from the cube studios in palo alto in boston bringing you data driven insights from the cube and etr this is breaking analysis with dave vellante five publicly traded u.s based companies have market valuations over or just near a trillion dollars as of october 29th apple and microsoft topped the list each with 2.5 trillion followed by alphabet at 2 trillion amazon at 1.7 and facebook now meta at just under a trillion off from a tie of 1.1 trillion prior to its recent troubles these companies have reached extraordinary levels of success and power what if anything could disrupt their market dominance in his book seeing digital author david micheller made three key points that i want to call out first in the technology industry disruptions of the norm the waves of mainframes minis pcs mobile and the internet all saw new companies emerge and power structures that dwarfed previous eras of innovation is that dynamic changing second every industry has a disruption scenario not just the technology industry and third silicon valley broadly defined to include seattle or at least amazon has a dual disruption agenda the first being horizontally disrupting the technology industry and the second as digital disruptors in virtually any industry how relevant is that to the future power structure of the digital industry generally in amazon specifically hello and welcome to this week's wikibon cube insights powered by etr in this breaking analysis we welcome in author speaker researcher and thought leader david michela to assess what could possibly disrupt today's trillionaire companies and we're going to start with amazon dave good to see you welcome thanks dave good to see you yeah so dave approached us about a month or so ago he was working on these disruption scenarios and we agreed to make this a community research project where we're going to tap the knowledge of the cube crowd and its adjacent communities and to that end we're initiating a community survey that asks folks to rate the likelihood of seven plus one disruption scenarios so we have a slide here that sort of shows what that survey structure is going to look like and so as i say there's seven plus another one which is kind of an open open-ended and we're going to start with amazon as the disruptee so dave you've been writing about the technology industry for decades and digital disruption and china and automation and hundreds of other topics what prompted you to start this project yeah it's a great question you know as you said that the whole history of our business has been you know every decade or so you have a new set of leaders ibm digital microsoft the internet companies etc but when i started looking at it you know that seems in some ways to have actually stopped that you know microsoft is now 40 years old amazon is what 1995 is getting towards 30. you know google's been a dominant company for 20 years and you know apple of course and facebook more recently so so whatever reason this sort of longevity of these firms has been longer than we've seen in the past so i sort of say well is there anything that's going to change that so part of it and we'll get into it is what could happen to disrupt those big five but then the sort of second question was well maybe the uh disruptive energies of the of the tech business have moved elsewhere they've moved to crypto currencies or they've moved to tesla and so you start to sort of broaden your sense of disruption and when you talked about that dual disruption agenda that whole ability of tech to disrupt other sectors banking health care insurance automobiles whatever is sort of a second wave of disruption so uh we started coming out all right what sort of scenarios are we really looking at over say for the 2020s what might shake up the big five as we know them and how might disruption spread to sort of more industry specific parts of the world and that was really the the genesis of the project and really just my own thinking of all right what scenarios can i come up with and then reaching out to companies like yourselves to figure out okay how can we get more input on that how can we crowdsource it how can we get a sense of of what the community thinks of all this it's great love it and as you know we're very open to do that so we're going to crowdsource this we're going to open it up to virtually anyone and use multiple channels so let's go through some of the scenarios all of them actually and explain the reasoning behind their inclusion the first one the govern government mandated separation divestment and or limits on amazon's cloud computing retail media credit card and or in-house product groups it probably no coincidence that this was the first one you chose today but why start here well i think the government interest in doing something to get back at big tech is is pretty clear and probably one of the few things that has bipartisan support in washington these days and also government interventions have always been an enormous part of the tech industry's history the the antitrust efforts against ibm and att in particular and more recently microsoft a smaller one but it's it's always been there there's a vibe to do it now and when you look at all the big ones but particularly amazon you can see that potential divestments and breakups are sitting there right in front of you the separation of retail and aws uh perhaps breaking out credit card or music or media businesses these sorts of things are all on the surface at least relatively clean things to do and i think when you look at the formation of an alphabet or a meta those companies themselves are starting to see their own businesses as consisting of multiple firms yeah so i just want to kind of drill into the cloud piece just to emphasize the importance of aws in the context of amazon amazon announced earnings thursday night after the close aws is now a 64 billion revenue run rate company and they're growing at 39 percent year over year that's actually an accelerated growth rate from q3 2020 when the company was grew at 29 it's astounding think about a company this size moreover aws accounted for more than actually but 100 of amazon's operating profit last quarter so the aws cloud is obviously crucial as a funding vehicle and ecosystem accelerant for amazon and i just wanted to share some data points dave before we move on to these other scenarios yeah and just on that uh i think that is the fundamental point it's very easy to see aws on its own as a powerhouse but i think you know if you figure how much freedom aws money has given the retail business or the credit card business or the music businesses to launch themselves and to essentially make no money for very long periods of time uh you see that you know if you're a walmart trying to compete with amazon as a retailer well that money from aws is is an awful big problem and and so when they look at separation that's the sort of stuff people talk about right so i just want to i want to put that into context just in in terms of the the cloud business so this chart is one from our etr surveys that isolates the four hyperscale cloud providers and adds in oracle and ibm we both own public clouds but don't you know don't have nearly the the scale we don't have apple or facebook they have clouds as well and we can talk about that in a moment but the chart shows net score or spending momentum on the vertical axis and market share or pervasiveness in the survey on the horizontal axis it's it's really mentioned share not dollar market share but it's an indicator and the red line is an indicator of elevated spending momentum and you can see azure and aws they're up and to the right i mean amazon is 64 billion you know uh azure will claim larger because they're including their application business but just their their their i asked business obviously smaller than amazon's but you can see in the survey the respondents define cloud they include that sas business so they they both impressively have this high spending momentum on the vertical axis well above that 40 line despite their size google obviously well behind those to the left and then alibaba which has a small sample in the etr survey it's you know it's not as prominent in china but even though it's ias cloud businesses larger than google's by probably a couple billion dollars now the point is these four hyperscalers and there really are only four in my view anyway they have a presence that allows them to build new businesses and disrupt ecosystems and enact that dual disruption agenda should they choose to do so at least in the case of amazon oracle and ibm are not in a position to do that it's not part of their agenda they don't they don't have that scale but dave can you talk about your dual disruption scenario very clearly amazon fits in there and i would think alibaba as well but what about microsoft facebook apple google yeah i mean you know people often say what's the biggest difference between microsoft and amazon from from a cloud point of view and the answer is pretty clear that microsoft goes out of its way to assure its customers that it really doesn't have any interest in competing directly about them so you don't see microsoft going into the retail business or the banking business or the healthcare business all that seriously in contrast that's really what amazon is all about is taking its capabilities to essentially any industry it likes and therefore as one is as great as the service aws provides it's often being provided to people who amazon is actually competing with at least some degree or another and you know that's a huge part of microsoft's sales pitch and it's certainly a potential vulnerability down the road uh it's very hard in the end to be an essential supplier and a direct competitor at the same time but so far they've managed to do that yeah so we put together just another sort of aside here this little thought experiment to see what aws would look like as a separate entity and so it's a chart that looks at a number of tech companies and lays out their revenue run rate the growth rates gross margin probably should have done operating margin might have been more relevant but market cap and revenue multiple again given the size of aws at 64 billion run rate and accelerating growth trajectory it's just it's remarkable and so we we figured this out based on industry norms and today's valuations it's not inconceivable that aws could be you know in the trillionaire club or close to it so based on that discussion we had earlier amazon amazon's dual disruption agenda being funded by empowered by aws as we just discussed dave yeah and just keep in mind nothing that you or i are saying are predictions or saying that anything is going to happen they are possible scenarios of what might happen that seem to make some plausible sense so that when amazon is making the sort of profits that it's making aws naturally that's going to attract other companies because there's margin to to be had there and similarly you know look at uh you look at microsoft for all those years the profits it made in windows or in office software allowed it to do all kinds of other things and essentially that's what amazon is doing today but if a google or a microsoft could cut into those profits through some sort of aggressive pricing and perhaps we'll talk about that you know that would have a lot of impact on amazon as a whole all right so let's quickly go through the other description scenarios and maybe make some comments the next one sort of major companies increasingly choose to do their own cloud computing and or sell their products directly for competitive cost security or other reasons so dave i saw this and look at a company like walmart and others no way they're going to run their business on aws walmart as we know is building out its own cloud and maybe it doesn't have the size of a hyperscaler but it's very large it's got the technical chops it can most likely do it a lot cheaper than renting cloud space what was your thinking in this scenario yeah the broader thing here is essentially one of that computing paradigms have been proven to go in cycles you know a long time ago people shared computers and called timeshare and then people ran their own and now they're sharing again through the cloud and who knows it's possible that the cycle could shift again through some innovation and you know a lot of companies today look at the bills they're getting for cloud or for various sas services and some of them are pretty high and a lot of them will look at and say hey maybe we actually can do some of this stuff cheaper so the scenario is that essentially the the cycle shifts once again uh and it makes more sense to do stuff in-house again that's not a prediction but uh certainly something that's happened before and couldn't plausibly happen again yeah there's a lot of discussion about that in the industry of martine casado and sarah wong wrote that piece about the you know the trillion dollar basically sucking sound basically saying the the scenario was the the the premise rather was the that that sas companies their cost of goods sold are increasingly going to be you know chewed up by cloud costs and then of course mark andreessen says every company is going to be a sas company so as the sassification of business occurs that's something to consider okay next scenario is environmental policies raise costs change packaging delivery recycling rules and or consumer preferences can you comment dave on your thinking on this scenario yeah first i'll just back up a bit we're used to thinking of technology is the great disrupter and clearly that's still important but there are now other forces out there china which will talk about uh the environment uh various cultural forces and and here with the environment you see all kinds of things that could change that you know if you look at amazon and its model of very high levels of packaging lots of delivery vehicles and all the things it is doing are those necessarily the best environmentally and will there potentially be various taxes carbon metrics or things that might work against that model and tend to favor more traditional stores where people go to pick them up that seems to be a plausible scenario and i think everybody here knows that desire to do something in the in the climate environmental spaces is pretty strong and you know if you look at you know just throws aside the recycling industry itself has arguably been quite a failure in that much of what is so-called recycled is basically put in tankers and shipped to the third world which no longer wants it uh and so the backlog of packaging and concerns about packaging and uh what to do with all that you know those those issues are rising and and will be real and i i don't know whether amazon has a good answer to that they're you know they obviously are very aware of it they're working very hard to do everything they can in that space but their fundamental model of essentially packaging every good in its own little box or envelope or whatever is arguably not the greenest way of doing business got it thank you so okay so the next one is price in slash trade wars with the u.s and or china cloud and e-commerce giant so protectionism favors national players so we talking here about for example google bombing prices or alibaba or trade policy making it difficult for amazon to do business in certain parts of the world can you add some color on this one yeah all those things and i would just start with with china itself you know you could argue that covet has been the biggest disruptor of the last couple years but if you look out the next five or eight you had to look at all these things you'd probably say china the size of the chinese market the power of its vendors players like alibaba clearly can rival amazon in many different ways uh you know it's no secret that it'd be hard for amazon to they're not going to be a big success in china uh but you can see it in harder ways that you imagine across asia or other markets where alibaba is strong and you're in today's sort of environment where there's scarce goods and maybe certain products well maybe they go chinese may probably go to alibaba first and you want to buy that product well amazon doesn't have it but alibaba has it you know those sort of scenarios if you get into a sharp trade war with china or even if the current tensions continue it's quite easy to see how that could uh play some havoc with amazon's supply chains in many ways the whole amazon retail model is based on a steady flow of goods manufactured in china and that clearly is not as stable as it was right got it the next one actually caught my attention and this is a big part of the reason why we want to survey the community to see how plausible folks think this is in its its technology related scenario so that would potentially disrupt aws and by fault by default hit amazon so that's major computing innovations such as quantum edge machine machine would obsolete today's cloud architectures okay so so here what you're thinking just as aws changed the game in i.t some future innovations or new business models that we haven't conceived yet could disrupt the prevailing cloud computing model right yeah absolutely i mean you know again we'll go back to where we started that new technologies have always been the main disruptors and here we're looking at some potentially very powerful uh new technologies you know your guess is good