>>from around the globe. It's the Cube presenting innovation for good, brought to you by on shape. >>Hello, everyone, and welcome to Innovation for Good Program, hosted by the Cuban. Brought to You by on Shape, which is a PTC company. My name is Dave Valentin. I'm coming to you from our studios outside of Boston. I'll be directing the conversations today. It's a very exciting, all live program. We're gonna look at how product innovation has evolved and where it's going and how engineers, entrepreneurs and educators are applying cutting edge, cutting edge product development techniques and technology to change our world. You know, the pandemic is, of course, profoundly impacted society and altered how individuals and organizations they're gonna be thinking about an approaching the coming decade. Leading technologists, engineers, product developers and educators have responded to the new challenges that we're facing from creating lifesaving products to helping students learn from home toe how to apply the latest product development techniques and solve the world's hardest problems. And in this program, you'll hear from some of the world's leading experts and practitioners on how product development and continuous innovation has evolved, how it's being applied toe positive positively affect society and importantly where it's going in the coming decades. So let's get started with our first session fueling Tech for good. And with me is John Hirschbeck, who is the president of the Suffers, a service division of PTC, which acquired on shape just over a year ago, where John was the CEO and co founder, and Dana Grayson is here. She is the co founder and general partner at Construct Capital, a new venture capital firm. Folks, welcome to the program. Thanks so much for coming on. >>Great to be here, Dave. >>All right, John. >>You're very welcome. Dana. Look, John, let's get into it for first Belated congratulations on the acquisition of Von Shape. That was an awesome seven year journey for your company. Tell our audience a little bit about the story of on shape, but take us back to Day zero. Why did you and your co founders start on shape? Well, >>actually, start before on shaping the You know, David, I've been in this business for almost 40 years. The business of building software tools for product developers and I had been part of some previous products in the industry and companies that had been in their era. Big changes in this market and about, you know, a little Before founding on shape, we started to see the problems product development teams were having with the traditional tools of that era years ago, and we saw the opportunity presented by Cloud Web and Mobile Technology. And we said, Hey, we could use Cloud Web and Mobile to solve the problems of product developers make their Their business is run better. But we have to build an entirely new system, an entirely new company, to do it. And that's what on shapes about. >>Well, so notwithstanding the challenges of co vid and difficulties this year, how is the first year been as, Ah, division of PTC for you guys? How's business? Anything you can share with us? >>Yeah, our first year of PTC has been awesome. It's been, you know, when you get acquired, Dave, you never You know, you have great optimism, but you never know what life will really be like. It's sort of like getting married or something, you know, until you're really doing it, you don't know. And so I'm happy to say that one year into our acquisition, um, PTC on shape is thriving. It's worked out better than I could have imagined a year ago. Along always, I mean sales are up. In Q four, our new sales rate grew 80% vs Excuse me, our fiscal Q four Q three. In the calendar year, it grew 80% compared to the year before. Our educational uses skyrocketing with around 400% growth, most recently year to year of students and teachers and co vid. And we've launched a major cloud platform using the core of on shape technology called Atlas. So, um, just tons of exciting things going on a TTC. >>That's awesome. But thank you for sharing some of those metrics. And of course, you're very humble individual. You know, people should know a little bit more about you mentioned, you know, we founded Solid Works, co founded Solid where I actually found it solid works. You had a great exit in the in the late nineties. But what I really appreciate is, you know, you're an entrepreneur. You've got a passion for the babies that you you helped birth. You stayed with the salt systems for a number of years. The company that quiet, solid works well over a decade. And and, of course, you and I have talked about how you participated in the the M I T. Blackjack team. You know, back in the day, a zai say you're very understated, for somebody was so accomplished. Well, >>that's kind of you, but I tend to I tend Thio always keep my eye more on what's ahead. You know what's next, then? And you know, I look back Sure to enjoy it and learn from it about what I can put to work making new memories, making new successes. >>Love it. Okay, let's bring Dana into the conversation. Hello, Dana. You look you're a fairly early investor in in on shape when you were with any A And and I think it was like it was a serious B, but it was very right close after the A raise. And and you were and still are a big believer in industrial transformation. So take us back. What did you see about on shape back then? That excited you. >>Thanks. Thanks for that. Yeah. I was lucky to be a early investment in shape. You know, the things that actually attracted me. Don shape were largely around John and, uh, the team. They're really setting out to do something, as John says humbly, something totally new, but really building off of their background was a large part of it. Um, but, you know, I was really intrigued by the design collaboration side of the product. Um, I would say that's frankly what originally attracted me to it. What kept me in the room, you know, in terms of the industrial world was seeing just if you start with collaboration around design what that does to the overall industrial product lifecycle accelerating manufacturing just, you know, modernizing all the manufacturing, just starting with design. So I'm really thankful to the on shape guys, because it was one of the first investments I've made that turned me on to the whole sector. And while just such a great pleasure to work with with John and the whole team there. Now see what they're doing inside PTC. >>And you just launched construct capital this year, right in the middle of a pandemic and which is awesome. I love it. And you're focused on early stage investing. Maybe tell us a little bit about construct capital. What your investment thesis is and you know, one of the big waves that you're hoping to ride. >>Sure, it construct it is literally lifting out of any what I was doing there. Um uh, for on shape, I went on to invest in companies such as desktop metal and Tulip, to name a couple of them form labs, another one in and around the manufacturing space. But our thesis that construct is broader than just, you know, manufacturing and industrial. It really incorporates all of what we'd call foundational industries that have let yet to be fully tech enabled or digitized. Manufacturing is a big piece of it. Supply chain, logistics, transportation of mobility or not, or other big pieces of it. And together they really drive, you know, half of the GDP in the US and have been very under invested. And frankly, they haven't attracted really great founders like they're on in droves. And I think that's going to change. We're seeing, um, entrepreneurs coming out of the tech world orthe Agnelli into these industries and then bringing them back into the tech world, which is which is something that needs to happen. So John and team were certainly early pioneers, and I think, you know, frankly, obviously, that voting with my feet that the next set, a really strong companies are going to come out of the space over the next decade. >>I think it's a huge opportunity to digitize the sort of traditionally non digital organizations. But Dana, you focused. I think it's it's accurate to say you're focused on even Mawr early stage investing now. And I want to understand why you feel it's important to be early. I mean, it's obviously riskier and reward e er, but what do you look for in companies and and founders like John >>Mhm, Um, you know, I think they're different styles of investing all the way up to public market investing. I've always been early stage investors, so I like to work with founders and teams when they're, you know, just starting out. Um, I happened to also think that we were just really early in the whole digital transformation of this world. You know, John and team have been, you know, back from solid works, etcetera around the space for a long time. But again, the downstream impact of what they're doing really changes the whole industry. And and so we're pretty early and in digitally transforming that market. Um, so that's another reason why I wanna invest early now, because I do really firmly believe that the next set of strong companies and strong returns for my own investors will be in the spaces. Um, you know, what I look for in Founders are people that really see the world in a different way. And, you know, sometimes some people think of founders or entrepreneurs is being very risk seeking. You know, if you asked John probably and another successful entrepreneurs, they would call themselves sort of risk averse, because by the time they start the company, they really have isolated all the risk out of it and think that they have given their expertise or what they're seeing their just so compelled to go change something, eh? So I look for that type of attitude experience a Z. You can also tell from John. He's fairly humble. So humility and just focus is also really important. Um, that there's a That's a lot of it. Frankly, >>Excellent. Thank you, John. You got such a rich history in the space. Uh, and one of you could sort of connect the dots over time. I mean, when you look back, what were the major forces that you saw in the market in in the early days? Particularly days of on shape on? And how is that evolved? And what are you seeing today? Well, >>I think I touched on it earlier. Actually, could I just reflect on what Dana said about risk taking for just a quick one and say, throughout my life, from blackjack to starting solid works on shape, it's about taking calculated risks. Yes, you try to eliminate the risk Sa's much as you can, but I always say, I don't mind taking a risk that I'm aware of, and I've calculated through as best I can. I don't like taking risks that I don't know I'm taking. That's right. You >>like to bet on >>sure things as much as you sure things, or at least where you feel you. You've done the research and you see them and you know they're there and you know, you, you you keep that in mind in the room, and I think that's great. And Dana did so much for us. Dana, I want to thank you again. For all that, you did it every step of the way, from where we started to to, you know, your journey with us ended formally but continues informally. Now back to you, Dave, I think, question about the opportunity and how it's shaped up. Well, I think I touched on it earlier when I said It's about helping product developers. You know, our customers of the people build the future off manufactured goods. Anything you think of that would be manufacturing factory. You know, the chair you're sitting in machine that made your coffee. You know, the computer you're using, the trucks that drive by on the street, all the covert product research, the equipment being used to make vaccines. All that stuff is designed by someone, and our job is given the tools to do it better. And I could see the problems that those product developers had that we're slowing them down with using the computing systems of the time. When we built solid works, that was almost 30 years ago. If people don't realize that it was in the early >>nineties and you know, we did the >>best we could for the early nineties, but what we did. We didn't anticipate the world of today. And so people were having problems with just installing the systems. Dave, you wouldn't believe how hard it is to install these systems. You need toe speck up a special windows computer, you know, and make sure you've got all the memory and graphics you need and getting to get that set up. You need to make sure the device drivers air, right, install a big piece of software. Ah, license key. I'm not making this up. They're still around. You may not even know what those are. You know, Dennis laughing because, you know, zero cool people do things like this anymore. Um, and it only runs some windows. You want a second user to use it? They need a copy. They need a code. Are they on the same version? It's a nightmare. The teams change, you know? You just say, Well, get everyone on the software. Well, who's everyone? You know, you got a new vendor today? A new customer tomorrow, a new employee. People come on and off the team. The other problem is the data stored in files, thousands of files. This isn't like a spreadsheet or word processor, where there's one file to pass around these air thousands of files to make one, even a simple product. People were tearing their hair out. John, what do we do? I've got copies everywhere. I don't know where the latest version is. We tried like, you know, locking people out so that only one person can change it At the time that works against speed, it works against innovation. We saw what was happening with Cloud Web and mobile. So what's happened in the years since is every one of the forces that product developers experience the need for speed, the need for innovation, the need to be more efficient with their people in their capital. Resource is every one of those trends have been amplified since we started on shape by a lot of forces in the world. And covert