>> From theCUBE studios in Palo Alto in Boston, bringing you data-driven insights from theCUBE in ETR. This is breaking analysis with Dave Vellante. >> ServiceNow is a company that investors love to love, but there's caution in the investor community right now is confusion about transitory inflation and higher interest rates looms. ServiceNow also suffers from a perfection syndrome of sorts. The company has seen that the slightest misstep can cause many freak outs from the investor community. So what it's done is it's architected a financial and communications model that allows it to beat expectations and raise its outlook on a consistent basis. Regardless, ServiceNow appears to be on track to vie for what its CEO Bill McDermott refers to as the next great enterprise software company. Wait, I thought Marc Benioff had his hands on that steering wheel. Hello everyone, and welcome to this week's Wikibon CUBE insights powered by ETR. In this breaking analysis, we'll dig into one of the companies we began following almost 10 years ago and provide some thoughts on ServiceNow's March to 15 billion by 2026, which we think is a highly probable achievement. In 2020, despite the contraction in IT spending, SeviceNow outperformed both the S&P 500 and the NASDAQ, but here's a view of 2021. And you can see while the stock has done well since it saw a softness in May and again in early June, and it bounced off that double bottom, it's performance is well below those other benchmarks. This is not a big surprise given the fact that this is a high growth stock and we all know that those names with high multiples get hurt in an inflationary environment, but still the gaps are notable. This is especially true given the performance of the company. It's not often that you see a company with four to $5 billion in revenue growing at a 30% clip, throwing off billions of dollars in free cash flow and increasing operating margins at 100 basis points a year and promising to do that over the next several years. In fact, I don't think we've ever seen that before. I remember years ago, when the trade press was criticizing SeviceNow for its lofty valuation, despite the fact that it was losing money, then CEO, Frank Slootman said to me, "Dave, we can be highly profitable tomorrow if we want it to be, but this is a marathon and we're planning to go big." So essentially Slootman was telling me that this company was going to be an ATM machine that prints money. And that seems to be how it's shaping up. I happened to be at SeviceNow headquarters in 2017, literally the first day on the job for John Donahoe, the CEO replaced Slootman, and I remember while I was there thinking Donahoe was certainly capable, but why the heck I said, would the board let Frank Slootman get away? You know what? It turned great for Slootman, he's at snowflake. Donahoe, I always felt was a consumer guy anyway, and not long for SeviceNow. And now you have this guy, new CEO, Bill McDermott at the helm. He's not a more qualified CEO for the company in my view. About two months ago, McDermott led a virtual investor day. We've had McDermott on theCUBE a couple of times back when he was CEO of SAP and this individual is very compelling. He's got JFK like looks and charisma, but more than that, he's passionate and convincing. And he obviously knows enterprise software. And with conviction, he laid the groundwork for how SeviceNow will get to $10 billion in revenue by 2024 on its way to 15 billion two years thereafter. And one of the big things McDermott's stressed was they're going to get there without any big M&A moves. And that's important because previously the door was left open for that possibility. And now the company is assuring investors that it can get there organically, even with slower growth. So this chart implies no big M&A, and you can see Slootman handed over the reigns at that year one tick on the horizontal axis. This was not a turnaround story. It was a rocket ship at the time. And look at the logos on this chart. This is a revenue view and SeviceNow is aiming to be the fastest to get to 10 billion in software industry history. SeviceNow is valuation just to sort of shift gears here for a minute blew by workdays years ago. Its sites are now set on SAP which is currently valued at 170 billion. And then there's Oracle and Salesforce. They're at around 250 billion and 225 billion in valuation respectively. And these lines back to revenue show the trajectory that these companies took to get to 10 billion. And you can see how SeviceNow plans to get there with those dotted lines. And this is why I call this a collision course with Salesforce, because I think Marc Benioff might say, "Hey, we are ready." Are the next great enterprise software company. We have no plans to give up that post, that mantle anytime soon. I want to share a clip from four years ago. something we've been saying for a long, long time. Roll the clip. >> As they say their goal now is to be four billion by 2020. It feels like, you know, when we first covered SeviceNow knowledge, we said, wow, this company reminds us a lot of the early days of Salesforce. They've got this platform you can develop on this platform, you know, call it paths or, you know, whatever you want to call it, but we at the time said, they're on a collision course with Salesforce. Now there's plenty of room for both of those companies in the marketplace. Salesforce obviously focused predominantly on Salesforce automation, SeviceNow really on workflow automation, but you can see those sort of two markets coming together. >> Now you may be thinking isn't Salesforce's revenue like 5X that of SeviceNow? And yes it is. But I would say a couple of things. One is that Salesforce has gotten to where it is with a lot of M&A, more than 60 acquisitions. At some high profile wants to like slack and Tableau as well as MuleSoft and Heroku back in the day and many others. So we'll see how far McDermott can get before he reverts to his inquisitive self that we saw at SAP. But the second thing I'll say is serviceNow positions itself as the platform of platforms. And the thing is it runs its own cloud. And when it does acquisitions, it replatforms the acquiree into the now platform so that it can drive integrations more seamlessly. That's fundamentally part of its value proposition, a big part of its value proposition. And that means it's somewhat limited on the acquisitions it can make, it has to be pretty selective. Otherwise it's got to do a heavy lift to get it the now platform. It's the power of the models, especially if customers can get to a single CMDB, that configuration database management system, which by the way, a lot of customers never get to that kind of skirt that, but remember SeviceNow is like the ERP for IT. So the more you can get to a single data model, the more effective you're going to be, especially in this data era where you got to put data at the core of your organization, something we've talked about a lot. And the third thing I'll mention the SeviceNow wants to use this platform to attack what it sees as a very large TAM as shown here. Now, a couple of things I want to point out. One is when SeviceNow IPO in 2012, a lot of the analysts said that they were way overvalued because they were in a market. It was help desk and writing tickets was a $2 billion business that was in decline and BMC remedy. Wasn't really that big of a base to attack. In 2013, the Wikibon team took a stab at sizing the TAM. I dug back into the old Wiki. We had well over 30 billion at the time and we expected the company to move deeper into IT and then beyond IT into lines of business and line of business management. Yeah, we felt we were being conservative. We thought the number could be as big as 100 billion, but we felt like putting that number out there, was too aggressive but, you know, it turns out from SeviceNow standpoint, it sees these new software opportunities coming together. And SeviceNow in a way they can double dip both in and beyond their current markets. What I mean by that is it can partner with, for instance, HCM vendors and then at the same time offer employee workflows. They can partner or even purchase RPA tools from specialists like UI path or automation anywhere. And it can go acquire a company which it did like Intel a bot and integrate what I would consider lighter-weight RPA into its platform. So it can manage workflows for best of breed and pick off functionality throughout the software stack. Now what's interesting in this chart is first, the size of the TAM that SeviceNow sees 175 billion, but also how it's now reorganizing its business around workflows, which you see in the left-hand side. This was done of course, to simplify the many, many, many things that you can buy from SeviceNow. But there's also speculation that SeviceNow is leveraging its orchestration and service catalog capabilities, which are meaningful from a revenue standpoint and using them to power these workflows because the way it was organized was both confusing and not as effective as it could be. Now, it's well known that SeviceNow has ITSM this comprises the biggest piece of its revenue pie, probably a couple billion. And it's adding to that with ITSM pro and ITSM enterprise going deeper, deeper into the ITSM space. And it's ITAM business is also doing well against the likes of Datadog and Elastic and Splunk and others and its acquisition of LightStep. It's going to push it further into this space, which is both crowded is morphing into observability as we've been reporting. What's unclear though is how well, for instance, HR and the CSM businesses are doing as sort of standalone businesses, you might remember they used to be standalone businesses with standalone GMs. They've sort of changed that up a little bit. So this is potentially not only a way to simplify, but also shuffle the deck chairs a bit and maybe prop up the non IT workflows, which then allows SeviceNow to show this chart, which essentially says to the street, see, we have this huge TAM and our TAM expansion strategy is working as the overall business is growing nicely yet the mix is shifting toward customer, employee and creator workflows. See how awesome our business is and see how smart we are. So this is possibly a way to hide some of the warts and accentuate the growth. Look, there's not a lot to criticize SeviceNow about, but they've been pretty good at featuring what some perceive as weaknesses. Like for instance, the way it marketed it's a multi-instance and turned that into an advantage as a better model. Even though the whole cloud world was going multitenant and within a ServiceNow you got to really plan new releases, which they drop every six months, although CJ decide. So he's SeviceNows head of products. He did say at the investor meeting, that event that they held last May, that they do certain releases now bi-monthly and even some bi-weekly. So, yeah, maybe a little bit of nitpicking here, but I always liked to question when such changes are made to the reporting structures to the street. And if workflows are the new black, so to speak, I wonder will SeviceNow start pricing by workflows versus what really has been a legacy of, you know, what's your ticket volume and how many agents need access to the model and we'll charge you accordingly? Now, I'm not a service pricing expert and they don't make it easy to figure out that pricing. So let's dig a little bit more on that and keep an eye on it. Now I want to turn to the customers survey data from ETR on ServiceNow. First, here's the latest update on IT spending from ETR, something that we've been tracking for quite some time. We've been consistently saying to expect this year a seven to 8% growth for 2021 IT spend off of last year's contraction. And the latest ETR survey data puts it right at 8%. So we really liked that number. You know, could even be higher push 10% this year. Now, let's look at the spending profile within the ETR dataset. Of the 1100 plus respondents to this quarter, there were 377 SeviceNow customers, and this chart shows the breakdown of net score or spending velocity among those respondents. Remember, net score is a measure of that spending momentum. What it does is it takes the lime green bar, which is adopting new, that says 11% of that 377 customers are adopting ServiceNow for the first time. It takes that lime green and it adds the forest green bar that's growth in spending of 6% or more this half relative to the first half. That's 43% of the customers that have been surveyed here. And then it subtracts out the reds, which is that pinkish is spending less, that's 3%, small number of spending less. And then the bright red is we're leaving the platform. That's a minuscule 1% of the respondents. And you can see the rest in that gray area is flat spending, which is ignored. And so what this does is it calculates out, you'd take the greens minus the reds. It calculates out to a net score 50% for SeviceNow, which is well above that magic 40% elevated mark that we'd like to see. It's rare for a company of this size, except for the hyperscalers. You see AWS and Microsoft and Google are up that high and oh, there's another great enterprise software company at the 45% net score level. Guess who that is, salesforce.com. But anyway, it's rare to see that large of a company have that much spending momentum in the ETR surveys. Now let's take a look at the time series data for ServiceNow. This chart shows the net score granularity over time. So you see the bars, that time series, the blue line is net score. And you can see that it was dragged down during last year's lockdown. As, even though SeviceNow did pretty well last year and it's now spiking back to pre-COVID levels, which is a very positive sign for the company. That red call-out that ETR makes it shows market share. That's an indicator of pervasiveness in the dataset. I'm not overlyconcern there that downturn. I don't think it's a meaningful indicator because ServiceNow revenue is skewed towards a big spender accounts and this is an account unit indicator, if you will not spending level metric. And okay, and here's another reason and why I'm not concerned about SeviceNow is a so-called market share number in the ETR dataset as ETR defines it. This is an X, Y Z view chart that we'd like to show here. We've got net score on the vertical axis and market share in the horizontal plane. This is focusing on enterprise software. So remember that 40% red line is the magic level, anything above that is really indicative of momentum. Oh look, there's Salesforce and ServiceNow on that little collision course that I talked about. Now, CEO McDermott, I would say as by the way, would his predecessors, look, we're a platform of platforms and we partner with other companies, we'll meet at the customer level and sure we'll integrate functions where we think it can add value to customers. But we also understand we have to work with the vendors that our customers are using. So it's all good, plenty of room for growth for all of us, which by the way is true. But I would say this, anyone who's ever been in the enterprise software industry knows that enterprise software execs and their salespeople believe that every dollar spent on software should go to them. And if it's a good market with momentum and growth, they believe they can either organically write software to deliver customer function and value, or they can acquire to fill gaps. So, well, what McDermott would say is true. The likes of Oracle, Microsoft, SAP, Salesforce, Infor, et cetera, they all want as big of a budget piece as possible in the enterprise software space. That's just the way it is. Now, we're going to close with some anecdotal comments from ETR insights, formerly called VENN, which is a round table discussion with CXOs. You can read the summaries when we post on Wikibon and SiliconANGLE but let me summarize. This first comment comes from an assistant VP in retail who says SeviceNow is a key part of their digital transformation. They moved off of BMC remedy two years ago for the global ticketing system. And this person is saying that while the platform is extremely powerful, you got to buy into specific modules to just get one feature that you want. You may not need a lot of the other features, so it starts to get expensive. The other thing this individual is saying is initially, it's a very services heavy project. And so I'll tell you, when you look at the SeviceNow ecosystem the big SIs, the big names, they have big appetites. They love to eat at the trough as I sometimes say, and they want big clients with big budgets. So if you're not one of those top 500 or 700 customers, the big name SIs, you know, they might not be for you. They're not going to pay attention to you. They're going after the big prizes. So what I would suggest is you call up someone like Jason Wojahn of third era, he's the CEO over there and he's got a lot of experience in this space or some more specialized SeviceNow consultancy like them because you're going to get better value for the money. And you're going to get short-term ROI faster with a long-term sustainable ROI as a measurable objective. And I think this last comment sums it up nice, let me to skip over the second one and go just jump to the third one. This basically says the platform is integrated. It's like a mesh. It's not a bunch of stovepipes and cul-de-sacs. Yes it's expensive, but people love it. And like the iPhone, it just works. And their feature pace is accelerating. So pretty strong testimonials, but I want to keep an eye on price transparency any possible backlash there and how the ecosystem evolves. It's something that we called out early on. It's an indicator and SeviceNow needs to continue to invest in that partner network is especially as it builds out its vertical industry practices and expands internationally. Okay, we'll leave it there for now. Remember I publish each week on wikibon.com and siliconangle.com. These episodes they're all available as podcasts. All you got to do is search for breaking analysis podcast. You can always connect with me on Twitter @DVellante or email me @david.vellantesiliconangle.com. Appreciate the comments on LinkedIn. And don't forget to check out etr.plus for all the survey data. This is Dave Vellante for theCUBE insights powered by ETR. Be well, and we'll see you next time. (upbeat music)

>>from around the globe. It's the Cube covering space and cybersecurity. Symposium 2020 hosted by Cal Poly >>Oven. Welcome back to the Space and Cyber Security Symposium. 2020 I'm John for your host with the Cuban silicon angle, along with Cal Poly, representing a great session here on industry success in developing space and cybersecurity. Resource is Got a great lineup. Brigadier General Steve Hotel, whose are also known as Bucky, is Call Sign director of Space Portfolio Defense Innovation Unit. Preston Miller, chief information security officer at JPL, NASA and Major General retired Clint Crozier, director of aerospace and satellite solutions at Amazon Web services, also known as a W s. Gentlemen, thank you for for joining me today. So the purpose of this session is to spend the next hour talking about the future of workforce talent. Um, skills needed and we're gonna dig into it. And Spaces is an exciting intersection of so many awesome disciplines. It's not just get a degree, go into a track ladder up and get promoted. Do those things. It's much different now. Love to get your perspectives, each of you will have an opening statement and we will start with the Brigadier General Steve Hotel. Right? >>Thank you very much. The Defense Innovation Unit was created in 2015 by then Secretary of Defense Ash Carter. To accomplish three things. One is to accelerate the adoption of commercial technology into the Department of Defense so that we can transform and keep our most relevant capabilities relevant. And also to build what we call now called the national Security Innovation Base, which is inclusive all the traditional defense companies, plus the commercial companies that may not necessarily work with focus exclusively on defense but could contribute to our national security and interesting ways. Um, this is such an exciting time Azul here from our other speakers about space on and I can't, uh I'm really excited to be here today to be able to share a little bit of our insight on the subject. >>Thank you very much. Precedent. Miller, Chief information security officer, Jet Propulsion Lab, NASA, Your opening statement. >>Hey, thank you for having me. I would like to start off by providing just a little bit of context of what brings us. Brings us together to talk about this exciting topic for space workforce. Had we've seen In recent years there's been there's been a trend towards expanding our space exploration and the space systems that offer the great things that we see in today's world like GPS. Um, but a lot of that has come with some Asian infrastructure and technology, and what we're seeing as we go towards our next generation expects of inspiration is that we now want to ensure that were secured on all levels. And there's an acknowledgement that our space systems are just a susceptible to cyber attacks as our terrestrial assistance. We've seen a recent space, uh, policy Directive five come out from our administration, that that details exactly how we should be looking at the cyber principle for our space systems, and we want to prevent. We want to prevent a few things as a result of that of these principles. Spoofing and jamming of our space systems are not authorized commands being sent to those space systems, lots of positive control of our space vehicles on lots of mission data. We also acknowledge that there's a couple of frameworks we wanna adopt across the board of our space systems levers and things like our nice miss cybersecurity frameworks. eso what has been a challenge in the past adopted somebody Cyber principles in space systems, where there simply has been a skill gap in a knowledge gap. We hire our space engineers to do a few things. Very well designed space systems, the ploy space systems and engineer space systems, often cybersecurity is seen as a after thought and certainly hasn't been a line item and in any budget for our spaces in racing. Uh, in the past in recent years, the dynamic started to change. We're now now integrating cyber principles at the onset of development of these life cycle of space. Systems were also taking a hard look of how we train the next generation of engineers to be both adequate. Space engineers, space system engineers and a cyber engineers, as a result to Mrs success on DWI, also are taking a hard look at What do we mean when we talk about holistic risk management for our space assistance, Traditionally risk management and missing insurance for space systems? I've really revolved around quality control, but now, in recent years we've started to adopt principles that takes cyber risk into account, So this is a really exciting topic for me. It's something that I'm fortunate to work with and live with every day. I'm really excited to get into this discussion with my other panel members. Thank you. >>You Preston. Great insight there. Looking forward. Thio chatting further. Um, Clint Closure with a W. S now heading up. A director of aerospace and satellite Solutions, formerly Major General, Your opening statement. >>Thanks, John. I really appreciate that introduction and really appreciate the opportunity to be here in the Space and Cybersecurity Symposium. And thanks to Cal Poly for putting it together, you know, I can't help, but as I think to Cal Poly there on the central California coast, San Luis Obispo, California I can't help but to think back in this park quickly. I spent two years of my life as a launch squadron commander at Vandenberg Air Force Base, about an hour south of Cal Poly launching rockets, putting satellites in orbit for the national intelligence community and so some really fond memories of the Central California coast. I couldn't agree more with the theme of our symposium this week. The space and cyber security we've all come to know over the last decade. How critical spaces to the world, whether it's for national security intelligence, whether it's whether communications, maritime, agriculture, development or a whole host of other things, economic and financial transactions. But I would make the case that I think most of your listeners would agree we won't have space without cybersecurity. In other words, if we can't guaranteed cybersecurity, all those benefits that we get from space may not be there. Preston in a moment ago that all the threats that have come across in the terrestrial world, whether it be hacking or malware or ransomware or are simple network attacks, we're seeing all those migrate to space to. And so it's a really important issue that we have to pay attention to. I also want to applaud Cow Pauling. They've got some really important initiatives. The conference here, in our particular panel, is about developing the next generation of space and cyber workers, and and Cal Poly has two important programs. One is the digital transformation hub, and the other is space data solutions, both of which, I'm happy to say, are in partnership with a W. S. But these were important programs where Cal Poly looks to try to develop the next generation of space and cyber leaders. And I would encourage you if you're interested in that toe. Look up the program because that could be very valuable is well, I'm relatively new to the AWS team and I'm really happy Thio team, as John you said recently retired from the U. S. Air Force and standing up the U. S. Space force. But the reason that I mentioned that as the director of the aerospace and satellite team is again it's in perfect harmony with the theme today. You know, we've recognized that space is critically important and that cyber security is critically important and that's been a W s vision as well. In fact, a W s understands how important the space domain is and coupled with the fact that AWS is well known that at a W s security is job zero and stolen a couple of those to fax A. W. S was looking to put together a team the aerospace and satellite team that focus solely and exclusively every single day on technical innovation in space and more security for the space domain through the cloud and our offerings there. So we're really excited to reimagine agree, envision what space networks and architectures could look like when they're born on the cloud. So that's important. You know, talk about workforce here in just a moment, but but I'll give you just a quick sneak. We at AWS have also recognized the gap in the projected workforce, as Preston mentioned, Um, depending on the projection that you look at, you know, most projections tell us that the demand for highly trained cyber cyber security cloud practitioners in the future outweighs what we think is going to be the supply. And so a ws has leaned into that in a number of ways that we're gonna talk about the next segment. I know. But with our workforce transformation, where we've tried to train free of charge not just a W s workers but more importantly, our customers workers. It s a W s we obsessed over the customer. And so we've provided free training toe over 7000 people this year alone toe bring their cloud security and cyber security skills up to where they will be able to fully leverage into the new workforce. So we're really happy about that too? I'm glad Preston raised SPD five space policy Directive five. I think it's gonna have a fundamental impact on the space and cyber industry. Uh, now full disclosure with that said, You know, I'm kind