>> From Boston, Massachusetts, it's the cube. covering LiveWorx 18, brought to you by PTC. (upbeat music) >> Welcome back to the Boston Seaport everybody. My name is David Vellante, I'm here with my co-host Stu Miniman and you're watching the cube, the leader in live tech coverage. We're at LiveWorx PTC's big IOT conference. Jaron Lanier is here, he's the father of virtual reality and the author of Dawn of the New Everything. Papa, welcome. >> Hey there. >> What's going on? >> Hey, how's it going? >> It's going great. How's the show going for you? It's cool, it's cool. It's, it's fine. I'm actually here talking about this other book a little bit too, but, yeah, I've been having a lot of fun. It's fun to see how hollow lens applied to a engines and factories. It's been really cool to see people seeing the demos. Mixed reality. >> Well, your progeny is being invoked a lot at the show. Everybody's sort of talking about VR and applying it and it's got to feel pretty good. >> Yeah, yeah. It seems like a VR IoT blockchain are the sort of the three things. >> Wrap it all with digital transformation. >> Yeah, digital transformation, right. So what we need is a blockchain VR IoT solution to transform something somewhere. Yeah. >> So tell us about this new book, what it's called? >> Yeah. This is called the deleting all your social media accounts right now. And I, I realize most people aren't going to do it, but what I'm trying to do is raise awareness of how the a psychological manipulation algorithms behind the system we're having an effect on society and I think I love the industry but I think we can do better and so I'm kind of agitating a bit here. >> Well Jaron, I was reading up a little bit getting ready for the interview here and people often will attack the big companies, but you point at the user as, you know, we need to kind of take back and we have some onus ourselves as to what we use, how we use it and therefore can have impact on, on that. >> Well, you know, what I've been finding is that within the companies and Silicon Valley, a lot of the top engineering talent really, really wants to pursue ethical solutions to the problem, but feels like our underlying business plan, the advertising business plan keeps on pulling us back because we keep on telling advertisers we have yet new ways to kind of do something to tweak the behaviors of users and it kind of gradually pulls us into this darker and darker territory. The thing is, there's always this assumption, oh, it's what users want. They would never pay for something the way they pay for Netflix, they would never pay for social media that way or whatever it is. The thing is, we've never asked users, nobody's ever gone and really checked this out. So I'm going to, I'm kind of putting out there as a proposition and I think in the event that users turn out to really want more ethical social media and other services by paying for them, you know, I think it's going to create this enormous sigh of relief in the tech world. I think it's what we all really want. >> Well, I mean ad-based business models that there's a clear incentive to keep taking our data and doing whatever you want with it, but, but perhaps there's a better way. I mean, what if you're, you're sort of proposing, okay, maybe users would be willing to pay for various services, which is probably true, but what if you were able to give users back control of their data and let them monetize their data. What are your thoughts on that? >> Yeah, you know, I like a lot of different solutions, like personally, if it were just up to me, if I ran the world, which I don't, but if I ran the world, I can make every single person of the world into a micro-entrepreneur where they can package, sell and price their data the way they want. They can, they can form into associations with others to do it. And they can also purchase data from others as they want. And I think what we'd see is this flowering of this giant global marketplace that would organize itself and would actually create wonders. I really believe that however, I don't run the world and I don't think we're going to see that kind of perfect solution. I think we're going to see something that's a bit rougher. I think we might see something approximating that are getting like a few steps towards that, but I think we are going to move away from this thing where like right now if two people want to do anything on online together, the only way that's possible is if there's somebody else who's around to pay them, manipulate them sneakily and that's stupid. I mean we can be better than that and I'm sure we will. >> Yeah, I'm sure we will too. I mean we think, we think blockchain and smart contracts are a part of that solution and obviously a platform that allows people to do exactly what you just described. >> And, and you know, it's funny, a lot of things that sounded radical a few years ago are really not sounding too radical. Like you mentioned smart contracts. I remember like 10 years ago for sure, but even five years ago when you talked about this, people are saying, oh no, no, no, no, no, this, the world is too conservative. Nobody's ever going to want to do this. And the truth is people are realizing that if it makes sense, you know, it makes sense. And, and, and, and so I think, I think we're really seeing like the possibilities opening up. We're seeing a lot of minds opening, so it's kind of an exciting time. >> Well, something else that I'd love to get your thoughts on and we think a part of that equation is also reputation that if you, if you develop some kind of reputation system that is based on the value that you contribute to the community, that affects your, your reputation and you can charge more if you have a higher reputation or you get dinged if you're promoting fake news. That that reputation is a linchpin to the successful community like that. >> Well, right now the problem is because, in the free model, there's this incredible incentive to just sort of get people to do things instead of normal capitalist. And when you say buy my thing, it's like you don't have to buy anything, but I'm going to try to trick you into doing something, whatever it is. And, and, and if you ever direct commercial relationship, then the person who's paying the money starts to be a little more demanding. And the reason I'm bringing that up is that right now there's this huge incentive to create false reputation. Like in reviews, a lot of, a lot of the reviews are fake, followers a lot of them are fake instance. And so there's like this giant world of fake stuff. So the thing is right now we don't have reputation, we have fake reputation and the way to get real reputation instead of think reputation is not to hire an army of enforcing us to go around because the company is already doing that is to change the financial incentives so you're not incentivizing criminals, you know I mean, that's incentives come first and then you can do the mop up after that, but you have to get the incentives aligned with what you want. >> You're here, and I love the title of the book. We interviewed James Scott and if you know James Scott, he's one of the principals at ICIT down PTC we interviewed him last fall and we asked him, he's a security expert and we asked them what's the number one risk to our country? And he said, the weaponization of social media. Now this is, this is before fake news came out and he said 2020 is going to be a, you know, what show and so, okay. >> Yeah, you know, and I want to say there's a danger that people think this is a partisan thing. Like, you know, if you, it's not about that. It's like even if you happen to support whoever has been on, on the good side of social media manipulation, you should still oppose the manipulation. You know, like I was, I was just in the UK yesterday and they had the Brexit foot where there was manipulation by Russians and others. And you know, the point I've made over there is that it's not about whether you support Brexit or not. That's your business, I don't even have an opinion. It's not, I'm an American. That's something that's for somebody else. But the thing is, if you look at the way Brexit happened, it tore society apart. It was nasty, it was ugly, and there have been tough elections before, but now they're all like that. And there was a similar question when the, the Czechoslovakia broke apart and they didn't have all the nastiness and it's because it was before social media that was called the velvet divorce. So the thing is, it's not so much about what's being supported, whatever you think about Donald Trump or anything else, it's the nastiness. It's the way that people's worst instincts are being used to manipulate them, that's the problem. >> Yeah, manipulation denial is definitely a problem no matter what side of the aisle you're on, but I think you're right that the economic incentive if the economic incentive is there, it will change behavior. And frankly, without it, I'm not sure it will. >> Well, you know, in the past we've tried to change the way things in the world by running around in outlying things. For instance, we had prohibition, we outlawed, we outlawed alcohol, and what we did is we created this underground criminal economy and we're doing something similar now. What we're trying to do is we're saying we have incentives for everything to be fake, everything to be phony for everything to be about manipulation and we're creating this giant underground of people trying to manipulate search results or trying to manipulate social media feeds and these people are getting more and more sophisticated. And if we keep on doing this, we're going to have criminals running the world. >> Wonder if I could bring the conversation back to the virtual reality. >> Absolutely. >> I'm sorry about that. >> So, but you know, you have some concerns about whether virtual reality will be something you for good or if it could send us off the deep end. >> Oh yeah, well. Look, there's a lot to say about virtual reality. It's a whole world after all. So you can, there is a danger that if the same kinds of games are being played on smartphones these days were transferred into a virtual reality or mixed reality modalities. Like, you could really have a poisonous level of mind control and I, I do worry about that I've worried about that for years. What I'm hoping is that the smartphone era is going to force us to fix our ways and get the whole system working well enough so that by the time technologies like virtual reality are more common, we'll have a functional way to do things. And it won't, it won't all be turned into garbage, you know because I do worry about it. >> I heard, I heard a positive segment on NPR saying that one of the problems is we all stare at our phones and maybe when I have VR I'll actually be talking to actual people so we'll actually help connections and I'm curious to hear your thoughts on that. >> Well, you know, most of the mixed reality demos you see these days are person looking at the physical world and then there's extra stuff added to the physical world. For instance, in this event, just off camera over there, there's some people looking at automobile engines and seeing them augmented and, and that's great. But, there's this other thing you can do which is augmenting people and sometimes it can be fun. You can put horns or wings or long noses or something on people. Of course, you still see them with the headsets all that's great. But you can also do other stuff. You can, you can have people display extra information that they have in their mind. You can have more sense of what each other are thinking and feeling. And I actually think as a tool of expression between people in real life, it's going to become extremely creative and interesting. >> Well, I mean, we're seeing a lot of applications here. What are some of your favorites? >> Oh Gosh. Of the ones right here? >> Yes. >> Well, you know, the ones right here are the ones I described and I really like them, there's a really cool one of some people getting augmentation to help them maintain and repair factory equipment. And it's, it's clear, it's effective, it's sensible. And that's what you want, right? If you ask me personally what really, a lot of the stuff my students have done, really charms me like up, there was just one project, a student intern made where you can throw virtual like goop like paint and stuff around in the walls and it sticks and starts running down and this is running on the real world and you can spray paint the real world so you can be a bit of a juvenile delinquent basically without actually damaging anything. And it was great, it was really fun and you know, stuff like that. There was this other thing and other student did where you can fill a whole room with these representations of mathematical objects called tensors and I'm sorry to geek out, but you had this kid where all these people could work together, manipulating tensors and the social environment. And it was like math coming alive in this way I hadn't experienced before. That really was kind of thrilling. And I also love using virtual reality to make music that's another one of my favorite things, >> Talk more about that. >> Well, this is something I've been doing forever since the '80s, since the '80s. I've been, I've been at this for awhile, but you can make an imaginary instruments