is amplified all those the need for agility and remote work cove it is amplified all that the same time, The acceptance of cloud. You know, a few years ago, people were like cloud, you know, how is that gonna work now They're saying to me, You know, increasingly, how would you ever even have done this without the cloud. How do you make solid works work without the cloud? How would that even happen? You know, once people understand what on shapes about >>and we're the >>Onley full SAS solution software >>as a service, >>full SAS solution in our industry. So what's happened in those years? Same problems we saw earlier, but turn up the gain, their bigger problems. And with cloud, we've seen skepticism of years ago turn into acceptance. And now even embracement in the cova driven new normal. >>Yeah. So a lot of friction in the previous environments cloud obviously a huge factor on, I guess. I guess Dana John could see it coming, you know, in the early days of solid works with, you know, had Salesforce, which is kind of the first major independent SAS player. Well, I guess that was late nineties. So his post solid works, but pre in shape and their work day was, you know, pre on shape in the mid two thousands. And and but But, you know, the bet was on the SAS model was right for Crick had and and product development, you know, which maybe the time wasn't a no brainer. Or maybe it was, I don't know, but Dana is there. Is there anything that you would invest in today? That's not Cloud based? >>Um, that's a great question. I mean, I think we still see things all the time in the manufacturing world that are not cloud based. I think you know, the closer you get to the shop floor in the production environment. Um e think John and the PTC folks would agree with this, too, but that it's, you know, there's reliability requirements, performance requirements. There's still this attitude of, you know, don't touch the printing press. So the cloud is still a little bit scary sometimes. And I think hybrid cloud is a real thing for those or on premise. Solutions, in some cases is still a real thing. What what we're more focused on. And, um, despite whether it's on premise or hybrid or or SAS and Cloud is a frictionless go to market model, um, in the companies we invest in so sass and cloud, or really make that easy to adopt for new users, you know, you sign up, started using a product, um, but whether it's hosted in the cloud, whether it's as you can still distribute buying power. And, um, I would I'm just encouraging customers in the customer world and the more industrial environment to entrust some of their lower level engineers with more budget discretionary spending so they can try more products and unlock innovation. >>Right? The unit economics are so compelling. So let's bring it, you know, toe today's you know, situation. John, you decided to exit about a year ago. You know? What did you see in PTC? Other than the obvious money? What was the strategic fit? >>Yeah, Well, David, I wanna be clear. I didn't exit anything. Really? You >>know, I love you and I don't like that term exit. I >>mean, Dana had exit is a shareholder on and so it's not It's not exit for me. It's just a step in the journey. What we saw in PTC was a partner. First of all, that shared our vision from the top down at PTC. Jim Hempleman, the CEO. He had a great vision for for the impact that SAS can make based on cloud technology and really is Dana of highlighted so much. It's not just the technology is how you go to market and the whole business being run and how you support and make the customers successful. So Jim shared a vision for the potential. And really, really, um said Hey, come join us and we can do this bigger, Better, faster. We expanded the vision really to include this Atlas platform for hosting other SAS applications. That P D. C. I mean, David Day arrived at PTC. I met the head of the academic program. He came over to me and I said, You know, and and how many people on your team? I thought he'd say 5 40 people on the PTC academic team. It was amazing to me because, you know, we were we were just near about 100 people were required are total company. We didn't even have a dedicated academic team and we had ah, lot of students signing up, you know, thousands and thousands. Well, now we have hundreds of thousands of students were approaching a million users and that shows you the power of this team that PTC had combined with our product and technology whom you get a big success for us and for the teachers and students to the world. We're giving them great tools. So so many good things were also putting some PTC technology from other parts of PTC back into on shape. One area, a little spoiler, little sneak peek. Working on taking generative design. Dana knows all about generative design. We couldn't acquire that technology were start up, you know, just to too much to do. But PTC owns one of the best in the business. This frustrated technology we're working on putting that into on shaping our customers. Um, will be happy to see it, hopefully in the coming year sometime. >>It's great to see that two way exchange. Now, you both know very well when you start a company, of course, a very exciting time. You know, a lot of baggage, you know, our customers pulling you in a lot of different directions and asking you for specials. You have this kind of clean slate, so to speak in it. I would think in many ways, John, despite you know, your install base, you have a bit of that dynamic occurring today especially, you know, driven by the forced march to digital transformation that cove it caused. So when you sit down with the team PTC and talk strategy. You now have more global resource is you got cohorts selling opportunities. What's the conversation like in terms of where you want to take the division? >>Well, Dave, you actually you sounds like we should have you coming in and talking about strategy because you've got the strategy down. I mean, we're doing everything said global expansion were able to reach across selling. We got some excellent PTC customers that we can reach reach now and they're finding uses for on shape. I think the plan is to, you know, just go, go, go and grow, grow, grow where we're looking for this year, priorities are expand the product. I mentioned the breath of the product with new things PTC did recently. Another technology that they acquired for on shape. We did an acquisition. It was it was small, wasn't widely announced. It, um, in an area related to interfacing with electrical cad systems. So So we're doing We're expanding the breath of on shape. We're going Maura, depth in the areas were already in. We have enormous opportunity to add more features and functions that's in the product. Go to market. You mentioned it global global presence. That's something we were a little light on a year ago. Now we have a team. Dana may not even know what we have. A non shape, dedicated team in Barcelona, based in Barcelona but throughout Europe were doing multiple languages. Um, the academic program just introduced a new product into that space that z even fueling more success and growth there. Um, and of course, continuing to to invest in customer success and this Atlas platform story I keep mentioning, we're going to soon have We're gonna soon have four other major PTC brands shipping products on our Atlas Saas platform. And so we're really excited about that. That's good for the other PTC products. It's also good for on shape because now there's there's. There's other interesting products that are on shape customers can use take advantage of very easily using, say, a common log in conventions about user experience there, used to invest of all they're SAS based, so they that makes it easier to begin with. So that's some of the exciting things going on. I think you'll see PTC, um, expanding our lead in SAS based applications for this sector for our our target, uh, sectors not just in, um, in cat and data management, but another area. PTC's Big and his augmented reality with of euphoria, product line leader and industrial uses of a R. That's a whole other story we should do. A whole nother show augmented reality. But these products are amazing. You can you can help factory workers people on, uh, people who are left out of the digital transformation. Sometimes we're standing from machine >>all day. >>They can't be sitting like we are doing Zoom. They can wear a R headset in our tools, let them create great content. This is an area Dana is invested in other companies. But what I wanted to note is the new releases of our authoring software. For this, our content getting released this month, used through the Atlas platform, the SAS components of on shape for things like revision management and collaboration on duh workflow activity. All that those are tools that we're able to share leverage. We get a lot of synergy. It's just really good. It's really fun to have a good time. That's >>awesome. And then we're gonna be talking to John MacLean later about that. Let's do a little deeper Dive on that. And, Dana, what is your involvement today with with on shape? But you're looking for you know, which of their customers air actually adopting. And they're gonna disrupt their industries. And you get good pipeline from that. How do you collaborate today? >>That sounds like a great idea. Um, Aziz, John will tell you I'm constantly just asking him for advice and impressions of other entrepreneurs and picking his brain on ideas. No formal relationship clearly, but continue to count John and and John and other people in on shaping in the circle of experts that I rely on for their opinions. >>All right, so we have some questions from the crowd here. Uh, one of the questions is for the dream team. You know, John and Dana. What's your next next collective venture? I don't think we're there yet, are we? No. >>I just say, as Dana said, we love talking to her about. You know, Dana, you just returned the compliment. We would try and give you advice and the deals you're looking at, and I'm sort of casually mentoring at least one of your portfolio entrepreneurs, and that's been a lot of fun for May on, hopefully a value to them. But also Dana. We uran important pipeline to us in the world of some new things that are happening that we wouldn't see if you know you've shown us some things that you've said. What do you think of this business? And for us, it's like, Wow, it's cool to see that's going on And that's what's supposed to work in an ecosystem like this. So we we deeply value the ongoing relationship. And no, we're not starting something new. I got a lot of work left to do with what I'm doing and really happy. But we can We can collaborate in this way on other ventures. >>I like this question to somebody asking With the cloud options like on shape, Wilmore students have stem opportunities s Oh, that's a great question. Are you because of sass and cloud? Are you able to reach? You know, more students? Much more cost effectively. >>Yeah, Dave, I'm so glad that that that I was asked about this because Yes, and it's extremely gratified us. Yes, we are because of cloud, because on shape is the only full cloud full SAS system or industry were able to reach. Stem education brings able to be part of bringing step education to students who couldn't get it otherwise. And one of most gratifying gratifying things to me is the emails were getting from teachers, um, that that really, um, on the phone calls that were they really pour their heart out and say We're able to get to students in areas that have very limited compute resource is that don't have an I T staff where they don't know what computer that the students can have at home, and they probably don't even have a computer. We're talking about being able to teach them on a phone to have an android phone a low end android phone. You can do three D modeling on there with on shape. Now you can't do it any other system, but with on shape, you could do it. And so the teacher can say to the students, They have to have Internet access, and I know there's a huge community that doesn't even have Internet access, and we're not able, unfortunately to help that. But if you have Internet and you have even an android phone, we can enable the educator to teach them. And so we have case after case of saving a stem program or expanding it into the students that need it most is the ones we're helping here. So really excited about that. And we're also able to let in addition to the run on run on whatever computing devices they have, we also offer them the tools they need for remote teaching with a much richer experience. Could you teach solid works remotely? Well, maybe if the student ran it had a windows workstation. You know, big, big, high end workstation. Maybe it could, but it would be like the difference between collaborating with on shape and collaborate with solid works. Like the difference between a zoom video call and talking on the landline phone. You know, it's a much richer experience, and that's what you need. And stem teaching stem is hard, So yeah, we're super super. Um, I'm excited about bringing stem to more students because of cloud yond >>we're talking about innovation for good, and then the discussion, John, you just had it. Really? There could be a whole another vector here. We could discuss on diversity, and I wanna end with just pointing out. So, Dana, your new firm, it's a woman led firm, too. Two women leaders, you know, going forward. So that's awesome to see, so really? Yeah, thumbs up on that. Congratulations on getting that off the ground. >>Thank you. Thank you. >>Okay, so thank you guys. Really appreciate It was a great discussion. I learned a lot and I'm sure the audience did a swell in a moment. We're gonna talk with on shaped customers to see how they're applying tech for good and some of the products that they're building. So keep it right there. I'm Dave Volonte. You're watching innovation for good on the Cube, the global leader