face-to-face, like we're doing here. And the bad things that come from that and challenges and this and the other. Who knew that two years from then we would all be forced and not asked, but forced to basically go to a work-from-home environment and increase the frequency and use of using electronic devices to communicate not only for work, but also for social stuff, for school, for everything, so, oh my goodness, you happen to be in the right place at the right time for not necessarily the greatest of reasons, but wow, I mean, how amazing this transformation that we've all been forced to since the middle of March. First off, get your thoughts on that and then we'll dive into what people should be thinking about, what people should be doing about it and how they can, I want to say make the most, but it does kind of make the most of, not necessarily the greatest situation. >> Yeah, well, I could have never imagined when we were sitting out at that round table outside the room where we had dinner that we'd be here two years later, right, talking about virtual distances, you said in the context of everyone having to be isolated from each other and working from home. Obviously, like everyone on the planet, I think I would never have wanted to see this happen. But I feel fortunate in a way to have put this out there many years ago because today it's serving a lot of different organizations, corporations, schools, even government organizations to have a very steady framework that's based on 15 years of data, to understand how to make the best, as you said, of this situation and to reduce some of the negative consequences of virtual distance and actually use the framework as a way to get to know people better and really see them more as human beings in a way that helps them through not just their work life, but also through the family challenges that they're having with every kid now, sort of going back to school, many of them online, there's a lot of virtual distance that can crop up even in the house. But I guess I just, I'm glad that I discovered virtual distance, and that it's useful in this time. >> Right, right. So let's jump into it. And actually I want to skip to the end of the book before we get into the beginning of the book because you talked about leadership and when this thing first hit, we had a number of leaders from the community, talking about leading through trying times. And most great leaders know that their primary job is really communication, right? Communication to their teams, communication to their constituents, communication to their customers. COVID has really changed the communication challenges and increase them dramatically and most of the stuff we're hearing is that leaders need to communicate more frequently and in more variety, both in terms of topics as well as communication forms. How does that kind of jive with your studies on virtual distance and leadership, given the fact that there aren't a lot of other options in terms of face-to-face or a little bit more intimate things? They have to use these electronic means. So what tips do you have for leaders, as they suddenly were told everybody's working from home starting like tomorrow? >> Yeah, well, it's funny that you asked me that because we learned early on when I started looking at this phenomenon in the early 2000s. We learned early on that it actually takes a lot more work and time to lead virtually than it does in more traditional environments. And the reason is because a leader really has to bring forward a lot of context that tends to go underground or become invisible about other people when we're working virtually. So the leader already was under a lot of pressure if you will, to communicate much more than they had been in more traditional settings because a lot of the information and knowledge and intelligence if you will, about the company was available in the context of the environment and other people. So leaders were already on track to having to communicate much more in order to make make remote work and virtual work work. Well, which of course it can. >> Right. >> But what happened was, we found that when suddenly a light switch is turned off, leaders needed to communicate even more. And that is kind of standard crisis management leadership. We talked a little bit about that in the past, right? So we can look at the situation we're in as not just an acute crisis that came to bear in early January and then sort of everything locking down in March. But we can kind of look at this as a long-term leadership crisis management strategy on top of just over communicating to do better in virtual space. And in a crisis management situation you definitely want to have even more communication, but it's also an opportunity actually to develop other leaders behind you on teams that can also communicate as well, to share that responsibility, to share that leadership commitment to a lot of communication during times like this, that actually works really well. >> Right, 'cause one of the things you talked about that's super, super important, more important actually than physical distance or the virtual distance is what you called the affinity distance, and I think it ties back to another point in the book in terms of clarity of communication from the leadership. What are the goals, what is the vision? And reinforcing that at a rate and frequency much higher than they've ever done before to build that affinity so people can continue to feel like they're part of something beyond more just the tasks and the roles and the assignments that I have to do every day. >> Yeah, that's exactly right, Jeff. So again, we found early on. And it was a surprise to us at first, but then became kind of obvious that people tend to think that the real challenge with virtual work is physical distance, right, sort of the space between us in terms of a geography or a geographic separation. And what we learned early on through the statistics, as well as sort of common sense was that actually physical distance had the least impact on corporate outcomes than any of the other three factors. So the affinity distance piece is really all about, how do I gain an affinity for someone when I really don't know that much about them. And I don't know much about their context in the moment that we're talking, and I also just know less about them in general when we're virtual. >> Right. >> So affinity distance is much more important than the physical separation because it's what holds us together and allows us to build very, very deep relationships which we can count on and trust no matter what the situation is. And yeah, doing that in these times is very important. >> So it's funny, right? 'Cause so much of the problems that we have with communications are in the subtle feedback mechanisms that aren't necessarily in the overt communication and as you said, those can be lost in a lot of channels. What's kind of (chuckles) interesting that's going on with COVID is we're actually seeing a side of people that we never did see in the physical space, right. Now we're literally being invited into everyone's home. I mean, I'm in your home office, I can see your books on your bookshelf and people are bringing people into their home which they may not have done before or been comfortable. Not only that, but the spouse is there, he or she is working from home. The kids are there, they're doing their school from home, the occasional dog or pet or other thing kind of jumping through the screen. So it's this weird kind of juxtaposition. On one hand you've lost a whole lot of kind of subtle communication reinforcers. On the other hand, you're getting kind of a whole new kind of the human side aspect in terms of who these people are and what they're all about, that you never necessarily had before. So I think the blending of the whole self is probably been elevated, even though the communication challenges without having kind of all these subtle feedback loops that we really rely on, are gone. So when you think about communication and communication methods based on communication messages and what you're trying to do, how do you tell people to think about that? What types of communications should be done in which ways to make them the most effective and avoid some of the real problems that come from the wrong type of communication on the wrong type of channel? >> Yeah, so first of all, you make some great points. Because it really is when we invite people into our home via these kind of video links, people see a different side of us, a contextualized side to us that they normally wouldn't see. And that opens the door, as you said, to having other communications. I think before I get directly to your question, one thing that strikes me about what you say is that this is truly a shared experience, right? So all of us are being impacted by COVID-19, the economics of the situation, the childcare issues that are raised by the situation, the community issues that we all have in our towns or cities. And we're sharing that experience, which is a great jumping off point in terms of communications because we actually have a very similar context from which were working. In terms of which communications to use when. This is a really important question, I had a person from a very, very large tech company that people use every day to go look for things on the Internet, call me and tell me at one point early, sort of early on in the pandemic that some of his people were starting to beg him to turn off the video screens. (chuckles) And just use audio because sometimes when we're overwhelmed with a crisis the video can be helpful, but it can also sort of be overwhelming. So it's important to understand sort of when to discern, when to use audio and when to use visual, when to use email and when to use tax. And the basic tips here is that email has really never been good to explain ourselves to other people. It's been great to set up lunch dates or an appointment and things like that. So email should be used pretty sparingly. Audio is really great if we don't have video, but we also just kind of need a rest from video. And we also need to really focus on a person's voice very, very intensely. So if we're trying to solve a really critical problem that's a little bit conceptual, sometimes audio can can be more helpful. Video is obviously great because it gives us all this context and it allows people to see into our home and hear our cats kind of screaming at each other which is happening right now in my house. But it also lets us see each other's expressions and a little bit of the facial communication that we need in order to know if people are okay with what we're saying, if they're quizzical and looking like they kind of don't understand et cetera, The overarching goal of communications in a situation like this, that I talk a lot about in the book, is to mix up modes of communication as much as you can think about that, right? Because we get context as I've just explained in different ways through different modes. And so if we mix it up, if I say well, I've talked to Jeff a lot over video maybe I'll just give him a call today. Or I've been using a lot of email to talk to one of my colleagues in Norway, maybe I should really try to set up a video call that is very helpful because it gives us dimensionality to someone's personality as well as their context. >> Yeah, that's a really interesting point. I think most people are always saying turn on the video, turn on the video, we want to see everybody's face but as this thing continues to go and go and go and it's going to go for the foreseeable future, and people are going to get fatigue, right, people are getting Zoom fatigue. That's a really interesting and simple way to I think, kind of lessen the stress a little bit by telling people, let's just turn the video off. We don't necessarily need to see each other, we know what we look like. And if you feel some reason to turn it on, you can turn it on, but having that as an option, I think that's a really insightful. And the other thing I want to focus on is it's not all negative, right? I mean, there's a lot of studies about the open office plan, which didn't necessarily work so well, and we've had conversations with a lot of people that say, just because you throw everybody in a room together doesn't mean that they're necessarily going to communicate more and there aren't necessarily the water cooler chatter that you're kind of hoping for. And in fact, you have a bunch of stats in the book here about remote workers having actually a lot of success. They have less trouble with technology, they can cope best with multiple projects. There's so many less interruptions, (chuckles) assuming the rest of the family has a place to work. But you don't get kind of the work interruptions that you would in terms of actually getting projects done. So, it's not all bad. And I think there's a lot of things that we can help people think about to really take advantage or make the most of the opportunity, to take advantage is probably the wrong word. So, vary communications, frequency in communications is certainly a good one. What are other ways that people kind of build trust? 