from the cube studios in Palo Alto in Boston connecting with thought leaders all around the world this is a cube conversation hi buddy welcome this special digital presentation where we're covering the topic of data ops and specifically how IBM is really operationalizing and automating the data pipeline with data ops and with me is Interpol Bhandari who is the global chief data officer at IBM in Nepal has always great to see you thanks for coming on my pleasure you know the standard throw away question from guys like me is you know what keeps the chief data officer up at night well I know what's keeping you up at night it's kovat 19 how are you doing it's keeping keeping all of us yeah for sure so how you guys making out as a leader I'm interested in you know how you have responded with whether it's you know communications obviously you're doing much more stuff you know remotely you're not on airplanes certainly like you used to be but but what was your first move when you actually realized this was going to require a shift well I think one of the first things that I did was to test the ability of my organization who worked remotely this was well before the the recommendations came in from the government but just so that we wanted you know to be sure that this is something that we could pull off if there were extreme circumstances where even everybody was good and so that was one of the first things we did along with that I think another major activity that we embarked on is even that we had created this central data and AI platform for IBM using our hybrid multi cloud approach how could that be adapting very very quickly you helped with the covert situation but those were the two big items that my team embarked on very quickly and again like I said this is well before there was any recommendations from the government or even internally within IBM any recommendations but B we decided that we wanted to run ahead and make sure that we were ready to ready to operate in that fashion and I believe a lot of my colleagues did the same yeah there's a there's a conversation going on right now just around productivity hits that people may be taking because they really weren't prepared it sounds like you're pretty comfortable with the productivity impact that you're achieving oh I'm totally comfortable with the productivity in fact I will tell you that while we've gone down this spot we've realized that in some cases the productivity is actually going to be better when people are working from home and they're able to focus a lot more on the work aspect you know and this could this runs the gamut from the nature of the job where you know somebody who basically needs to be in the front of a computer and is remotely taking care of operations you know if they don't have to come in their productivity is gonna go up somebody like myself who had a long drive into work you know which I would use on phone calls but now that entire time is can be used a lot more productivity but not maybe in a lot more productive manner so there is a we realize that that there's going to be some aspects of productivity that will actually be helped by the situation provided you're able to deliver the services that you deliver with the same level of quality and satisfaction that you've always done now there were certain other aspects where you know productivity is going to be affected so you know my team there's a lot of whiteboarding that gets done there are lots of informal conversations that spark creativity but those things are much harder to replicate in a remote in life so we've got a sense of you know where we have to do some work what things together versus where we were actually going to be more productive but all in all they are very comfortable that we can pull this off no that's great I want to stay on Kovac for a moment and in the context of just data and data ops and you know why now obviously with a crisis like this it increases the imperative to really have your data act together but I want to ask you both specifically as it relates to Co vid why data ops is so important and then just generally why at this this point in our time so I mean you know the journey we've been on they you know when I joined our data strategy centered around the cloud data and AI mainly because IBM's business strategy was around that and because there wasn't the notion of ái in enterprise right there was everybody understood what AI means for the consumer but for the enterprise people don't really understand what it meant so our data strategy became one of actually making IBM itself into an AI and a BA and then using that as a showcase for our clients and customers who look a lot like us to make them into a eye on the prize and in a nutshell what that translated to was that one had to in few AI into the workflow of the key business processes of enterprise so if you think about that workflow is very demanding why do you have to be able to deliver data and insights on time just when it's needed otherwise you can essentially slow down the whole workflow of a major process with but to be able to pull all that off you need to have your own data very very streamlined so that a lot of it is automated and you're able to deliver those insights as the people who are involved in the workflow needed so we've spent a lot of time while we were making IBM into an AI enterprise and infusing AI into our keepers and thus processes into essentially a data ops pipeline that was very very streamlined which then allowed us to very quickly adapt to the covert 19 situation and I'll give you one specific example that we'll go to you know how one would say one could essentially leverage that capability that I just talked about to do this so one of the key business processes that we had taken aim at was our supply chain you know we're a global company and our supply chain is critical we have lots of suppliers and they are all over the globe and we have different types of products so that you know it has a multiplicative fact is we go from each of those you have other additional suppliers and you have events you have other events you have calamities you have political events so we have to be able to very quickly understand the risk associated with any of those events with regard to our supply chain and make appropriate adjustments on the fly so that was one of the key applications that we built on our central data and the Aqua and as part of a data ops pipeline that meant he ingested the ingestion of the several hundred sources of data had to be blazingly fast and also refreshed very very quickly also we had to then aggregate data from the outside from external sources that had to do with weather related events that had to do with political events social media feeds etcetera and overlay that on top of our map of interest with regard to our supply chain sites and also where they were supposed to deliver we'd also weaved in our capabilities here to track those shipments as they flowed and have that data flow back as well so that we would know exactly where where things were this is only possible because we had a streamlined data ops capability and we had built this central data Nai platform for IBM now you flip over to the covert 19 situation when go with 19 you know emerged and we began to realize that this was going to be a significant significant pandemic what we were able to do very quickly was to overlay the Kovach 19 incidents on top of our sites of interest as well as pick up what was being reported about those sites of interest and provide that over to our business continuity so this became an immediate exercise that we embarked but it wouldn't have been possible if you didn't have the foundation of the data ops pipeline as well as that central data Nai platform in place to help you do that very very quickly and adapt so so what I really like about this story and something that I want to drill into is it essentially a lot of organizations have a real tough time operationalizing AI and fusing it to use your word and the fact that you're doing it is really a good proof point that I want to explore a little bit so you're essentially there was a number of aspects of what you just described there was the data quality piece with your data quality in theory anyway is gonna go up with more data if you can handle it and the other was speed time to insight so you can respond more quickly if it's think about this Kovan situation if your days behind or weeks behind which is not uncommon you know sometimes even worse you just can't respond I mean these things change daily sometimes certainly within the day so is that right that's kind of the the business outcome and objective that you guys were after yes you know so trauma from an infused AI into your business processes by the overarching outcome metric that one focuses on is end to end cycle so you take that process the end-to-end process and you're trying to reduce the end-to-end cycle time by you know several factors several orders of magnitude we did for instance in my organization that have to do with the generation of metadata is data about data and that's usually a very time-consuming process and we've reduced that by over 95% by using AI you actually help in the metadata generation itself and that's applied now across the board for many different business processes that you know iBM has that's the same kind of principle that was you you'll be able to do that so that foundation essentially enables you to go after that cycle time reduction right off the bat so when you get to a situation like of open 19 situation which demands urgent action your foundation is already geared to deliver on that so I think actually we might have a graphic and then the second graphic guys if you bring up this second one I think this is Interpol what you're talking about here that sort of 95 percent reduction guys if you could bring that up would take a look at it so this is maybe not a co vid use case yeah here it is so that 95 percent reduction in in cycle time improving and data quality what we talked about there's actually some productivity metrics right this is what you're talking about here in this metadata example correct yeah yes the middle do that right it's so central to everything that one does with data I mean it's basically data about data and this is really the business metadata that we're talking about which is once you have data in your data Lee if you don't have business metadata describing what that data is then it's very hard for people who are trying to do things to determine whether they can even whether they even have access to the right data and typically this process has been done manually because somebody looks at the data they looks at the fields and they describe it and it could easily take months and what we did was we essentially use a deep learning and a natural language processing approach looked at all the data that we've had historically over an idea and we've automated the metadata generation so whether it was you know you were talking about both the data relevant for probit team or for supply chain or for a receivable process any one of our business processes this is one of those fundamental steps that one must go through to be able to get your data ready for action and if you were able to take that cycle time for that step and reduce it by 95% you can imagine the acceleration yeah and I liked it we were saying before you talk about the end to end a concept you're applying system thinking here which is very very important because you know a lot of a lot of points that I talked you'll they'll be they're so focused on one metric may be optimizing one component of that end to end but it's really the overall outcome that you're trying to achieve you you may sometimes you know be optimizing one piece but not the whole so that systems thinking is is very very important isn't it the system's thinking is extremely important overall no matter you know where you're involved in the process of designing the system but if you're the data guy it's incredibly important because not only does that give you an insight into the cycle time reduction but it also gives it clues you in into what standardization is necessary in the data so that you're able to support an eventual out you know a lot of people will go down the path of data governance and creation of data standard and you can easily boil the ocean trying to do that but if you actually start with an end-to-end view of your key processes and that by extension the outcomes associated with those processes as well as the user experience at the end of those processes and kind of then work backwards as to what are the standards that you need for the data that's going to feed into all that that's how you arrive at you know a viable practical data standards effort that you can essentially push forward with so there's there are multiple aspects when you take that end-to-end system you that helps the chief later one of the other tenets of data ops is really the ability across the organization for everybody to have visibility communications it's very key we've got another graphic that I want to show around the organizational you know in the right regime and this is a complicated situation for a lot of people but it's imperative guys if you bring up the first graphic it's imperative that organizations you know fine bring in the right stakeholders and actually identify those individuals that are going to participate so that there's full visibility everybody understands what their their roles are they're not in in silos so a guys if you could show us that first graphic that would be great but talk about the organization and the right regime they're Interpol yes yes I believe you're going to what you're gonna show up is actually my organization but I think it's yes it's very very illustrative of what one has to set up to be able to pull off the kind of impact you know so let's say we talked about that central data and AI platform that's driving the entire enterprise and you're infusing AI into key business processes like the supply chain you then create applications like the operational risk insights that we talked about and then extend it over to a faster merging and changing situation like the overt nineteen you need an organization that obviously reflects the technical aspects of the plan right so you have to have the data engineering arm and in my case there's a lot of emphasis around because that's one of those skill set areas that's really quite rare and but also very very powerful so they're the major technology arms of that there's also the governance arm that I talked about where you have to produce a set of standards and implement them and enforce them so that you're able to make this end-to-end impact but then there's also there's a there's an adoption where there's a there's a group that reports in to me very very you know empowered which essentially has to convince the rest of the organization to adopt but the key to their success has been in power in the sense that they are empowered to find like-minded individuals in our key business processes who are also empowered and if they agree they just move forward and go ahead and do it because you know we've already provided the central capabilities by central I don't mean they're all in one location we're completely global and you know it's it's it's a hybrid multi-cloud set up but it's central in the sense that it's one source to come for for trusted data as well as the expertise that you need from an AI standpoint to be able to move forward and deliver the business outcome so when these business schemes come together with the adoption that's where the magic hand so that's another another aspect of the organization that's critical and then we've also got a data officer council that I chair and that has to do with the people who are the chief data officer z' of the individual business units that we have and they're kind of my extended team into the rest of the organization and we leverage that bolt from a adoption of the platform standpoint but also in terms of defining and enforcing standard it helps us do want to come back the Ovid talked a little bit about business resiliency people I think you've probably seen the news that IBM's you know providing super computer resources to the government to fight coronavirus you've also just announced that some some RTP folks are helping first responders and nonprofits and providing capabilities for no charge which is awesome I mean it's the kind of thing look I'm sensitive the companies like IBM you know you don't want to appear to be ambulance-chasing in these times however IBM and other big tech companies you're in a position to help and that's what you're doing here so maybe you could talk a little bit about what you're doing in this regard and then we'll tie it up with just business resiliency and the importance of data right right so you know I'd explained the operational risk insights application that we had which we were using internally and be covert nineteen even be using it we were using it primarily to assess the risk to our supply chain from various events and then essentially react very very quickly to those through those events so you could manage the situation well we realize that this is something that you know several non government NGOs that big they could essentially use the ability because they have to manage many of these situations like natural disasters and so we've given that same capability to the NGOs to you and to help them to help them streamline their planning and their