and play them with your hands and you can do all kinds of crazy things. I've done a lot of stuff with like, oh I made this thing that was halfway between the saxophone and an octopus once and I'll just >> Okay. >> all this crazy. I love that stuff I still love it. (mumbling) It hasn't gotten old for me. I still love it as much as I used to. >> So I love, you mentioned before we came on camera that you worked on minority report and you made a comment that there were things in that that just won't work and I wonder if you could explain a little bit more, you know, because I have to imagine there's a lot of things that you talked about in the eighties that, you know, we didn't think what happened that probably are happening. Well, I mean minority report was only one of a lot of examples of people who were thinking about technology in past decades. Trying to send warnings to the future saying, you know, like if you try to make a society where their algorithms predicting what'll happen, you'll have a dystopia, you know, and that's essentially what that film is about. It uses sort of biocomputer. They're the sort of bioengineered brains in these weird creatures instead of silicon computers doing the predicting. But then, so there are a lot of different things we could talk about minority report, but in the old days one of the famous VR devices which these gloves that you'd use to manipulate virtual objects. And so, I put a glove in a scene mockup idea which ended up and I didn't design the final production glove that was done by somebody in Montreal, but the idea of putting a glove a on the heroes hand there was that glove interfaces give you arm fatigue. So the truth is if you look at those scenes there physically impossible and what we were hoping to do is to convey that this is a world that has all this power, but it's actually not. It's not designed for people. It actually wouldn't work in. Of course it kind of backfired because what happened is the production designers made these very gorgeous things and so now every but every year somebody else tries to make the minority report interface and then you discover oh my God, this doesn't work, you know, but the whole point was to indicate a dystopian world with UI and that didn't quite work and there are many other examples I could give you from the movie that have that quality. >> So you just finished the book. When did this, this, this go to print the. >> Yeah, so this book is just barely out. It's fresh from the printer. In fact, I have this one because I noticed a printing flaw. I'm going to call the publisher and say, Oh, you got to talk to the printer about this, but this is brand new. What happened was last year I wrote a kind of a big book of advert triality that's for real aficionados and it's called Dawn of the new everything and then when I would go and talk to the media about it they'd say, well yeah, but what about social media? And then all this stuff, and this was before it Cambridge Analytica, but people were still interested. So I thought, okay, I'll do a little quick book that addresses what I think about all that stuff. And so I wrote this thing last year and then Cambridge Analytica happened and all of a sudden it's, it seems a little bit more, you know, well timed >> than I could have imagined >> Relevant. So, what other cool stuff are you working on? >> I have to tell you something >> Go ahead. >> This is a real cat. This is a black cat who is rescued from a parking lot in Oakland, California and belongs to my daughter. And he's a very sweet cat named Potato. >> Awesome. You, you're based in Northern California? >> Yeah, yeah, yeah. >> Awesome And he was, he was, he was an extra on the set of, of the Black Panther movie. He was a stand-in for like a little mini black panthers. >> What other cool stuff are you working on? What's next for you? >> Oh my God, there's so much going on. I hardly even know where to begin. There's. Well, one of the things I'm really interested in is there's a certain type of algorithm that's really transforming the world, which is usually called machine learning. And I'm really interested in making these things more transparent and open so it's less like a black box. >> Interesting. Because this has been something that's been bugging me you know, most kinds of programming. It might be difficult programming, but at least the general concept of how it works is obvious to anyone who's program and more and more we send our kids to coding camps and there's just a general societal, societal awareness of what conventional programming is like. But machine learning has still been this black box and I view that as a danger. Like you can't have society run by something that most people feel. It's like this black box because it'll, it'll create a sense of distrust and, and, I think could be, you know, potentially quite a problem. So what I want to try to do is open the black box and make it clear to people. So that's one thing I'm really interested in right now and I'm, oh, well, there's a bunch of other stuff. I, I hardly even know where to begin. >> The black box problem is in, in machine intelligence is a big one. I mean, I, I always use the example I can explain, I can describe to you how I know that's a dog, but I really can't tell you how I really know it's a dog. I know I look at a dog that's a dog, but. Well, but, I can't really in detail tell you how I did that but it isn't AI kind of the same way. A lot of AI. >> Well, not really. There's, it's a funny thing right now in, in, in the tech world, there are certain individuals who happen to be really good at getting machine language to work and they get very, very well paid. They're sort of like star athletes. But the thing is even so there's a degree of almost like folk art to it where we're not exactly sure why some people are good at it But even having said that, we, it's wrong to say that we have no idea how these things work or what we can certainly describe what the difference is between one that fails and that's at least pretty good, you know? And so I think any ordinary person, if we can improve the user interface and improve the way it's taught any, any normal person that can learn even a tiny bit of programming like at a coding camp, making the turtle move around or something, we should be able to get to the point where they can understand basic machine learning as well. And we have to get there. All right in the future, I don't want it to be a black box. It doesn't need to be. >> Well basic machine learning is one thing, but how the machine made that decision is increasingly complex. Right? >> Not really it's not a matter of complexity. It's a funny thing. It's not exactly complexity. It has to do with getting a bunch of data from real people and then I'm massaging it and coming up with the right transformation so that the right thing spit out on the other side. And there's like a little, it's like to me it's a little bit more, it's almost like, I know this is going to sound strange but it's, it's almost like learning to dress like you take this data and then you dress it up in different ways and all of a sudden it turns functional in a certain way. Like if you get a bunch of people to tag, that's a cat, that's a dog. Now you have this big corpus of cats and dogs and now you want to tell them apart. You start playing with these different ways of working with it. That had been worked out. Maybe in other situations, you might have to tweak it a little bit, but you can get it to where it's very good. It can even be better than any individual person, although it's always based on the discrimination that people put into the system in the first place. In a funny way, it's like Yeah, it's like, it's like a cross between a democracy and a puppet show or something. Because what's happening is you're taking this data and just kind of transforming it until you find the right transformation that lets you get the right feedback loop with the original thing, but it's always based on human discrimination in the first place so it's not. It's not really cognition from first principles, it's kind of leveraging data, gotten from people and finding out the best way to do that and I think really, really work with it. You can start to get a two to feel for it. >> We're looking forward to seeing your results of that work Jared, thanks for coming on the cube. You're great guests. >> Really appreciate it >> I really appreciate you having me here. Good. Good luck to all of you. And hello out there in the land that those who are manipulated. >> Thanks again. The book last one, one last plug if I may. >> The book is 10 arguments for deleting your social media accounts right now and you might be watching this on one of them, so I'm about to disappear from your life if you take my advice. >> All right, thanks again. >> All right. Okay, keep it right there everybody. We'll be back with our next guest right after this short break. You're watching the cube from LiveWorx in Boston. We'll be right back. (upbeat music)

>> From Boston Massachusets, it's the Cube, covering LiveWorx 18, brought to you by PTC. >> Welcome back to the seaport in Boston everybody, you're watching the Cube, the leader in live tech coverage and my name is Dave Vellante. We're here, this is day one of the PTC LiveWorx show, the confluence of internet of things, Edge Computing, AI, Block chains, security, a lot of innovation going on here in this new industry that's being formed out of a lot of older and existing incumbent industries. Lieutenant Bruce Litchfield is here, he's the VP of sustainment operations at Lockheed Martin. Bruce, thanks so much for coming on the Cube, appreciate you coming on. >> Thanks David, how are you today? >> I'm doing great thanks, it's a good show here, a lot of excitement, a lot of really interesting demos, we see you lot of movement here but I wonder if can talk about your military experience and how it relates to your current role at Lockheed Martin? >> Sure, so I spent 30 plus years in the military, and I retired as a lieutenant general so. >> Well, thank you for your service really. >> You know, it's an honor to serve and time when by fast and really got to work with some great people. And when you have that in your blood, it's hard to walk away and not continue service. I got a chance to work with Lockheed Martin who delivers the products and builds the products that I grew up with in the air force. Most of my career was in the sustainment and keeping them flying kind of aspect of the air force so now I get to work on them from a corporate perspective and continued to deliver products and capabilities and upgrade them so that tomorrow can be better than today. And that folks out in the field make sure that when the systems are needed and they have to use them, they're ready, capable, and, to go to, do whatever it is. >> Okay, sustainment is in your title and that's your current role, so by sustainment you mean, it works, when you need it to work, is that, describe that a little bit? That's right so, I use the simple term, keep them flying. And when you think about that, all over the world, 365 days a year, 27-7, you never know when a mission needs to take off or a soldier, sailor, eminent marine might need a capability to save a life, change the course of a battle, or otherwise make a difference. If a Lockheed Martin system's involved, I want to make sure it's there and ready to go and they don't have to worry about whether it's going to be able to succeed in the mission. >> So what's the role of technology in keeping systems up? I know in the IT world, it used to be just get two of everything, or three of everything, or four of everything, and just make things redundant. That kind of thinking's obviously evolved but what tech is Lockheed Martin bringing to this problem? >> If you look over the systems, and I'll just take, I came from the air force, and so the air force is flying weapon systems that are 50 plus years old along with we are delivering now the F35, which is the absolute latest in technology and capability. And so when I look at the evolution of technology over the time, it really is very impressive. I really do term sustainment as a systems engineering problem, it's making sure the part is there, it's making sure the system's reliable, it's making sure the tech data, it's making sure the support equipment. Anything that the maintenance person may need to get that jet airborne. Got to make sure it's there at the right time at the right place. And so if you look at the technology of how it's evolved over the year, it's much the same as our capability to go to war is, from what I would consider the command and control of World War Two or you just launched a jet. In fact we talked about it today. For one raid in World War Two, it took almost 200 bombers to hit one target, dropping over, almost a half a million tons of munitions, to today one aircraft can hit multiple targets with precision accuracy and keeping our air men safe, so the technology's evolved, along with how we sustain aircraft, which has really evolved over that time. >> So much more software obviously involved in aircraft today, how has the industry dealt with the increase in complexity as a result of things like software and code, but at the same time, it's clearly delivering more reliable systems and more efficient systems as you described? >> That's right, so think about in this way. Underpinning an inherent capability, such as the F35, is a reliability of this system. So if just take that one weapon system. So we have, right now, delivered over 300 aircraft and they're bedded down at over 14 locations, around the world. 