[Music] when welcome to the special exclusive cube conversation here in Palo Alto in our studios I'm John for your host of the cube we have a very special guest speaking for the first time around some alleged alleged accusations and also innuendo around the Amazon Web Services Jedi contract and his firm c5 capital our guest as Andre Pienaar who's the founder of c5 capital Andre is here for the first time to talk about some of the hard conversations and questions surrounding his role his firm and the story from the BBC Andre thanks for a rat for meeting with me John great to have me thank you so you're at the center of a controversy and just for the folks who know the cube know we interviewed a lot of people I've interviewed you at Amazon web sources summit Teresa Carl's event and last year I met you and bought a rein the work you're doing there so I've met you a few times so I don't know your background but I want to drill into it because I was surprised to see the BBC story come out last week that was basically accusing you of many things including are you a spy are you infiltrating the US government through the Jedi contract through Amazon and knowing c-5 capital I saw no correlation when reading your article I was kind of disturbed but then I saw I said a follow-on stories it just didn't hang together so I wanted to press you on some questions and thanks for coming in and addressing them appreciate it John thanks for having me so first thing I want to ask you is you know it has you at the center this firm c5 capital that you the founder of at the center of what looks like to be the fight for the big ten billion dollar DoD contract which has been put out to multiple vendors so it's not a single source deal we've covered extensively on silicon angle calm and the cube and the government the government Accounting Office has ruled that there are six main benefits of going with a sole provider cloud this seems to be the war so Oracle IBM and others have been been involved we've been covering that so it kind of smells like something's going along with the story and I just didn't believe some of the things I read and I want to especially about you and see five capitals so I want to dig into what the first thing is it's c5 capital involved in the Jedi contract with AWS Sean not at all we have absolutely no involvement in the Jedi contract in any way we're not a bidder and we haven't done any lobbying as has been alleged by some of the people who've been making this allegation c5 has got no involvement in the general contract we're a venture capital firm with a British venture capital firm we have the privilege of investing here in the US as a foreign investor and our focus really is on the growth and the success of the startups that we are invested in so you have no business interest at all in the deal Department of Defense Jedi contract none whatsoever okay so to take a minute to explain c5 firm I read some of the stories there and some of the things were intricate structures of c5 cap made it sound like there was like a cloak-and-dagger situation I want to ask you some hard questions around that because there's a link to a Russian situation but before we get to there I want to ask you explain what is c5 capital your mission what are the things that you're doing c5 is a is a British venture capital firm and we are focused on investing into fast-growing technology companies in three areas cloud computing cyber security and artificial intelligence we have two parts our business c5 capital which invests into late stage companies so these are companies that typically already have revenue visibility and profitability but still very fast-growing and then we also have a very early stage startup platform that look at seed state investment and this we do through two accelerators to social impact accelerators one in Washington and one in Bahrain and it's just size of money involved just sort of order magnitude how many funds do you have how is it structure again just share some insight on that is it is there one firm is there multiple firms how is it knows it work well today the venture capital business has to be very transparent it's required by compliance we are a regulated regulated firm we are regulated in multiple markets we regulated here in the US the sec as a foreign investor in london by the financial conduct authority and in Luxembourg where Afonso based by the regulatory authorities there so in the venture capital industry today you can't afford to be an opaque business you have to be transparent at all levels and money in the Western world have become almost completely transparent so there's a very comprehensive and thorough due diligence when you onboard capital called know your client and the requirements standard requirement now is that whenever you're onboard capital from investor you're gonna take it right up to the level of the ultimate beneficial ownership so who actually owns this money and then every time you invest and you move your money around it gets diligence together different regulators and in terms of disclosure and the same applies often now with clients when our portfolio companies have important or significant clients they also want to know who's behind the products and the services they receive so often our boards our board directors and a shell team also get diligence by by important clients so explain this piece about the due diligence and the cross country vetting that goes on is I think it's important I want to get it out because how long has been operating how many deals have you done you mentioned foreign investor in the United States you're doing deals in the United States I know I've met one of your portfolio companies at an event iron iron on it iron net general Keith Alexander former head of the NSA you know get to just work with him without being vetted I guess so so how long a c5 capital been in business and where have you made your investments you mentioned cross jurisdiction across countries whatever it's called I don't know that so we've been and we've been in existence for about six years now our main focus is investing in Europe so we help European companies grow globally Europe historically has been underserved by venture capital we on an annual basis we invest about twenty seven billion dollars gets invested in venture capital in Europe as opposed to several multiples of that in the US so we have a very important part to play in Europe to how European enterprise software companies grow globally other important markets for us of course are Israel which is a major center of technology innovation and and the Middle East and then the u.s. the u.s. is still the world leader and venture capital both in terms of size but also in terms of the size of the market and of course the face and the excitement of the innovation here I want to get into me early career because again timing is key we're seeing this with you know whether it's a Supreme Court justice or anyone in their career their past comes back to haunt them it appears that has for you before we get there I want to ask you about you know when you look at the kind of scope of fraud and corruption that I've seen in just on the surface of government thing the government bit Beltway bandits in America is you got a nonprofit that feeds a for-profit and then what you know someone else runs a shell corporation so there's this intricate structures and that word was used which it kind of implies shell corporations a variety of backroom kind of smokey deals going on you mentioned transparency I do you have anything to hide John in in in our business we've got absolutely nothing to hide we have to be transparent we have to be open if you look at our social media profile you'll see we are communicating with the market almost on a daily basis every time we make an investment we press release that our website is very clear about who's involved enough who our partners are and the same applies to my own personal website and so in terms of the money movement around in terms of deploying investments we've seen Silicon Valley VCS move to China get their butts handed to them and then kind of adjust their scenes China money move around when you move money around you mentioned disclosure what do you mean there's filings to explain that piece it's just a little bit so every time we make an investment into a into a new portfolio company and we move the money to that market to make the investment we have to disclose who all the investors are who are involved in that investment so we have to disclose the ultimate beneficial ownership of all our limited partners to the law firms that are involved in the transactions and those law firms in turn have applications in terms of they own anti-money laundering laws in the local markets and this happens every time you move money around so I I think that the level of transparency in venture capital is just continue to rise exponentially and it's virtually impossible to conceal the identity of an investor this interesting this BBC article has a theme of national security risk kind of gloom and doom nuclear codes as mentioned it's like you want to scare someone you throw nuclear codes at it you want to get people's attention you play the Russian card I saw an article on the web that that said you know anything these days the me2 movement for governments just play the Russian card and you know instantly can discredit someone's kind of a desperation act so you got confident of interest in the government national security risk seems to be kind of a theme but before we get into the BBC news I noticed that there was a lot of conflated pieces kind of pulling together you know on one hand you know you're c5 you've done some things with your hat your past and then they just make basically associate that with running amazon's jedi project yes which i know is not to be true and you clarified that joan ends a problem joan so as a venture capital firm focused on investing in the space we have to work with all the Tier one cloud providers we are great believers in commercial cloud public cloud we believe that this is absolutely transformative not only for innovation but also for the way in which we do venture capital investment so we work with Amazon Web Services we work with Microsoft who work with Google and we believe that firstly that cloud has been made in America the first 15 companies in the world are all in cloud companies are all American and we believe that cloud like the internet and GPS are two great boons which the US economy the u.s. innovation economy have provided to the rest of the world cloud computing is reducing the cost of computing power with 50 percent every three years opening up innovation and opportunities for Entrepreneurship for health and well-being for the growth of economies on an unprecedented scale cloud computing is as important to the global economy today as the dollar ease as the world's reserve currency so we are great believers in cloud we great believers in American cloud computing companies as far as Amazon is concerned our relationship with Amazon Amazon is very Amazon Web Services is very clear and it's very defined we participate in a public Marcus program called AWS activate through which AWS supports hundreds of accelerators around the world with know-how with mentoring with teaching and with cloud credits to help entrepreneurs and startups grow their businesses and we have a very exciting focus for our two accelerators which is on in Washington we focus on peace technology we focus on taking entrepreneurs from conflict countries like Sudan Nigeria Pakistan to come to Washington to work on campus in the US government building the u.s. Institute for peace to scale these startups to learn all about cloud computing to learn how they can grow their businesses with cloud computing and to go back to their own countries to build peace and stability and prosperity their heaven so we're very proud of this mission in the Middle East and Bahrain our focus is