thinking by the same token but you talked about Oh with nineteen that same capability with the poet mine team data overlaid on top of them essentially becomes a business continuity planning and resilience because let's say I'm a supply chambers right now I can look the incidence of probe ignite and I can and I know where my suppliers are and I can see the incidence and I can say oh yes know this supplier and I can see that the incidence is going up this is likely to be affected let me move ahead and start making plans backup plans just in case it reaches a crisis level then on the other hand if you're somebody in our revenue planning you know on the finance side and you know where your keep clients and customers are located again by having that information overlaid with those sites you can make your own judgments and you can make your own assessment to do that so that's how it translates over into a business continuity and resilient resilience planning - we are internally doing that now - every department you know that's something that we are actually providing them this capability because we could build rapidly on what we had already done and to be able to do that and then as we get inside into what each of those departments do with that data because you know once they see that data once they overlay it to their sites of interest and this is you know anybody and everybody in IBM because no matter what department they're in there are going to be sites of interest that are going to be affected and they have an understanding of what those sites of interest mean in the context of the planning that they're doing and so they'll be able to make judgments but as we gain a better understanding of that we will automate those capabilities more and more for each of those specific areas and now you're talking about a comprehensive approach an AI approach to business continuity and resilience planning in the context of a large complicated organization like IBM which obviously will be of great interest to enterprise clients and customers right one of the things that we're researching now is trying to understand you know what about this crisis is gonna be permanent some things won't be but but we think many things will be there's a lot of learnings do you think that organizations will rethink business resiliency in this context that they might sub optimize profitability for example to be more prepared for crises like this with better business resiliency and what role would data play in that so no it's a very good question and timely question Dave so I mean clearly people have understood that with regard to such a pandemic the first line of beef right is it is it's not going to be so much on the medicine side because the vaccine is not even we won't be available for a period of time it has to go to development so the first line of defense is actually to take a quarantine like a pro like we've seen play out across the world and then that in effect results in an impact on the businesses right in the economic climate and the businesses there's an impact I think people have realized this now they will obviously factor this in into their into how they do business will become one of those things from if this is time talking about how this becomes permanent I think it's going to become one of those things that if you're a responsible enterprise you are going to be planning for you're going to know how to implement this on the second go-around so obviously you put those frameworks and structures in place and there will be a certain cost associated with them and one could argue that that could eat into the profitability on the other hand what I would say is because these two points really that these are fast emerging fluid situations you have to respond very very quickly to those you will end up laying out a foundation pretty much like we did which enables you to really accelerate your pipeline right so the data ops pipelines we talked about there there's a lot of automation so that you can react very quickly you know data ingestion very very rapidly that you're able to you know do that kind of thing the metadata generation just the entire pipeline that we're talking about that you're able to respond and very quickly bring in new data and then aggregated at the right levels infuse it into the workflows and then deliver it to the right people at the right time I will you know that will become a must now but once you do that you could argue that there is a cost associated with doing that but we know that the cycle time reductions on things like that they can run you know I mean I gave you the example of 95 percent you know on average we see like a 70% end to end cycle time era where we've implemented the approach that's been pretty pervasive with an idea across a business process so that in a sense in in essence then actually becomes a driver for profitability so yes it might you know this might back people into doing that but I would argue that that's probably something that's going to be very good long term for the enterprises involved and they'll be able to leverage that in their in their business and I think that just the competitive pressure of having to do that will force everybody down that path mean but I think it'll be eventually a good that end and cycle time compression is huge and I like what you're saying because it's it's not just a reduction in the expected loss during a crisis there's other residual benefits to the organization Interpol thanks so much for coming on the cube and sharing this really interesting and deep case study I know there's a lot more information out there so really appreciate your time all right take care buddy thanks for watching and this is Dave Allante for the cube and we will see you next time [Music]

from the cube studios in Palo Alto in Boston connecting with thought leaders all around the world this is a cube conversation as we've been reporting the Koba 19 pandemic has created a bifurcated IT spending picture and over the last several weeks we've reported both on the macro and even some come at it from from a vendor and a sector view I mean for example we've reported on some of the companies that have really continued to thrive we look at the NASDAQ and its you know near at all-time highs companies like oh and in CrowdStrike we've reported on snowflake uipath the sectors are PA some of the analytic databases around AI maybe even to a lesser extent cloud but still has a lot of tailwind relative to some of those on-prem infrastructure plays even companies like Cisco bifurcated in and of themselves where you see this Meraki side of the house you know doing quite well the work from home stuff but maybe some of the traditional networking not as much well now what if you flip that to really try to understand what's going on with the shape of the recovery which is the main narrative right now is it a v-shape does it a u-shape what is what's that what do people expect and now you understand that you really have to look at different industries because different industries are going to come back at a different pace with me again is Sagar khadiyah who's the director of research at EGR Sagar you guys are all over this as usual timely information it's great to see you again hope all is well in New York City thanks so much David it's a pleasure to be back on again yeah so where are we in the cycle we give dividend a great job and very timely ETR was the first to really put out data on the koban impact with the survey that ran from mid-march to to mid-april and now everybody's attention sagar is focused on okay we're starting to come back stores are starting to open people are beginning to to go out again and everybody wants to know what the shape of the recovery looks like so where are we actually in that research cycle for you guys yeah no problem so like you said you know in that kind of march/april timeframe we really want to go out there and get an idea of what we're doing the budget impacts you know as it relates to IT because of kovat 19 right so we kind of ended off there around a decline of 5% and coming into the year the consensus was of growth of 4 or 5% right so we saw about a 900,000 basis points wing you know to the negative side and the public covered in March and April were you know which sectors and vendors were going to benefit as a result of work from home and so now as we kind of fast forward to the research cycle as we kind of go more into May and into the summer rather than asking those exact same question to get again because it's just been you know maybe 40 or 50 days we really want Singh on the recovery type as well as kind of more emerging private vendors right we want to understand what's gonna be the impact on on these vendors that typically rely on you know larger conferences more in-person meetings because these are younger technologies there's not a lot of information about them and so last Thursday we launched our biannual emerging technology study it covers roughly 300 private emerging technologies across maybe 60 sectors of technology and in tandem we've launched a co-ed flash poll right what we wanted to do was kind of twofold one really understand from CIOs the recovery type they had in mind as well as if they were seeing any any kind of permanent changes in their IT stacks IT spend because of koban 19 and so if we kind of look at the first chart here and kind of get more into that first question around recovery type what we asked CIOs and this kind of COBIT flash poll again we did it last Thursday was what type of recovery are you expecting is it v-shaped so kind of a brief decline you know maybe one quarter and then you're gonna start seeing growth in 2 to H 20 is it you shaped so two to three quarters of a decline or deceleration revenue and you're kind of forecasting that growth in revenue as an organization to come back in 2021 is it l-shaped right so maybe three four five quarters of a decline or deceleration and then you know very minimal to moderate growth or none of the above you know your organization is actually benefiting from from from koban 19 as you know we've seen some many reports so those are kind of the options that we gave CIOs and you kind of see it on that first chart here interesting and this is a survey a flash service 700 CIOs or approximately and the interesting thing I really want to point out here is this you know the koban pandemic was it didn't suppress you know all companies you know and in the return it's not going to be a rising tide lifts all ships you really got to do your research you have to understand the different sectors really try to peel back the onion skin and understand why there's certain momentum how certain organizations are accommodating the work from home we heard you know several weeks ago how there's a major change in in networking mindsets we're talking about how security is changing we're going to talk about some of the permanence but it's really really important to try to understand these different trends by different industries which you're going to talk about in a minute but if you take a look at this slide I mean obviously most people expect this u-shaped decline I mean a you know a u-shaped recovery rather so it's two or three quarters followed by some growth next year but as we'll see some of these industries are gonna really go deeper with an l-shape recovery and then it's really interesting that a pretty large and substantial portion see this as a tailwind presumably those with you know strong SAS models some annual recurring revenue models your thoughts if we kind of star on this kind of aggregate chart you know you're looking at about forty four percent of CIOs anticipated u-shaped recovery right that's the largest bucket and then you can see another 15 percent and to say an l-shape recovery 14 on the v-shaped and then 16 percent to your point that are kind of seeing this this tailwind but if we kind of focus on that largest bucket that you shaped you know one of the thing to remember and again when we asked is two CIOs within the within this kind of coded flash poll we also asked can you give us some commentary and so one of the things that or one of the themes that are kind of coming along with this u-shaped recovery is you know CIOs are cautiously optimistic about this u-shaped recovery you know they believe that they can get back on to a growth cycle into 2021 as long as there's a vaccine available we don't go into a second wave of lockdowns economic activity picks up a lot of the government actions you know become effective so there are some kind of let's call it qualifiers with this bucket of CIOs that are anticipating a u-shape recovery what they're saying is that look we are expecting these things to happen we're not expecting that our lock down we are expecting a vaccine and if that takes place then we do expect an uptick in growth or going back to kind of pre coded levels in in 2021 but you know I think it's fair to assume that if one or more of these are apps and and things do get worse as all these states are opening up maybe the recovery cycle gets pushed along so kind of at the aggregate this is where we are right now yeah so as I was saying and you really have to understand the different not only different sectors and all the different vendors but you got to look into the industries and then even within industries so if we pull up the next chart we have the industry to the breakdown and sort of the responses by the industries v-shape you shape or shape I had a conversation with a CIO of a major resort just the other day and even he was saying what was actually I'll tell you it was Windham Resorts public company I mean and obviously that business got a good crush they had their earnings call the other day they talked about how they cut their capex in half but the stock sagar since the March lows is more than doubled yeah and you know that's amazing and now but even there within that sector they're peeling that on you're saying well certain parts are going to come back sooner or certain parts are going to longer depending on you know what type of resort what type of hotel so it really is a complicated situation so take us through what you're seeing by industry sure so let's start with kind of the IT telco retail consumer space Dave to your point there's gonna be a tremendous amount of bifurcation within both of those verticals look if we start on the IT telco side you know you're seeing a very large bucket of individuals right over twenty percent that indicated they're seeing a tail with our additional revenue because of covin 19 and you know Dave we spoke about this all the way back in March right all these work from home vendors you know CIOs were doubling down on cloud and SAS and we've seen how some of these events have reported in April you know with this very good reports all the major cloud vendors right select security vendors and so that's why you're seeing on the kind of telco side definitely more positivity right as it relates to recovery type right some of them are not even going through recovery they're they're seeing an acceleration same thing on the retail consumer side you're seeing another large bucket of people who are indicating what we've benefited and again there's going to be a lot of bifurcation here there's been a lot of retail consumers you just mentioned with the hotel lines that are definitely hurting but you know if you have a good online presence as a retailer and you know you had essential goods or groceries you benefited and and those are the organizations that we're seeing you know really indicate that they saw an acceleration due to Koga 19 so I thought those two those two verticals between kind of the IT and retail side there was a big bucket or you know of people who indicated positivity so I thought that was kind of the first kind of you know I was talking about kind of peeling this onion back you know that was really interesting you know tech continues to power on and I think you know a lot of people try I think that somebody was saying that the record of the time in which we've developed a fit of vaccine previously was like mumps or something and it was I mean it was just like years but now today 2020 we've got a I we've got all this data you've got these great companies all working on this and so you know wow if we can compress that that's going to change the equation a couple other things sagar that jump out at me here in this chart I want to ask you about I mean the education you know colleges are really you know kind of freaking out right now some are coming back I know like for instance my daughter University Arizona they're coming back in the fall evidently others are saying and no you can clearly see the airlines and transportation as the biggest sort of l-shape which is the most negative I'm sure restaurants and hospitality are kind of similar and then you see energy you know which got crushed we had you know oil you know negative people paying it big barrels of oil but now look at that you know expectation of a pretty strong you know you shape recovery as people start driving again and the economy picks up so maybe you could give us some thoughts on on some of those sort of outliers yeah so I kind of bucket you know the the next two outliers as from an l-shaped in a u-shaped so on the l-shaped side like like you said education airlines transportation and probably to a little bit lesser extent industrials materials manufacturing services consulting these verticals are indicating the highest percentages from an l-shaped recovery right so three plus