74% of the items in that aircraft have never failed, over the time that they been out there, including over, about a hundred thousand hours worth of flight hours. Then when you start looking at that, almost 94% of them meet or exceed their liability requirements. So now we're just down to a few parts that we've got to make sure that we improve through regular upgrades that you would do under normal conditions to make the most reliable system. Then on top of that, you put the software embedded in the aircraft, it helps the folks on the flight line know what's failed, where it's failed and then know how to troubleshoot and so you've brought technology to a point of what I would call human interaction on the flight line. >> You talk a lot about predictive maintenance and anticipating failures. Presumably that is part of this capability, is that, I mean, how real is that? Is it in action today? Is it sort of a future thing or can you talk about that? >> So, it's very much in action today and we have a predictive health and what we're really trying to drive to is a condition based maintenance airplane. In other words, if you think about going to a commercial airline, you don't want it to fly to fail, you want to make sure that when ever you show up that it's ready, you board it and you take off. Well, we're evolving the technology that involves us to go to a condition based maintenance so we can do maintenance on the off time and when the aircraft not needed or what I would call a scheduled kind of time frame and that helps ensure that we don't just, it's mission ready whenever the pilots need it or when ever the sorty requirements call for it. >> Okay, so, let's talk about some of the challenges that you guys face in terms of bringing technology and sustaining this technology into whatever generation of aircraft? I think we're in fifth generation today? First of all what's fifth generation what are some of the challenges that you face? >> So let's start with fifth gen, so from an operational perspective, when someone says fifth gen technology, it's really taken into account what I would consider low visibility or in other words, making the aircraft hard to detect. It's putting avionic sensors on there so that the pilot knows what's going on around them and is able to fuse that information, to to give them very explicit information of what's happening on the battlefield and then be able to keep those that are supporting him informed of what's happening. It's a high maneuverability of the weapon system as well as speed that it goes. So there's the technology aspects of fifth gen and then what I like to refer to is fifth gen sustainment and that's really what we're doing at Lockheed Martin. What we want to be able to do is bring fifth gen sustainment capability to the field and drive the cost down so it's at a fourth gen or below the price of what current systems are. So get new technology, modern technology, sustain it at a very high readiness rate at a cost lower than what they currently see today. So fifth for fourth is one of the mantra's that we're trying to deliver, or at least drive the cost down, as low as possible. And one of the challenges that I would say is that balance between how do you have that capability and then keep the cost down? So you have to do things differently. You have to evolve to a new way of looking, so we talked about, a condition based maintenance or evolving to it and a capability where you don't fly to fail. You do it when the system's down when you do it on a scheduled basis to do that. At the same time you have to integrate all the capabilities together for software, to bring in analytics to the capabilities that you have and prognostics kind of maintenance to the field. And so it's a systems engineering, a complex instrument system's engineering problem so really that's what makes, kind of, I would call the strength of Lockheed Martin, which prides itself on being a technology company, making tomorrow better than today. >> Yeah, and a system's thinker. >> And a system's thinker. >> When you talk about these capabilities, observability, avionics capabilities, maneuverability, increased speeds, I just, it just jumps in my head, data. Let's talk about the role of data in analytics, I mean, the data explosion here, how are you dealing with all of that data? >> So we get close to a terabyte worth of information a day, and then how you exploit that really goes across the entirety of what I would call the sustainment ecosystem. And if you look at it, sustainment probably, we can break it down into about 11 different areas, whether it's supply chain, whether it's managing the inventory that we have within supply chain, whether it's in reliability, prognostics. Whether it's in the maintenance repair and overhaul capability. So we're bringing analytics across the entire spectrum of that and what we're out doing right now, is getting best of breed capabilities so that we can piece together a holistic picture to better sustain this weapon system, so data is the key to doing that. At the end of the day it's how do you bring that data and then bring it to what I would call the analog piece or the human being at the flight line that still has to maintain the parts. But we want to make sure the right parts at the right place at the right time. >> So the human is still the last mile. That terabyte a day, is the majority of that stored, it is persisted or is there a lot of it that's kind of throw away data? Can you? >> No, I mean, the great news id we capture that data and so we have a chance to go utilize it to improve not only what tomorrow is but if I look at analytics for sustainment piece, I look at it in three pieces. One is a dashboard, alright where are you? What's the status? Okay that's good, that's your speedometer. Then it is how do you do decision aids and tools, which means how do you make better decisions to affect maybe tomorrow's operation? Then there's a third part about it which is predictive analytics, how do I make decisions today that affect me three to five years apart and that I can make a decision today and have confidence that down the road that's absolutely going to be the right decision? >> And I mean, the first two, the status and the decision aids, those are real time or near real time. >> Very much so. >> Pretty much instantaneous types of things, that's a challenge obviously to deal with that. >> It is and then we are dealing with a defense. You got to be always cognizant of security, cyber security, and making sure that what you do keeps that data safe and make sure that no one be able to tamper with it so that your making real time decisions based on the known capabilities of the data and where it comes from. >> Well Bruce thank you very much for coming on the Cube. I hope you're enjoying the LiveWorx show. It was really a pleasure having you. >> David thank you, it's a great show and it's great to be here. >> Our pleasure. >> Okay, keep it right there everybody, we'll be back with our next guest. You're watching the Cube live, from LiveWorx in Boston. We'll be right back.

>> From Boston, Massachusetts, it's theCUBE. Covering LiveWorx 18, brought to you by PTC. >> Welcome back to Boston, everybody. This is theCUBE, the leader in live tech coverage, and we are here, day one of the PTC LiveWorx conference, IOT, blockchain, AI, all coming together in a confluence of innovation. I'm Dave Vellante with my co-host, Stu Miniman. Wolfgang Ulaga is here. He's the AT&T Professor of Services Leadership and Co-Executive Director, the Center for Services Leadership at Arizona State University. Wolfgang, welcome to theCUBE, thank you so much for coming on. >> Thank you. >> So services leadership, what should we know? Where do we start this conversation around services leadership? >> The Center of Services Leadership is a center that has been created 30 years ago around a simple idea, and that is putting services front and center of everything a company does. So this is all about service science, service business, service operations, people and culture. When you touch service, you immediately see that you have to be 360 in your approach. You have to look at all the aspects. You have to look at structures and people. You have to look at operations with a service-centric mindset. >> I mean, it sounds so obvious. Anytime we experience, as consumers, great service, we maybe fall in love with a company, we're loyal, we tell everybody. But so often, services fall down. I mean, it seems obvious. Why is it just not implemented in so many organizations? >> One of the problems is that companies tend to look at services as an afterthought. Think about the word after-sales service, which in my mind is already very telling about how it's from a cultural perspective perceived. It's something that you do after the sale has been done. That's why oftentimes, there is the risk that it falls back, it slips from the priority list. You do it once, you have done all the other things. But in reality, businesses are there to serve customers. Service should be the center of what the company does, not at the periphery. >> Or even an embedded component of what the company, I mean, is Amazon a good example of a company that has embraced that? Or is Netflix maybe even a better example? I don't even know what the service department looks like at Netflix, it's just there. Is that how we should envision modern-day service? >> It excites me at the conference at LiveWorx. We see so many companies talking about technology and changes. And you really can sense and see how all of them are thinking about how can they actually grow the business from historic activities into new data-enabled activities. But the interesting challenge for many firms is that this is going to be also journey of learning how to serve its customers through data analytics. So data-enabled services is going to be a huge issue in the next coming years. >> Wolfgang, you're speaking here at the conference. I believe you also wrote a book about advanced services. For those that aren't familiar with the term, maybe walk us through a little bit about what that is. >> Earlier this morning, I presented the book "Service Strategy in Action", which is a very managerial book that we wrote over 10 years of experience of doing studies, working with companies on this journey from a product-centric company that wants to go into a service and solution-centric world and business. Today we see many of the companies picking up the pace, going into that direction, and I would say that with data analytics, this is going to be an even more important phenomenon for the next years to come. >> A lot of companies struggle with service as well because they don't see it as a scale component of their business. It's harder to scale services than it is to scale software, for example. In thinking about embedding services into your core business, how do you deal as an organization with the scale problem? Is it a false problem? How are organizations dealing with that? >> No, you're absolutely right. Many companies know and learn when they are small and they control operations. It's easy to actually have your eyes on service excellence. Once you scale up, you run into this issue of how do you maintain service quality. How do you make sure that each and every time to replicate into different regions, into different territories, into different operations, that you keep that quality up and running. One way to do it is to create a service culture among the people because one way to control that quality level is to push responsibility as low as possible down so that each and every frontline employee knows what he or she has to do, can take action if something goes wrong, and can maintain that service quality at the level we want. That's where sometimes you see challenges and issues popping up. >> What role do you see machines playing? You're seeing a lot of things like Chatbox or voice response. What role will machines play in the services of the future? >> I think it's a fascinating movement that is now put in place where, machine, artificial intelligence, is there to actually enhance value being created for customers. Sometimes you hear this as a threat or as a danger, but I would rather see it as an opportunity to raise levels of service qualities, have this symbiosis between human and machine to actually provide better, outstanding service for customers. >> Could you share some examples of successes there or things that you've studied or researched? >> Yeah so for example, if I take a consumer marketing example. In Europe I worked with a company, which is Nespresso. They do this coffee machines and capsules. In their boutique, they don't call it a store, by the way, they call it a boutique, they have injected a lot of new technology into helping customers to have different touchpoints, get served the way they want to, at the time they want to, how they want to. So this multi-channel, multi-experience for customers, is actually a growing activity. When you look at it from a consumer perspective, I get more opportunities, I get more