of a big fan of space policy directives, ESPN, Or was the space policy directive that directed to stand up of the U. S. Space Force and I spent the last 18 months of my life as the lead planner and architect for standing up the U. S. Space force. But with that said, I think when we look back a decade from now, we're going to see that s p d five will have as much of an impact in a positive way as I think SPD for on the stand up of the space Force have already done so. So I'll leave it there, but really look forward to the dialogue and discussion. >>Thank you, gentlemen. Clint, I just wanna say thank you for all your hard work and the team and the people who were involved in standing up Space force. Um, it is totally new. It's a game changer. It's modern, is needed. And there's benefits on potential challenges and opportunities that are gonna be there, so thank you very much for doing that. I personally am excited. I know a lot of people are excited for what the space force is today and what it could become. Thank you very much. >>Yeah, Thanks. >>Okay, So >>with >>that, let me give just jump in because, you know, as you're talking about space force and cybersecurity and you spend your time at Vanderburgh launching stuff into space, that's very technical. Is operation okay? I mean, it's complex in and of itself, but if you think about like, what's going on beyond in space is a lot of commercial aspect. So I'm thinking, you know, launching stuff into space on one side of my brain and the other side of brain, I'm thinking like air travel. You know, all the logistics and the rules of the road and air traffic control and all the communications and all the technology and policy and, you >>know, landing. >>So, Major General Clint, what's your take on this? Because this is not easy. It's not just one thing that speaks to the diversity of workforce needs. What's your reaction to that? >>Yeah. I mean, your observation is right on. We're seeing a real boom in the space and aerospace industry. For all the good reasons we talked about, we're recognizing all the value space from again economic prosperity to exploration to being ableto, you know, improve agriculture and in weather and all those sorts of things that we understand from space. So what I'm really excited about is we're seeing this this blossom of space companies that we sort of referred to his new space. You know, it used to be that really only large governments like the United States and a handful of others could operate in the space domain today and largely infused because of the technological innovation that have come with Cyber and Cyrus Space and even the cloud we're seeing more and more companies, capabilities, countries, all that have the ability, you know. Even a well funded university today can put a cube sat in orbit, and Cal Poly is working on some of those too, by the way, and so it's really expanded the number of people that benefits the activity in space and again, that's why it's so critically important because we become more and more reliant and we will become more and more reliant on those capabilities that we have to protect him. It's fundamental that we do. So, >>Bucky, I want you to weigh in on this because actually, you you've flown. Uh, I got a call sign which I love interviewing people. Anyone who's a call sign is cool in my book. So, Bucky, I want you to react to that because that's outside of the technology, you know, flying in space. There's >>no >>rule. I mean, is there like a rules? I mean, what's the rules of the road? I mean, state of the right. I mean, what I mean, what what's going? What's gonna have toe happen? Okay, just logistically. >>Well, this is very important because, uh and I've I've had access thio information space derived information for most of my flying career. But the amount of information that we need operate effectively in the 21st century is much greater than Thanet has been in the past. Let me describe the environment s so you can appreciate a little bit more what our challenges are. Where, from a space perspective, we're going to see a new exponential increase in the number of systems that could be satellites. Uh, users and applications, right? And so eso we're going we're growing rapidly into an environment where it's no longer practical to just simply evolved or operate on a perimeter security model. We and with this and as I was brought up previously, we're gonna try to bring in MAWR commercial capabilities. There is a tremendous benefit with increasing the diversity of sources of information. We use it right now. The military relies very heavily on commercial SAT com. We have our military capabilities, but the commercial capabilities give us capacity that we need and we can. We can vary that over time. The same will be true for remote sensing for other broadband communications capabilities on doing other interesting effects. Also, in the modern era, we doom or operations with our friends and allies, our regional partners all around the world, in order to really improve our interoperability and have rapid exchange of information, commercial information, sources and capabilities provides the best means of doing that. So that so that the imperative is very important and what all this describes if you want to put one word on it. ISS, we're involving into ah hybrid space architectures where it's gonna be imperative that we protect the integrity of information and the cyber security of the network for the things most important to us from a national security standpoint. But we have to have the rules that that allows us to freely exchange information rapidly and in a way that that we can guarantee that the right users are getting the right information at the right. >>We're gonna come back to that on the skill set and opportunities for people driving. That's just looking. There's so much opportunity. Preston, I want you to react to this. I interviewed General Keith Alexander last year. He formerly ran Cyber Command. Um, now he's building Cyber Security Technologies, and his whole thesis is you have to share. So the question is, how do you share and lock stuff down at the same time when you have ah, multi sided marketplace in space? You know, suppliers, users, systems. This is a huge security challenge. What's your reaction to this? Because we're intersecting all these things space and cybersecurity. It's just not easy. What's your reaction? >>Absolutely, Absolutely. And what I would say in response to that first would be that security really needs to be baked into the onset of how we develop and implement and deploy our space systems. Um, there's there's always going to be the need to collect and share data across multiple entities, particularly when we're changing scientific data with our mission partners. Eso with that necessitates that we have a security view from the onset, right? We have a system spaces, and they're designed to share information across the world. How do we make sure that those, uh, those other those communication channels so secure, free from interception free from disruption? So they're really done? That necessitates of our space leaders in our cyber leaders to be joining the hip about how to secure our space systems, and the communications there in Clinton brought up a really good point of. And then I'm gonna elaborate on a little bit, just toe invite a little bit more context and talk about some the complexities and challenges we face with this advent of new space and and all of our great commercial partners coming into therefore way, that's going to present a very significant supply chain risk management problems that we have to get our hands around as well. But we have these manufacturers developing these highly specialized components for the space instruments, Um, that as it stands right now, it's very little oversight And how those things air produced, manufactured, put into the space systems communication channels that they use ports protocols that they use to communicate. And that's gonna be a significant challenge for us to get get our hands around. So again, cybersecurity being brought in. And the very onset of these development thes thes decisions in these life cycles was certainly put us in a best better position to secure that data in our in our space missions. >>Yeah, E just pick up on that. You don't mind? Preston made such a really good point there. But you have to bake security in up front, and you know there's a challenge and there's an opportunity, you know, with a lot of our systems today. It was built in a pre cyber security environment, especially our government systems that were built, you know, in many cases 10 years ago, 15 years ago are still on orbit today, and we're thankful that they are. But as we look at this new environment and we understand the threats, if we bake cybersecurity in upfront weaken balance that open application versus the risk a long as we do it up front. And you know, that's one of the reasons that our company developed what we call govcloud, which is a secure cloud, that we use thio to manage data that our customers who want to do work with the federal government or other governments or the national security apparatus. They can operate in that space with the built in and baked in cybersecurity protocols. We have a secret region that both can handle secret and top secret information for the same reasons. But when you bake security into the upfront applications, that really allows you to balance that risk between making it available and accessible in sort of an open architecture way. But being sure that it's protected through things like ITAR certifications and fed ramp, uh, another ice T certifications that we have in place. So that's just a really important point. >>Let's stay high level for a man. You mentioned a little bit of those those govcloud, which made me think about you know, the tactical edge in the military analogy, but also with space similar theater. It's just another theater and you want to stand stuff up. Whether it's communications and have facilities, you gotta do it rapidly, and you gotta do it in a very agile, secure, I high availability secure way. So it's not the old waterfall planning. You gotta be fast is different. Cloud does things different? How do you talk to the young people out there, whether it's apparent with with kids in elementary and middle school to high school, college grad level or someone in the workforce? Because there are no previous jobs, that kind of map to the needs out there because you're talking about new skills, you could be an archaeologist and be the best cyber security guru on the planet. You don't have to have that. There's no degree for what, what we're talking about here. This >>is >>the big confusion around education. I mean, you gotta you like math and you could code you can Anything who wants to comment on that? Because I think this >>is the core issue. I'll say there are more and more programs growing around that educational need, and I could talk about a few things we're doing to, but I just wanna make an observation about what you just said about the need. And how do you get kids involved and interested? Interestingly, I think it's already happening, right. The good news. We're already developing that affinity. My four year old granddaughter can walk over, pick up my iPad, turn it on. Somehow she knows my account information, gets into my account, pulls up in application, starts playing a game. All before I really even realized she had my iPad. I mean, when when kids grow up on the cloud and in technology, it creates that natural proficiency. I think what we have to do is take that natural interest and give them the skill set the tools and capabilities that go with it so that we're managing, you know, the the interest with the technical skills. >>And also, like a fast I mean, just the the hackers are getting educated. Justus fast. Steve. I mean e mean Bucky. What do you do here? You CIt's the classic. Just keep chasing skills. I mean, there are new skills. What are some of those skills? >>Why would I amplify eloquent? Just said, First of all, the, uh, you know, cyber is one of those technology areas where commercial side not not the government is really kind of leading away and does a significant amount of research and development. Ah, billions of dollars are spent every year Thio to evolve new capabilities. And a lot of those companies are, you know, operated and and in some cases, led by folks in their early twenties. So the S O. This is definitely an era and a generation that is really poised in position. Well, uh, Thio take on this challenge. There's some unique aspects to space. Once we deploy a system, uh, it will be able to give me hard to service it, and we're developing capabilities now so that we could go up and and do system upgrades. But that's not a normal thing in space that just because the the technical means isn't there yet. So having software to find capabilities, I's gonna be really paramount being able to dio unique things. The cloud is huge. The cloud is centric to this or architectural, and it's kind of funny because d o d we joke because we just discovered the cloud, you know, a couple years ago. But the club has been around for a while and, uh, and it's going to give us scalability on and the growth potential for doing amazing things with a big Data Analytics. But as Preston said, it's all for not if if we can't trust the data that we receive. And so one of the concepts for future architectures is to evolve into a zero trust model where we trust nothing. We verify and authenticate everyone. And, uh, and that's that's probably a good, uh, point of departure as we look forward into our cybersecurity for space systems into the future. >>Block everyone. Preston. Your reaction to all this gaps, skills, What's needed. I mean it Z everyone's trying to squint through this >>absolutely. And I wanna want to shift gears a little bit and talk about the space agencies and organizations that are responsible for deploying these spaces into submission. So what is gonna take in this new era on, and what do we need from the workforce to be responsive to the challenges that we're seeing? First thing that comes to mind is creating a culture of security throughout aerospace right and ensuring that Azzawi mentioned before security isn't an afterthought. It's sort of baked into our models that we deploy and our rhetoric as well, right? And because again we hire our spaces in years to do it very highly. Specialized thing for a highly specialized, uh, it's topic. Our effort, if we start to incorporate rhetorically the importance of cybersecurity two missing success and missing assurance that's going to lend itself toe having more, more prepared on more capable system engineers that will be able to respond to the threats accordingly. Traditionally, what we see in organizational models it's that there's a cyber security team that's responsible for the for the whole kit kaboodle across the entire infrastructure, from enterprise systems to specialize, specialize, space systems and then a small pocket of spaces, years that that that are really there to perform their tasks on space systems. We really need to bridge that gap. We need to think about cybersecurity holistically, the skills that are necessary for your enterprise. I t security teams need to be the same skills that we need to look for for our system engineers on the flight side. So organizationally we need we need to address that issue and approach it, um todo responsive to the challenges we see our our space systems, >>new space, new culture, new skills. One of the things I want to bring up is looking for success formulas. You know, one of the things we've been seeing in the past 10 years of doing the Cube, which is, you know, we've been called the ESPN of Tech is that there's been kind of like a game ification. I want to. I don't wanna say sports because sports is different, but you're seeing robotics clubs pop up in some schools. It's like a varsity sport you're seeing, you know, twitch and you've got gamers out there, so you're seeing fun built into it. I think Cal Poly's got some challenges going on there, and then scholarships air behind it. So it's almost as if, you know, rather than going to a private sports training to get that scholarship, that never happens. There's so many more scholarship opportunities for are not scholarship, but just job opportunities and even scholarships we've covered as part of this conference. Uh, it's a whole new world of culture. It's much different than when I grew up, which was you know, you got math, science and English. You did >>it >>and you went into your track. Anyone want to comment on this new culture? Because I do believe that there is some new patterns emerging and some best practices anyone share any? >>Yeah, I do, because as you talked about robotics clubs and that sort of things, but those were great and I'm glad those air happening. And that's generating the interest, right? The whole gaming culture generating interest Robotic generates a lot of interest. Space right has captured the American in the world attention as well, with some recent NASA activities and all for the right reasons. But it's again, it's about taking that interested in providing the right skills along the way. So I'll tell you a couple of things. We're doing it a w s that we found success with. The first one is a program called A W s Academy. And this is where we have developed a cloud, uh, program a cloud certification. This is ah, cloud curriculum, if you will, and it's free and it's ready to teach. Our experts have developed this and we're ready to report it to a two year and four year colleges that they can use is part of the curriculum free of charge. And so we're seeing some real value there. And in fact, the governor's in Utah and Arizona recently adopted this program for their two year schools statewide again, where it's already to teach curriculum built by some of the best experts in the industry s so that we can try to get that skills to the people that are interested. We have another program called A W s educate, and this is for students to. But the idea behind this is we have 12 cracks and you can get up to 50 hours of free training that lead to A W s certification, that sort of thing. And then what's really interesting about that is all of our partners around the world that have tied into this program we manage what we call it ws educate Job board. And so if you have completed this educate program now, you can go to that job board and be linked directly with companies that want people with those skills we just helped you get. And it's a perfect match in a perfect marriage there. That one other piece real quickly that we're proud of is the aws Uh restart program. And that's where people who are unemployed, underemployed or transitioning can can go online. Self paced. We have over 500 courses they can take to try to develop those initial skills and get into the industry. And that's been very popular, too, So that those air a couple of things we're really trying to lean into >>anyone else want to react. Thio that question patterns success, best practices, new culture. >>I'd like Thio. The the wonderful thing about what you just touched on is problem solving, right, And there's some very, very good methodologies that are being taught in the universities and through programs like Hacking for Defense, which is sponsored by the National Security Innovation Network, a component of the I you where I work but the But whether you're using a lien methodologies or design school principals or any other method, the thing that's wonderful right now and not just, uh, where I work at the U. The Space force is doing this is well, but we're putting the problem out there for innovators to tackle, And so, rather than be prescriptive of the solutions that we want to procure, we want we want the best minds at all levels to be able to work on the problem. Uh, look at how they can leverage other commercial solutions infrastructure partnerships, uh, Thio to come up with a solution that we can that we can rapidly employ and scale. And if it's a dual use solution or whether it's, uh, civil military or or commercial, uh, in any of the other government solutions. Uh, that's really the best win for for the nation, because that commercial capability again allows us to scale globally and share those best practices with all of our friends and allies. People who share our values >>win win to this commercial. There's a business model potential financial benefits as well. Societal impact Preston. I want to come to you, JPL, NASA. I mean, you work in one of the most awesome places and you know, to me, you know, if you said to me, Hey, John, come working JP like I'm not smart enough to go there like I mean, like, it's a pretty It's intimidating, it might seem >>share folks out there, >>they can get there. I mean, it's you can get there if you have the right skills. I mean I'm just making that up. But, I mean, it is known to be super smart And is it attainable? So share your thoughts on this new culture because you could get the skills to get there. What's your take on all this >>s a bucket. Just missing something that really resonated with me, right? It's do it your love office. So if you put on the front engineer, the first thing you're gonna try to do is pick it apart. Be innovative, be creative and ways to solve that issue. And it has been really encouraging to me to see the ground welcome support an engagement that we've seen across our system. Engineers in space. I love space partners. A tackling the problem of cyber. Now that they know the West at risk on some of these cyber security threats that that they're facing with our space systems, they definitely want to be involved. They want to take the lead. They want to figure things out. They wanna be innovative and creative in that problem solving eso jpl We're doing a few things. Thio Raise the awareness Onda create a culture of security. Andi also create cyber advocates, cybersecurity advocates across our space engineers. We host events like hacked the lad, for example, and forgive me. Take a pause to think about the worst case scenarios that could that could result from that. But it certainly invites a culture of creative problem solving. Um, this is something that that kids really enjoy that are system engineers really enjoyed being a part off. Um, it's something that's new refreshing to them. Eso we were doing things like hosting a monthly cybersecurity advocacy group. When we talk about some of the cyber landscape of our space systems and invite our engineers into the conversation, we do outweighs programs specifically designed to to capture, um, our young folks, uh, young engineers to deceive. They would be interested and show them what this type of security has to offer by ways of data Analytic, since the engineering and those have been really, really successful identifying and bringing in new talent to address the skill gaps. >>Steve, I want to ask you about the d. O. D. You mentioned some of the commercial things. How are you guys engaging the commercial to solve the space issue? Because, um, the normalization in the economy with GPS just seeing spaces impacts everybody's lives. We we know that, um, it's been talked about. And and there's many, many examples. How are you guys the D o. D. From a security standpoint and or just from an advancement innovation standpoint, engaging with commercials, commercial entities and commercial folks? >>Well, I'll throw. I'll throw a, uh, I'll throw ah, compliment to Clint because he did such an outstanding job. The space forces already oriented, uh, towards ah, commercial where it's appropriate and extending the arms. Leveraging the half works on the Space Enterprise Consortium and other tools that allow for the entrepreneurs in the space force Thio work with their counterparts in a commercial community. And you see this with the, uh, you know, leveraging space X away to, uh, small companies who are doing extraordinary things to help build space situational awareness and, uh, s So it's it's the people who make this all happen. And what we do at at the D. O. D level, uh, work at the Office of Secretary defense level is we wanna make sure that they have the right tools to be able to do that in a way that allows these commercial companies to work with in this case of a space force or with cyber command and ways that doesn't redefine that. The nature of the company we want we want We want commercial companies to have, ah, great experience working with d o d. And we want d o d toe have the similar experience working, working with a commercial community, and and we actually work interagency projects to So you're going to see, uh, General Raymond, uh, hey, just recently signed an agreement with the NASA Esa, you're gonna see interagency collaborations on space that will include commercial capabilities as well. So when we speak as one government were not. You know, we're one voice, and that's gonna be tremendous, because if you're a commercial company on you can you can develop a capability that solves problems across the entire space enterprise on the government side. How great is that, Right. That's a scaling. Your solution, gentlemen. Let >>me pick you back on that, if you don't mind. I'm really excited about that. I mentioned new space, and Bucky talked about that too. You know, I've been flying satellites for 30 years, and there was a time where you know the U. S. Government national security. We wouldn't let anybody else look at him. Touch him. Plug into, um, anything else, right. And that probably worked at the time. >>But >>the world has changed. And more >>importantly, >>um, there is commercial technology and capability available today, and there's no way the U. S government or national security that national Intel community can afford economically >>to >>fund all that investment solely anymore. We don't have the manpower to do it anymore. So we have this perfect marriage of a burgeoning industry that has capabilities and it has re sources. And it has trained manpower. And we are seeing whether it's US Space Force, whether it's the intelligence community, whether it's NASA, we're seeing that opened up to commercial providers more than I've ever seen in my career. And I can tell you the customers I work with every day in a W s. We're building an entire ecosystem now that they understand how they can plug in and participate in that, and we're just seeing growth. But more importantly, we're seeing advanced capability at cheaper cost because of that hybrid model. So that really is exciting. >>Preston. You know you mentioned earlier supply chain. I don't think I think you didn't use the word supply chain. Maybe you did. But you know about the components. Um, you start opening things up and and your what you said baking it in to the beginning, which is well known. Uh, premise. It's complicated. So take me through again, Like how this all gonna work securely because And what's needed for skill sets because, you know, you're gonna open. You got open source software, which again, that's open. We live in a free society in the United States of America, so we can't lock everything down. You got components that are gonna be built anywhere all around the world from vendors that aren't just a certified >>or maybe >>certified. Um, it's pretty crazy. So just weigh in on this key point because I think Clint has it right. And but that's gonna be solved. What's your view on this? >>Absolutely. And I think it really, really start a top, right? And if you look back, you know, across, um in this country, particularly, you take the financial industry, for