'Cause you talk a lot about trust and feeling part of something bigger and not letting the individual tasks and the little day-to-day things that we do get in the way of still feeling like you belong to something that's important, that you care about, with your teammates that you want to move forward. >> Yeah, so the it's a great question, and again I think, obviously, amongst sort of the darkness there's always sort of opportunities to see some light. And I think one of the ways that we can see light through working this way at this time is to expand our understanding of the people that we're working with, right? And we can do that in a framework, it doesn't have to be haphazard. So when we look at affinity, what we really want to do is to bring forward the way people feel about their value systems, what's important to them about work in sort of pre-COVID or BC, right before COVID, but also what's important to them about their family life or about the situation that's happening, that's interacting with and integrating with their work life. So asking those questions in ways that are not guised, but sort of directly asking them things about what they value? How they feel that they're interdependent on other people? Why other people are important to them in their work, as well as just in their day-to-day lives? Those are the kinds of opportunities for questions around things that are not work related, are not party Friday, which are also kind of fun things right? But that get more to the core of who a person is, that whole person that you were talking about. And that allows us to see so much more deeply, ironically, into that human being. And when you talk about purpose, and really wanting to feel like we're part of something bigger than ourselves, those kinds of insights that build affinity help us help other people. So, we tend to focus on task orientation and goals and deliverables and all that which is absolutely critical for business continuity, and to get through the day and focus our attention. But actually what makes people feel really good about their day as a person is often how they can help other people. And so if we draw this closer affinity, we can actually figure out ways to help other people. And that just lifts everybody up and makes the work product actually even better. >> Right, right, I've always ascribed to the theory that right, if you spend your work helping other people do their work better, easier, get roadblocks out of the way, whatever, be an enabler, then you're getting this multiplier effect because I'm doing my work and I'm helping somebody else be more efficient. And it's a very different way to kind of think about work in terms of helping everybody be more effective, more efficient, and as you said, you get this great multiplier effect, but I want to shift gears a little bit. And this sentence, just jumped out of your book. I'm actually going to read from it, that despite the fact that many leadership challenges are new, we continue to over rely on management thinking and solutions that are fundamentally designed around outdated assumptions. I mean, to me this is such a huge thing. We had Martin Mikason at the beginning of this process and his great line, and he's managed remote companies for years and multiple companies. And he said, it's so easy to fake it in the office, right? It's so easy to look busy. (Karen chuckles) Whereas when you're working from home, the only thing you have to show is your output. And that's what you're graded on, your output. And yet when this thing first hit, we saw all types of new products coming out that are basically spyware for the employees, how often are you sitting in front of your computer? How often are you on a Zoom call? How often are you, doing these things? And it's striking to me that it's such an outdated way to measure activity, versus a way to measure outcome and output and what are you trying to do? I mean, it just drives me crazy to hear those things, I just love to get your take that people still are mixed up about what they're supposed to be measuring and what the purpose of the whole task is, which is to get output done not just to be busy and sit in Zoom calls all day. >> It's so true. So there's sort of two prongs to that question. And two very important things to look at. So one is how do we measure productivity, right among knowledge workers, which has been the topic of a lot of conversation. And the other thing is, what have leadership models been built off of in the past, right? If you just take the first thing first. Productivity today, if you go to the Bureau of Labor Statistics website, you will still see productivity defined as how many widgets can I produce in an hour. That's still today, how we measure productivity, even though (chuckles) all of our output or most of our output, right, is coming from our knowledge, our thinking, our problem solving. (clears throat) So the notion of productivity feels very heavy handed to a lot of people, because it's still rooted literally economics wise in this notion of x widgets per hour, which just doesn't fit. And that comes through the second point, which is our leadership models, right? So I talked in the book and I've been talking about this for many years, because it just jumped out at me when I started to do this research, is that if you look at most leadership models today, any one of them, pick whatever one you like, transformational leadership, transactional leadership, situational leadership or whatever it might be. Those leadership models were built mainly in the 1950s. And some of them came later in the 80s. We have a few new ones, (clears throat) excuse me that have come after the internet, but not too many. And fundamentally, if you look at the communication mode of leaders in the 50s, and the 80s, it was face-to-face or phone. I mean, just by definition, was in person or via phone. But that assumption doesn't hold true anymore and hasn't held true for a good 15 years. And yet, in every business school today, we still use those leadership models as sort of our first run at how to lead. It's not that they're not useful and helpful and don't have extremely good words of advice for leaders. But the main thing leaders do is communicate. So if the fundamental channel over which leaders are communicating has completely changed, it seems natural that we should be looking for new leadership models (chuckles) that fit our times a little bit better. Taking pieces of the best of those leadership models, but really turning them on their head and saying, what's really a better approach when fundamentally our communication mode itself, it has completely changed. >> Right right. >> And that's what we do as leaders. >> And I do just want to say a word. We're talking about working from home and knowledge workers and unfortunately, there's a whole lot of people going through COVID right now that don't have that option, right. If you're in the travel industry, if you're in the hospitality industry, if you're in a lot of services industries, if you are a plumber, you can't go virtual as a plumber, unfortunately. So just to acknowledge that, what we're talking about applies to a lot of people, but certainly not everyone and everyone doesn't have these options. So I just wanted to mention that but before we wrap, Karen, the thing that struck me, as you're talking about kind of the 50s and the organizational structure, was it was really command and control and just top down hierarchies that dictated what people did. And then you as you said, your job was to put so many widgets on the widget receiver per hour, and that's what you were graded on. Where in knowledge workers, it's a very different thing. And in fact, you shouldn't tell people how to do things, you should tell people what the objectives are, and then see what they come up with. And hopefully, they'll come up with lots of different ways to achieve the objective, most of which that management has never thought of, they're not down in the weeds, and you get all kinds of interesting and diversity of opinion and different approaches. And kind of a DevOps mentality where you try lots of things and you'll find new ways to get it done. So I want to close out on this final kind of communication piece for leadership. And this is the why. I think back in the 50s, I don't know that the why we was that important. Or maybe it was and I'm not giving it enough credit. But today the why is so important. That is such a big piece of why do I come to work every day? And why am I important to work with my colleagues and move this mission forward. And so whenever you can just share, how important the why is today, and then how important the why is in trying to build a culture and hold people together when they are now by rule distributed all over the place. Talk a little bit about the why. >> Yeah, I love that question, Jeff. Because in the book, I talk a lot about Taylorism. And Taylor was the founder of like bureaucratic management and leadership and he actually despised the worker. (chuckles) There's actually a little piece in the book where he's testifying to Congress and saying that the man who handles pig iron, a type of steel, wasn't intelligent enough to understand what pig iron really was, he got a lot of flak for that. (chuckles) So as we've evolved, right, and as we've grown as organizations into knowledge workers, and I think your point about not everyone is a quote unquote, knowledge worker, is really, really important. The bottom line is, we're trying to measure our output and the value of our work by these older standards. And so people are struggling a little bit with that sort of disconnect, and looking for why, what purpose do they have? What is their bigger purpose? How are they connected to the organization in new ways? And there's actually an excellent analogy in the Navy. Is has its traditions in the Navy, called Commander's Intent which I talk about. So if you think of ships that used to sail, right out to sea, and they had lots of goals about either taking over a certain country or whatever it was they were doing, they couldn't be together, right. So we've been working remotely for a very long time. So the commander would gather all of his lieutenants, and basically tell them what his or, there were no hers at that time, but what his intentions were. And the lieutenants, the captains of the other ships, would go out to each ship, and they wouldn't follow a blueprint tactical plan they would just have the Commander's Intent as their guide. And then they were free actually, to use whatever strategies and tactics that they thought of and that worked in their context in order to fulfill the Commander's Intent, but they weren't given a blueprint. Their goal was really to use their own smarts, their own critical thinking in order to carry forward that intent. And I think that idea is very powerful today because I think if leaders can focus on helping their workers, their employees, their ecosystem partners, supply chain partners, whatever it may be, understand what the intent of the company is, and show that they trust the employees or the partner to deliver on that intent, with whatever means and creativity and imagination, guided by the intent, can be used and selected from on their day-to-day lives, people will feel so much more empowered and still get to the same outcome or actually better, than if they're told do A, B, C and D. So this idea of leader intent, I think would serve companies really well during this time, and if I could just add one other quick thing. There's another idea that comes out of sort of the military that I used and doing some work with leadership crisis management after 9-11. Around this notion of net-centricity. Net-centricity is sort of allowing people on the ground to sort of form their own networks and push information up to leadership so that they can make certain decisions and then push those decisions down with an intention back to the ground, so that this network can operate with some freedom and flexibility. And I think corporations can put net-centricity actually into place in a structured way and they'll find themselves with a lot more flexibility, higher levels of business continuity and effectiveness, and perhaps, most importantly, giving a sense of more meaningfulness and purpose and powerfulness, or self actualization back to the worker. >> Right, right, as you're speaking the word I just can't get out of my head is trust, right? It's so much about trust. And then giving people the power, enabling people the power that you trust to go do the jobs that you've hired them to do. And then to the other point that we talked about, then as a leader, help them remove roadblocks. Give them the tools, do the things that you can do to help them do their job better, versus to your point, being super prescriptive on the road actions that you wish that they would do, and then managing to the completion of the road, actions versus the accomplishment of the bigger task. It seems so simple, it's so hard for so many people to grok. It just, it still just amazes me that so many folks are unfortunately still stuck in that old paradigm. But you can't anymore 'cause everybody's (chuckles) working from home, so you better get with the program. >> (clears throat) Yeah, I'm sorry, I have a little frog in my throat. But you can. And just to add to what you're saying. I think the best thing that leaders can do is also expand their understanding of the worker as no longer just coming to work in some kind of bubble. They're coming to work with all kinds of personal situations. And I've had clients who have sort of tried to get away from that and keep the worker in a bubble. And I think, to be successful as we get through this sort of long-term leadership crisis, I think it's important to lean in to the chaos. Lean into the complexities that COVID, the pandemic, the economic situation bring and see the corporation and their role as leaders as trying to help that whole person with the complexities of their life, as opposed to trying to divorce them from their life, because that has not worked. And what works best, and I've seen this over and over again, is that companies that lean into the crisis, embrace it, and really try to help that whole employee who's coming to work in their house, really, really works very well. >> Yeah, it's going to be interesting as we come out of the summer and go back into the fall, which is the traditional season of kids going back to school and everybody kind of going back to work, and in our world conferences, and it's kind of the ramp up of a busy activity until we get kind of to the Christmas season again coming off of summer, now knowing that isn't a temporary situation, this isn't going away anytime soon. I mean, we used to talk about the new normal in March or April and May. Well now talking about the new normal in September, October, November and into 2021 is a whole different deal. So to your point, I think that's a great tip, lean in, do the best you can, learn from the experts. You don't need to do it by yourself. There's lots of documentation out there. Darren Murph has stuff up from GitHub. Or excuse me GitLab. There's lot of good information. So you do have to kind of buy into it and embrace it, 'cause it's not it's not going away. So these are great tips Karen and I give you this, the last word before we sign off. Of all the work you've done, all the clients you've worked with, a couple of two or three really good nuggets that are really simple things that everybody should be thinking about and doing today. >> I think, there's the Waldorf Schools out by you on the west coast, right, have a motto that they use for education. And it it says in through the heart out through the mind. And I think more than ever, leadership and business can borrow that idea. I think we have to sort of look at things in through the heart. And then, distribute our directions and our leadership out through the mind. At the end of the day (chuckles) we're all human beings that are all struggling in this shared experience, something that has literally never happened on planet earth with 8 billion people, connected through technology with a global pandemic. And so if we kind of can make a shift and think about taking things in through the heart and then delivering out through the mind. I think that a lot of people will feel that compassion. And that will translate into the kind of trust that we're trying to build between all of us to get through it together. And I think when we do that, I have a lot of confidence in the human spirit that we will get through it. People will be able to look back and say, yes, this was very difficult and horrific on many levels, but at the end of the day, maybe there's a little bit of a renaissance in how we sort of look at each other and treat each other with compassion and some love and joy, even in the worst of times. I think that translates over any communication medium (chuckles) including the one we're using today. >> Well, Karen, thank you for the time and thank you for closing this with a little bit of light. Congrats again on the book, "The Power of Virtual Distance", I'm sure it's available everywhere. And again, great to see you. >> Thank you so much Jeff, you too. >> All right. >> Take care. >> She's Karen, I'm Jeff, you're watching theCUBE. Thanks for watching. We'll see you next time. (soothing music)