in mind about what's gonna happen with quantum is clearly a very different way of computing quite possibly led by other vendors possibly even led by china which would be a huge issue you look at the cloud well cloud's not very good at sort of edge stuff or machine to a machine stuff or sort of near field things out cars in the highway talking to each other uh you know again amazon's totally aware of these things and they are working on it but they have a huge investment in other ways of doing things and historically that inertia that need to protect existing bases of activity and practices has made it difficult for a lot of companies to adjust to new things and so that could happen again uh and there's certainly a puzzle but yeah in all these cases so far amazon has been aware of it is trying to do it but you can still see the scenario playing out and in a truly disruptive technology it's not always possible for the incumbent to effectively cope with it okay the next scenario speaks to i think some of the work that you've done in automation and related areas software replaces centralized warehouses as delivery services are directly connected to suppliers and factories so dave this is like cut out the middle man right software and automation changes the nature of the route absolutely i mean you know in a world of ubiquitous delivery services and product standardization metrics and products being built and shipped from all over the world the concept of running them all through a centralized warehouse is at least at a minimum uh seems like something that might be uh obsoleted and replaced and you know imagine if google built a significant taxonomy of of core products that could be traced directly to where they are either manufactured supplied or brought into the country from whatever company that tries to sell them and the delivery service connected directly to that uh and so that model has always been out there i think at various times people have looked at it it hasn't happened so far and i think amazon itself is is is looking at this particularly as it gets more into food that the idea of shipping all fresh food any sort of centralized warehouse is a pretty bad idea uh and so you know that model of software essentially replacing giant automated warehouses uh is out there and and seems to me uh likely and i just say that you know alibaba for the record doesn't really use that warehouse model it uses a network of suppliers and does it that way and and there do seem to be uh some efficiencies that would likely come with that the next one is was really interesting from a historian's perspective and it's the penultimate uh scenario and that's the proverbial self-inflicted wound and you and i certainly remember ibm's you know fateful decision to outsource the microprocessor and operating system to intel and and and and and microsoft sorry ibm's decision to do that lotus you might recall it refused to allow 123 to run on windows back in the day novell buying word perfect jim barksdale a lot of young people the audience won't of course remember this but jim barksdale poo-pooing microsoft's decision to bundle internet explorer into the operating system all those were kind of self-inflicted or blind spots so this one is complacency arrogance blindness abuse of power loss of trust so much more than the examples i gave consumer and or employee backlash you're seeing some of that at facebook now and i guess this is taking their eye off the customer ball losing the day zero in amazon's case forgetting that customer obsession formula they're working backwards culture and i think this is a big reason why andy jassy was put in charge so this wouldn't happen but we've seen time and time again as the examples i just gave blind spots have absolutely killed companies haven't they dave absolutely he listed many of the most famous but perhaps my favorite of all was kennels and the founder of digital equipment corporation one of the great tech visionaries of his time who stated over and over again why would anybody want a home computer or eunuch's snake oil was his other beautiful all of those things and and so there's the blindness uh there's the area ibm who just came to the view that they and att both came to the view that they were invincible and nothing could ever crack their control of their customer base so we've seen all that i think uh more recently i think some of these things can actually go from the bottom up and you know what's happening to facebook today well they're being hurt by former employees speaking out uh you know this never really happened too much to in the ibm and t days but people calling into question amazon's work labor practices and such things is certainly a possible scenario and the whole sort of you know in the end you know people talk about a cultural backlash against technology i'm not sure i believe it'll happen but it certainly is possible that people will start to rebel against these firms you see it more likely with facebook is fairly well along there uh amazon's still popular but you know in the end and as you i think you said the the core thing that companies routinely fail on is they lose their customer focus and they get caught up in other things their financial numbers their their power inside their position of their company but they they lose track of staying close to the customer has need and terrific job of staying close to the customers over the years uh so if anyone you know was maybe less vulnerable that they they would be well along that that line but it can happen to anyone and new management is often you know one of the real tests and there's many examples of that through history when a new executive comes in will they have that same focus that same thing particularly you know as the first generation's employees get wealthy and retired in a new set of people come in you know you look at microsoft the new people who came in well they're not going to be multi-millionaires they may have missed the great runs they're there to work and and the culture of companies changes when you get to that state the m is not that there yet but you can envision that comings soon enough so you know cultural issues have always been a factor and it's hard to imagine there won't be some sort of factor going forward well and you know you talk about that the the succession of founders and ceos i mean that's what to me makes microsoft so astounding because during the bomber years it was unclear that they were ever going to become relevant again and so nadella has done a masterful job but of course they had the margins from the pc software business that allowed them to buy that time but look at intel and the troubles it's going through uh and so many other examples of companies that just sort of said all right well we're going to pack it in and either sell the company or which is again what i think makes think companies like oracle and dell which you know founder-led ceos not ceo in the case of oracle but still running the business uh so quite uh significant yeah yeah and you know we've talked a lot about things that might hurt answers but you gotta recognize how in many ways how amazing they are and most tech companies a lot of them anyways have essentially been one trick ponies i mean google still makes overwhelming amount of its money selling ads and the things it's tried to do in cars and healthcare and various things you know they've often struggled you know apple still makes the core of its money around it's it's cell phone platform amazon's one of the few that continually generates entirely new huge businesses and and you have to give them an enormous amount of credit for that you know microsoft uh was a they failed repeatedly over and over again with internet stuff and phone stuff and all these things and it really wasn't until you know satya came in and really focused on their customers and their need for enterprise services that he that he really got the company on the right track so you know amazon has always been good listeners customers and if they continue to do so it bodes well but history says other stuff comes along okay and the last scenario is open-ended dave included uh you know what did we miss is there another scenario that we haven't put forth that you could feel it could be disruptive to amazon right i mean you've got to have the at least what'd we miss yeah i mean you know these are things that me and you and i just sort of made up the top of our head these are things we see that that might happen but you know in your huge audience of people in this community every day i'm sure there are other people out there who have thoughts of what might shake things up or even doing things that might shake things up already uh and you know one of the things you do for you guys is get this sort of material out there and and see what ideas surface so hopefully people will uh participate in this and we'll see what comes out of it all right so what happens from here is we're going to publish the the link to the survey in this video description and in our posts we ask you to take the survey please tell your friends we're going to publish the results as always we do in an open and free david michelle thanks so much for putting your brain power on this and collaborating with us i'm really excited to see the results and and and run through the other giants with you as well once we see what this survey says yeah thanks david great and yeah if we can make this one work be fun to do it for for google and microsoft and facebook and apple and see where it all goes thanks a lot all right okay that's it for today remember these episodes are all available as podcasts wherever you listen just search breaking analysis podcast i publish each week on wikibon.com and siliconangle.com etr.plus is where all the cool survey data lives they just dropped their october survey with some great findings so do check that out you can reach me on twitter at d velante he's at d michelle or comment on my linkedin post or email me at david.vellante at siliconangle.com this is dave vellante for dave michelle thanks for watching thecube insights powered by etr be well and we'll see you next time

>> From around the globe, it's The Cube, presenting Cube on Cloud, brought to you by SiliconANGLE. >> Welcome back to Cube on Cloud. I'm Paul Gillin, enterprise editor of SiliconANGLE. As we look ahead at what is in store for the cloud this year, one of the intriguing possibilities that has emerged is the rise of vertical clouds. IBM has been a leader in this area with its launch in late '19 of the IBM Financial Services cloud. That's a services-ready public cloud with exceptional security, as well as a policy framework for certifying compliance and services from the IBM subsidiary, Promontory. Now, with the IBM Financial Services cloud, that has been a major focus of our next guest, Hillery Hunter. She is the Vice President and CTO of IBM Cloud, an IBM Fellow, and a veteran of, I believe, three previous appearances on The Cube. Am I right, Hillery? >> Yep, sounds about right. Great to be back here today. >> Thanks for joining us. So let's start with getting an update on the IBM Financial Services cloud. What progress have you made in signing up customers and your ecosystem of partners? >> Yeah, we've made really significant progress advancing the IBM Cloud for Financial Services since we last talked, and we're really at that place of establishing a trusted platform for the industry. Just in some specifics, in addition to Bank of America which we had talked about as our U.S. anchor partner for the program, we've announced several global banks that are partnering with us for the global expansion of the program, including BNP party bar, which is one of Europe's largest banks. More than 70 ASVs are signed up with us now as part of the program and adopting IBM Cloud for Financial Services. This level of ecosystem is exciting because it means that banks will have the opportunity to transform what they're doing, but do so in a way which is driven by security and compliance so that they can be confident in those deployments on IBM Cloud for Financial Services. We also released the IBM Cloud policy framework for Financial Services. This is both the security and compliance posture of the environment, as well as guidance on controls, reference architectures, automation to help people onboard. And so both ISVs and banks now are able to onboard to this environment, and offer their wares and deploy their workloads. So it's a really exciting state for us on the program, and we're really in a place where there'll be an ongoing cadence of additional releases and announcements of additional partnerships and clients. So it's an exciting time in the program. >> One of the distinctive features, I think, of this launch is that you're working actively with your customers. They're working with you on building policy frameworks, as well as, I imagine, the features that you're offering on the cloud. How do you orchestrate all of these different customers and get them involved in, actually, co-development. >> Yeah, the ecosystem conversation and the partnership conversation are two of the fundamental aspects of the program. Like you said, this isn't just us sitting off in a bubble and inventing the future. We're working internally with partners within IBM, like IBM Promontory, which is a consultancy that has deep, deep regulatory expertise in jurisdictions globally, with IBM Security Services, and then with these individual partners and banks and clients. One of the ways that we bring everything together is through our council. So our council, our Cloud Council for Financial Services, is where we have global, systemically important financial institutions partnered with us and working together with one another, and that covers CIOs, it covers chief security officers, risk officers, et cetera. So we have some formality around how we work with all of these partners, really, as a body and as a group. >> And what have you learned from this experience? If you were to go into other vertical clouds, what have been the lessons? >> Ecosystem is so important. As I look at this space, I see that everyone has an existing business. They have a platform they're running, they have clients they're trying to service, but the software providers into this space are looking, themselves, to transform. They're looking to transform from being software vendors to being SaaS providers. The banks and financial institutions themselves are looking to transform from working on their own premises to benefit from the elasticity and the scale and the optionality that being in public cloud provides. So there's a lot of parties themselves that are trying to transform, and a lot of vendors into the financial space that are looking to transform. And in that time of a lot of change, ecosystem is absolutely key. And so the ISE and SaaS providers providing their wares on the cloud for financial services is really just as important as those financial services institutions, so that everyone can make that transition together, and so that banks that are looking to digitally transform can leverage partners that are really at the forefront of that change and that innovation in platforms for the industry. >> Would you say that there are- Is this the first of many? Are there going to be other vertical IBM clouds, or is the range of industries that really need that kind of specificity, limited? I think it's actually not limited, though I will say that within the space of industries that are heavily regulated, there's obviously a deeper need for specific cloud embodiments and cloud implementation, so regulated industries like insurance, like telco, health care, et cetera, these are the ones, I think, where there's the greatest opportunity to do verticals that are specific to industry. But as we look at this, this is absolutely part of an IBM Cloud strategy to deliver industry-specific clouds. And this comes from our decades of expertise. Even in financial services, being able to leverage those other entities within IBM that I mentioned, our regulatory background with companies, having helped them address regulatory needs for specific industries, and then translating that into cloud and cloud technologies. And then coming up from the other side, in terms of the technologies themselves, we've partnered with key industries to deliver security, and data protection, and cryptography technologies, and such, on premises, and we're contextualizing that now for cloud and public cloud deployments. And so it brings together the pieces of decades of expertise in platforms, and technology, and regulations, and contextualizes it into cloud, and I absolutely think that's an opportunity for other industries as well. >> Can you give us a bit of a preview? Do you have specific industries in mind? Is there a timeframe? >> Yeah, so late last year we did announce a second industry-specific cloud initiative, and that was IBM Cloud for Telco. So we have in that ecosystem, now, over 40 partners that are now, that are working with IBM and with Red Hat, especially with clients and partners that are looking to help with that transition into 5G and increasing use of IOT. 5G is really this disruptive opportunity for that industry, and also just for many other different types of companies and institutions that are looking to deploy with more efficiency, better operational efficiency, deploy with AI