example, when when that was a burgeoning industry, what had to happen to ensure that across the board. Um, you know, your your finances were protected these way. Implemented regulations from the top, right? Yeah. And same thing with our health care industry. We implemented regulations, and I believe that's the same approach we're gonna need to take with our space systems in our space >>industry >>without being too directive or prescriptive. Instance she ating a core set of principles across the board for our manufacturers of space instruments for deployment and development of space systems on for how space data and scientific data is passed back and forth. Eso really? We're gonna need to take this. Ah, holistic approach. Thio, how we address this issue with cyber security is not gonna be easy. It's gonna be very challenging, but we need to set the guard rails for exactly what goes into our space systems, how they operate and how they communicate. >>Alright, so let's tie this back to the theme, um, Steve and Clint, because this is all about workforce gaps, opportunities. Um, Steve, you mentioned software defined. You can't do break fix in space. You can't just send a technician up in the space to fix a component. You gotta be software defined. We're talking about holistic approach, about commercial talk about business model technology with software and policy. We need people to think through, like you know. What the hell are you gonna do here, right? Do you just noticed road at the side of the road to drive on? There's no rules of engagement. So what I'm seeing is certainly software Check. If you wanna have a job for the next millennial software policy who solves two problems, what does freedom looked like in space Congestion Contention and then, obviously, business model. Can you guys comment on these three areas? Do you agree? And what specific person might be studying in grad school or undergraduate or in high school saying, Hey, I'm not a techie, but they can contribute your thoughts. I'll >>start off with, uh, speak on on behalf of the government today. I would just say that as policy goes, we need to definitely make sure that we're looking towards the future. Ah, lot of our policy was established in the past under different conditions, and, uh, and if there's anything that you cannot say today is that space is the same as it was even 10 years ago. So the so It's really important that our policy evolves and recognizes that that technology is going to enable not just a new ways of doing things, but also force us to maybe change or or get rid of obsolete policies that will inhibit our ability to innovate and grow and maintain peace with with a rapid, evolving threat. The for the for the audience today, Uh, you know, you want some job assurance, cybersecurity and space it's gonna be It's gonna be an unbelievable, uh, next, uh, few decades and I couldn't think of a more exciting for people to get into because, you know, spaces Ah, harsh environment. We're gonna have a hard time just dud being able differentiate, you know, anomalies that occur just because of the environment versus something that's being hacked. And so JPL has been doing this for years on they have Cem Cem great approaches, but but this is this is gonna be important if you put humans on the moon and you're going to sustain them there. Those life support systems are gonna be using, you know, state of the art computer technology, and which means, is also vulnerable. And so eso the consequences of us not being prepared? Uh, not just from our national security standpoint, but from our space exploration and our commercial, uh, economic growth in space over the long term all gonna be hinged on this cyber security environment. >>Clint, your thoughts on this too ill to get. >>Yeah. So I certainly agree with Bucky. But you said something a moment ago that Bucky was talking about as well. But that's the idea that you know in space, you can't just reach out and touch the satellite and do maintenance on the satellite the way you can't a car or a tank or a plane or a ship or something like that. And that is true. However, right, comma, I want to point out. You know, the satellite servicing industry is starting to develop where they're looking at robotic techniques in Cape abilities to go up in services satellite on orbit. And that's very promising off course. You got to think through the security policy that goes with that, of course. But the other thing that's really exciting is with artificial intelligence and machine learning and edge computing and database analytics and all those things that right on the cloud. You may not even need to send a robotic vehicle to a satellite, right? If you can upload and download software defined, fill in the blank right, maybe even fundamentally changing the mission package or the persona, if you will, of the satellite or the spacecraft. And that's really exciting to, ah, lot >>of >>security policy that you've gotta work through. But again, the cloud just opens up so many opportunities to continue to push the boundaries. You know, on the AWS team, the aerospace and satellite team, which is, you know, the new team that I'm leading. Now our motto is to the stars through the cloud. And there are just so many exciting opportunities right for for all those capabilities that I just mentioned to the stars through the cloud >>President, your thoughts on this? >>Yes, eso won >>a >>little bit of time talking about some of the business model implications and some of the challenges that exists there. Um, in my experience, we're still working through a bit of a language barrier of how we define risk management for our space systems. Traditionally traditionally risk management models is it is very clear what poses a risk to a flight mission. Our space mission, our space system. Um, and we're still finding ways to communicate cyber risk in the same terms that are system engineers are space engineers have traditionally understood. Um, this is a bit of a qualitative versus quantitative, a language barrier. But however adopting a risk management model that includes cybersecurity, a za way to express wish risk to miss the success, I think I think it would be a very good thing is something that that we have been focused on the J. P o as we Aziz, we look at the 34 years beyond. How do >>we >>risk that gap and not only skills but communication of cyber risk and the way that our space engineers and our project engineers and a space system managers understand >>Clinton, like Thio talk about space Force because this is the most popular new thing. It's only a couple of nine months in roughly not even a year, uh, already changing involving based on some of the reporting we've done even here at this symposium and on the Internet. Um, you know, when I was growing up, you know, I wasn't there when JFK said, you know, we're gonna get to the moon. I was born in the sixties, so, you know, when I was graduating my degree, you know, Draper Labs, Lincoln Lab, JPL, their pipeline and people wasn't like a surge of job openings. Um, so this kind of this new space new space race, you know, Kennedy also said that Torch has been passed to a new generation of Americans. So in a way that's happening right now with space force. A new generation is here is a digital generation. It's multi disciplinary generation. Could you take a minute and share, uh, for for our audience? And here at this symposium, um, the mission of Space Force and where you see it going because this truly is different. And I think anyone who's young e I mean, you know, if this was happening when I was in college would be like dropping everything. I'm in there, I think, cause there's so many areas thio jump into, um, it's >>intellectually challenging. >>It's intoxicating in some level. So can you share your thoughts? >>Yeah. Happy to do that. Of course. I I need to remind everybody that as a week ago I'm formally retired. So I'm not an official spokesman for US forces. But with that, you know, it said I did spend the last 18 months planning for it, designing and standing it up. And I'll tell you what's really exciting is you know, the commander of, uh, US Base Force General J. Raymond, who's the right leader at the right time. No question in my >>mind. But >>he said, I want to stand up the Space Force as the first fully digital service in the United States. Right? So he is trying >>to bake >>cloud baked cybersecurity, baked digital transformational processes and everything we did. And that was a guidance he gave us every day, every day. When we rolled in. He said, Remember, guys, I don't wanna be the same. I don't wanna be stale. I want new thinking, new capabilities and I want it all to be digital on. That's one of the reasons When we brought the first wave of people into the space force, we brought in space operations, right. People like me that flew satellites and launch rockets, we brought in cyber space experts, and we brought in intelligence experts. Those were the first three waves of people because of that, you know, perfect synergy between space and cyber and intel all wrapped in >>it. >>And so that was really, really smart. The other thing I'll say just about, you know, Kennedy's work. We're going to get to the moon. So here we are. Now we're going back to the Moon Project Artemus that NASA is working next man first woman on the moon by 2024 is the plan and >>then >>with designs to put a permanent presence on the moon and then lean off to march. So there was a lot to get excited about. I will tell you, as we were taking applications and looking at rounding out filling out the village in the U. S. Space Force, we were overwhelmed with the number of people that wanted, and that was a really, really good things. So they're off to a good start, and they're just gonna accomplishment major things. I know for sure. >>Preston, your thoughts on this new generation people out there were like I could get into this. This is a path. What's your what's your opinion on this? And what's your >>E could, uh, you so bold as to say >>that >>I feel like I'm a part of that new generation eso I grew up very much into space. Uh, looking at, um, listen to my, uh, folks I looked up to like Carl Sagan. Like like Neil Tyson. DeGrasse on did really feeling affinity for what What this country has done is for is a space program are focused on space exploration on bond. Through that, I got into our security, as it means from the military. And I just because I feel so fortunate that I could merge both of those worlds because of because of the generational, um, tailoring that we do thio promote space exploration and also the advent of cybersecurity expertise that is needed in this country. I feel like that. We are We are seeing a conversions of this too. I see a lot of young people really getting into space exploration. I see a lot of young people as well. Um uh, gravitating toward cybersecurity as a as a course of study. And to see those two worlds colliding and converse is something that's very near and dear to me. And again, I I feel like I'm a byproduct of that conversion, which is which, Really, Bothwell for space security in the future, >>we'll your great leader and inspiration. Certainly. Senior person as well. Congratulations, Steve. You know, young people motivational. I mean, get going. Get off the sidelines. Jump in Water is fine, Right? Come on in. What's your view on motivating the young workforce out there and anyone thinking about applying their skills on bringing something to the table? >>Well, look at the options today. You have civil space President represents you have military space. Uh, you have commercial space on and even, you know, in academia, the research, the potential as a as an aspiring cyber professional. All of you should be thinking about when we when we When? When we first invented the orbit, which eventually became the Internet, Uh, on Lee, we were, uh if all we had the insight to think Well, geez, you know whether the security implications 2030 years from now of this thing scaling on growing and I think was really good about today's era. Especially as Clint said, because we were building this space infrastructure with a cyber professionals at ground zero on dso the So the opportunity there is to look out into the future and say we're not just trying to secure independent her systems today and assure the free for all of of information for commerce. You know, the GPS signal, Uh, is Justus much in need of protection as anything else tied to our economy, But the would have fantastic mission. And you could do that. Uh, here on the ground. You could do it, uh, at a great companies like Amazon Web services. But you can also one of these states. Perhaps we go and be part of that contingency that goes and does the, uh, the se's oh job that that president has on the moon or on Mars and, uh, space will space will get boring within a generation or two because they'll just be seen as one continuum of everything we have here on Earth. And, uh, and that would be after our time. But in the meantime, is a very exciting place to be. And I know if I was in in my twenties, I wanna be, uh, jumping in with both feet into it. >>Yeah, great stuff. I mean, I think space is gonna be around for a long long time. It's super exciting and cybersecurity making it secure. And there's so many areas defeating on. Gentlemen, thank you very much for your awesome insight. Great panel. Um, great inspiration. Every one of you guys. Thank you very much for for sharing for the space and cybersecurity symposium. Appreciate it. Thank you very much. >>Thanks, John. Thank you. Thank you. Okay, >>I'm >>John for your host for the Space and Cybersecurity Symposium. Thanks for watching.

>> Announcer: From theCUBE studios in Palo Alto in Boston, connecting with thought leaders all around the world, this is theCUBE conversation. >> Hi, everyone. Welcome to theCUBE Studios here in Palo Alto, California. I'm John Furrier, host of theCUBE. We're here for coverage of AWS Public Sector Summit. This is theCUBE Virtual with our quarantine crew going out and covering the latest posts of the Virtual Summit where our next guest is Matthew Cornelius, Executive Director for the Alliance for Digital Innovation. Matthew, thanks for joining me today for part of AWS virtual Public Sector Summit. >> That's great, thanks, John. Appreciate you having me. >> I know that John Wood and I have been talking about this organization and some of the ambition and the relevance of it. So I think it's a super important story. I want to get your thoughts on this in an unpack kind of the mission but for starters, tell us what is the Alliance for Digital Innovation? When were you formed? What's the mission? What do you do? >> Sure. Yeah, so ADI was formed about two years ago, to create a new advocacy group that could focus explicitly on getting cloud forward, commercial, highly innovative companies into the public sector. So the government technology space has traditionally been dominated by a lot of legacy vendors, folks that are very happy with vendor lock-in, folks that have an outdated business model that would not suffice in the commercial sector. So why does it have to be that way for government and ADI started with about eight members has since grown. We're approaching two dozen now. So we've had a lot of growth and I think a lot of the response that you've seen in the public sector, especially to the COVID crisis, and the response and relief efforts have made this organization and our mission more relevant now than ever. There's no way that you can go back to the previous way of doing business, so adopting all these commercials technologies, changing your business model, changing your operating model, and really use an emerging technology to deliver all these missions services is critical. >> You know, one of the things that I've been reporting on for many, many years is this idea of modernization. Certainly on the commercial side with cloud, it's been really important and Amazon has done extremely well, from a business standpoint. We all know that where that's going. The issue that's happening now is the modernization is kicking in. So the government has started to move down this track, we've seen the procurement start to get more modernized. Move from buying manuals to actually having the modern stuff and in comes COVID-19. You couldn't have accelerated, you couldn't have pulled the future forward fast enough to an already struggling federal government, in my opinion, and I've talked to many people in DC and the young crowd saying, "Hey, old government get modern", and then this comes. It's almost like throwing the rock on your back and you're sinking. This is a problem. What's your take on this? Because you're trying to solve a problem with modernizing, but now you got COVID-19 coming in, it compounds the complexity and the challenge. What's your chosen reaction to that? >> Yeah, so it there's a multifaceted response to this. So part of it is what I like to say is the government's done more in the past four months than it's done in the past 14 years when it comes to modernization and adopting commercial capabilities. I think with individual agencies, you've seen those those agencies, I will name a couple like the Small Business Administration, the General Services Administration, where I used to work, folks that were already heavily invested in cloud, heavily invested in modern digital tools and modern digital processes, they were able to weather this storm and to deal especially in SPS case, with a dramatic increase in their mission. I mean, running the paycheck Protection Program is something unlike an organization that size has ever seen. And from a technology standpoint, they have a lot of good stories that are worth telling and I think it's because they were so cloud forward. I think one of the other interesting points that as really come to light over the past four months is so many of the issues around modernization were cultural. Now, of course, there are some that are legal, there's acquisition, there's the way agencies are appropriated and financed and the way they can spend their money, but by and large, all of these agencies had to move to maximum telework, they had to get rid of all of these outdated on premise processes, these paper based processes that they had. And although surely there were some bumps in the road, and that was not easy, especially for these folks working around the clock to keep their agencies operational to make sure citizens are getting the services, they need, especially during this crisis, I think there's a lot of great success stories that you see there and because of this, no one even if they're allowed to go back into the office or when they're allowed to go back in the office, people are going to understand how much more productive they are, how much more technologically capable they are. And that's not just CIO officers that's people on programs in the front lines delivering services that mission response. We've really seen it powerful word over the last four months. >> You know, Matthew, I've been very vocal given that I'm kind of the old guy, get off my lawn kind of commentary. (Matthew laughs) I've seen that the waves and I remember coming in when I was in my late 20s and 30s old school enterprises, the commercial business wouldn't do business with startups, you had to be approved or you were in entrenched vendors supporting those things and then in comes the web, in comes the 90s, and then the web came there's more agile, you had startups that were more open and working with commercial vendors. It seems like we're seeing that movie play out in public sector where you have the entrenched incumbents, they got the town wired, who knows what's going on. It's been called the Beltway bandits for years and Tris and Curson and I talk about that all the time, but now the government can be agile, and startups need to be product to these new solutions, like whether it's video conferencing or virtual events, things like we do. New solutions are coming that need to come in, it's hard. Can you share how a company whether it's a startup or a new solution can come in and work with the government? Because the perception is, it's impossible. >> Yeah, and part of why ADI exist is to break that down. One to recruit more members to join us to really help drive commercial innovation in the government. And we have some very large companies like AWS and others that do an awful lot of work with the government. And we have a lot of smaller startups that are interested in dipping their toe in there. And so we try to help them demystify how it is that you go about working with the government. I think there have been again, some good success stories on this one. I think that there are lots of places like the Department of Defense, a lot of the folks in the intelligence community, some other agencies, they have authorities, they have partnership programs that make it easier for folks to adopt commercial innovation. They have unique authorities like other transaction authorities or commercial solutions offerings that really lowers the barrier for new technologies to be piloted and potentially scaled inside government. But that's not the case across lots of agencies, and that's why we advocate broadly for getting the acquisition process to move at the speed of technology. If there are good authorities that work in some agencies, let's get into everybody, let's have everybody try it because the people in the agencies, the acquisition professionals, the technical professionals, they have to be committed to working with industry, so the industry is committed to working with them. And as a former federal employee, myself, I worked at the Office of Management and Budget and the General Service Administration, I always was upset at the fact that the government is very good at speaking to industry, but not very good at working with industry and listening, and so we see a lot more of that now and I think part of that is a response to COVID, but it's also the recognition that you can't do things the way you used to do it, the traditional butts in seats contracting business model where everybody in between a federal employee and that outsourced service provider. You don't need all those people there, you can do it yourself and be just as effective and get all the real outcomes you're looking for with commercial innovation. >> It sounds like ADI your priorities is to make things go fast and be modernized. So I have to ask you, the question that's on my mind, probably on everyone's mind is, what are the key conversations or messages you provide to the agencies, heads or members of Congress to get them excited about this, to take action to support what you're doing? Because let's face it, most of these guys up on the Hill are girls now, most of them have a law backgrounds, they don't have a tech background. So that's a complaint that I've heard in the hallways in DC is, the guy making all the decisions doesn't know jack about tech. >> No, it's it's a great point. When we advocate up on the Hill there's a law that I don't think a lot of folks pay in awful lot of attention to. Everybody likes the nice new things that are coming from Capitol Hill but there's a great piece of legislation from 1994 for the Federal Acquisition Streamlining Act. We actually did some tremendous original research at ADI, about a year ago and released an interesting report that got a lot of uptick here. And most people don't even understand that the law requires you to do market research and see if there's a commercial product or service that meets your need before you go down building any sort of specific requirements or building out some sort of long procurement process. And so a lot of what we're doing is educating folks, not just on what the law says, but on why these can lead to better outcomes for agencies. I mean, I truly believe that most of the folks in government whether they're technical folks or not want to do the best thing, but if you're a company trying to do business with the government, you have to go through what is often a five or six or sometimes 10 person human supply chain. There's someone in government who wants your solution because it addresses a particular problem, and between them, and you the company, there's all sorts of additional bureaucratic overlays and folks that are not technical, that have other incentives and other priorities that don't always lead to the most optable procurement outcome. So there's an educational component, there's a cultural component. We need more champions inside government. We need not just better technology that's wanting to work with the government but we also need smarter, better people inside that understand the technology and can get to it the way they need to get to it so that they can deliver mission. >> As someone like me who's in the technology business, who loves entrepreneurship, loves business, loves the impact of technology, I'm not a public servant, and I'm not at that up to speed on all the government kind of inside baseball, so I kind of look at it a little bit differently. I've always been a big proponent of public private partnerships that's been kicked around in the past. It's kind of like digital transformation, kind of cliche, but there's been some pockets of success there, but look at the future. The role of influence and the commercial impact just China, for instance, just riffing the other day with someone around China doesn't actually go through government channels for how they deal with the United States. There's a little commercial, they have intellectual property issues going on, people saying they're stealing, they're investing in the United States. So there's a commercial influence. So as the government has to look at these commercial influences, they then have to modernize their workforce, their workloads, their applications, their workplaces. The work is not just workloads, it's workplace, workforce. So if you had your way, how would you like to see the landscape of the federal technology piece of this look like in five years? Because there's now new influence vectors coming in that are outside the channels of federal purview. >> No, it's a great question, and I appreciate you bringing up the other complexities around nation state actors in China and everything else. Obviously, supply chain security and being able to deal with legitimate security threat is critical when you're inside government. I mean, your first sort of purpose is to do no harm and to make sure that you're keeping citizen data, whether it's classified or unclassified secure. We think at ADI that there's a great balance to be heard there and part of that is if you're working with American companies, and you're adopting the best and most agile and most innovative commercial technology that America has to offer, that's going to make our industry more competitive and position it better in the commercial market and it's also going to make government agencies more effective. They're going to be able to meet their mission faster, they're going to be able to lower costs, they're going to be able to shift what are going to be tighter and tighter budgets over the next four or five or 10 years to other areas because they're not wasting so much money on these old systems and this old business processes, this old way of doing business. So you that is one of the balances that we have to take from an advocacy standpoint. We have to understand that supply chain security, cybersecurity are real issues, but security can also be an enabler to innovation and not an impediment and if a lot of the commercial capabilities that are coming out now and a lot of these companies like the ones ADI represents, want to do business with the government, and their commercial products can inherently be more secure than a lot of these old bespoke systems or old business practices. That's good for not just federal agencies, that's good for citizens and that's good for our national defense and our economy. >> You know, I look at our landscape and being an American born here, looking at other emerging countries, certainly China's one example of becoming very world digital native, even other areas where 5G and then telecom has made great internet access, you're seeing digital native countries, so as we modernize, and our lawmakers have more tech savvy and things become digital native, the commercial enabling piece is a huge thing, having that enabling technology, because it creates wealth and jobs and other things so you got three things, digital native country, enabling technologies to promote good and wealth and engine of economic value, and then societal impact. What's your take on those three kind of pillars? Because we're kind of as a country coming into this world order and look at the younger generation, they're all screaming for it, we're digital native, and all kinds of arbitrage there, fake news, misinformation, then you got enabling technology with the cloud, and then you get societal benefits, future of elections and everything else. So what's your thoughts? 