>> Announcer: From the heart of Silicon Valley, it's theCUBE covering CloudNOW's 7th annual Top Women Entrepreneurs in Cloud Innovation Awards. (lively music) >> Hi, Lisa Martin with theCUBE on the ground at Facebook Headquarters. We're here with the CloudNOW Top Women Entrepreneurs in Cloud Innovation Awards, their seventh annual. We're here with one of the award winners, Katherine Kostereva, the founder and CEO of bpm'online. Katherine, it's great to have you here. >> It's honor to be here. Thank you very much, Lisa. >> Congratulations on the CloudNOW award, but also you are no stranger to awards. Even in 2018, you were named one of the Top 50 SaaS CEOs for 2018. Not just female CEOs, CEOs. That's a pretty big honor as well. >> Katherine: Thank you. >> So bpm'online I want folks to understand not just your career path, but also that you're pretty persistent and bold. Bpm'online is a very successful and well-known business in Europe. >> Katherine: Right. >> Founded in 2002 with five people. >> 16 years ago. >> 16 years ago. >> Bootstrapped. >> Bootstrapped by yourself, and here you are recently moved to the US and you're basically kind of start-up in the US. >> Exactly. >> Tell us a little bit about that story. What you grew as a female leader in Europe, and the impetus to say we can do more and bring the business to the United States. >> Absolutely, would love to tell you this story. So 16 years ago we built this company. Bootstrapped it, no investors, no friends and family money. Just from zero, from scratch, and have successfully grown the business until we started to hear from our customers who were large, global organizations using our software in Europe. We started to hear, "Hey guys, "why we don't know you in the United States? "Why our headquarters doesn't know your name?" And then we started to talk to Gartner and Forrester, and they said exactly the same. Your technology is so amazing, and, right now, we are included in five Gartner Magic Quadrants and five Forrester Waves. And technology is amazing, but why you are not here in the United States? So, eventually, I moved to the United States with some of my peers, and we started to build our office in Boston. It happened three years ago. So right now we feel ourselves like a start-up here in Boston. While back like several years ago in Europe, and right now actually in Europe, this is a strong, mature company with 500 people in the company, working in the company in six offices. >> And business process automation, CRM, well-known in Europe, tell us about why did you select Boston and not come out here to Silicon Valley when you decided to move out here? >> (laughs) That's a great question, and I have a very easy answer to this question. As we have so many customers, partners and actually team members in Europe, we just wanted to find something with a shortest time-zone like time difference, right. So the difference between Europe and Boston is five to seven hours while here's it's additional plus three hours. So my day usually starts with Europe, so, when I start working around 7 a.m. in the morning, I work work with Europe, then I work with the United States, and then in the evening I start working with APAC with Asia, with Australia because we have our office in Australia as well. So we have our customers and people working in Australia, so this is my evening hours. >> Oh my goodness, so here you are being recognized tonight as a female entrepreneur. Tell us about your inspiration, and what has kept you persistent. Being a female in technology is challenging, and we all know that and, for many reasons. Hopefully one day it won't matter, gender, but it does. What are some of your recommendations for not only founding a company, and really kind of harnessing that persistence but also growing a culture that supports diversity. That understands and embraces change. >> This is a great question. Honestly, for me those are my customers, and that what I would recommend all women and female and male entrepreneurs to talk more to their customers because when you and your customers have the same vision about how to develop the company, how to develop the product, it inspires you. You just, you move on. You want to develop. You want to develop more, and just to give you an example both our customers and our team we believe that organization just can't have excellent customer relations without very holistic business processes beneath. So we believe that organization, if we're talking about mid-sized and large organization, they need to have holistic processes first, and then, based on this process, they going to have great customer relations. So this is kind of our vision and our mission, and that's what our customers share with us and that what has inspires me to move on and on and develop new products for our customers. >> Well, Katherine congratulations on the CloudNOW Award win. >> Thank you. >> Thanks so much for joining us on the program, and we hope you have a great night. >> Thank you so much for your time. Honor to be here. Thank you >> Our pleasure. We want to thank you for watching. I'm Lisa Martin for theCUBE at Facebook Headquarters. We'll see you next time. (lively, airy music)

>> Announcer: From San Francisco it's theCUBE. Covering Red Hat Summit 2018. Brought to you by Red Hat. >> Welcome back, everyone. We are here live in San Francisco, the Moscone West for the Red Hat Summit and we're covering three days of wall-to-wall coverage. I'm John Furrier with my co-host John Troyer. Our next guest is Jennifer Cloer, creator and executive producer of The Chasing Grace Project, formerly CUBE alumni, was on at the CloudNOW awards at Google. Great to see you. >> Great to see you, thanks for having me. >> So obvioulsy Open Source has been amazing growth, okay, and it has kind of democratized software. >> Right. >> You've got a project in my opinion that I think is democratizing, getting the word out on the tech issues around women in tech and more importantly, it's inspirational, but it's also informational. Take a minute and explain what is the project Chasing Grace? Obviously Grace, Grace Hopper. >> Right. Right, The Chasing Grace Project is a documentary series of six episodes about women in tech. The name does lend itself to Grace. We named it after Grace Hopper because she really exemplifies the grit and the excellence that we're all chasing all the time. It's also this idea that we're chasing the idea of grace in the face of adversity. It's not always easy but the women who we've interviewed and talked to exhibit amazing grace and are super inspiring. So the series doesn't shy away from adversity but it certainly focuses on stories of resilience. >> And when did you start the project and is there episodes? Is it on Netflix? >> Yes. >> Is it on DVD? >> (laughs) Let's hope. We hope so. We started the project, excuse me, about a year and a half ago. I put a call for stories out in a number of women in tech forums I belong to, was inundated with responses. Women are ready to share their stories. Spent every Friday for about four or five months on back-to-back calls with women, produced the trailer last May, a year ago, released it in September, and since then it's been a whirlwind. Lots of interest. Lots of men and women wanting to share their stories, as well as people wanting to underwrite the work, which is fabulous because it relies on sponsors. So yeah, we're about a year and a half in. We just finished episode one and screened it. We've got four or five more to go so we're early. We're early, but it's happening. >> And share some stories because I saw the trailer, it's phenomenal. There's women in tech and the culture of the bro culture, people talk about that all the time. It's male-dominated and you're seeing here with Red Hat Summit, there's women here but it's still dominated by men. >> Right. >> The culture has to evolve and I think a lot of men are smart and see it. Some aren't and some are learning. I would call learning a bigger (laughs) percentage. >> Sure. >> What are you finding that women who are really driving the change has been the big trend line? And how's the men reacting? Because the men have to be involved, too because they also have to take responsibility for the change. >> Absolutely, absolutely. I would say that by women sharing their stories we are starting to change culture. I'm actually keynoting today at the Women's Leadership lunch at Red Hat Summit. I'm going to talk about that, the impact of story on cultural change because there's a lot of reasons cited for the decline of women in tech, because we've gone backwards. There's actually fewer than ever before. But many things are cited. So the pipeline issue, poor education, but the biggest thing cited is the culture and the culture has changed over the course of the last decade in particular. So the women we've talked to, their stories of resilience are starting to change that culture. When people talk and share experiences and stories, there's empathy that comes from both men and women who hear those stories and I think that that starts to change culture. It's starting to happen. I think we are pivoting, it's happening. But there's still a lot of work to do. >> John Troyer: Jennifer, at the keynote, or at the luncheon here, the Women's Leadership luncheon, anything else that you'll be bringing up? That sounds like part of your message here that you're going to be bringing today and you want to share right before you go up? >> Yeah, sure. So like I said, I'll talk about the impact of story on culture. I'll talk about the stories of resilience. I'm going to share a few stories from women who we've actually interviewed and featured in episode one. Because you can't see episode one online because we're in discussions with distributors, I'm going to share those stories with this audience. And I think folks can, like I said, learn from those and gain empathy and walk away hopefully with action. >> That seems great. The storytelling of course is key, right? We're in an interesting place in our culture today and I think social media, the 10 or 20 years of social media that we've had is part of that. I know my feed is filled with incredible women leaders in tech and frankly it's much better for it. But you know, you do sense a sense of almost weariness in some folks because this is one, they get shit on, can I say that? >> Hey, it's digital TV, there's no censorship. >> But also you'd like to eventually, if you're a woman in tech, you'd like to be able to talk about tech, not just being a woman in tech. >> Right, right. >> I guess, is that just at the part, is that just where we are in society right now? >> I think so and you know, it's a marathon, not a sprint, right? It's going to take a long time. It took a long time to get us to this place, it's going to take a long time to move us forward. But yeah, women do want to build tech and not have to advocate for themselves. Hopefully projects like The Chasing Grace Project and other work that's happening out there, there's a lot of initiatives that have sprung up in the last few years, are helping to do that so that the women who are building can build. >> What's your big takeaway from the work you've done so far? It could be something that didn't surprise you that you knew was pretty obvious and what surprised you? What's some of the things that's come out of it that's personal learnings for you? >> I think the power that comes from giving women a platform to be seen and heard for their experiences. Almost every woman I've talked to says I feel so alone. They're in an office with mostly men. There might be another woman but they feel so alone and when they share their stories and they see other women sharing their stories, they know they're not alone. There may be few of them but the stories are very similar. I think that men learn a lot when they see women sharing their stories, too because they don't know. The experiences that we all have are very different. We're walking through the same industry but our day-to-day experiences are quite different. Learning what that's like, both for women, for men, there are men that are going to be featured in this series, and women of other women. Just the power in