choices. I can pick and choose when, where, and how I want to be served. A similar example is Procter & Gamble here in the United States. P&G has recently rolled out a new service business, taking a brand, Tide, and creating Tide Dry Cleaners here in America. It's a fascinating example. They use technology like apps on a smartphone to give the customer a much better experience. I think there's many of these example we'll see in the future. >> When we talk about IOT, one of the things that caught our ear in the keynote this morning is, it's going to take 20 to 25 partners putting together this solution. Not only is there integration of software, but one of the big challenges there, I think, is how do you set up services and transform services to be able to live in this multi-vendor environment. I wonder if you could comment on that? >> I agree, I agree. What I see, which makes me as a business professor very excited and that is, of course there's technology, of course there's hardware and software. But one of the biggest challenges will be the business challenges. How do you implement all of these offers? How do you roll it out? One of my talk topics today were how do you commercialize it? How do you actually make money with it? How do you get paid for it? One of my research areas is what they call free to fee. How do you get the r out of the free, and make customers pay for value you create? What I find, especially in the digital services space, there's so much value being created, but not every company is able to capture the value. Getting adequately paid for the value, this is a huge challenge. In sum, I would say it's really an issue about business challenges as much as it's a technological issue or technical challenges. >> I think about IOT, so many of the different transfer protocols, it's open source, that free to fee. Any advice you can give to people out there as to how they capture that value and capture revenue? >> I think you have to be super careful where the commoditization will kick in. If over time, something that was a differentiator yesterday, with the open sources and everything, will become not so much differentiator tomorrow. So where is your competitive edge? How do you stand out from competition? I know these are very classic questions, but you know what? In the IOT and digital space, they resurface, they come back, and having the right answers on these questions will make the difference between you and competition. >> Last question, we got to go. The trend toward self-service, is that a good thing, a bad thing, a depends thing? >> I think everything that allows customers to have choices. Customers today want to be in charge. They want to be in control. They, in fact, want all of it. They want to have service when they want it, but they want to have a non-self-service option if they feel like. So I think the trick is to know, how can I be nimble and give customers all of these choices so that they are in charge and pick and choose. >> Wolfgang, thanks so much for coming to theCUBE. >> Appreciate it, >> It's a pleasure having you, >> thank you very much, >> good to see you. All right, keep it right there, everybody. Stu and I will be back with our next guest right after this short break. We're here at the PTC LiveWorx show, you're watching theCUBE. (electronic music)

>> From Boston, Massachusetts it's theCUBE covering LiveWorx 18. Brought to you by PTC. >> Welcome back to Boston, everybody. You're watching theCUBE, the leader in live tech coverage. I'm Dave Vellante with Stu Miniman. This is day one of LiveWorx, theCUBE's special coverage of the PTC-sponsored conference. Karen Leavitt is here. She's the CMO of Locus Robotics. Karen, welcome to theCUBE. Thanks so much for coming on. >> Thanks for having me, Dave. >> So, tell us about Locus Robotics. Most people in our audience might not be familiar with it. >> No, I think when most people think about robots they either think about things that clean their house or something from The Jetsons. But these days robots are really anything that can autonomously fulfill the needs of the job requirements. In our case we build robots that work in e-commerce warehouses. Anybody whose ever purchased anything online realizes that the magic is you click the button, you pay for it, and then two days later it magically shows up at your door. >> How'd that happen? >> Yeah, exactly. Well the magic is the raw materials of most of those goods that you get at your door is human labor. They're actually people who walk through warehouses 10, 15 miles a day pushing glorified shopping carts picking items off of shelves in order to put into a box to ship to you. Well e-commerce has been growing like wildfire and we have actually a labor shortage in this country and so what we need to do is we need to figure out ways of automating the warehouse so that the merchandise can get picked efficiently, cost-effectively, and get it out to the consumers. So let's summarize. The big drivers in the business, the demand drivers you're talking about e-commerce spurring the need for automation, lack of labor, >> Yep. >> or a lot of sort of low level tasks that can be replaced by machines. Is that right? Maybe talk about that a little bit. >> Well, you know there are a few different tasks involved. Humans are still best at the ones requiring manual dexterity. Actually physically picking an item off of a shelf or out of a bin and putting it into a tote, humans are still the best at that. But robots are really the best at transporting merchandise through the warehouse and they not only transport the merchandise, they also transport the instructions. So instead of a worker having to snake her way for 15 miles a day through the warehouse, the worker simply needs a robot at a pick location and a robot displays the information that the worker needs. It shows her a photograph of the item to be picked, tells her the bin location to take it from, then she just does the pick, drops it in, and the robot moves on but it means she can be twice or three times as effective. So we built our robots that are collaborative with humans that make the humans work much better. We created sort of an external bionics, if you will. You know this is like the six million dollar warehouse worker but working with a robot friend. >> And the other trend is there is a labor shortage you're saying >> Absolutely. >> Maybe double click on that a little bit. >> We hear all the time about the labor gap in this country. First of all, we have virtually full employment in this country. When we hear about the labor gap when people say there are six million workers who are unemployed and six million jobs that need to be filled but there's a mismatch. I think a lot of people think well maybe what we need to do is we need to retrain these workers to fill the jobs that need filling and our perspective is maybe we should be doing is training the jobs not to require any training on the part of the humans. So by putting the robots in the warehouse, the robot knows what action needs to be taken, knows what task needs to be performed, and has a really bright, friendly screen to be able to inform the worker. So the entire training is you say to the worker, "Hey whenever you see a robot with it's light turned green, approach the robot and do whatever it tells you to do." And that's the whole training and since we're operating in an industry, e-commerce has a lot of spikes. The last three months of the year, last two months of the year really make up probably 40 percent of all the volume in a typical e-commerce warehouse and so the warehouse operators will often hire temporary workers and those are people that may not be trained on the full layout of the warehouse. But now, with the use of the robots, a warehouse operator can bring in even temporary labor and the training can be minimized to within say 15 minutes so that the robot is really creating an environment where the humans work better and they're more engaged. The work is less cumbersome. They're not having to push or pull a heavy cart and we can use the screen on the robot to really create some gamification to keep that worker engaged and make their job more fun. >> Karen, could you give us a little insight into your business. >> Sure. >> The clients that you sell to, who do you sell to? Are there challenges about them? Do you help them with the kind of the training of the robots aren't going to come put you out of work? >> Absolutely. Sure. The generic form of who our customers are; are warehouse operators, these are large retailers that are operating warehouses from which they do direct shipment to consumers or what are called 3PLs, third-party logistics providers. I'll give you an example. One of customers is DHL. DHL runs thousands of warehouses in which they house other people's products and they store and they ship those good in response to e-commerce orders that come in online. As I said, there are seasonal peaks and valleys to this and everybody is looking to hire workers the same seasonal peaks. So what our robots do is, and actually we've got one back here. Got a robot spinning around. They don't usually spin for a living but they're usually moving through the warehouse. They're effectively self-driving cars that carry things and they have a tablet interface with large text to be able to describe to the workers what's going on. So there's a curious passerby looking at the robot. But the robots integrate with the software that's managing the warehouse. They take the orders as they come in and then the robot will drive through the warehouse to the locations where the merchandise is located and then ask a worker to please grab one of those items, or more than one, and put it into the robot's bin and then the robot will take it to where it needs to go. To packing, it may need to go a gift wrap station or may need to be express shipped. But a company like DHL has found that by using humans alone they get one level of productivity out of their workers and it's typically measured in units picked per hour and with the robots they're getting two and a half to three times that level of productivity. So the worker is still doing the real core part of the task that only the human can do, for now, which is picking the item but the robot's doing everything else: carrying instructions, transporting the merchandise, prioritizing the tasks and actually even directing the workers' motions. >> So for decades in the technology world the innovation of the industry marched to the cadence of Moore's Law. >> Yes. Absolutely >> Metcalf's Law obviously came in so you had these sort of laws that are very predictable Like the sunrise, they come up and you can draw a straight line on a log-log scale. What's the innovation source in this world? >> And there is a Moore's Law and it's being written today for these autonomous vehicles. For the self-driving robots. What we're seeing is the hard tech has really been developed for the automotive industry by and large and we're drafting off of that. So a company our size in this nascent industry of warehouse robotics the price of a robot would be out of reach were it not for the fact that there's been critical mass established in the automotive industry. So they key hard tech items are laser in the form of LIDAR and laser cameras and tactile sensors. So all the things that you would imagine you would equip your self-driving passenger car with the robot gets equipped with and of course this hard tech is advancing along the lines of Moore's Law where it's doubling in functionality or capacity every period and it's dropping in cost. So it gives us the opportunity of either holding the cost steady while continuing to improve the functionality of the robot or holding the functionality steady while dropping the cost and because we offer our robots as a service you're effectively hiring a robot as a worker. There's no capital investment. You don't go and buy this as if you were buying a fork truck, for example. You go and you hire a robot and you pay a monthly salary to the robot and so you're instantly seeing a drop in your operating expense because you've got robots that are able to do the work of a couple of humans and you're paying them a little bit less so that you're able to really make your operating expense that much more predictable and lowering it. >> Presumably with less complaints. >> We were really kind of nervous, honestly, a year and half ago that the workers would revolt but the workers are telling us that they're really enjoying it and so it's also allowing the warehouse operators to retain their workers better because they happier workers. >> So software's the lynchpin as well. You're taking advantage . . . >> It's all software >> . . . of the advances in hard tech and then you've got non-recurring engineering costs and then you've got software-like economics driving the business. >> Yeah, apart from the hard tech robots are probably 90 percent software. They look adorable and they're running around and they have a physical manifestation which is obvious to everyone but it really is all about the software. It's about enabling the robots to move fluidly in an environment that's often very congested and gets more congested at times that are most critical because as the volume rises you need to have more workers, more robots, there's higher volume of product moving through and the