on on female founders and female entrepreneurs we've got a program called nebula through which we empower female founders and female entrepreneurs interesting in the Middle East the statistics are the reverse from what we have in the West the majority of IT graduates in the Middle East are fimo and so there's a tremendous talent pool of of young dynamic female entrepreneurs coming out of not only the Gulf but the whole of the MENA region how about a relation with Amazon websites outside of their normal incubators they have incubators all over the place in the Amazon put out as Amazon Web Services put out a statement that said hey you know we have a lot of relationships with incubators this is normal course of business I know here in Silicon Valley at the startup loft this is this is their market filled market playbook so you fit into that is that correct as I'm I get that that's that's absolutely correct what we what is unusual about a table insists that this is a huge company that's focused on tiny startups a table started with startups it double uses first clients with startups and so here you have a huge business that has a deep understanding of startups and focus on startups and that's enormous the attractor for us and terrific for our accelerators department with them have you at c5 Capitol or individually have any formal or conversation with Amazon employees where you've had outside of giving feedback on products where you've tried to make change on their technology make change with their product management teams engineering you ever had at c5 capital whore have you personally been involved in influencing Amazon's product roadmap outside they're just giving normal feedback in the course of business that's way above my pay grade John firstly we don't have that kind of technical expertise in C 5 C 5 steam consists of a combination of entrepreneurs like myself people understand money really well and leaders we don't have that level of technical expertise and secondly that's what one our relationship with AWS is all about our relationship is entirely limited to the two startups and making sure that the two accelerators in making sure that the startups who pass through those accelerators succeed and make social impact and as a partner network component Amazon it's all put out there yes so in in a Barren accelerator we've we formed part of the Amazon partner network and the reason why we we did that was because we wanted to give some of the young people who come through the accelerator and know mastering cloud skills an opportunity to work on some real projects and real live projects so some of our young golf entrepreneurs female entrepreneurs have been working on building websites on Amazon Cloud and c5 capital has a relationship with former government officials you funded startups and cybersecurity that's kind of normal can you explain that positioning of it of how former government if it's whether it's US and abroad are involved in entrepreneurial activities and why that is may or may not be a problem certainly is a lot of kind of I would say smoke around this conversation around coffin of interest and you can you explain intelligence what that was it so I think the model for venture capital has been evolving and increasingly you get more and more differentiated models one of the key areas in which the venture capital model is changed is the fact that operating partners have become much more important to the success of venture capital firms so operating partners are people who bring real world experience to the investment experience of the investment team and in c-five we have the privilege of having a terrific group of operating partners people with both government and commercial backgrounds and they work very actively enough firm at all levels from our decision-making to the training and the mentoring of our team to helping us understand the way in which the world is exchanging to risk management to helping uh portfolio companies grow and Silicon Valley true with that to injuries in Horowitz two founders mr. friendly they bring in operating people that have entrepreneurial skills this is the new model understand order which has been a great source of inspiration to us for our model and and we built really believe this is a new model and it's really critical for the success of venture capitals to be going forward and the global impact is pretty significant one of things you mentioned I want to get your take on is as you operate a global transaction a lots happened a lot has to happen I mean we look at the ICO market on the cryptocurrency side its kind of you know plummeting obsoletes it's over now the mood security children's regulatory and transparency becomes critical you feel fully confident that you haven't you know from a regulatory standpoint c5 capital everything's out there absolutely risk management and regulated compliance and legal as the workstream have become absolutely critical for the success of venture capital firms and one of the reasons why this becomes so important John is because the venture capital world over the last few years have changed dramatically historically all the people involved in venture capital had very familiar names and came from very familiar places over the last few years with a diversification of global economic growth we've seen it's very significant amounts of money being invest invested in startups in China some people more money will invest in startups this year in China than in the US and we've seen countries like Saudi Arabia becoming a major source of venture capital funding some people say that as much as 70% of funding rounds this year in some way or another originated from the Gulf and we've seen places like Russia beginning to take an interest in technology innovation so the venture capital world is changing and for that reason compliance and regulation have become much more important but if Russians put 200 million dollars in face book and write out the check companies bright before that when the after 2008 we saw the rise of social networking I think global money certainly has something that I think a lot of people start getting used to and I want on trill down into that a little bit we talked about this BBC story that that hit and the the follow-on stories which actually didn't get picked up was mostly doing more regurgitation of the same story but one of the things that that they focus in on and the story was you and the trend now is your past is your enemy these days you know they try to drum up stuff in the past you've had a long career some of the stuff that they've been bringing in to paint you and the light that they did was from your past so I wanted to explore that with you I know you this is the first time you've talked about this and I appreciate you taking the time talk about your early career your background where you went to school because the way I'm reading this it sounds like you're a shady character I like like I interviewed on the queue but I didn't see that but you know I'm going to pressure here for that if you don't mind I'd like to to dig into that John thank you for that so I've had the I've had the privilege of a really amazingly interesting life and at the heart of at the heart of that great adventures been people and the privilege to work with really great people and good people I was born in South Africa I grew up in Africa went to school there qualified as a lawyer and then came to study in Britain when I studied international politics when I finished my studies international politics I got head hunted by a US consulting firm called crow which was a start of a 20 years career as an investigator first in crawl where I was a managing director in the London and then in building my own consulting firm which was called g3 and all of this led me to cybersecurity because as an investigator looking into organized crime looking into corruption looking into asset racing increasingly as the years went on everything became digital and I became very interested in finding evidence on electronic devices but starting my career and CRO was tremendous because Jules Kroll was a incredible mentor he could walk through an office and call everybody by their first name any Kroll office anywhere in the world and he always took a kindly interest in the people who work for him so it was a great school to go to and and I worked on some terrific cases including some very interesting Russian cases and Russian organized crime cases just this bag of Kroll was I've had a core competency in doing investigative work and also due diligence was that kind of focus yes although Kroll was the first company in the world to really have a strong digital practice led by Alan Brugler of New York Alan established the first computer forensics practice which was all focused about finding evidence on devices and everything I know about cyber security today started with me going to school with Alan Brolin crawl and they also focused on corruption uncovering this is from Wikipedia Kroll clients help Kroll helps clients improve operations by uncovering kickbacks fraud another form of corruptions other specialty areas is forensic accounting background screening drug testing electronic investigation data recovery SATA result Omar's McLennan in 2004 for 1.9 billion mark divested Kroll to another company I'll take credit risk management to diligence investigator in Falls Church Virginia over 150 countries call Kroll was the first CRO was the first household brand name in this field of of investigations and today's still is probably one of the strongest brand names and so it was a great firm to work in and was a great privilege to be part of it yeah high-end high-profile deals were there how many employees were in Kroll cuz I'd imagine that the alumni that that came out of Kroll probably have found places in other jobs similar to yes do an investigative work like you know they out them all over the world many many alumni from Kroll and many of them doing really well and doing great work ok great so now the next question want to ask you is when you in Kroll the South Africa connection came up so I got to ask you it says business side that you're a former South African spy are you a former South African spy no John I've never worked for any government agency and in developing my career my my whole focus has been on investigations out of the Kroll London office I did have the opportunity to work in South Africa out of the Kroll London office and this was really a seminal moment in my career when I went to South Africa on a case for a major international credit-card company immediately after the end of apartheid when democracy started to look into the scale and extent of credit card fraud at the request of this guy what year was there - how old were you this was in 1995 1996 I was 25 26 years old and one of the things which this credit card company asked me to do was to assess what was the capability of the new democratic government in South Africa under Nelson Mandela to deal with crime and so I had the privilege of meeting mr. Mandela as the president to discuss this issue with him and it was an extraordinary man the country's history because there was such an openness and a willingness to to address issues of this nature and to grapple with them so he was released from prison at that time I remember those days and he became president that's why he called you and you met with him face to face of a business conversation around working on what the future democracy is and trying to look at from a corruption standpoint or just kind of in general was that what was that conversation can you share so so that so the meeting involved President Mandela and and the relevant cabinet ministers the relevant secretaries and his cabinet - responsible for for these issues and the focus of our conversation really started with well how do you deal with credit card fraud and how do you deal with large-scale fraud that could be driven by organized crime and at the time this