that. Most women tell me I don't really have a story. Well, you both know that when you dig a little bit, >> They all have stories. >> everybody has a story. Everybody has a story, multiple stories. So, yeah. >> So let me as you a question. This has come up in some of my interviews on women in tech and that is is that it kind of comes up subtlety, it's not really put out there, like you said, aggressively. But they say there's also a women women pressure. So how have you found that come up? Because it's not just women and men. I've heard women say there's pressure, there's other pressures from other women. Do more or do less and it's kind of an individual thing but it's also kind of code, as well to stick together. At the same time, there's a women and women dynamic. >> Yeah. >> What have you found on that? >> Mostly I've found, I think there's a shift happening, mostly I've found that women are forming community and supporting each other. Everyone has a different definition of feminism or womenism (laughs) as some women have called it, but I think there are some women who have told me, usually the older generations who have told me there's only room for one woman at the table. One woman makes it to leadership and she's very protective of that space. But we're seeing that less and less. >> I don't want to turn this into, you hate to turn this into a versus scenario, right? Especially online I see a lot of interaction of men coming up and saying, either trying to explain to women what their problem is or, but also saying educate me, like take your time to educate me because I can't be bothered to figure it out myself. Or also trying to stand up themselves and lead the charge. So one of my personal things I do, I sit back and let the women talk and listen to them about what they want to do. >> Right. >> Any particular advice you have for folks who are listening and who might want to, you know, what do you do? I guess sit down and pay attention. >> Yeah, I'd say listen to the stories. Listen to what women need and want out of their male allies and advocates. And listen to the women who you already are friends and colleagues with. What do they need from you? Start there. And then build your way out. I remember when I first started The Chasing Grace Project, I was actually advised by people, well don't feature men at all because they can't speak for women and that's very true but I've decided that we will feature both men and women because we're all part of the industry, right? When I talk about the future is being built by all of us. We need more women in leadership. We don't need just women in leadership, we need men and women. So I think though, right now at this moment in time men should listen and ask their, like I said, their inside circle of women that are friends and colleagues, what can I do? What do you need in terms of my support? >> And it's inclusion, too. There's a time to have certain, all women and then men, as well. >> Right. >> Kind of the right balance. >> Right. >> Well, I have to ask you obvioulsy, Red Hat is an Open Source world. Community is huge. Obviously tech has a community and some will argue how robust it is (laughs) >> Right. (laughs) >> and fair it is. And communities have their own personality, but the role of the community becomes super critical. Can you just share your thoughts and views of how the role of the community can up its game a bit on inclusion and diversity? And I put inclusion first because inclusion and diversity, that seems to be the trend in my interviews, diversity and inclusion, and now it's inclusion and diversity. But the community has some self-policing mechanisms. There's kind of a self-governance dynamic of communities. So it's an opportunity. >> It is an opportunity. >> So what's your view? >> There are a lot of things that are talked about within the Open Source community in terms of how to advance inclusion in a positive way. One is enforcement. So at events like this, there's a code of conduct. They've become very popular. Everybody has one, for good reason, but everybody's doing them now. I worked at The Linux Foundation for 12 years. When you have an incident at an event, if you don't enforce your code of conduct, it doesn't mean anything. So I think that's one very tangible example of something you can do. We certainly tried at The Linux Foundation, but I remember it was a challenge. If something happened, what was the level of issue and how would we enforce that and address it? So I think the community can do that. I think start there, yeah. >> What's your take on The Linux Foundation, since you brought it up? Lots going on there. >> Right. >> You've got CNCF is exploding in growth. >> Jennifer: Right. >> Part of that, Jim Zemlin is doing a great job. As you look at The Linux Foundation since you have the history, >> Yeah. >> where it's come from and where it's going, what's your view of that? >> My goodness. I was part of The Linux Foundation before it was called The Linux Foundation. It was called Open Source Development Labs, way, way, back. But you know, always impressed with what The Linux Foundation is doing. CNCF in particular is on fire. I watched my social media feeds last week about KubeCon in Copenhagen, a lot of friends there. You know, Open Source is the underpinning of society. If the world we live in is a digital one and we're building that digital existence for tomorrow, the infrastructure is Open Source. So it's just going to become more and more relevant. >> And they're doing a great job. And it's an opportunity with the community again to change things. >> Yeah. >> There's a good mindset in the Open Source community with Linux Foundation. Very growth-oriented, growth mindset. Love the vibe there. They've got good vibes. >> Yeah. >> They're very open and inclusive. >> There's some projects that are really prioritizing. DNI, one of which is Cloud Foundry Foundation. Abby Kearns is doing an amazing job there. The Node.js community I think is pretty progressive. So yeah, it's encouraging. >> Abby was on theCUBE. We were there in Copenhagen. >> Right, right. >> Thanks for coming on. >> My pleasure. >> What's next for you? Your life's a whirlwind. Take a quick minute. >> Yeah, I'm in Chicago next week for a shoot. We're shooting episode two which is focused on women in leadership roles. There's only 11% of executive positions in Silicon Valley are held by women. So it's a provocative topic because a lot of women haven't experienced that so we want more to do that. >> Well, if you need any men for the next show, John and I will happily volunteer. >> Okay, wonderful. >> To be stand-ins and backdrops. >> Fantastic, thank you. >> Thanks for coming on. It's theCUBE coverage here live, Moscone West in San Francisco for Red Hat Summit 2018. We'll be back with more coverage after this short break.

(techy music) >> Announcer: Live from Las Vegas, it's theCUBE, covering Dell Technologies World 2018. Brought to you by Dell EMC and its ecosystem partners. >> We're back in not-so-sunny Las Vegas. You're watching theCUBE, the leader in live tech coverage. We're here at day three, wall-to-wall coverage of Dell Technologies World, the Inaugural Dell Tech World. I'm here with Tom Sweet, who's the CFO of the 80 billion dollar Dell Technologies empire. Thanks for coming to theCUBE. >> Happy to be here. >> So, really thrilled to have you on. I think it's the first time you've been on theCUBE. >> You guys usually don't let me on, so you know, they're letting me out a little bit, I guess. >> Well, I say, we're happy to have you. So, a lot going on, obviously, in your business. I mean, let's start with, you know, we're a couple of years into the integration, you guys, obviously, you dug in. You've got a pretty good handle on this, like I said, 80 billion. When it started, you guys were in the low 70's, I believe, so you've seen some growth. Not a lot of growth in this business, but you guys are growing. So, give us the rundown of your business. How should we think about the Dell empire, as I called it? >> Look, I think that we're very happy with the progress that we've made since the integration, which was back in September of 16, so over the last 20 months, we've been focused on building velocity within the business, and particularly, as you think about our major tranches of product, if you will. So, you know, our client business is growing quite nicely, as we evidenced by last year, 21 consecutive quarters of share gain. Pleased with our server velocity. Last year, we were number one in servers. Storage has been a bit of a work in process, as you know, but I think we're beginning to see a little bit better velocity in that business. Clearly, we have VMware, and we have Pivotal. So, what's been really interesting is how the companies have come together, and the offerings have come together in a much more integrative fashion, which has been fun to watch and fun to sort of help put this thing together. The customer buy-in and the customer acceptance of the vision and the story has been pretty remarkable, from my perspective. >> And, the client's side of the business surprised me anyway. It's like the gift that keeps on giving. >> Well, you know, what was it, 10 years ago, they said the PC was dead, you know, and today it's roughly half of our revenue and growing nicely. I think the secret, as always, as you know, is work gets done on a keyboard. The tablet and the phone become an and device, a notebook and a tablet, a notebook and a phone. We keep innovating form factors or innovating the interfaces with the device, so we're pretty excited about it. It's just a really good, really great business for us. >> I think what Michael said in his keynote, when IBM announced the end of the PC era, since then there's been four, I think he said four billion PCs shipped. >> Yes, exactly. >> It's astounding. >> Clearly, the overall market for PCs is flat to slightly down, it's going to be in that range, but in that type of market, our point of view, as you well know, is you have to take share, you have to grow. The team's done a nice job. Jeff Clark and his product team have done a really nice job around form factor innovation, 87 CES awards this year for PCs, so really good business. >> And, from a CFO's perspective, it's throwing off cash, you're comfortable with, what is it, a 5% to 6% operating margin, basically? >> We typically think of that as about a 5% op inc business, but it provides huge amount of scale for us, if you think about our supply chain, our ability. It's a nice, predictable, really strong cash flow business for us, so it's a good business. >> And, the higher end, the server business and the storage business is what now, around 7% op inc, and there's a lot of upside there, potentially? >> Yeah, it's a little bit higher than that, but there is upside there as we continue to drive the business and drive efficiency in that business and, as you know, we're doing a lot of work right now in our storage area in terms of how, over time, do we evolve that road map around the solution set, and working more in an integrative fashion with VMware around the convergence of hardware and software, into more thoughtful and more smarter designs or in the storage platforms. So, you know, that business is, that's going to be a really interesting business for us over the next year or so. >> Well, really, VMware, people look at Dell as a hardware company, but VMware is not a hardware company. It's software, marginal economics. It throws off 50% roughly of your operating cash, I mean, it's a gem. >> We're actually huge fans of VMware. It's a great company, growing very nicely, and extraordinarily well-positioned, as you think about the world of Multi-Cloud. And, what we're doing and how they're thinking about any device to any device, any Cloud to any Cloud, that whole story is resonating, and from a CFO perspective, you got to like software margins. It's a good business. >> So, let's talk about the debt a little bit, because I think there are a lot of misconceptions out there. You paid down $10 billion in debt, I think it's roughly around 40 billion now. Is that about right? >> A little bit higher than that, because we've added some debt related to our GFS business, but I think the way you ought to think about our debt load is that very manageable, we're right on the schedule we thought we were going to be on, in terms of debt paydown, and we'll continue to pay down debt, from a capital allocation focus. You know, 60-70% of our capital is focused on debt paydown, doesn't mean we're not investing in the business properly, 'cause I think we are, and we're continuing to fuel those investments, and then we're going to add some debt, because our DFS, or financing business, we use debt to fund that business, but that's a little bit different sort of perspective. We think about that debt separately and different than the core debt of the business, and our analyst community and the credit rating agencies think about that debt differently. And the GFS business is growing very nicely in terms of originations, and it's a great tool for our sales force to help in terms of the financing capacity and credit capacity for our customers. So, it's a good business. >> And, let's talk taxes for a second. I know it's kind of off the normal CUBE interviews, but a lot of people talk about that. All the legislation tax, legislation, that's bad for Dell, you can't write off that debt, but essentially, from what I've read, it's a net neutral to you guys. >> It's generally neutral to maybe slightly negative, as we understand the debt regulatory environment today, with the US tax reform. They did put some limits on how much interest, and there's transition rules around how much you can deduct, but you know, you got to lower corporate tax rate in the US, you also have the immediate expensing of CapX, and then you've got the repatriation toll charge, but when you throw it all together, slightly negative, but it's not a big cash dynamic for us, it's not a driver of, geez, we've got to go do something with our capital structure as a result of that. So, that's just a misconception that's out there right now. >> And then, you've told me earlier that the Pivotal move was not about delevering, it was a move that you guys have been planning for