capabilities, really being able to do things at cellular network EDGE, and the places that they're doing business using IOT devices, and 5G will enable much of that to really transform and flourish. So a couple of the partners, initially, in addition to that ecosystem that I mentioned in Cloud for Telco, we've got Samsung working with us, Nokia, AT&T, et cetera, and so these partnerships and capabilities around network EDGE and specific capabilities in Cloud for Telco are that second public announcement that we've made around industry-specific cloud. >> And as far as your competitive position is concerned, are you taking away business from your competitors when you partner with these telcos and these banks, or is this an entirely new line of business that was not previously in the cloud? >> Yeah, these are really, I think, in, by and large, new opportunities. As we look at, for example, how we, as customers, expect to engage with our bank, we are looking to increasingly engage with a bank in a digital way, use our applications, use mobile devices. We're looking for individual bank outlets, branch outlets of a banking institution, to be increasingly smart, to service our needs more quickly, et cetera. And so as we look at 5G and telco EDGE, it's about delivery of smarter capabilities and such. I think much of it really is about, in this digital transformation space, about creating new capabilities, creating new experiences, creating new ways of engagement, and engagement and opportunity to customize and personalize, I think most of those are new experiences and new capabilities for most companies. >> So speak about IBM's positioning right now. You're not one of the big three cloud providers, unlikely to become one, but you do have a big cloud business, and you've got the verticals, you've got the multicloud. I know IBM has been a big champion of multicloud. How is IBM distinctively positioned in the cloud market right now? >> Yeah, we are all-in on hybrid cloud and AI, and if you listen to our CEO and chairman, you'll hear that. It is a really consistent message since he came into his role as as our CEO. So being all-in on hybrid cloud and AI, we really are looking to help our clients transform into holistic cloud architecture. So when I say all-in on hybrid cloud, I mean that there's been a lot of, I jokingly say, random acts of cloud usage. People have ended up using cloud because there's some SaaS function that they want, or some particular line of business has been highly motivated to pursue some service on a particular cloud. And hybrid cloud is really about taking a step back, having a holistic architecture for cloud consumption. And in that sense, clouds are IBM's partners. And we're really looking to enable our clients to have consistency in their deployments, to consolidate across their IT estate and across their cloud deployments so that they can have a common platform, so they can have efficiency in how their developers deploy capabilities, so they can deploy more quickly with security and compliance patterns, and have oversight over everything that's going on in a consistent way that really enables them to have that velocity in their business. And so when we then position things like industry cloud, we're leveraging IBM-specific technologies to deliver differentiated capabilities in data privacy, data protection, security and compliance, for these industries, in public cloud, yes, but it's in the context of helping our clients overall across all the different things, some of which may not need all of that data privacy or be leveraging particular SaaS content. We're looking to help them really have cloud architecture, have a holistic conversation across hybrid cloud, and yet to still be able to choose particular cloud deployments on our cloud for industries that enables data protection and policy for the most sensitive and enterprise grade things that they're looking to do at the core of their business. >> So speaking of hybrid hybrid cloud, the major cloud providers, Amazon, Microsoft, Google, Oracle's another one, all have on-premises offerings right now. Several of them are working with telcos to expand their reach out into co-location and into telecom data centers, all of this being to enable this distributed cloud fabric, a hybrid cloud fabric. What's IBM's play in this area? Do you have a similar strategy or is it different? >> Yeah, I really think, and I think you maybe wanted to get a little bit into trends and predictions here in this conversation, and we absolutely see that need for distributed cloud, for cloud to really be alive in all the places where it needs to be, in all the places that someone is doing business, and in a consistent way across cloud environments, to be one of those major trends that's emerging as a really hot conversation. We have introduced IBM Cloud Satellite, that is IBM's hybrid cloud, as a service platform. It enables our clients to leverage OpenShift and Kubernetes environments, developer tooling, consistency in a cloud catalog, visibility and control over all their resources across different environments, and to be able to run end-to-end with consistency from on-premises, to EDGE, to different public cloud providers, and this is absolutely something that, across industries but within, also, those industries, that we're focused on in particular, that we're seeing a lot of interesting conversations emerge, because if cloud is everywhere, if cloud is distributed and can be on premises and in public cloud, it enables this consistency and this parity, really that brings together that seamlessness, not just the random acts of cloud usage. It means that using cloud can be something that drives speed of release of new product. It means that you can deliver more capability and functionality into a retail outlet where you're doing business, or a banking brick-and-mortar location. You can have AI for IT ops and understand what's going on across those different environments, and ensure things are kept secure, and patched, and updated, and you're responding to incidents in efficient ways. And so, really, having a consistent cloud environment and a distributed cloud environment across different locations, it's really key to leveraging the promises of what everyone had originally hoped to get out of cloud computing. >> And of course, one of IBM's distinctive advantages in this area is, you've got a huge hardware install base out there. How do all those 360 mainframes figure into this? >> Yeah, with the OpenShift capabilities and our (audio skips) relations with Red Hat in this area, we are able to actually help our clients leverage Kubernetes, and Linux, and all those things, even on the mainframe. So across the mainframe family, the IBM power family, where folks may also have AIX or IBM i deployments, people can now do Linux, they can do OpenShift, they can do Kubernetes, and we have core technologies that enable that really to be stitched together, and I think that's one of the unique perspectives that IBM has in this whole conversation about hybrid cloud. There are many different definitions of hybrid cloud, but we really view it as stretching from the traditional enterprise IT, like you said, there's a lot of IT out there, and being able to also incorporate OpenShift and Kubernetes in a common cloud platform, on traditional enterprise IT, on private cloud, on fresh deployments, on private cloud, Amazon public cloud, that really is the whole IT estate. So when we talk about hybrid cloud, when we talk about distributed cloud, we're really talking about the entirety of the IT state, not just new deployments of SaaS, or something like that. >> So as someone who's on the front lines of what customers are asking about cloud, do you see customer, the questions that they're asking, changing? Are their decision criteria changing for how they choose a cloud provider? >> Yeah, I think that there's definitely a lot more conversation, and especially in this current era where there's an accelerated rate of cloud adoption, there's a lot more conversation around things like security, data protection, data privacy, being able to run in an environment that you trust not just, is it a cloud and what does it do, but can I trust it? Do I understand how my data is protected, how my workloads are secured? That's really why we started Cloud for Financial Services, because that industry shepherds such vital data, so the reason that they are highly regulated is because of the importance of what they are stewarding, very important data and financial information. So we began there with the Cloud for Regulated Industries, there with with Financial Services, but I see that across all industries. I was participating on a panel with a bunch of CIOs, and I was there interviewing some CIOs who were from a much more consumer-facing, and also from from foods industry, et cetera, and their conversation was exactly the same as I have with many other clients, which is that their cloud choices, their efficiency in cloud deployment, now are largely driven by the ability to get to a secure posture and the ability to demonstrate to their internal security and risk teams that they understand their data protection and data privacy posture. So we are seeing lots of pickup and conversation opportunity around confidential computing, specifically, and that's really about enabling our clients to have full authority and privacy in their computing, in their code, in their data, even when running in a cloud environment. And so I do see a shift. Everyone's more concerned about security, and I think we have great technologies, and we've been working with core partners to establish, and harden, and create generations of technology that can really answer those questions. >> I have to ask you about that term, confidential computing. I haven't heard that before. What does that involve? >> Yeah, it is a buzzword to watch out here for in 2021. So confidential computing means being able to run in an environment where there are others, in a cloud computing environment, for example, but still have full privacy and authority over what you're doing. So you are effectively in an enclave. Imagine yourself protected and secured. And so our confidential computing technology is, we're actually on, basically, our fourth generation of the hardware and software technologies to create that strong degree of isolation. This enables us to deliver a really rich portfolio, frankly, the richest portfolio in the industry, of actual services delivered using confidential computing and secure enclaves. And so we can enable our customers to solution things in a way, for example, where their data can not even be visible to our cloud operators, or where they retain full control over a database, and have full privacy as they're running in that environment. These are really great considerations, but they impact everything from health care, financial services. We have other partners and clients who are working to protect consumer data through these means, et cetera. And so across different industries, everyone's really looking at this topic of data privacy and data protection. And so we have a whole suite and a whole family of confidential computing-based services that we're able to offer, to offer those assurances and that privacy to them in their cloud computing. >> I do have to ask you about the multicloud, because this is a topic of constant debate in the industry of whether customers want to shift workloads across multiple clouds to protect themselves from lock-in. Is that a fantasy? Is that too restrictive? This has been a key part of IBM strategy is enabling the multicloud. How do you see customer attitudes developing right now? How do they want to use multiple clouds, or, in fact, do they? Are they concentrating perhaps more of their workloads in one or two? >> Yeah, we believe vendor lock-in goes against the true spirit of hybrid cloud, that desire to have consistency across environments, that desire to- and the business need to have continuity and resiliency and operations, et cetera, and so I do see this as a really important topic. From the perspective of managing environments, I think in multicloud, I think folks are starting to realize that multicloud isn't necessarily a strategy, it's a reality. People have deployments in lots of different cloud environments that happen somewhat organically, in many cases, and so the key question is how to then get to visibility and control over those resources. I think two of the core topics in that are multicloud management, being able to understand clusters, and virtual machines, and other things that are deployed across different environments, and manage them with a common set of policies, for example. And then, in addition to multicloud management, AI for IT operations is another really important topic in multicloud, being able to respond to incidents, understand and analyze and leverage AI for understanding what's going on across those environments is another really core topic. And then as you said, distributed cloud is a means of getting that consistency. Having a common control and deployment plane across those different environments can help it not just be accidental usage of multiple cloud environments, but very intentional deployment, based on the needs of particular workloads to the environment that they're best suited to. And that's really what you want to aim for. Not that multicloud is necessarily, I guess I would say, is a- It is a complexity that is manageable through these new types of technologies and multicloud management, and such like that, and distributed cloud. >> Well, Hillery 'tis the season for predictions, it's January. Everyone's prognosticating about what the future will look like. What do you think are going to be the main trend lines in cloud this year? >> Yeah, I sprinkled a few in there as we were talking, but I really do think that the conversation around hybrid cloud, number one, how to have an open innovation ecosystem for cloud, where you have consistency across environments, not just random acts of cloud usage, but intentional and holistic architecture. I really see that as the transition, as the second wave of of cloud adoption. And then, secondly, is we were talking earlier about security. Everyone is wondering about data policy, data privacy. We've always taken a strong stance that our client's data is their data. We are not going to be using their data to further develop our AI services on our cloud, or something. We have deployed technologies in confidential computing that enable them to keep full control over their keys so that even our cloud operators don't have access to data, computing in secure enclaves where they have a strong degree of isolation and full privacy and authority over their workload. I really think these two topics, open and secure hybrid computing and with consistency across environments, with distributed cloud technology, and secondly, security. I think these are really important topics for 2021. And they may seem a little bit obvious, but I think it's important as people look at this to look for technologies that are multiple generations into this journey, partner with folks who are committed very clearly to an open ecosystem and open source innovation on the one hand, and secondly, when we talk about security and data protection, you want to know that that provider is several generations into that journey so you really know that that technology has been vetted out, is at production scale, and has a stable basis. And so I think this is the year when folks are transitioning from cloud adoption to consistency in cloud, and security and privacy in cloud. >> A final question, and it has nothing to do with cloud. You're an IBM Fellow, and I see that term turn up occasionally with other other people I've spoken to from IBM. What is an IBM Fellow, how do you become one, and what privileges and responsibilities does it entail? >> Yeah, it's an exciting opportunity to be an IBM Fellow. There's about a hundred active IBM Fellows right now, so there aren't too many of us, but there is a small community of us. IBM Fellow is IBM's highest technical designation within our technical population, so I do have a role within our cloud business, but as one of our technical leaders, get to interact with the other Fellows, work on strategy for IBM in technology overall as a company, and I also get to be a trusted advisor to many of our clients, and so I get to work with CTOs and CIOs and VP of Application Development profiles, and VP of IT, and things like that, in our different clients, and really help them wrestle through those struggles of future IT transformation. And so part of what I enjoy most about the role, and the Fellow role, is being able to be that trusted advisor to many of our clients. There's been so much change in this last year for everyone, and being able to also help our technical population through that, in various means, and then help our clients through all of that change, and really being able to take and grasp onto the opportunities that this last year has had in the way that we work has changed, and the way that companies are looking to deliver capabilities has changed. So that's, for me, the exciting part of the role. >> Well, you're one in a hundred, then, and you do a great job of articulating the IBM strategy, and also the cloud landscape. Hillery Hunter, VP and CTO, excuse me, CTO of IBM Cloud, thank you so much for joining us today on Cube on Cloud. >> Thanks so much for having me. It was a pleasure. >> I'm Paul Gillin, stick with us. (upbeat music)