robots have to be able to move fluidly through very narrow spaces between people. It's very easy to get a robot to totally avoid a human but in this case because the robots are collaborating with the humans we need them to kind of nuzzle up to you kind of like a service animal and work with you in very close quarters and that's all software. >> So, we've got this demo that I've been mesmerized by, your robot behind us. Do you think that the trend toward robotics will reverse the trend towards offshore manufacturing? Maybe bring some of that back or not? >> So our robots are not manufacturing robots however we sort of play in the same world. We see different robots. One of the interesting characteristics of this display that we're looking at here is you'll notice those robots are hidden behind glass. They're expressly being cordoned off so that they're not working with the humans who are deriving the benefits. [Dave] Much different from what you guys are doing. >> So yeah, ours is really designed to work as closely as you would with a human collaborator, perhaps maybe even more closely. (coughing) Excuse me. What I think we are seeing is we've seen automation again, particularly in large scale manufacturing like the automotive industry, for years as that automation has replaced the need for workers. And of course we now see the automotive industry, even offshore manufacturers, offshore headquartered manufacturers are doing their manufacturing here in the United States and I think because they're able to use this automation to get a more consistent cost of production worldwide. I'm not an expert on the automotive industry but I would imagine that the automation allows them to more consistently predict their costs. >> How large is this market? Can you give us a sense of that? You're probably asked that all the time. You're probably asking yourselves that all the time but when you think about the TAM, it feels like it's enormous. >> Well it's global. Everybody shops. Everybody around the world has e-commerce. It depends on how we slice it, of course. If I just looked at the e-commerce industry today, it's at roughly close to two trillion dollars worldwide in e-commerce top line revenue growing to probably three and a half trillion in just the next four or five years. It's growing about 10 percent a year here in the U.S.. Everybody is seeing the stores disappearing from their malls because people are choosing to buy things online rather than walk into a store to do shopping and we're seeing that trend continue at about ten percent growth every year. So that's growing and then at the same time we can look at it and say in terms of how many robots you need, it's a function of how many humans are required to keep up the pace and the robots sort of represent a fraction of that. The robots are designed to hold payload of varying sizes. Our robots are perfectly-sized for things like consumer packaged goods, clothing, medical devices, things like that. They're not designed to carry large building supplies, for example, but we're seeing robots with different form factors all over. But we're looking at probably a multi-billion dollar market over just the next few years. >> Obviously product costs in e-commerce is huge but the labor costs are quite substantial. >> Labor is the single biggest variable cost. >> So you're attacking a portion of that variable cost. >> Absolutely. >> Be interesting to see as this plays out, sports analogy if I may, what inning are we in here? >> I think we just had the coin-flip. >> Okay, so the national anthem just played. >> Actually, we're a little bit further than that because we have established that they serve their purpose well. We already have 10 customers, four of whom are going on record and saying I'm doubling and tripling my productivity and we expect to see this expanded dramatically over the course of just the next year. I'm seeing this grow at a very rapid pace very similar to the early days of the PC. >> Okay. >> So we've had kickoff, I would say, and the ball is moving downfield. >> And how large are you guys? Headcount-wise. >> Our company is about 70 employees. >> Seven-zero? >> Seven-zero. >> And you're VC-funded presumably? >> We're VC-funded. We're angel-funded. Fairly recently, we took on an additional 25 million dollars about six months ago. >> So that was your A round? >> That was our A round. >> Excellent. Who was in? Who was it? Do you remember offhand or could you tell us? >> Actually, most of the round was taken by a combination of around-the-table folks and a company . . . . . .great I'm going to forget my . . . >> Local VC or East Cost, West Coast? >> No, no. West Coast VC. >> But you guys are a Boston-based company. Just north of Boston, right? >> Yes, just north of Boston. >> Well I guess you're now bi-coastal. Kind of like theCUBE. >> Well, we're international. Our largest customers are DHL, which is obviously a German-domiciled company, and GEODIS, which is a French-domiciled company. So we will be moving offshore very quickly. >> Excellent. Well, Karen, thanks so much for coming to theCUBE. >> Thank you for having me Really interesting story and thanks for bringing your robot here behind us. Really appreciate it. >> Thank you. >> Alright, you're welcome. Keep right there. Stu and I will be back with our next guest right after this short break. You're watching theCUBE live from LiveWorx in Boston. We'll be right back. (electronic music)

>> From Boston, Massachusetts, it's The Cube, covering LiveWorx '18. Brought to you by PTC. >> Welcome back to Boston, everybody. This is the LiveWorx show, hosted by PTC, and you're watching The Cube, the leader in live tech coverage. I'm Dave Vellante with my co-host, Stu Miniman, covering IoT, Blockchain, AI, the Edge, the Cloud, all kinds of crazy stuff going on. Kevin Ashton is here. He's the inventor of the term, IoT, and the creator of the Wemo Home Automation platform. You may be familiar with that, the Smart Plugs. He's also the co-founder and CEO of Zensi, which is a clean tech startup. Kevin, thank you for coming on The Cube. >> Thank you for having me. >> You're very welcome. So, impressions of LiveWorx so far? >> Oh wow! I've been to a few of these and this is the biggest one so far, I think. I mean, it's day one and the place is hopping. It's like, it's really good energy here. It's hard to believe it's a Monday. >> Well, it's interesting right? You mean, you bring a ton of stayed manufacturing world together with this, sort of, technology world and gives us this interesting cocktail. >> I think the manufacturing world was stayed in the 1900s but in the 21st century, it's kind of the thing to be doing. Yeah, and this... I guess this is, you're right. This is not what people think of when they think of manufacturing, but this is really what it looks like now. It's a digital, energetic, young, exciting, innovative space. >> Very hip. And a lot of virtual reality, augmented reality. Okay, so this term IoT, you're accredited, you're the Wikipedia. Look up Kevin, you'll see that you're accredited with inventing, creating that term. Where did it come from? >> Oh! So, IoT is the Internet of Things. And back in 1990s, I was a Junior Manager at Proctor & Gamble, consumer goods company. And we were having trouble keeping some products on the shelves, in the store, and I had this idea of putting this new technology called RFID tags. Little microchips, into all Proctor products. Gamble makes like two billion products a year or something and putting it into all of them and connecting it to this other new thing called the internet, so we'd know where our stuff was. And, yeah the challenge I faced as a young executive with a crazy idea was how to explain that to senior management. And these were guys who, in those days, they didn't even do email. You send them an email, they'd like have their secretary print it out and then hand write a reply. It would come back to you in the internal mail. I'm really not kidding. And I want to put chips in everything. Well the good news was, about 1998, they'd heard of the internet, and they'd heard that the internet was a thing you were supposed to be doing. They didn't know what it was. So I literally retitled my PowerPoint presentation, which was previously called Smart Packaging, to find a way to get the word Internet in. And the way I did it was I wrote, Internet of Things. And I got my money and I founded a research center with Proctor & Gamble's money at MIT, just up the road here. And basically took the PowerPoint presentation with me, all over the world, to convince other people to get on board. And somehow, the name stuck. So that's the story. >> Yeah, it's fascinating. I remember back. I mean, RFID was a big deal. We've been through, you know-- I studied Mechanical Engineering. So manufacturing, you saw the promise of it, but like the internet, back in the 90s, it was like, "This seems really cool. "What are you going to do with it?" >> Exactly, and it kind of worked. Now it's everywhere. But, yeah, you're exactly right. >> When you think back to those times and where we are in IoT, which I think, most of us still say, we're still relatively early in IoT, industrial internet. What you hear when people talk about it, does it still harken back to some of the things you thought? What's different, what's the same? >> So some of the big picture stuff is very much the same, I think. We had this, the fundamental idea behind the MIT research, behind the Internet of Things was, get computers to gather the relevant information. If we can do that, now we have this whole, powerful new paradigm in computing. Coz it's not about keyboards anymore, and in places like manufacturing, I mean Proctor & Gamble is a manufacturing company, they make things and they sell them. The problem in manufacturing is keyboards just don't scale as an information capture technology. You can't sit in a warehouse and type everything you have. And something goes out the door and type it again. And so, you know, in the 90s, barcodes came and then we realized that we could do much better. And that was the Internet of Things. So that big picture, wouldn't it be great if we knew wherever things was, automatically? That's come true and at times, a million, right? Some of the technologies that are doing it are very unexpected. Like in the 1990s, we were very excited about RFID, partly because vision technology, you know, cameras connected to computers, was not working at all. It looked very unpromising, with people been trying for decades to do machine vision. And it didn't work. And now it does, and so a lot of things, we thought we needed RFID for, we can now do with vision, as an example. Now, the reason vision works, by the way, is an interesting one, and I think is important for the future of Internet of Things, vision works because suddenly we had digital cameras connected to networks, mainly in smartphones, that we're enable to create this vast dataset, that could then be used to train their algorithms, right? So what is was, I've scanned in a 100 images in my lab at MIT and I'm trying to write an algorithm, machine vision was very hard to do. When you've got hundreds of, millions of images available to you easily because phones and digital cameras are uploading all the time, then suddenly you can make the software sing and dance. So, a lot of the analytical stuff we've already seen in machine vision, we'll start to see in manufacturing, supply chain, for example, as the data accumulates. >> If you go back to that time, when you were doing that PowerPoint, which was probably less than a megabyte, when you saved it, did you have any inkling of the data explosion and were you even able to envision how data models would change to accommodate, did you realize at the time that the data model, the data pipeline, the ability to store all this distributed data would have to change? Were you not thinking that way? >> It's interesting because I was the craziest guy in the room. When I came to internet bandwidth and storage ability, I was thinking in, maybe I was thinking in gigabytes, when everyone else was thinking in kilobytes, right? But I was wrong. I wasn't too crazy, I was not crazy enough. I wouldn't, quick to quote, quite go so far as to call it a regret, but my lesson for life, the next generation of innovators coming up, is you actually can't let, kind of, the average opinion in the room limit how extreme your views are. Because if it seems to make sense to you, that's all that matters, right? So, I didn't envision it, is the answer to your question, even though, I was envisioning stuff, that seemed crazy to a lot of other people. I wasn't the only crazy one, but I was one of the few. And so, we underestimated, even in our wildest dreams, we underestimated the bandwidth and memory innovation, and so we've seen in the last 25 years. >> And, I don't know. Stu, you're a technologist, I'm not, but based on what you see today, do you feel like, the technology infrastructure is there to support these great visions, or do we have to completely add quantum computing or blockchain? Are we at the doorstep, or are we decades away? >> Oh, were at the doorstep. I mean, I think the interesting thing is, a lot of Internet of Things stuff, in particular, is invisible for number of reasons, right? It's invisible because, you know, the sensors and chips are embedded in things