'Cause it sounds like you're thinking about these things in your Digital Innovation Alliance. >> Yeah, absolutely. The one thing I will say and as someone that was a former federal employee, the one thing we need more of whether you're on the executive branch or in Congress, we need more people that like you said, are digital natives that understand technology that also want to be inside government either running programs or dealing with policy issues. We need as many good new ideas and folks with real, legitimate, necessary and current skills in there. Because if you don't understand the technology, you don't understand, like you said the societal impacts, you don't understand the business impacts of government decision making and the government can drive markets. I mean, especially in the middle of Coronavirus, we're spending trillions of dollars to keep folks afloat and we're using technology primarily as a way to make that happen. So the first thing I would say is, we need, we continue, need to continue, sorry, we need to continue to recruit and retain and train the best and the brightest to go into government service because it is a joy and a privilege to serve government and we've got to have better smarter technical people in there or we're going to keep getting these same outcomes, like you've mentioned over the past 30 plus years. >> I think we're in a JFK moment where John F. Kennedy said, "Ask not what your country can do for you, "what you can do for your country". Moment in the modern era and that was the 60s, that we saw the revolution of that happen there, we're kind of having a digital version of that now where it's an opportunity for people to get involved, younger generations and make change rather than arguing about it. So I feel fairly strongly about this so I think this is an opportunity. Your reaction to that? >> No, that's a fantastic point. I hadn't really thought about the JFK resemblance. From an industry standpoint, I think that is what is happening with these emerging technology companies and even some of the large companies. They understand that this is their way to contribute to the country whose R&D dollars and these public private partnerships helped a lot of these folks to grow and become the companies they are now. At least started them down that road. And so for us at the Alliance for Digital Innovation and the companies that are a part of us that is sort of purposeful to who we are. We do what we do and we want the government to build stronger relationships and to use this technology, because it does serve mission. I mean, we exclusively focus on the public sector. Focus of these companies and it's tremendously valuable when you see a federal agency who spent five or 10 years and hundreds of millions of dollars and still not solving a problem and then they can pick up the commercial off the shelf technology from a company that we represent, and can solve that problem for $5 million and do it in six months. I mean, that's truly rewarding and whether you're inside government or out, we should all celebrate that and we should find ways to make that the norm and not the exception. >> And take all that hate and violence and challenge it towards voting and getting involved. I'm a big proponent of that. Matthew, thank you so much for taking the time. I'll give you the last word. Take a minute to put a plug in for the Alliance for Digital Innovation. Who are the charter members, who's involved? I know John Wood from Telos is a charter member. Who's involved, how did it all start? >> Yeah. >> Give it taste of the culture and who's involved. >> Yeah, thanks, John. So, yeah, like you mentioned, we have tremendous members, AWS is obviously a great partner. We have a lot of big companies that are involved, Google Cloud, Salesforce, Palantir, Palo Alto Networks. We also have great midsize and small companies. You think of Telos, you think of SAP NS2 and Iron Net, you think of Saildrone. We've got companies that whose technology product and service offerings run the range for government needs. We all come together because we understand that the government can and should and must do better to buy and leverage commercial technology to meet mission outcomes. So that is what we focus on. And, frankly, we have seen tremendous growth since COVID started. I mean, we are 24 members now we were at 18, just four months ago, but I like to say that ADI is an organization whose mission is more important and more resonant now, not just in the technology, parts of government, but at the secretary level at the Chief Acquisition Officer level, in Congress. We are folks that are trying to paint the future, we're doing a positive vision for change for what government can and should be. And for all of those other technology companies that want to be a part of that, that understand that the government can do better, and that has ideas for making it work better and for getting commercial innovation into government faster, to solve mission outcomes and to increase that trust between citizens and government, we want you. So if folks are interested in joining you got people that are watching out there, you can go to alliance4digitalinnovation.org. We're always accepting interested applicants and we look forward to continuing this message, showing some real outcomes and helping the government for the next year, five years, 10 years, really mature and modernize faster and more effectively than it has before. >> Great mission, love what you're doing. I think the future democracy depends on these new models to be explored, candidly and out in the open, and it's a great mission, we support that. Thanks for taking the time, Matthew. Appreciate it. >> Thanks, John. Have a great Public Sector Summit. >> Okay, this is theCUBE coverage of AWS Public Sector Virtual Summit. I'm John Furrier here in theCUBE Virtual. Thanks for watching and stay tuned for more coverage. (gentle music)

>>LA Las Vegas. It's the cube hovering AWS reinvent 2019 brought to you by Amazon web services and along with its ecosystem partners. >>Hey, welcome back everyone. This is the cubes live covers Las Vegas anus. Re-invent. I'm John furrier with Dave Alante extracting the signal from the noise sponsored by Intel and AWS. They put the stage together, two big stages. Day two, we're here day Jew, I rapid fire a devil's execs coming on. Dave McCann, cube alumni, VP of ADAS migration marketplace and control services known most for the marketplace and a lot of stuff going on. That's exciting in the marketplace. It's where all the ecosystem actions happening. Congratulations on you six. I know you're busy, you've got new stuff, but the marketplace seems to be changing the procurement and the consumption of software and solutions, whether it's SAS or images and technology, your demand on the marketplace. So great to be back, Kimberly. It's another reinvent. This is my sixth. Um, so lots going on. Marketplace has got a lot bigger in the last year. >>We're up to 260,000 customers, so not substantial growth from last year. And we're adding thousands of customers every month. Um, big headline I have to start with is marketplace has been a marketplace for software for the last seven years. And two weeks ago we launched a marketplace for data and it's a new service that we call AWS data exchange. And instead of allowing you to point, click subscribe to software, and if you're a data consumer and a bank and you're an analyst or you're a researcher and a pharma company, you actually buy data from hundreds of companies, you know, you can go into the new console, find the product and market, please go over to this console called data exchange. And you can go buy research data or you can buy healthcare data from change healthcare. You can buy news data from Thomson Reuters, you can buy consumer data from Experian. >>And we've launched 1400 products from 19 data providers and we've made it available globally. So it's a whole new class of intellectual property data sources in there as well. There's some open source public sources as well. And we're adding literally dozens of products every day. So really easy API. And the cool thing is that after you subscribe, you copy it right into your S three bucket, moves into your VPC and then you move it into your project and you can actually create a Lambda function with the next version of the data. The next day gets updated and know the data just gets updated. And the use case here is like, if I'm a retail outlet, I could buy or go and get weather data and do some things. Is that kind of the model? Exactly. Right. I mean companies all over the world by $150 billion worth of data, but it's all delivered thousands of different EPA. >>Dave, we got cube data, we put all of our advanced data out there, which might be an opportunity. But seriously, Q three 65 is our new listing on the market place. So we have a Q cloud service, little plug for the cube cube three 65 on the marketplace and we're, we're happy. But I want to ask you because one of the things that's coming up is, um, from your team in the marketplace, the industry is this notion of buying through the marketplace. The trend is increasing private offers is a hot feature that you guys have put in place. And there's some news there. Could you explain how private offers is changing the game in the marketplace? I'd love to show you, if you think about it, a lot of our customers are developers and builders and they're working on something on test and it's a pilot and you use it for a few hours or a week. >>But once a company contracts for software and if you're contracting for a lot of software, procurement, one's best price, legal one's best terms, and there's going to be in negotiation and we call that negotiation of private offer. And so that involves salespeople. And so our top software vendors like a Splunk and new Relic of trend micro, uh, Palo Alto, their sales guys, or negotiate our sales ladies and negotiating with the customer for a couple hundred thousand dollars and there's a price and terms. When are you going to pay? What clauses do you agree? How many of you buying? Where are you going to deploy? All of that's negotiated and no, we have a portal for the sailor. We've had it for a year, we've made some really good changes and the central, they arose the seller to automate that price court rate into your account and then the buyer subscribes, and this is allowing our sailors to do quotations in the hundreds of thousands, the millions and sometimes in the tens of millions on a contract rate through marketplace, you're doing millions of dollars of business with with private offers today we've seen vendors write contracts for over $10 million, Peter over three years SAS contracts. >>So we've had that program available for the last year and we'd be working on a lot of features with the help of people at Splunk and new Relic today, we've made it available for all ISBNs and marketplace. You say all the iterations get to take place in the market place, so it's all those informations. I should just speak, just make sure I get it right before private offers were invite only kind of thing. Now you're making it available to all ASVs. Correct. We've got one. As of today, we've over 1,500 ASVs in the marketplace. You're one of them. And with those 1500 vendors within our go into marketplace, there's a new button and the seller portal and it says create Piper offer and any over ISV can note create a private. So I'm going to put my little seller hat on. I have a SAS application. Look at, I don't have a big Salesforce. >>How can you guys help me? How do I, how do I get more sales? Is there a, there's the money just following my bank account. Oh, are you overstaffed to do marketing? You have to do some discussions. You know, we had a company in the UK called Matilda MAF last year on, on the cube. Medallian Staffan was 17 engineers and new salespeople and now they're like 300 people, two runs of venture and everything's through marketplace. Big booth here. Well, congratulations to those guys. We love them. And to come Mytilene again, they engage rafted with you guys. It is all the sales and go to market through AWS complete everything goes through marketplace. Okay. We've made it available to 1,500 vendors today. Okay. So changing procurement. I love that trend. You kind of modernizing the procurement process with the marketplace. What about um, resellers? What's the update there? >>So the big update there is, you know, for the first six years of marketplace we couldn't handle the resaler. We didn't conceive of the VAR or the consulting partner and we got a lot of feedback that we had to do work. And so we've taken private offers and we've designed consulting partner, private offers and no, we've saved up over a hundred top consulting partner resellers, the likes of an OCT of an Ashi, a Rackspace in Europe computer center and Softcat and they were working with all of the world's top resellers and know if you are a Splunk or trend micro, you can authorize computer center to offer private prices to their customers and you can actually authorize a wholesale price from Splunk directly to computer and get paid for. Well, they could actually set the price. Mark it up. I got to ask you, Dave, what's your vision for marketplace? >>Because you're doing a great job. It seems like you're paddling as fast as you can constantly improving the service. I know you've got a big to do list, you want to make it easy or make it faster, all that good stuff, but what's the vision? Where do you see marketplace evolving? You know, Jeff Bezos says it's only day one. We're seven years old. We've barely scratched the surface. Global software is 450 billion growing 8% data is 150 billion growing at 3% you've got a $600 billion industry. Marketplace has not touched a tiny percentage. We want all of our customers to be able to find, discover, provision, and run all of their software and their data out of marketplace and it's gonna take us another 10 years and you get a lot of teen. How big is the team? We never publish JFK K but just let's say the Andy Jassy continues to invest in the business and as we add engineers and we add business people and development people, you know we work well with our partners. >>We cool market. Yeah, we grew up well, as Andy always says, you know, and you always say this, the customer needs come first. That's kind of a vetting process. Then working backwards documents, we know all about that history. What is the number one customer need that you're hearing, that you're addressing, that you see coming up around the corner, you're constantly working on and new potentially new requests that are coming in that are relevant to your business. There's two or three big customer needs. The number one is governance. So while engineers are going fast, innovating, legal, finance and procurement need to be confident that the contracts are being written well and is the spend under control. And so we're doing a lot of work around tagging or the resources so that it's tagged to the right project. Did you overspend on the project? And then on the contracting inside we launched this thing called enterprise contract and we're continuing to work with customers. >>We just integrated into the leading procurement system called ACP a Reebok and we launched that last week. And so we know have a procurement workflow that says procurement's happy it finances happy legal needs to be happy because the engineers want to go quick, but we can't leave the it finance legal professionals behind because they protect the risks for the kinda, the contracts too are all there. So you're modernizing procurement. We are transforming the supply chain for data and for software, you know big. You know I'm a big fan of what you do and I know you got a lot of hard work, a lot of demand, there's a lot of money to be made there, water customers to make happy and you know we've got great customers that BP or shell or Coca Cola, Coke industries that are using marketplace on a regular basis and we have customers now with over a foes and subscriptions from over 50 vendors and that's a single customer. >>Dave, thank you so much for coming on. I know you're super busy and making the time for wrestling the cube means a lot. You've been with us the entire journey for the Ravens, our seventh reinvent. You've been a great one. I missed one but usually patients man it's just you. You saw it working backwards and it's happening. It's working well and you know we learn from our customers and I'm having a dinner tonight with 40 more and I'm sure they'll hit us with more requirements. I'll check my email for the invite. I'm sure it's in there somewhere. Dave McKenna inside the cube. Good friend of the cube, hardworking, billable in the next generation, the next gen marketplace. Check it out. Of course, the cube three 65 our new offering is up there as of Monday. It's kind of a soft launch, but we're telling you now, I'm John Freud. Dave Volante. Thanks for watching back with more. Thanks and have a short break.

(electronic dance music) (Intel Jingle) (ethereal electronic dance music) ♪ Okay ♪ (upbeat techno dance music) ♪ Oh oh oh oh ♪ ♪ Oh oh oh oh ♪ ♪ Oh oh oh oh oh ♪ ♪ Oh oh oh oh ♪ ♪ Oh oh oh oh oh ♪ ♪ Take it back take it back ♪ ♪ Take it back ♪ ♪ Take it back take it back ♪ ♪ Take it back ♪ ♪ Take it back take it back ♪ ♪ Yeah everybody get loose yeah ♪ ♪ Yeah ♪ ♪ Ye-yeah yeah ♪ ♪ Yeah yeah ♪ ♪ Everybody everybody yeah ♪ ♪ Whoo whoo ♪ ♪ Whoo whoo ♪ ♪ Whoo yeah ♪ ♪ Everybody get loose whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ >> As a courtesy to the presenters and those around you, please silence all mobile devices, thank you. (electronic dance music) ♪ Everybody get loose ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ (upbeat salsa music) ♪ Ha ha ha ♪ ♪ Ah ♪ ♪ Ha ha ha ♪ ♪ So happy ♪ ♪ Whoo whoo ♪ (female singer scatting) >> Ladies and gentlemen, please take your seats. Our program will begin momentarily. ♪ Hey ♪ (female singer scatting) (male singer scatting) ♪ Hey ♪ ♪ Whoo ♪ (female singer scatting) (electronic dance music) ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ Red red red red ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ Red red red red ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ Red red red red ♪ ♪ Red don't go ♪ ♪ All hands are in don't go ♪ ♪ In don't go ♪ ♪ Oh red go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ Red red red red ♪ ♪ All hands are red don't go ♪ ♪ All hands are in red red red red ♪ ♪ All hands are in don't go ♪ ♪ All hands are in red go ♪ >> Ladies and gentlemen, there are available seats. Towards house left, house left there are available seats. If you are please standing, we ask that you please take an available seat. We will begin momentarily, thank you. ♪ Let go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ (upbeat electronic dance music) ♪ Just make me ♪ ♪ Just make me ♪ ♪ Just make me ♪ ♪ Just make me ♪ ♪ Just make me ♪ ♪ I live ♪ ♪ Just make me ♪ ♪ Just make me ♪ ♪ Hey ♪ ♪ Yeah ♪ ♪ Oh ♪ ♪ Ah ♪ ♪ Ah ah ah ah ah ah ♪ ♪ Just make me ♪ ♪ Just make me ♪ (bouncy techno music) >> Ladies and gentlemen, once again we ask that you please take the available seats to your left, house left, there are many available seats. If you are standing, please make your way there. The program will begin momentarily, thank you. Good morning! This is Lenovo Transform 2.0! (keyboard clicks) >> Progress. Why do we always talk about it in the future? When will it finally get here? We don't progress when it's ready for us. We need it when we're ready, and we're ready now. Our hospitals and their patients need it now, our businesses and their customers need it now, our cities and their citizens need it now. To deliver intelligent transformation, we need to build it into the products and solutions we make every day. At Lenovo, we're designing the systems to fight disease, power businesses, and help you reach more customers, end-to-end security solutions to protect your data and your companies reputation. We're making IT departments more agile and cost efficient. We're revolutionizing how kids learn with VR. We're designing smart devices and software that transform the way you collaborate, because technology shouldn't just power industries, it should power people. While everybody else is talking about tomorrow, we'll keep building today, because the progress we need can't wait for the future. >> Please welcome to the stage Lenovo's Rod Lappen! (electronic dance music) (audience applauding) >> Alright. Good morning everyone! >> Good morning. >> Ooh, that was pretty good actually, I'll give it one more shot. Good morning everyone! >> Good morning! >> Oh, that's much better! Hope everyone's had a great morning. Welcome very much to the second Lenovo Transform event here in New York. I think when I got up just now on the steps I realized there's probably one thing in common all of us have in this room including myself which is, absolutely no one has a clue what I'm going to say today. So, I'm hoping very much that we get through this thing very quickly and crisply. I love this town, love New York, and you're going to hear us talk a little bit about New York as we get through here, but just before we get started I'm going to ask anyone who's standing up the back, there are plenty of seats down here, and down here on the right hand side, I think he called it house left is the professional way of calling it, but these steps to my right, your left, get up here, let's get you all seated down so that you can actually sit down during the keynote session for us. Last year we had our very first Lenovo Transform. We had about 400 people. It was here in New York, fantastic event, today, over 1,000 people. We have over 62 different technology demonstrations and about 15 breakout sessions, which I'll talk you through a little bit later on as well, so it's a much bigger event. Next year we're definitely going to be shooting for over 2,000 people as Lenovo really transforms and starts to address a lot of the technology that our commercial customers are really looking for. We were however hampered last year by a storm, I don't know if those of you who were with us last year will remember, we had a storm on the evening before Transform last year in New York, and obviously the day that it actually occurred, and we had lots of logistics. Our media people from AMIA were coming in. They took the, the plane was circling around New York for a long time, and Kamran Amini, our General Manager of our Data Center Infrastructure Group, probably one of our largest groups in the Lenovo DCG business, took 17 hours to get from Raleigh, North Carolina to New York, 17 hours, I think it takes seven or eight hours to drive. Took him 17 hours by plane to get here. And then of course this year, we have Florence. And so, obviously the hurricane Florence down there in the Carolinas right now, we tried to help, but still Kamran has made it today. Unfortunately, very tragically, we were hoping he wouldn't, but he's here today to do a big presentation a little bit later on as well. However, I do want to say, obviously, Florence is a very serious tragedy and we have to take it very serious. We got, our headquarters is in Raleigh, North Carolina. While it looks like the hurricane is just missing it's heading a little bit southeast, all of our thoughts and prayers and well wishes are obviously with everyone in the Carolinas on behalf of Lenovo, everyone at our headquarters, everyone throughout the Carolinas, we want to make sure everyone stays safe and out of harm's way. We have a great mixture today in the crowd of all customers, partners, industry analysts, media, as well as our financial analysts from all around the world. There's over 30 countries represented here and people who are here to listen to both YY, Kirk, and Christian Teismann speak today. And so, it's going to be a really really exciting day, and I really appreciate everyone coming in from all around the world. So, a big round of applause for everyone whose come in. (audience applauding) We have a great agenda for you today, and it starts obviously a very consistent format which worked very successful for us last year, and that's obviously our keynote. You'll hear from YY, our CEO, talk a little bit about the vision he has in the industry and how he sees Lenovo's turned the corner and really driving some great strategy to address our customer's needs. Kirk Skaugen, our Executive Vice President of DCG, will be up talking about how we've transformed the DCG business and once again are hitting record growth ratios for our DCG business. And then you'll hear from Christian Teismann, our SVP and General Manager for our commercial business, get up and talk about everything that's going on in our IDG business. There's really exciting stuff going on there and obviously ThinkPad being the cornerstone of that I'm sure he's going to talk to us about a couple surprises in that space as well. Then we've got some great breakout sessions, I mentioned before, 15 breakout sessions, so while this keynote section goes until about 11:30, once we get through that, please go over and explore, and have a look at all of the breakout sessions. We have all of our subject matter experts from both our PC, NBG, and our DCG businesses out to showcase what we're doing as an organization to better address your needs. And then obviously we have the technology pieces that I've also spoken about, 62 different technology displays there arranged from everything IoT, 5G, NFV, everything that's really cool and hot in the industry right now is going to be on display up there, and I really encourage all of you to get up there. So, I'm going to have a quick video to show you from some of the setup yesterday on a couple of the 62 technology displays we've got on up on stage. Okay let's go, so we've got a demonstrations to show you today, one of the greats one here is the one we've done with NC State, a high-performance computing artificial intelligence demonstration of fresh produce. It's about modeling the population growth of the planet, and how we're going to supply water and food as we go forward. Whoo. Oh, that is not an apple. Okay. (woman laughs) Second