>>From around the globe. It's the cube presenting cube on cloud brought to you by Silicon angle. >>Welcome back to coupon cloud I'm Paul Gillan enterprise editor of Silicon angle. You know, as we look ahead at what is in store for the cloud this year, one of the intriguing possibilities that has emerged is the rise of vertical clouds. IBM has been a leader in this area with its launch in late 19 of the IBM financial services cloud. That's a services ready public cloud with exceptional security, as well as Polly, a policy framework for certifying compliance and services from the IBM subsidiary. Promintory now with the IBM financial services cloud, uh, that has been a major focus of our next guest, Hillary Hunter. She is the vice president and CTO of IBM cloud and IBM fellow and a veteran of, I believe, three previous appearances on the cube. Am I right Hillary? >>Yep. Sounds about right. Great to be back here today. >>Thanks for joining us. So let's start with getting an update on the IBM financial services cloud. What progress have you made in signing up customers and your ecosystem of partners? >>Yeah, you know, we've made really significant progress, uh, progress in advancing the IBM cloud for financial services since we last talked, you know, and, and we're really at that place of establishing a trusted platform for the industry, just in, you know, some specifics in addition to bank of America, which we had talked about as our us anchor partner for the program. Um, we've announced several global banks, um, that are partnering with us for the global expansion of the program, including BNP party, you know, which is one of Europe's largest banks. Um, more than 70 ASVs are signed up with us now as part of the program and adopting IBM cloud for financial services, this level of sort of ecosystem is, is exciting because it means that, you know, banks will have the opportunity to, to transform what they're doing, but do so in a way, which is driven by security and compliance, um, so that they can be confident in those deployments on IBM cloud for financial services. >>We also released the IBM cloud policy framework for financial services. This is both the sort of security and compliance posture of the environment, as well as, you know, guidance on controls, reference architectures automation to help people on board. And so both ISBNs and banks now are able to, um, onboard to this environment and offer their wares and deploy their workloads. So it's a really exciting state for us on the program. And we're really in a place where there'll be, you know, an ongoing cadence of, you know, additional releases and announcements of additional partnerships and clients. So it's an exciting time in the program. >>Uh, one of the distinctive features I think of this, uh, of this launch is that you're working actively with your customers. They're working with you on building policy frameworks, as well as I imagined the features that you're offering on the cloud. How do you orchestrate all of these different customers and get them involved and actually co-development >>Yeah. You know, it's the ecosystem conversation and the partnership conversation are two of the fundamental aspects of the program. Like you said, this isn't, you know, just us sitting off in a bubble, inventing the future. Um, you know, we're working internally with partners, uh, within IBM like IBM Promintory, um, which is a consultancy that has deep, deep regulatory expertise and in jurisdictions globally with IBM security services. And then with these individual partners and banks and clients, one of the ways that we bring everything together is through our councils. So our council, our cloud council for financial services, um, it's where we have global systemically important financial institutions partnered with us and, and working together with one another. And, and that covers, you know, CIO is it covers chief security officers, risk officers, et cetera. Um, so we have some formality around how we work with, um, all of these partners, uh, really as a body and as a group. >>And what have you learned from this experience? I mean, if you were to go into the, uh, into other vertical clouds, what have been the lessons >>Ecosystem is so important, right? It's as I look at this space, I see that, you know, everyone has an existing business, they have a platform they're running, they have clients they're trying to service. Um, but those, the software providers into this space are looking themselves to transform their they're looking to transform from being a software vendors, to being SAS providers, the banks and financial institutions themselves are looking to transform from working on their own premises to benefit from the Alaska city and the scale and the optionality of, you know, that being in public cloud provides. So there's a lot of, um, parties themselves that are trying to transform and a lot of vendors into the financial space that are looking to transform. And in that time of a lot of change ecosystem is, is absolutely key. And so, um, the ISE and SAS providers, you know, providing their wares on the cloud for financial services is, is really just as important as those financial services institutions so that everyone can make that transition together. Um, and so that banks that are looking to digitally transform can, can leverage partners that are really at the forefront of that change in that innovation and in platforms for the industry. >>Would you say that there are, is this the first of many, I mean, are there going to be other vertical financial or other vertical IBM clouds or is the range of industries that really need that kind of specificity limited? >>I think it's, it's actually not limited, you know, though, I will say that within the space of industries that are heavily regulated, there's obviously a deeper need for sort of specific cloud embodiments and cloud implementation. So regulated industries like insurance, like telco healthcare, et cetera. Um, these are the ones I think, where there's the greatest opportunity to do verticals that are specific to industry. Um, but you know, as we look at this, this is absolutely part of an IBM cloud strategy to deliver industry specific clouds. And, and, and this comes from our decades of expertise, right? Even in financial services, being able to leverage, you know, those other entities within IBM that I mentioned, right. You know, our, our regulatory, um, background with companies, you know, having helped them address regulatory needs for specific industries, and then translating that into cloud and cloud technologies. Right. And, and then coming up from the other side, you know, in terms of the technologies themselves, we've partnered with key industries, um, to deliver security and data protection and cryptography technologies and such on premises. And we're contextualizing that now for cloud and public cloud deployments. And so it kind of brings together the pieces of decades of expertise and platforms and technology and regulations and contextualizes it into cloud. And I absolutely think that's, you know, an opportunity for, for other industries as well. >>Can you give us a bit of a preview? I mean, do you have specific industries in mind? Is there a time? >>Yeah, so, so, uh, late last year we did announce a second industry specific cloud initiative and that was IBM cloud for telco. So we have in that ecosystem now over 40 partners that are announced, that are working with IBM and with red hat, especially with, um, clients and partners that are looking to help with that transition into 5g and increasing use of IOT. 5g is really this disruptive opportunity for that industry. And, and also just for many other different types of companies and institutions that are looking to deploy with more efficiency, better operational efficiency, deploy with AI capabilities, really being able to do things that like cellular network edge, um, and the places that they're doing business using IOT devices and 5g will enable much of that to really transform and flourish. So a couple of the partners, initially, in addition to that ecosystem that I mentioned in cloud for telco, um, you know, we've got Samsung working with us, Nokia ATNT, et cetera. Um, and so, you know, these, these partnerships and, and capabilities around network edge, um, and specific capabilities in cloud for telco, um, are sort of that second, you know, public announcement that we've made around industry specific cloud, >>As far as your competitive position is concerned. I mean, are, are you taking away business from your competitors when you partner with these, these telcos and these banks, or is this an entirely new line of business that was not previously in the cloud? >>Yeah. You know, these are really, I think in, by and large new opportunities as we look at, you know, for example, how we as customers expect to engage with, um, you know, our bank, right. You know, we are looking to increasingly engage with a bank in a digital way, use our applications, use mobile devices. We're looking for, you know, individual bank outlets, uh, branch outlets of, of a banking institution to be increasingly smart, to service our needs, you know, more quickly, et cetera. Um, and so as we look at, you know, 5g and telco edge, it's about delivery of sort of smarter capabilities and such. I think much of it really is about in this digital transformation space about, you know, creating new capabilities, creating new experiences, creating new ways of engagement, um, and engagement and an opportunity to customize and personalize. Um, I think most of those are sort of new experiences and new capabilities for most companies. >>So speak about IBM's positioning right now. I mean, you're not one of the big three cloud providers to, to become one. Uh, but you do have as a big cloud business and, uh, you've, you've got the verticals, you've got the multi-cloud, uh, I know IBM is big, has been a big champion of multi-cloud. I mean, how is IBM distinctively positioned in the cloud market right now? >>Yeah. You know, we are all in, on hybrid cloud and AI. And if you listened to our CEO and chairman, you'll hear that it is a really consistent message. And he, since he came into his role as, as our CEO, um, so being all in, on hybrid cloud and AI, you know, we really are looking to help our clients transform into holistic cloud architecture. Right? So, so when I say all in, on hybrid cloud, I mean that, you know, it's, there's been a lot of sort of, I jokingly say random acts of cloud usage, right? People have ended up using cloud because there's some SAS function that they want, or some particular line of business has been highly motivated to pursue some service on a particular cloud. And hybrid cloud is really about taking a step back, having a holistic architecture for cloud consumption. And in that sense, you know, uh, clouds, uh, are IBM's partners. >>Um, and we're really looking to enable our clients to have consistency in their deployments to consolidate across their it estate and across their cloud deployments so that they can have, um, a common platform, so they can have efficiency in how their developers to like capabilities. So they can deploy more quickly with security and compliance patterns and have oversight over everything that's going on in a consistent way that really enables them to have that velocity in their business. And so when we then, you know, positioned things like industry cloud, we're leveraging IBM specific technologies to deliver differentiated capabilities and data privacy, data protection, security compliance, where these industries in public cloud. Yes. But it's in the context of helping our clients overall across all the different things. Some of which may not need all of that data privacy or, or, or be leveraging particular SAS content we're looking to help them really have cloud architecture have a holistic conversation across hybrid cloud. Um, and yet to still be able to choose particular cloud deployments on our cloud for industries, um, that enables data protection and policy for the most sensitive and, and enterprise grade things that they're looking to do at the core of their business. >>So speaking of hybrid hybrid cloud, I mean the major cloud providers, Amazon, Microsoft, Google, Oracle, and other one all have on premises offerings right now. Uh, several of them are working with telcos to expand their reach out into, uh, into co-location and into telecom, uh, data centers. Uh, all of these things were to enable is this distributed cloud fabric kind of a hybrid cloud fabric what's, IBM's play in this area. Uh, do you have a similar strategy or is it different? >>I really think, and I think you maybe wanted to get a little bit into sort of, you know, trends and predictions here in this conversation and, and, and, you know, we, we absolutely see that need for distributed cloud for cloud to really kind of be alive in all the places where it needs to be in, in all the places that someone is doing business and in a consistent way across cloud environments, um, to be one of those major trends, that's emerging as a really hot conversation. We have introduced IBM cloud satellite, um, that is IBM's hybrid cloud as a service platform, um, and enables our clients to leverage, um, uh, OpenShift and Kubernetes environments, developer tooling, uh, consistency in a cloud catalog, visibility and control over all their resources, um, across different environments. And to be able to run end, to end with consistency from on-premises to edge to different public cloud providers. >>Um, and this is absolutely something that across industries, but, you know, within also those industries that we're focused on in particular, um, that we're seeing a lot of interesting conversations emerge because if cloud is sort of everywhere, if cloud is distributed and can be on premises and in public cloud, it enables this consistency in this parody, um, really that sort of brings together that, that seamlessness, not just the random acts cloud usage, right? I mean, it means that using cloud, um, can be something that, that drives, you know, speed of release of new product. It means that you can deliver more capability and functionality into, you know, a retail outlet where you're doing business or a banking, you know, brick and mortar location. Um, you can have, you know, AI for it ops and understand what's going on across those different environments and ensure things are kept secure and patched and updated, and you're responding to incidents in efficient ways. Um, and so really having a consistent cloud environment and a distributed cloud environment across different locations, um, it's really key to leveraging the promises of what everyone had originally hoped to get out of out of cloud computing. >>Of course, one of IBM's distinctive, uh, advantages of this area is you've got a huge hardware install base out there. I mean, how do all those three 60 mainframes figuring it out, figure into this, >>Um, with the OpenShift capabilities in our Clara operations with red hat in this area, we are able to actually help our clients leverage Kubernetes and Linux and all those things, even on the mainframe. So across the mainframe family, the IBM power family, um, you know, where folks may also have AIX or IBMI deployments, people can now do Lennox, they can do open shifts, they can do Coopernetti's. Um, and we have core technologies that enable that really to be stitched together. And I think that's one of the unique perspectives that IBM has in this whole conversation about hybrid cloud. Um, there are many different definitions of hybrid cloud, but we really view it as stretching from the traditional enterprise. It, like you said, there's a lot of it out there and being able to also incorporate OpenShift and Kubernetes in a common cloud platform, um, on traditional enterprise, it on private cloud, on fresh deployments, on private cloud, Amazon public cloud, that really is the whole it estate. So when we talk about hybrid cloud, when we talk about distributed cloud, really talking about the entirety of VIT state, not just sort of new deployments of, of SAS or something like that. >>So as someone who's on the front lines of, you know, what customers are asking about cloud, do you see customer the questions that they're asking changing? Are they, are they their decision criteria changing for how they choose a cloud provider? >>Yeah. You know, I think that, um, there's definitely a lot more conversation, especially in this current era where there's an accelerated rate of cloud adoption. Um, there's a lot more conversation around things like security, um, data protection, data, privacy, being able to run in an environment that you trust, not just is it a cloud and what does it do, but can I trust it? Do I understand how my data is protected, how my workloads are secured? Um, you know, that's really why we started cloud for financial services because that industry shepherds such vital data, right? So the reason that they are highly regulated is because of the importance of what they are stewarding very important data and financial information. Um, so, you know, we began there with the cloud for regulated industries there with, with financial services, but I see that across all industries, I was participating