was an issue of great concern to the president because there was bombing in Kate of a Planet Hollywood cafe where a number of people got very severely injured and the president believed that this could have been the result of a protection racket in Cape Town and so he wanted to do something about it he was incredibly proactive and forward-leaning and in an extraordinary way he ended the conversation by by asking where the Kroll can help him and so he commissioned Kroll to build the capacity of all the black officers that came out of the ANC and have gone into key government positions on how to manage organized crime investigations it was the challenge at that time honestly I can imagine apartheid I remember you know I was just at a college that's not properly around the same age as you it was a dynamic time to say the least was his issue around lack of training old school techniques because you know that was right down post-cold-war and then did what were the concerns not enough people was it just out of control was it a corrupt I mean just I mean what was the core issue that Nelson wanted to hire Kroll and you could work his core issue was he wanted to ensure the stability of South Africa's democracy that was his core focus and he wanted to make South Africa an attractive place where international companies felt comfortable and confident in investing and that was his focus and he felt that at that time because so many of the key people in the ANC only had training in a cold war context that there wasn't a Nessy skill set to do complex financial or more modern investigations and it was very much focused he was always the innovator he was very much focused on bringing the best practices and the best investigative techniques to the country he was I felt in such a hurry that he doesn't want to do this by going to other governments and asking for the help he wanted to Commission it himself and so he gave he gave a crawl with me as the project leader a contract to do this and my namesake Francois Pienaar has become very well known because of the film Invictus and he's been he had the benefit of Mandela as a mentor and as a supporter and that changed his career the same thing happened to me so what did he actually asked you to do was it to train build a force because there's this talk that and was a despite corruption specifically it was it more both corruption and or stability because they kind of go hand in hand policy and it's a very close link between corruption and instability and and president Ellis instructions were very clear to Crowley said go out and find me the best people in the world the most experienced people in the world who can come to South Africa and train my people how to fight organized crime so I went out and I found some of the best people from the CIA from mi6 the British intelligence service from the Drug Enforcement Agency here in the US form officers from the Federal Bureau of Investigation's detectives from Scotland Yard prosecutors from the US Justice Department and all of them for a number of years traveled to South Africa to train black officers who were newly appointed in key roles in how to combat organized crime and this was you acting as an employee he had crow there's not some operative this is he this was me very much acting as a as an executive and crow I was the project leader Kroll was very well structured and organized and I reported to the chief executive officer in the London office nor Garret who was the former head of the CIA's Near East Division and Nelson Mandela was intimately involved in this with you at Krall President Mandela was the ultimate support of this project and he then designated several ministers to work on it and also senior officials in the stories that had been put out this past week they talked about this to try to make it sound like you're involved on two sides of the equation they bring up scorpions was this the scorpions project that they referred to so it was the scorpions scorpion sounds so dangerous and a movie well there's a movie a movie does feature this so at the end of the training project President Mandela and deputy president Thabo Mbeki who subsequently succeeded him as president put together a ministerial committee to look at what should they do with the capacity that's been built with this investment that they made because for a period of about three years we had all the leading people the most experienced people that have come out of some of the best law enforcement agencies and some of the best intelligence services come and trained in South Africa and this was quite this was quite something John because many of the senior officers in the ANC came from a background where they were trained by the opponents of the people came to treat trained them so so many of them were trained by the Stasi in East Germany some of them were trained by the Russian KGB some of them were trained by the Cubans so we not only had to train them we also had to win their trust and when we started this that's a diverse set of potential dogma and or just habits a theory modernised if you will right is that what the there was there was a question of of learning new skills and there was a question about also about learning management capabilities there was also question of learning the importance of the media for when you do difficult and complex investigations there was a question about using digital resources but there was also fundamentally a question of just building trust and when we started this program none of the black officers wanted to be photographed with all these foreign trainers who were senior foreign intelligence officers when we finished that everyone wanted to be in the photograph and so this was a great South African success story but the President and the deputy president then reflected on what to do with his capacity and they appointed the ministerial task force to do this and we were asked to make recommendations to this Minister ministerial task force and one of the things which we did was we showed them a movie because you referenced the movie and the movie we showed them was the untouchables with Kevin Costner and Sean Connery which is still one of my favorite and and greatest movies and the story The Untouchables is about police corruption in Chicago and how in the Treasury Department a man called Eliot Ness put together a group of officers from which he selected from different places with clean hands to go after corruption during the Probie and this really captured the president's imagination and so he said that's what he want and Ella yeah okay so he said della one of the untouchables he wanted Eliot Ness exactly Al Capone's out there and and how many people were in that goodness so we asked that we we established the government then established decided to establish and this was passed as a law through Parliament the director of special operations the DSO which colloquy became known as the scorpions and it had a scorpion as a symbol for this unit and this became a standalone anti-corruption unit and the brilliant thing about it John was that the first intake of scorpion officers were all young black graduates many of them law graduates and at the time Janet Reno was the US Attorney General played a very crucial role she allowed half of the first intake of young cratchits to go to Quantico and to do the full FBI course in Quantico and this was the first group of foreign students who've ever been admitted to Quantico to do the full Quantico were you involved at what score's at that time yes sir and so you worked with President Mandela yes the set of the scorpions is untouchable skiing for the first time as a new democracy is emerging the landscape is certainly changing there's a transformation happening we all know the history laugh you don't watch Invictus probably great movie to do that you then worked with the Attorney General United States to cross-pollinate the folks in South Africa black officers law degrees Samar's fresh yes this unit with Quantico yes in the United States I had the privilege of attending the the graduation ceremony of the first of South African officers that completed the Quantico course and representing crow they on the day you had us relationships at that time to crawl across pollen I had the privilege of working with some of the best law enforcement officers and best intelligence officers that has come out of the u.s. services and they've been tremendous mentors in my career they've really shaped my thinking they've shaped my values and they've they've shaved my character so you're still under 30 at this time so give us a is that where this where are we in time now just about a 30 so you know around the nine late nineties still 90s yeah so client-server technologies there okay so also the story references Leonard McCarthy and these spy tapes what is this spy tape saga about it says you had a conversation with McCarthy me I'm thinking that a phone tap explain that spy tape saga what does it mean who's Lennon McCarthy explain yourself so so so Leonard McCarthy it's a US citizen today he served two terms as the vice president for institutional integrity at the World Bank which is the world's most important anti-corruption official he started his career as a prosecutor in South Africa many years ago and then became the head of the economic crimes division in the South African Justice Department and eventually became the head of the scorpions and many years after I've left Kroll and were no longer involved in in the work of the scorpions he texted me one evening expressing a concern and an anxiety that I had about the safety of his family and I replied to him with two text messages one was a Bible verse and the other one was a Latin saying and my advice name was follow the rule of law and put the safety of your family first and that was the advice I gave him so this is how I imagined the year I think of it the internet was just there this was him this was roundabout 2000 December 2007 okay so there was I phone just hit so text messaging Nokia phones all those big yeah probably more text message there so you sitting anywhere in London you get a text message from your friend yep later this past late tonight asking for help and advice and I gave him the best advice I can he unfortunately was being wiretapped and those wiretaps were subsequently published and became the subject of much controversy they've now been scrutinized by South Africa's highest court and the court has decided that those wiretaps are of no impact and of importance in the scheme of judicial decision-making and our unknown provenance and on and on unknown reliability they threw it out basically yeah they're basically that's the president he had some scandals priors and corruption but back to the tapes you the only involvement on the spy tapes was friend sending you a text message that says hey I'm running a corruption you know I'm afraid for my life my family what do I do and you give some advice general advice and that's it as there was there any more interactions with us no that's it that's it okay so you weren't like yeah working with it hey here's what we get strategy there was nothing that going on no other interactions just a friendly advice and that's what they put you I gave him my I gave him my best advice when you when you work in when you work as an investigator very much as and it's very similar in venture capital it's all about relationships and you want to preserve relationships for the long term and you develop deep royalties to its people particularly people with whom you've been through difficult situations as I have been with Leonard much earlier on when I was still involved in Kroll and giving advice to South African government on issues related to the scorpius so that that has a lot of holes and I did think that was kind of weird they actually can produce the actual tax I couldn't find that the spy tapes so there's a spy tape scandal out there your name is on out on one little transaction globbed