one over here is really, hey Jonas, how are you? Is really around virtual reality, and how we look at one of the most amazing sites we've got, as an install on our high-performance computing practice here globally. And you can see, obviously, that this is the Barcelona supercomputer, and, where else in New York can you get access to being able to see something like that so easily? Only here at Lenovo Transform. Whoo, okay. (audience applauding) So there's two examples of some of the technology. We're really encouraging everyone in the room after the keynote to flow into that space and really get engaged, and interact with a lot of the technology we've got up there. It seems I need to also do something about my fashion, I've just realized I've worn a vest two days in a row, so I've got to work on that as well. Alright so listen, the last thing on the agenda, we've gone through the breakout sessions and the demo, tonight at four o'clock, there's about 400 of you registered to be on the cruise boat with us, the doors will open behind me. the boat is literally at the pier right behind us. You need to make sure you're on the boat for 4:00 p.m. this evening. Outside of that, I want everyone to have a great time today, really enjoy the experience, make it as experiential as you possibly can, get out there and really get in and touch the technology. There's some really cool AI displays up there for us all to get involved in as well. So ladies and gentlemen, without further adieu, it gives me great pleasure to introduce to you a lover of tennis, as some of you would've heard last year at Lenovo Transform, as well as a lover of technology, Lenovo, and of course, New York City. I am obviously very pleasured to introduce to you Yang Yuanqing, our CEO, as we like to call him, YY. (audience applauding) (upbeat funky music) >> Good morning, everyone. >> Good morning. >> Thank you Rod for that introduction. Welcome to New York City. So, this is the second year in a row we host our Transform event here, because New York is indeed one of the most transformative cities in the world. Last year on this stage, I spoke about the Fourth Industrial Revolution, and our vision around the intelligent transformation, how it would fundamentally change the nature of business and the customer relationships. And why preparing for this transformation is the key for the future of our company. And in the last year I can assure you, we were being very busy doing just that, from searching and bringing global talents around the world to the way we think about every product and every investment we make. I was here in New York just a month ago to announce our fiscal year Q1 earnings, which was a good day for us. I think now the world believes it when we say Lenovo has truly turned the corner to a new phase of growth and a new phase of acceleration in executing the transformation strategy. That's clear to me is that the last few years of a purposeful disruption at Lenovo have led us to a point where we can now claim leadership of the coming intelligent transformation. People often asked me, what is the intelligent transformation? I was saying this way. This is the unlimited potential of the Fourth Industrial Revolution driven by artificial intelligence being realized, ordering a pizza through our speaker, and locking the door with a look, letting your car drive itself back to your home. This indeed reflect the power of AI, but it just the surface of it. The true impact of AI will not only make our homes smarter and offices more efficient, but we are also completely transformed every value chip in every industry. However, to realize these amazing possibilities, we will need a structure built around the key components, and one that touches every part of all our lives. First of all, explosions in new technology always lead to new structures. This has happened many times before. In the early 20th century, thousands of companies provided a telephone service. City streets across the US looked like this, and now bundles of a microscopic fiber running from city to city bring the world closer together. Here's what a driving was like in the US, up until 1950s. Good luck finding your way. (audience laughs) And today, millions of vehicles are organized and routed daily, making the world more efficient. Structure is vital, from fiber cables and the interstate highways, to our cells bounded together to create humans. Thankfully the structure for intelligent transformation has emerged, and it is just as revolutionary. What does this new structure look like? We believe there are three key building blocks, data, computing power, and algorithms. Ever wondered what is it behind intelligent transformation? What is fueling this miracle of human possibility? Data. As the Internet becomes ubiquitous, not only PCs, mobile phones, have come online and been generating data. Today it is the cameras in this room, the climate controls in our offices, or the smart displays in our kitchens at home. The number of smart devices worldwide will reach over 20 billion in 2020, more than double the number in 2017. These devices and the sensors are connected and generating massive amount of data. By 2020, the amount of data generated will be 57 times more than all the grains of sand on Earth. This data will not only make devices smarter, but will also fuel the intelligence of our homes, offices, and entire industries. Then we need engines to turn the fuel into power, and the engine is actually the computing power. Last but not least the advanced algorithms combined with Big Data technology and industry know how will form vertical industrial intelligence and produce valuable insights for every value chain in every industry. When these three building blocks all come together, it will change the world. At Lenovo, we have each of these elements of intelligent transformations in a single place. We have built our business around the new structure of intelligent transformation, especially with mobile and the data center now firmly part of our business. I'm often asked why did you acquire these businesses? Why has a Lenovo gone into so many fields? People ask the same questions of the companies that become the leaders of the information technology revolution, or the third industrial transformation. They were the companies that saw the future and what the future required, and I believe Lenovo is the company today. From largest portfolio of devices in the world, leadership in the data center field, to the algorithm-powered intelligent vertical solutions, and not to mention the strong partnership Lenovo has built over decades. We are the only company that can unify all these essential assets and deliver end to end solutions. Let's look at each part. We now understand the important importance data plays as fuel in intelligent transformation. Hundreds of billions of devices and smart IoTs in the world are generating better and powering the intelligence. Who makes these devices in large volume and variety? Who puts these devices into people's home, offices, manufacturing lines, and in their hands? Lenovo definitely has the front row seats here. We are number one in PCs and tablets. We also produces smart phones, smart speakers, smart displays. AR/VR headsets, as well as commercial IoTs. All of these smart devices, or smart IoTs are linked to each other and to the cloud. In fact, we have more than 20 manufacturing facilities in China, US, Brazil, Japan, India, Mexico, Germany, and more, producing various devices around the clock. We actually make four devices every second, and 37 motherboards every minute. So, this factory located in my hometown, Hu-fi, China, is actually the largest laptop factory in the world, with more than three million square feet. So, this is as big as 42 soccer fields. Our scale and the larger portfolio of devices gives us access to massive amount of data, which very few companies can say. So, why is the ability to scale so critical? Let's look again at our example from before. The early days of telephone, dozens of service providers but only a few companies could survive consolidation and become the leader. The same was true for the third Industrial Revolution. Only a few companies could scale, only a few could survive to lead. Now the building blocks of the next revolution are locking into place. The (mumbles) will go to those who can operate at the scale. So, who could foresee the total integration of cloud, network, and the device, need to deliver intelligent transformation. Lenovo is that company. We are ready to scale. Next, our computing power. Computing power is provided in two ways. On one hand, the modern supercomputers are providing the brute force to quickly analyze the massive data like never before. On the other hand the cloud computing data centers with the server storage networking capabilities, and any computing IoT's, gateways, and miniservers are making computing available everywhere. Did you know, Lenovo is number one provider of super computers worldwide? 170 of the top 500 supercomputers, run on Lenovo. We hold 89 World Records in key workloads. We are number one in x86 server reliability for five years running, according to ITIC. a respected provider of industry research. We are also the fastest growing provider of hyperscale public cloud, hyper-converged and aggressively growing in edge computing. cur-ges target, we are expand on this point soon. And finally to run these individual nodes into our symphony, we must transform the data and utilize the computing power with advanced algorithms. Manufactured, industry maintenance, healthcare, education, retail, and more, so many industries are on the edge of intelligent transformation to improve efficiency and provide the better products and services. We are creating advanced algorithms and the big data tools combined with industry know-how to provide intelligent vertical solutions for several industries. In fact, we studied at Lenovo first. Our IT and research teams partnered with our global supply chain to develop an AI that improved our demand forecasting accuracy. Beyond managing our own supply chain we have offered our deep learning supply focused solution to other manufacturing companies to improve their efficiency. In the best case, we have improved the demand, focused the accuracy by 30 points to nearly 90 percent, for Baosteel, the largest of steel manufacturer in China, covering the world as well. Led by Lenovo research, we launched the industry-leading commercial ready AR headset, DaystAR, partnering with companies like the ones in this room. This technology is being used to revolutionize the way companies service utility, and even our jet engines. Using our workstations, servers, and award-winning imaging processing algorithms, we have partnered with hospitals to process complex CT scan data in minutes. So, this enable the doctors to more successfully detect the tumors, and it increases the success rate of cancer diagnosis all around the world. We are also piloting our smart IoT driven warehouse solution with one of the world's largest retail companies to greatly improve the efficiency. So, the opportunities are endless. This is where Lenovo will truly shine. When we combine the industry know-how of our customers with our end-to-end technology offerings, our intelligent vertical solutions like this are growing, which Kirk and Christian will share more. Now, what will drive this transformation even faster? The speed at which our networks operate, specifically 5G. You may know that Lenovo just launched the first-ever 5G smartphone, our Moto Z3, with the new 5G Moto model. We are partnering with multiple major network providers like Verizon, China Mobile. With the 5G model scheduled to ship early next year, we will be the first company to provide a 5G mobile experience to any users, customers. This is amazing innovation. You don't have to buy a new phone, just the 5G clip on. What can I say, except wow. (audience laughs) 5G is 10 times the fast faster than 4G. Its download speed will transform how people engage with the world, driverless car, new types of smart wearables, gaming, home security, industrial intelligence, all will be transformed. Finally, accelerating with partners, as ready as we are at Lenovo, we need partners to unlock our full potential, partners here to create with us the edge of the intelligent transformation. The opportunities of intelligent transformation are too profound, the scale is too vast. No company can drive it alone fully. We are eager to collaborate with all partners that can help bring our vision to life. We are dedicated to open partnerships, dedicated to cross-border collaboration, unify the standards, share the advantage, and market the synergies. We partner with the biggest names in the industry, Intel, Microsoft, AMD, Qualcomm, Google, Amazon, and Disney. We also find and partner with the smaller innovators as well. We're building the ultimate partner experience, open, shared, collaborative, diverse. So, everything is in place for intelligent transformation on a global scale. Smart devices are everywhere, the infrastructure is in place, networks are accelerating, and the industries demand to be more intelligent, and Lenovo is at the center of it all. We are helping to drive change with the hundreds of companies, companies just like yours, every day. We are your partner for intelligent transformation. Transformation never stops. This is what you will hear from Kirk, including details about Lenovo NetApp global partnership we just announced this morning. We've made the investments in every single aspect of the technology. We have the end-to-end resources to meet your end-to-end needs. As you attend the breakout session this afternoon, I hope you see for yourself how much Lenovo has transformed as a company this past year, and how we truly are delivering a future of intelligent transformation. Now, let me invite to the stage Kirk Skaugen, our president of Data Center growth to tell you about the exciting transformation happening in the global Data C enter market. Thank you. (audience applauding) (upbeat music) >> Well, good morning. >> Good morning. >> Good morning! >> Good morning! >> Excellent, well, I'm pleased to be here this morning to talk about how we're transforming the Data Center and taking you as our customers through your own intelligent transformation journey. Last year I stood up here at Transform 1.0, and we were proud to announce the largest Data Center portfolio in Lenovo's history, so I thought I'd start today and talk about the portfolio and the progress that we've made over the last year, and the strategies that we have going forward in phase 2.0 of Lenovo's transformation to be one of the largest data center companies in the world. We had an audacious vision that we talked about last year, and that is to be the most trusted data center provider in the world, empowering customers through the new IT, intelligent transformation. And now as the world's largest supercomputer provider, giving something back to humanity, is very important this week with the hurricanes now hitting North Carolina's coast, but we take this most trusted aspect very seriously, whether it's delivering the highest quality products on time to you as customers with the highest levels of security, or whether it's how we partner with our channel partners and our suppliers each and every day. You know we're in a unique world where we're going from hundreds of millions of PCs, and then over the next 25 years to hundred billions of connected devices, so each and every one of you is going through this intelligent transformation journey, and in many aspects were very early in that cycle. And we're going to talk today about our role as the largest supercomputer provider, and how we're solving humanity's greatest challenges. Last year we talked about two special milestones, the 25th anniversary of ThinkPad, but also the 25th anniversary of Lenovo with our IBM heritage in x86 computing. I joined the workforce in 1992 out of college, and the IBM first personal server was launching at the same time with an OS2 operating system and a free mouse when you bought the server as a marketing campaign. (audience laughing) But what I want to be very clear today, is that the innovation engine is alive and well at Lenovo, and it's really built on the culture that we're building as a company. All of these awards at the bottom are things that we earned over the last year at Lenovo. As a Fortune now 240 company, larger than companies like Nike, or AMEX, or Coca-Cola. The one I'm probably most proud of is Forbes first list of the top 2,000 globally regarded companies. This was something where 15,000 respondents in 60 countries voted based on ethics, trustworthiness, social conduct, company as an employer, and the overall company performance, and Lenovo was ranked number 27 of 2000 companies by our peer group, but we also now one of-- (audience applauding) But we also got a perfect score in the LGBTQ Equality Index, exemplifying the diversity internally. We're number 82 in the top working companies for mothers, top working companies for fathers, top 100 companies for sustainability. If you saw that factory, it's filled with solar panels on the top of that. And now again, one of the top global brands in the world. So, innovation is built on a customer foundation of trust. We also said last year that we'd be crossing an amazing milestone. So we did, over the last 12 months ship our 20 millionth x86 server. So, thank you very much to our customers for this milestone. (audience applauding) So, let me recap some of the transformation elements that have happened over the last year. Last year I talked about a lot of brand confusion, because we had the ThinkServer brand from the legacy Lenovo, the System x, from IBM, we had acquired a number of networking companies, like BLADE Network Technologies, et cetera, et cetera. Over the last year we've been ramping based on two brand structures, ThinkAgile for next generation IT, and all of our software-defined infrastructure products and ThinkSystem as the world's highest performance, highest reliable x86 server brand, but for servers, for storage, and for networking. We have transformed every single aspect of the customer experience. A year and a half ago, we had four different global channel programs around the world. Typically we're about twice the mix to our channel partners of any of our competitors, so this was really important to fix. We now have a single global Channel program, and have technically certified over 11,000 partners to be technical experts on our product line to deliver better solutions to our customer base. Gardner recently recognized Lenovo as the 26th ranked supply chain in the world. And, that's a pretty big honor, when you're up there with Amazon and Walmart and others, but in tech, we now are in the top five supply chains. You saw the factory network from YY, and today we'll be talking about product shipping in more than 160 countries, and I know there's people here that I've met already this morning, from India, from South Africa, from Brazil and China. We announced new Premier Support services, enabling you to go directly to local language support in nine languages in 49 countries in the world, going directly to a native speaker level three support engineer. And today we have more than 10,000 support specialists supporting our products in over 160 countries. We've delivered three times the number of engineered solutions to deliver a solutions orientation, whether it's on HANA, or SQL Server, or Oracle, et cetera, and we've completely reengaged our system integrator channel. Last year we had the CIO of DXE on stage, and here we're talking about more than 175 percent growth through our system integrator channel in the last year alone as we've brought that back and really built strong relationships there. So, thank you very much for amazing work here on the customer experience. (audience applauding) We also transformed our leadership. We thought it was extremely important with a focus on diversity, to have diverse talent from the legacy IBM, the legacy Lenovo, but also outside the industry. We made about 19 executive changes in the DCG group. This is the most senior leadership team within DCG, all which are newly on board, either from our outside competitors mainly over the last year. About 50 percent of our executives were now hired internally, 50 percent externally, and 31 percent of those new executives are diverse, representing the diversity of our global customer base and gender. So welcome, and most of them you're going to be able to meet over here in the breakout sessions later today. (audience applauding) But some things haven't changed, they're just keeping getting better within Lenovo. So, last year I got up and said we were committed with the new ThinkSystem brand to be a world performance leader. You're going to see that we're sponsoring Ducati for MotoGP. You saw the Ferrari out there with Formula One. That's not a surprise. We want the Lenovo ThinkSystem and ThinkAgile brands to be synonymous with world record performance. So in the last year we've gone from 39 to 89 world records, and partners like Intel would tell you, we now have four times the number of world record workloads on Lenovo hardware than any other server company on the planet today, with more than 89 world records across HPC, Java, database, transaction processing, et cetera. And we're proud to have just brought on Doug Fisher from Intel Corporation who had about 10-17,000 people on any given year working for him in workload optimizations across all of our software. It's just another testament to the leadership team we're bringing in to keep focusing on world-class performance software and solutions. We also per ITIC, are the number one now in x86 server reliability five years running. So, this is a survey where CIOs are in a blind survey asked to submit their reliability of their uptime on their x86 server equipment over the last 365 days. And you can see from 2016 to 2017 the downtime, there was over four hours as noted by the 750 CXOs in more than 20 countries is about one percent for the Lenovo products, and is getting worse generation from generation as we went from Broadwell to Pearlie. So we're taking our reliability, which was really paramount in the IBM System X heritage, and ensuring that we don't just recognize high performance but we recognize the highest level of reliability for mission-critical workloads. And what that translates into is that we at once again have been ranked number one in customer satisfaction from you our customers in 19 of 22 attributes, in North America in 18 of 22. This is a survey by TVR across hundreds of customers of us and our top competitors. This is the ninth consecutive study that we've been ranked number one in customer satisfaction, so we're taking this extremely seriously, and in fact YY now has increased the compensation of every single Lenovo employee. Up to 40 percent of their compensation bonus this year is going to be based on customer metrics like quality, order to ship, and things of this nature. So, we're really putting every employee focused on customer centricity this year. So, the summary on Transform 1.0 is that every aspect of what you knew about Lenovo's data center group has transformed, from the culture to the branding to dedicated sales and marketing, supply chain and quality groups, to a worldwide channel program and certifications, to new system integrator relationships, and to the new leadership team. So, rather than me just talk about it, I thought I'd share a quick video about what we've done over the last year, if you could run the video please. Turn around for a second. (epic music) (audience applauds) Okay. So, thank you to all our customers that allowed us to publicly display their logos in that video. So, what that means for you as investors, and for the investor community out there is, that our customers have responded, that this year Gardner just published that we are the fastest growing server company in the top 10, with 39 percent growth quarter-on-quarter, and 49 percent growth year-on-year. If you look at the progress we've made since the transformation the last three quarters publicly, we've grown 17 percent, then 44 percent, then 68 percent year on year in revenue, and I can tell you this quarter I'm as confident as ever in the financials around the DCG group, and it hasn't been in one area. You're going to see breakout sessions from hyperscale, software-defined, and flash, which are all growing more than a 100 percent year-on-year, supercomputing which we'll talk about shortly, now number one, and then ultimately from profitability, delivering five consecutive quarters of pre-tax profit increase, so I think, thank you very much to the customer base who's been working with us through this transformation journey. So, you're here to really hear what's next on 2.0, and that's what I'm excited to talk about today. Last year I came up with an audacious goal that we would become the largest supercomputer company on the planet by 2020, and this graph represents since the acquisition of the IBM System x business how far we were behind being the number one supercomputer. When we started we were 182 positions behind, even with the acquisition for example of SGI from HP, we've now accomplished our goal actually two years ahead of time. We're now the largest supercomputer company in the world. About one in every four supercomputers, 117 on the list, are now Lenovo computers, and you saw in the video where the universities are said, but I think what I'm most proud of is when your customers rank you as the best. So the awards at the bottom here, are actually Readers Choice from the last International Supercomputing Show where the scientific researchers on these computers ranked their vendors, and we were actually rated the number one server technology in supercomputing with our ThinkSystem SD530, and the number one storage technology with our ThinkSystem DSS-G, but more importantly what we're doing with the technology. You're going to see we won best in life sciences, best in data analytics, and best in collaboration as well, so you're going to see all of that in our breakout sessions. As you saw in the video now, 17 of the top 25 research institutions in the world are now running Lenovo supercomputers. And again coming from Raleigh and watching that hurricane come across the Atlantic, there are eight supercomputers crunching all of those models you see from Germany to Malaysia to Canada, and we're happy to have a SciNet from University of Toronto here with us in our breakout session to talk about what they're doing on climate modeling as well. But we're not stopping there. We just announced our new Neptune warm water cooling technology, which won the International Supercomputing Vendor Showdown, the first time we've won that best of show in 25 years, and we've now installed this. We're building out LRZ in Germany, the first ever warm water cooling in Peking University, at the India Space Propulsion Laboratory, at the Malaysian Weather and Meteorological Society, at Uninett, at the largest supercomputer in Norway, T-Systems, University of Birmingham. This is truly amazing technology where we're actually using water to cool the machine to deliver a significantly more energy-efficient computer. Super important, when we're looking at global warming and some of the electric bills can be millions of dollars just for one computer, and could actually power a small city just with the technology from the computer. We've built AI centers now in Morrisville, Stuttgart, Taipei, and Beijing, where