on a panel, um, that was, uh, with a bunch of CEOs. >>And I was there interviewing some CEOs who were from a much more sort of consumer facing and also from, from foods industry, et cetera. And their conversation was exactly the same as I have with many other clients, which is that their cloud choices, their efficiency and cloud deployment now are largely driven by the ability to get to a secure posture and the ability to demonstrate their, to their internal security and risk teams that they understand their data protection, data, privacy posture. So we are seeing lots of pickup and, and conversation opportunity around confidential competing specifically. Um, and you know, that's really about enabling, uh, our clients to have full authority and privacy in their computing, in their code and their data, even when running in a cloud environment. And so I do see a shift everyone's more concerned about security, and I think we have great technologies and we've been working with core partners to establish and harden and, and create, um, generations of technology that can really answer those questions. >>I have to ask you about that term confidential computing. I haven't heard that before. What, what does that involve? >>Yeah. You know, it's, it is a buzzword to watch out here for an in 2021. So confidential computing means being able to run in an environment where there are others in a, in a cloud computing environment, for example, um, but still have full privacy and authority over what you're doing. So you are effectively in an enclave, uh, imagine yourself sort of protected and secured. And so our confidential competing technologies, um, we're actually on basically our fourth generation of, of, of the hardware and software technologies to create that strong degree of isolation. Um, this enables us to deliver a really rich portfolio. Um, frankly, the, the, the richest portfolio in the industry of actuals services delivered, um, using confidential, competing and secure enclaves. And so we can enable our customers to solution things in a way, for example, where their data, you know, can not even be visible to our cloud operators or where they, uh, retain, you know, full control over, you know, a database and have full privacy as they're running in that environment. Um, these are really great, um, you know, considerations, but they impact everything from health care financial services. Uh, we have other partners and clients who are working to protect consumer data, um, you know, through these means et cetera. And so, um, across different industries, everyone's really looking at this topic of data, privacy, data protection. Um, and so we have a whole suite and whole family of confidential competing based, uh, services that we're able to offer to, uh, offer those assurances and that privacy to them in their cloud competing. >>I do have to ask you about the multi-cloud because this is a topic of constant debate in the industry of whether customers want to move shift workloads across multiple clouds to protect themselves from lock-in. I mean, is that a fantasy? Is that real? Is that a too restrictive? Uh, this has been a key part of IBM strategy is enabling the multi-cloud. How do you see customer attitudes developing right now? How do they want to use multiple clouds or in fact, do they, are they, are they, uh, concentrating perhaps more of their workloads in one or two? >>Yeah. You know, we believe vendor locking goes against the true spirit of hybrid cloud, right. Um, that desire to have consistency across environments, um, that desire to, uh, and the business need to have, you know, continuity and resiliency and operations, et cetera. Um, and so I do see this as a really important topic, um, from the perspective of, you know, managing environments, I think in multi-cloud, um, I think folks are starting to realize that multicloud isn't necessarily a strategy. It's a reality. Um, people have deployments in lots of different cloud environments, um, that happened somewhat organically in many cases. And so the key question is how to then get to visibility and control over those resources. Um, I think kind of two of the, the, the core topics in that are multicloud management, um, you know, being able to understand, you know, clusters and virtual machines and other things that are deployed across different environments and manage them with a common set of policies, for example. >>Um, and then in addition to multicloud management, um, I, for it, operations is another really important topic in, in multi-cloud being able to respond to incidents, understand and analyze and leverage AI, um, for what's going on for understanding what's going on across those environments, um, is another really core topic. And then as you said, you know, distributed cloud is a means of getting that consistency, having a common, you know, control and deployment plane across those different environments, um, can help it not just be sort of accidental usage of multiple cloud environments, but very intentional deployment based on the needs of particular workloads to the environment that they're best suited to. Um, and, and that's really what you want to aim for. Um, not that multi-cloud is necessarily, um, you know, uh, uh, I guess I would say is, is it is a, um, it is a complexity that is manageable, um, through these, you know, new types of technologies and multicloud management and such like that, and cloud >>Well, uh, Hillary TIS, the season for predictions is January, uh, everyone's prognostic table of what the future will look like. What do you think are going to be the main trend lines in cloud this year? Yeah, >>You know, I, I sort of sprinkled a few in there as we were talking, but I really do think that, um, the conversation around hybrid cloud number one, how to have an open innovation ecosystem for cloud, where, um, you have a consistency across environments, you know, not just random acts of cloud usage, but intentional and holistic architecture. Um, I really see that as the transition to sort of the second wave of, of cloud adoption. Um, and then secondly, as we were talking earlier about security, right, everyone is wondering about data policy and data privacy. Um, we've always taken a strong stance that, you know, our client's data is, is, is their data. We are not going to be using their data to, you know, further develop our, um, you know, AI services on our cloud or something. Um, we have deployed technologies and confidential computing that enabled them to keep full control over their keys so that, you know, even our caught operators center have access to data, um, competing in secure enclaves, where they have a strong degree of isolation and full privacy and authority over their workload. >>I really think, you know, these two topics open and secure hybrid computing and with consistency across environments, but distributed cloud technology. Um, and secondly, security, I think these are really important topics for 2021, and they may seem a little bit obvious, but I think it's important as people look at this to look for technologies that are multiple generations into this journey, right. Um, you know, partner with, um, folks who, um, are, you know, committed, uh, very clearly to an open ecosystem and open source innovation on the one hand. Um, and secondly, you know, um, when we talk about security and data protection, you want to know that that provider is several generations into that journey. Um, you know, so you really know that that technology has been vetted out is that production scale and has the stable basis. And so I think this is the year when folks are transitioning from cloud adoption, uh, to consistency in cloud and security and privacy in cloud >>Final question. And it has nothing to do with cloud. You're an IBM fellow. And I see that term, uh, turn up occasionally with other other people I've spoken to from IBM, what is it? IBM fellow, how do you become one and what right. Privileges and responsibilities as an entail. >>Yeah. You know, it's an exciting opportunity to be an IBM fellow. There's about a hundred active IBM fellows, um, right now. Um, so there aren't too many of us, but there is a small community of us. Um, IBM fellow is IBM's highest technical designation within our technical population. Um, so I do have a role within our cloud business. Um, but as one of our technical leaders, um, get to interact with the other fellows, um, you know, work on strategy for IBM in technology overall as a company. Um, and I also get to sort of be a trusted advisor to many of our clients. And so, um, I get to with CTOs and CEOs and VP of application development, um, you know, kind of, kind of profiles and VP of, of it and things like that, um, in our different clients and really help them wrestle through those struggles, um, of, you know, future it transformation. >>And so, um, you know, part of what I enjoy most about sort of the role and, and the fellow role is, is being able to kind of be that trusted advisor to many of our clients. There's been so much change in this last year for everyone. Um, and being able to, you know, also, you know, help our technical population through that, you know, in various means and then help our clients, um, through all of that change and really being able to take and grasp onto the opportunities, um, that this last year has had in the way that we work has changed. And the way that companies are looking to deliver capabilities has changed. Um, so that's, for me, the exciting part of, of the role, >>Or you're wondering a hundred then, and you do a great job of articulating the IBM strategy and also the, uh, the cloud landscape, Hillary Hunter, VP and CTO, excuse me, CTO of IBM cloud. Thank you so much for joining us today on Cuban cloud. >>Thanks so much for having me. It was a pleasure. >>I'm Paul Gillan stick with us.

>> Live from Midtown Manhattan, it's theCUBE. Covering BigData New York City 2017. Brought to you by SiliconANGLE Media and its ecosystem sponsors. (calm electronic music) >> Basil Faruqui, who's the Solutions Marketing Manger at BMC, welcome to theCUBE. >> Thank you, good to be back on theCUBE. >> So first of all, heard you guys had a tough time in Houston, so hope everything's gettin' better, and best wishes to everyone down in-- >> We're definitely in recovery mode now. >> Yeah and so hopefully that can get straightened out quick. What's going on with BMC? Give us a quick update in context to BigData NYC. What's happening, what is BMC doing in the big data space now, the AI space now, the IOT space now, the cloud space? >> So like you said that, you know, the data link space, the IOT space, the AI space, there are four components of this entire picture that literally haven't changed since the beginning of computing. If you look at those four components of a data pipeline it's ingestion, storage, processing, and analytics. What keeps changing around it, is the infrastructure, the types of data, the volume of data, and the applications that surround it. And the rate of change has picked up immensely over the last few years with Hadoop coming in to the picture, public cloud providers pushing it. It's obviously creating a number of challenges, but one of the biggest challenges that we are seeing in the market, and we're helping costumers address, is a challenge of automating this and, obviously, the benefit of automation is in scalability as well and reliability. So when you look at this rather simple data pipeline, which is now becoming more and more complex, how do you automate all of this from a single point of control? How do you continue to absorb new technologies, and not re-architect our automation strategy every time, whether it's it Hadoop, whether it's bringing in machine learning from a cloud provider? And that is the issue we've been solving for customers-- >> Alright let me jump into it. So, first of all, you mention some things that never change, ingestion, storage, and what's the third one? >> Ingestion, storage, processing and eventually analytics. >> And analytics. >> Okay so that's cool, totally buy that. Now if your move and say, hey okay, if you believe that standard, but now in the modern era that we live in, which is complex, you want breath of data, but also you want the specialization when you get down to machine limits highly bounded, that's where the automation is right now. We see the trend essentially making that automation more broader as it goes into the customer environments. >> Correct >> How do you architect that? If I'm a CXO, or I'm a CDO, what's in it for me? How do I architect this? 'Cause that's really the number one thing, as I know what the building blocks are, but they've changed in their dynamics to the market place. >> So the way I look at it, is that what defines success and failure, and particularly in big data projects, is your ability to scale. If you start a pilot, and you spend three months on it, and you deliver some results, but if you cannot roll it out worldwide, nationwide, whatever it is, essentially the project has failed. The analogy I often given is Walmart has been testing the pick-up tower, I don't know if you've seen. So this is basically a giant ATM for you to go pick up an order that you placed online. They're testing this at about a hundred stores today. Now if that's a success, and Walmart wants to roll this out nation wide, how much time do you think their IT department's going to have? Is this a five year project, a ten year project? No, and the management's going to want this done six months, ten months. So essentially, this is where automation becomes extremely crucial because it is now allowing you to deliver speed to market and without automation, you are not going to be able to get to an operational stage in a repeatable and reliable manner. >> But you're describing a very complex automation scenario. How can you automate in a hurry without sacrificing the details of what needs to be? In other words, there would seem to call for repurposing or reusing prior automation scripts and rules, so forth. How can the Walmart's of the world do that fast, but also do it well? >> Yeah so we do it, we go about it in two ways. One is that out of the box we provide a lot of pre-built integrations to some of the most commonly used systems in an enterprise. All the way from the Mainframes, Oracles, SAPs, Hadoop, Tableaus of the world, they're all available out of the box for you to quickly reuse these objects and build an automated data pipeline. The other challenge we saw, and particularly when we entered the big data space four years ago was that the automation was something that was considered close to the project becoming operational. Okay, and that's where a lot of rework happened because developers had been writing their own scripts using point solutions, so we said alright, it's time to shift automation left, and allow companies to build automations and artifact very early in the developmental life cycle. About a month ago, we released what we call Control-M Workbench, its essentially a community edition of Control-M, targeted towards developers so that instead of writing their own scripts, they can use Control-M in a completely offline manner, without having to connect to an enterprise system. As they build, and test, and iterate, they're using Control-M to do that. So as the application progresses through the development life cycle, and all of that work can then translate easily into an enterprise edition of Control-M. >> Just want to quickly define what shift left means for the folks that might not know software methodologies, they don't think >> Yeah, so. of left political, left or right. >> So, we're not shifting Control-M-- >> Alt-left, alt-right, I mean, this is software development, so quickly take a minute and explain what shift left means, and the importance of it. >> Correct, so if you think of software development as a straight line continuum, you've got, you will start with building some code, you will do some testing, then unit testing, then user acceptance testing. As it moves along this chain, there was a point right before production where all of the automation used to happen. Developers would come in and deliver the application to Ops and Ops would say, well hang on a second, all this Crontab, and these other point solutions we've been using for automation, that's not what we use in production, and we need you to now go right in-- >> So test early and often. >> Test early and often. So the challenge was the developers, the tools they used were not the tools that were being used on the production end of the site. And there was good reason for it, because developers don't need something really heavy and with all the bells and whistles early in the development lifecycle. Now Control-M Workbench is a very light version, which is targeted at developers and focuses on the needs that they have when they're building and developing it. So as the application progresses-- >> How much are you seeing waterfall-- >> But how much can they, go ahead. >> How much are you seeing waterfall, and then people shifting left becoming more prominent now? What percentage of your customers have moved to Agile, and shifting left percentage wise? >> So we survey our customers on a regular basis, and the last survey showed that eighty percent of the customers have either implemented a more continuous integration delivery type of framework, or are in the process of doing it, And that's