a while. I mean, that was in the works before the merger. Talk about that. >> Look, I mean, Pivotal's done, their growth at Pivotal and the acceptance of Pivotal's been remarkable. So, that conversation around should we IPO, when should we IPO, has been in the works for over a year, and Pivotal needed to continue to grow and mature a little bit in some of its processes and making sure that when you decide to go public that you're ready to go public. For that last year, that's what they've been working on. But in terms of the actual, to go public and the proceeds from that, that's all about giving Pivotal their own capital to fund their business growth and dynamic. We could have done it at the Dell level, Dell technology level, but I thought it was more appropriate, the size of company they are, that they have their own capital. They're doing business with over half of the Fortune 500, so they need some substance, and it's a great retention to 'em, in terms of having currency for their employee base, for both their attracting talent and retaining talent. >> A Silicon Valley company with its own, I've visited those offices. It's not the normal corporate office down on Howard Street, right? >> No, you know, they're doing the huddles in the morning, but that's what's interesting about Dell technology, the family of businesses, the different cultures, the different capabilities, it's a pretty remarkable set of companies with it. >> The market's booming right now, hope it continues, knock wood here, but what are the assumptions you're making in your business, maybe the economy, you could touch on that. >> We look across the top 45 economies right now, where we do business. They're all growing, GDP's growing, so we feel pretty good about the overall economic environment. Interest rates are slightly rising, but not a big issue for us, even with our debt load. We're about, roughly 70% fixed, 30% floating, so the fact that LiveBoard's up a little bit isn't a big deal. Currency's relatively stable, so we're positive, and companies and institutions are spending on IT, the round of innovation that's being driven, the round of investments and the changes in business models. Typically, one of the first things they go do is they invest in IT to help with that digital transformation, that IT transformation. We're bullish on the economics, so it's a good platform for us. >> One of the things I've said for quite some time now is that the merger between Dell and EMC was inevitable. You had these pressures of Cloud, you needed a company who was comfortable, with a lower margin business and had a profitability model that could thrive, and it made a lot of sense. But, you don't have a public cloud, and you're comfortable with that, but you've done a lot of work with, I'll call, utility pricing. Can you talk about that a little bit? >> Well, one of the feedback things we got from our customers is, hey, look, I like the economics of the Cloud. I like this pay-as-you-consume, pay-as-you-grow, that flexibility to scale up, scale down, so through our Dell Financial Services and using our own balance sheet, we have put together flexible consumption models, so I can offer you a pay-as-you-grow, pay-as-you-consume, or we can do a straight out utility where the assets are on my balance sheet and you're paying a monthly fee, if you will. So, all we're trying to do there is to normalize the economics for our customers, say, hey, I want you to take economics out of your decision about whether you want to go to the Cloud or not, because we can offer that capacity and capability. And, let's really talk why, and what's the purpose, and what's the work load, what's the problem that you're trying to solve? >> And, you obviously recognize that as radical revenue. >> Yeah, absolutely. >> I'm guessing it's not meaningful, like a software company shifting from a perpetual model, or is it? >> Well, I think over time you're going to see the rise in these types of models. Customers are interested, as a service models. So, there is interest in that, and I think you'll see that piece of the business grow over time, but I don't think it's going to be a step function change. But, again, it's just another example, I think, of Dell Technologies offering customers what they want and in different and innovative ways to do business with us. >> One of the things that EMC did, was they did a lot of M&A. That's kind of how EMC innovated, no offense to my friends from EMC, but they fill gaps. And, a lot of times, those gaps created huge overlaps. You guys are addressing that carefully, I understand that. How has the merger, the debt, affected your ability to do M&A? How critical is that to you guys, because you are very acquisitive, obviously, as well? >> We are still very active, as we look at the technology trends and what type of capabilities and new technologies are on the horizon, so we haven't done a lot of M&A since the acquisition of EMC. We've principally focused on the integration, but if you look at VMware, they've done acquisition, we've done a couple of really small tuck-ins within the family, but we'll continue to look at that. And, one of the other tools in our tool chest, as you know, is Dell Technologies Capital. I think we've got roughly over 81 investments in technology startups, principally on the West Coast, but some overseas, and very focused on security, AI, machine learning, next-generation storage capabilities, and so we get exposed to that type of technology, and we put our R&D teams together with them, so I feel like we're in a reasonable position, and as the business tells me they need something, we'll go evaluate it. >> I want to ask you a question about your peers, the CFOs. I'm getting to know you a little bit. I think you're a rock star CFO. One of our analysts said to us the other day, Tom Sweet is a stud, I said, yeah, it's the make-up on theCUBE. >> I don't know about that. >> So, what's going on in the, well, you've got a big job, and you've got a really good handle on what's going on here. What's going on in the world of CFOs these days? I mean, obviously, you've got stuff like GDPR that gets in there, but digital transformation is obviously a huge theme among the C-Suite. Security is a board level issue. What kind of discussions are you having with your peers these days? >> Look, I mean, most of the conversations tend to be around two or three different areas. One is how do you think about how does the finance function and our capabilities change over the coming three, five years, right? How do you think about the use of AI, machine learning, and in the processes of the company? And, what is everybody doing to innovate around that? That's a pretty common conversation we're having. You know, security cyber is a huge conversation point in terms of how is your board looking at it, how are you thinking about it. Since we're CFOs, we're always talking about how much money, what's that investment profile you need to have there, in terms of what's the right amount? As you well know, you can spend a lot of money there. Are you guaranteed of a perfect defense? Absolutely not, so that tends to be a common area, but more importantly, there's this whole comment, this whole big data conversation that's also happening around how do you help the business make better decisions? How do you add and drive value back to the business? How are you using advanced analytics to drive insight back into the business, the various businesses? So, pretty much the same sort of conversations we're having with our customers, we're having internally, or amongst the CFO community. >> A lot of risk management, obviously, >> Yeah, absolutely, absolutely. >> goes into that equation. >> I mean, inside of tech or outside of tech, are there companies or CFOs that you sort of follow, admire, kind of models that you look at? >> Look, there's some great CFOs that I've had the opportunity to have interactions with. You know, Mark Hawkins at Salesforce is a great CFO, also a good friend, Amy up at Microsoft, really doing a really nice job up there, and then Bob Swan at Intel. So, we tend to sort of be industry-organized, just because that's how we interact, but they're all doing nice jobs and really interesting innovative things within the context of their companies' business models. >> Have you changed the sources of where you guys get information? Obviously, your peers is probably number one, but as the digital world comes forward, have you sort of changed the sources, or still sort of the Wall Street Journal every day? >> Well, it's guys like you, right? We're all watching the blogs and, look, the amount of data and information that's flowing these days can be overwhelming, so I tend to be, I'm looking at industry publications, I'm looking at some of the online blogs in terms of trying to understand where are our competitors headed, where is the industry headed, what are the themes out there? You know, Michael's got a perspective with his leadership team that, hey, he wants us out in front of customers, so I spend roughly 30% of my time with customers and partners. You have to be aware of, obviously, what's going around in the industry, not only to be thoughtful and intelligent, but to also help think about where do you position the company, three and five years down the road? And, helping Michael in that thought process, and helping the leadership team in that thought process. >> Well, Tom, it's been a real pleasure getting to know you a little bit, and watching you guys in action. Wish you best of luck. >> I appreciate it. >> Thank you so much for being on theCUBE. >> It was a lot of fun. >> All right. Keep it right there, buddy. We'll be right back with our next guest, right after this short break. You're watching Dell Technologies World, live on theCUBE. (techy music)

(techno music) >> Announcer: Live from Las Vegas, it's theCUBE. Covering Dell Technologies World 2018. Brought to you by Dell EMC and its Ecosystem Partners. >> Welcome to Las Vegas everybody. You're watching theCUBE, the leader in live tech coverage. My name is Dave Vellante, and I'm here with Stu Miniman and this is the inaugural Dell Technologies World and Pat Gelsinger's here, he's the- >> Hey, great to be with you today, >> Dave: the CEO of VMware, awesome to see you, >> Oh, thank you. >> Our number one guest of all time, this is our ninth Dell/EMC World and your 900th CUBE interview, But it never gets old Pat. It's really a pleasure to see you. >> Oh it's always fun to be with you guys. Thank you for the chance to spend some time on theCUBE, you've come a long way. >> So, thank you for noticing! So, you were the first, and people are recognizing this, to really sort of call the boom in the data center. We certainly have seen it with cloud, and we saw a little bit with data and big data, and now digital transformation, but well over a year ago, you said, we have tailwinds, it just feels right, so good call. >> Yeah, hey thank you, and you know clearly like the IDCs, Gartners, you know, they began last year, 2% to 3% growth, I said no, I think it's at least 2x that, and we ended of the year almost 6% growth in IT, and everybody's raised their forecast, and I think they're still a little bit conservative, and I think in this period, where technology is becoming more pervasive in everything, every business is becoming a tech business, every area of every business is becoming influenced by tech, and as a result, hey I think we're going to see a long run of tech strength and every company in tech is going to benefit and those that are well-positioned are going to benefit in a big way. >> Yeah, you see, you called it, "tech is breaking out of tech" >> Yep, yep absolutely, right, you know, we're no longer that little IT thing stuck in the back corner making sure your mail runs, it's now everything. You know, back office has become front office, right. You know, every aspect of data becomes mission-critical for the business. As some have called it, you know, data is the new oil, right, in the future. And it really is thrilling to see some of our customers, and Michael had a few on stage this morning doing really pretty cool things. >> Well VMware is on fire. I mean, it's only 10% of Dell's revenue, but it's half, it generates half of its operating cash flow. Obviously we love the software business, of course. Talk about your business, the core is doing really well, you got NSX crankin', vSAN cranking, the cloud now, there's Clarity in cloud, give us the overview of your business and give us the update. >> Sure, and as I say, you know, there's three reasons we're doing well. You know, one is our strategy is resonating with customers, and you know, when you got strategic resonance with customers, you're not in the purchasing department, you're in the business units, the CIO's office. So strategy is resonating well, across what we do for private cloud, what we're doing for public cloud, what we're doing for end user and workforce transformation, our security strategy, every aspect is resonating. You know, second, we're executing well. And I'll say, you know, your good strategy, you're executing it well, and you know, clearly the Dell momentum has helped us. We're ahead of schedules on the synergies that we've laid out, and that's been a powerful accelerant. It was like we're doing well, you know, and you put some turbochargers on, whoa, you know this is going, and then finally as we said, it's a good market, right. And well-positioned tech companies are benefiting from that. So across our product families, you know, NSX, vSAN, and HCI, you know, our cloud management is really performing, the end user computing, you know, all of these seeing, you know 30, 50, 100 percent growth rates. You know, my overall cloud business, you know, VMware is growing in the teens you know, my cloud business is growing in the 30s, and way ahead of the growth rate of the business, so pretty much everything that we've laid out is firing on all cylinders. >> Pat, I think most people understand some of the products of VMware. I think it's, you know, 20 years now, since server virtualization laws You've, you know great momentum with NSX with vSAN, wonder if you could talk a little bit about the digital platform though, you know how does VMware look, you know, for