on to you I mean how do you feel about that I mean you must've been pretty pissed when you saw that when you do it when when you do when you do investigative work you see really see everything and all kinds of things and the bigger the issues that you deal with the more frequently you see things that other people might find unusual I are you doing any work right now with c5 at South Africa and none whatsoever so I've I retired from my investigative Korea in 2014 I did terrific 20 years as an investigator during my time as investigator I came to understood the importance of digital and cyber and so at the end of it I saw an opportunity to serve a sector that historically have been underserved with capital which is cyber security and of course there are two areas very closely related to cyber security artificial intelligence and cloud and that's why I created c5 after I sold my investigator firm with five other families who equally believed in the importance of investing private capital to make a difference invest in private capital to help bring about innovation that can bring stability to the digital world and that's the mission of c-5 before I get to the heart news I want to drill in on the BBC stories I think that's really the focal point of you know why we're talking just you know from my standpoint I remember living as a young person in that time breaking into the business you know my 20s and 30s you had Live Aid in 1985 and you had 1995 the internet happened there was so much going on between those that decade 85 to 95 you were there I was an American so I didn't really have a lot exposure I did some work for IBM and Europe in 1980 says it's co-op student but you know I had some peak in the international world it must been pretty dynamic the cross-pollination the melting pot of countries you know the Berlin Wall goes down you had the cold war's ending you had apartheid a lot of things were going on around you yes so in that dynamic because if if the standard is you had links to someone you know talked about why how important it was that this melting pot and how it affected your relationships and how it looks now looking back because now you can almost tie anything to anything yes so I think the 90s was one of the most exciting periods of time because you had the birth of the internet and I started working on Internet related issues yet 20 million users today we have three and a half billion users and ten billion devices unthinkable at the time but in the wake of the internet also came a lot of changes as you say the Berlin Wall came down democracy in South Africa the Oslo peace process in the time that I worked in Kroll some of them made most important and damaging civil wars in Africa came to an end including the great war in the Congo peace came to Sudan and Angola the Ivory Coast so a lot of things happening and if you have a if you had a an international career at that time when globalization was accelerating you got to no a lot of people in different markets and both in crow and in my consulting business a key part of what it but we did was to keep us and Western corporations that were investing in emerging markets safe your credibility has been called in questions with this article and when I get to in a second what I want to ask you straight up is it possible to survive in the international theatre to the level that you're surviving if what they say is true if you if you're out scamming people or you're a bad actor pretty much over the the time as things get more transparent it's hard to survive right I mean talk about that dynamic because I just find it hard to believe that to be successful the way you are it's not a johnny-come-lately firms been multiple years operating vetted by the US government are people getting away in the shadows is it is is it hard because I almost imagine those are a lot of arbitrage I imagine ton of arbitrage that you that are happening there how hard or how easy it is to survive to be that shady and corrupt in this new era because with with with investigated with with intelligence communities with some terrific if you follow the money now Bitcoin that's a whole nother story but that's more today but to survive the eighties and nineties and to be where you are and what they're alleging I just what's your thoughts well to be able to attract capital and investors you have to have very high standards of governance and compliance because ultimately that's what investors are looking for and what investors will diligence when they make an investment with you so to carry the confidence of investors good standards of governance and compliance are of critical importance and raising venture capital and Europe is tough it's not like the US babe there's an abundance of venture capital available it's very hard Europe is under served by capital the venture capital invested in the US market is multiple of what we invest in Europe so you need to be even more focused on governance and compliance in Europe than you would be perhaps on other markets I think the second important point with Gmail John is that technology is brought about a lot of transparency and this is a major area of focus for our piece tech accelerator where we have startups who help to bring transparency to markets which previously did not have transparency for example one of the startups that came through our accelerator has brought complete transparency to the supply chain for subsistence farmers in Africa all the way to to the to the shelf of Walmart or a big grocery retailer in in the US or Europe and so I think technology is bringing a lot more more transparency we also have a global anti-corruption Innovation Challenge called shield in the cloud where we try and find and recognize the most innovative corporations governments and countries in the space so let's talk about the BBC story that hit 12 it says is a US military cloud the DoD Jedi contractor that's coming to award the eleventh hour safe from Russia fears over sensitive data so if this essentially the headline that's bolded says a technology company bidding for a Pentagon contract that's Amazon Web Services to store sensitive data has close partnerships with a firm linked to a sanctioned Russian oligarch the BBC has learned goes on to essentially put fear and tries to hang a story that says the national security of America is at risk because of c5u that's what we're talking about right now so so what's your take on this story I mean did you wake up and get an email said hey check out the BBC you're featured in and they're alleging that you have links to Russia and Amazon what Jon first I have to go I first have to do a disclosure I've worked for the BBC as an investigator when I was in Kroll and in fact I let the litigation support for the BBC in the biggest libel claim in British history which was post 9/11 when the BBC did a broadcast mistakenly accusing a mining company in Africa of laundering money for al-qaeda and so I represented the BBC in this case I was the manager hired you they hired me to delete this case for them and I'm I helped the BBC to reduce a libel claim of 25 million dollars to $750,000 so I'm very familiar with the BBC its integrity its standards and how it does things and I've always held the BBC in the highest regard and believed that the BBC makes a very important contribution to make people better informed about the world so when I heard about the story I was very disappointed because it seemed to me that the BBC have compromised the independence and the independence of the editorial control in broadcasting the story the reason why I say that is because the principal commentator in this story as a gentleman called John Wheeler who's familiar to me as a someone who's been trolling our firm on internet for the last year making all sorts of allegations the BBC did not disclose that mr. Weiler is a former Oracle executive the company that's protesting the Jedi bidding contract and secondly that he runs a lobbying firm with paid clients and that he himself often bid for government contracts in the US government context you're saying that John Wheeler who's sourced in the story has a quote expert and I did check him out I did look at what he was doing I checked out his Twitter he seems to be trying to socialise a story heavily first he needed eyes on LinkedIn he seems to be a consultant firm like a Beltway yes he runs a he runs a phone called in interoperability Clearing House and a related firm called the IT acquisition Advisory Council and these two organizations work very closely together the interoperability Clearing House or IC H is a consulting business where mr. Weiler acts for paying clients including competitors for this bidding contract and none of this was disclosed by the BBC in their program the second part of this program that I found very disappointing was the fact that the BBC in focusing on the Russian technology parks cocuwa did not disclose the list of skok of our partners that are a matter of public record on the Internet if you look at this list very closely you'll see c5 is not on there neither Amazon Web Services but the list of companies that are on there are very familiar names many of them competitors in this bidding process who acted as founding partners of skok about Oracle for example as recently as the 28th of November hosted what was described as the largest cloud computing conference in Russia's history at Skolkovo this is the this is the place which the BBC described as this notorious den of spies and at this event which Oracle hosted they had the Russian presidential administration on a big screen as one of their clients in Russia so some Oracle is doing business in Russia they have like legit real links to Russia well things you're saying if they suddenly have very close links with Skolkovo and so having a great many other Khayyam is there IBM Accenture cisco say Microsoft is saying Oracle is there so Skolkovo has a has a very distinguished roster of partners and if the BBC was fair and even-handed they would have disclosed us and they would have disclosed the fact that neither c5 nor Amazon feature as Corcovado you feel that the BBC has been duped the BBC clearly has been duped the program that they broadcasted is really a parlor game of six degrees of separation which they try to spun into a national security crisis all right so let's tell us John while ago you're saying John Wyler who's quoted in the story as an expert and by the way I read in the story my favorite line that I wanted to ask you on was there seems to be questions being raised but the question is being raised or referring to him so are you saying that he is not an expert but a plant for the story what's what's his role he's saying he works for Oracle or you think do you think he's being paid by Oracle like I can't comment on mr. Wireless motivation what strikes me is the fact that is a former Oracle executive what's striking is that he clearly on his website for the IC H identifies several competitors for the Jedi business clients and that all of this should have been disclosed by the BBC rather than to try and characterize and portray him as an independent expert on this story well AWS put out a press release or a blog post essentially hum this you know you guys had won it we're very clear and this I know it goes to the top because that's how Amazon works nothing goes out until it goes to the top which is Andy chassis and the senior people over there it says here's the relationship with c5 and ATS what school you use are the same page there but also they hinted the old guard manipulation distant I don't think they use the word disinformation campaign they kind of insinuate it and that's what I'm looking into I want to ask you are you part are you a victim of a disinformation campaign do you believe that you're not a victim being targeted with c5 as part of a disinformation campaign put on by a competitor to AWS I think what we've seen over the course of this last here is an enormous amount of disinformation