the other-- >> And getting close to a 100 as possible, pretty much. >> Yeah, exactly. The tipping point is reached. >> And what is driving. >> What is driving all is the need from the business. The days of the five year implementation timelines are gone. This is something that you need to deliver every week, two weeks, and iteration. >> Iteration, yeah, yeah. And we have also innovated in that space, and the approach we call jobs as code, where you can build entire complex data pipelines in code format, so that you can enable the automation in a continuous integration and delivery framework. >> I have one quick question, Jim, and I'll let you take the floor and get a word in soon, but I have one final question on this BMC methodology thing. You guys have a history, obviously BMC goes way back. Remember Max Watson CEO, and Bob Beach, back in '97 we used to chat with him, dominated that landscape. But we're kind of going back to a systems mindset. The question for you is, how do you view the issue of this holy grail, the promised land of AI and machine learning, where end-to-end visibility is really the goal, right? At the same time, you want bounded experiences at root level so automation can kick in to enable more activity. So there's a trade-off between going for the end-to-end visibility out of the gate, but also having bounded visibility and data to automate. How do you guys look at that market? Because customers want the end-to-end promise, but they don't want to try to get there too fast. There's a diseconomies of scale potentially. How do you talk about that? >> Correct. >> And that's exactly the approach we've taken with Control-M Workbench, the Community Edition, because earlier on you don't need capabilities like SLA management and forecasting and automated promotion between environments. Developers want to be able to quickly build and test and show value, okay, and they don't need something that is with all the bells and whistles. We're allowing you to handle that piece, in that manner, through Control-M Workbench. As things progress and the application progresses, the needs change as well. Well now I'm closer to delivering this to the business, I need to be able to manage this within an SLA, I need to be able to manage this end-to-end and connect this to other systems of record, and streaming data, and clickstream data, all of that. So that, we believe that it doesn't have to be a trade off, that you don't have to compromise speed and quality for end-to-end visibility and enterprise grade automation. >> You mentioned trade offs, so the Control-M Workbench, the developer can use it offline, so what amount of testing can they possibly do on a complex data pipeline automation when the tool's offline? I mean it seems like the more development they do offline, the greater the risk that it simply won't work when they go into production. Give us a sense for how they mitigate, the mitigation risk in using Control-M Workbench. >> Sure, so we spend a lot of time observing how developers work, right? And very early in the development stage, all they're doing is working off of their Mac or their laptop, and they're not really connected to any. And that is where they end up writing a lot of scripts, because whatever code business logic they've written, the way they're going to make it run is by writing scripts. And that, essentially, becomes the problem, because then you have scripts managing more scripts, and as the application progresses, you have this complex web of scripts and Crontabs and maybe some opensource solutions, trying to simply make all of this run. And by doing this on an offline manner, that doesn't mean that they're losing all of the other Control-M capabilities. Simply, as the application progresses, whatever automation that the builtin Control-M can seamlessly now flow into the next stage. So when you are ready to take an application into production, there's essentially no rework required from an automation perspective. All of that, that was built, can now be translated into the enterprise-grade Control M, and that's where operations can then go in and add the other artifacts, such as SLA management and forecasting and other things that are important from an operational perspective. >> I'd like to get both your perspectives, 'cause, so you're like an analyst here, so Jim, I want you guys to comment. My question to both of you would be, lookin' at this time in history, obviously in the BMC side we mention some of the history, you guys are transforming on a new journey in extending that capability of this world. Jim, you're covering state-of-the-art AI machine learning. What's your take of this space now? Strata Data, which is now Hadoop World, which is Cloud Air went public, Hortonworks is now public, kind of the big, the Hadoop guys kind of grew up, but the world has changed around them, it's not just about Hadoop anymore. So I'd like to get your thoughts on this kind of perspective, that we're seeing a much broader picture in big data in NYC, versus the Strata Hadoop show, which seems to be losing steam, but I mean in terms of the focus. The bigger focus is much broader, horizontally scalable. And your thoughts on the ecosystem right now? >> Let the Basil answer fist, unless Basil wants me to go first. >> I think that the reason the focus is changing, is because of where the projects are in their lifecycle. Now what we're seeing is most companies are grappling with, how do I take this to the next level? How do I scale? How do I go from just proving out one or two use cases to making the entire organization data driven, and really inject data driven decision making in all facets of decision making? So that is, I believe what's driving the change that we're seeing, that now you've gone from Strata Hadoop to being Strata Data, and focus on that element. And, like I said earlier, the difference between success and failure is your ability to scale and operationalize. Take machine learning for an example. >> Good, that's where there's no, it's not a hype market, it's show me the meat on the bone, show me scale, I got operational concerns of security and what not. >> And machine learning, that's one of the hottest topics. A recent survey I read, which pulled a number of data scientists, it revealed that they spent about less than 3% of their time in training the data models, and about 80% of their time in data manipulation, data transformation and enrichment. That is obviously not the best use of a data scientist's time, and that is exactly one of the problems we're solving for our customers around the world. >> That needs to be automated to the hilt. To help them >> Correct. to be more productive, to deliver faster results. >> Ecosystem perspective, Jim, what's your thoughts? >> Yeah, everything that Basil said, and I'll just point out that many of the core uses cases for AI are automation of the data pipeline. It's driving machine learning driven predictions, classifications, abstractions and so forth, into the data pipeline, into the application pipeline to drive results in a way that is contextually and environmentally aware of what's goin' on. The history, historical data, what's goin' on in terms of current streaming data, to drive optimal outcomes, using predictive models and so forth, in line to applications. So really, fundamentally then, what's goin' on is that automation is an artifact that needs to be driven into your application architecture as a repurposable resource for a variety of-- >> Do customers even know what to automate? I mean, that's the question, what do I-- >> You're automating human judgment. You're automating effort, like the judgments that a working data engineer makes to prepare data for modeling and whatever. More and more that can be automated, 'cause those are pattern structured activities that have been mastered by smart people over many years. >> I mean we just had a customer on with a Glass'Gim CSK, with that scale, and his attitude is, we see the results from the users, then we double down and pay for it and automate it. So the automation question, it's an option question, it's a rhetorical question, but it just begs the question, which is who's writing the algorithms as machines get smarter and start throwing off their own real-time data? What are you looking at? How do you determine? You're going to need machine learning for machine learning? Are you going to need AI for AI? Who writes the algorithms >> It's actually, that's. for the algorithm? >> Automated machine learning is a hot, hot not only research focus, but we're seeing it more and more solution providers, like Microsoft and Google and others, are goin' deep down, doubling down in investments in exactly that area. That's a productivity play for data scientists. >> I think the data markets going to change radically in my opinion. I see you're startin' to some things with blockchain and some other things that are interesting. Data sovereignty, data governance are huge issues. Basil, just give your final thoughts for this segment as we wrap this up. Final thoughts on data and BMC, what should people know about BMC right now? Because people might have a historical view of BMC. What's the latest, what should they know? What's the new Instagram picture of BMC? What should they know about you guys? >> So I think what I would say people should know about BMC is that all the work that we've done over the last 25 years, in virtually every platform that came before Hadoop, we have now innovated to take this into things like big data and cloud platforms. So when you are choosing Control-M as a platform for automation, you are choosing a very, very mature solution, an example of which is Navistar. Their CIO's actually speaking at the Keno tomorrow. They've had Control-M for 15, 20 years, and they've automated virtually every business function through Control-M. And when they started their predictive maintenance project, where they're ingesting data from about 300,000 vehicles today to figure out when this vehicle might break, and to predict maintenance on it. When they started their journey, they said that they always knew that they were going to use Control-M for it, because that was the enterprise standard, and they knew that they could simply now extend that capability into this area. And when they started about three, four years ago, they were ingesting data from about 100,000 vehicles. That has now scaled to over 325,000 vehicles, and they have no had to re-architect their strategy as they grow and scale. So I would say that is one of the key messages that we are taking to market, is that we are bringing innovation that spans over 25 years, and evolving it-- >> Modernizing it, basically. >> Modernizing it, and bringing it to newer platforms. >> Well congratulations, I wouldn't call that a pivot, I'd call it an extensibility issue, kind of modernizing kind of the core things. >> Absolutely. >> Thanks for coming and sharing the BMC perspective inside theCUBE here, on BigData NYC, this is the theCUBE, I'm John Furrier. Jim Kobielus here in New York city. More live coverage, for three days we'll be here, today, tomorrow and Thursday, and BigData NYC, more coverage after this short break. (calm electronic music) (vibrant electronic music)

Silicon Valley, it's theCUBE covering People First Network. Brought to you by Mayfield. >> Hello, I'm John Furrier here in Palo Alto for an exclusive conversation, CUBE conversation, part of the People First Network with theCUBE and Mayfield fund. I'm here with John Chambers at his house in Palo Alto. John Chambers is the former CEO/Chairman of Cisco Systems, now running J2C, JC2 Ventures. Great to see you, thanks for spending time! >> It's a pleasure to be together again. >> I'm here for two reasons. One, I wanted a conversation about People First and technology waves, but also, I want to talk about your new book, which is exciting, called Connecting the Dots. And it's not your standard business book, where, you know, hey, rah-rah, you know, like a media post these days on the internet; it's some personal stories weaved in with the lessons you've learned through the interactions you've had with many people over the years, so exciting book and I'm looking forward to talking about that. >> Thank you! >> Again, John Chambers, legend, Cisco, 1991 when you joined the company from Wang before that. 400 employees, one product, 70 million in revenue. And when you retired in 2015, not so much retired, 'cos you've got some--. >> I'm working on my next chapter! >> You've got your next chapter (laughs)! 180 acquisitions, 447 billion in revenue, you made 10,000 people millionaires, you created a lot of value, probably one of the biggest inflection points in computer history, the evolution of inter-networking and tying systems together, it was probably one of the biggest waves somewhat before the wave we're on now. So an amazing journey, now you're running JC2 Ventures and investing in game-changing start-ups. So you're not retired? >> No. It was only my next chapter. I made my decision almost 10 years before I left Cisco first, to make for a very smooth transition because it's my family, and out of the 75,000 people, I hired all but 23 of them! And in terms of what I wanted to do next, I really wanted to both give back, create more jobs, get our start-up engine going again in this country, and it's currently broken, and I want to do that on a global basis, in places like France and India as well. So I'm on to my next chapter, but the fun part in this chapter is that I do the things that I love. >> And you've got a great team behind you, but also, you have a great personal network. And I want to get into that, of your personal stories as well as your social network in business and in the community; but one of the things I want to get up front, because I think this is important for this conversation is, you've been very strong. I've seen you present many times over the years, going way back into the 90's. You're eloquent, you're people-oriented, but you have a knack for finding the waves, seeing transitions, you've been through many waves. >> Yes I have, good and bad. >> Good and bad. But one of the big ones, how do you spot those transitions? And what wave are we in now? I mean, talk about the wave that's happening now, it's unprecedented on many levels, but, different, but it's still a wave. >> It is, and outgoing market transitions and often combined with either economic changes or business model changes with technology. And part of the reason that I've been fortunate to be able to identify many of them is I listen to customers very carefully, but also, you're often a product of your prior experiences. Having experienced West Virginia, one of the top states in the US in terms of the chemical industry, uh, during the 40's and 50's and 60's when I was growing up there, and literally more millionaires in West Virginia than there were in the entire Great Britain. We were on top of the world in the chemical industry, and the coal industry, and yet, because we missed transitions, and we should've seen them coming, the state fell a long way, so now we're trying to correct that with some of the start-up activity we'll talk about later. As you see this, and then I went to Boston, 128, we were talking earlier, Wang Laboratories, the mini-computer era, but I was in IBM first out of the central part of the nation, so I watched IBM and Mainframes, and then I watched them miss on going to the mini-computer, and then miss in terms of the internet. So I was able to see the transitions that occurred in Boston, Route 128, where we were the Silicon Valley of the world, and we knew it, and this unusual area out in California called Silicon Valley, we paid almost no attention to, and we didn't realize we failed to make a transition from the mini-computer era to the pc and the internet era. Then I joined Cisco, and saw the internet era. So part of it is, you're a product of your experiences, and know the tremendous pain that occurs, because Boston 128 is nowhere near what it used to be, so there's no entitlement in this new world out of the thousand high-tech companies that I was associated with, including four or five giants in mini-computers, none of them are really in existence today, so it shows you, if you don't identify the transitions, number one, you're going to have an opportunity to benefit by them, but number two, you sure have an opportunity to get hurt by them. >> And you know, these waves also create a lot of wealth and value; not just personal wealth, but community wealth, and Cisco in particular had a good thing going for them, you know, TCP-IP was a defact-- not even a standard, it was a defacto standard at that time, IBM and these kinds of digital equipment corporations dominated the network protocol. Even today, people are still trying to take out Cisco competitively, and they can't because they connected the world. Now the world's connected with digital, it's connected with mobile, so we're kind of seeing this connected wave globally. How do you think about that, now that you've seen the movie at the plumbing levels at Cisco, you now have been traveling the world, we're all connected. >> We are. And it's important to understand that I'm completely arms-length with Cisco, it's their company to run now, and I'm excited about their future. But I'm focused on the next chapter in my life, and while I think about the people at Cisco everyday, I'm into the