and you don't see them, that's one. I mean, there is a billion more RFID tags made in the world, than smartphones every year. But you don't see them. You see the smartphone, someone's always looking at their smartphone. So you don't realize that's there. So that's one reason, but, I mean, the other reason is, the Internet of Things is happening places and in companies that don't have open doors and windows, they're not on the high street, right? They are, it's warehouses, it's factories, it's behind the scenes. These companies, they have no reason to talk about what they are doing because it's a trade secret or it's you know, just not something people want to write about or read about, right? So, I just gave a talk here, and one of the examples I gave was a company who'd, Heidelberger. Heidelberger makes 60% of the offset printing presses in the world. They're one of the first Internet of Things pioneers. Most people haven't heard of them, most people don't see offset printers everyday. So the hundreds of sensors they have in their hundreds of printing presses, completely invisible to most of us, right? So, it's definitely here, now. You know, will the infrastructure continue to improve? Yes. Will we see things that are unimaginable today, 20 years from today? Yes. But I don't see any massive limitations now in what the Internet of Things can become. >> We just have a quick question, your use case for that offset printing, is it predictive maintenance, or is it optimization (crosstalk). >> It is initially like, it was in 1990s, when the customer calls and says, "My printing press isn't working, help", instead of sending the guide and look at the diagnostics, have the diagnostics get sent to the guide, that was the first thing, but then gradually, that evolves to realtime monitoring, predictive maintenance, your machine seems to be less efficient than the average of all the machines. May be we can help you optimize. Now that's the other thing about all Internet of Things applications. You start with one sensor telling you one thing for one reason, and it works, you add two, and you find four things you can do and you add three, and you find nine things you can do, and the next thing you know, you're an Internet of Things company. You never meant to be. But yeah, that's how it goes. It's a little bit like viral or addictive. >> Well, it's interesting to see the reemergence, new ascendancy of PTC. I mean, heres a company in 2003, who was, you know, bouncing along the ocean's floor, and then the confluence of all this trends, some acquisitions and all of a sudden, they're like, the hot new kid on the block. >> Some of that's smart management, by the way. >> Yeah, no doubt. >> And, I don't work for PTC but navigating the change is important and I want to say, all of the other things I just talked about in my talk, but, you know, we think about these tools that companies like PTC make as design tools. But they're very quickly transitioning to mass production tools, right? So it used be, you imagined a thing on your screen and you made a blueprint of it. Somebody made it in the shop. And then it was, you didn't make it in a shop, you had a 3D printer. And you could make a little model of it and show management. Everyone was very excited about that. Well, you know, what's happening now, what will happen more is that design on the screen will be plugged right in to the production line and you push a button and you make a million. Or your customer will go to a website, tweak it a little bit, make it a different color or different shape or something, and you'll make one, on your production line that makes a million. So, there's this seamless transition happening from imagining things using software, to actually manufacturing them using software, which is very much the core of what Internet of Things is about and it's a really exciting part of the current wave of the industrial revolution. >> Yeah, so Kevin, you wrote a book which follows some of those themes, I believe, it's How to Fly A Horse. I've read plenty of books where it talks about people think that innovation is, you know, some guy sitting under a tree, it hits him in the head and he does things. But we know that, first of all, almost everybody is building on you know, the shoulders of those before us. Talk a little bit about creativity, innovation. >> Okay. Sure. >> Your thoughts on that. >> So, I have an undergraduate degree in Scandinavian studies, okay? I studied Ibsen in 19th century Norwegian, at university. And then I went to Proctor & Gamble and I did marketing for color cosmetics. And then the next thing that happened to me was I'm at MIT, right? I'm an Executive Director of this prestigious lab at MIT. And I did this at the same time that the Harry Potter books were becoming popular, right? So I already felt like, oh my God! I've gone to wizard school but nobody realizes that I'm not a wizard. I was scared of getting found out, right? I didn't feel like a wizard because anything I managed to create was like the 1000th thing I did after 999 mistakes. You know, I was like banging my head against the wall. And I didn't know what I was doing. And occasionally, I got lucky, and I was like, oh they're going to figure out, that I'm not like them, right? I don't have the magic. And actually what happened to me at MIT over four years, I figured out nobody had the magic. There is no magic, right? There were those of us who believed this story about geniuses and magic, and there were other people who were just getting on with creating and the people at MIT were the second group. So, that was my revelation that I wasn't an imposter, I was doing things the way everybody I'd ever heard of, did them. And so, I did some startups and then I wanted to write a book, like kind of correcting the record, I guess. Because it's frustrating to me, like now, I'm called the inventor of the Internet of Things. I'm not the inventor of the Internet of Things. I wrote three words on a PowerPoint slide, I'm one of a hundred thousand people that all chipped away at this problem. And probably my chips were not as big as a lot of other people's, right? So, it was really important to me to talk about that, coz I meet so many people who want to create something, but if it doesn't happen instantly, or they don't have the brilliant idea in the shower, you know, they think they must be bad at it. And the reality is all creating is a series of steps. And as I was writing the book, I researched, you know, famous stories like Newton, and then less famous stories like the African slave kid who discovered how to farm vanilla, right? And found that everybody was doing it the same way, and in every discipline. It doesn't matter if it's Kandinsky painting a painting, or some scientist curing cancer. Everybody is struggling. They're struggling to be heard, they're struggling to be understood, they're struggling to figure out what to do next. But the ones who succeed, just keep going. I mean, and the title, How To Fly A Horse is because of the Wright brothers. Coz that's how they characterized the problem they were trying to solve and there are classic example of, I mean, literally, everybody else was jumping off mountains wit wings on their back, and dying, and the Wright brothers took this gradual, step by step approach, and they were the ones who solved the problem, how to fly. >> There was no money, and no resources, and Samuel Pierpont Langley gave up. >> Yeah, exactly. The Wright brothers were bicycle guys and they just figured out how to convert what they knew into something else. So that's how you create. I mean, we're surrounded by people who know how to do that. That's the story of How To Fly A Horse. >> So what do we make of, like a Steve Jobs. Is he an anomaly, or is he just surrounded by people who, was he just surrounded by people who knew how to create? >> I talk about Steve Jobs in the book, actually, and yeah, I think the interesting thing about Jobs is defining characteristic, as I see it. And yeah, I followed the story of Apple since I was a kid, one of the first news I ever saw was an Apple. Jobs was never satisfied. He always believed things could be made better. And he was laser focused on trying to make them better, sometimes to the detriment of the people around him, but that focus on making things better, enabled him, yes, to surround himself with people who were good at doing what they did, but also then driving them to achieve things. I mean, interesting about Apple now is, Apple are sadly becoming, kind of, just another computer company now, without somebody there, who is not-- I mean, he's stand up on stage and say I've made this great thing, but what was going on in his head often was, but I wish that curve was slightly different or I wish, on the next one, I'm going to fix this problem, right? And so the minute you get satisfied with, oh, we're making billions of dollars, everything's great, that's when your innovation starts to plummet, right? So that was, I think to me, Jobs was a classic example of an innovator, because he just kept going. He kept wanting to make things better. >> Persistence. Alright, we got to go. Thank you so much. >> Thank you guys. >> For coming on The Cube. >> Great to see you. >> Great to meet you, Kevin. Alright, keep it right there buddy. Stu and I will be back with our next guest. This is The Cube. We're live from LiveWorx at Boston and we'll be right back.

>> From Boston, Massachusetts, it's theCUBE, covering LiveWorx 18. Brought to you by PTC. >> Welcome back to Boston, everybody, to the LiveWorx show, hashtag LiveWorx with an "x" at the end. You're watching theCUBE, the leader in live-tech coverage. My name is Dave Vellante, and I'm with my co-host Stu Miniman. Mario Armstrong is here. He's a two-time Emmy winner, contributor to NBC today. He's the creator of the "Never Settle Show". He's an NPR contributor. >> Yep. >> And the host of LiveWorx. >> Yeah! >> Thanks so much coming on theCUBE. >> Yeah, it's a pleasure to see both of you. Good to see you too, Stu. Thanks for having me on the show. >> So yeah, this morning, a lot of action-- >> Yes. >> First of all, I tweeted out, that was like an Olympic opening, I mean-- >> That open was phenomenal. I mean, an LED-lit troop, full LED uniforms on, being acrobatic, what you can't see behind the scenes, by the way, 'cause you think it's kind of like Cirque du Soleil type of thing, with like, tech, but what you don't see are, like, these three other people that are way in the back behind the scenes, going up, scaling up and down like this truss that's like dropping them or raising them. It's just, the performance was phenomenal. >> Yeah, it was really great. And you kicked it off... 6,000 plus people here. >> Yes. >> You said the largest digital transformation conference on the planet, which of course, we were joking. Everybody says their digital-- >> Yeah. (laughs) >> But this really is digital transformation, isn't it? >> It's a lot that's taking place. I mean when you think about manufacturing, smart manufacturing, when you think about how you're trying to accelerate processes and you start looking at where things were like 20 or 30 years ago and how physical things had to be and how you actually had to, like, maybe even work on a thing then leave it, go to another place, report on it, come back to it, tweak it, and so now when you start seeing the merging of AI, VR, and so you're taking the physical and the human, and you're putting these... and the virtual, and you're putting these things together, you're seeing things like what PTC is showing us today. I mean, some of the demonstrations that I saw were absolutely mind blowing in terms of the acceleration of the process that you can actually get things done with how they're merging the different technologies and integrating them together. >> Yes, Stu and I, we're talking earlier, it's hard to get your head around this whole IOT, industrial IOT, there's just so many segments, it's so fragment that, and it's-- >> Yeah. >> It's enormous, it's almost impossible to size, I mean it's trillion dollars, this whole economy of its own. What are your takeaways on just that whole space? >> You know, a lot of what I focus on, too, when I'm doing everything from NBC or NPR and stuff like that is on the consumer impact. So I'm looking at the consumer side but I'm also an entrepreneur, so I'm thinking about what's happening on the business side. And when I see on both ends, you're absolutely right. The field is enormous when you really think about it. Whether you want to look at how we can replace old school manufacturing and how this is going to transfer... That's a whole sector just in it of itself. We haven't even now talked about, you know, AI for children or for (incoherent) or for the health and wellness sector, whole other sector that's looking at IOT and the power of that. I mean, being able to look at.. I was just in one of the other, in the deluxe lounge and I was checking out one of our fun games. It's called Sphero. It's a consumer game, but its a small ball that you control through VR and AR on your phone, but you can actually use the phone to program things in real time to make it respond in real time. So all of these things together, to me, start to paint this large ecosystem because now you have kids that are growing up using devices and using technologies that we're just