orders of revenue declines and deceleration followed by kind of you know minimal to moderate growth and look there's no surprise here those are the verticals that have been impacted the most by less demand from consumers and and businesses and then as you mentioned on the energy utility side and then I would probably bucket maybe healthcare Pharma those have some of the largest percentages of u-shaped recovery and it's funny like I read a lot of commentary from some of the energy in the healthcare CIOs and they were said they were very optimistic about a u-shaped type of recovery and so it kind of you know maybe with those two issues then you could even kind of lump them into you know probably to a lesser extent but you could probably open into the prior one with the airlines and the education and services consulting and IMM where you know these are definitely the verticals that are going to see the longest longest recoveries it's probably a little bit more uniform versus what we've kind of talked about a few minutes ago with you know IT and and retail consumer where it's definitely very bifurcated you know there's definitely winners and losers there yeah and again it's a very complicated situation a lot of people that I've talked to are saying look you know we really don't have a clear picture that's why all these companies have are not giving guidance many people however are optimistic not only for a vet a vaccine but but but also they're thinking as young people with disposable income they're gonna kind of say dorm damn the torpedoes I'm not really going to be exposed and you know they can come back much stronger you know there seems to be pent up demand for some of the things like elective surgery or even the weather is sort of more important health care needs so that obviously could be a snap back so you know obviously we're really closely looking at this one thing though is is certain is that people are expecting a permanent change and you've got data that really shows that on the on the next chart that's right so one of the one of the last questions that we asked on this you know quick coded flash poll was do you anticipate permanent changes to your kind of IT stack IT spend based on the last few months you know as everyone has been working remotely and you know rarely do you see results point this much in one direction but 92% of CIOs and and kind of IT you know high level ITN users indicated yes there are going to be permanent changes and you know one of the things we talked about in March and look we were really the first ones you know you know in our discussion where we were talking about work from home spend kind of negating or balancing out all these declines right we were saying look yes we are seeing a lot of budgets come down but surprisingly we're seeing 2030 percent of organizations accelerate spent and even the ones that are spending less they even then you know some of their some of their budgets are kind of being negated by this work from home spend right when you think about collaboration tool is an additional VPN and networking bandwidth in laptops and then security all that stuff CIOs now continue to spend on because what what CIO is now understand as productivity has remained at very high levels right in March CIOs were very with the catastrophe and productivity that has not come true so on the margin CIOs and organizations are probably much more positive on that front and so now because there is no vaccine where you know CIOs and just in general the population we don't know when one is coming and so remote work seems to be the new norm moving forward especially that productivity you know levels are are pretty good with people working from home so from that perspective everything that looked like it was maybe going to be temporary just for the next few months as people work from home that's how organizations are now moving forward well and we saw Twitter basically said we're gonna make work from home permanent that's probably cuz their CEO wants to you know live in Africa Google I think is going to the end of the year I think many companies are going to look at a hybrid and give employees a choice say look if you want to work from home and you can be productive you get your stuff done you know we're cool with that I think the other point is you know everybody talks about these digital transformations you know leading into Kovan and I got to tell you I think a lot of companies were sort of complacent they talked the talk but they weren't walking the walk meaning they really weren't becoming digital businesses they really weren't putting data at the core and I think now it's really becoming an imperative there's no question that that what we've been talking about and forecasting has been pulled forward and you you're either going to have to step up your digital game or you're going to be in big trouble and the other thing that's I'm really interested in is will companies sub optimize profitability in the near term in order to put better business resiliency in place and better flexibility will they make those investments and I think if they do you know longer term they're going to be in better shape you know if they don't they could maybe be okay in the near term but I'm gonna put a caution sign a little longer term no look I think everything that's been done in the last few months you know in terms of having those continuation plans because you know do two pandemics all that stuff that is now it look you got to have that in your playbook right and so to your point you know this is where CIOs are going and if you're not transforming yourself or you didn't or you know lesson learned because now you're probably having to move twice as fast to support all your employees so I think you know this pandemic really kind of sped up you know digital transformation initiatives which is why you know you're seeing some companies desks and cloud related companies with very good earnings reports that are guiding well and then you're seeing other companies that are pulling their guidance because of uncertainty but it's it's likely more on the side of they're just not seeing the same levels of spend because if they haven't oriented themselves on that digital transformation side so I think you know events like this they typically you know Showcase winners and losers then you know when when things are going well and you know everything is kind of going up well I think that - there's a big you know discussion around is the ESPY overvalued right now I won't make that call but I will say this then there's a lot of data out there there's data and earnings reports there's data about this pandemic which change continues to change maybe not so much daily but you're getting new information multiple times a week so you got to look to that data you got to make your call pick your spot so you talk about a stock pickers market I think it's very much true here there are some some gonna be really strong companies emerging out of this you know don't gamble but do your research and I think you'll you'll find some you know some Dems out there you know maybe Warren Buffett can't find them okay but the guys at Main Street I think you know the I am I'm optimistic I wonder how you feel about about the recovery I I think we may be tainted by tech you know I'm very much concerned about certain industries but I think the tech industry which is our business is gonna come out of this pretty strong yeah we look at the one thing we we should we should have stated this earlier the majority of organizations are not expecting a v-shaped recovery and yet I still think there's part of the consensus is expecting a v-shaped recovery you can see as we demonstrate in some of the earlier charts the you know almost the majority of organizations are expecting a u-shaped recovery and even then as we mentioned right that you shape there is some cautious up around there and I have it you probably have it where yes if everything goes well it looks like 2021 we can really get back on track but there's so much unknown and so yes that does give I think everyone pause when it comes from an investment perspective and even just bringing on technologies and into your organization right which ones are gonna work which ones are it so I'm definitely on the boat of this is a more u-shaped in a v-shaped recovery I think the data backs that up I think you know when it comes to cloud and SAS players those areas and I think you've seen this on the investment side a lot of money has come out of all these other sectors that we mentioned that are having these l-shaped recoveries a lot of it has gone into the tech space I imagine that will continue and so that might be kind of you know it's tough to sometimes balance what's going on on the investor in the stock market side with you know how organizations are recovering I think people are really looking out in two to three quarters and saying look you know to your point where you set up earlier is there a lot of that pent up demand are things gonna get right back to normal because I think you know a lot of people are anticipating that and if we don't see that I think you know the next time we do some of these kind of coded flash bolts you know I'm interested to see whether or not you know maybe towards the end of the summer these recovery cycles are actually longer because maybe we didn't see some of that stuff so there's still a lot of unknowns but what we do know right now is it's not a v-shaped recovery agree especially on the unknowns there's monetary policy there's fiscal policy there's an election coming up there's a third there's escalating tensions with China there's your thoughts on the efficacy of the vaccine what about therapeutics you know do people who have this yet immunity how many people actually have it what about testing so the point I'm making here is it's very very important that you update your forecast regularly that's why it's so great that I have this partnership with you guys because we you know you're constantly updating the numbers it's not just a one-shot deal so suck it you know thanks so much for coming on looking forward to having you on in in the coming weeks really appreciate it absolutely yeah well I will really start kind of digging into how a lot of these emerging technologies are faring because of kovat 19 so that's I'm actually interested to start thinking through the data myself so yeah well we'll do some reporting in the coming weeks about that as well well thanks everybody for watching this episode of the cube insights powered by ETR I'm Dave Volante for sauger kuraki check out ETR dot plus that's where all the ETR data lives i published weekly on wiki bon calm and silicon angle calm and reach me at evil on Tay we'll see you next time [Music]

from the cube studios in Palo Alto in Boston connecting with thought leaders all around the world this is a cube conversation LeBron's special conversation I'm John Tory here in the cube I'm not in the studio I'm at home we're sheltering in place the studio quarantine crew is there we've got a great guest here to break down and Alice in the tech industries for vallah who's this principle of zk research Aziz great to check in with you for our check-in last time we chatted you broke down entire industry a lot to talk about now we have the Cisco earnings just came out and a lot of other great things are happening thanks for joining me well what's your take on what's going on yeah I think so thanks John it's uh it's been heard about tumultuous last few months I think one of the takeaways I had from Cisco's earnings actually was that it's not as bad as you think I know if you read a lot of what's going on the media we get everything from doomsday and the world's ending or whatever but I think what Cisco's earnings showed and in Cisco I know they have a lot of enemies and a lot of competitors out there but they're really still a bellwether for the industry and so everyone should rejoice in the fact that they actually had a pretty good quarter I think what was was telling about that was security was up the services business was up the margins were good and what that shows me is that there's still room for innovation customers relax are still buying things and they're willing to pay for things that actually help drive their business forward and so Cisco's put a lot of energy into their services group to make sure that customers are able to adapt their technology and change their business right and so from an overall market perspective Cisco is you know they're the quarters are the court has shifted from almost everybody else's and so they're generally a leading indicator of where things are going so I think the fact that they showed some strength they guided up from where the street thought I think that's a good thing for the entire industry and I think I'm not saying we're out of this yet but I think businesses are starting to spend money where they need to in order to put themselves in a position to come on strong after well once we start going back to work whoever knows what that'll be I think the other sort of interesting pivot here is that I think the overall role the network has changed with income right we've covered networking technologies a long time it gets a little bit of interest sometimes from sea level certainly not as much as it should from CEOs and CIOs a lot of people think of it as the plumbing and the pipes it's hard to understand it's a very complicated technology sometimes but when you look at what's happened with digital transformation initiatives and now covent we've got more people at home or adopting cloud services we use video for connecting more things with IOT initiatives so the overall value of the network is increased that I think that was also reflected in Cisco's numbers I think this transition had started when you look at a lot of the building blocks and digital transformation IOT cloud mobility things like that they're all Network centric in nature and so for the first time in history I think business leaders actually need to look at their network strategies because if that's without a sound network strategy as we sort of come out of this and the companies that have a good one will be able to really step on the gas and do what they want with their business the ones that don't I think I'd a really struggle to survive because I'm not gonna be able to do a lot of these advanced things yeah great point one of the things Brazil the new cisco has a new leadership new c has been in place for a while positioning they're going after and you know with the cloven crisis it really puts more pressure knock the move of the network because it's a core staple of an organization yet the transformation journey is going to be accelerated this gives Cisco it's a lucky strike for Cisco because it'll move packets around and the multi cloud conversation comes in and the enablement of application development all being five to the network is what cisco has been preparing on and this has kind of been a nuance point then that everyone understands but coming out of Cova to have a growth strategy if you're not programming up and down the stack with DevOps and Nets a cops or whatever you want to call it people working at home a new perimeter is now emerged that's everything everything is the premise is this a tailwind for Cisco your thoughts on that your face oh yeah the big time tailwind francisco i think what's happened gentlemen you look at network evolution over the last five years we can do much more with our network that's coming to cost and that cost us complexity so trying to tie all these things together SP Winn Sassie datacenter Sdn right we've got Wi-Fi six coming we've got 5g coming so we've got all these great things that we're gonna let our networks be faster than ever before and run applications we can never run before right you look at some of the demos on 5g we're able to wear untethered Wi-Fi our virtual reality headsets complete creating completely new shopping experiences educational experiences but you need a lot of bandwidth that but not only you need bandwidth I think the one thing that Kovac has taught us is do you have any weakness in the network anywhere right from the user's hand all the way to the cloud that weak point at the time and so now you have to start thinking of your network not in pieces of having a campus network Wi-Fi network data center network and that a single network right and so cisco is really one of the few companies maybe the only company that can actually deliver that end and network that starts in the company extends to people's homes goes out to the cloud and with what they've done masterfully under Chuck Robbins is they've been able to pile those things together to create a much simpler way of operating this complicated network so you look at what they're doing you know with a CI and intent based networking what that is is you can think of it almost as a software overlay that masks the complexity of the network that's underneath it yeah talking about cisco over the past decade and a half and i'm with the stack guys you gotta move up the stack this has been this is now their opportunity and with multi cloud on the horizon or here this is going to give cisco a path but I got to ask you what is your take and advice to Cisco when you're out there talking to them you're talking to of the customers all the time and practitioners you're the analyst what do they need to do better because you can't just wish a multi cloud upon the marketplace it's coming but it's not clearly not the use case yet so