in digital tech event coverage. Stay right there. >>Oh, yeah, it's >>yeah, yeah, around >>the globe. It's the Cube presenting innovation for good. Brought to you by on shape. >>Okay, we're back. This is Dave Volonte and you're watching innovation for good. A program on Cuba 3 65 made possible by on shape of PTC company. We're live today really live tv, which is the heritage of the Cube. And now we're gonna go to the sources and talkto on shape customers to find out how they're applying technology to create real world innovations that are changing the world. So let me introduce our panel members. Rafael Gomez Furberg is with the Chan Zuckerberg bio hub. A very big idea. And collaborative nonprofit was initiative that was funded by Mark Zuckerberg and his wife, Priscilla Chan, and really around diagnosing and curing and better managing infectious diseases. So really timely topic. Philip Tabor is also joining us. He's with silver side detectors, which develops neutron detective detection systems. Yet you want to know if early, if neutrons and radiation or in places where you don't want them, So this should be really interesting. And last but not least, Matthew Shields is with the Charlottesville schools and is gonna educate us on how he and his team are educating students in the use of modern engineering tools and techniques. Gentlemen, welcome to the Cuban to the program. This should be really interesting. Thanks for coming on. >>Hi. Or pleasure >>for having us. >>You're very welcome. Okay, let me ask each of you because you're all doing such interesting and compelling work. Let's start with Rafael. Tell us more about the bio hub and your role there, please. >>Okay. Yeah. So you said that I hope is a nonprofit research institution, um, funded by Mark Zuckerberg and his wife, Priscilla Chan. Um, and our main mission is to develop new technologies to help advance medicine and help, hopefully cure and manage diseases. Um, we also have very close collaborations with Universe California, San Francisco, Stanford University and the University California Berkeley on. We tried to bring those universities together, so they collaborate more of biomedical topics. And I manage a team of engineers. They by joining platform. Um, and we're tasked with creating instruments for the laboratory to help the scientist boats inside the organization and also in the partner universities Do their experiments in better ways in ways that they couldn't do before >>in this edition was launched Well, five years ago, >>it was announced at the end of 2016, and we actually started operation with at the beginning of 2017, which is when I joined, um, So this is our third year. >>And how's how's it going? How does it work? I mean, these things take time. >>It's been a fantastic experience. Uh, the organization works beautifully. Um, it was amazing to see it grow From the beginning, I was employee number 12, I think eso When I came in, it was just a nem P office building and empty labs. And very quickly we had something running about. It's amazing eso I'm very proud of the work that we have done to make that possible. Um And then, of course, that's you mentioned now with co vid, um, we've been able to do a lot of very cool work attire being of the pandemic in March, when there was a deficit of testing, uh, capacity in California, we spun up a testing laboratory in record time in about a week. It was crazy. It was a crazy project, Um, but but incredibly satisfying. And we ended up running all the way until the beginning of November, when the lab was finally shut down. We could process about 3000 samples a day. I think at the end of it all, we were able to test about 100 on the order of 100 and 50,000 samples from all over the state. We were providing free testing toe all of the Department of Public Health Department of Public Health in California, which at the media pandemic, had no way to do testing affordably and fast. So I think that was a great service to the state. Now the state has created that testing system that would serve those departments. So then we decided that it was unnecessary to keep going with testing in the other biopsy that would shut down. >>All right. Thank you for that. Now, Now, Philip, you What you do is mind melting. You basically helped keep the world safe. Maybe describe a little bit more about silver sod detectors and what your role is there and how it all works. >>Tour. So we make a nuclear bomb detectors and we also make water detectors. So we try and do our part thio keep the world from blowing up and make it a better place at the same time. Both of these applications use neutron radiation detectors. That's what we make. Put them out by import border crossing places like that. They can help make sure that people aren't smuggling. Shall we say very bad things. Um, there's also a burgeoning field of research and application where you can use neutrons with some pretty cool physics to find water so you could do things. Like what? A detector up in the mountains and measure snowpack. Put it out in the middle of the field and measure soil moisture content. And as you might imagine, there's some really cool applications in, uh, research and agronomy and public policy for this. >>All right, so it's OK, so it's a It's much more than, you know, whatever fighting terrorism, it's there's a riel edge or I kind of i o t application for what you guys >>do. We do both its's to plowshares. You might >>say a mat. I I look at your role is kind of scaling the brain power for for the future. Maybe tell us more about Charlottesville schools and in the mission that you're pursuing and what you do. >>Thank you. Um, I've been in Charlottesville City schools for about 11 or 12 years. I started their teaching, um, a handful of classes, math and science and things like that. But Thescore board and my administration had the crazy idea of starting an engineering program about seven years ago. My background is an engineering is an engineering. My masters is in mechanical and aerospace engineering and um, I basically spent a summer kind of coming up with what might be a fun engineering curriculum for our students. And it started with just me and 30 students about seven years ago, Um, kind of a home spun from scratch curriculum. One of my goals from the outset was to be a completely project based curriculum, and it's now grown. We probably have about six or 700 students, five or six full time teachers. We now have pre engineering going on at the 5th and 6th grade level. I now have students graduating. Uh, you know, graduating after senior year with, like, seven years of engineering under their belt and heading off to doing some pretty cool stuff. So it's It's been a lot of fun building a program and, um, and learning a lot in the process. >>That's awesome. I mean, you know, Cuba's. We've been passionate about things like women in tech, uh, diversity stem. You know, not only do we need more, more students and stem, we need mawr underrepresented women, minorities, etcetera. We were just talking to John Herstek and integrate gration about this is Do you do you feel is though you're I mean, first of all, the work that you do is awesome, but but I'll go one step further. Do you feel as though it's reaching, um, or diverse base? And how is that going? >>That's a great question. I think research shows that a lot of people get funneled into one kind of track or career path or set of interests really early on in their educational career, and sometimes that that funnel is kind of artificial. And so that's one of the reasons we keep pushing back. Um, so our school systems introducing kindergartners to programming on DSO We're trying to push back how we expose students to engineering and to stem fields as early as possible. And we've definitely seen the first of that in my program. In fact, my engineering program, uh, sprung out of an after school in Extracurricular Science Club that actually three girls started at our school. So I think that actually has helped that three girls started the club that eventually is what led to our engineering programs that sort of baked into the DNA and also our eyes a big public school. And we have about 50% of the students are under the poverty line and we e in Charlottesville, which is a big refugee town. And so I've been adamant from Day one that there are no barriers to entry into the program. There's no test you have to take. You don't have to have be taking a certain level of math or anything like that. That's been a lot of fun. To have a really diverse set of kids enter the program and be successful, >>that's final. That's great to hear. So, Philip, I wanna come back to you. You know, I think about maybe some day we'll be able to go back to a sporting events, and I know when I when I'm in there, there's somebody up on the roof looking out for me, you know, watching the crowd, and they have my back. And I think in many ways, the products that you build, you know, our similar. I may not know they're there, but they're keeping us safe or they're measuring things that that that I don't necessarily see. But I wonder if you could talk about a little bit more detail about the products you build and how they're impacting society. >>Sure, so There are certainly a lot of people who are who are watching, trying to make sure things were going well in keeping you safe that you may or may not be aware of. And we try and support ah lot of them. So we have detectors that are that are deployed in a variety of variety of uses, with a number of agencies and governments that dio like I was saying, ports and border crossing some other interesting applications that are looking for looking for signals that should not be there and working closely to fit into the operations these folks do. Onda. We also have a lot of outreach to researchers and scientists trying to help them support the work they're doing. Um, using neutron detection for soil moisture monitoring is a some really cool opportunities for doing it at large scale and with much less, um, expense or complication than would have been done. Previous technologies. Um, you know, they were talking about collaboration in the previous segment. We've been able to join a number of conferences for that, virtually including one that was supposed to be held in Boston, but another one that was held out of the University of Heidelberg in Germany. And, uh, this is sort of things that in some ways, the pandemic is pushing people towards greater collaboration than they would have been able to do. Had it all but in person. >>Yeah, we did. Uh, the cube did live works a couple years ago in Boston. It was awesome show. And I think, you know, with this whole trend toward digit, I call it the Force march to digital. Thanks to cove it I think that's just gonna continue. Thio grow. Rafael. What if you could describe the process that you use to better understand diseases? And what's your organization's involvement? Been in more detail, addressing the cove in pandemic. >>Um, so so we have the bio be structured in, Um um in a way that foster so the combination of technology and science. So we have to scientific tracks, one about infectious diseases and the other one about understanding just basic human biology, how the human body functions, and especially how the cells in the human body function on how they're organized to create tissues in the body. On Ben, it has this set of platforms. Um, mind is one of them by engineering that are all technology rated. So we have data science platform, all about data analysis, machine learning, things like that. Um, we have a mass spectrometry platform is all about mass spectrometry technologies to, um, exploit those ones in service for the scientist on. We have a genomics platform that it's all about sequencing DNA and are gonna, um and then an advanced microscopy. It's all about developing technologies, uh, to look at things with advanced microscopes and developed technologies to marry computation on microscopy. So, um, the scientists set the agenda and the platforms, we just serve their needs, support their needs, and hopefully develop technologies that help them do their experiments better, faster, or allow them to the experiment that they couldn't do in any other way before. Um And so with cove, it because we have that very strong group of scientists that work on have been working on infectious disease before, and especially in viruses, we've been able to very quickly pivot to working on that s O. For example, my team was able to build pretty quickly a machine to automatically purified proteins on is being used to purify all these different important proteins in the cove. It virus the SARS cov to virus Onda. We're sending some of those purified proteins all over the world. Two scientists that are researching the virus and trying to figure out how to develop vaccines, understand how the virus affects the body and all that. Um, so some of the machines we built are having a very direct impact on this. Um, Also for the copy testing lab, we were able to very quickly develop some very simple machines that allowed the lab to function sort of faster and more efficiently. Sort of had a little bit of automation in places where we couldn't find commercial machines that would do it. >>Um, eso Matt. I mean, you gotta be listening to this and thinking about Okay, So someday your students are gonna be working at organizations like like, like Bio Hub and Silver Side. And you know, a lot of young people they're just don't know about you guys, but like my kids, they're really passionate about changing the world. You know, there's way more important than you know, the financial angles and it z e. I gotta believe you're seeing that you're right in the front lines there. >>Really? Um, in fact, when I started the curriculum six or seven years ago, one of the first bits of feedback I got from my students is they said Okay, this is a lot of fun. So I had my students designing projects and programming microcontrollers