starting to get our hands on but this is how they're solving problems and thinking about things already. So when this economy and this ecosystem starts to mature, you're going to have a ready-made audience that's already been exposed to 90% of this. >> Well, and Stu I wonder if you could chime into it, it makes me think that these worlds, even though consumer and industrial are so seemingly different, it seems like parts of them, anyway, adjacencies are coming together. >> Absolutely. And there's always going to be that... There's always going to be... Look, when I talk about innovation and whether you look at Dr. Hill, who's speaking here today, Dr. Linda Hill from Harvard and others, when I look at it, she calls it creative abrasion, like the difference between brainstorming and actually utilizing new ideas to create new concepts. I call it hybrid design. Normally, it's taking something that you know exists and then taking two things that don't seem to go together-- that's normally where you find creation. I don't like to say disruption, I like to say creation. >> Yeah, actually there's a good friend of mine that I work with and I worked at EMC, he called it venn diagram innovation. >> Oh, that's it! That's it! >> I take a few things and I put it together and we were talking about the consumer side-- >> Yeah! >> We've looked so many technologies, you get the scale usually from the consumer. When we look at things like flash in all of our devices-- >> That's right. >> Really enabled the enterprise to do things. The VR and AR is something that we've actually got some folks on the team that are heavy gamers that they're the ones that I go to when I want to learn, "Okay, what's the cutting-edge--" >> 'Cause they've already been in it. That's right. >> They're on their Steam, they're doing everything. >> That's right. >> They sort everything out. You leverage a lot of technology in how you really get your message out there. Talk a little about how you think of media these days. >> Oh, it's completely different. I mean, when we're looking at how media is even utilized in these new technologies, you know, our talk show is a talk show that we shoot in Nasdaq Studios, so it's shot in New York City, it's called the "Never Settle Show", it's a weekly one-hour live stream talk show, so we get and appreciate what you have to go through. These guys are pros by the way. (Dave and Stu laugh) Yeah, they're pros 'cause this is not easy to do. >> It's a minor miracle, right? Every time. >> (laughs) It's not easy to do at all. And so a lot of kudos to you and the team behind the scenes that make that happen. >> Thank you. >> With that being said, it's a great time if you have an expertise or if you have content to share especially in a live scenario because now you can start to really utilize other technologies within that. For example, we kind of claim ourselves to be one of the most interactive talk shows out there. What we do in our show is we're using other technologies, bringing them together to create real time conversations. So how that practically plays out is I'll have a guest on the show, we'll be talking, I'll put up a screen of three options and people can vote right then and there while they're watching in stream and you'll see which of what they want me to do next. I'll say something like, "Which thing is most appealing... Which topic do you want us to talk about next?" And they'll actually vote in real time and then the control room in everyone doesn't know what the answer's going to be, but we're all waiting for the answer and then when the popular vote comes out, few seconds later, we scramble and adjust to that. That's real time television, giving viewers what they really want in real time, using different technologies. So that's this hybrid approach. We can be a standard show and just do... talk and have that format, or we could really be looking at things that we could integrate in other technologies that would enhance the viewing experience and make it much more productive. >> Well you're actually affecting the, you call it "creation" as supposed to "disruption" of this new media industry, I mean, you've seen... I saw a stat the other day that cost the New York Times 200 million dollars to run a news desk. (Mario laughs) You're seeing, you know, billionaires buy up, you know, the Boston Globe, the Washington Post-- >> Yes, that's right. >> The industry is transforming in a huge way. You're seeing, you know, Facebook backlash with fake news. What's your senses as to what's going on in the media business? Obviously you're "creating", "disrupting", whatever you like to call it, sure. What do you see is the future of the media business? >> Well, I mean I think it's going to become something where the end reader, the end viewer has more control. Ultimately, that's... the problem with most systems and most structures is when people want to hold the control and not share because whether that's ego, whether they're worried about intellectual property loss, or whether they really think that the market's going to swallow them up.... Now I'm not saying, obviously you give away all your secret sauce, but what I am saying is when you start thinking from that small limiting position, you've already lost the game. And so what I think is going to happen, yes, you have big people buying a lot of media and there's a lot of discussion in politics about whether or not, you know, billionaires buying media are problems and what that's going to mean in terms of the message that's going to be reported to people, that's going to always be an issue, but I think even with that, that's why it's even more empowering that the individuals are taking more control over their own narrative. And that's why I think you've seen social media, Instagram video, Instagram talking about going to sixty minutes in it's video, not just a minute, for publishers, I think the power's now more in the person's hand to really pick and choose and so they vote with their eyeballs, they vote with their engagement, they vote with their interactivity. And so I think no matter what happens on the big end, people are going to be able to create and get the stories that they want to be able to get. >> Well we're big believers of that, Stu, and we're decentralized media and we really believe that there's got to be an incentive system to put the power back in the hands of the users to control their data. >> This is how it works. >> Right? I mean... >> Yeah. And, Mario, so we've talked about the tech and your show "Never Settle" actually won an Emmy for the interactivity nature of it? >> Yeah. It did. >> But talk to the people and passion, how that fits into "Never Settle". >> Yeah, so it's a blending. So what we try to do on our show is blend how you can leverage technology to move forward on your passion. But you can't use technology to move forward on your passion if you don't know what your passion is. So a lot of our discussions really work more around, "how do we get you to think differently"? How do we, you know... our vision for our company is to motivate people across the globe to never settle. How we do that through our mission is that we inspire the humans spirit, we want to teach lessons that matter and we want to uncover new perspectives. What that means, tangibly, is that when you watch our show, you should be having notes. You should be, like... our show is meant for you to want to take notes so that you actually know the process. What people are missing for the most part today is they see how to maybe start something or they see how someone else did and how they succeeded or how they failed, but they don't get the in between, the recipe. And so the more we can be sharing about the process about someone's success or, even better, someone's failure, 'cause that's where you learn more and you get more uncomfortable, makes you more comfortable, it's a blending of those two things of getting your mental position and getting you stronger mentally and building up your resilience so that you can actually go find your purpose, be happier in your life, but then use technology to accelerate. Like, that's the, as Jim put, like, you know, put gasoline and make it fast or make it go quicker. And so I think the blending of the two, again, a hybrid... Even how we approach our content is that. So we'll have everyone from tech luminaries on the show but also we'll just have everyday folks that have really proven success, like these people deserve attention but they're not maybe, quote on quote, big-names. >> And this idea of combinatorial innovation, you certainly heard Jim Heppelmann talking about that today with machines that are powerful and computers that are fast and can do things repetitively and then humans, which are creative. I like that theme. >> You can't do it any other way, I mean, this is why, you know, it's determination and direction. Your team needs to be determined but also have the direction. You need to have what I call the three P's. You need to have your passion in place. Like, what are you ultimately passionate about as a team? As an organization? What are you driving towards? What's your "why"? And then once you have that, then you can start to really push through on the perseverance. You're going to bump your head. You're going to fail fast. A great tech term, I love flipping that tech term because we learn in programming to fail to quick so that we can find the bugs fast and correct our course really quick. So that persistence happens. And then, the hardest part is you got to have some patience. Because then you have to kind of sit back. Let the market also play. Let the universe come around. Sometimes we're ahead. Sometimes we're behind. But we need to have a little bit of that patience to have some reflection to see where we are, so I think, you know, now is really just a great time for a lot of people that are looking to really figure out where they can make their moves... the opportunities that keep creating themselves in IOT are endless. I don't care if you're talking from someone that's a graphic designer all the way up to an engineer or a coder, to marketing and sales, like there's so many different facets of this ecosystem and opportunity now. >> I love that, Mario. Patient, passion, persistence, patience-- >> Yes. >> The three P's kind of start with why, the old-- >> Yeah. Simon Sinek. That's right. >> People don't buy what you do. They buy why you do it. >> That's right. >> Break stuff. >> (laughs) Love that. Break stuff. >> And don't give up. Don't give up. (Mario laughs) >> No, it's, you know... it's because what we're trying to do, if you really wanted to have action, you want to take complex things and you want to pull them together in a hybrid scenario and start to bang upon them. As opposed to the other idea of planning, planning, planning, planning, you actually want to practice, practice, practice, practice. That's what's going to get you there fast. So I just think that with a lot of the technologies it can be overwhelming to people 'cause they start to hear so much so that's why I say it comes back to, "What's your purpose?" If you can stay focused on why you're doing what it is you're doing, you'll know which technologies to pay more attention to. You'll know where your curiosity should veer more into. You'll study the things that you need to really study. And then you'll accelerate faster because you've identified your niche. It's like having a, you know, an Italian restaurant. You're not just, you know... somebody's going to come by and present to you... Some sales rep is going to come by and present to you, like, beer that's not a fit for like Italian restaurant, you know, like, I know that's not for me instantly. As opposed to being pulled in so many directions, which is what the danger of all this technology can do, is it can overwhelm us and pull us into so many directions that we want to go and pursue the hottest new trend or the hot thing. If we come back to our "why", we're always going to be secure. >> That's a great point, I mean there are an infinite opportunities of purposes in this world. >> Yes. >> It's sometimes hard to get a grasp on things and really focus. But you're seeing some of this successful projects really do start with a main spring and a focus and a purpose. >> Yeah. >> And a mission. >> It does. I mean, that's where it all becomes. I mean, it has to start there in order to get other people on board with your dream, whether you're the leader of the organization or the leader of a project. And, you know, I just feel that for many people, they are at an age where they have been in this business for quite some time. They've seen a lot of things evolve. Accepting change and, like Jim had said today, preparing to change is one of the best keys of information that you can take away because we all have the skill, the talent, the ability, it's just a matter or not, are we willing to adjust or are we... do we want to do status quo. >> Awesome. Hey, you're a clear thinker, articulate, you look great. Thanks so much for coming to theCUBE. >> (laughs) Aw man, Dave and Stu, it's been a pleasure. Thank you so much for having me on theCUBE. >> Our pleasure. >> This has been awesome. >> Alright, keep it right there, buddy, we'll be back from LiveWorx with our next guest right after this short break. You're watching theCUBE. We'll be right back.