around this contract and around this bidding process and they've a lot of the information that has been disseminated has not only not been factual but in some cases have been patently malicious well I have been covering Amazon for many many years this guy Tom Wyler is in seems to be circulating multiple reports invested in preparing for this interview I checked Vanity Fair he's quoted in Vanity Fair he's quoted in the BBC story and there's no real or original reporting other than those two there's some business side our article which is just regurgitating the Business Insider I mean the BBC story and a few other kind of blog stories but no real original yes no content don't so in every story that that's been written on this subject and as you say most serious publication have thrown this thrown these allegations out but in the in those few instances where they've managed to to publish these allegations and to leverage other people's credibility to their advantage and leverage other people's credibility for their competitive advantage John Wheeler has been the most important and prominent source of the allegations someone who clearly has vested commercial interests someone who clearly works for competitors as disclosed on his own website and none of this has ever been surfaced or addressed I have multiple sources have confirmed to me that there's a dossier that has been created and paid for by a firm or collection of firms to discredit AWS I've seen some of the summary documents of that and that is being peddled around to journalists we have not been approached yet I'm not sure they will because we actually know the cloud what cloud computing is so I'm sure we could debunk it by just looking at it and what they were putting fors was interesting is this an eleventh-hour a desperation attempt because I have the Geo a report here that was issued under Oracle's change it says there are six conditions why we're looking at one sole cloud although it's not a it's a multiple bid it's not an exclusive to amazon but so there's reasons why and they list six service levels highly specialized check more favorable terms and conditions with a single award expected cause of administration of multiple contracts outweighs the benefits of multiple awards the projected orders are so intricately related that only a single contractor can reasonably be perform the work meaning that Amazon has the only cloud that can do that work now I've reported on the cube and it's looking angle that it's true there's things that other clouds just don't have anyone has private they have the secret the secret clouds the total estimated value of the contract is less than the simplified acquisition threshold or multiple awards would not be in the best interest this is from them this is a government report so it seems like there's a conspiracy against Amazon where you are upon and in in this game collect you feel that collateral damage song do you do you believe that to be true collateral damage okay well okay so now the the John Wheeler guys so investigate you've been an investigator so you mean you're not you know you're not a retired into this a retired investigator you're retired investigated worked on things with Nelson Mandela Kroll Janet Reno Attorney General you've vetted by the United States government you have credibility you have relationships with people who have have top-secret clearance all kinds of stuff but I mean do you have where people have top-secret clearance or or former people who had done well we have we have the privilege of of working with a very distinguished group of senior national security leaders as operating partisan c5 and many of them have retained their clearances and have been only been able to do so because c5 had to pass through a very deep vetting process so for you to be smeared like this you've been in an investigative has you work at a lot of people this is pretty obvious to you this is like a oh is it like a deep state conspiracy you feel it's one vendor - what is your take and what does collateral damage mean to you well I recently spoke at the mahkum conference on a session on digital warfare and one of the key points I made there was that there are two things that are absolutely critical for business leaders and technology leaders at this point in time one we have to clearly say that our countries are worth defending we can't walk away from our countries because the innovation that we are able to build and scale we're only able to do because we live in democracies and then free societies that are governed by the rule of law the second thing that I think is absolutely crucial for business leaders in the technology community is to accept that there must be a point where national interest overrides competition it must be a point where we say the benefit and the growth and the success of our country is more important to us than making commercial profits and therefore there's a reason for us either to cooperate or to cease competition or to compete in a different way what might takes a little bit more simple than that's a good explanation is I find these smear campaigns and fake news and I was just talking with Kara Swisher on Twitter just pinging back and forth you know either journalists are chasing Twitter and not really doing the original courting or they're being fed stories if this is truly a smear campaign as being fed by a paid dossier then that hurts people when families and that puts corporate interests over the right thing so I think I a personal issue with that that's fake news that's just disinformation but it's also putting corporate inches over over families and people so I just find that to be kind of really weird when you say collateral damage earlier what did you mean by that just part of the campaign you personally what's what's your view okay I think competition which is not focused on on performance and on innovation and on price points that's competition that's hugely destructive its destructive to the fabric of innovation its destructive of course to the reputation of the people who fall in the line of sight of this kind of competition but it's also hugely destructive to national interest Andrae one of the key stories here with the BBC which has holes in it is that the Amazon link which we just talked about but there's one that they bring up that seems to be core in all this and just the connections to Russia can you talk about your career over the career from whether you when you were younger to now your relationship with Russia why is this Russian angle seems to be why they bring into the Russia angle into it they seem to say that c-5 Cable has connections they call deep links personal links into Russia so to see what that so c5 is a venture capital firm have no links to Russia c5 has had one individual who is originally of Russian origin but it's been a longtime Swiss resident and you national as a co investor into a enterprise software company we invested in in 2015 in Europe we've since sold that company but this individual Vladimir Kuznetsov who's became the focus of the BBC's story was a co investor with us and the way in which we structure our investment structures is that everything is transparent so the investment vehicle for this investment was a London registered company which was on the records of Companies House not an offshore entity and when Vladimir came into this company as a co investor for compliance and regulatory purposes we asked him to make his investment through this vehicle which we controlled and which was subject to our compliance standards and completely transparent and in this way he made this investment now when we take on both investors and Co investors we do that subject to very extensive due diligence and we have a very robust and rigorous due diligence regime which in which our operating partners who are leaders of great experience play an important role in which we use outside due diligence firms to augment our own judgment and to make sure we have all the facts and finally we also compare notes with other financial institutions and peers and having done that with Vladimir Kuznetsov when he made this one investment with us we reached the conclusion that he was acting in his own right as an independent angel investor that his left renova many years ago as a career executive and that he was completely acceptable as an investor so that you think that the BBC is making an inaccurate Association the way they describe your relationship with Russia absolutely the the whole this whole issue of the provenance of capital has become of growing importance to the venture capital industry as you and I discussed earlier with many more different sources of capital coming out of places like China like Russia Saudi Arabia other parts of the world and therefore going back again to you the earlier point we discussed compliance and due diligence our critical success factors and we have every confidence in due diligence conclusions that we reached about vladimir quits net source co-investment with us in 2015 so I did some digging on c5 razor bidco this was the the portion of the company in reference to the article I need to get your your take on this and they want to get you on the record on this because it's you mentioned I've been a law above board with all the compliance no offshore entities this is a personal investment that he made Co investment into an entity you guys set up for the transparency and compliance is that true that's correct no side didn't see didn't discover this would my my children could have found this this this company was in a transparent way on the records in Companies House and and Vladimir's role and investment in it was completely on the on the public record all of this was subject to financial conduct authority regulation and anti money laundering and no your client standards and compliance so there was no great big discovery this was all transparent all out in the open and we felt very confident in our due diligence findings and so you feel very confident Oh issue there at all special purpose none whatsoever is it this is classic this is international finance yes sir so in the venture capital industry creating a special purpose vehicle for a particular investment is a standard practice in c-five we focus on structuring those special-purpose vehicles in the most transparent way possible and that was his money from probably from Russia and you co invested into this for this purpose of doing these kinds of deals with Russia well we just right this is kind of the purpose of that no no no this so in 2015 we invested into a European enterprise software company that's a strategic partner of Microsoft in Scandinavian country and we invested in amount of 16 million pounds about at the time just more than 20 million dollars and subsequent in August of that year that Amir Kuznetsov having retired for nova and some time ago in his own right as an angel investor came in as a minority invest alongside us into this investment but we wanted to be sure that his investment was on our control and subject to our compliance standards so we requested him to make his investment through our special purpose vehicle c5 raised a bit co this investment has since been realized it's been a great success and this business is going on to do great things and serve great clients it c5 taking russian money no see if I was not taking Russian money since since the onset of sanctions onboarding Russian money is just impossible sanctions have introduced complexity and have introduced regulatory risk related to Russian capital and so we've taken a decision that we will not and we can't onboard Russian capital and sanctions have also impacted my investigative career sanctions have also completely changed because what the US have done very effectively is to make sanctions a truly global regime and in which ever country are based it doesn't really matter you have to comply with US sanctions this is not optional for anybody on any sanctions regime including the most recent sanctions on Iran so if there are sanctions in place you can't touch it have you ever managed Russian oligarchs money or interests at any time I've never managed a Russian oligarchs money at any point in time I served for a period of a year honest on the board of a South African mining company in which Renova is a minority invest alongside an Australian company called South 32 and the reason why I did this was because of my support for African entrepreneurship this was one of the first black owned mining companies in South Africa that was established with a British investment in 2004 this business have just grown to be a tremendous success and so for a period of a year I offered to help them on the board and to support them as they as they looked at how they can grow and scale the business I have a couple more questions Gabe so I don't know if you wanna take a break you want to keep let's take a break okay let's take a quick break do a quick break I think that's great that's the meat of it great job by the way fantastic lady here thanks for answering those questions the next section I want to do is compliment