that's a time lag between a CI intent based networking to true multi-cloud what if Cisco do in the meantime yeah well I think what's this go has to do is is think about what they're doing with a CI and multi cloud and actually help their customers implement it in in pieces and what the description I'd use is is the paths this goes on and the path customers are on actually in this world of you think if the end state is true hybrid multi-cloud right we have to get there in ship shots and not moon shots and what I mean by that is if you were to say to a customer this is your end state right the path to get there is so donkey and it's like a moon shot that it paralyzes the customer if you break this down into a set of chip shots right that gets much easier so so put the infrastructure in place to be able to just have the visibility across applause then maybe automate movement from hi private the public cloud right then automate some of the processes that give you the most headaches then move to a bigger Ottoman Ottoman automation framework right so yeah areas like security network configuration right things like that those are those are very difficult for customers to do manually those are the things they should be automating today so what they want to do is almost take through their intent-based network to almost as a lighthouse the road to a visionary state and then help customers get there in pieces because if they try and rush them along too fast I think they'll lose the customer because the complexity is too high the other area they should really be focused on is continuing to mature the services business I think that's something under Chuck Robbins that's night and day different than what it was the services business - Cisco prior to Chuck was a lot of break fix you know their TAC is well renowned as being a great pack but now they've gotten more of the pro services they've gotten more into adoption services and I think the more subscription they sell what Cisco needs to really understand is that customers tend not to renew things they don't use right so making sure that the services group helps customers and use the things that they're paying for and that'll pay dividends for them multiple dividends for them down the road I want to get the silken one on that opportunity to upsell and do a refresh because what refreshes are not gonna be on the docket early on unless discuss business value so let's hold that for a second John Chambers has been on the cube recently in his new role as a coach and investor and he says to us on the cube you know transitions versus transformation Cisco and the big companies are expected to win the transitions but now with coming out of this there's real transformation so you got to look at things like collaboration hey guys get better this is not just win the enterprise with a better web max zoom is they can ask Bob teams is out there so you know Cisco's that's a huge collaboration piece and a bunch of other business so where's their transition wins and where's their transformational opportunity in Europe in well I think the entire company is kind of going through transformations right even on the network side so it's right it's like you know the industry has been calling Francisco to get commoditized for years right and if you look the product gross margins are actually the strongest they've been in a decade right so I remember when I fell below 60% they everybody thought the world was falling this quarter I think was a little over 65 on the product side and so my belief is nothing is really a commodity if you can drive innovation that's what's this has been doing so from a transition standpoint I think they've done a lot of that they've transitioned the company to software and services they've transitioned the company more terrain model they've actually decoupled software from the hardware so customers can buy differently and you brought up the fact that we may not have a hardware refresh but that's okay as long as they keep the software a newa cycles forth where the transformations has to come is completely change the dynamics of how something works and so with intent-based networking you think of the old way that network engineers to work like the way I used to work when I was an engineer a lot of hunting pecking and at a CLI doing a lot of cutting and pasting and using homegrown tools that doesn't scale anymore my research shows that on average takes companies about four months the implemented change network-wide far too slow for digital company right so Francisco's done is they've accelerated that by letting customers automate more things and so Francisco the transformation comes in allowing customers to new new things I think you read in the collaboration side there's more work to do nobody's got a bigger collaboration portfolio than Cisco they got endpoints they got rooms just right they've got software they were a cloud on Prem but they got to take that and tie it together and I think the other area that's is gonna need improving is on they've they've got a lot of management tools that that look at different things they have at the ACI manager and a whole bunch of different security consoles in fact they funded them sometimes and said that the market leader in single panes of glass because they have more than anybody right I think eventually they got to be able to tie that information together and help customers understand what it means from a cross domain perspective because they still build a product's wireless campus data center but as I mentioned before we just have one network and so Cisco can aggregate this data up apply machine learning to it and help customers what that means they see insight across the entire network that would really be powerful because they they've got the footprint now they just have to be able to deliver the machine learning based insights some customers understand what that data means and they have a unique opportunity in the short term no one's going to be kidding Cisco out anytime soon there's a safety rating and using the big companies I think what what Cisco is able to bring is a there's a level of financial stability that other companies may not have and so they can weather the storm for a long time so you know I it's easy to say going to Cisco is the safe bet it has been for a long time but but i but I think it's also the smart bet I think they're they're able to continue to invest in things maybe smaller companies more people do yeah my question on Cisco a big fan of their strategy have been vocal about that for a while my question on Cisco want to be critical is to say how fast can you get that development going show the software value in market show customers a growth trajectory that they can execute on it can advantage the network policy intelligence if they could do that they're gonna be in good shape you agree yeah I think one of the challenges though is the transformation of their customer base do and that's where the work Suzy we've been doing in the dev that teams so important like if if they were to shift their whole strategy over at the developer folks talk word today I think that would largely put them in a position or trouble because the engineers that work with the stuff and the resellers that work with the stuff aren't they don't really have the skill sets they advantage that right so last year Suzy we she really talked a lot about the growth a definite this year they came out with in Barcelona this year they they came up with a bunch of certifications for dev net now there they were actually coming out with a number of a partner certifications as well so the resellers can get certified but I think it's important that they continue to push their engineer base into gaining these new skills I'll give you an interesting data point for my research and that's you know that only about a quarter of networking engineers has ever made an API call right and so you look at all Cisco's new gear it's all API driven and so if you want to do something as simple as say get all the IP addresses in your network you can just use an API call for that right the other way to do it is you do a show command and the CLI your screen scrape and you take a visual basic trip that you parse it you know and you get it that way right so the API map using those is a lot easier and so I think Cisco's got a good strategy with Deb net they've grown that face a lot it's still relatively small you know it's under a million people and you think of the overall size the Cisco customer user base point that's where they gonna put some effort right more and more out driving adoption to them now well I think you're smarter than I think you're researching them they must be listening to you because they haven't really tried to jam that down their throats they've been very humble about it and I think a million is pretty damn good number I think Cisco again to your point they're bringing people into the water the low end first before you you go to the deep end so swim with the bubble if you will with definite what they did was they assumed the engineer had no knowledge of software because I think at first when they put the lot of the programs a place they assumed people would have some knowledge of how to code right and and I also think the industry did them a bit of a disservice we used her there was a lot of stuff written in the media how every network engineer needs to become a software developer well they don't have to summer get make them software developers but they at least have to come software power ease right so do your job through software but you don't have to be a developer and that's where definite really when it really matured is that diverge down to past developer engineer who's your saw common software skills and then you break down a specialist after that and so they've they've actually helped with the maturity of that they've changed their certification programs for reflect that and I think Devin that really is a big be and if they can transition that engineer base then it helps the adoption of the new on these I want to get your final thoughts on this segment on multi-cloud obviously it would be a really great win for it creates of interoperability strictly with the network intelligence cisco could bring to the table and others you got startups out there like aviatrix and others and vmware with nsx trying to get that for the security fabric a lot of action going on with multi cloud and networking your thoughts what does your research tell you what's gonna transpire how do you see that market playing out in my research shows that little R ad percent of companies prior to Co vid had multi-cloud on the roadmap and I'm assuming that's that's gone up I haven't actually done a survey since then um one of the I think it's funny koban exposed a lot of things from a lot of vendors right and I think one of the things that is is shown cracks in the cloud yeah you look at some of the the data and how many outages Microsoft had Google had some strains AWS has held up pretty well under the strain of of a lot of the higher utilization when coated but they've been building a lot of capacity into theirs as well so I think from a customer perspective it makes sense you don't want to put all your eggs in one basket some cloud providers are stronger in some regions they each have different their own different cloud platforms other private cloud platforms and the problem is is if you decide if you decide to go multi-cloud you can't use the cloud providers tools right so if I use an AWS load balancer that works great in AWS but it's not gonna help me with Azure or GCE similarly if I use GCP tools I can't extend that out the azure so something needs to connect those and be able to five security and policy and that's where multi cloud comes from and you're right there's some good startups there I think um the difference with Cisco this time versus the Sdn world was when as the ends came about I think Cisco didn't want that to happen and I think they actually actively worked against us the end and I've talked to chuck Robbins about that he said you'll never ever see Cisco do that again if something is good for the customers they want to lead that transition and so Cisco's been very active in multi focking and given they've got the install base already I do think they will help bring this long but there are some good stir yeah it's interesting Sdn really wasn't ready for primetime even when VMware bought in this era hey when it was still there I didn't have a lot of revenue it had a future VMware claims that's the saves and NSX was saved by a Sdn some people say was completely rewritten final thoughts on outlook and you see coming out of Ovid obviously it's been well reported we've been reporting VPNs have been under provision that was a blind spot bought a blind spots and disruption that wasn't forecasted in the classic sense there was no there was no you know hurricane there was no flood it was a covin invisible disruption yeah and there's no impact right like even with when you think of what happened with the the floods in New York and 9/11 people knew that they'd eventually go back and so business continuity and disaster recovery was a temporary thing and I can I set up a data center to work for a couple months so I can go back to New York that's not the case with koban where we're trying to manage for an undefined endpoint which is extremely difficult for an IT perspective I do think that Kogan again has highlighted the value of the network I think we'll see a lot of transition from VPN to sd when I think that's that's certainly good I think the rise in video will also cause a Wi-Fi upgrade cycle we'll get back to the office and I think you'll see a lot of focus on programmability and agility because I don't believe we're gonna see everybody return to the office was like one big bang John I think we're more likely to see is the future work to be almost like when you and I were in college we do a bunch of stuff at home we go to the campus when we have classes and when we want to meet people similarly we'll go to work when we have meetings and then in between meetings we'll go find an open place to work but in general we'll do a lot of work a lot more work from home in fact my research shows 93 percent of the business leaders I interviewed said they expect to see at least a 30 percent increase in the work from home post Kovan right so we're gonna have a lot more people doing that but it's not gonna be everyone working for home everybody work in the office it's gonna be a hybrid of the two people are gonna come and go and that bribes the need for agility and today's networks really not that agile and so I need I want to go back to college if we do thirsty happy hours do I mean have the whole week or the stupid stuff it's the final point you mentioned SP when I was talking with Dave Volante SP Minutemen just last week and I said you know this SD win today is not your grandfather's sdn meaning SP where it's changed a lot it's basically the internet now so what was the modern update definition of SD grin I mean it used to be you connect the wide area network you can have some campus you'd do some networking what is it now what's the same name but it's yeah what is it your journey the technology if you look at the adoption of anything right the first wave of stuff is to make the new stuff look like the old stuff so we put VoIP in we made it look a lot like TDM when we had cloud we lifted and shift it and how did we didn't really enjoy wraps and then we eventually get smart and think what can I do with the new thing that I can't do the old thing and so a lot of early SD win deployments were simply just replacements for MPLS and they were put in to save a bit of money but now companies are getting smarter they're thinking about what can I do with my SD win that I couldn't do before so there's a lot more tighter integration with security I think as companies but SD win in and and think about what the win is today John it used to be corporate offices and data centers I think it's everybody's house right and so being able to extend your win at the single people out to planes trains and automobiles you remember that movie but those are all getting connected as well people's back acts fan kiosk those are all becoming way endpoints right so that's where you need to embed more security in the network and so I think that's a transition we've seen into that see you and I think the technology has matured to the point where it's getting easier to deploy faster to flow and you're right we can use the internet for transport in some cases some will still keep there still be a lot of MPLS out there but I do think we wind up in this hybrid world but clearly then the time has never been better for for SD win I will see a rule of curve for that because it's the only way to extend the win the people's homes the things the cars and really anything that's connected you know that's such a great point and I think this is a real new once in the industry it's a whole nother rebirth of the category because the aperture is brighter you got policy you've got reliability and get security built in this is key key Johnny H salt key yeah yeah whole concept the AI ops becomes real because we're collecting data and we're able to use AI to automate operations so Z's we call it s T win 2.0 that's what you got to do we got making an acronym out of this come on we can't just saw s T when it is SD win - righto because it's the next it's that it's it's the second wave of it we're actually thinking about how to transform our companies so the the John Chambers quote of transition for transversus transformation is apropos because the like I said a lot of the waves that that Cisco went through early on was we transition the market and then we transform right and so SD win so far has been transitional moving away from the old thing but now in strength and defense formed where our entire network operates these gradients that always a pleasure to talk to you get the straight scoop for the signal right there from all the noise in the industry now more than ever people are gonna be focused on critical project so thanks for your insight as DK now can research great stuff and we'll keep keep following you in great guest thank you come on thanks John first burger okay cute conversation here remote we're doing our part either at home and studio quarantine in this is the cube virtual virtualization has come to the cube will do will do whatever it takes to get the content out there Z's thanks so much for coming I appreciate thanks for watching on John Currier [Music]