>> From Boston, Massachusets it's theCube. Covering LiveWorx 18. Brought to you by PTC. >> Welcome back to bean town, everybody. This is theCube, the leader in live tech coverage, and we're covering LiveWorx, the three day conference hosted by PTC. We're at the BCEC, which is kind of the Starship Enterprise. I'm Dave Vellante, with my co-host Stu Miniman. As I say, Cube one day coverage of this three day conference. Maciek Kranz is here. He's the Vice President of Strategic Innovations at Cisco. Maciek, thanks for coming on theCube. >> Thank you so much for having me. It really looks like a cube. >> Usually we're out in the open, but they've put us here in a cube, which is great. Of course we were at Cisco Live last week. You were there, it was an awesome show. 27, 28 thousand people. A lot of the innovations that we're talking about here, you guys, you know, at Cisco, are obviously touching upon. Whether it was blockchain or the edge. May I ask you, innovation's in your title. What are you doing here at this conference? >> Basically we're on the mission to make sure that every company, large and small, whatever the industry you're in, gets started on the IOT journey. All of us here, we were talking about it last week at Cisco Live, we are sort of on the mission to make sure that everybody knows how to do it, how to get started, how to go through the journey. So I'm here to promote the cause. >> You had posted a blog a little bit ago on LinkedIn. Check it out, if you go to Maciek's LinkedIn profile you'll see it. Five myths around IOT, and I thought it was quite instructive. I'm going to start with the middle of it, which is IOT is this one big market, and we've been talking about how it's a trillion dollar market. It's almost impossible to size. It's so fragmented, and bringing together the operations technology and information technology world, and there's the edge, there's the core, there's hardware, there's software, there's services. How should we think about the IOT, obviously not as one big market as you pointed out in your blog. >> Right, and you actually nailed it. When you think about sort of a traditional way that technology companies think about the market, it was sort of model of just get a billion people to get on your platform and the good things will happen. Well in the IOT space, as you pointed out, it's a very fragmented market. So you basically need to have two strategies. You either become a horizontal specialist and then you integrate with a vertical specialist to develop a joint solution, or you focus on use case and you focus on one market, and you go deep and focus with customers. So from that perspective the approach is different, but in a nutshell to be successful in this space, it's not only about technology, it's about ecosystem. It's about building the coaliltion of the willing, because at the end of the day, the customers want solutions to their problems. And they don't want to just buy your technology, they want to work with you on developing solutions that drive business outcomes. >> Maciek, one of the things that's been interesting to watch is that people want to try, and they want to try faster. One of the big benefits of public cloud was that I have this sandbox that I could throw some people at, have a little bit of money, and try things and fail and try again. One of the concerns I have when I hear things like PTC and Microsoft get up on stage and say, "It's going to take 20 to 25 partners to put this together." When I hear that it's fragmented, it's going to take time, it's going to take money, help us. Are there are ways I can start playing with things to understand what will and what won't work for my environment, or is this something that I have to throw a million dollars and group of people for a year and a half on? >> It's actually a great point, and it's another, I would say, misconception, which is I need to go deep, have a sort of a big strategy. One of the things that I talk about with the customers is, yes, dream big but start small. So yes, have a sort of a big vision, big architecture, but then focus on a first project, because it's a multi-year, multi-phased journey. So from that perspective, you know, at Cisco we have roughly 14,000 customers that already got started on this IOT journey, and the use cases that we've seen sort of are in four different categories. First one is connect things, so connecting your operations, the second one is remote operations, the third one is predictive analytics, the fourth one is preventive maintenance. So don't be a hero, pick one of these four use cases, try it out, then do a ROI on this, and if your ROI is positive then do a next, maybe more sophisticated, more adventurous kind of a project down the road. So pace yourself. >> This is our 9th year doing theCube, and the one thing we've learned about information technology, operations technology, is it all comes back to data. And you pointed out again, you pointed it out in your piece, it's not just about connecting, it's about the data. So let's talk about the data, the data model. You've got edge, you've got core. You've got this really increasingly complex and elongating data pipeline. You've got physics, you've got latency. So what's your perspective on the data, how that's evolving, and how organizations need to take advantage of the data? >> Dave, I think you nailed it. It may come across funny because I work for Cisco and we connect things, but if you think about the first wave of internet, the main purpose of the devices and the way we were connecting them, was basically for you and I to get access to each other, to get access to the online data, to the online processes. The main purpose we connecting IOT devices, so that they can generate the data, and then we can analyze that data, turn these systems into solutions to drive business outcomes. So from that perspective we're actually seeing a big shift in the sort of data model, and it requires flexibility. Traditionally, we talked about cloud, right? In a cloud we usually see the use cases that require a processing of a lot of data, sort of in the batch possessing mode, or for example if you want to connect a bunch of vending machines, you can connect them directly to the cloud, because these machines actually send only very few packets and they send them very infrequently. Basically saying, "Hey, come on over "and replenish a bunch of supplies." But if you look at connected vehicle, if you look at an oil rig, in the case of oil rig, there's let's say a large one that has 100,000 sensors. These sensors generate a couple terabytes of data per day. You can't just send this data directly to the cloud through the satellite connection, right? You have to process the data on the oil rig based on the policy coming from the cloud. So from that perspective we've seen that there's a need for a more flexible architecture. We call it Fog Computing, which basically allows you to have flexibility of extending the cloud to the edge so you can process the data at the edge. You can execute on the AI functions at the edge as well. So that's one of the big architectural shifts that we've seen with IOT as well. >> Maciek, one of the opportunities of new architectures has been to do a redo for security. When it comes to IOT, though, there's a lot of concern around that, because just the surface area that we're going to have, the devices. Talk to us about how security fits into IOT. >> Yeah, it's hard to talk about IOT without mentioning security, right? And we obviously seen over the last two years a lot of press around IOT denial of service attacks and so forth, and for me I think the silver lining out of all of this news is that, first of all, that we have seen the vendor community finally taking IOT security seriously. So all the security vendors are actually investing in IOT security now appropriately. We now working together as an industry on standards, on interoperability, on sort of come on architectures, even with the device vendors who traditionally didn't pay much attention to security as well. Sort of like what we did with wifi, you remember, about 15 years ago but at a much greater scale. So the vendor community's focusing on it, but more importantly also the businesses are moving from what I would consider sort of a... I would say that kind of a denial. Hoping that their plant is not connected to the outside world and that it's secure. Moving down now to the much more modern model, which is basically a comprehensive architecture working with are-see-sos, across the enterprise, focusing on before, during, and after. So IOT now is being integrated into a broader security architecture, and IT and OT are working together. So yes, there is a concern, yes. There are a lot of events hitting the news, but I also think as an industry we're making progress. >> Just to follow up on that, Cisco obviously has an advantage in security, because you go end-to-end, you guys make everything, and you can do deep-packet inspection, and that seems to be a real advantage here. But then there's this thing called blockchain, and everybody talks about how blockchain can be applied. Where do you see blockchain fitting into the security equation? >> Yeah, I think that's a good question. Maybe a bit more broader story, I actually believe there's four legs to this digital transformations tool. There's IOT generating the data and acting on the decisions, there's AI, there is the fog computing we talked about, and the fourth tool is blockchain, which basically allows us to make sure that the data we're using we can actually trust. At the high level blockchain, people often confuse blockchain and Bitcoin and cryptocurrencies, but blockchain is an underlying technology behind sort of the crypto, that allows basically multiple parties to write their transactions in a fast and permanent way. But in the enterprise context, in IOT context, blockchain allows us to actually come up with very new use cases by looking at the provenance, and looking at the data across multiple parties. The data we can trust. For example, the use cases such as counterfeiting, there are use cases like food safety. Like patient records. Like provenance of materials. So now we can enable these use cases, because we have a single source of truth. >> I want to ask you about disruption. I like the mental model and picture that you created before of a horizontal technologies, and you kind of get vertical industries, and it seems like, again I'm bringing it back to data. We heard Super Mario at the host of the conference say this was the largest digital transformation conference. Which we laughed, like every conference is a digital transformation conference. But to us, digital transformation, digital means data. And that picture you drew of horizontal technology and vertical industries, it's all data, and data enables disruption. It used to be a vertical stack of talent and manufacturing and supply chain within an industry, and now data seems to be blowing that to pieces in digital. You see Amazon getting into, you know, buying Whole Foods in grocery. You see Apple in financial services. Others, Silicon Valley type companies, disrupting healthcare, which we all know needs disruption. What do you make of disruption? It seems like no industry is safe. It seems like Silicon Valley has this dual disruption agenda. Horizontal technology and then partnering within industries, and everything is getting turned up on its side. What do you make of it all? >> Dave, I think you nailed it. It is about and verus or, right? When you think about companies, you mentioned Microsoft, Cisco, Amazon, verus PTC or Rockwell, or Emerson and others. 10 years ago we sort of lived on a different planet, right, and rarely these companies even talked to each other. And now, even at this show, these companies are actually showing joint solutions. So that's precisely, I think, what we've seen, which is technology competence coming from the Valley and from traditional technology industry, and then the vertical and market expertise coming from these more traditional vendors. At the end of the day, it is about technology, but it is also about talent. It is about skillsets. It's about all of us pulling our resources together to develop solutions to drive business outcomes. So cloud, obviously, was a very disruptive force in our industry. But when you think about IOT, just based on what you just said, it seems to me given the assets, the resources, the people, the plants, the equipment, it seems like IOT is maybe somewhat evolutionary. Not a completely... It's a disruptive force in that's new and that it's different, but it seems like the incumbents, I mean look at PTC, their resurgence. It seems like the incumbents have an advantage here. What are your thoughts? >> I think that if they play it right they absolutely do. But it requires also a shift in mindset, and I think we seeing it already, which is moving from a vertical, one company does it all kind of mentality, into the lets build an ecosystem based on open systems, open standards, interoperability. And that's sort of a shift I think we are seeing. So for me, I think that the incumbents, if they embrace this kind of a model, they absolutely have a critical role to play. On the flip side, the technology companies realizing that they need to, it's not only about technology, but it's also about partnering. It's about integrating within legacy ecosystems and the legacy infrastructure. So each of the sides of the coin need to learn new tricks. >> Okay, last question, is your initial thoughts, anyway, on this event, some initial take aways. I know it's early, day one, but you've been here. You've heard the keynotes. Final thoughts? >> I think so far it's actually a great start to the event. I have to say, what we've talked about already, my biggest take away is to see, and actually joy, is to see companies from different walks of life working together. You have robotics companies, you have AI companies, you have industrial companies. All of them are coming up with solutions together, and that's basically what we want to see. Is breaking the barriers and multiple companies working together to move the industry forward. >> And you're also seeing the big SIs are here. I can see Accenture, I can see Deloid. I know InfoSys is here, et cetera, et cetera. So if they're here, you know there's a lot of money to be made. So Maciek, thanks very much. It's really a pleasure having you. Alright, keep it right there, everybody. This is theCube, from LiveWorx in Boston. We'll be right back after this short break.