raspberry, PiS and order we nose and things like that. The first bit of feedback I got from students was they said Okay, when do we get to impact the world? I've heard engineering >>is about >>making the world a better place, and robots are fun and all, but, you know, where is the real impact? And so um, dude, yeah, thanks to the guidance of my students, I'm baking that Maurin. Now I'm like day one of engineering one. We talk about how the things that the tools they're learning and the skills they're gaining, uh, eventually, you know, very soon could be could be used to make the world a better place. >>You know, we all probably heard that famous line by Jeff Hammer Barker. The greatest minds of my generation are trying to figure out how to get people to click on ads. I think we're really generally generationally, finally, at the point where young students and engineering a really, you know, a passionate about affecting society. I wanna get into the product, you know, side and understand how each of you are using on shape and and the value that that it brings. Maybe Raphael, you could start how long you've been using it. You know, what's your experience with it? Let's let's start there. >>I begin for about two years, and I switched to it with some trepidation. You know, I was used to always using the traditional product that you have to install on your computer, that everybody uses that. So I was kind of locked into that. But I started being very frustrated with the way it worked, um, and decided to give on ship chance. Which reputation? Because any change always, you know, causes anxiety. Um, but very quickly my engineers started loving it, Uh, just because it's it's first of all, the learning curve wasn't very difficult at all. You can transfer from one from the traditional product to entree very quickly and easily. You can learn all the concepts very, very fast. It has all the functionality that we needed and and what's best is that it allows to do things that we couldn't do before or we couldn't do easily. Now we can access the our cat documents from anywhere in the world. Um, so when we're in the lab fabricating something or testing a machine, any computer we have next to us or a tablet or on iPhone, we can pull it up and look at the cad and check things or make changes. That's something that couldn't do before because before you had to pay for every installation off the software for the computer, and I couldn't afford to have 20 installations to have some computers with the cat ready to use them like once every six months would have been very inefficient. So we love that part. And the collaboration features are fantastic, especially now with Kobe, that we have to have all the remote meetings eyes fantastic, that you can have another person drive the cad while the whole team is watching that person change the model and do things and point to things that is absolutely revolutionary. We love it. The fact that you have very, very sophisticated version control before it was always a challenge asking people, please, if you create anniversary and apart, how do we name it so that people find it? And then you end up with all these collection of files with names that nobody ever remembers, what they are, the person left. And now nobody knows which version is the right one. A mess with on shape on the version ING system it has, and the fact that you can go back in history off the document and go back to previous version so easily and then go back to the press and version and explore the history of the part that is truly, um, just world changing for us, that we can do that so easily on for me as a manager to manage this collection of information that is critical for our operations. It makes it so much easier because everything is in one place. I don't have to worry about file servers that go down that I have to administer that have to have I t taken care off that have to figure how to keep access to people to those servers when they're at home, and they need a virtual private network and all of that mess disappears. I just simply give give a person in accounting on shape and then magically, they have access to everything in the way I want. And we can manage the lower documents and everything in a way that is absolutely fantastic. >>Feel what was your what? What were some of the concerns you had mentioned? You had some trepidation. Was it a performance? Was it security? You know some of the traditional cloud stuff, and I'm curious as to how, How, whether any of those act manifested really that you had to manage. What were your concerns? >>Look, the main concern is how long is it going to take for everybody in the team to learn to use the system like it and buy into it? Because I don't want to have my engineers using tools against their will write. I want everybody to be happy because that's how they're productive. They're happy, and they enjoyed the tools they have. That was my main concern. I was a little bit worried about the whole concept of not having the files in a place where I couldn't quote unquote seat in some server and on site, but that That's kind of an outdated concept, right? So that took a little bit of a mind shift, but very quickly. Then I started thinking, Look, I have a lot of documents on Google Drive. Like, I don't worry about that. Why would I worry about my cat on on shape, right? Is the same thing. So I just needed to sort of put things in perspective that way. Um, the other, um, you know, the concern was the learning curve, right? Is like, how is he Will be for everybody to and for me to learn it on whether it had all of the features that we needed. And there were a few features that I actually discussed with, um uh, Cody at on shape on, they were actually awesome about using their scripting language in on shape to sort of mimic some of the features of the old cat, uh, in on, shaped in a way that actually works even better than the old system. So it was It was amazing. Yeah, >>Great. Thank you for that, Philip. What's your experience been? Maybe you could take us through your journey within shape. >>Sure. So we've been we've been using on shaped silver side for coming up on about four years now, and we love it. We're very happy with it. We have a very modular product line, so we make anything from detectors that would go into backpacks. Two vehicles, two very large things that a shipping container would go through and saw. Excuse me. Shape helps us to track and collaborate faster on the design. Have multiple people working a same time on a project. And it also helps us to figure out if somebody else comes to us and say, Hey, I want something new how we congrats modules from things that we already have put them together and then keep track of the design development and the different branches and ideas that we have, how they all fit together. A za design comes together, and it's just been fantastic from a mechanical engineering background. I will also say that having used a number of different systems and solid works was the greatest thing since sliced bread. Before I got using on shape, I went, Wow, this is amazing and I really don't want to design in any other platform. After after getting on Lee, a little bit familiar with it. >>You know, it's funny, right? I'll have the speed of technology progression. I was explaining to some young guns the other day how I used to have a daytime er and that was my life. And if I lost that daytime, er I was dead. And I don't know how we weigh existed without, you know, Google maps eso we get anywhere, I don't know, but, uh but so So, Matt, you know, it's interesting to think about, you know, some of the concerns that Raphael brought up, you hear? For instance, you know, all the time. Wow. You know, I get my Amazon bill at the end of the month that zip through the roof in, But the reality is that Yeah, well, maybe you are doing more, but you're doing things that you couldn't have done before. And I think about your experience in teaching and educating. I mean, you so much more limited in terms of the resource is that you would have had to be able to educate people. So what's your experience been with With on shape and what is it enabled? >>Um, yeah, it was actually talking before we went with on shape. We had a previous CAD program, and I was talking to my vendor about it, and he let me know that we were actually one of the biggest CAD shops in the state. Because if you think about it a really big program, you know, really big company might employ. 5, 10, 15, 20 cad guys, right? I mean, when I worked for a large defense contractor, I think there were probably 20 of us as the cad guys. I now have about 300 students doing cat. So there's probably more students with more hours of cat under their belt in my building than there were when I worked for the big defense contractor. Um, but like you mentioned, uh, probably our biggest hurdle is just re sources. And so we want We want one of things I've always prided myself and trying to do in this. Programs provide students with access two tools and skills that they're going to see either in college or in the real world. So it's one of the reason we went with a big professional cad program. There are, you know, sort of K 12 oriented software and programs and things. But, you know, I want my kids coding and python and using slack and using professional type of tools on DSO when it comes to cat. That's just that That was a really hurt. I mean, you know, you could spend $30,000 on one seat of, you know, professional level cad program, and then you need a $30,000 computer to run it on if you're doing a heavy assemblies, Um and so one of my dreams And it was always just a crazy dream. And I was the way I would always pitcher in my school system and say, someday I'm gonna have a kid on a school issued chromebook in subsidized housing, on public WiFi doing professional level bad and that that was a crazy statement until a couple of years ago. So we're really excited that I literally and you know, March and you said the forced march, the forced march into, you know, modernity, March 13th kids sitting in my engineering lab that we spent a lot of money on doing cad March 14th. Those kids were at home on their school issued chromebooks on public WiFi, uh, keeping their designs going and collaborating. And then, yeah, I could go on and on about some of the things you know, the features that we've learned since then they're even better. So it's not like this is some inferior, diminished version of Academy. There's so much about it. Well, I >>wanna I wanna ask you that I may be over my skis on this, but we're seeing we're starting to see the early days of the democratization of CAD and product design. It is the the citizen engineer, I mean, maybe insulting to the engineers in the room, But but is that we're beginning to see that >>I have to believe that everything moves into the cloud. Part of that is democratization that I don't need. I can whether you know, I think artists, you know, I could have a music studio in my basement with a nice enough software package. And Aiken, I could be a professional for now. My wife's a photographer. I'm not allowed to say that I could be a professional photographer with, you know, some cloud based software, and so, yeah, I do think that's part of what we're seeing is more and more technology is moving to the cloud. >>Philip. Rafael Anything you Dad, >>I think I mean, yeah, that that that combination of cloud based cat and then three d printing that is becoming more and more affordable on ubiquitous It's truly transformative, and I think for education is fantastic. I wish when I was a kid I had the opportunity to play with those kinds of things because I was always the late things. But, you know, the in a very primitive way. So, um, I think this is a dream for kids. Teoh be able to do this. And, um, yeah, there's so many other technologies coming on, like Arduino on all of these electronic things that live kids play at home very cheaply with things that back in my day would have been unthinkable. >>So we know there's a go ahead. Philip, please. >>We had a pandemic and silver site moved to a new manufacturing facility this year. I was just on the shop floor, talking with contractors, standing 6 ft apart, pointing at things. But through it all, our CAD system was completely unruffled. Nothing stopped in our development work. Nothing stopped in our support for existing systems in the field. We didn't have to think about it. We had other server issues, but none with our, you know, engineering cad, platform and product development in support world right ahead, which was cool, but also a in that's point. I think it's just really cool what you're doing with the kids. The most interesting secondary and college level engineering work that I did was project based, taken important problem to the world. Go solve it and that is what we do here. That is what my entire career has been. And I'm super excited to see. See what your students are going to be doing, uh, in there home classrooms on their chromebooks now and what they do building on that. >>Yeah, I'm super excited to see your kids coming out of college with engineering degrees because, yeah, I think that Project based experience is so much better than just sitting in a classroom, taking notes and doing math problems on day. I think it will give the kids a much better flavor. What engineering is really about Think a lot of kids get turned off by engineering because they think it's kind of dry because it's just about the math for some very abstract abstract concept on they are there. But I think the most important thing is just that hands on a building and the creativity off, making things that you can touch that you can see that you can see functioning. >>Great. So, you know, we all know the relentless pace of technology progression. So when you think about when you're sitting down with the folks that on shape and there the customer advisor for one of the things that that you want