from the cube studios in Palo Alto in Boston connecting with thought leaders all around the world this is a cube conversation we've been reporting that the Kovan pandemic has created a bifurcated IT spending outlook legacy on print on-prem infrastructure in traditional software licensing models they're giving away two approaches that enable more flexibility in business agility automation initiatives that reduce human labor labor that's not value add has really been gaining traction for the past 18 months the pandemic has only accelerated to focus on such efforts and robotic process automation or RPA along with machine intelligence have been the beneficiaries relative to other segments of the IT stack welcome to this week's wiki Vaughn cube insights powered by ETR my name is Dave Volante and in this breaking analysis we're gonna update you on the latest demand picture for the red-hot RP a sector will also focus on two main areas today first we're gonna review the basics of the RP a space for those that may not be as familiar with the market next we'll share with you the spending data and outlook in the RT ARPA space from ETR and we're really dig into the kovat impact on this market segment and take a look at the competitive outlook we're gonna pay particular attention to the leaders in this space and then we're gonna wrap up so let me start with kind of the RPI basics if you're not familiar with our PA here's what you really need to know happy hour PA gained traction by taking software robots and pointing them at existing applications to mimic human behavior and automate repeatable and well understood processes keyboard behavior that is now a challenge with early RPA implementations is that most customers chose to point these bots at legacy backend office systems now that the open emails and fill out forms and the like so that's great because it digitizes processes around legacy systems awesome ROI but the problem is that these bots will they interact with a user interface of that application and many of these apps they really don't have an API so any change in data or the interface breaks the automation down now more recently automations are interacting to apps through api's that makes them less brittle but of course you know the quality of api's as you well know will vary so enter your machine intelligence into the equation there's been a lot of discussion around the intersection of our PA and AI and that's allowed organizations to automate more processes that do so in a way that takes an augmentation approach using things like natural language processing or speech recognition and machine learning to iterate and improve automations and you know this trend holds a lot of promise and is a lot of talk about it in the marketplace particularly in the form of really trying to understand which processes to automate and where the best ROI can be achieved for organization but it's important to note it's really still early days with this AI intersection nonetheless investors you know they're ahead of the game they've they've poured money into this space as we've been reporting now for you know well over a year or two uipath an automation anywhere have raised close to two billion dollars and have been growing very very rapidly we're gonna talk more about that existing players like blue prism they've actually benefited from the automation tailwind and other you know process business process players take for example like Pegasus Toombs I mean they started in the early 80s they've added our PA to their platform as have many others by the way including Microsoft who has barely been trying to crack into this market for a while in fact Microsoft just bought a small company called soft emotive and to really try to shore up its RP a game but you know just a quick aside in our view Microsoft is their well behind the leaders it's gonna take years for them to get where the leaders are today yeah but it's Microsoft so you don't want to ignore them now the big buzzword here is hyper automation evidently it's a torrent a coin term coined by Gartner and uipath has picked up on this in a big way and so is automation anywhere now those both those companies are in hyper growth so it plays more established companies for example pega yeah they look at the term differently you know of course their vision is Rp a is a small portion of their their their vision these established firms they want to incorporate their business process automation z' that have been built over decades into a systems view of the organization using existing platforms the upstarts of course they want to build from new platforms what's really happening in the marketplace and like in many situations is this emergence of a hybrid you know quasi-equilibrium here we saw this in mainframes who certainly you know saw it in middleware enterprise data warehouses and we've seen it in the cloud you know where most companies don't just throw away the investments that they've made in legacy systems now they're stable they're operationalized and rather what they do is they overlay the more modern technologies and they kind of create an abstraction layer of their business that incorporates the old and the new but the growth is much much higher in the new as we know it and that leads me to the TAM the total available market let's look at the RPM you know we think the TAM expansion opportunity is pretty substantial we put this chart together awhile back that really underscores that the progression of our PA from you know simple BOTS automating back-office functions to really infusing automations in virtually all applications you know if you expand the definition beyond our PA software into the broader automation opportunities the other thing about it this this could be a much much larger than depicted here maybe well over a hundred billion dollar Tam as a I powered automation becomes fundamental to every organization in their operating model anyway it's a big opportunity and the data suggests that it's growing rapidly so let's turn to the data let's look at the spending and bring ETR into the equation so which technologies are showing new adoptions in tech on balance the tech sector has done pretty well despite this pandemic at the time of this video the Nasdaq Composite is up about a point and a half year to date and as we know from previous surveys that heading into 2020 there was a pullback in a narrowing of new technology adoptions as organizations began to operationalize their digital initiatives and place bets this chart shows new adoptions across three survey dates the gray is April last year the blue is January which is pre-pandemic really and the survey of more than 1,200 IT buyers is really the latest one which is the April so this survey took place at the height of the US lockdown and you can see look at all PA it's got 22% new adoptions what does that mean it means that 22% of the customers in the survey we're planning our PA spend there that are planning for our PA spend are planning new adoptions now that's a figure that says hi as machine learning and artificial intelligence and of course as we said these two technologies are increasingly playing a role together so our PA adoptions more than containers more than videoconferencing which has had this tailwind from work from home and more than cloud more than mobile device management so it's really one of the hottest sectors in terms of new adoptions now let's look at some of the players in our PA and try to really better understand their positions here's a chart that uses the two primary met work net metrics that we've been sharing over the past year net score or spending momentum is on the y-axis and market share which is a measure of pervasiveness in the data set is on the x-axis the chart plots are PA players in the et our data set and you can see uipath in automate anyway our the to market leaders they show both spending momentum and market awareness then you see blue prism and peg is in there and the rest of the pack and I'll say this about pegye systems I recently spoke to their CEO Alan trifler he's an amazing self-made billionaire he's got a great business you know peg that really doesn't see you know itself anyway as an RPA play and I don't either our PA is really a small part of their story but they're in the data set and certainly automation related so it's what's showing but it's a bit of an oranges and tangerines comparison now notice in the upper right of this chart you can see that the net scores are in the green shade and there's a little bit of red in there but remember net score is a simple metric sort of like Net Promoter Score in PS it subtracts customer spending less from those spending more and that's the difference and you can see very very strong net scores for both uipath in automation anywhere and I'm gonna discuss that more in a moment but there's lots of green in the chart and even pega or as I said it's really not an RPA specialist they've got a solid net score now let's look at a time series of this net score in the spending momentum what we do here is this chart takes the three leaders uipath automation anywhere and blue prism and it plots their net scores over time goes all the way back to the January 18 survey now let me make a couple of points here uipath in automation anywhere 70% plus net scores is very impressive and amongst the highest in the data set even though you see some of the Lawson momentum in the UI path line and the convergence with automation anywhere they're both very very strong and you can see in the upper right you can see the shared end which is an indicator of the presence of the company in the data set how many response is out of the 1200 plus so you might say well wait a minute you I passed the I had they had layoffs last fall and automation anywhere they more recently just recently had layoffs how can they show such strength well I make a few points first fast-growing companies like this that have raised you know nearly a billion dollars each they've got investors to serve and they're going to course-correct when they feel like there's some slack in the system yet to me it's not a sign of fundamental trouble second both of these companies are going to continue to invest heavily on research and development uipath has 60 openings on its website mostly in engineering automation anywhere they only have nine openings but I would expect both companies to up their engineering hiring especially given the Microsoft acquisition today third remember this is not an indicator of the amount of money spent in absolute dollars rather it looks at spending momentum of the doll in dollar terms as well if you were to cut the data by larger companies let's say the Fortune 1000 where the average contract values are higher you'd see that you I pass a net score jumps to 77% automation anywhere would drop into the 60s and blue prison would stay about the same where it is today today so let's look for example in the global 2000 so we'll expand that notion of a fortune 1000 let's go to the global 2000 where there's more of an end slice and you can see the picture changes from the overall data sample this chart shows the net scores in the global 2000 where the ends are more than 25 responses across all the three surveys gray as last April blue was January yellow is April 2020 and you can see the year-on-year decline and the modest step down during the the Colvin lockdown which again surveyed in April but still very elevated net scores for uipath and automation anywhere and respectable for the other so the point is Co vyd has not really crushed the RPA market I mean if anything is witnessed by the new adoptions it's maybe it's certainly better off than most IT sectors now let's dig into the net scores of the two leaders a little bit more uipath and automation anywhere remember net scores of very important metric and I want to spend the moment explaining how we use it you see this wheel chart this red green gray it really shows how the net score method is applied now we've taken the UI path example from the April survey net score works by asking buyers relative to last year are you adopting new that's the 28% are you increasing spend by 6 percent or greater that's 51 percent are you expecting flat spending that's 15 percent or a decrease in spend of 6 percent or more or finally are you replacing the vendor checking them out so look at this you can see for UI path added up 79 percent of respondents expect to increase spending in 2020 relative to 2019 and again remember this survey was taken at the height of the kovat lockdown let me show you the data for automation anywhere same exact methodology 72 percent of automation anywhere a customer's plan to spend more only 1 percent plan to spend less with zero replacements so very strong fundamentals as it relates to spending momentum for both UI path and automation anywhere now how is presents or what we call market share in the data set changing on a year-on-year basis well this is the last data point that I want to show and it relates to that metric of market share which again is the measure of pervasiveness it's calculated by dividing the number of mentions of a vendor in a sector by the total mentions of that sector in this case RP a and this chart shows the year-on-year change in customer growth comparing market share from the April 20 survey with that from the April 19 data and you can see the yellow line at 11% is the sector average uipath has the fastest growth automation anywhere is growing faster than the market average and blue prism is below the average now this looks back to last year and it'll be interesting to see how this picture changes with the next survey based on what we're seeing with the next net scores which is a forward-looking metric all right let's wrap so we're seeing that the bifurcated market is high that the automation trend generally is real and that the RP a drill down specifically shows us an example in action we think that kovat 919 not hit these numbers would actually be higher by maybe as much as 10% but in the near near to mid term we would expect a pretty fast return to normal patterns of demand if I put normal and air quotes for our PA in fact you know we don't expect a real v-shaped recovery across the board but our PA is you know one of those areas where we actually may see such a rebound the pandemic really underscores the need to accelerate digital transformations our PA we think is going to be a central player in that movie along with AI the cloud all right we have to leave it there for now so remember these episodes they're all available as podcasts just all you got to do is search breaking analysis podcasts please subscribe to the series would appreciate that and check out ETR dot plus for all the data I also publish a full report every week on wiki bound comm tons of data there as well and Silicon angle comm has all the news and I published there alright this is Dave Volante thanks for watching this episode of the cube insights powered by ETR we'll see you next time [Music]