the next five to 10 years, fit into the Vision 2030 like Michael was talking about. >> Yeah, yeah, you know very much, you know, as I say, you know, our objective is to be the essential, ubiquitous, digital infrastructure, right. Where you know, this idea, you know, essential. You know we run this mission critical stuff and increasingly we're seeing businesses put their crown jewels running on VMware. You know, 'cause we ran a lot of the stuff of the past, we'd run your SharePoints, your Outlooks, and so on, but now, they're putting core banking on us, you know, core transactional platform. They just say, you are essential, ubiquitous, our strategy is to move all the way to the edge, and the IOT use cases, into the core networks of our service provider partners, You know, to as I say, build these four clouds, the private cloud, the public cloud, the telco cloud, and the NF or the IOT cloud. All of those on a common infrastructure, that enables applications to build on and leverage all of the above. So you know, we're increasingly ubiquitous, digital infrastructure, meaning that they can build their applications from the past as well as in the future on us. And as we're partnering with Pivotal with our PKS strategy, reaching more to the developer, right, and delivering that infrastructure for the next-generation apps, and of course the dirty secret is, is that almost all of the cool new apps are some ugly combination of new and old. And if we can give a common operational security management and automation environment that transcends their cool new container, and function as a service, but combine it, in a consistent operational and security environment with today's infrastructure, oh, that's like the big easy button for IT. Got it, we could take you to the future, without giving up the past. >> We hear from our, you know, CXOs, in our community, in our audience, they really, they want to get digital right. So my question to you is, what kind of conversations are you having with executives around getting digital right? >> Uh-huh, yeah, and lots of those things are, you know, like just with a big media company, was with a huge Bank, on the phone with a big consumer goods product last week. You know these interactions occurring, you know like you say they want to get it right. And with it we're seeing the conversation shift, because a lot of it used to be, you know best of breed. Oh that looks good, and I'll stitch it together with this, and maybe I'll put it that, and a lot of their bandwidth was being put to putting the pieces together, and we're saying no, right. What you going to do is have robust infrastructure. Increasingly rely on fewer, more strategic vendors. It's my job to put it together, so you can take your investments and put them into the applications and services that really differentiate your business. And this is becoming a sea change in how we work with customers and say, okay, yeah I can't stitch all these pieces together, I can't have a hundred security vendors, I must rely on fewer vendors, in much more strategic ways. And in that, obviously we're benefiting from that enormously and they're expecting us to step up like never before, to be a partner with them, and it really is a thrilling time for us. >> So that simplifies all the complexity on there, and at least in concept. Who's leading this charge? Do you discern any patterns of the guys that are getting it right, versus the guys that are maybe struggling, or maybe complacent, specifically in terms of leadership? >> Yeah, and it's super, super interesting, because I find leaders in every industry, right? You know, you find leaders and laggards in those, I had one customer not a lot, long say, "Hey is that virtualization stuff, can I really rely on it?" It's like, ding dong, you know, you're now the trailing edge of technology, but for every one of those trailers, we're seeing those front end customers, and you saw some of them on stage this morning. Where they're just really going and saying, boy we are now ready to ante in, in a big way. We're seeing that in car companies. We're seeing that in financial services companies. We're seeing that in supply chain companies. And some of those are now really seeing these startups now putting pressure on their business for the first time, and they say no, we got to innovate in a very aggressive way. And for that, you know, the Dell Technologies family, you know all of us coming together, you know with our, each skills and focus areas, but together being able to present that holistic solution that says, that's right, we can lead you on digital transformation, we could change your infrastructure, we can build-in security, we could transform your workplace, we could take you to the multi-cloud future, we got it. >> Pat, there was one of the things that caught my ear, Allison Dew, when she was talking about the Dell Technology Institute, said that, together you're going to become a force for good. I know that's something that's near and dear to your heart, >> Pat: Yeah. >> So, maybe, you talked about the tech, and the security and everything, what about the Dell families as a force for good out there? >> Yeah, and I've described this era, and I've said there's four superpowers. You know, technology superpowers that are bigger than any of us, right. And the four I described, you know, mobile. The ability to reach anyone, over half the planet is now connected. Cloud, the ability to scale as never before. AI, the ability to bring intelligence to everything, and IOT, the ability to bridge to the physical world everywhere. And those four are really reinforcing each other, right? They're accelerating each other, as Michael said, you know, "Today, the fastest day of your life. "Today, the slowest day of the rest of your life, "for tech evolution." And we see them just causing and accelerating each to go, as I mentioned in my talk this week at the Grow Awards in Silicon Valley, in 1986 I was making the 486, a great AI chip, right. It's like, what? 31 years ago? And now it's a success because the superpowers are coming together. The compute is now big enough, the data is now volumous enough, that we can do things never possible before. But with that, technology is neutral. The Gutenberg printing press did the Bible, you know, Luther's Bible, it also prints Playboy. It sort of doesn't care. Technology is neutral. And it's our job as a tech industry to shape technology for good. You know that's our obligation, and increasingly we need to be involved in, and shaping, legislations, policies, laws, to enable tech to be that force for good. >> Pat, you mentioned kind of the speed of change in the industry. You're a public company with you know, a lot of employees, how does, internally, how do you keep up with the pace of change, keep inspiring people, get them working on the next thing? You know, Michael talked about going private was one of the things that would help him restructure and get ready for that, so maybe discuss that dynamic. >> Well, you know and for us, you know, as a software company living in Silicon Valley, we feel it every day, right. I'll tell ya' you know, we see these startups, that are hovering around our people, and our buildings, and they got ideas, you know, so we're synthesizing those ideas. We have our own research effort, our advanced product efforts, we're engaging, you know, and thousands of customer interactions per day. And ultimately, it's my job to create a culture that enables my 8,000 software engineers to go for it every single day, right. Where they are just, you know, they love what we do as a company, they love who we are as a company, our values. And then find ways that we enable our teams to, what I say, innovate in everything. Not just in R and D, but how we sell our products, how we support our customers, you know, how we enable these new use cases. We have to innovate in everything, if we're going to keep pace with this industry, and to some degree, I think it's almost in the water in Silicon Valley, right. You know yeah, you got some crazy master's student coming out of Stanford, and he thinks he's going to start up a company to displace me. It's like, what are you talking about? But we feel that every day, and as we bring those people into our environment, creating that culture that allows everybody to innovate in everything, >> So it's hard to argue that things aren't getting faster, that speed, but speed is an interesting question. When you think about blockchains, and AI, and natural language processing, just digital in general, there's a lot of complexity in terms of adopting those things. So speed versus adoption. What do you see in terms of adoption? >> Yeah, you know in a lot of these things like, you know, you look at a technology like NSX, cool, breakthrough, you know we're five years old now, almost on NSX, right? Since we did the Nicira acquisition as a starting point, 4 1/2 years on NSX, and some of these things need to be sedimented, as I describe it, into the infrastructure. Hardened, you know when you've really proven all of the edge cases. You know, those things don't move every day. >> Dave: Right right, fossilized, Furrier word, >> Yeah, you know there is, you know similarly with vSAN. Boy, these edge use cases, data recovery, pounding on the periphery of failure cases, disk drives, failure modes on flash drives, some of those things need to be sedimented, but as you think about those layers, always it's you know, how do you sediment? How do you standardize? And then expose them as APIs and services to the next layer. And every layer as you go up the stack gets faster and faster right, so as somebody would consume the software-defined data center, they need to be able to do that pretty fast. You know, how can I make, you know VM, we just released 6.7. Which reduced by an order of magnitude the time to launch a VM. You know, increase the, by 20x the amount of V-Center bandwidth, just so I can go faster. Not that I needed to go faster for VMs, I needed to go faster that I can put containers in VMs, and they need much higher speed of operation. So to me, it's this constant standardization, sedimenting, integrating, and then building more and more agile surfaces, as you go higher in the stack, that allows people to build applications where literally they're pushing updates, and seeing their CICD pipeline allow new code releases every day. I'm not changing NSX every day, but I am changing my container environment for that new app literally every day, and the whole stack needs to support that. >> Cloud partnerships, we talked last year at Vmworld, about the clarity that the AWS deal brought, of course you have an arrangement with IBM, you're doing stuff with Kubernetes, so, just talk about your posture with the big cloud players, and how that has affected your business, and where you see it going. >> Yeah, you know, clearly the cloud strategy, the AWS partnership, as I said, more than anything else, when we announced that, people moved their views of VMware. Oh, I get it, VMware isn't part of my private cloud, or part of my past, they're the bridge to the future. And that has been sort of a game-changing perspective where we can truly enable this hybrid cloud experience. Where I could take you and take your existing data centers, I can move them into a range of public cloud partners, AWS, IBM, you know, and be able to operate seamlessly in a truly hybrid way. Oh your data center's getting a little hot, let's move a few workloads out. Oh, it's getting a little bit cool, let's move some workloads back. We can truly do that now, in a seamless, hybrid multi-cloud way, and customers, as they see that, it's not only the most cost-efficient, right, it also allows them to deal with unique business requirements, geo-requirements that they might have, oh, in Europe I have to be on a GDPR cloud in Germany. Okay, we support, we have a right, you know here's our portfolio. Other cases, it's like, oh, I really want to do take advantage of those proprietary services that some of the cloud vendors are doing, you know. You know, maybe in fact that new AI service is something that I could differentiate my business on, but the bulk of my workload, I want to have it on this hybrid platform that truly does give them more freedom and choice over time, while still meeting unique compliance, legal, security, issues, as they've come to know and love from VMware over time. >> So to clarify, is it, are you seeing it as use-case-specific, or is it people wanting to bring that cloud experience on-prem, or is it both? >> It is truly both, because what you've seen, is many people, and if we were talking four years ago, you would've been asking me questions, "oh, you know I just talked to Fred, "and he says everything is going to the cloud" right. And people tried that student body right to the cloud of their existing apps, and it was like, oh crap, right? You know, it's hard to re-platform, to refactor those applications, and when I got there, I got the same app, right. You know, it's like, wow that was a lot of investment to not get much return, right. Now, they look at it and they say, "Oh boy, you know, "I can build some new apps in cool new ways" right, with these cloud native services. I can now have this agile private hybrid cloud environment, and I truly can operationalize across that in a flexible way. And sometimes we have customers that are bringing workloads out of native cloud, and saying, oh that's become too big in my operation role. You know I have different governance requirements. I'm going to bring that one back. Other cases are saying, "Oh, I didn't want to move it to the VMware cloud on Amazon", or you know, IBM, the migration service is really powerful. I want to get out of the data center. Other cases, they look at their cost of capital, and the size and scale they're operating, and says, "Hey, I'm going to keep 80% on-premise forever, "but I never want to be locked in, "that I can't take advantage of that, "should there be a new service." It really is all of the above. And VMware, and our Dell relationship, and our key cloud partners, now 4,100 cloud partners strong, it's really stepping into that, in a pretty unique and powerful way. >> And the key is that operational impact, as Pat is saying. >> So