>> Narrator: From Nice, France, it's theCUBE, covering .NEXT Conference 2017 Europe. Brought to you by Nutanix. Welcome back, I'm Stu Miniman, and this is theCUBE's live coverage from Nutanix .NEXT in Nice, France. Always love when we get to dig in of some of the practitioners, the users at this conference 'cause a lot of 'em have shown up for this show. Happen to welcome to the program first time guest Mohammed Ibrahim, who's the head of IT with Securities and Investment Company or SICO headquartered out of Bahrain. Great to see you Hello, how are you? Good to see you, too. It's really my pleasure to participate and to be here and joining the .NEXT Conference. I'm very lucky to be here. Thank you so much. And you've been at both of the European shows? Exactly, I have attended last year in Vienna, and that was really good as well. And this year I really see a very big development and enhancement and the difference between this year and last year which is a very good progress. So, Mohammed, first tell us about SICO. How long's the company been around? Kind of the breadth of coverage and locations and the like. Yeah, SICO, it's actually, it's a wholesale bank headquartered in Bahrain, and we are a premiere wholesale bank in the region, Middle East and North Africa. We do business in two different lines like asset management because we manage more than one billion US dollar as asset management and portfolio managers, and we are also a custodian house. And the brokerage business, this is one of our main business lines as well because we are brokers and we started as brokers, and now we are a wholesale bank. Our coverage as I said is MENA, Middle East and North Africa, and we have our also subsidiary brokerage arm in United Arab Emirates. It's SICO UAE. It's our brokerage arm there, and they are also working under SICO. You were telling me SICO's been around since 1995. Give us a little bit of your background. How long have you been on there? Actually, yeah, SICO established in 1995, and I joined SICO in 2007, and since that time I'm at SICO, I started as the head of infrastructure, and now I am the head of IT looking after the whole IT and services in SICO. Maybe explain to us those roles, infrastructure and IT, and kind of how many people, how many data centers, that kind of stuff. We have actually one data center which is on the main side, and we have another data center in our DR side, that's the recovery side. And yeah, it's very, very sophisticated because we are operating as a bank and we have a core banking system. We have a trading platform. We are serving more than 1,900 customers, and our customers are government, pension fund, high-worth net individuals, corporates, so we have fund managers. This all our customers, and this is actually very critical customers for us. We are in IT of course. We have couple of units. We have the infrastructure and application. I was actually entitled for the infrastructure, looking after the platform and security network, and recently from couple of years back, I have been promoted to be the head of IT and looking after the applications as well as the infrastructure. Great, and you've got security under your preview which I have to imagine is taking a lot of time and budget these days. Exactly, it was a very, again, critical task and a critical position because handling the security, it was really important for the business and for our data and our confidentiality. So, it was really a good practice and a good experience. And now we are actually enhancing more in our information security policy because as you know, cyber security is one of the important topics, especially when you go to the digitalization. And this is our main purpose and our main target, is to do digitalization automation and enhancing this domain, plus ensuring the security is very standard, very high level, matching the whole expectations, the fund regulator, as well as the worldwide standards. Brought up a great point, Mohammed, there. I want you to explain to our audience what is digitization mean to SICO? For us, digitalization is actually, it's more than giving online services. Automation for our services as well. Make it easy because the wholesale bank actually have different line of services, and getting into access to your data, to your portfolio managing your orders, placing your orders, getting your positions, guaranteeing your cash statements, this is all actually, transferring your cash, this is all something that it's very important for the customer. And in many places, even in the Gulf, even in the area, it happens manually, so we are trying to be more automated, more smart, and this is for us, is the digitalization in the time being. Okay, so let's dig into the part of your job but your whole job too, the infrastructure itself. What's the role of infrastructure when you're doing the digitalization? You've probably gone through some transformations there. If you can tell us a little bit about kind of what it was like, and kind of what led to where you are and where you're going? Mainly, this is a very important question actually, and I love to answer it because when I joined SICO, it was a traditional infrastructure. As many people did, it's a physical implementation. You have servers, you have network switches, so it was a very traditional. And this was actually the challenge is to move SICO from the traditional way of the infrastructure into very simple way and very standard way, allowing you to grow, allowing you to add more applications, allowing you to really develop and focus more on the functionalities other than infrastructure. Since you also have limited resources in terms of IT resources, so you need really to think about simple infrastructure giving you the functionalities you expect, giving you the stability, that resiliency, and as well as giving you the opportunity to add more sort of critical applications on top of that. So I have to imagine in your time virtualization played a role in this, and when did Nutanix come into the picture? Actually, Nutanix came into the picture when we decided to go with our online and trading platform, SICO Life. SICO Life, it's actually a very important and critical product for us because it allows our customers to get the direct market access, and we are currently online with seven markets, and we are going for the globe as well because we are planning to go for Europe and US markets. So to build this kind of critical system you have to have a cloud. You have to think about virtualization because again, following the traditional implementation of infrastructure, it will not help you. And it will take a long, long time, and it will be very complex in terms of administration and support. For this reason, we have to had actually our private cloud, because again, you will stuck with the regulator if you go with the public cloud. If you tell him I'm going for a public cloud, he will tell you it's against confidentiality. You cannot take the customer information and put it somewhere. So we said, okay, we will go for our private cloud, and this was a challenge. We need a hyper-converged infrastructure. We need infrastructure that is smart enough to be hosting all our VMs with a central monitoring, central sort of administration, and easy as well. So we have converted more than couple of solutions around the world, and Nutanix was one of the proposed solutions coming to us. And we have done a very sophisticated vendor selection, and I think we have taken the right decision when we have selected Nutanix to be our infrastructure for a trading platform. Before I get into the Nutanix a little bit more, some people when they hear I built a private cloud, they say, well, you virtualized some environment, you did some things. What were your internal requirement? What makes it a cloud versus just okay, I've automated some things, or I've done some things? Did you have certain criteria that you went through or what did you do? Did you benchmark yourselves against the public cloud from kind of the usage and the agility? How do you sort that out? Again, it's very important, the question, because this was the strategy when I joined SICO from the beginning. As I said, we have or we had actually, a traditional infrastructure and the market, and the standards was ahead actually. So you have to bring SICO infrastructure into the standards. Traditional infrastructure, it doesn't give you that facility to grow and to add more sort of systems. It's very difficult, so this was actually the criteria and the requirements from our side. We need to have a simple infrastructure where we can add additional servers seamlessly. We can grow, we can expand, we can add more resources without rebuilding the whole infrastructure because the physical implementation, if you're stuck with the capacity, you have to shut down the server, bring a new server, do another implementation, bring everybody involved to do the new implementation. But with the virtualization, it's easy. It's a virtual server. It's a data, you take it somewhere. Just only you need to provide the infrastructure that can host it. And with the Nutanix or with the hyper-converged infrastructure, you can whenever you need additional resources, you can add resources, and you can keep your application running as is. You can keep your data as is, and without interrupting the business, without interrupting the operation, and without interrupting customers as well. And this was actually the criteria when we selected and when we decided to go with our hybrid-converged infrastructure. Okay, that's great. Do you have any metrics as to kind of operations or how many headcount you have working on things? What's been the impact of the planned Nutanix? This what we have done actually. I told you we did like a vendor selection, and we compared two different vendors. And actually, to be more honest, four vendors actually. Monitoring and developing and comparing different technologies. So if you go with the traditional infrastructure and implementation, how it will go in terms of support, in terms of implementation, timelines, the cost, post-implementation, support, even with the converged infrastructure because I remember in that time we had a converged infrastructure where some people like well-known companies were talking about converged infrastructure. And we had the hyper-converged infrastructure solution, which was a very a new into the market. For this reason, we had taken, I think, a decision where everybody said, Mohammed and SICO, I think you are taking a very what you can say? It's a very new decision. It's something that is-- Say it's risky? Exactly, some people consider it a little bit risky because you are doing something, it's still not yet many people did it, especially in the financial services and the banking sector. But as I told you, it was a challenge that