[Music] from the cube studios in Palo Alto in Boston it's the cube covering the IBM thing brought to you by IBM hello everybody this is state velocity of the cube and you're watching our wall-to-wall coverage of the IBM think digital experience at Justin Youngblood is here he's the vice president of IBM security Justin good to see you again thanks for coming on hey Dave good to be here thank you so look let's get right into it I mean we're here remote I wish we were you know for face-to-face and in Moscow II but things have changed dramatically there's a massive shift to work from home that's you know obviously kovat 19 has tightened the need for security but let's start with some of the things that you're seeing how you're responding the to secure those remote workers and let's get into some of the trends that you're seeing in the security space yeah absolutely some major trends and there is a big response around Cove at night 19 right now and and first of all you know what we tell all of our employees our clients our partners the entire ecosystem is number one priority stay safe and healthy of course even at IBM right now we have over 95% of IBM erse who are working from home we've seen that trend across our clients and partners as well and basically three themes keep popping up as it relates to security in Kovan 19 the first is clients are asking us to help them secure their remote workforce we have a number of tools technologies and services to help them do that the second is detecting and responding to accelerating threats amidst Cova 19 the threat actors are more active than ever they're driving some targeted attacks and phishing campaigns and our clients are asking us for help on that front and then the third is virtually extending security teams and operations and we've got a set of services managed services and and remote employees who can actually work with our clients and help them with their security operation centers and anything they need from a security program yeah I mean when you talk to CISOs they'll tell you look we you know our biggest problem is a lack of talent and we have all these fragmented tools and then now you throw kovat 19 at them and it's okay now overnight blank and secure the remote workforce so talk a little bit about this notion of platforms I've said often the security marketplace is very fragmented that accentuates the skills issue is you got to learn all these different tools and this is integration issues talk about platforms and how that might help solve this problem absolutely security platforms are on the rise do you see a lot of security platforms being announced by vendors today the problem statements are very clear oh as enterprises have moved along on their journey to cloud and digital transformation they now have workloads applications data users spread across multiple cloud environments every enterprise is using multiple clouds today so the problem statements become very clear for security security leaders have too many security tools they have too much data and they don't have enough people right so too many security tools that lack interoperability the average Enterprise has anywhere from 50 to 80 different security point products that don't talk to each other but trying to solve a security problem to pinpoint an issue actually takes looking at multiple screens too much data that comes without insights trying to stitch together all of this disparate data across a fragmented security landscape is very complex and it allows threats to be missed and then not enough people the shortage in cybersecurity is well documented over 2 million unfilled jobs today and that number continues to grow so enter security platforms that are that are on the value proposition of cleaning up this mess in November last year we announced the cloud pack for security that's IBM security platform and it has some some attributes that are powerful compelling we're seeing a lot of traction with client well you mentioned two things that really caught my attention the detection and the response because you know you're gonna get infiltrated everybody gets infiltrated and you know you've seen the stats it takes you know whatever 250 300 days before you can even detect it and then and then responses is critical so so talk about the cloud pack for security you know there are other platforms out there what makes yours different yeah are basically traditional security is broken we have a vision of modern security at centers on the cloud pack for security we set out two years ago with the concept of a next-generation platform it's a security control plane that works across hybrid multi cloud environments it connects all your security data and tools with a common platform that includes IBM and security tools and cloud platforms so whether you're using a sim like Q radar or Splunk endpoint detection systems like carbon black or CrowdStrike and any of the IBM any of the cloud platforms including IBM AWS or Azure it connects all of those and brings the insights together we work with over 50 enterprises and service providers help us co-create this solution and the attributes are its multi cloud capable but for security is multi cloud capable it can bring all the insights together from across these hybrid multi cloud environment it's open it's built and based on open standards and open technologies it's simple and it's composable in the sense that it has the ability to integrate with IBM and third-party technologies and add more capabilities over time what we see from other security platforms in the industry is they they basically approached the problem saying mr. customer bring all your data to our cloud will run the analytics on it and then provide you the insights what's different with cloud pack for security is we take the analytics to the data customers don't need to move their data from all the disparate sources where it exists we take the analytics to the data and bring those insights back to a common console or the or the security leaders and security analysts to take action on why you preaching to the choir now because well first of all you've got the the integration matrix and you've got the resources obviously I mean you mentioned a couple of really prominent and you know some hot products right now and this is the challenge right best to breathe versus fully integrated suite and what you're saying if I understand it correctly is we're not asking you to make that trade-off if you want to use you know of some tool go for it we're gonna integrate with that and give you the control and then the second piece is bringing that analytics capability to the data cuz that's the other thing you really don't want to move your data you the Einstein written move as much data as you have to but no more right absolutely this is a this is a team sport security is a team sport and that's where open technologies are so important the ability with an open API to integrate with any IBM or third-party technology this is not a rip and replace strategy clients can't afford to do that they want to work within their existing security tools but they need a common platform for bring it all together so we talked about the ability to gain complete insights across your hybrid multi cloud environment the ability to act faster with a set of playbooks and automation that basically runs security run books once a once an incident is detected to automatically go about about the fix and then third is the ability to run anywhere cloud pack for security like all of the IBM cloud packs is built on kubernetes and Red Hat openshift so it can be deployed on-premise or on the public cloud of the customers choosing complete choice and flexibility in that deployment I mean another key point you just made is automation and you talked earlier about that skills gap and the unfilled jobs automation is really the way certainly a way and probably a the most important way to close that gap I want to ask you about open could you think about you know security and networks and you know opens almost antithetical to secure I want close but you mean open in a different context and what if we could talk about that and maybe break down the key aspects of open as you defined it we've seen open technologies open standards open source be adopted across technology domains think of operating systems and Linux think of application development think of the management domain and kubernetes which now has a community of over 4,000 developers behind it it's more than any single vendor could put behind it so it's so open technologies really provide a force multiplier for any any industry security has been a laggard in adopting open standards and open source code so last year 2019 October time frame IBM partnered with McAfee and dozens of other vendors and launching the open Cyber Security Alliance focused on open standards that promote interoperability across security tools focused on open source code which we've adopted into an underpin the cloud pack I beams cloth pack for security focused on threat intelligence and analytics and ultimately sharing best practices and let me talk about run books this really comes down to the automated play books that customers need to run in response to a security threat or incident that's become really important automating actions to help security operations teams be more productive so all of those capabilities in total sum up what we're talking about with open technology for security and it underpins our IBM cloud pack for security solution well I've always felt that Open was part of the answer and like you said the industry was slowly to adopt adversary is highly capable he-she they're very well-funded do you think our industry is ready for this open approach we're absolutely ready for the open approach we see customers responding extremely positively to the cloud pack for security and the fact that it is built on open technologies many enterprises come to us and say they want that future proofing of their investments they want to know that what they purchased will interoperate with their existing environments without a rip rip and replace and the only way to get there is through open standards and open technology so it's it's already being well received and we're gonna see it grow just like it has any other technology domains operating systems application development management etc now is the time for security while Justin you're operating in one of the most important aspects of the IT value chain thank you for keeping us safe stay safe down there in Austin and thanks for coming on the queue thank you Dave good to be here take care and thank you for watching everybody watching the cubes coverage of IBM sync 2020 ibm's digital production keep it right there we're right back right after this short break [Music] you

[Music] from the cube studios in Palo Alto in Boston it's the cube covering the IBM think brought to you by IBM hi everybody we're back and this is Dave Valentine you're watching the cubes coverage of the IBM think 20/20 digital event experience lisa cisco is here she's the global head of go to market and IBM cloud at wit-pro Lisa good to see you thanks for coming on how you doing you're welcome how things holding up down in Florida you guys staying safe good working from home like like most of us everyone's doing good so I want to ask you don't go right to it talk about digital transformation and I want to get your take and maybe share some thoughts that we've heard from clients but digital transformation you're kind of in the heart of it you've got cloud you do and work with cognitive and AI and and blockchain and and the like so what are you seeing in terms of how clients are adopting this notion this digital transformation journey and how has kovat affected that great question so the hopefully the digital transformation won't always be about Kovan but there always will be a need for companies to move quickly and adopt new technologies and do things that are unexpected whether that's from an acquisition or an unexpected competitive move or new market that they want to be in so any of those things and affect businesses and what we're seeing right now is businesses who have adopted digital technology and by extension adopted cloud as the backbone to that digital technology have been able to move faster in this environment they're able to do things like work from home they're able to ensure security is in place they're able to give their employees and their customers access to information in a faster and more cost-effective way and so we're really not excited to have coated but we're really it's an interesting time to be looking at digital technologies and first mover advantages here and the digital Tudo era is all about enabling business responsiveness and those are the things that we're doing with the technology plays that we're working on today yeah I mean the customers we've talked to the the CIOs the CISOs they've said in many hard-hit industries hey we basically has shut down spending with some exceptions digital transformation being one of them you've got experience in two areas that are being affected pretty dramatically by kovat want a supply chain on the other is e-commerce you know supply chains are just you know especially for a while we're just in shambles or seeming to come back you know a little bit but what have you seen from the supply chain and what do you think what kind of changes do you expect are gonna be affected by koban going forward so again this was an area that if you had invested in your supply chain and you have automated some of those processes you're having an easier time onboarding your suppliers and knowing where your shipments are and understanding what your forward-looking position is going to be if you haven't done those things um even though your IT budgets might be being slashed they're things that you have to do right now and so doing some of those things using supply chain automation on the cloud it's it's um it's the right way for companies to go right now that find themself in a predicament and maybe aren't as prepared as they'd like to be so some of the technologies that we're helping bring to market we've we're seeing results with with things like five times faster adoption and 40% more cost efficient than if they weren't trying to do these things in an automated way using the cloud and so for companies that that need help doing this iBM has some of the best supply chain solutions in the market and and Wipro certainly has years of experience bringing those turquoise and then e-commerce is the other one I mean obviously there's been an explosion nobody wants to go out if they don't have to we're ordering anything and everything online there's been a kind of similar situation right if you if you had your kind of e-commerce you know we have you been running water through the pipes and you've perfected that over the last you know a couple of years or part of a decade then you're in pretty good shape but what are you seeing there with if you didn't have a loyal customer base now the time to really get used to interacting with your customers in that way so restaurants for example think the local mom-and-pop shops I live in a small town outside of Orlando and I'm seeing little businesses get online and and sew clothing and wine and things that they wouldn't normally see and dabbling in e-commerce so it's it's really comfortable for most people now to buy things online and we're seeing services that you wouldn't normally be be having online things like education k12 all allerjies everything can be pretty much bought on-line these days or consumed in a digital format and so I think again customers that have experience in doing this are ahead of the curve and customers that don't are going to quickly find that they have too I want to turn our attention to in the conversation to cloud and get your perspectives I mean I've reported a number of times that you know the IBM cloud it's not it's not an infrastructure as a service and the race to the bottom obviously IBM offers infrastructure of service but IBM strategy is not to try to take AWS head-on and you know storage cost per bit it's really to bring value through its software estate and portfolio and help its customers really take advantage of that the cloud model how are you and your clients taking advantage of the IBM cloud what kind of solutions do you have that are that are specific that leverage the IBM cloud that's correct we have two solutions that we're working on building out with with IBM and leveraging hybrid clouds so for an environment where 94% of enterprises have multiple clouds now they all have a combination of AWS or Azure or private clouds or IBM cloud and 73% of our clients see the ability to move between those clouds as a high priority and we are addressing that with two main solutions that we've built out at with row one is called our boundary list enterprise solution and you can think of that as the infrastructure and the knowledge we've taken the knowledge from thousands of successful hybrid cloud migrations that we've done and we've built it into this framework to help our customers be able to have a single dashboard and manage their view across hybrid cloud in an automated way and be able to be nimble and move between those clouds as business requirements it demand that they do and so that's the boundary-less Enterprise side the other side that we're working on with IBM is the application and integration modernization and we have a solution that we call moderniser and that is using some of the IBM technologies some third-party technologies and again the with our knowledge from our successful engagement and making it so that we can easily see what the workload is going to be to contain a rise and a single integration methodology that we're going to be bringing to our clients to help them be able to do this in a in an automated in a better way a faster way a more economical way so those are the two things that we're working on now and some of IBM's products are under the covers things like multiple cloud manager some of their DevOps and automation tools and there's some some tools again from third parties in firmware that we've brought in there as well so the boundary let's enterprise them in the idea there is that you've got a layer that allows you to go across clouds and have the same experience whether you're on pram whether you're in an Amazon Cloud and IBM cloud as you're wherever is that correct and it's a single sort of cloud experience single dashboard you know glass that you can look and you can serve you know in an IT environment your constituents the best way possible so that you're not locked into any cloud vendor and you can take advantage of where your workloads need to go and the modernization piece the modernized moderniser you talk about how clients are approaching it where do they start when they modernize their applicants that they do kind of and you help them do an application portfolio assessment they identify the high value workloads in their portfolio maybe the ones that they're