on shape to do that it doesn't do today >>I could start by saying, I just love some of the things that does do because it's such a modern platform. And I think some of these, uh, some some platforms that have a lot of legacy and a lot of history behind them. I think we're dragging some of that behind them. So it's cool to see a platform that seemed to be developed in the modern era, and so that Z it is the Google docks. And so the fact that collaboration and version ing and link sharing is and like platform agnostic abilities, the fact that that seems to be just built into the nature of the thing so far, That's super exciting. As far as things that, uh, to go from there, Um, I don't know, >>Other than price. >>You can't say >>I >>can't say lower price. >>Yeah, so far on P. D. C. S that work with us. Really? Well, so I'm not complaining. There you there, >>right? Yeah. Yeah. No gaps, guys. Whitespace, Come on. >>We've been really enjoying the three week update. Cadence. You know, there's a new version every three weeks and we don't have to install it. We just get all the latest and greatest goodies. One of the trends that we've been following and enjoying is the the help with a revision management and release work flows. Um, and I know that there's more than on shape is working on that we're very excited for, because that's a big important part about making real hardware and supporting it in the field. Something that was cool. They just integrated Cem markup capability. In the last release that took, we were doing that anyway, but we were doing it outside of on shapes. And now we get to streamline our workflow and put it in the CAD system where We're making those changes anyway when we're reviewing drawings and doing this kind of collaboration. And so I think from our perspective, we continue to look forward. Toa further progress on that. There's a lot of capability in the cloud that I think they're just kind of scratching the surface on you, >>right? I would. I mean, you're you're asking to knit. Pick. I would say one of the things that I would like to see is is faster regeneration speed. There are a few times with convicts, necessities that regenerating the document takes a little longer than I would like. It's not a serious issue, but anyway, I I'm being spoiled, >>you know? That's good. I've been doing this a long time, and I like toe ask that question of practitioners and to me, it It's a signal like when you're nit picking and that's what you're struggling to knit. Pick that to me is a sign of a successful product, and and I wonder, I don't know, uh, have the deep dive into the architecture. But are things like alternative processors. You're seeing them hit the market in a big way. Uh, you know, maybe helping address the challenge, But I'm gonna ask you the big, chewy question now. Then we maybe go to some audience questions when you think about the world's biggest problems. I mean, we're global pandemics, obviously top of mind. You think about nutrition, you know, feeding the global community. We've actually done a pretty good job of that. But it's not necessarily with the greatest nutrition, climate change, alternative energy, the economic divides. You've got geopolitical threats and social unrest. Health care is a continuing problem. What's your vision for changing the world and how product innovation for good and be applied to some of the the problems that that you all are passionate about? Big question. Who wants toe start? >>Not biased. But for years I've been saying that if you want to solve the economy, the environment, uh, global unrest, pandemics, education is the case. If you wanna. If you want to, um, make progress in those in those realms, I think funding funding education is probably gonna pay off pretty well. >>Absolutely. And I think Stam is key to that. I mean, all of the ah lot of the well being that we have today and then industrialized countries. Thanks to science and technology, right improvements in health care, improvements in communication, transportation, air conditioning. Um, every aspect of life is touched by science and technology. So I think having more kids studying and understanding that is absolutely key. Yeah, I agree, >>Philip, you got anything to add? >>I think there's some big technical problems in the world today, Raphael and ourselves there certainly working on a couple of them. Think they're also collaboration problems and getting everybody to be able to pull together instead of pulling separately and to be able to spur the ideas on words. So that's where I think the education side is really exciting. What Matt is doing and it just kind of collaboration in general when we could do provide tools to help people do good work. Uh, that is, I think, valuable. >>Yeah, I think that's a very good point. And along those lines, we have some projects that are about creating very low cost instruments for low research settings, places in Africa, Southeast Asia, South America, so that they can do, um, um, biomedical research that it's difficult to do in those place because they don't have the money to buy the fancy lab machines that cost $30,000 an hour. Um, so we're trying to sort of democratize some of those instruments. And I think thanks to tools like Kahn shape then is easier, for example, to have a conversation with somebody in Africa and show them the design that we have and discuss the details of it with them on. But it's amazing, right to have somebody, you know, 10 time zones away, Um, looking really life in real time with you about your design and discussing the details or teaching them how to build a machine, right? Because, um, you know, they have a three D printer. You can you can just give them the design and say like, you build it yourself, uh, even cheaper than and, you know, also billing and shipping it there. Um, so all that that that aspect of it is also super important. I think for any of these efforts to improve some of the hardest part was in the world for climate change. Do you say, as you say, poverty, nutrition issues? Um, you know, availability of water. You have that project at about finding water. Um, if we can also help deploy technologies that teach people remotely how to create their own technologies or how to build their own systems that will help them solve those forms locally. I think that's very powerful. >>Yeah, the point about education is right on. I think some people in the audience may be familiar with the work of Erik Brynjolfsson and Andrew McAfee, the second machine age where they sort of put forth the premise that, uh, is it laid it out. Look, for the first time in history, machines air replacing humans from a cognitive perspective. Machines have always replaced humans, but that's gonna have an impact on jobs. But the answer is not toe protect the past from the future. The answer is education and public policy that really supports that. So I couldn't agree more. I think it's a really great point. Um, we have We do have some questions from the audience. If if we could If I can ask you guys, um, you know, this one kind of stands out. How do you see artificial intelligence? I was just talking about machine intelligence. Um, how do you see that? Impacting the design space guys trying to infuse a I into your product development. Can you tell me? >>Um, absolutely, like, we're using AI for some things, including some of these very low cost instruments that will hopefully help us diagnose certain diseases, especially this is that are very prevalent in the Third World. Um, and some of those diagnostics are these days done by thes armies of technicians that are trained to look under the microscope. But, um, that's a very slow process. Is very error prone and having machine learning systems that can to the same diagnosis faster, cheaper and also little machines that can be taken to very remote places to these villages that have no access to a fancy microscope. To look at a sample from a patient that's very powerful. And I we don't do this, but I have read quite a bit about how certain places air using a Tribune attorneys to actually help them optimize designs for parts. So you get these very interesting looking parts that you would have never thought off a person would have never thought off, but that are incredibly light ink. Earlier, strong and I have all sort of properties that are interesting thanks to artificial intelligence machine learning in particular >>yet another. The advantage you get when when your work is in the cloud I've seen. I mean, there's just so many applications that so if the radiology scan is in the cloud and the radiologist is goes to bed at night, Radiologist could come in in the morning and and say, Oh, the machine while you were sleeping was using artificial intelligence to scan these 40,000 images. And here's the five that we picked out that we think you should take a closer look at. Or like Raphael said, I can design my part. My, my, my, my, my you know, mount or bracket or whatever and go to sleep. And then I wake up in the morning. The machine has improved. It for me has made it strider strider stronger and lighter. Um And so just when your when your work is in the cloud, that's just that's a really cool advantage that you get that you can have machines doing some of your design work for you. >>Yeah, we've been watching, uh, you know, this week is this month, I guess is AWS re invent and it's just amazing to see how much effort is coming around machine learning machine intelligence. You know Amazon has sage maker Google's got, you know, embedded you no ML and big query. Uh, certainly Microsoft with Azure is doing tons of stuff and machine learning. I think the point there is that that these things will be infused in tow R and D and in tow software product by the vendor community. And you all will apply that to your business and and build value through the unique data that your collecting, you know, in your ecosystems. And and that's how you add value. You don't have to be necessarily, you know, developers of artificial intelligence, but you have to be practitioners to apply that. Does that make sense to you, Philip? >>Yeah, absolutely. And I think your point about value is really well chosen. We see AI involved from the physics simulations all the way up to interpreting radiation data, and that's where the value question, I think, is really important because it's is the output of the AI giving helpful information that the people that need to be looking at it. So if it's curating a serious of radiation alert, saying, Hey, like these air the anomalies. You need to look at eyes it, doing that in a way that's going to help a good response on. In some cases, the II is only as good as the people. That sort of gave it a direction and turn it loose. And you want to make sure that you don't have biases or things like that underlying your AI that they're going to result in less than helpful outcomes coming from it. So we spend quite a lot of time thinking about how do we provide the right outcomes to people who are who are relying on our systems? >>That's a great point, right? Humans air biased and humans build models, so models are inherently biased. But then the software is hitting the market. That's gonna help us identify those biases and help us, you know? Of course. Correct. So we're entering Cem some very exciting times, guys. Great conversation. I can't thank you enough for spending the time with us and sharing with our audience the innovations that you're bringing to help the world. So thanks again. >>Thank you so much. >>Thank you. >>Okay. Welcome. Okay. When we come back, John McElheny is gonna join me. He's on shape. Co founder. And he's currently the VP of strategy at PTC. He's gonna join the program. We're gonna take a look at what's next and product innovation. I'm Dave Volonte and you're watching innovation for good on the Cube, the global leader. Digital technology event coverage. We'll be right back. >>Okay? Okay. Yeah. Okay. >>From around >>the globe, it's the Cube. Presenting innovation for good. Brought to you by on shape. >>Okay, welcome back to innovation. For good. With me is John McElheny, who is one of the co founders of On Shape and is now the VP of strategy at PTC. John, it's good to see you. Thanks for making the time to come on the program. Thanks, Dave. So we heard earlier some of the accomplishments that you've made since the acquisition. How has the acquisition affected your strategy? Maybe you could talk about what resource is PTC brought to the table that allowed you toe sort of rethink or evolve your strategy? What can you share with us? >>Sure. You know, a year ago, when when John and myself met with Jim Pepperman early on is we're we're pondering. Started joining PTC one of things became very clear is that we had a very clear shared vision about how we could take the on shape platform and really extended for, for all of the PTC products, particular sort of their augmented reality as well as their their thing works or the i o. T business and their product. And so from the very beginning there was a clear strategy about taking on shape, extending the platform and really investing, um, pretty significantly in the product development as well as go to market side of things, uh, toe to bring on shape out to not only the PTC based but sort of the broader community at large. So So So PTC has been a terrific, terrific, um, sort of partner as we've we've gonna go on after this market together. Eso We've added a lot of resource and product development side of things. Ah, lot of resource and they go to market and customer success and support. So, really, on many fronts, that's been both. Resource is as well a sort of support at the corporate level from from a strategic standpoint and then in the field, we've had wonderful interactions with many large enterprise customers as well as the PTC channels. So it's been really a great a great year. >>Well, and you think about the challenges of in your business going to SAS, which you