start-up world now, so how do I think about it now? I think most of the innovation over the next decade will come from start-ups. The majority of the top engineering students, for example, at a Stanford or an MIT or a Polytechnique in France, which is the top engineering school, I think, in Europe, or at the ITs in India, they are all thinking about going to start-ups, which means this is where innovations going to come from. And if you think about a digital world going from the time you and I, we almost recruited you to Cisco, and then we finally did; there's only a thousand devices connected then when Cisco was founded. Today there are about 20 billion devices connected to the internet; in the future, it's going to be 500 billion in a decade, and so this concept of digitalization combined with artificial intelligence, all of a sudden we'll get the right information at the right time to the right person or machine to make the right decision, sounds complex, and it is. And it's ability to do that, I think start-ups are well-positioned to play a key role in, especially in innovation. So while the first stage of the internet, and before that were all dominated by the very large companies, I think you're going to see, in this next phase of digitalization, you're going to see a number of start-ups really emerge, in terms of the innovation leaders, and that's what I'm trying to do with my 16 investments I've made, but also coaching probably another 50 uh, start-ups around the world on a regular basis. >> And the impact of outside Silicon Valley, globally, how do you see that ecosystem developing with the entrepreneurship models that are now globally connected in with these connection points like Silicon Valley? >> It will partially in parallel, partially, it's a new phenomenon. I sold the movie of Boston 128, as I said earlier, and on top of the world, and there is no entitlement. The same thing's true with Cisco, um, sorry, of Silicon Valley today; there's no entitlement for the future, and just because we've led up until this point in time, doesn't mean we will in 10 years, so you can't take anything for granted. What you are seeing, since almost all job creation will be from start-ups, and small companies getting bigger, the large companies in total will probably not add any head count over this next decade because of artificial intelligence and digitization, and so you're now going to see job growth coming from those smaller companies, if these small companies don't get a forum to all 50 states, if they don't get a chance to grow their head count there, and the economic benefits of that, then we're going to leave whole states behind. So I think it's very important that we look at the next wave of innovation, I think there's a very good probability that it will be more inclusive, both by geography, by gender, and all diversity measures, and I'm optimistic about the future, but there are no guarantees, and we'll see how it plays out. >> Let's talk about your next chapter. I was going to wait, but I want to jump while we're on the topic. JC2 is a global start-up, game-changing start-up focus that you have. What is the thesis? What are you looking for, and talk about your mission? >> Well, our mission is very simple. I had a chance to change the world one time with Cisco, and many people, when I said Cisco's going to change the way the world works, lives, learns, and plays by enabling the internet, everybody said nice marketing, but you're a router company. And yet, I think most people would agree, probably more than any other company, we had the leadership role in changing the internet and the direction going on, and now, a chance to do it again, because I think the next wave of innovation will come from the start-ups, and it doesn't come easy. They need coaches, they need strategic partners, they need mentors as much as they need the venture capitalists, so I would think of as this focusing on disruptive start-ups that get very excited in these new areas of technology, ranging from physical and virtual worlds coming together, to artificial intelligence and automation everywhere, to the major capabilities on cyber security across that to the internet of things, so we're trying to say, how do we help these companies grow in skill? But if I was just after financial returns, I'd stay right here in the Valley. I can channel anybody, VC's here that I trust and they trust me, and it would be a better financial return. But I'm after, how do you do this across a number of states, already in seven states, and how do you do it in France and India as role models? >> It's got a lot of purpose. It's not just a financial purpose. I mean, entrepreneurs want to make money, too, but you've made some good money over the years, but this is a mission for you, this is a purpose. >> It is, but you referred to it in your opening comments. When we were at Cisco, I've always believed that the most successful owe an obligation to give back, and we did. We won almost every corporate social responsibility award there was. We won it from the Democrats and the Republicans, from Condie Rice and George Bush and from Hillary Clinton and President Obama. We also, as you said, made 10,000 Cisco employees millionaires just in the first decade. And we tried to give back to society with training programs like Network Academies and trained seven million students. And I think it's very important for the next generation of leaders here in the Valley to be good at giving back. And it's something that I think they owe an obligation to do, and I think we're in danger now of not doing it as well as we should, and for my start-ups, I try to pick young CEOs that understand, they want to make a financial return, and they want to get a great product out of this, but they also want to be fair and giving back to society and make it a win-win, if you will. >> And I think that's key. Mission-driven companies are attracting the best talent, too, these days, because people are more cognizant of that. I want to get into some of your personal stories. You mentioned giving back. And reading your book, your parents have had a big role in your life--. >> Yes, they have. >> And being in West Virginia has had a big role in your life. You mentioned it having a prosperity environment, and then missing that transition. Talk about the story of West Virginia and the role your parents played, because, they were doctors, so they were in the medical field. The combination of those two things, the culture where you were brought up, and your family impacted your career. >> I'm very proud of being from West Virginia, and very proud of the people in West Virginia, and you see it as you travel around the world. All of us who, whether we're in West Virginia, or came out of it, care about the state a great deal. The people are just plain good people, and I think they care about treating people with respect. If I were ever run off a road at night in the middle of the night, I'd want to be in West Virginia, (both laugh) when I go up to knock on that door. And I think it carries through. And also, the image of our state is one that people tend to identify in terms of a area that you like the people. Now what I'm trying to do in West Virginia, and what we just announced since last week, was to take the same model we did on doing acquisitions, 180 of them, and say here's the playbook, the innovation playbook for doing acquisitions better than anyone else, and take the model that we did on country digitization, which we did in Israel and France and India with the very top leaders, with Netanyahu and Shimon Peres in Israel, with Macron in France and with Modi in India, and drove it through, and then do the same thing in terms of how we take the tremendous prosperity and growth that you see in Silicon Valley, and make it more uniform across the country, especially as traditional business won't be adding head count. And while I'd like to tell you the chemical industry will come back to West Virginia and mining industry will come back in terms of job creation, they probably won't, a lot of that will be automated in the future. And so it is the ability to get a generation of start-ups, and do it in a unique way! And the hub of this has to be the university. They have to set the pace. Gordon Gee, the President there, gets this. He's created a start-up mentality across the university. The Dean of the business school, Javier Reyes is going across all of the university, in terms of how you do start-ups together with business school, with engineering, with computer science, with med school, et cetera. And then how do you attract students who will want to really be a part of this, how do you bring in venture capital, how do you get the Governor and the President and the Senate and the Speaker of the House on board? How do you get our two national senators, Shelly Moore Capito and also Joe Manchin, a Democrat and a Republican working together on common goals? And then how do you say here's what's possible, write the press release, be the model for how a country, or a state, comes from behind and that at one time, then a slow faller, how do we leap frog? And before you say it can't be done, that was exactly what people said first about India, when I said India would be the strongest growing economy in the world, and it is today, probably going to grow another seven to 10%. That means you double the per capita of everyone in India, done right, every seven to 10 years. And France being the innovation engine in Europe to place your new business, you and I would have said John, no way, just five years ago, yet it has become the start-up engine for Europe. >> It's interesting, you mentioned playbook, and I always see people try to replicate Silicon Valley. I moved out here from the East Coast in 1999, and it's almost magical here, it's hard to replicate, but you can reproduce some things. One of the common threads, though, is education. The role of education in the ecosystem of these new environments seems to be a key ingredient. Your thoughts about how education's going to play a role in these ecosystems, because education and grit, and entrepreneurial zeal, are kind of the magic formula. >> Well they are in many ways. It's about leadership, it's about the education foundation, it's about getting the best and brightest into your companies, and then having the ability to dream, and role models you can learn from. We were talking about Hewlett-Packard earlier, a great role model of a company that did the original start-up and Lou Platt, who was the President of HP when I came out here, I called him up and said, you don't know me, Lou, I'm with a company you've probably never heard of, and we have 400 people, but I don't know the Valley, can you teach me? And he did, and he met with me every quarter for three years, and then when I said what can I do to repay you back, because at that time, Cisco was on a roll, he said John, do it for the next generation. And so, that's what I'm trying to do, in terms of, you've got to have role models that you can learn from and can help you through this. The education's a huge part. At the core of almost all great start-up engines is a really world-class university. Not just with really smart students, but also with an entrepreneur skill and the ability to really create start-ups. John Hennessey, Stanford did an amazing thing over the last 17 years on how to create that here at Stanford, the best in the world, probably 40% of the companies, when I was with Cisco, we bought were direct or indirect outgrowth of Stanford. Draw a parallel. Mercury just across the way, and this isn't a Stanford/CAL issue, (both laugh) equally great students, very good focus on interdisciplinary activities, but I didn't buy a single company out of there. You did not see the start-ups grow with anywhere near the speed, and that was four times the number of students. This goes back to the educational institution, it has to have a focus on start-ups, it has to say how they drive it through, this is what MIT did in Boston, and then lost it when 128 lost it's opportunity, and this is what we're trying to do at West Virginia. Make a start-up engine where you've got a President, Gordon Gee, who really wants to drive this through, bring the political leaders in the state, and bring the Mountaineers, the global Mountaineers to bare, and then bring financial resources, and then do it differently. So to your point, people try to mimic Silicon Valley, but they do it in silos. What made Silicon Valley go was an ecosystem, an education system, a environment for risk-taking, role models that you could steal people from--. >> And unwritten rules, too. They had these unwritten rules like pay it forward, your experience with Lou Platt, Steve Jobs talks about his relationship with David Packard, and this goes on and on and on. This is an important part. Because I want to just--. >> Debt for good is a big, big issue. Last comment on education, it's important for this country to know, our K through 12 system is broken. We're non-competitive. People talk about STEM, and that's important, but if I were only educating people in three things, entrepreneurship, how to use technology, and artificial intelligence; I would build that into the curriculum where we lose a lot of our diversity, especially among females in the third, fourth, fifth grade, so you haveta really, I think, get people excited about this at a much earlier age. If we can become an innovation engine again, in this country, we are not today. We're not number one in innovation, we're number 11! Imagine that for America? >> I totally agree with ya! And I don't want to rant and waste a lot of time, but my rants are all on Facebook and Twitter. (both laugh) Education's a problem. It's like linear, it's like a slow linear train wreck, in my opinion, but now you have that skills gaps, you mentioned AI. So AI and community are two hot trends right now. I'm going to stay with community for a minute. You mentioned paying it forward. Open source software, these new forms of operational scale, cloud computing, open source software, that all have this ethos of pay it forward; community. And now, community is more important than ever. Not just from the tech world, but you're talking about in West Virginia, now on a global scale. How does the tech industry, how can the tech industry, in your opinion, nurture community at local, regional, global scale? >> This is a tough one John, and I'd probably answer it more carefully if I was still involved directly with Cisco. But the fun thing is, now I represent myself. >> In your own opinion, not Cisco. There's a cultural thing. This is, Silicon Valley has magic here, and community is part of it. >> Yes, well it's more basic than that. I think, basically, we were known for two decades, not just Cisco, but all of the Valley as tech for good, and we gave back to the communities, and we paid it forward all the time, and I use the example of Cisco winning the awards, but so do many of our peers. We're going to Palestine and helping to rebuild Palestine in terms of creating jobs, et cetera. We went in with the Intels of the world, and the Oracles and the other players and HP together, even though at times we might compete. I think today, it's not a given. I think there is a tug of war going on here, in terms of what is the underlying purpose of the Valley. Is it primarily to have major economic benefits, and a little bit of arm's length from the average citizen from government, or is it do well financially, but also do very well in giving back and making it inclusive. That tug of war is not a given. When you travel throughout the US, today, or around the world, there are almost as many people that view tech for bad as they do tech for good, so I think it's going to be interesting to watch how this plays out. And I do think there are almost competing forces here in the Valley about which way should that go and why. The good news is, I think we'll eventually get it right. The bad news is, it's 50/50 right now. >> Let's talk about the skill gap. A lot of leaders in companies right now are looking at a work force that needs to be leveled up, and as new jobs are coming online that haven't been trained for, these openings they don't have skills for because they haven't been taught. AI is one example, IOT you mentioned a few of those. How do great leaders, proactively and reactively, too, get the skills gaps closed? What strategies can you do, what's the playbook there? >> Well two separate issues. How do they get it closed, in terms of their employees, and second issue, how do we train dramatically better than we've done before? Let's go to the first one. In terms of the companies, I think that your ability to track the millennials, the young people, is based upon your vision of doing more than quote just making a profit, and you want to be an exciting place to work with a great culture, and part of that culture should be giving back. Having said that, however, the majority of the young people today, and I'm talking about the tops out of the key engineering schools, et cetera, they want to go to start-ups. So what you're going to see is, how well established companies work with start-ups, in a unique partnership, is going to be one of the textbook opportunities for the future, because most companies, just like they didn't know how to acquire tech companies and most of all tech acquisitions failed, even through