customers can bring their AI workloads in with experts from Intel, from Nvidia, from our FPGA partners, to work on their workloads, and how they can best implement artificial intelligence. And we also this year launched LICO which is Lenovo Intelligent Compute Orchestrator software, and it's a software solution that simplifies the management and use of distributed clusters in both HPC and AI model development. So, what it enables you to do is take a single cluster, and run both HPC and AI workloads on it simultaneously, delivering better TCO for your environment, so check out LICO as well. A lot of the customers here and Wall Street are very excited and using it already. And we talked about solving humanity's greatest challenges. In the breakout session, you're going to have a virtual reality experience where you're going to be able to walk through what as was just ranked the world's most beautiful data center, the Barcelona Supercomputer. So, you can actually walk through one of the largest supercomputers in the world from Barcelona. You can see the work we're doing with NC State where we're going to have to grow the food supply of the world by 50 percent, and there's not enough fresh water in the world in the right places to actually make all those crops grow between now and 2055, so you're going to see the progression of how they're mapping the entire globe and the water around the world, how to build out the crop population over time using AI. You're going to see our work with Vestas is this largest supercomputer provider in the wind turbine areas, how they're working on wind energy, and then with University College London, how they're working on some of the toughest particle physics calculations in the world. So again, lots of opportunity here. Take advantage of it in the breakout sessions. Okay, let me transition to hyperscale. So in hyperscale now, we have completely transformed our business model. We are now powering six of the top 10 hyperscalers in the world, which is a significant difference from where we were two years ago. And the reason we're doing that, is we've coined a term called ODM+. We believe that hyperscalers want more procurement power than an ODM, and Lenovo is doing about $18 billion of procurement a year. They want a broader global supply chain that they can get from a local system integrator. We're more than 160 countries around the world, but they want the same world-class quality and reliability like they get from an MNC. So, what we're doing now is instead of just taking off the shelf motherboards from somewhere, we're starting with a blank sheet of paper, we're working with the customer base on customized SKUs and you can see we already are developing 33 custom solutions for the largest hyperscalers in the world. And then we're not just running notebooks through this factory where YY said, we're running 37 notebook boards a minute, we're now putting in tens and tens and tens of thousands of server board capacity per month into this same factory, so absolutely we can compete with the most aggressive ODM's in the world, but it's not just putting these things in in the motherboard side, we're also building out these systems all around the world, India, Brazil, Hungary, Mexico, China. This is an example of a new hyperscale customer we've had this last year, 34,000 servers we delivered in the first six months. The next 34,000 servers we delivered in 68 days. The next 34,000 servers we delivered in 35 days, with more than 99 percent on-time delivery to 35 data centers in 14 countries as diverse as South Africa, India, China, Brazil, et cetera. And I'm really ashamed to say it was 99.3, because we did have a forklift driver who rammed their forklift right through the middle of the one of the server racks. (audience laughing) At JFK Airport that we had to respond to, but I think this gives you a perspective of what it is to be a top five global supply chain and technology. So last year, I said we would invest significantly in IP, in joint ventures, and M and A to compete in software defined, in networking, and in storage, so I wanted to give you an update on that as well. Our newest software-defined partnership is with Cloudistics, enabling a fully composable cloud infrastructure. It's an exclusive agreement, you can see them here. I think Nag, our founder, is going to be here today, with a significant Lenovo investment in the company. So, this new ThinkAgile CP series delivers the simplicity of the public cloud, on-premise with exceptional support and a marketplace of essential enterprise applications all with a single click deployment. So simply put, we're delivering a private cloud with a premium experience. It's simple in that you need no specialists to deploy it. An IT generalist can set it up and manage it. It's agile in that you can provision dozens of workloads in minutes, and it's transformative in that you get all of the goodness of public cloud on-prem in a private cloud to unlock opportunity for use. So, we're extremely excited about the ThinkAgile CP series that's now shipping into the marketplace. Beyond that we're aggressively ramping, and we're either doubling, tripling, or quadrupling our market share as customers move from traditional server technology to software-defined technology. With Nutanix we've been public, growing about more than 150 percent year-on-year, with Nutanix as their fastest growing Nutanix partner, but today I want to set another audacious goal. I believe we cannot just be Nutanix's fastest growing partner but we can become their largest partner within two years. On Microsoft, we are already four times our market share on Azure stack of our traditional business. We were the first to launch our ThinkAgile on Broadwell and on Skylake with the Azure Stack Infrastructure. And on VMware we're about twice our market segment share. We were the first to deliver an Intel-optimized Optane-certified VSAN node. And with Optane technology, we're delivering 50 percent more VM density than any competitive SSD system in the marketplace, about 10 times lower latency, four times the performance of any SSD system out there, and Lenovo's first to market on that. And at VMworld you saw CEO Pat Gelsinger of VMware talked about project dimension, which is Edge as a service, and we're the only OEM beyond the Dell family that is participating today in project dimension. Beyond that you're going to see a number of other partnerships we have. I'm excited that we have the city of Bogota Columbia here, an eight million person city, where we announced a 3,000 camera video surveillance solution last month. With pivot three you're going to see city of Bogota in our breakout sessions. You're going to see a new partnership with Veeam around backup that's launching today. You're going to see partnerships with scale computing in IoT and hyper-converged infrastructure working on some of the largest retailers in the world. So again, everything out in the breakout session. Transitioning to storage and data management, it's been a great year for Lenovo, more than a 100 percent growth year-on-year, 2X market growth in flash arrays. IDC just reported 30 percent growth in storage, number one in price performance in the world and the best HPC storage product in the top 500 with our ThinkSystem DSS G, so strong coverage, but I'm excited today to announce for Transform 2.0 that Lenovo is launching the largest data management and storage portfolio in our 25-year data center history. (audience applauding) So a year ago, the largest server portfolio, becoming the largest fastest growing server OEM, today the largest storage portfolio, but as you saw this morning we're not doing it alone. Today Lenovo and NetApp, two global powerhouses are joining forces to deliver a multi-billion dollar global alliance in data management and storage to help customers through their intelligent transformation. As the fastest growing worldwide server leader and one of the fastest growing flash array and data management companies in the world, we're going to deliver more choice to customers than ever before, global scale that's never been seen, supply chain efficiencies, and rapidly accelerating innovation and solutions. So, let me unwrap this a little bit for you and talk about what we're announcing today. First, it's the largest portfolio in our history. You're going to see not just storage solutions launching today but a set of solution recipes from NetApp that are going to make Lenovo server and NetApp or Lenovo storage work better together. The announcement enables Lenovo to go from covering 15 percent of the global storage market to more than 90 percent of the global storage market and distribute these products in more than 160 countries around the world. So we're launching today, 10 new storage platforms, the ThinkSystem DE and ThinkSystem DM platforms. They're going to be centrally managed, so the same XClarity management that you've been using for server, you can now use across all of your storage platforms as well, and it'll be supported by the same 10,000 plus service personnel that are giving outstanding customer support to you today on the server side. And we didn't come up with this in the last month or the last quarter. We're announcing availability in ordering today and shipments tomorrow of the first products in this portfolio, so we're excited today that it's not just a future announcement but something you as customers can take advantage of immediately. (audience applauding) The second part of the announcement is we are announcing a joint venture in China. Not only will this be a multi-billion dollar global partnership, but Lenovo will be a 51 percent owner, NetApp a 49 percent owner of a new joint venture in China with the goal of becoming in the top three storage companies in the largest data and storage market in the world. We will deliver our R and D in China for China, pooling our IP and resources together, and delivering a single route to market through a complementary channel, not just in China but worldwide. And in the future I just want to tell everyone this is phase one. There is so much exciting stuff. We're going to be on the stage over the next year talking to you about around integrated solutions, next-generation technologies, and further synergies and collaborations. So, rather than just have me talk about it, I'd like to welcome to the stage our new partner NetApp and Brad Anderson who's the senior vice president and general manager of NetApp Cloud Infrastructure. (upbeat music) (audience applauding) >> Thank You Kirk. >> So Brad, we've known each other a long time. It's an exciting day. I'm going to give you the stage and allow you to say NetApp's perspective on this announcement. >> Very good, thank you very much, Kirk. Kirk and I go back to I think 1994, so hey good morning and welcome. My name is Brad Anderson. I manage the Cloud Infrastructure Group at NetApp, and I am honored and privileged to be here at Lenovo Transform, particularly today on today's announcement. Now, you've heard a lot about digital transformation about how companies have to transform their IT to compete in today's global environment. And today's announcement with the partnership between NetApp and Lenovo is what that's all about. This is the joining of two global leaders bringing innovative technology in a simplified solution to help customers modernize their IT and accelerate their global digital transformations. Drawing on the strengths of both companies, Lenovo's high performance compute world-class supply chain, and NetApp's hybrid cloud data management, hybrid flash and all flash storage solutions and products. And both companies providing our customers with the global scale for them to be able to meet their transformation goals. At NetApp, we're very excited. This is a quote from George Kurian our CEO. George spent all day yesterday with YY and Kirk, and would have been here today if it hadn't been also our shareholders meeting in California, but I want to just convey how excited we are for all across NetApp with this partnership. This is a partnership between two companies with tremendous market momentum. Kirk took you through all the amazing results that Lenovo has accomplished, number one in supercomputing, number one in performance, number one in x86 reliability, number one in x86 customers sat, number five in supply chain, really impressive and congratulations. Like Lenovo, NetApp is also on a transformation journey, from a storage company to the data authority in hybrid cloud, and we've seen some pretty impressive momentum as well. Just last week we became number one in all flash arrays worldwide, catching EMC and Dell, and we plan to keep on going by them, as we help customers modernize their their data centers with cloud connected flash. We have strategic partnerships with the largest hyperscalers to provide cloud native data services around the globe and we are having success helping our customers build their own private clouds with just, with a new disruptive hyper-converged technology that allows them to operate just like hyperscalers. These three initiatives has fueled NetApp's transformation, and has enabled our customers to change the world with data. And oh by the way, it has also fueled us to have meet or have beaten Wall Street's expectations for nine quarters in a row. These are two companies with tremendous market momentum. We are also building this partnership for long term success. We think about this as phase one and there are two important components to phase one. Kirk took you through them but let me just review them. Part one, the establishment of a multi-year commitment and a collaboration agreement to offer Lenovo branded flash products globally, and as Kurt said in 160 countries. Part two, the formation of a joint venture in PRC, People's Republic of China, that will provide long term commitment, joint product development, and increase go-to-market investment to meet the unique needs to China. Both companies will put in storage technologies and storage expertise to form an independent JV that establishes a data management company in China for China. And while we can dream about what phase two looks like, our entire focus is on making phase one incredibly successful and I'm pleased to repeat what Kirk, is that the first products are orderable and shippable this week in 160 different countries, and you will see our two companies focusing on the here and now. On our joint go to market strategy, you'll see us working together to drive strategic alignment, focused execution, strong governance, and realistic expectations and milestones. And it starts with the success of our customers and our channel partners is job one. Enabling customers to modernize their legacy IT with complete data center solutions, ensuring that our customers get the best from both companies, new offerings the fuel business success, efficiencies to reinvest in game-changing initiatives, and new solutions for new mission-critical applications like data analytics, IoT, artificial intelligence, and machine learning. Channel partners are also top of mind for both our two companies. We are committed to the success of our existing and our future channel partners. For NetApp channel partners, it is new pathways to new segments and to new customers. For Lenovo's channel partners, it is the competitive weapons that now allows you to compete and more importantly win against Dell, EMC, and HP. And the good news for both companies is that our channel partner ecosystem is highly complementary with minimal overlap. Today is the first day of a very exciting partnership, of a partnership that will better serve our customers today and will provide new opportunities to both our companies and to our partners, new products to our customers globally and in China. I am personally very excited. I will be on the board of the JV. And so, I look forward to working with you, partnering with you and serving you as we go forward, and with that, I'd like to invite Kirk back up. (audience applauding) >> Thank you. >> Thank you. >> Well, thank you, Brad. I think it's an exciting overview, and these products will be manufactured in China, in Mexico, in Hungary, and around the world, enabling this amazing supply chain we talked about to deliver in over 160 countries. So thank you Brad, thank you George, for the amazing partnership. So again, that's not all. In Transform 2.0, last year, we talked about the joint ventures that were coming. I want to give you a sneak peek at what you should expect at future Lenovo events around the world. We have this Transform in Beijing in a couple weeks. We'll then be repeating this in 20 different locations roughly around the world over the next year, and I'm excited probably more than ever about what else is coming. Let's talk about Telco 5G and network function virtualization. Today, Motorola phones are certified on 46 global networks. We launched the world's first 5G upgradable phone here in the United States with Verizon. Lenovo DCG sells to 58 telecommunication providers around the world. At Mobile World Congress in Barcelona and Shanghai, you saw China Telecom and China Mobile in the Lenovo booth, China Telecom showing a video broadband remote access server, a VBRAS, with video streaming demonstrations with 2x less jitter than they had seen before. You saw China Mobile with a virtual remote access network, a VRAN, with greater than 10 times the throughput and 10x lower latency running on Lenovo. And this year, we'll be launching a new NFV company, a software company in China for China to drive the entire NFV stack, delivering not just hardware solutions, but software solutions, and we've recently hired a new CEO. You're going to hear more about that over the next several quarters. Very exciting as we try to drive new economics into the networks to deliver these 20 billion devices. We're going to need new economics that I think Lenovo can uniquely deliver. The second on IoT and edge, we've integrated on the device side into our intelligent devices group. With everything that's going to consume electricity computes and communicates, Lenovo is in a unique position on the device side to take advantage of the communications from Motorola and being one of the largest device companies in the world. But this year, we're also going to roll out a comprehensive set of edge gateways and ruggedized industrial servers and edge servers and ISP appliances for the edge and for IoT. So look for that as well. And then lastly, as a service, you're going to see Lenovo delivering hardware as a service, device as a service, infrastructure as a service, software as a service, and hardware as a service, not just as a glorified leasing contract, but with IP, we've developed true flexible metering capability that enables you to scale up and scale down freely and paying strictly based on usage, and we'll be having those announcements within this fiscal year. So Transform 2.0, lots to talk about, NetApp the big news of the day, but a lot more to come over the next year from the Data Center group. So in summary, I'm excited that we have a lot of customers that are going to be on stage with us that you saw in the video. Lots of testimonials so that you can talk to colleagues of yourself. Alamos Gold from Canada, a Canadian gold producer, Caligo for data optimization and privacy, SciNet, the largest supercomputer we've ever put into North America, and the largest in Canada at the University of Toronto will be here talking about climate change. City of Bogota again with our hyper-converged solutions around smart city putting in 3,000 cameras for criminal detection, license plate detection, et cetera, and then more from a channel mid market perspective, Jerry's Foods, which is from my home state of Wisconsin, and Minnesota which has about 57 stores in the specialty foods market, and how they're leveraging our IoT solutions as well. So again, about five times the number of demos that we had last year. So in summary, first and foremost to the customers, thank you for your business. It's been a great journey and I think we're on a tremendous role. You saw from last year, we're trying to build credibility with you. After the largest server portfolio, we're now the fastest-growing server OEM per Gardner, number one in performance, number one in reliability, number one in customer satisfaction, number one in supercomputing. Today, the largest storage portfolio in our history, with the goal of becoming the fastest growing storage company in the world, top three in China, multibillion-dollar collaboration with NetApp. And the transformation is going to continue with new edge gateways, edge servers, NFV solutions, telecommunications infrastructure, and hardware as a service with dynamic metering. So thank you for your time. I've looked forward to meeting many of you over the next day. We appreciate your business, and with that, I'd like to bring up Rod Lappen to introduce our next speaker. Rod? (audience applauding) >> Thanks, boss, well done. Alright ladies and gentlemen. No real secret there. I think we've heard why I might talk about the fourth Industrial Revolution in data and exactly what's going on with that. You've heard Kirk with some amazing announcements, obviously now with our NetApp partnership, talk about 5G, NFV, cloud, artificial intelligence, I think we've hit just about all the key hot topics. It's with great pleasure that I now bring up on stage Mr. Christian Teismann, our senior vice president and general manager of commercial business for both our PCs and our IoT business, so Christian Teismann. (techno music) Here, take that. >> Thank you. I think I'll need that. >> Okay, Christian, so obviously just before we get down, you and I last year, we had a bit of a chat about being in New York. >> Exports. >> You were an expat in New York for a long time. >> That's true. >> And now, you've moved from New York. You're in Munich? >> Yep. >> How does that feel? >> Well Munich is a wonderful city, and it's a great place to live and raise kids, but you know there's no place in the world like New York. >> Right. >> And I miss it a lot, quite frankly. >> So what exactly do you miss in New York? >> Well there's a lot of things in New York that are unique, but I know you spent some time in Japan, but I still believe the best sushi in the world is still in New York City. (all laughing) >> I will beg to differ. I will beg to differ. I think Mr. Guchi-san from Softbank is here somewhere. He will get up an argue very quickly that Japan definitely has better sushi than New York. But obviously you know, it's a very very special place, and I have had sushi here, it's been fantastic. What about Munich? Anything else that you like in Munich? >> Well I mean in Munich, we have pork knuckles. >> Pork knuckles. (Christian laughing) Very similar sushi. >> What is also very fantastic, but we have the real, the real Oktoberfest in Munich, and it starts next week, mid-September, and I think it's unique in the world. So it's very special as well. >> Oktoberfest. >> Yes. >> Unfortunately, I'm not going this year, 'cause you didn't invite me, but-- (audience chuckling) How about, I think you've got a bit of a secret in relation to Oktoberfest, probably not in Munich, however. >> It's a secret, yes, but-- >> Are you going to share? >> Well I mean-- >> See how I'm putting you on the spot? >> In the 10 years, while living here in New York, I was a regular visitor of the Oktoberfest at the Lower East Side in Avenue C at Zum Schneider, where I actually met my wife, and she's German. >> Very good. So, how about a big round of applause? (audience applauding) Not so much for Christian, but more I think, obviously for his wife, who obviously had been drinking and consequently ended up with you. (all laughing) See you later, mate. >> That's the beauty about Oktoberfest, but yes. So first of all, good morning to everybody, and great to be back here in New York for a second Transform event. New York clearly is the melting pot of the world in terms of culture, nations, but also business professionals from all kind of different industries, and having this event here in New York City I believe is manifesting what we are trying to do here at Lenovo, is transform every aspect of our business and helping our customers on the journey of intelligent transformation. Last year, in our transformation on the device business, I talked about how the PC is transforming to personalized computing, and we've made a lot of progress in that journey over the last 12 months. One major change that we have made is we combined all our device business under one roof. So basically PCs, smart devices, and smart phones are now under the roof and under the intelligent device group. But from my perspective makes a lot of sense, because at the end of the day, all devices connect in the modern world into the cloud and are operating in a seamless way. But we are also moving from a device business what is mainly a hardware focus historically, more and more also into a solutions business, and I will give you during my speech a little bit of a sense of what we are trying to do, as we are trying to bring all these components closer together, and specifically also with our strengths on the data center side really build end-to-end customer solution. Ultimately, what we want to do is make our business, our customer's businesses faster, safer, and ultimately smarter as well. So I want to look a little bit back, because I really believe it's important to understand what's going on today on the device side. Many of us have still grown up with phones with terminals, ultimately getting their first desktop, their first laptop, their first mobile phone, and ultimately smartphone. Emails and internet improved our speed, how we could operate together, but still we were defined by linear technology advances. Today, the world has changed completely. Technology itself is not a limiting factor anymore. It is how we use technology going forward. The Internet is pervasive, and we are not yet there that we are always connected, but we are nearly always connected, and we are moving to the stage, that everything is getting connected all the time. Sharing experiences is the most driving force in our behavior. In our private life, sharing pictures, videos constantly, real-time around the world, with our friends and with our family, and you see the same behavior actually happening in the business life as well. Collaboration is the number-one topic if it comes down to workplace, and video and instant messaging, things that are coming from the consumer side are dominating the way we are operating in the commercial business as well. Most important beside technology, that a new generation of workforce has completely changed the way we are working. As the famous workforce the first generation of Millennials that have now fully entered in the global workforce, and the next generation, it's called Generation Z, is already starting to enter the global workforce. By 2025, 75 percent of the world's workforce will be composed out of two of these generations. Why is this so important? These two generations have been growing up using state-of-the-art IT technology during their private life, during their education, school and study, and are taking these learnings and taking these behaviors in the commercial workspace. And this is the number one force of change that we are seeing in the moment. Diverse workforces are driving this change in the IT spectrum, and for years in many of our customers' focus was their customer focus. Customer experience also in Lenovo is the most important thing, but we've realized that our own human