guys, you know, took on that journey. You know, 78 years ago. Uh, it's not trivial for a lot of companies to make that transition, especially a company that's been around as long as PTC. So So I'm wondering how much you know, I was just asking you How about what PCP TC brought to the table? E gotta believe you're bringing a lot to the table to in terms of the mindset, uh, even things is, is mundane is not the right word, but things like how you compensate salespeople, how you interact with customers, the notion of a service versus a product. I wonder if you could address >>that. Yeah, it's a it's a really great point. In fact, after we had met Jim last year, John and I one of the things we walked out in the seaport area in Boston, one of things we sort of said is, you know, Jim really gets what we're trying to do here and and part of let me bring you into the thinking early on. Part of what Jim talked about is there's lots of, you know, installed base sort of software that's inside of PTC base. That's helped literally thousands of customers around the world. But the idea of moving to sass and all that it entails both from a technology standpoint but also a cultural standpoint. Like How do you not not just compensate the sales people as an example? But how do you think about customer success? In the past, it might have been that you had professional services that you bring out to a customer, help them deploy your solutions. Well, when you're thinking about a SAS based offering, it's really critical that you get customers successful with it. Otherwise, you may have turned, and you know it will be very expensive in terms of your business long term. So you've got to get customers success with software in the very beginning. So you know, Jim really looked at on shape and he said that John and I, from a cultural standpoint, you know, a lot of times companies get acquired and they've acquired technology in the past that they integrate directly into into PTC and then sort of roll it out through their products, are there just reached channel, he said. In some respects, John John, think about it as we're gonna take PTC and we want to integrate it into on shape because we want you to share with us both on the sales side and customer success on marketing on operations. You know all the things because long term, we believe the world is a SAS world, that the whole industry is gonna move too. So really, it was sort of an inverse in terms of the thought process related to normal transactions >>on That makes a lot of sense to me. You mentioned Sharon turns the silent killer of a SAS company, and you know, there's a lot of discussion, you know, in the entrepreneurial community because you live this, you know what's the best path? I mean today, You see, you know, if you watch Silicon Valley double, double, triple triple, but but there's a lot of people who believe, and I wonder, if you come in there is the best path to, you know, in the X Y axis. If if it's if it's uh, growth on one and retention on the other axis. What's the best way to get to the upper right on? Really? The the best path is probably make sure you've nailed obviously the product market fit, But make sure that you can retain customers and then throw gas on the fire. You see a lot of companies they burn out trying to grow too fast, but they haven't figured out, you know that. But there's too much churn. They haven't figured out those metrics. I mean, obviously on shape. You know, you were sort of a pioneer in here. I gotta believe you've figured out that customer retention before you really, You know, put the pedal to the >>metal. Yeah, and you know, growth growth can mask a lot of things, but getting getting customers, especially the engineering space. Nobody goes and sits there and says, Tomorrow we're gonna go and and, you know, put 100 users on this and and immediately swap out all of our existing tools. These tools are very rich and deep in terms of capability, and they become part of the operational process of how a company designs and builds products. So any time anybody is actually going through the purchasing process. Typically, they will run a try along or they'll run a project where they look at. Kind of What? What is this new solution gonna help them dio. How are we gonna orient ourselves for success? Longer term. So for us, you know, getting new customers and customer acquisition is really critical. But getting those customers to actually deploy the solution to be successful with it. You know, we like to sort of, say, the marketing or the lead generation and even some of the initial sales. That's sort of like the Kindle ing. But the fire really starts when customers deploy it and get successful. The solution because they bring other customers into the fold. And then, of course, if they're successful with it, you know, then in fact, you have negative turn which, ironically, means growth in terms of your inside of your install. Bates. >>Right? And you've seen that with some of the emerging, you know, SAS companies, where you're you're actually you know, when you calculate whatever its net retention or renew ALS, it's actually from a dollar standpoint. It's up in the high nineties or even over 100%. >>So >>and that's a trend we're gonna continue. See, I >>wonder >>if we could sort of go back. Uh, and when you guys were starting on shape, some of the things that you saw that you were trying to strategically leverage and what's changed, you know, today we were talking. I was talking to John earlier about in a way, you kinda you kinda got a blank slate is like doing another startup. >>You're >>not. Obviously you've got installed base and customers to service, but But it's a new beginning for you guys. So one of the things that you saw then you know, cloud and and sas and okay, but that's we've been there, done that. What are you seeing? You know today? >>Well, you know, So So this is a journey, of course, that that on shape on its own has gone through it had I'll sort of say, you know, several iterations, both in terms of of of, you know, how do you How do you get customers? How do you How do you get them successful? How do you grow those customers? And now that we've been part of PTC, the question becomes okay. One, There is certainly a higher level of credibility that helps us in terms of our our megaphone is much bigger than it was when we're standalone company. But on top of that now, figuring out how to work with their channel with their direct sales force, you know, they have, um, for example, you know, very large enterprises. Well, many of those customers are not gonna go in forklift out their existing solution to replace it with with on shape. However, many of them do have challenges in their supply chain and communications with contractors and vendors across the globe. And so, you know, finding our fit inside of those large enterprises as they extend out with their their customers is a very interesting area that we've really been sort of incremental to to PTC. And then, you know, they they have access to lots of other technology, like the i o. T business. And now, of course, the augmented reality business that that we can bring things to bear. For example, in the augmented reality world, they've they've got something called expert capture. And this is essentially imagine, you know, in a are ah, headset that allows you to be ableto to speak to it, but also capture images still images in video. And you could take somebody who's doing their task and capture literally the steps that they're taking its geo location and from their builds steps for new employees to be, we'll learn and understand how todo use that technology to help them do their job better. Well, when they do that, if there is replacement products or variation of of some of the tools that that they built the original design instruction set for they now have another version. Well, they have to manage multiple versions. Well, that's what on shape is really great at doing and so taking our technology and helping their solutions as well. So it's not only expanding our customer footprint, it's expanding the application footprint in terms of how we can help them and help customers. >>So that leads me to the tam discussion and again, as part of your strategist role. How do you think about that? Was just talking to some of your customers earlier about the democratization of cat and engineering? You know, I kind of joked, sort of like citizen engineering, but but so that you know, the demographics are changing the number of users potentially that can access the products because the it's so much more of a facile experience. How are you thinking about the total available market? >>It really is a great question, You know, it used to be when you when you sold boxes of software, it was how many engineers were out there. And that's the size of the market. The fact that matter is now when, When you think about access to that information, that data is simply a pane of glass. Whether it's a computer, whether it's a laptop, UH, a a cell phone or whether it's a tablet, the ability to to use different vehicles, access information and data expands the capabilities and power of a system to allow feedback and iteration. I mean, one of the one of the very interesting things is in technology is when you can take something and really unleash it to a larger audience and builds, you know, purpose built applications. You can start to iterate, get better feedback. You know there's a classic case in the clothing industry where Zara, you know, is a fast sort of turnaround. Agile manufacturer. And there was a great New York Times article written a couple years ago. My wife's a fan of Zara, and I think she justifies any purchases by saying, You know, Zara, you gotta purchase it now. Otherwise it may not be there the next time. Yet you go back to the store. They had some people in a store in New York that had this woman's throw kind of covering Shaw. And they said, Well, it would be great if we could have this little clip here so we can hook it through or something. And they sent a note back toe to the factory in Spain, and literally two weeks later they had, you know, 4000 of these things in store, and they sold out because they had a closed loop and iterative process. And so if we could take information and allow people access in multiple ways through different devices and different screens, that could be very specific information that, you know, we remove a lot of the engineering data book, bring the end user products conceptually to somebody that would have had to wait months to get the actual physical prototype, and we could get feedback well, Weaken have a better chance of making sure whatever product we're building is the right product when it ultimately gets delivered to a customer. So it's really it's a much larger market that has to be thought of rather than just the kind of selling A boxes software to an engineer. >>That's a great story. And again, it's gonna be exciting for you guys to see that with. The added resource is that you have a PTC, Um, so let's talk. I promise people we wanna talk about Atlas. Let's talk about the platform. A little bit of Atlas was announced last year. Atlas. For those who don't know it's a SAS space platform, it purports to go beyond product lifecycle management and you You're talking cloud like agility and scale to CAD and product design. But John, you could do a better job than I. What do >>we need to know about Atlas? Well, I think Atlas is a great description because it really is metaphorically sort of holding up all of the PTC applications themselves. But from the very beginning, when John and I met with Jim, part of what we were intrigued about was that he shared a vision that on shape was more than just going to be a cad authoring tool that, in fact, you know, in the past these engineering tools were very powerful, but they were very narrow in their purpose and focus. And we had specialty applications to manage the versions, etcetera. What we did in on shape is we kind of inverted that thinking. We built this collaboration and sharing engine at the core and then kind of wrap the CAD system around it. But that collaboration sharing and version ING engine is really powerful. And it was that vision that Jim had that he shared that we had from the beginning, which was, how do we take this thing to make a platform that could be used for many other applications inside of inside of any company? And so not only do we have a partner application area that is is much like the APP store or Google play store. Uh, that was sort of our first Stan Shih ation of this. This this platform. But now we're extending out to broader applications and much meatier applications. And internally, that's the thing works in the in the augmented reality. But there'll be other applications that ultimately find its way on top of this platform. And so they'll get all the benefits of of the collaboration, sharing the version ing the multi platform, multi device. And that's an extremely extremely, um, strategic leverage point for the company. >>You know, it's interesting, John, you mentioned the seaport before. So PTC, for those who don't know, built a beautiful facility down at the Seaport in Boston. And, of course, when PTC started, you know, back in the mid 19 eighties, there was nothing at the seaport s. >>So it's >>kind of kind of ironic, you know, we were way seeing the transformation of the seaport. We're seeing the transformation of industry and of course, PTC. And I'm sure someday you'll get back into that beautiful office, you know? Wait. Yeah, I'll bet. And, uh and but I wanna bring this up because I want I want you to talk about the future. How you how you see that our industry and you've observed this has moved from very product centric, uh, plat platform centric with sass and cloud. And now we're seeing ecosystems form around those products and platforms and data flowing through the ecosystem powering, you know, new