going to sunset is a rationalization exercise the first step may be to talk about that every client is different but if the plant was to approach us and recommend the best practice we actually have a free two-week consulting engagement that we use for our clients that take a look at the workloads that they have and potentially will want to move to good we help them organize those workloads and figure out what the low-hanging fruit will be the things that will take a little bit more time on the things that are going to give them the highest bang for the buck and we will make some recommendations to them and that that two-week engagement about how to get started what about the I wanna shift gears talk about the you guys done in India with the Novus lab what is that all about what kind of expertise is there how does how two clients take advantage of that so we in IBM and out of the first soon-to-be announced we've just built it and we're soon to launch the I began with pro nobis loan you know this is the latin word from new or for innovation and that's what we plan to be doing in this lounge together so we have we pro talent and 150 seats where we'll have clients and different experts coming in and in residing in that center as well as access to all of the products i just talked about we'll be working closely with the IBM on GSI labs and bringing in new technologies building out new solutions so everything from taking supply chain to the next step to adding additional industry solutions one of the first things that we're going to do in that IBM Davis line just take advantage of the new IBM finance services cloud which is going to be a covering cloud focused at that industry and we're really excited to get started working on that technology to bring in our clients so ok so that's a that's an example of an industry solution and it's what it's it's optimized or for for banking and financial services or explain that if you would that's correct so iBM has worked with their clients in the financial services industry and they have packaged some of the governance and security and regulations that are needed for the financial services industry and they've put that into a solution that they'll be rolling out shortly I'm sure you'll hear more about it at IBM thing and that solution is going to be based on the industry guidelines by country on rolling out in the US and then shortly to Europe and we're going to be able to use that to jumpstart a lot of the workloads that we want to bring to our financial services clients without having to make them reinvent the wheel or all of the governance and security and regulatory things that they need well I can see you guys doing this across multiple industries kind of an out of the box you know tune something for retail government financial services Manufacturing healthcare where you've got the the requisite of security and compliance edicts depending on where you are in the world if it's a global organization you're able to you know identify what those local laws are maybe there's certain analytics capabilities and dashboards that you'd include is that is that kind of the right way to think about this that's exactly where we're headed and we're already starting to talk about healthcare as the next industry where we tackling after the services yeah well I mean the healthcare is that there are so heads down right now yeah believe you know we could think they'd come out of this and take a take a little breather and then can really you know get back to some of the more strategic things that they want to do in the industry I'll leave you with the last word kind of where you see the IBM Wipro partnership going you know what's your vision for that we really like IBM's approach in terms of avoiding vendor lock-in but we love what's happened with the acquisition of Red Hat and being able to use that technology more easily in our solutions we think that the industry approach is the right approach all of those things will have our focus in the noon double Ange this year and so while things are unusual in this current environment and we have a lot of things that we have to do immediately to help our clients just be able to survive we're very much looking to the future and what we can bring when this is all over that will help our clients make sure that they're ready for whatever the next Rose might be well Lisa thanks very much for coming on the cube you got a deep experience appreciate you sharing that with our with our audience they say you're welcome and thank you for watching everybody this is Dave Volante for the cube and our continuing coverage wall-to-wall coverage of IBM think 2020 the digital event experience you watch in the cube we were right back right after this short break [Music] you

from the cube studios in Palo Alto in Boston connecting with thought leaders all around the world this is a cube conversation hello everyone welcome to the cube conversation here in Palo Alto our studios of the cube I'm showing for your host we're here during the crisis of Cove in nineteen doing remote interviews I come into the studio we've got a quarantine crew or here getting the interviews getting the stories out there and of course the story we continue to talk about is the impact of Kovan 19 and how we're all getting back to work either working at home or working remotely and virtually certainly but as things start to change we can start to see events mostly digital events and we're here to talk about an event that's coming up called the failover conference from gremlin which is now gone digital because it's April 21st but I think what's important about this conversation that I want to get into is not only talk about the event that's coming up but talk about these scale problems that are being highlighted by this change in work environment working at home we've been talking about the at scale problems that we're seeing whether it's a flood of surge of traffic and the chaos that's ensuing across the world with this pandemic so I'm excited have two great guests Alberto Ferran auto senior vice president marketing gremlin and Tammy Bhutto principal site reliability engineer or SRE guys thanks for coming on appreciate it thank you Thank You Alberto I want to get to you first you know we've known each other before you've been in this industry we all we've been all been talking about the cloud native cloud scale for some time it's kind of inside the ropes it's inside baseball Tami your site reliability engineer everyone knows Google knows how well cloud works this is large-scale stuff now with The Cove in 19 we're starting to see the average person my brother my sister our family members and people around the world go oh my god this is really a high impact this change of behavior the surge of you know whether whether it's traffic on the internet or work at home tools that are inadequate you start to see these statistical things that were planned for not working well and this actually Maps the things that we've been talking about it in our industry Alberto you've been on this how you guys doing and what's your what's your take on this situation we're in right now yeah yeah we're we're doing pretty well as a company we were born as a distributed organization to begin with so for us working in a distributed environment from all over the world is is common practice day-to-day personally you know I'm originally from Italy my parents my family is Milan and Bergen audible places so I have to follow the news with extra care and so much in me it becomes so much clearer nowadays that technology is not just a powerful tool to enable our businesses but it also is so critical for our day-to-day life and thanks to you know video calls I can easily talk to my family back there every day Wow so that's that's really important so yes we've been talking for a long time as you mentioned about complex systems at scale and reliability often in the context of mission-critical applications but more and more these systems need to be reliable also when it comes to back office systems that enable people to continue to work on a daily basis yeah well our hearts go out to your family and your friends in Italy and hope everyone's stay safe there no that was a tough situation continues to be a challenge Tammy I want to get your thoughts how is life going for you you're a sight reliable engineer what you deal with on the tech side is now happening in the real world it's it's almost it's mind-blowing and to me that we're seeing these these things happen it's it's a paradigm that needs attention and whew look at it as a sre dealing a most from a tech side now seeing it play out in real life it's such an interesting situation really terrible so one of the things that I specialize in as a site reliability engineer is incident management and so for example I previously worked at Dropbox where I was you know the incident manager on call for 500 million customers you know it's like 24/7 and these large-scale incidents you really need to be able to act fast there are two very important metrics that we track and care about as a site reliability engineer the first one is mean time to detection how fast can you detect what something is happening obviously if you detect an issue faster and you've got a better chance of making the impact lower so you can contain the blast radius I like to explain it to people like if you have a fire in your sauce bin in your kitchen and you put it out that's way better than waiting until your entire house is on fire and the other metric is mean time to resolution so how long does it take you to recover from the situation so yeah this is a large-scale global incident right now that we're in yeah I know you guys do a lot of talk about chaos theory and that applies a lot of math involved we all know that but I think when you go look at the real world this is gonna be table stakes and you know there's now a line in the sand here you know pre-pandemic post pandemic and i think you guys have an interesting company gremlin in the sense that this is this is a complex system and if you think about the world we're going to be living in whether it's digital events that you guys are have one coming up or how to work at home or tools that humans are going to be using it's going to be working with systems right so you have this new paradigm gonna be upon us pretty quickly and it's not just buying software mechanisms or software it's a complex system it's distributed computing and operating so I mean this is kind of the world can you guys talk about the gremlin situation of how you guys are attacking these new problems and these new opportunities that are emerging one of the things that I've always specialized in over the last 10 years is chaos engineering and so the idea of chaos engineering is that you're injecting failure on purpose to uncover weaknesses so that's really important in distributed systems with distributed you know cloud computing all these different services that you're kind of putting together but the idea is if you can inject failure you can actually figure out what happens when I inject that small failure and then you can actually go ahead and fix it one of the things I like to say to people is you know focus on what your top 5 critical systems are let's fix those first don't go for low-hanging fruit fix the biggest problems first get rid of the biggest amount of pain that you have as a company and then you can go ahead and like actually if you think about Pareto principle the 80/20 rule if you fix 20% of your biggest problems you actually solve 80% of your issues that always works something that I've done while working at National Australia Bank doing chaos engineering also what gremlin at Dropbox and I help a lot of our customers do that to albariño talk about the mindset involved it's almost counterintuitive whoa-oh-oh risk the biggest system and I don't want to touch those there working fine right now and then these problems just gestate they kind of hang around to the bin in the kitchen fire you know mist okay I don't want to touch it the house is still working so this is kind of a new mindset could you talk about what your take is on that is the industry there I mean oh it was a kind of a corner case you know you had Netflix you had the chaos monkey those days and then now it's the DevOps practice for a lot of folks you guys are involved in that what's the what's the appetite what's the progress of chaos engineering and mainstream yeah it's interesting that you mentioned DevOps and you know recently Gartner came up with a new revisited devil scream work that has chaos engineering in the middle of the lifecycle of your application and the reality is that systems have become so complex in infrastructure so many layers of abstractions you have hundreds of services if you're doing micro services but even if you're not doing micro services you have so many applications connected to each other build really complex workflows and automation flows it's impossible for traditional QA to really understand well the vulnerability are in terms of resiliency in terms of quality too often the production environment is also too different from the staging environment and so you need a fundamentally different approach to go and find where your weaknesses are and find them before they happen before you end up finding yourself in a situation like the one we're in today and you're not prepared and so much of what we talk about is giving it >> and the methodology for people to go and find these vulnerabilities not so much about creating cause chaos but it's about managing sales that is built into our current system and exposing those vulnerabilities before they create problem and so that's a very scientific methodology and and and tooling that we would bring to market and we help customers with Tammy I want to get your thoughts on so you know we used to riff a lot of to our 10th you know cube we've had a lot of conversation we've ripped over the over the years but you know when the surge of Amazon Web Services came out as pretty obvious the clouds amazing and look at the startups that were born you mentioned Dropbox you work there these comings and all these born in the cloud these hyper scale comes built from scratch great way to scale up and we used to joke about Google people say I would like a cloud like Google but no one has Google's use cases and Google really pioneered the sre concept and you gotta give them a lot of props for that but now we're kind of getting to a world where it's becoming Google like there's more scale now than ever before it's not a corner case it's becoming more popular and more of a preferred architecture this large scale what's your assessment of the of the mainstream enterprises how far are they did in your mind our way are they there with Castle they clothed how they doing it how does someone take how does someone develop an SRE practice to get the Google like scale because Google has an amazing network they got large-scale cloud they have sres they've been doing it for years how does a company that's transforming their IT have expertise it's a great question I get asked this a lot as well one of our goals at Bremen is to help make Internet more reliable for everybody everyone using the Internet all of the engineers who are trying to build reliable services and so I'm often asked by you know companies all over the world how do we create an SRE practice and how do we practice chaos engineering and so actually how you can get started actually rolling out your sre program based on my experiences I've done it so when I worked at Dropbox I worked with a lot of people who had been at Google they've been at YouTube they were there when was rolled out across those companies and then they brought those learnings to Dropbox and I learned from them but also the interesting thing is if you look at enterprise companies so large banks say for example I worked at a National Australia Bank for six years we actually did a lot of work that I would consider chaos engineering and sre practices so for example we would do large-scale disaster recovery and that's where you fail over an entire data center to a secret data center in an unknown location and the reason is because you're checking to make sure that everything operates okay if there's a nuclear blast that's actually what you have to do and you have to do that practice every quarter so but but if you think about it it's not very good to only do it once a quarter you really want to be practicing chaos engineering and injecting failure on this I think actually my I prefer to do it three times a week do I do it a lot but I'm also someone who likes to work out a lot and be fit all the time so I know that do something regularly you get great results so that's what I always tell us yeah I get the reps in as we say you know get get stronger at the muscle memory guys talk about the event that's coming up you got an event that was schedules physical event and then you were right in the planning mode and then the crisis hits you going digital going virtual it's really digital but it's digital that's on the internet so how are you guys thinking about this I know I it's out there it's April 21st can you share some specifics around the event well who should be attending and how they get involved online yeah yeah they vent really came about about together about a month ago when we started to see all the cancellations happening across the industry because of code 19 and we are extremely engaged with in the community and we have a lot of talks and we are seeing a lot