Pat, just one of the challenges we've heard from users we talked to is, if this was supposed to get simpler, virtualizing it, you know, I kept all my old applications. Going the cloud, there's more SKUs of compute in the public cloud than there are, if I was to buy from Dell.com. You know, in management, you know we're making steps, but you know it's heterogeneous, it's always add, nothing ever dies, how do we help customers through this? >> Yeah, and I do think they're, you know we're definitely hearing that from customers. And they're looking to us to make these things simpler. And I think we've now, you know, laid the templates for a truly simpler world. Right, in the security domain, intrinsic security. Build many of the base security capabilities into the platform. Automation, automate across these multiple cloud environments, so you don't care about it, we're taking care of it against your policies. Being able to do that, you know, and have an increasingly autonomous infrastructure that truly is responding and operationalizing those environments, without you having to put personnel and specific investments, right at that fundamental operations level, because it's too big, it's too fast, you can't respond at the pace the business requires. So I feel really good, we have some key innovations, you'll see us announcing. Now, we're going to talk at VMworld right? >> Dave: Oh absolutely. >> Okay, >> I will 100% be there, >> I have some cool announcements in this area, by VMworld as well, specifically, in some of these management automation, we see some of that applying, some new AIML techniques, to be able to help with some of those workload management and policy management areas. So, some really cool things going on to help these problems specifically. >> We've seen, oh we saw blog recently, about you guys working on some blockchain stuff. I know it's early days there, but it's exciting new technology. >> Yeah, and the blockchain stuff is what I'm really, really pretty excited about. We have some algorithmic breakthroughs that right now, you know, blockchain on a log scale basically scales at you know log or super log, right. Which meaning, it's problematic right. Is you get lots of nodes, right, you know the time to resolve those, gets to be exponentially expensive, to be able to resolve. We've come up with some algorithmic breakthroughs that drop that to near linear. And when people look at that, they sort of say, wow, I can make my blockchain environments much larger, much more distributed as a result, so as a result of some of that work we'll be increasingly making blockchain as a primitive. We're not trying to deal with the application level, you know for insurance, for financial, but we can increasingly deliver a primitive infrastructure along with vSphere in the VMware environment, that says yeah, we've taken care of that base issue. We've guaranteed it from a vendor you trusted, and you might remember there was a couple of breaches, of some of the blockchain implementations, so yeah, we hope to take care of some of those hard problems for customers and bring some, a good breakthrough engineering, from VMware to that problem. >> Well, it's great to see companies like VMware and you know enterprise plays, IBM obviously involved, into bringing some credibility to that space, which everybody says "Crypto, oh", they don't walk they run, but there's real potential in the technology. I want to ask you about a Silicon Valley question. >> Pat: Okay. >> Any chance I get, so if I broadly define Silicon Valley, Let's include, you know, Seattle. And we generally don't do that, but that's okay, but I'm going to. >> We'll take this, we'll take 'em in okay. >> it's technology industry, but technology industry seems to have this dual disruption agenda. We've always sort of seen, tech companies own this horizontal stack, you know, and go attack, and cloud, and big data, and disruption, but it seems like, with digital, you're seeing them attack new industries. Whether it's healthcare, or groceries, or media. What do you make of that? Can Silicon Valley, broadly defined, pull off this dual disruption agenda? >> You know I really believe it can, right. In that, I'm, you know, being part of it. I'm a huge optimist on it. I don't think it will be exclusive to Silicon Valley, right. You know, there's a tech community in Boston, that's a bit more focused on healthcare, right. Obviously, the cloud guys coming out of Seattle. You know, Austin, and you know, Texas has increasing, Research Triangle, when you go around the world, you see more places because, you know, in that sense, one of my favorite, you know, cartoons, is a picture of a dog at a terminal. I'm sure it was a Dell terminal, but you know, and the caption reads right, "On the internet, "they don't know you're a dog." Right, you know the point being, hey, when you're on the net, it doesn't matter where you are, right. And it enables innovation, whether that's Afghanistan, whether that's Bangladesh, whether that's Myanmar, you know any of those places, become equal on the net, and it does open up that domain of innovation. So I view it much more as tech is disrupting everything. And that's my theme of, "tech is breaking out of tech". Clearly the hub of that, is Silicon Valley. Right you know, that's the center where you know, every third door is a new startup, as you walk down the street. It really is an incredible experience. But increasingly, you know, that innovative disruptive spirit is breaking out of Silicon Valley, to you know, literally across the world. The Chinese think they might be the number one. You know, Europeans, oh sort of a renaissance in France, you know that we haven't seen for many years, and so on. And I do believe that it will continue to be technology, in this horizontal way you know, but increasingly, and I think you know, Amazon has led the way on this. We're seeing boy, we can disrupt entire industries you know, leveraging that. You know, Tesla in automotive, and Airbnbs. All of these are changing industries in fundamental ways, and I do not see that slowing down at all. You know, I'm thrilled to see like, you know, health care, right. Boy, I have not seen this amount of disruptive technology startups in healthcare, healthcare one of the lowest percentage of spend on IT. Can you imagine that? Right, you know at that level, and boy, we're starting to see that pick up. So industry by industry I think we're just getting started. >> And that's an industry that is really ripe for disruption. >> Pat: Oh my gosh. >> So Pat, we're going to hear about some of this, this afternoon at your keynote, I presume? Maybe show us a little leg there, and we'll wrap. >> Yeah, yeah. >> Dave: Alright, take it home. >> Hey, you know we're, today's keynote, obviously going to talk about the better together aspects, we'll update on vSAN and HCI and our strategy there, some of the cool things we're doing with Dell, and AirWatch Workspace ONE, and the client space. Yeah, we're going to talk about networking. I'm going to lay out our networking strategy, and we're going to give a teaser this afternoon of a broad set of networking announcements that we're doing this week. And hope to really lay out, what we think of, as the virtual cloud network of the future, and how the network is essential to that future. So, we're going to have a little bit of fun there, and you'll see me don the VR headset, right, and hey we're going to go into the virtual, virtual data center today, >> Virtualization inception. >> There we go. >> Well Pat, on a personal note, you've been a great friend of theCUBE, and we really appreciate that, and you've been an awesome guest, we saw you come from Intel with an amazing career, and we just see it going from there. So congratulations on all your personal success, your team success and continued. >> Love you guys, it's always great to be on theCUBE. You guys do a fabulous job, >> Dave: Thank you. >> For live tech coverage, and it really has been a lot of fun, and next year we're going to go party for your 10 year anniversary on theCUBE. >> Dave: That's right. Love it. >> Okay, cool, very good. >> Alright. >> Thank you, thanks so much. >> Good. Thanks. >> Alright, keep it right there everybody. We'll be back with our wall-to-wall coverage of Dell Technologies World. You're watching theCUBE. (techno music)

>> Narrator: From the Computer Museum in Mountain View, California, it's theCUBE, covering ACG Silicon Valley Grow Awards. Brought to you by ACG Silicon Valley. (electronic music) >> Welcome back, everybody, Jeff Frick here with theCUBE. We're at the ACGSV, it's a mouthful. Association of Corporate Growth Silicon Valley Awards, the 14th annual. We've been coming here for about three years. We're really excited to have tonight's keynote speaker on, many time CUBE alum, Pat Gelsinger, CEO of VMware. Pat, great to see you. >> Great to be here, Jeff, thank you so much. It's always great to be on theCUBE, and so many good friends from theCUBE and great interviews. I really enjoy you guys, thank you. >> We're excited for VMworld later this year, we've got Dell Technology World coming up next week, so... >> Just working on my keynote this morning, so almost ready to go, so. >> But you're going to keynote tonight, so what's your keynote tonight on? >> Well, tonight, it's about tech as a force for good. And I'm going to talk about what I call the four superpowers today. You know in the past, we thought of superpower, like, USSR and the USA. >> Jeff: Right, right. >> Today I believe superpowers are far more powerful, and they're technology superpowers. And the four I talk about are mobile, unlimited reach, cloud, unlimited scale, A.I., unlimited intelligence, an IOT bridging from the digital to the physical world, and how those four superpowers are reinforcing each other today, and literally it's our opportunity to improve the quality of lives for every human on the planet as a result of those superpowers. And really how it's our responsibility as a tech community to shape those superpowers for good. >> It's so good to talk about the "for good" because there's so much bad in the news lately about some of the stuff that's going on, and you know, it's two sides of the same coin always. You can use it for good or you can use it for bad. And unfortunately, the bad has been in the news more than the good, but there's so many exciting things going on in medicine, healthcare, agriculture, energy. The opportunities are almost endless. >> Yeah, it really is, and as I say, technology is neutral. It can be used for good or bad. The Gutenberg Press. The Bible or Playboy, it works for both, and it really is our responsibility as a society, and I'll say even more so today as tech leaders, to be that force shaping those technological superpowers for good. You know, one of the statistics offside of my keynote, is in the last fifty years, we've taken the extreme poverty rate from over forty percent, to less than ten percent on the planet. It's stunning that we've lifted two and a half billion people out of extreme poverty. Healthcare reach, we've increased the length of life by almost twenty years on the planet, over the last fifty years. I mean, these are stunning things, and largely the result of the technological breakthroughs that we're doing, and as I say, today is the fastest day of tech evolution of your life. It's also the slowest day of tech evolution of the rest of your life. >> Of the rest of your life, pretty interesting. And with 5G coming just around the corner, kind of thinking of a world of infinite bandwidth, infinite compute, infinite store. How do you start to design applications and distribution when you can have all that power? And as you said, with cloud really at your disposal. You don't have to build it all yourself, you leverage companies like you guys to put it in place and I as an entrepreneur don't have to build all that stuff anymore. >> That's right, this really is impressive that way, 'cause today we've crossed over half the population of the planet has a persistent connection to the internet over some form of mobile or PC device. Half the population, you can now reach over the internet. I mean, it's just stunning that way. >> Jeff: Yeah. >> You can rent the world's largest super computer for a few thousand bucks. The scale that we're able to now conduct business to be able to develop software to reach customers, and truly to change people's lives. >> Right. You do a lot of work. I follow you on Twitter and you're out in the community, you do a lot of stuff with your faith and outside of work to help people. You see the power that you can bring to this technology. What are some of the inspiring stories that get you up everyday, when you do some of this stuff outside of your day job? >> It really is exciting and one of the charities that my wife and I are very involved in is called Missions of Hope International. They work in the slums of Nairobi primarily, and we help to start schools there that literally today have over fifteen thousand kids in the schools that we helped start. Over the summer, I'm climbing Mount Kilimanjaro, in July, as a fundraise to build the next girls high school for those schools. As the girls get younger, they get pulled back into tribalism. For five camels, they get married off at young ages, and keeping them in school so that they can really advance and become proper members of society versus drug into tribalism, so that's one of my summer projects is doing that. Particularly in Kenya, we've been thrilled, things like M-Pesa, and we work with a company called Node Africa, to deliver farming and agricultural services. You know, the most basic things that give people market access, give people cropped information, and literally are lifting people out of poverty in the country of Kenya today. >> That's great work and like I said, follow Pat on Twitter. You're pretty active on there doing good work. >> Thank you. >> We look forward to your keynote tonight and we'll see you next week in Las Vegas. >> Look forward to it. Thank you so much, Jeff. >> Alright, he's Pat Gelsinger, I'm Jeff Frick, you're watching theCUBE from the ACGSV Awards. Thanks for watching. (electronic music)