innovation. I wonder if you could paint a picture for us of what the future looks like to you from your vantage point. >>Yeah, I think one of the key words you said there is data because up until now, data for companies really was sort of trapped in different applications. And it wasn't because people were nefarious and they want to keep it limited. It was just the way in which things were built. And, you know, when people use an application like on shape, what ends up happening is there their day to day interaction and everything that they do is actually captured by the platform. And, you know, we don't have access to that data. Of course it's it's the customer's data. But as as an artifact of them using the system than doing their day to day job, what's happening is they're creating huge amounts of information that can then be accessed and analyzed to help them both improve their design process, improve their efficiencies, improve their actual schedules in terms of making sure they can hit delivery times and be able to understand where there might be roadblocks in the future. So the way I see it is companies now are deploying SAS based tools like on shape and an artifact of them. Using that platform is that they have now analytics and tools to better understand and an instrument and manage their business. And then from there, I think you're going to see, because these systems are all you know extremely well. Architected allow through, you know, very structured AP. I calls to connect other SAS based applications. You're gonna start seeing closed loop sort of system. So, for example, people design using on shape, they end up going and deploying their system or installing it, or people use the end using products. People then may call back into the customers support line and report issues, problems, challenges. They'll be able to do traceability back to the underlying design. They'll be able to do trend analysis and defect analysis from the support lines and tie it back and closed loop the product design, manufacture, deployment in the field sort of cycles. In addition, you can imagine there's many things that air sort of as designed. But then when people go on site and they have to install it. There's some alterations modifications. Think about think about like a large air conditioning units for buildings. You go and you go to train and you get a large air conditioning unit that put up on top of building with a crane. They have to build all kinds of adaptors to make sure that that will fit inside of the particulars of that building. You know, with on shape and tools like this, you'll be able to not only take the design of what the air conditioning system might be, but also the all the adapter plates, but also how they installed it. So it sort of as designed as manufactured as stalled. And all these things can be traced, just like if you think about the transformation of customer service or customer contacts. In the early days, you used to have tools that were PC based tools called contact management solution, you know, kind of act or gold mine. And these were basically glorified Elektronik role in Texas. It had a customer names and they had phone numbers and whatever else. And Salesforce and Siebel, you know, these types of systems really broadened out the perspective of what a customer relationship? Waas. So it wasn't just the contact information it was, you know, How did they come to find out about you as a company? So all of the pre sort of marketing and then kind of what happens after they become a customer and it really was a 3 60 view. I think that 3 60 view gets extended to not just to the customers, but also tools and the products they use. And then, of course, the performance information that could come back to the manufacturer. So, you know, as an engineer, one of the things you learn about with systems is the following. And if you remember, when the CD first came out CDs that used to talk about four times over sampling or eight times over sampling and it was really kind of, you know, the fidelity the system. And we know from systems theory that the best way to improve the performance of a system is to actually have more feedback. The more feedback you have, the better system could be. And so that's why you get 16 60 for example, etcetera. Same thing here. The more feedback we have of different parts of a company that a better performance, The company will be better customer relationships. Better, uh, overall financial performance as well. So that's that's the view I have of how these systems all tied together. >>It's a great vision in your point about the data is I think right on. It used to be so fragmented in silos, and in order to take a system view, you've gotta have a system view of the data. Now, for years, we've optimized maybe on one little component of the system and that sometimes we lose sight of the overall outcome. And so what you just described, I think is, I think sets up. You know very well as we exit. Hopefully soon we exit this this covert era on John. I hope that you and I can sit down face to face at a PTC on shape event in the near term >>in the seaport in the >>seaport would tell you that great facility toe have have an event for sure. It >>z wonderful >>there. So So John McElhinney. Thanks so much for for participating in the program. It was really great to have you on, >>right? Thanks, Dave. >>Okay. And I want to thank everyone for participating. Today we have some great guest speakers. And remember, this is a live program. So give us a little bit of time. We're gonna flip this site over toe on demand mode so you can share it with your colleagues and you, or you can come back and and watch the sessions that you heard today. Uh, this is Dave Volonte for the Cube and on shape PTC. Thank you so much for watching innovation for good. Be well, Have a great holiday. And we'll see you next time. Yeah.

>>from around the globe. It's the Cube presenting innovation for good. Brought to >>you by on shape. Okay, welcome back to innovation. For good. With me is John McElheny, who is one of the co founders of on Shape and is now the VP of strategy at PTC. John, good to see you. Thanks for making the time to come on the program. Thanks, Dave. So we heard earlier some of the accomplishments that you've made since the acquisition. How has the acquisition affected your strategy? Maybe you could talk about what resource is PTC brought to the table that allowed you toe sort of rethink or evolve your strategy? What can you share with us? >>Sure. You know, a year ago when John and myself met with Jim Hempleman early on is we're we're pondering started joining PTC. One of things became very clear is that we had a very clear shared vision about how we could take the on shape platform and really extended for for all of the PTC products, particular sort of their augmented reality as well as their their thing works or the i o. T business and their product. And so from the very beginning, there was a clear strategy about taking on shape, extending the platform and really investing, um, pretty significantly in the product development as well as go to market side of things, uh, toe to bring on shape out to not only the PTC based but sort of the broader community at large. So So So PTC has been terrific. Terrific, um, sort of partner as we've we've gonna go on after this market together. Eso we've added a lot of resource and product development side of things. Ah, lot of resource and to go to market and customer success and support. So really, on many fronts, that's with both resource is, as well a sort of support at the corporate level from from a strategic standpoint and then in the field, we've had wonderful interactions with many large enterprise customers as well as the PTC channels. So it's been really a great a great year. >>Well, and you think about the challenges of your business going to sas what you guys, you know, took on that journey, you know, 78 years ago. Uh, it's not trivial for a lot of companies to make that transition, especially company. That's been around as long as PTC. So So I'm wondering how much you know, I was just asking you what PC PTC brought the table. E gotta believe you're bringing a lot to the table to in terms of the mindset, uh, even things is, is mundane is not the right word. But things like how you compensate sales people, how you interact with customers, the notion of a service versus a product. I wonder if you could address >>that. Yeah, it's a It's a really great point. In fact, after we had met Jim last year, John and I one of the things we walked out in the seaport area in Boston one of things we sort of said is you know, Jim really gets what we're trying to do here and and part of let me bring you into the thinking early on. Part of what Jim talked about is there's lots of, you know, installed base sort of software that's inside of PTC base. That helped literally thousands of customers around the world. But the idea of moving to sass and all that it entails both from a technology standpoint, but also a cultural standpoint, like how do you not not just compensate the sales people as an example? But how do you think about customers? Success? In the past, it might have been that you had professional services that you bring out to a customer, help them deploy your solutions. Well, when you're thinking about a SAS based offering, it's really critical that you get customers successful with it. Otherwise, you may have turned, and you know it will be very expensive in terms of your business long term. So you've got to get customers success with software in the very beginning. So you know, Jim really looked at on shape and he said that John and I from a cultural standpoint, you know, a lot of times companies get acquired and they've acquired technology in the past that they integrate directly into into PTC and then sort of roll it out through their products or their distribution channels, he said. In some respects, John John, think about it as we're gonna take PTC and we want to integrate it into on shape because we want you to share with us both on the sales side and customer success on marketing on operations, you know, all the things because long term, we believe the world is a SAS world, that the whole industry is gonna move too. So, really, it was sort of an inverse in terms of the thought process related to normal transactions >>on that makes a lot of sense to me. You mentioned Sharon turns the silent killer of a SAS company. And you know, there's a lot of discussion, you know, in the entrepreneurial community because you live this, you know, what's the best path? I mean, today, you see, you know, you you watch Silicon Valley double, double, triple triple. But but there's a lot of people who believe, and I wonder, if you come in there is the best path to, you know, in the X Y axis. If if it's if it's, uh, growth on one and retention on the other axis, what's the best way to get to the upper right on? Really, the the best path is probably make sure you've nailed obviously the product market fit, but make sure that you can retain customers and then throw gas on the fire. You see a lot of companies they burn out trying to grow too fast, but they haven't figured out, you know that. But there's too much churn. They haven't figured out those metrics. I mean, obviously on shape. You know, you were sort of a pioneer in here. I gotta believe you've figured out that customer retention before you really? You know, put the pedal to the >>metal. Yeah. And you know, growth growth can mask a lot of things, but getting getting customers, especially the engineering space. Nobody goes and sits there and says, Tomorrow we're gonna go and and, you know, put 100 users on this and and immediately swap out all of our existing tools. These tools are very rich and deep in terms of capability, and they become part of the operational process of how a company designs and builds products. So any time anybody is actually going through the purchasing process, typically they will run a try along or they'll run a project where they look at Kind of What? What is this new solution gonna help them dio. How are we gonna orient ourselves for success? Longer term. So for us, you know, getting new customers and customer acquisition is really critical. But getting those customers to actually deploy the solution to be successful with it. You know, we like to sort of, say, the marketing or the lead generation and even some of the initial sales. That's sort of like the Kindle ing. But the fire really starts when customers deploy it and get successful with the solution because they bring other customers into the fold. And then, of course, if they're successful with it, you know, then in fact, you have negative turn which, ironically, means growth in terms of your inside of your install Bates. >>Right? And you've seen that with some of the emerging, you know, SAS companies, where you're you're actually you know, when you calculate whatever its net retention or renew ALS, it's actually from a dollar standpoint that's up in the high nineties or even over 100% >>so and >>that's a trend we're gonna continue. See, I wonder if we could sort of go back. Uh, and when you guys were starting on shape, some of the things that you saw that you were trying to strategically leverage and what's changed, you know, today we were talking. I was talking to John earlier about in a way, you kinda you kinda got a blank slate is like doing another startup. You're not. Obviously you've got installed base and customers to service, but but it's a new beginning for you guys. So one of the things that you saw then you know, cloud and and sas and okay, but that's we've been there, done that. What are you seeing? You know, today? >>Well, you know, So So this is a journey, of course, that that on shape on its own has gone through. And had, I'll sort of say, you know, several iterations, both in terms of of of, you know, how do you How do you get customers? How do you How