capital is equally valuable in our customer relationships, and employee experience is becoming a very important thing for many of our customers, and equally for Lenovo as well. As you have heard YY, as we heard from YY, Lenovo is focused on intelligent transformation. What that means for us in the intelligent device business is ultimately starting with putting intelligence in all of our devices, smartify every single one of our devices, adding value to our customers, traditionally IT departments, but also focusing on their end users and building products that make their end users more productive. And as a world leader in commercial devices with more than 33 percent market share, we can solve problems been even better than any other company in the world. So, let's talk about transformation of productivity first. We are in a device-led world. Everything we do is connected. There's more interaction with devices than ever, but also with spaces who are increasingly becoming smart and intelligent. YY said it, by 2020 we have more than 20 billion connected devices in the world, and it will grow exponentially from there on. And users have unique personal choices for technology, and that's very important to recognize, and we call this concept a digital wardrobe. And it means that every single end-user in the commercial business is composing his personal wardrobe on an ongoing basis and is reconfiguring it based on the work he's doing and based where he's going and based what task he is doing. I would ask all of you to put out all the devices you're carrying in your pockets and in your bags. You will see a lot of you are using phones, tablets, laptops, but also cameras and even smartwatches. They're all different, but they have one underlying technology that is bringing it all together. Recognizing digital wardrobe dynamics is a core factor for us to put all the devices under one roof in IDG, one business group that is dedicated to end-user solutions across mobile, PC, but also software services and imaging, to emerging technologies like AR, VR, IoT, and ultimately a AI as well. A couple of years back there was a big debate around bring-your-own-device, what was called consumerization. Today consumerization does not exist anymore, because consumerization has happened into every single device we build in our commercial business. End users and commercial customers today do expect superior display performance, superior audio, microphone, voice, and touch quality, and have it all connected and working seamlessly together in an ease of use space. We are already deep in the journey of personalized computing today. But the center point of it has been for the last 25 years, the mobile PC, that we have perfected over the last 25 years, and has been the undisputed leader in mobility computing. We believe in the commercial business, the ThinkPad is still the core device of a digital wardrobe, and we continue to drive the success of the ThinkPad in the marketplace. We've sold more than 140 million over the last 26 years, and even last year we exceeded nearly 11 million units. That is about 21 ThinkPads per minute, or one Thinkpad every three seconds that we are shipping out in the market. It's the number one commercial PC in the world. It has gotten countless awards but we felt last year after Transform we need to build a step further, in really tailoring the ThinkPad towards the need of the future. So, we announced a new line of X1 Carbon and Yoga at CES the Consumer Electronics Show. And the reason is not we want to sell to consumer, but that we do recognize that a lot of CIOs and IT decision makers need to understand what consumers are really doing in terms of technology to make them successful. So, let's take a look at the video. (suspenseful music) >> When you're the number one business laptop of all time, your only competition is yourself. (wall shattering) And, that's different. Different, like resisting heat, ice, dust, and spills. Different, like sharper, brighter OLA display. The trackpoint that reinvented controls, and a carbon fiber roll cage to protect what's inside, built by an engineering and design team, doing the impossible for the last 25 years. This is the number one business laptop of all time, but it's not a laptop. It's a ThinkPad. (audience applauding) >> Thank you very much. And we are very proud that Lenovo ThinkPad has been selected as the best laptop in the world in the second year in a row. I think it's a wonderful tribute to what our engineers have been done on this one. And users do want awesome displays. They want the best possible audio, voice, and touch control, but some users they want more. What they want is super power, and I'm really proud to announce our newest member of the X1 family, and that's the X1 extreme. It's exceptionally featured. It has six core I9 intel chipset, the highest performance you get in the commercial space. It has Nvidia XTX graphic, it is a 4K UHD display with HDR with Dolby vision and Dolby Atmos Audio, two terabyte in SSD, so it is really the absolute Ferrari in terms of building high performance commercial computer. Of course it has touch and voice, but it is one thing. It has so much performance that it serves also a purpose that is not typical for commercial, and I know there's a lot of secret gamers also here in this room. So you see, by really bringing technology together in the commercial space, you're creating productivity solutions of one of a kind. But there's another category of products from a productivity perspective that is incredibly important in our commercial business, and that is the workstation business . Clearly workstations are very specifically designed computers for very advanced high-performance workloads, serving designers, architects, researchers, developers, or data analysts. And power and performance is not just about the performance itself. It has to be tailored towards the specific use case, and traditionally these products have a similar size, like a server. They are running on Intel Xeon technology, and they are equally complex to manufacture. We have now created a new category as the ultra mobile workstation, and I'm very proud that we can announce here the lightest mobile workstation in the industry. It is so powerful that it really can run AI and big data analysis. And with this performance you can go really close where you need this power, to the sensors, into the cars, or into the manufacturing places where you not only wannna read the sensors but get real-time analytics out of these sensors. To build a machine like this one you need customers who are really challenging you to the limit. and we're very happy that we had a customer who went on this journey with us, and ultimately jointly with us created this product. So, let's take a look at the video. (suspenseful music) >> My world involves pathfinding both the hardware needs to the various work sites throughout the company, and then finding an appropriate model of desktop, laptop, or workstation to match those needs. My first impressions when I first seen the ThinkPad P1 was I didn't actually believe that we could get everything that I was asked for inside something as small and light in comparison to other mobile workstations. That was one of the I can't believe this is real sort of moments for me. (engine roars) >> Well, it's better than general when you're going around in the wind tunnel, which isn't alway easy, and going on a track is not necessarily the best bet, so having a lightweight very powerful laptop is extremely useful. It can take a Xeon processor, which can support ECC from when we try to load a full car, and when we're analyzing live simulation results. through and RCFT post processor or example. It needs a pretty powerful machine. >> It's come a long way to be able to deliver this. I hate to use the word game changer, but it is that for us. >> Aston Martin has got a lot of different projects going. There's some pretty exciting projects and a pretty versatile range coming out. Having Lenovo as a partner is certainly going to ensure that future. (engine roars) (audience applauds) >> So, don't you think the Aston Martin design and the ThinkPad design fit very well together? (audience laughs) So if Q, would get a new laptop, I think you would get a ThinkPad X P1. So, I want to switch gears a little bit, and go into something in terms of productivity that is not necessarily on top of the mind or every end user but I believe it's on top of the mind of every C-level executive and of every CEO. Security is the number one threat in terms of potential risk in your business and the cost of cybersecurity is estimated by 2020 around six trillion dollars. That's more than the GDP of Japan and we've seen a significant amount of data breach incidents already this years. Now, they're threatening to take companies out of business and that are threatening companies to lose a huge amount of sensitive customer data or internal data. At Lenovo, we are taking security very, very seriously, and we run a very deep analysis, around our own security capabilities in the products that we are building. And we are announcing today a new brand under the Think umbrella that is called ThinkShield. Our goal is to build the world's most secure PC, and ultimately the most secure devices in the industry. And when we looked at this end-to-end, there is no silver bullet around security. You have to go through every aspect where security breaches can potentially happen. That is why we have changed the whole organization, how we look at security in our device business, and really have it grouped under one complete ecosystem of solutions, Security is always something where you constantly are getting challenged with the next potential breach the next potential technology flaw. As we keep innovating and as we keep integrating, a lot of our partners' software and hardware components into our products. So for us, it's really very important that we partner with companies like Intel, Microsoft, Coronet, Absolute, and many others to really as an example to drive full encryption on all the data seamlessly, to have multi-factor authentication to protect your users' identity, to protect you in unsecured Wi-Fi locations, or even simple things like innovation on the device itself, to and an example protect the camera, against usage with a little thing like a thinkShutter that you can shut off the camera. SO what I want to show you here, is this is the full portfolio of ThinkShield that we are announcing today. This is clearly not something I can even read to you today, but I believe it shows you the breadth of security management that we are announcing today. There are four key pillars in managing security end-to-end. The first one is your data, and this has a lot of aspects around the hardware and the software itself. The second is identity. The third is the security around online, and ultimately the device itself. So, there is a breakout on security and ThinkShield today, available in the afternoon, and encourage you to really take a deeper look at this one. The first pillar around productivity was the device, and around the device. The second major pillar that we are seeing in terms of intelligent transformation is the workspace itself. Employees of a new generation have a very different habit how they work. They split their time between travel, working remotely but if they do come in the office, they expect a very different office environment than what they've seen in the past in cubicles or small offices. They come into the office to collaborate, and they want to create ideas, and they really work in cross-functional teams, and they want to do it instantly. And what we've seen is there is a huge amount of investment that companies are doing today in reconfiguring real estate reconfiguring offices. And most of these kind of things are moving to a digital platform. And what we are doing, is we want to build an entire set of solutions that are just focused on making the workspace more productive for remote workforce, and to create technology that allow people to work anywhere and connect instantly. And the core of this is that we need to be, the productivity of the employee as high as possible, and make it for him as easy as possible to use these kind of technologies. Last year in Transform, I announced that we will enter the smart office space. By the end of last year, we brought the first product into the market. It's called the Hub 500. It's already deployed in thousands of our customers, and it's uniquely focused on Microsoft Skype for Business, and making meeting instantly happen. And the product is very successful in the market. What we are announcing today is the next generation of this product, what is the Hub 700, what has a fantastic audio quality. It has far few microphones, and it is usable in small office environment, as well as in major conference rooms, but the most important part of this new announcement is that we are also announcing a software platform, and this software platform allows you to run multiple video conferencing software solutions on the same platform. Many of you may have standardized for one software solution or for another one, but as you are moving in a world of collaborating instantly with partners, customers, suppliers, you always will face multiple software standards in your company, and Lenovo is uniquely positioned but providing a middleware platform for the device to really enable multiple of these UX interfaces. And there's more to come and we will add additional UX interfaces on an ongoing base, based on our customer requirements. But this software does not only help to create a better experience and a higher productivity in the conference room or the huddle room itself. It really will allow you ultimately to manage all your conference rooms in the company in one instance. And you can run AI technologies around how to increase productivity utilization of your entire conference room ecosystem in your company. You will see a lot more devices coming from the node in this space, around intelligent screens, cameras, and so on, and so on. The idea is really that Lenovo will become a core provider in the whole movement into the smart office space. But it's great if you have hardware and software that is really supporting the approach of modern IT, but one component that Kirk also mentioned is absolutely critical, that we are providing this to you in an as a service approach. Get it what you want, when you need it, and pay it in the amount that you're really using it. And within UIT there is also I think a new philosophy around IT management, where you're much more focused on the value that you are consuming instead of investing into technology. We are launched as a service two years back and we already have a significant number of customers running PC as a service, but we believe as a service will stretch far more than just the PC device. It will go into categories like smart office. It might go even into categories like phone, and it will definitely go also in categories like storage and server in terms of capacity management. I want to highlight three offerings that we are also displaying today that are sort of building blocks in terms of how we really run as a service. The first one is that we collaborated intensively over the last year with Microsoft to be the launch pilot for their Autopilot offering, basically deploying images easily in the same approach like you would deploy a new phone on the network. The purpose really is to make new imaging and enabling new PC as seamless as it's used to be in the phone industry, and we have a complete set of offerings, and already a significant number customers have deployed Autopilot with Lenovo. The second major offering is Premier Support, like in the in the server business, where Premier Support is absolutely critical to run critical infrastructure, we see a lot of our customers do want to have Premier Support for their end users, so they can be back into work basically instantly, and that you have the highest possible instant repair on every single device. And then finally we have a significant amount of time invested into understanding how the software as a service really can get into one philosophy. And many of you already are consuming software as a service in many different contracts from many different vendors, but what we've created is one platform that really can manage this all together. All these things are the foundation for a device as a service offering that really can manage this end-to-end. So, implementing an intelligent workplace can be really a daunting prospect depending on where you're starting from, and how big your company ultimately is. But how do you manage the transformation of technology workspace if you're present in 50 or more countries and you run an infrastructure for more than 100,000 people? Michelin, famous for their tires, infamous for their Michelin star restaurant rating, especially in New York, and instantly recognizable by the Michelin Man, has just doing that. Please welcome with me Damon McIntyre from Michelin to talk to us about the challenges and transforming collaboration and productivity. (audience applauding) (electronic dance music) Thank you, David. >> Thank you, thank you very much. >> We on? >> So, how do you feel here? >> Well good, I want to thank you first of all for your partnership and the devices you create that helped us design, manufacture, and distribute the best tire in the world, okay? I just had to say it and put out there, alright. And I was wondering, were those Michelin tires on that Aston Martin? >> I'm pretty sure there is no other tire that would fit to that. >> Yeah, no, thank you, thank you again, and thank you for the introduction. >> So, when we talk about the transformation happening really in the workplace, the most tangible transformation that you actually see is the drastic change that companies are doing physically. They're breaking down walls. They're removing cubes, and they're moving to flexible layouts, new desks, new huddle rooms, open spaces, but the underlying technology for that is clearly not so visible very often. So, tell us about Michelin's strategy, and the technology you are deploying to really enable this corporation. >> So we, so let me give a little bit a history about the company to understand the daunting tasks that we had before us. So we have over 114,000 people in the company under 170 nationalities, okay? If you go to the corporate office in France, it's Clermont. It's about 3,000 executives and directors, and what have you in the marketing, sales, all the way up to the chain of the global CIO, right? Inside of the Americas, we merged in Americas about three years ago. Now we have the Americas zone. There's about 28,000 employees across the Americas, so it's really, it's really hard in a lot of cases. You start looking at the different areas that you lose time, and you lose you know, your productivity and what have you, so there, it's when we looked at different aspects of how we were going to manage the meeting rooms, right? because we have opened up our areas of workspace, our CIO, CEOs in our zones will no longer have an office. They'll sit out in front of everybody else and mingle with the crowd. So, how do you take those spaces that were originally used by an individual but now turn them into like meeting rooms? So, we went through a large process, and looked at the Hub 500, and that really met our needs, because at the end of the day what we noticed was, it was it was just it just worked, okay? We've just added it to the catalog, so we're going to be deploying it very soon, and I just want to again point that I know everybody struggles with this, and if you look at all the minutes that you lose in starting up a meeting, and we know you know what I'm talking about when I say this, it equates to many many many dollars, okay? And so at the end the day, this product helps us to be more efficient in starting up the meeting, and more productive during the meeting. >> Okay, it's very good to hear. Another major trend we are seeing in IT departments is taking a more hands-off approach to hardware. We're seeing new technologies enable IT to create a more efficient model, how IT gets hardware in the hands of end-users, and how they are ultimately supporting themselves. So what's your strategy around the lifecycle management of the devices? >> So yeah you mentioned, again, we'll go back to the 114,000 employees in the company, right? You imagine looking at all the devices we use. I'm not going to get into the number of devices we have, but we have a set number that we use, and we have to go through a process of deploying these devices, which we right now service our own image. We build our images, we service them through our help desk and all that process, and we go through it. If you imagine deploying 25,000 PCs in a year, okay? The time and the daunting task that's behind all that, you can probably add up to 20 or 30 people just full-time doing that, okay? So, with partnering with Lenovo and their excellent technology, their technical teams, and putting together the whole process of how we do imaging, it now lifts that burden off of our folks, and it shifts it into a more automated process through the cloud, okay? And, it's with the Autopilot on the end of the project, we'll have Autopilot fully engaged, but what I really appreciate is how Lenovo really, really kind of got with us, and partnered with us for the whole process. I mean it wasn't just a partner between Michelin and Lenovo. Microsoft was also partnered during that whole process, and it really was a good project that we put together, and we hope to have something in a full production mode next year for sure. >> So, David thank you very, very much to be here with us on stage. What I really want to say, customers like you, who are always challenging us on every single aspect of our capabilities really do make the big difference for us to get better every single day and we really appreciate the partnership. >> Yeah, and I would like to say this is that I am, I'm doing what he's exactly said he just said. I am challenging Lenovo to show us how we can innovate in our work space with your devices, right? That's a challenge, and it's going to be starting up next year for sure. We've done some in the past, but I'm really going to challenge you, and my whole aspect about how to do that is bring you into our workspace. Show you how we make how we go through the process of making tires and all that process, and how we distribute those tires, so you can brainstorm, come back to the table and say, here's a device that can do exactly what you're doing right now, better, more efficient, and save money, so thank you. >> Thank you very much, David. (audience applauding) Well it's sometimes really refreshing to get a very challenging customers feedback. And you know, we will continue to grow this business together, and I'm very confident that your challenge will ultimately help to make our products even more seamless together. So, as we now covered productivity and how we are really improving our devices itself, and the transformation around the workplace, there is one pillar left I want to talk about, and that's really, how do we make businesses smarter than ever? What that really means is, that we are on a journey on trying to understand our customer's business, deeper than ever, understanding our customer's processes even better than ever, and trying to understand how we can help our customers to become more competitive by injecting state-of-the-art technology in this intelligent transformation process, into core processes. But this cannot be done without talking about a fundamental and that is the journey towards 5G. I really believe that 5G is changing everything the way we are operating devices today, because they will be connected in a way like it has never done before. YY talked about you know, 20 times 10 times the amount of performance. There are other studies that talk about even 200 times the performance, how you can use these devices. What it will lead to ultimately is that we will build devices that will be always connected to the cloud. And, we are preparing for this, and Kirk already talked about, and how many operators in the world we already present with our Moto phones, with how many Telcos we are working already on the backend, and we are working on the device side on integrating 5G basically into every single one of our product in the future. One of the areas that will benefit hugely from always connected is the world of virtual reality and augmented reality. And I'm going to pick here one example, and that is that we have created a commercial VR solution for classrooms and education, and basically using consumer type of product like our Mirage Solo with Daydream and put a solution around this one that enables teachers and schools to use these products in the classroom experience. So, students now can have immersive learning. They can studying sciences. They can look at environmental issues. They can exploring their careers, or they can even taking a tour in the next college they're going to go after this one. And no matter what grade level, this is how people will continue to learn in the future. It's quite a departure from the old world of textbooks. In our area that we are looking is IoT, And as YY already elaborated, we are clearly learning from our own processes around how we improve our supply chain and manufacturing and how we improve also retail experience and warehousing, and we are working with some of the largest companies in the world on pilots, on deploying IoT solutions to make their businesses, their processes, and their businesses, you know, more competitive, and some of them you can see in the demo environment. Lenovo itself already is managing 55 million devices in an IoT fashion connecting to our own cloud, and constantly improving the experience by learning from the behavior of these devices in an IoT way, and we are collecting significant amount of data to really improve the performance of these systems and our future generations of products on a ongoing base. We have a very strong partnership with a company called ADLINK from Taiwan that is one of the leading manufacturers of manufacturing PC and hardened devices to create solutions on the IoT platform. The next area that we are very actively investing in is commercial augmented reality. I believe augmented reality has by far more opportunity in commercial than virtual reality, because it has the potential to ultimately improve every single business process of commercial customers. Imagine in the future how complex surgeries can be simplified by basically having real-time augmented reality information about the surgery, by having people connecting into a virtual surgery, and supporting the surgery around the world. Visit a furniture store in the future and see how this furniture looks in your home instantly. Doing some maintenance on some devices yourself by just calling the company and getting an online manual into an augmented reality device. Lenovo is exploring all kinds of possibilities, and you will see a solution very soon from Lenovo. Early when we talked about smart office, I talked about the importance of creating a software platform that really run all these use cases for a smart office. We are creating a similar platform for augmented reality where companies can develop and run all their argumented reality use cases. So you will see that early in 2019 we will announce an augmented reality device, as well as an augmented reality platform. So, I know you're very interested on