you had to take and you had to go through because you have to have your own private cloud. Why, because you have to host whatever VMs you need. Whenever you need to add a VM, it will be very easy for you. Whenever you want to expand, it will be also easy for you. And with your resources, current IT resources, you can still handle this sophisticated systems and the critical systems. And this was a challenge because again every time you implement a new system, you add to payroll additional resources and you hire more resources. The business will be killed. You said something I've heard lots from financial markets these days is, the business is changing, so you need to have the agility to be able to respond and deliver what you need. And to be honest, again, I will tell you frankly speaking, now the management and the business decision makers, they look to the IT that they have a buttons. When I tell you something, you should press the button and bring it to me. They don't actually think about how much sophisticated that your system have already in the background. So they don't care about the technicality. They care more about the functionality and the deliverables. IT, it's very now challenging and the decision makers and the IT management and the technical resources we have a very challenge, a very high challenge, that whenever they get the requirements and a lot of priorities are coming from the business, they have to be always ready. So if you don't have a simple and a proper infrastructure that can really flexible, help you achieve all of these kind of deliverables, then you will stuck. And people will look at you like you are in 19th century. So we are now in 91, we are growing. We have to grow. We have to be very fast like others. It sounds like your saying Nutanix provides the easy button for the infrastructure. From my experience and from the implementation we have done, I think Nutanix, with our systems, it could really achieve our target. And we could really implement the trading platform in a very good time as we expected, even less. And we could really do this kind of performance. We could really achieve the deliverables as we expected. We have more than expected performance. We have the right choice in terms of expansion. We have also good support from Nutanix, which is really helping a lot in terms of critical systems because it's a 24 by 7. I cannot actually afford a couple minutes even downtime. It's the markets. I'm accessing the markets, so I'm placing orders, and these orders are money. And if the customer while placing the order his order did not reach the market because of the system, he will kill us. (laughs) Exactly, this is how much, and actually it's seconds because the price in the markets is changing, and the customer is placing the order. So if I did not give him the very stable platform that he can really place the order into the market with this moment and then it got delayed, then he will lose money. And I will lose the customer, and I will lose the business. For this reason, it's very critical and it's very important to have such a simple, flexible, reliable solution for your system. Mohammed Ibrahim, really appreciate the updates on what SICO has been doing. Thank you so much and best of luck. We'll be back with lots more programming here from theCUBE's coverage of Nutanix .NEXT, I'm Stu Miniman. You're watching theCUBE.

>> Narrator: Live from Munich Germany, it's theCUBE, covering IBM, Fast Track Your Data. Brought to you by IBM. >> We're back. This is Dave Vellante with Jim Kobielus, and this is theCUBE, the leader in live tech coverage. We go out to the events. We extract the signal from the noise. We are here covering special presentation of IBM's Fast Track your Data, and we're in Munich Germany. It's been a day-long session. We started this morning with a panel discussion with five senior level data scientists that Jim and I hosted. Then we did CUBE interviews in the morning. We cut away to the main tent. Kate Silverton did a very choreographed scripted, but very well done, main keynote set of presentations. IBM made a couple of announcements today, and then we finished up theCUBE interviews. Jim and I are here to wrap. We're actually running on IBMgo.com. We're running live. Hilary Mason talking about what she's doing in data science, and also we got a session on GDPR. You got to log in to see those sessions. So go ahead to IBMgo.com, and you'll find those. Hit the schedule and go to the Hilary Mason and GDP our channels, and check that out, but we're going to wrap now. Jim two main announcements today. I hesitate to call them big announcements. I mean they were you know just kind of ... I think the word you used last night was perfunctory. You know I mean they're okay, but they're not game changing. So what did you mean? >> Well first of all, when you look at ... Though IBM is not calling this a signature event, it's essentially a signature event. They do these every June or so. You know in the past several years, the signature events have had like a one track theme, whether it be IBM announcing their investing deeply in Spark, or IBM announcing that they're focusing on investing in R as the core language for data science development. This year at this event in Munich, it's really a three track event, in terms of the broad themes, and I mean they're all important tracks, but none of them is like game-changing. Perhaps IBM doesn't intend them to be it seems like. One of which is obviously Europe. We're holding this in Munich. And a couple of things of importance to European customers, first and foremost GDPR. The deadline next year, in terms of compliance, is approaching. So sound the alarm as it were. And IBM has rolled out compliance or governance tools. Download and the go from the information catalog, governance catalog and so forth. Now announcing the consortium with Hortonworks to build governance on top of Apache Atlas, but also IBM announcing that they've opened up a DSX center in England and a machine-learning hub here in Germany, to help their European clients, in those countries especially, to get deeper down into data science and machine learning, in terms of developing those applicants. That's important for the audience, the regional audience here. The second track, which is also important, and I alluded to it. It's governance. In all of its manifestations you need a master catalog of all the assets for building and maintaining and controlling your data applications and your data science applications. The catalog, the consortium, the various offerings at IBM is announced and discussed in great detail. They've brought in customers and partners like Northern Trust, talk about the importance of governance, not just as a compliance mandate, but also the potential strategy for monetizing your data. That's important. Number three is what I call cloud native data applications and how the state of the art in developing data applications is moving towards containerized and orchestrated environments that involve things like Docker and Kubernetes. The IBM DB2 developer community edition. Been in the market for a few years. The latest version they announced today includes kubernetes support. Includes support for JSON. So it's geared towards new generation of cloud and data apps. What I'm getting at ... Those three core themes are Europe governance and cloud native data application development. Each of them is individually important, but none of them is game changer. And one last thing. Data science and machine learning, is one of the overarching envelope themes of this event. They've had Hilary Mason. A lot of discussion there. My sense I was a little bit disappointed because there wasn't any significant new announcements related to IBM evolving their machine learning portfolio into deep learning or artificial intelligence in an environment where their direct competitors like Microsoft and Google and Amazon are making a huge push in AI, in terms of their investments. There's a bit of a discussion, and Rob Thomas got to it this morning, about DSX. Working with power AI, the IBM platform, I would like to hear more going forward about IBM investments in these areas. So I thought it was an interesting bunch of announcements. I'll backtrack on perfunctory. I'll just say it was good that they had this for a lot of reasons, but like I said, none of these individual announcements is really changing the game. In fact like I said, I think I'm waiting for the fall, to see where IBM goes in terms of doing something that's actually differentiating and innovative. >> Well I think that the event itself is great. You've got a bunch of partners here, a bunch of customers. I mean it's active. IBM knows how to throw a party. They've always have. >> And the sessions are really individually awesome. I mean terms of what you learn. >> The content is very good. I would agree. The two announcements that were sort of you know DB2, sort of what I call community edition. Simpler, easier to download. Even Dave can download DB2. I really don't want to download DB2, but I could, and play with it I guess. You know I'm not database guy, but those of you out there that are, go check it out. And the other one was the sort of unified data governance. They tried to tie it in. I think they actually did a really good job of tying it into GDPR. We're going to hear over the next, you know 11 months, just a ton of GDPR readiness fear, uncertainty and doubt, from the vendor community, kind of like we heard with Y2K. We'll see what kind of impact GDPR has. I mean it looks like it's the real deal Jim. I mean it looks like you know this 4% of turnover penalty. The penalties are much more onerous than any other sort of you know, regulation that we've seen in the past, where you could just sort of fluff it off. Say yeah just pay the fine. I think you're going to see a lot of, well pay the lawyers to delay this thing and battle it. >> And one of our people in theCUBE that we interviewed, said it exactly right. It's like the GDPR is like the inverse of Y2K. In Y2K everybody was freaking out. It was actually nothing when it came down to it. Where nobody on the street is really buzzing. I mean the average person is not buzzing about GDPR, but it's hugely important. And like you said, I mean some serious penalties may be in the works for companies that are not complying, companies not just in Europe, but all around the world who do business with European customers. >> Right okay so now bring it back to sort of machine learning, deep learning. You basically said to Rob Thomas, I see machine learning here. I don't see a lot of the deep learning stuff quite yet. He said stay tuned. You know you were talking about TensorFlow and things like that. >> Yeah they supported that ... >> Explain. >> So Rob indicated that IBM very much, like with power AI and DSX, provides an open framework or toolkit for plugging in your, you the developers, preferred machine learning or deep learning toolkit of an open source nature. And there's a growing range of open source deep learning toolkits beyond you know TensorFlow, including Theano and MXNet and so forth, that IBM is supporting within the overall ESX framework, but also within the power AI framework. In other words they've got those capabilities. They're sort of burying that message under a bushel basket, at least in terms of this event. Also one of the things that ... I said this too Mena Scoyal. Watson data platform, which they launched last fall, very important product. Very important platform for collaboration among data science professionals, in terms of the machine learning development pipeline. I wish there was more about the Watson data platform here, about where they're taking it, what the customers are doing with it. Like I said a couple of times, I see Watson data platform as very much a DevOps tool for the new generation of developers that are building machine learning models directly into their applications. I'd like to see IBM, going forward