(upbeat music) >> Announcer: Live from the Computer History Museum in Mountain View, California. It's theCube covering DevNet Create 2018, brought to you by Cisco. >> Okay, welcome back everyone. Live here in Silicon Valley at the Computer History Museum in Mountain View, California. We're here for Cisco's DevNet Create. I'm John Furrier with my cohost Lauren Cooney. Our next guest is Sylvain Kalache, who's the co-founder of Holberton School. In the news today for big venture funding. Eight and a half million dollars, congratulations. >> Thank you. >> Welcome to theCUBE. >> Thank you. >> Thanks for coming on, we've had many conversations with some of the folks you work with at your place there. Really great mission, CloudNow Awards have been on Open Source Summit. You guys have a very special mission, certainly recognized with some good funding, congratulations, but take a minute to explain the mission of your school. >> Yes, so the mission of the school is to provide high quality education to the most. I think that's something that is very tough in the US for American people is that there is high quality education and you know, like Ivy League are, like, obviously doing a great job, but the issue with that is that it's, like, limited to an elite. But a fraction of American people can access high quality education, and so when you look at the student debt, you know, 1.4 trillion dollar, like, something is wrong with that, right? >> John: Yeah. >> And so we want to be a part of the solution and that's why we created Holberton School. >> And the interesting thing, too, about it is that what I liked about your mission, too, is that you're very transparent about what you do and... But a lot of the jobs are skills that not a lot of people have, so it's a first time skill. So, you know, as people look to hire, say, a data scientist or someone in AI or someone in machine learning or anything in tech, for instance, no one really has that many years of experience, so there's an opportunity to level up for someone who might not have gone to a fancy school. >> Exactly, so today there is more than half a million unfilled jobs that require tech skills in the US, right. And according to the previous white house CTO, it's going to grow to 1.4 million in the next decade, right. And universities are only going to train 400,000. So, there is a gap of a million skilled people within the next 10 years for software engineering type of job, right. So, my co-founder, with Julie and Bobby, we used to be head of marketing and community and I used to work for LinkedIn, would, you know, interview a lot of people who wanted to, you know, work for Docker and LinkedIn and one of the issue we saw is that a lot of out of colleges candidates will not be ready to take on a job. They were not ready. You could see they were smarter than you think but you would need to train them for six months or a year to get them ready to take on a job. >> What makes you different, what are you guys doing that's working? Can you explain the model? >> Yeah so in regular education, we bring you the knowledge right, through a lecture to share, we lecture you right. And two weeks down the road, we give you the exam to see if you memorized, you know, like the solution kind of, right? At Holberton, we've flipped the education. We give students the exam through a project, and they have to go, acquire the knowledge, learn the tool that they need to solve the thing, right. Which is very much what we do in the workplace, right. My manager at LinkedIn would coach me and say hey Sylvain you need to build this, you need to fix that, right. And then I'm paid to like find the best solution, right. So we train our students the same way. And our students come from all walks of life. Right out of high school, some started college didn't finish, some used to be barista, poker player, guitar player, artist, teacher, and some other place, right. They come with no software engineering knowledge, and we train them from zero. For two things, first one to learn a craft that's in demand in today's software engineering. So that they can find a job you know after graduation. And second to earn or to learn, to develop problem solving skills, critical thinking. So that they can continue to grow even after graduation and continue to learn after that, right. >> Is there a requirement? >> The requirement is that you have to be over 18 years old. That's it. >> John: That's it. >> That's it. >> And what does it cost? >> So the cost is none, until you find a job, right. >> Lauren: Until you find a job. And then what happens? >> So what happens, if you find a job that is over 40,000 dollar per year, then you contribute back to the school with a percentage of your salary. So we align the school success with student success. And the final contribution that students make to the school is used to finance the next generation of students. >> Lauren: Great. >> So that, you know, an organic circle where, the more students are successful through them, the more we can train other students. >> And you're investing in the outcome of the students. >> Exactly. We are investing in our students worthy of this school. But obviously we're are like investing in their success. >> Lauren: That's great >> That's the only way for us to succeed. >> Well you're certainly optimized for success. Because you're motivated to do it right. Right, so. This is interesting. >> We are, and when we say we, it's like the Holberton staff, but also the Holberton community. Which is composed of more than 150 mentors. Who are professionals in the tech industry. And they are here for two things. To guide students to enter the tech industry. They come to the school, share their experiences. What it's like to work for a startup. What it's like to work for a big company. What it's like to be a woman in tech, right. And also, they guide us on the curriculum, right. To make sure that what is being taught, like is always relevant. And that's where students find jobs in several companies including Tesla, Apple, NASA, LinkedIn, you name it. So they're competing with Ivy League type of talent. >> John: Yeah, yeah. >> But they are definitely in the type of demographic that you really want... >> And they actually might win too, because they have the street smarts. And they get the hands on skills. Okay, so quick question, so. Is it the for-profit? Or non-profit? >> Sylvain: It's for-profit. >> Okay, so it's for-profit. But it's got a mission driven initiative. >> Sylvain: Yes. >> Tied to a profit objective. So you just raise some funding. How did that go? Is that use of funds to expand the scope? Or student body? I'm sure there's some constraints, in terms of, how much you can handle in terms of student body. Locations around the world. What is there an expansion strategy? Obviously you got some funding. >> Sylvain: Yes. >> What are you going to do with it? >> Yeah, so, we are a San Francisco based crew. We started three years ago with our first cohort of solid students. And with the location we had, we could train 100 students a year. Right. That's good but, in the grand scheme of things, it's not a lot. >> John: It's a prototype. >> It's a prototype. Exactly. So now that we have the students working for EnVideo, Dropbox, Apple, and like you know, the Google of the world. Alright, okay. Now we need to scale up and we move to a new location, that's seven times bigger. Where we'll be able to train 500 students per year, which... Because it's a two year program, we'd be a campus of 1000 students. Right. And to give you an idea of the scale, the largest University for software students, in the US is training 700 students a year. So we are like quickly coming up, as one of the largest trainer of 20,000 students. >> That's phenomenal. What's the curriculum? Is it mostly computer science? Is it mostly tech? I mean obviously you have the... I see any of you come in. But you do have women in tech. And you have a under represented minority kind of component, which is great. But it's open to anyone. >> It's open to anyone over 18. The application process is blind and fully automated. So there is no, human selection. >> John: No discrimination of any kind. >> No discrimination, and... >> How do you cut people off? Is it random? >> It's not random. >> And not random. I mean like, if you have like 500 spots. >> Yah. >> And you have 1000 applicants. >> Yah. >> So do you sort it? Is it like... >> Right. >> You get the lottery? I mean, is it... >> No, so there is only three percent of student who start the application process who make it. >> Okay, got it. >> And... >> So there's a selection criteria. >> There is a selection criteria. It's hard to get in. It's mostly based on motivation and talent. And by talent we mean, this ability to strive in this type of environment. Where you learn by doing and you learn by collaborating with your peers. Which is something that not everybody, you know, can do. >> So you identify success criteria, with what you think might be aligned with the culture of the curriculum. >> Yah, we believe that grit, is you know, a big element in people's success. And I think there is a lot of American people with grit. But they're born in the wrong zip code. They didn't have the right family, you know, who could support them. And to us, we don't want to select people because of their past. We want to select people because of who they are. Ultimately the application process is doing this for us. In terms of numbers, so far it's brought 35 percent woman. 50 percent of our students aren't white. And the age goes from anywhere from 17 to 56. So it's like very diverse crowd of students. That makes this community really amazing. >> Lauren: Yah. Coming from someone who paid for their own college, and then had to pay it all back... (laughing) I would have loved to have this around when I was going to school.6 >> John: And you still pay the pack. It's like you wanted it upfront for free. So what percentage of the salary is it? I mean, can you talk about numbers or... >> Yah. >> Cause I mean, cause that's always some people want to know the math in advance. >> Absolutely, absolutely. So it's a 17 percent of your income, for the first three years of employment, if you find a job that's over 40,000. So if you don't find a job then, you don't pay anything. >> John: And direct deposit probably, mostly. Do they have to be obligated to pay you? Do they usually do... direct deposit? >> Sylvain: Yah. We partner with third parties that's taking care of this. And it's basically like a monthly, you know, deposit. >> So it's automated for this candidates, for the students. >> Sylvain: It's automated, yah. >> Lauren: And do you do partnerships in any way? So like, you know, woman that are re-entering the work force. Or, you know... things along those lines. There's a lot of different programs out there that support. You know... >> Sylvain: Absolutely. So we are partnering with a lot of organizations. >> Lauren: Okay. >> We want to inspire... And the represented, you know like, demographic to, believe that they can become software engineer. They can be part of that, right. And so we partner... One of them is a clan now, with Justine Mitchell. >> Lauren: I won an award, yah. (Lauren laughing) >> And she was on theCube... >> Lauren: Yah. She's great. >> John: We cover their events. >> So with Justine we worked on fundraising, for women, for living state. And from Google extension... And Schelling, and yeah, we are going to help more students to get in the program. And also, one thing that we are doing is that we have a wall of trustees, where actually, Justine is sitting. We also have the singer, grammy award winner, Neyo. Who help's us to make sure we are doing everything we can, to communicate to this minority, right. And as you say, like the kid in the hood will come up with a different set of problems, and different set of ideas on how to build product and solve issues. And not only having a diverse work force is socially good. But it also makes sense business wise. Because your customer base is diverse by definition, right. >> John: Yah, I mean you need to have the algorithms. So the algorithms are being written by only a small percentage of the population. >> Sylvain: Yah, yah. They're inherently bias. >> Sylvain: They are. >> So we need to have that diversity, and plus diversity brings more unique perspectives. It might slow things down a bit. But you're going to get a much more broader representation. >> Sylvain: It is, and... >> And we heard with that in front with Mark Zuckerberg in front of senate yesterday. (Sylvain laughing) Questions like, you know... There's biases in there. Who's writing the algorithms? >> Yah, it's became even worse with AIM mission learning. If you feed this intelligence, that I've said is bias or discriminative, then AI will behave, like, with discrimination. >> And they're hidden bias so people might not even know that their biases is builtin. >> So it's terrible. I've arranged a number of money to take in the industry. In the valley's, 12 percent. So we really... and it's also bad for, like you know, authenticity. But also, I would say, none visual diversity, right. Like, what zip code? What background? What academic background do you come from? >> Yah. I mean it's a group thinking, mentality. "Oh we went to Harvard", "Oh you're instantly funded." >> Exactly. >> I mean that was the old way. The new way is the new generation. You do amazing work, we applaud your mission and success. We think this is the model, in fact, I'm even more aggressive, that you should get tax-deductions for contributing your time to the school. And the students should get a tax-deduction off the payment. This is a very skilled model. Congratulations. You should propose that. Get Mark Zuckerberg's in and Washington, DC. >> You should send to us. (laughing) >> Send some text messages, while you're there change some regulations. Hey, thanks for coming on. >> Thank you very much. >> Thank you >> Holbertonschool.com. Check it out. Great mission, changing the education paradigm. Bringing a new paradigm for learning. Really filling the gap in the jobs front, across the world. It's theCube of course doing our part. Sharing it with you. Back with more live coverage here at Cisco DevNet Create, at the Computer History Museum. We'll be right back. (upbeat music)