what exactly we are rolling out, so we will have a first prototype view available there. It's still a codename project on the horizon, and we will announce it ultimately in 2019, but I think it's good for you to take a look what we are doing here. So, I just wanted to give you a peek on what we are working beyond smart office and the device productivity in terms of really how we make businesses smarter. It's really about increasing productivity, providing you the most secure solutions, increase workplace collaboration, increase IT efficiency, using new computing devices and software and services to make business smarter in the future. There's no other company that will enable to offer what we do in commercial. No company has the breadth of commercial devices, software solutions, and the same data center capabilities, and no other company can do more for your intelligent transformation than Lenovo. Thank you very much. (audience applauding) >> Thanks mate, give me that. I need that. Alright, ladies and gentlemen, we are done. So firstly, I've got a couple of little housekeeping pieces at the end of this and then we can go straight into going and experiencing some of the technology we've got on the left-hand side of the room here. So, I want to thank Christian obviously. Christian, awesome as always, some great announcements there. I love the P1. I actually like the Aston Martin a little bit better, but I'll take either if you want to give me one for free. I'll take it. We heard from YY obviously about the industry and how the the fourth Industrial Revolution is impacting us all from a digital transformation perspective, and obviously Kirk on DCG, the great NetApp announcement, which is going to be really exciting, actually that Twitter and some of the social media panels are absolutely going crazy, so it's good to see that the industry is really taking some impact. Some of the publications are really great, so thank you for the media who are obviously in the room publishing right no. But now, I really want to say it's all of your turn. So, all of you up the back there who are having coffee, it's your turn now. I want everyone who's sitting down here after this event move into there, and really take advantage of the 15 breakouts that we've got set there. There are four breakout sessions from a time perspective. I want to try and get you all out there at least to use up three of them and use your fourth one to get out and actually experience some of the technology. So, you've got four breakout sessions. A lot of the breakout sessions are actually done twice. If you have not downloaded the app, please download the app so you can actually see what time things are going on and make sure you're registering correctly. There's a lot of great experience of stuff out there for you to go do. I've got one quick video to show you on some of the technology we've got and then we're about to close. Alright, here we are acting crazy. Now, you can see obviously, artificial intelligence machine learning in the browser. God, I hate that dance, I'm not a Millenial at all. It's effectively going to be implemented by healthcare. I want you to come around and test that out. Look at these two guys. This looks like a Lenovo management meeting to be honest with you. These two guys are actually concentrating, using their brain power to race each others in cars. You got to come past and give that a try. Give that a try obviously. Fantastic event here, lots of technology for you to experience, and great partners that have been involved as well. And so, from a Lenovo perspective, we've had some great alliance partners contribute, including obviously our number one partner, Intel, who's been a really big loyal contributor to us, and been a real part of our success here at Transform. Excellent, so please, you've just seen a little bit of tech out there that you can go and play with. I really want you, I mean go put on those black things, like Scott Hawkins our chief marketing officer from Lenovo's DCG business was doing and racing around this little car with his concentration not using his hands. He said it's really good actually, but as soon as someone comes up to speak to him, his car stops, so you got to try and do better. You got to try and prove if you can multitask or not. Get up there and concentrate and talk at the same time. 62 different breakouts up there. I'm not going to go into too much detai, but you can see we've got a very, very unusual numbering system, 18 to 18.8. I think over here we've got a 4849. There's a 4114. And then up here we've got a 46.1 and a 46.2. So, you need the decoder ring to be able to understand it. Get over there have a lot of fun. Remember the boat leaves today at 4:00 o'clock, right behind us at the pier right behind us here. There's 400 of us registered. Go onto the app and let us know if there's more people coming. It's going to be a great event out there on the Hudson River. Ladies and gentlemen that is the end of your keynote. I want to thank you all for being patient and thank all of our speakers today. Have a great have a great day, thank you very much. (audience applauding) (upbeat music) ♪ Ba da bop bop bop ♪ ♪ Ba da bop bop bop ♪ ♪ Ba da bop bop bop ♪ ♪ Ba da bop bop bop ♪ ♪ Ba da bop bop bop ♪ ♪ Ba da bop bop bop ♪ ♪ Ba da bop bop bop ba do ♪

>> Hey welcome back everybody, Jeff Frick here with theCUBE. We're at Zuora Subscribe 2017 in San Francisco. You know, I go to these events a lot. We love to talk to customers and clients and there's just some customers that are a little bit more personal than others. And this is one here. We're really excited to have Ken Cornick on. He's the co-founder, president and CFO, a busy guy, of Clear or affectionately known as ClearMe. >> ClearMe >> In the twitter-sphere. >> ClearMe.com, that's right. >> Jeff: Ken, great to meet you in person. >> Nice to meet you as well, thanks for your support as a customer. >> As you say, I'm an unabashed happy customer. >> That's great. >> Except when you get the nasty looks from people when they escort you past them all in the security line. >> Well, everybody can be a Clear member if they want. >> Exactly. >> And we give free trials, so they don't have to pay. >> How can you miss? So, where'd you come up with the idea? Just give us a little bit of the history for people that aren't familiar with Clear. >> Actually we don't have a not-invented-here mentality. We actually bought the business out of bankruptcy. >> Oh that's right >> 'Cause it was completely shut down. >> I actually ran into someone the other day at the airport, she said, "I had Clear before and then it went away." And then she was so happy you brought it back. >> Right and for our, we call them, legacy members that were members of the old company, we give their time back for free. So, I shouldn't say free because they paid for it. So, if you had a year remaining when the old company went under, we'll honor that year and you can use Clear for a year without paying and then hopefully you'll continue to pay us as an ongoing customer. >> And what people maybe don't know or are not as familiar with, is it's not just for airports anymore. I was so thrilled, not that long ago, I went to a Giants game at AT&T and I see the ClearMe sign. >> That's right. So we're in eight stadiums across the country with more to come. I live in New York so we have Yankees and Mets which makes me happy. I'm a Yankee fan, my kids are Mets fans so we're covered there. But we're looking to increase the number of places you can use Clear and to increase value, add to our members. So the more you use it, the happier you'll be, and the longer you'll stay with us. >> Right and how do you describe the service? Is it identity as a service? Which is something that just popped into my mind. How do you describe what Clear is all about? >> Funny enough, we do talk about identity as a service not relative to the airport business. The airport business is what we're known for. But really, we bought the business out of bankruptcy and we started it to become a biometric identity platform. Our view is, we want to remove friction. Wherever identity is important, up until now, any time you want to increase security, it diminishes the consumer experience. >> Right. >> So we think, our technology can change all that. We can increase security while making better consumer experiences as you witnessed at the Giants game. >> Or the Orlando airport which is my favorite Clear airport. >> So we are expanding in the airport but we are also looking to expand outside of the airport, even beyond stadiums. So things like, payment applications or it could be healthcare applications, we're building a biometric ecosystem. You've enrolled in Clear once, you can use that enrollment wherever we are. >> God, I can imagine you could integrate with building access points? All these types of things. >> That's exactly right. So there's smart cities, smart cars, all of those applications have biometric angles to them. >> So, good space to be in, good move. >> We think so. >> But we're here at Zuora Subscribe. So you guys chose to have a subscription relationship with your customers. So, why and what are some of the things that have come out of that that you've learned both kind of surprises as well as validations? >> Well, we're big believers in the subscription economy which is the sort of buzz word here. But for us, we want Clear members to not have to think about it. Part of the draw of Clear, is obviously you are saving time in the airport, but it's also the mentality of no stress going to the airport. So I flew out of JFK the other day at a seven AM flight. I live downtown. And I woke up at 5:15 for a seven AM flight, knowing that I could get through JFK, through the Clear lane in five minutes or less. That change in behavior is the true value add, that once our members experience that they love the service. And so, I don't want you to have to think about, well, it's a monthly, am I active am I not active? It's an annual, once a year subscription. You pay it, you don't worry about it again until you renew the year later. >> Yeah that's funny too that you put it in kind of an experience point of view. Because it is the experience. We just had the No-Stress Guy put a thing on the back of your head. Get the Clear card and that'll lower your stress on the way to the airport. >> Absolutely. >> Quite a bit because you just never know what's waiting for you at those security lines. >> You never know and it could be five minutes. It could be 30 minutes. And that uncertainty causes you to carve out a bunch of your time ahead of getting to the airport. You know that you can look at Waze and see what the traffic is. You know you can check online to see what kind of delays there are for your flight. But you just don't know what's going to happen at the security checkpoint. >> Right, right. >> It's the last frontier. >> So, any special, exciting new places that you want to highlight before we have to go? >> Sure so, we started in 2010 with two airports. Denver and Orlando were our first two airports back. We've been growing fairly rapidly. And we're about to open our 22nd airport in about a week to 10 days and that's Los Angeles which is a huge airport. >> Male: Oh, you're not at Los Angeles. >> We are not at Los Angeles yet. So that is a big piece of the network for us and especially if your in Bay Area base, really, really important. >> Right, how many terminals do you have to go? 'Cause you guys do it kind of terminal by terminal right? >> Yeah, we're going to be ubiquitous in L.A., besides the international terminal, we're going to be in seven check-points I believe. It's a very big operation, a big undertaking. >> Alright, well Ken like I say, I'm an unabashed fan so I won't pretend to be bias at all. Love the service. >> Great, thank you so much. >> And congratulations and again, great opportunities to go way beyond the airport. >> Thanks for hosting me. >> Alright my pleasure, Ken Cornick, I'm Jeff Frick. He's from ClearMe, I'm from theCUBE. Thanks for watching.

>>Fly from Houston, Texas. It's the cube covering Grace Hopper celebration of women in computing. >>Welcome back to the cubes coverage of the Grace Hopper conference here in Houston, Texas. I am your host, Rebecca Knight. We have a great panel today. Uh, three distinguished guests, Jeanette Epps, an aerospace astronaut. Uh, an engineer at NASA, Mimi Valdez, a executive producer on the film, hidden figures and Christina DOJ who is a, I want to call her a rocket scientist. She will not let me, she's an electrical engineer at, at, at NASA. Thank you so much for joining me. Hey Jeanette. I want to start with you. Um, recently president Obama has said we're gonna put men on Mars, men and women, men and women on Mars. How realistic is that? I mean, it's exciting for the, for the rest of us, non astronauts to hear this is, is it realistic? >>It is realistic. And one of the things I love that he, he did that was that it gives a national initiative to go back to Mars. And so that means that people will get more involved in STEM careers, especially girls will get more involved. And it's kinda like, you know what JFK did back in the 60s to give us that push a goal, an end goal to do something. Great. >>And do you think that, you know, he said by 2030, it's not very long from now. I mean, is it going to happen? I mean, what's, >>well right now a witness is working on is we have the NASA Orion program and it's a, uh, a power light capsule that will be launched off of one of the largest rockets bigger than the Saturn five or as big. And so that the mission of NASA, Orion is to take us beyond low earth orbit and go deeper into space. So we're looking at NASA, Orion, potentially maybe being the ship that will go to Mars and you know, maybe we have more work to do, but all of getting the nation onboard with going to Mars will inspire a new generation to do great things that will help us to get to Mars. Even >>Obama has said he loves science as a kid. That was his favorite subject in school. And do you think that it will have this galvanizing effect of, as you said, making sure more little boys and girls are studying STEM? >>Well, I've seen it already with some of the tweets and different things, questions that kids ask me nowadays. I think every kid has in their heart this goal to go to Mars now. And um, I can't go to a conference or anywhere without, uh, some young child asking about Mars and what, what are, how are we going to get there? When are we going to get there? And you know, I think one of my jobs is to inspire them to get involved in STEM and help us to get to Mars. There's a lot of technology that we need to develop and produce so that we can get astronauts to live longer away from the earth surface. We have the propulsion system that can get them there faster and bring them back home long. Will it take, well, it depends on the propulsion system that we developed. So there's a number of things that we're working on to make sure that what president Obama has said will get us to Mars in the 2030s if it's pushed out to a little later, that's fine. We're working on it and we're, we're going forward with them. >>Mimi, I want to talk to you now about the film hidden figures. Uh, we'll be out in some theaters and Christmas wide release in January. It is the story of black women mathematicians working in the 1960s at NASA. How did you find out about this story? Well, I give credits at Donna gelato, one of the producers on the film who optioned the book when it was a book proposal. So before the book was even written, she optioned this the story, and it's just this amazing story that the world doesn't even know about. We all know about John Glenn's mission. He came back a national hero. It was a moment in history that galvanized the world. You know, America winning the space race. But we don't know the story of all these brilliant mathematicians, all these women who actually will really responsible Katherine Johnson specifically who hand calculated those numbers for his cause. >>Everybody, I mean, I think this is such an amazing thing to do. And, and again, we just don't know her story. And as well as Dorothy Vaughn and Mary Jackson, I mean, so many women that worked at NASA that were just, um, they were hidden. You just don't know their stories. So, so the film tells their story, it tells their, um, it tells what they did, how they helped John Glenn. Did John Glenn appreciate that John Glenn actually would not go into space unless Katherine double checked the numbers. Like he wanted her to actually, you know, he, he, he trusted her because this is when the IBM computers were first coming into NASA. So they had started asserted use that and he was like, Hmm, I, I need Catherine to check the numbers before I go into say they were friends, professional colleagues. I mean he just knew who, you know, obviously she, she was really responsible and sort of that whole mission. >>And, and you know, for him it was just sort of like, eh, these computers thing, this was like a new thing at NASA. He's like, I need a human to make sure that these numbers are right. Right. Yeah. So we're excited about the film. Who's in it? Taraji P Henson plays captain Johnson. Octavia Spencer, please. I'm Dorothy Vaughan and Janell Monae. Um, she's a, uh, a musician. This is sort of her first really big role and she plays Mary Jackson. Kevin Costner is the head of the space station. Um, we have really great actors, but I think what was really important to everyone who participated in the film was everyone understood the importance of the story and wanting to make sure that we got it right. And also, you know, movies are supposed to be entertaining, but when they can be also inspirational and educate in some way, the fact that some young girls somewhere may see this movie and decide to pursue a career in math or science or any of the STEM careers is really gratifying to us because that's what we would love to accomplish. >>You know, Christina, you have been at NASA for nine years. Uh, tell me about your style, how you got, how you got to NASA in the first place. So I've always loved space since I was like a young child. I was in fifth grade when I told my parents that I wanted to work for NASA. So really since that point, like that was, you know, my dream. And so I, you know, pursued the math and science. Those were some of my favorite subjects. Um, luckily I had some supportive parents who really like saw that desire in me and kind of nurtured and encouraged me to, Hey, if that's what you want to do, then you go for it. We'll do whatever we can. Um, and then I came across some NASA opportunities in high school. Um, and one of the programs was the high school aerospace scholars program. >>And in that program I kinda got a glimpse into what it was like to be an engineer, to work at NASA. I got to speak with, you know, fight directors and um, flight controllers. And there's so many people who contribute to the space program. And that experience really solidified my desire to pursue STEM, STEM. Um, so I started to electrical engineering and then from there, um, you know, did the internship at NASA and I've enjoyed my career so far. It's been a, it's been a great experience. And so you work on the jet propulsion system of spaceships. Um, I work Lena. Um, I work on the power systems power systems. So you are, what do you do? So, um, as an electrical engineer on power systems, I work on the design of the power system testing. Um, basically everything on the spacecraft is going to need power. >>So I'm responsible for how I need to provide power, how much, um, when we talk about going to Mars, that's a, that's a long duration mission and power is something that, um, you have to budget for. So we need to advance that technology to support these missions that, um, our administration has said we want to go there. How are y'all going to accomplish this? So there's a lot of um, design hands on work and it's, you know, it's a challenge. But I mean, together as a team, we can, I believe that will, you know, meet that goal and be able to deliver a power system that will take us to Mars. So this is a question for rip for really all of you. You're an astronaut, you were working at NASA, you just made a movie to encourage young women to, to, to, to get into the STEM field. Why is it NASA recruiting here at, at, at Grace Hopper and, and should it be, do not, do you want to take this? >>Well, that's a good question. It's not that I'm mass and I don't, it's not that I don't think NASA has a desire to recruit here. I think there's recruiting times where people come out and do that. But I think I'm, one of the things that we do in the astronaut Corps, we try to go out and attend conferences like that and try to inspire students to be interested in NASA to understand what NASA is doing, to understand, you know, the shuttle retired. But we're still flying. In fact, when I fly to space and hopefully in 2018 I'll fly with the Russians. But in the meantime, NASA's building two shadows that would take astronauts to the international space station and NASA, Orion, that'll take us deeper into space. So we want to try to inspire with our stories and get people interested in science, technology, engineering, mathematics, and now even the arts, the arts play a big part of this. The arts play a big part of the well, yeah, I think I'm as a scientist and looking at patterns and things like that, there's a lot of um, people who, um, begin to work in the arts, even if it's building things with their hands and making, sculpting things, painting things. And so there's a lot of artwork that comes into play in science that is >>really refreshing, exciting, count, counterintuitive. I mean, what would you say are the ways we've talked about getting them, getting them interested through, through film. Um, talking about, uh, Obama making this, this grand announcement and Treme, what are some other ways that we can get the next generation into this field? Well, representation is obviously important. I think when people get to see images in the media of these different fields and all the possibilities, I mean every kid on this planet is obsessed with their phone, maybe not realizing like the importance of these STEM careers that are making these phones even possible or even exist. And I think the more that we can expose these careers and all these possibilities, I think it will just be just more beneficial just for humanity in general. I mean, as we know, nothing in this world can exist without math. >>Nothing. So the more that we can sort of encourage young people to see what an incredible career this is in all the possibilities that go into it, I just think we'll be better off as a nation and as a, you know, just globally as a world. Jeanette, I mean, do you have any thoughts about how, what you would advise someone? I mean you started at NASA nine years ago. So I mean, as an engineer I feel like, I mean I am making some contribution, but really the way I feel like I have more impact is through mentoring and you know, participating in those outreach type of activities for, uh, younger students like K through 12. And then also, um, you know, undergraduate like where they're really like trying to figure out what are the career options and STEM. And so that's how I feel I can have an impact there. >>And these movies help because there's a surge of like, like it's inspirational for young students to see this and be like, Oh, I never knew that that was an option. And so we get outreached to NASA, um, our request to, you know, interact with, uh, local schools and communities and kind of, um, you know, do all my lessons or just teaching with them, just talking about kind of like what the career is like. So, um, I mean I hoping that I can contribute in that way for younger, younger people. Janette are, you are an impressive astronaut, but you are also known as a black woman astronaut. Yeah. D do you do, do you bristle at that or do you embrace it? What, what do you, how, what's the responsibility? >>Oh, I totally embrace it. You know, I'm young ladies always ask me, did you have a problem being a black woman and engineering? And I always tell them that, um, I don't have a problem with being a black woman. And if other people do, then that's their problem. I totally embrace it because I'm, one of the things that I didn't realize was that, um, there's still a need to have positive role models and images of yourself. You know, growing up, my mom never taught my twin sister and I that you couldn't do something because you are a female or Brown. But there are a lot of young ladies that actually do experience that. And so having a positive roam out of it, show them that, Hey look, if I can do this, you can do this too. There's no reason you shouldn't be doing this right now yourself. >>So you are a role model. And how do you then also make sure that it's active role modeling and not just sort of standing on a pedestal of. >>One of the things I like to do is like Catherine Johnson and these great ladies that, you know, without them I, you know, I wouldn't be here is you have to do well and you have to perform well. You have to do the same work that your colleagues are doing and don't do less and don't accept less either. And when it comes to the hard work, put in the time, do the work, complete the tasks and make sure you're, you're representing yourself and your group well and you don't want to be accounted as well. You know, she's the one that we've got to help and we've got to do this, but you want to be a contributing member to every group that you're a part of and completing the tasks, doing the same work if not better. I like to say do better work, but you know, you want to be a part of the. >>Yeah. But that puts so much pressure too because it is, it's, it's be a contributor, but also don't mess up because you are under a microscope to some degree because those are, >>you know, messing up isn't, isn't. Um, failure is never, um, should never be. If it's unintentional, that's okay because you always learn from your mistakes and you have to forgive yourself and keep moving forward. If you stop right there because of a failure, um, you wouldn't go anywhere. We all fell. And it's how you respond to it. That matters. >>Yeah. Every failure is an opportunity to learn. And I think, um, you know, yeah. You can't be scared. I mean, the first and foremost is just doing a good job that, cause once, if you're just dedicated and focused on that, then I think great things can happen. And then failure is really a, a buzzword in Silicon Valley too. Right now. It's a fail fast. Um, and this idea, as you were talking about that it's your response to failure that makes a difference. Yeah. And NASA, I became familiar with this famous phrase of failing forward, meaning that yes, you're going to encounter problems, but if you are learning from the, if you're making improvements, you can design something better. So we call it failing forward. And that concept has, I've embraced that comset and it's, you know, I've encountered many failures. I mean, designing new hardware. It's not gonna, you know, work right off the box. And I'm kind of embracing that idea that it's a learning experience. As long as you don't give up as if you're applying what you learned, then that is not a failure. Christina, this is great. Christina DOJ, Mimi Valdez, Jeanette Epps. Thank you so much for joining us today. This has been such a having to be here. I'm not worthy. Thank you. This has been Rebecca Knight live coverage of the Grace Hopper conference here in Houston, Texas. We'll be back after this break.