turn Watson data platform into a true DevOps platform, in terms of continuous integration of machine learning and deep learning another statistical models. Continuous training, continuous deployment, iteration. I believe that's where they're going, or probably she will be going. I'd like to see more. I'm expecting more along those lines going forward. What I just described about DevOps for data science is a big theme that we're focusing on at Wikibon, in terms where the industry is going. >> Yeah, yeah. And I want to come back to that again, and get an update on what you're doing within your team, and talk about the research. Before we do that, I mean one of the things we talked about on theCUBE, in the early days of Hadoop is that the guys are going to make the money in this big data business of the practitioners. They're not going to see, you know these multi-hundred billion dollar valuations come out of the Hadoop world. And so far that prediction has held up well. It's the Airbnbs and the Ubers and the Spotifys and the Facebooks and the Googles, the practitioners who are applying big data, that are crushing it and making all the money. You see Amazon now buying Whole Foods. That in our view is a data play, but who's winning here, in either the vendor or the practitioner community? >> Who's winning are the startups with a hot new idea that's changing, that's disrupting some industry, or set of industries with machine learning, deep learning, big data, etc. For example everybody's, with bated breath, waiting for you know self-driving vehicles. And the ecosystem as it develops somebody's going to clean up. And one or more companies, companies we probably never heard of, leveraging everything we're describing here today, data science and containerized distributed applications that involve you know deep learning for you know image analysis and sensor analyst and so forth. Putting it all together in some new fabric that changes the way we live on this planet, but as you said the platforms themselves, whether they be Hadoop or Spark or TensorFlow, whatever, they're open source. You know and the fact is, by it's very nature, open source based solutions, in terms of profit margins on selling those, inexorably migrate to zero. So you're not going to make any money as a tool vendor, or a platform vendor. You got to make money ... If you're going to make money, you make money, for example from providing an ecosystem, within which innovation can happen. >> Okay we have a few minutes left. Let's talk about the research that you're working on. What's exciting you these days? >> Right, right. So I think a lot of people know I've been around the analyst space for a long long time. I've joined the SiliconANGLE Wikibon team just recently. I used to work for a very large solution provider, and what I do here for Wikibon is I focus on data science as the core of next generation application development. When I say next-generation application development, it's the development of AI, deep learning machine learning, and the deployment of those data-driven statistical assets into all manner of application. And you look at the hot stuff, like chatbots for example. Transforming the experience in e-commerce on mobile devices. Siri and Alexa and so forth. Hugely important. So what we're doing is we're focusing on AI and everything. We're focusing on containerization and building of AI micro-services and the ecosystem of the pipelines and the tools that allow you to do that. DevOps for data science, distributed training, federated training of statistical models, so forth. We are also very much focusing on the whole distributed containerized ecosystem, Docker, Kubernetes and so forth. Where that's going, in terms of changing the state of the art, in terms of application development. Focusing on the API economy. All of those things that you need to wrap around the payload of AI to deliver it into every ... >> So you're focused on that intersection between AI and the related topics and the developer. Who is winning in that developer community? Obviously Amazon's winning. You got Microsoft doing a good job there. Google, Apple, who else? I mean how's IBM doing for example? Maybe name some names. Who do you who impresses you in the developer community? But specifically let's start with IBM. How is IBM doing in that space? >> IBM's doing really well. IBM has been for quite a while, been very good about engaging with new generation of developers, using spark and R and Hadoop and so forth to build applications rapidly and deploy them rapidly into all manner of applications. So IBM has very much reached out to, in the last several years, the Millennials for whom all of this, these new tools, have been their core repertoire from the very start. And I think in many ways, like today like developer edition of the DB2 developer community edition is very much geared to that market. Saying you know to the cloud native application developer, take a second look at DB2. There's a lot in DB2 that you might bring into your next application development initiative, alongside your spark toolkit and so forth. So IBM has startup envy. They're a big old company. Been around more than a hundred years. And they're trying to, very much bootstrap and restart their brand in this new context, in the 21st century. I think they're making a good effort at doing it. In terms of community engagement, they have a really good community engagement program, all around the world, in terms of hackathons and developer days, you know meetups here and there. And they get lots of turnout and very loyal customers and IBM's got to broadest portfolio. >> So you still bleed a little bit of blue. So I got to squeeze it out of you now here. So let me push a little bit on what you're saying. So DB2 is the emphasis here, trying to position DB2 as appealing for developers, but why not some of the other you know acquisitions that they've made? I mean you don't hear that much about Cloudant, Dash TV, and things of that nature. You would think that that would be more appealing to some of the developer communities than DB2. Or am I mistaken? Is it IBM sort of going after the core, trying to evolve that core you know constituency? >> No they've done a lot of strategic acquisitions like Cloudant, and like they've acquired Agrath Databases and brought them into their platform. IBM has every type of database or file system that you might need for web or social or Internet of Things. And so with all of the development challenges, IBM has got a really high-quality, fit-the-purpose, best-of-breed platform, underlying data platform for it. They've got huge amounts of developers energized all around the world working on this platform. DB2, in the last several years they've taken all of their platforms, their legacy ... That's the wrong word. All their existing mature platforms, like DB2 and brought them into the IBM cloud. >> I think legacy is the right word. >> Yeah, yeah. >> These things have been around for 30 years. >> And they're not going away because they're field-proven and ... >> They are evolving. >> And customers have implemented them everywhere. And they're evolving. If you look at how IBM has evolved DB2 in the last several years into ... For example they responded to the challenge from SAP HANA. We brought BLU Acceleration technology in memory technology into DB2 to make it screamingly fast and so forth. IBM has done a really good job of turning around these product groups and the product architecture is making them cloud first. And then reaching out to a new generation of cloud application developers. Like I said today, things like DB2 developer community edition, it's just the next chapter in this ongoing saga of IBM turning itself around. Like I said, each of the individual announcements today is like okay that's interesting. I'm glad to see IBM showing progress. None of them is individually disruptive. I think the last week though, I think Hortonworks was disruptive in the sense that IBM recognized that BigInsights didn't really have a lot of traction in the Hadoop spaces, not as much as they would have wished. Hortonworks very much does, and IBM has cast its lot to work with HDP, but HDP and Hortonworks recognizes they haven't achieved any traction with data scientists, therefore DSX makes sense, as part of the Hortonworks portfolio. Likewise a big sequel makes perfect sense as the sequel front end to the HDP. I think the teaming of IBM and Hortonworks is propitious of further things that they'll be doing in the future, not just governance, but really putting together a broader cloud portfolio for the next generation of data scientists doing work in the cloud. >> Do you think Hortonworks is a legitimate acquisition target for IBM. >> Of course they are. >> Why would IBM ... You know educate us. Why would IBM want to acquire Hortonworks? What does that give IBM? Open source mojo, obviously. >> Yeah mojo. >> What else? >> Strong loyalty with the Hadoop market with developers. >> The developer angle would supercharge the developer angle, and maybe make it more relevant outside of some of those legacy systems. Is that it? >> Yeah, but also remember that Hortonworks came from Yahoo, the team that developed much of what became Hadoop. They've got an excellent team. Strategic team. So in many ways, you can look at Hortonworks as one part aqui-hire if they ever do that and one part really substantial and growing solution portfolio that in many ways is complementary to IBM. Hortonworks is really deep on the governance of Hadoop. IBM has gone there, but I think Hortonworks is even deeper, in terms of their their laser focus. >> Ecosystem expansion, and it actually really wouldn't be that expensive of an acquisition. I mean it's you know north of ... Maybe a billion dollars might get it done. >> Yeah. >> You know so would you pay a billion dollars for Hortonworks? >> Not out of my own pocket. >> No, I mean if you're IBM. You think that would deliver that kind of value? I mean you know how IBM thinks about about acquisitions. They're good at acquisitions. They look at the IRR. They have their formula. They blue-wash the companies and they generally do very well with acquisitions. Do you think Hortonworks would fit profile, that monetization profile? >> I wouldn't say that Hortonworks, in terms of monetization potential, would match say what IBM has achieved by acquiring the Netezza. >> Cognos. >> Or SPSS. I mean SPSS has been an extraordinarily successful ... >> Well the day IBM acquired SPSS they tripled the license fees. As a customer I know, ouch, it worked. It was incredibly successful. >> Well, yeah. Cognos was. Netezza was. And SPSS. Those three acquisitions in the last ten years have been extraordinarily pivotal and successful for IBM to build what they now have, which is really the most comprehensive portfolio of fit-to-purpose data platform. So in other words all those acquisitions prepared IBM to duke it out now with their primary competitors in this new field, which are Microsoft, who's newly resurgent, and Amazon Web Services. In other words, the two Seattle vendors, Seattle has come on strong, in a way that almost Seattle now in big data in the cloud is eclipsing Silicon Valley, in terms of where you know ... It's like the locus of innovation and really of customer adoption in the cloud space. >> Quite amazing. Well Google still hanging in there. >> Oh yeah. >> Alright, Jim. Really a pleasure working with you today. Thanks so much. Really appreciate it. >> Thanks for bringing me on your team. >> And Munich crew, you guys did a great job. Really well done. Chuck, Alex, Patrick wherever he is, and our great makeup lady. Thanks a lot. Everybody back home. We're out. This is Fast Track Your Data. Go to IBMgo.com for all the replays. Youtube.com/SiliconANGLE for all the shows. TheCUBE.net is where we tell you where theCUBE's going to be. Go to wikibon.com for all the research. Thanks for watching everybody. This is Dave Vellante with Jim Kobielus. We're out.