of conferences just dropping and so speakers losing their opportunity to share their knowledge with respect to how you do reliability and topics that we focus on and so we quickly people it as a company and created a new online event to give everyone in the community the opportunity to you know they'll over to a new event as the president as a as the conference name says and and have those speakers will have lost their speaking slots have a new opportunity to go share their knowledge and so that came together really quickly we share the idea with a dozen of our partners and everyone liked it and all the sudden this thing took off like crazy in just a month where we are approaching you know four thousand registrations we have over 30 partners signed up and supporting the initiative a lot of a lot of past partners as well covering the event so it was impressive to see the amount of interest that that we were able to generate in such a short amount of time and really this is a conference for anybody who is interested in resilience and if you want to know from the best on how to build business continuity of persistence people and processes this is a great opportunity at no cost we need some free conference and the target persona and the audience you want to have a ten is what Sree Zoar folks doing architectural work and what's that that's the target yes and to attend our cadets s Ari's developers business leaders who care about the quality and reliability of their applications who need to help create a framework and a mindset for their organization that speaks to what Tammy was saying a minute ago having that constant crap is on a daily basis about who and finding how to improve things you know Tammy we've been doing going to physical events with the cube and extracting the signal of the noise and distributing it digitally for ten years and I got to ask you because now that those are those events have gone away you talk about chaos and injecting failure these doing these digital events is not as easy it's just live streaming it's it's hard to replicate the value of a physical event years of experience and standards roles and responsibilities to digital different consumption environments a synchronous you're trying to create a synchronous environment it's its own complex system so I think a lot of people are experimenting and learning from these events because it's pretty chaotic so I'd love to get your thoughts on how you look at these digital events as a chaos engineer how should people be looking at these events how are you I was looking at it you know I also want to get the program going get people out there get the content but you have to iterate on this how do you view this it is really different so I actually like to compare it to fire drills in SRA so often what you do there is you actually create a fake incident or a fake issue so you just you know you're saying let's have a fire drill similar to like you know when you're in a building and you have a fire drill that goes off you have wardens and everything and you all have to go outside so we can do that in this new world that we're all in all of a sudden you know a lot of people have never run an online event and now all of a sudden they have to so what I would say is like do a fire drill um run up you know a baked one before you do the actual on one to make sure that everything does work okay my other tip is make sure that you have backup plans backup plans on backup plans on backup plans like as in SRA I always have at least three to five backup plans like I'm not just saying plan a and Plan B but there's also a C D and E and I think that's very important and you know even when you're considering technology one of the things we say with chaos engineering is you know if you're using one service inject failure and make sure that you can fail over to a different alternative service in case something goes wrong yeah hence the failover conference which is the name of the conference yeah yeah well we certainly are gonna be sending a digital reporter there virtually if you need any backup plans obviously we have the remote interviews here if you need any help let us know really appreciate it I'll great to see you guys and thanks for sharing any final thoughts on the conference how what what happens when we get through the other side of this I'll give you guys a final word we'll start with Alberto with you first yeah I think one when we are on the other side of this will will understand even more the importance of effective resilience architecting and and and testing I think you know as a provider of tools and methodologies for that we we think we will be able to help customers do we do a significant leap forward on that side and the conference is just super exciting I think it's going to be a great I encourage everyone to participate we have tremendous lineup of speakers that have incredible reputation in their fields so I'm really happy and and excited about the work that the team has being able to do with our partners put together this type of event okay Tammy yes ma'am I'm actually going to be doing the opening keynote for the conference and the topic that I'm speaking about is that reliability matters more now than ever and I'll be sharing some you know bizarre weird incidents that I've worked on myself that I've experienced you know really critical strange issues that have come up but yeah I just I'm really looking forward to sharing that with everybody else so please come along it's free you can join from your own home and we can all be there together to support each other you got a great community support and there's a lot of partners press media and an ecosystem and customers so congratulations gremlin having a conference on April 21st called the failover conference the qubits look at angle we'll have a digital reporter there we covering the news thanks for coming on and sharing and appreciate the time I'm Jeff we're here in the Palo Alto series with remote interview with gremlin around there failover conference April 21st it's really demonstrating in my opinion the at scale problems that we've been working on the industry now more applicable than ever before as we get post pandemic with kovin 19 thanks for watching be back [Music]

hello everyone and welcome to this week's wiki Bond cube insights powered by ETR in this breaking analysis we're going to share fresh data from etrs latest spending survey in particular ETR added a drill down question on the impact of coronavirus now yesterday I had the pleasure of hosting ETRS director of research Sagar khadiyah who took us through the details of that survey and we're gonna bring his comments in to this discussion so today I want to accomplish three things first I want to summarize the macro where are we at this point on the second day of spring in Massachusetts second I want to assess the impact from Co vid 19 on i.t spend for 2020 and the third thing I want to do is drill down into the findings from ET ARS latest survey after we do this I'll summarize and talk about what the outlook it looks like so where are we today you know we've gone from the fear of missing out in the stock market to basically fall out fear now as you well know the economic impact is not pretty I gotta say this is the first time I've ever seen a government imposed recession rightly so to save lives but I've also never seen such an escrow the board doubled downward shift in both supply and demand this creates uncertainty and ambiguity in pricing which makes forecasting anything really really difficult the liquidity shock and the credit risks are really of primary concern right now the price of oil is a huge issue why it's because energy companies account for a very sizable portion of the high-yield credit market over 10% so as prices fall it's going to be harder for oil companies to repay loans this creates default risk so this is the markets freaked out and functioning very very poorly now a poorly functioning market signals that we are not at the bottom everybody wants to know where the bottom is I'm not a stock picker and I'm not a market technician but I've seen a lot of downturns I'll share a quick story when I was at IDC we had an exclusive deal with Goldman Sachs two of the Goldman analysts were embedded into our Framingham offices now in 1987 on Black Monday and the following weeks I would stand at their real-time terminal there was no internet back then kids nobody had access to real-time trades but I did and I would watch the market in freefall and I would see it bounce back and then I would see it freefall again what I will tell you is this bottoms are impossible to protect everybody says that why because bottoms are not technical their psychological their emotional and in 1987 and then after the dot-com bust and after the financial crisis each time you saw the S&P with rally sometimes it would rally as high as 10% it would suck people back into the market and then pull back and that's going to happen here the markets not just gonna be fine any day now now if you're looking for some positives there is some silver linings that the canals in Venice are running clear which is amazing to see nitrous oxide levels over China are way way down okay let's shift and take a look at what this all means for IT spending what are the industries that are being most affected right now now as I show here there are some obvious sectors like energy and transportation retail etc but let's listen to Sagar from ETR what he told me yesterday now pay particular attention to what he says about supply chains roll the clip yeah industrials materials manufacturing retail consumer you know the healthcare pharma they you know those are the verticals from a supply chain perspective that are in you know elevated levels of broken supply chains and what's actually interesting is we in this survey we actually asked not only whether your supply chains were broken today but do you anticipate or do you continue or do and just they continue getting experiencing broken supply chains in three months from now and those percentages were up and I think that really tells us that this is not a one or two month type of recovery we're gonna see supply chains and demand continuing to be broken continuing to come down over the next three four months that I think is probably one of the biggest takeaways from the drill-down study so you see in the EGR survey it really underscores that we are not likely to see a quick snap back it's not a 1 or a two-month fix now in my own research I go out to the field I talked to people on the cube within our network I can add some excuse me some comments and some color here what we see is that healthcare right now is so swamped that they're not buying anything I mean they just they just are how many cycles most customers are taking they're skunkworks put anyone hold they're narrowing the capital spend and really focusing only on mission-critical items banks even though banks are down they have capital and they're still buying they got cash thanks they're smart and they're negotiating very hard for big discounts the other thing is a lot of customers have no choice but to buy many are on an AR are in your recurring revenue or annual current contract and have compliance edicts like we got to send out monthly statements if they don't renew they can't use their software to do that it's different but somewhat similar with maintenance contracts so you're seeing that sales teams are clearly bringing down their forecasts but they're not cutting them in half mmm not yet anyway all right but here's what's somewhat counterintuitive and you really you can really only quantify this with data some companies actually believe it or not they're spending more why because they try to preserve productivity would their work from home solutions they need infrastructure to do that so they're pivoting their budget to work from home they also have to secure that infrastructure so that means the cyber cyber security is seeing a little bit of momentum now let's take a look at the EGR data this is from more than a thousand CIOs and IT buyers it's fresh data right from March 40% of the survey said they see no current impact on their IT budget that is surprisingly high and look at all the green to the right-hand side you know most are showing five to ten percent increase but more than 20% of the respondents are actually expecting to increase budget in 2020 for things like work from home infrastructure let's take a listen to saga kadia who explains this further roll the clip yeah I think that's I think the the positive spent or the no change in spend I think that is what a lot of the market right now is missing and I haven't seen a lot of research on that because no one else has really been able to quantify how budgets are changing and so as you noted we're actually seeing people accelerate spend because of Kovan 19 and the reason is you know they're trying to avoid a catastrophe in productivity they are ramping up all this work from home infrastructure right not just collaboration tools virtualization infrastructure increasing VPN networking bandwidth mobile devices laptops security desktop support right you're a fortune 500 organization and you have 40 50 60 thousand employees working from home all the sudden you have to be able to support those employees and as a result you're actually seeing a large number of organizations accelerating spend and even the ones that are being hurt by the broken supply chains the demand coming down you're seeing some of their spendy seller ation being offset by spending a little bit more kind of what we're calling this kind of work from home infrastructure so sada went on to explain that consensus consensus expectations for global IT spend they were roughly at four percent before coronavirus and the pullback takes us now to flat or zero percent but what's not been reported is really the offset to the declines particularly from the work from home infrastructure now obviously this could all change in a likely will but this next chart really underscores that uncertainty and really the dynamic nature of the risk here what this track charts is the daily impact of the expected retraction so earlier this month in the et our survey you saw about a two percent retraction and exceed by March seventeenth it's down to flat so as we heard from Sagar the et our thesis is currently at 0% IT spend for growth in 2020 because of some of the offset now if the news continues to worsen the outlook is going to follow alright I want to wrap up by summarizing and and talking about what what's next and what you can expect so the current call as I said is for flat IT spend in 2020 it would be worse if not for the uptick in work from home and corollaries security infrastructure now it's not just collaboration and video tools it's virtualization solutions it's VPNs network upgrades mobile devices laptops and and the software to to secure all this stuff and make it work now despite the work from home offset we fully expect this picture or worsen over the next three months you got a watch for the duration of the the remote work at home mandates the travel bans the the no meeting policies there's a little doubt that productivity is going to be heard as we discussed yesterday with Sagar you can't just flick a switch and scale remote worker productivity you know that's a real challenge now having said that the expectation from CIOs is that this spending decline is going to be temporary what's unclear is the shape of the recovery is it going to be a v-shaped or a slow slog you can see the distant rim on the other side of the canyon it's there we just don't know how far away it is and we don't know how deep the canyon really is now there will be changes in our opinion that are going to be permanent as we said on a last braking analysis over the next several months organizations they're going to learn new things and that is going to shape their thinking in the future I personally expect accelerated digital transformations and a sustained viability of the work from home options you're gonna see new capabilities from distant learning with all the college shutdowns you're also going to see new risk mitigation paradigms you know the list goes on and on and on in terms of what we're going to see here as I said earlier there seemed to be some environmental benefits you know if you're looking for some positives here I think this next generation is much more in tune with that and you have my word and my promise and our team's promise that the cube and ETR is going to be here to keep you up to date et our survey data keeps rolling in you can check that out at ETR dot plus they are vigilant on this issue as are we from our remote studios look this is the new normal our skeleton crews are in studio and we're keeping the content flowing as many folks on our team they're working from home and they're on the grid currently our Palo Alto studio is fully operational four days a week each week and we're capturing remote guests on camera and Boston is open as well so get in touch if you need anything we are here to help and we're here to serve you okay this is Dave Villante for wiki bones cube insights powered by ETR thanks for watching this breaking analysis remember these episodes they're available on podcasts wherever you listen please connect with me emails David Galante at Silicon angle dot-com comment on my LinkedIn post I always appreciate that from the community thanks for watching everybody wishing good health and safety for you and your families we'll see you next time [Music]