today. We wrote the textbook on how to do it differently. I think how these companies work with start-ups and how they create a strategic relationship with a company they know has at least a 50/50 probability of going out of business. And how do you create that working relationship so that you can tap into these young innovative ideas and partnerships, and so, what you see with the Spark Cognition, 200 people out of Texas, brilliant, brilliant CEO there in terms of what he is focused on, partnering with Boeing in that 50/50 joint venture, 50/50 joint venture to do the next FAA architecture for unmanned aircraft in this country. So you're going to see these companies relate to these start-ups in ways they haven't done before. >> Partnership and collaboration and acquisitions are still rampant on the horizon, certainly as a success for you. Recently in the tech industry we're seeing big acquisitions, Dell, EMC, IBM bought Red Hat, and there's some software ones out there. One was just going public and got bought, just recently, by SAP, how do you do the acqui-- you've done 180 of them? How do you do them successfully without losing the innovation and losing the people before they invest and leave; and this is a key dynamic, how do companies maintain innovation in an era of collaboration, partnerships, and enmity? >> I had that discussion this morning at Techonomy with David Kirkpatrick, and David said how do you do this. And then as I walked out of the room, I had a chance to talk with other people and one of them from one of the very largest technology companies said, John, we've watched you do this again and again; we assumed that when we acquired a company, we'd get them to adjust to our culture and it almost never worked, and we lost the people at a tremendously fast pace, especially after their lock-in of 18 to 24 months came up. We did the reverse. What we did was develop a replicatible innovation playbook, and I talk about it in that book, but we did this for almost everything we did at Cisco, and I would've originally called that, bureaucracy, John. (both laugh) I would've said that's what slow companies do. And actually, if done right, allows you to move with tremendous speed and agility, and so we'd outline what we'd look for in terms of strategy and vision; if our cultures weren't the same, we didn't acquire them. And if we couldn't keep the people, to generate the next generation of product, that was a bad financial decision for us, as well. So our attrition rate averaged probably about 5% or over while I was at Cisco for 20 years. Our voluntary attrition rate of our acquired companies, which normally runs 20% in these companies, we had about four. So we kept the people, we got the next generation product out, and we went in with that attitude in terms of you're acquiring to be able to keep the people and make them a part of your family and culture. And I realize that that might sound corny today, but I disagree. I think to attract people, to get them to stay at your company, it is like a family, it is like how you succeed and occasionally lose together, and how you build that family attitude under every employee, spouse, or their children that was life-threatening, and we were there for them in the ways that others were not. So you're there when your employees have a crisis, or your customer does, and that's how you form trust in relationships. >> And here's the question, what does People First mean to you? >> Well people first is our customer first. It means your action and everything you do puts your customers and your people first, that's what we did at Cisco. Any customer you would talk to, almost every customer I've ever met in my life would do business with us again, or with me again, because your currency in today's world is trust, track record, and relationships, and we built that very deep. Same thing with the employees. I still get many, many notes from people we helped 10 or 15 years ago; here's the picture of my child that you all helped make a difference in, Cisco and John, and you were there for us when we needed you most. And then in customers. It surprises you, when you help them through a crisis, they remember that more than when you helped them be successful, and they're there for you. >> Talk about failure and successes. You talk about this in the book. This is part of entrepreneurship, you can't succeed without failures. Handling failures is just as important as handling successes, your thoughts on people should think about that from a mindset standpoint? >> Well, you know, what's fun is those of you who are parents, or who will be parents in the future, when your child scores a goal in soccer or makes a good grade on a test, you're proud for them, but that isn't what worries you. What worries you is when they have their inevitable setbacks, everybody has that in life. How do you learn to deal with them? How do you understand how much were self-inflicted and how much of it was done by other causes, and how they navigate through that determines who they are. Point back to the West Virginia roots, I'm dyslexic, which means that I read backwards. Some people in early grade school thought I might not even graduate from high school much less go to college. My parents were doctors, they got it, but how I handled that was key. And while I write in the book about our successes, I spend as much time on when disaster strikes, how you handle that determines who you are in the future. Jack Welch told me in the 90's, he said John, you have a very good company, and I said Jack, you're good at teaching me something there, we're about to become the most valuable company in the world, we've won all of the leadership awards and everything else, what does it take to have a great company? He said a near-death experience. At the time I didn't understand it. At the end of 2001 after the dot com bubble, he called me up, he said, you now have a great company, I said Jack, it doesn't feel like it. Our stock price is down dramatically, people are questioning can I even run the company now, many of the people who were so positive turned very tough and--. >> How did you handle that? How did you personally handle that, 'cos--. >> It's a part of leadership. It's easy to be a leader when everything goes well, it's how you handle when things are tough, and leadership is lonely, you're by yourself. No matter how many friends you have around you, it's about leadership, and so you'd lead it through it. So 2001, took a real hard look, we made the mistake of focusing, me, on the numbers, and my numbers in the first week of December were growing at 70% year over year. We'd never had anything negative to speak of, much less below even 30% growth, and by the middle of January, we were -30%. And so you have to be realistic, how much was self-inflicted, how much the market, I felt the majority of it was market-inflicted, I said at the time it's a hundred year flood. I said to the employees, here's how we're going to go forward, we need to bring our head count back in line to a new reality, and we did it in 51 days. And then you paint the picture from the very beginning of what you look like as you recover and in the future and why your employees want to stay here, your customers stay with you and your shareholders. It wiped out most of our competitors. Jack Welch said, John, this is probably your best leadership year ever, and I said Jack, you're the only one that's going to say that. He said probably, and he has been. >> And you've got the scar tissue to prove it. And I love this story. >> But you're a product of your scars. And do you learn how to deal with them? >> Yeah, and how you-- and be proud of them, it's what, who you are. >> I don't know if proud's the right word. >> Well, badge of honor. (both laugh) >> Red badge of honor, they're painful! >> Just don't do it again twice, right? >> We still make the same mistake twice, but at the same time when I teach all these start-ups, I expect you to make mistakes. If you don't make mistakes, you're not taking enough risk. And while people might've, might say John, one of your criticisms is that you spread yourself a little bit too thin in the company at times, and you were too aggressive. After thinking about it, I respectfully disagree. If I had to do it over, I'd be even bolder, and more aggressive, and take more risks, and I would dream bigger dreams. With these start-ups, that's what I'm teaching them, that's what I'm doing myself. >> And you know, this is such a big point, because the risk is key. Managing risk is actually, you want to be as risky as possible, just don't cut an artery, you know, do the right things. But in your book, you mention this about how you identify transitions, but also you made the reference to your parents again. This is, I think, important to bring up, because we have an expression in our company: let's put the patient on the table and let's look at the problem. Solving the problems and not going out of business at that time, but your competitors did, you had to look at this holistically, and in the book, you mentioned that experience your parents taught you, being from West Virginia, that it changed how you do problem solving. Can you share what that, with that in conscience? >> Well, both parents were doctors, and the good news is, you got a lot of help, the bad news is, you didn't get a lot of self 'cos they'd fix you. But they always taught me to focus on the real, underlying issue, to your point. What is the real issue, not what the symptom is, the temperature, or something else. And then you want to determine how much of that was self-inflicted, and how much of it was market, and if your strategy's working before, continue, if your strategy was starting to get long in the tooth, how do you change it, and then you got to have the courage to reinvent yourself again and again. And so they taught me how to deal with that. I start off the book by talking about how I almost drowned at six years of age, and as I got pulled down through the rapids, I could still see my dad in my mind today running down the side of the river yelling hold on to the fishing pole. It was an ugly fishing pole. Might've cost $5. But he was concerned about the fishing pole, so therefore I obviously couldn't be drowning so I focused both hands on the fishing pole and as I poked my head above water, I could still see him running down. He got way down river, swam out, pulled me in, set me on the side, and taught me about how you deal when you find yourself with major setbacks. How do you not panic, how do you not try to swim against the tide or the current, how you be realistic of the situation that you're in, work your way to the side, and then you know what he did? He put me right back in the rapids and let me do it myself. And taught me how to deal with it. Dad taught me the business picture and how you deal with challenges, Mom, uh, who was internal medicine, psychiatry, taught me the emotional IQ side of the house, in terms of how you connect with people, and I believe, this whole chapter, I build relationships for life. And I really mean it. I think your currency is trust, relationships, and track record. >> And having that holistic picture to pull back and understand what to focus on, and this is a challenge for entrepreneurs. You're now dealing with a lot of entrepreneurs and coaching them; a lot of times they get caught in the forest and miss the trees, right? Or have board meetings or have, worry about the wrong metrics, or hey, I got to get financing. How should an entrepreneur, or even a business leader, let's talk about entrepreneur first and then business leader, handle their advisors, their investors, how do they manage that, how do they tap into that? A lot of people say, ah, they don't add much value, I just need money. This is important, because this could save them, this could be the pole for them. >> It could, or it could also be the pole that causes the tent to collapse (both laugh). So I think the first thing when you advise young entrepreneurs, is realize you're an advisor, not a part of management. And I only take young entrepreneurs who want to be coached. And as I advise them, I say all I'm asking is that you listen to my thoughts and then you make the decision, and I'll support you either way you go, once you've listened to the trade-offs. And I think you want to very quickly realize where they are in vision and strategy, and where they are on building the right team and evolving the team and changing the team, where they are in culture, and where they are on their communication skills because communication skills were important to me, they might not have been to Jack Welch, the generation in front of me, but they were extremely important to ours. And today, your communication mismatch on social media could cost your company a billion dollars. If you're not good at listening, if you're not good at communicating with people and painting the picture, you've got a problem. So how do you teach that to the young players? Then most importantly, regardless of whether you're in a big company or a small company, public or private sector, you know what you know and know what you don't. Many people who, especially if they're really good in one area, assume that carries over to others, and assume they'll be equally as good in the others, that's huge mistake; it's like an engineer hiring a good sales lead, very rarely does it happen. They recruit business development people who appeals to an engineer, not the customer. (both laugh) So, know what you know, know what you don't. For those things you don't know, surround yourself with those people in your leadership team and with your advisors to help you navigate through that. And I had, during my career, through three companies, I always had a number of advisors, formal and informal, that I went to and still go to today. Some of them were very notable players, like our President Clinton or President Bush, Shimon Peres, Henry Kissinger, or names that were just really technical leads within companies, or people that really understood PR like Thomas Freedman out of the New York Times, or things of that. >> You always love being in the trenches. I noticed that in Cisco as an observer. But now that you're in start-ups, it's even more trenches deeper (laughs) and you've got to be seeing the playing field, so I got to ask ya a personal question. How do you look back at the tech trends that's happening right now, globally, both political, regulatory technology, what advice would you give your 23-year-old self if you were breaking into the business, you were at Wang and you were going to make your move; in this world today, what's going on, what would you be doing? >> Well the first thing on the tech trend is, don't get too short-term focused. Picture the ones that are longer term, what we refer to as digitization, artificial intelligence, et cetera. If I were 23 years old, or better yet, 19 years old, and were two years through college and thinking what did I want to do in college and then on to MBA school and perhaps beyond that, legal degree if I'd followed the prior path. I would focus on entrepreneurship and really understand it in a lot more detail. I learned it over 40 years in the business. And I learned it from my dad and my mom, but also from the companies I went into before. I would focus on entrepreneurship, I'd focus on technology that enables entrepreneurship, I would probably focus on what artificial intelligence can do for that and that's what we're doing at West Virginia, to your point earlier. And then I would think about security across that. If you want really uh, job security and creativity for the future, if you're a really good entrepreneur, with artificial intelligence capability, and security capability, you're going to be a very desired resource. >> So, we saw you, obviously networking is a big part of it. You got to be networking with other people and in the industry, would you be hosting meet ups? Young John Chambers right now, tech meet ups, would you be at conferences, would you be writing code, would you be doing a start-up? >> Well, if we were talking about me advising them? >> No, you're 23-years-old right now. >> No, I'd just be fooling around. No, I'd be in MBA school and I'd be forming my own company. (both laugh) And I would be listening to customers. I think it's important to meet with your peers, but while I developed strong relationships in the high-tech industry, I spent the majority of time with my customers and with our employees. And so, I think at that age, my advice to people is there was only one Steve Jobs. He just somehow knew what to build and how to build it. And when you think about where they were, it still took him seven years (laughs). I would say, really get close to your customers, don't get too far away; if there's one golden rule that a start-up ought to think about, it's learning and staying close to your customers. There too, understand your differentiation and your strategy. Well John, thanks so much. And the book, Connecting the Dots, great read, it's again, not a business book in the sense of boring, a lot of personal stories, a lot of great lessons and thanks so much for giving the time for our conversation. >> John, it was my pleasure. Great to see you again. >> I'm John Furrier here with the People First interview on theCUBE, co-created content with Mayfield. Thanks for watching! (upbeat electronic music)