do you get them successful? How do you grow those customers? And now that we've been part of PTC, the question becomes okay, One, there is certainly a higher level of credibility that helps us in terms of our our megaphone is much bigger than it was when we're standalone company. But on top of that now, figuring out how to work with their channel with their direct sales force, you know, they have, um, for example, you know, very large enterprises. Well, many of those customers are not gonna go in forklift out their existing solution to replace it with with on shape. However, many of them do have challenges in their supply chain and communications with contractors and vendors across the globe. And so, you know, finding our fit inside of those large enterprises as they extend out with their their customers is a very interesting area that we've really been sort of incremental to to PTC. And then, you know, they they have access to lots of other technology, like the i O. T business. And now, of course, the augmented reality business that that we can bring things to bear. For example, in the augmented reality world they've they've got something called expert capture. And this is essentially imagined, you know, in a are, ah, headset that allows you to be ableto to speak to it but also capture images, still images in video, and you could take somebody who's doing their task and capture literally the steps that they're taking its geo location and from their builds steps for new employees. We'll learn and understand how todo use that technology to help them do their job better. Well, when they do that if there is replacement products or variation of of some of the tools that that they built the original design instruction set for they now have another version. Well, they have to manage multiple versions. Well, that's what on shape is really great at doing and so taking our technology and helping their solutions as well. So it's not only expanding our customer footprint, it's expanding the application footprint in terms of how we can help them and help customers. >>So that leads me to the tam discussion. And again, it was part of your strategist role. How do you think about that? Was just talking to some of your customers earlier about the democratization of cat and engineering. You know, I kind of joked, sort of like citizen engineering, but but so that, you know, the demographics are changing the number of users potentially that can access the products because the it's so much more of a facile experience. How are you thinking about the total available market? >>It really is a great question, you know, It used to be when you when you sold boxes of software, it was how many engineers were out there, and that's the size of the market. The fact that matter is now when, When you think about access to that information, that data is simply a pane of glass. Whether it's a computer, whether it's a laptop, uh, a cell phone or whether it's a tablet, the ability to to use different vehicles, access information and data expands the capabilities and power of a system to allow feedback and iteration. I mean, one of the one of the very interesting things is in technology is when you can take something and really unleash it to a larger audience and builds, you know, purpose built applications. You can start to iterate, get better feedback. You know, there's a classic case in the clothing industry where Zara, you know, is a fast, sort of turnaround agile manufacturer. And there was a great New York Times article written a couple years ago. My wife's a fan of Zara, and I think she justifies any purchases by saying, you know, was Are you gotta purchase it now. Otherwise it may not be there the next time. Yet you go back to the store. They had some people in the store in New York that had this woman's throw kind of covering Shaw, and they said, Well, it would be great if we could have this little clip here so we could hook it through or something. And they sent a note back toe to the factory in Spain and literally two weeks later they had, you know, 4000 of these things in store, and they sold out because they had a closed loop and iterative process. And so if we could take information and allow people access in multiple ways through different devices and different screens, that could be very specific information that, you know, we remove a lot of the engineering data book, bring the end user products conceptually to somebody that would have had to wait months to get the actual physical prototype, and we could get feedback. Well, Weaken have a better chance of making sure whatever product we're building is the right product when it ultimately gets delivered to a customer. So it's really it's a much larger market that has to be thought of rather than just the kind of selling a boxes off where to an engineer, >>that's a great story, and and again, it's gotta be exciting for you guys to see that on day with the added resource is that you have a PTC eso. Let's talk. I promise people we want to talk about Atlas. Let's talk about the platform. A little bit of Atlas was announced last year. Atlas. For those who don't know it's a SAS space platform, it purports to go beyond product lifecycle management and you you're talking cloudlike agility and scale to CAD and product design. But, John, you could do a better job than I. What do >>we need to know about Atlas? Well, I think Atlas is a great description because it really is metaphorically, sort of holding up all of the PTC applications themselves. But from the very beginning, when John and I met with Jim, part of what we were intrigued about was that he shared a vision that on shape was more than just going to be a cad authoring tool that, in fact, you know, in the past, these engineering tools were very powerful, but they were very narrow in their purpose and focus, and we had specialty applications to manage diversions, etcetera. What we did in on shape is we kind of inverted that thinking we built this collaboration and sharing engine at the core and then kind of wrap the CAD system around it. But that collaboration sharing and version ING engine is really powerful. And it was that vision that Jim had that he shared that we had from the beginning, which was, how do we take this thing to make a platform that could be used for many other applications inside of inside of any company? And so not only do we have a partner application area that is is much like the APP store or Google play store. Uh, that was sort of our first misty initiation of this this this platform. But now we're extending out to broader applications and much meatier applications. And internally, that's the thing works in the in the augmented reality. But there'll be other applications that ultimately find its way on top of this platform, and so they'll get all the benefits of of the collaboration, sharing the version ing the multi platform multi device. And that's an extremely extremely, um, strategic leverage point for the company. >>You know, it's interesting, John, you mentioned the seaport before, So PTC For those who don't know built a beautiful facility down at the seaport in Boston. And of course, when PTC started back in the mid 19 eighties, this there was nothing at the seaport s. >>So it's >>kind of kind of ironic, you know, we were way seeing the transformation of the seaport. We're seeing the transformation of industry and of course, PTC. And I'm sure someday you'll get back into that beautiful office, you know? Wait. Yeah, I'll Bet. And, uh and but I wanna bring this up because I want I want you to talk about the future. How you how you see that our industry and you've observed this has moved from very product centric, uh, plat platform centric with sass and cloud. And now we're seeing ecosystems form around those products and platforms and in data flowing through the ecosystem, powering you new innovation. I wonder if you could paint a picture for us of what the future looks like to you from your vantage point. >>Yeah, I think one of the key words you said there is data because up until now, data for companies really was sort of trapped in different applications. And it wasn't because people with nefarious and they want to keep it limited. It was just the way in which things were built, and you know, when people use an application like on shape, what ends up happening is there their day to day interactions and everything that they dio is actually captured by the platform. And you know, we don't have access to that data. Of course it's it's the customer's data. But as as an artifact of them using the system than doing their day to day job, what's happening is they're creating huge amounts of information that can then be accessed and analyzed to help them both improve their design process, improve their efficiencies, improve their actual schedules in terms of making sure they can hit delivery times and be able to understand where there might be roadblocks in the future. So the way I see it is, companies now are deploying SAS based tools like an shape and an artifact of them. Using that platform is that they have now analytics and tools to better understand and an instrument and manage their business. And then from there, I think you're going to see, because these systems are all you know extremely well. architected allow through, you know, very structured AP. I calls to connect other SAS based applications. You're gonna start seeing closed loop sort of system. So, for example, people design using on shape. They end up going and deploying their system or installing it, or people use the end using products. People then may call back into the customers support line and report issues problems, challenges. They'll be able to do traceability back to the underlying design. They'll be able to do trend analysis and defect analysis from the support lines and tie it back and closed loop the product design, manufacture, deployment in the field sort of cycles. In addition, you can imagine there's many things that air sort of as designed. But then when people go on site and they have to install it, there's some alterations modifications. Think about think about like a large air conditioning units for buildings. You go and you go to train and you get a large air conditioning unit that put up on the top of building with a crane. They have to build all kinds of adaptors to make sure that that will fit inside of of of the particulars of that building. You know, with on shape and tools like this, you'll be able to not only take the design of what the air conditioning system might be, but also the all the adapter plates, but also how they installed it. So it sort of as designed as manufactured as stalled. And all these things can be traced just like if you think about the transformation of customer service or customer contacts. In the early days, you used to have tools that were PC based tools called contact management solution, you know, kind of act or gold mine. And these were basically glorified Elektronik role in Texas. It had a customer names, and they had phone numbers and whatever else. And Salesforce and Siebel, these types of systems really broadened out the perspective of what a customer relationship waas. So it wasn't just the contact information it was, you know, How did they come to find out about you as a company? So all the pre sort of marketing and then kind of what happens after they become a customer and it really was a 3 60 view. I think that 3 60 view gets extended to not just to the customers, but also tools and the products they use. And then, of course, the performance information that could come back to the manufacturer. So, you know, as an engineer, one of the things you learn about with systems is the following. And if you remember, when the 501st came out CDs that used to talk about four times over sampling or eight times over sampling and it was really kind of, you know, the fidelity the system. And we know from systems theory that the best way to improve the performance of a system is to actually have more feedback. The more feedback you have, the better system could be. And so that's why you got 16 60 for example, etcetera. Same thing here. The more feedback we have of different parts of a company that a better performance. The company will be better customer relationships, better overall financial performance as well. So that's that's the view I have of how these systems all tied together. >>The great vision in your point about the data is, I think, right on. It used to be so fragmented in silos, and in order to take a system view, you've gotta have a system view of the data. Uh, for years we've optimized maybe on one little component of the system and that sometimes we lose sight of the overall outcome. And so what you just described, I think is, I think sets up. You know very well as we exit. Hopefully soon we exit this this covert era on John. I hope that you and I can sit down face to face at a PTC on shape event in the near term. Who's >>in the seaport in the >>seaport Would tell you that great facility toe have have an event for sure. It >>z wonderful >>there. So So, John McElhinney. Thanks so much for for participating in the program. It was really great to have you on. >>Right. Thanks, Dave. >>Okay. And I want to thank everyone for participating. Today. We have some great guest speakers. And remember, this is a live program, so give us a little bit of time. We're gonna flip this site over to on demand mode so you can share it with your colleagues and you, or you can come back and and watch the sessions that you heard today. Uh, this is Dave Volonte for the Cube and on shape PTC. Thank you so much for watching innovation for good. Be well, have a great holiday and we'll see you next time.

I literally retitled my PowerPoint presentation which was previously called smart packaging to find a way to get the word internet in and the way I do that was I wrote Internet of Things and I got my money and I founded a research center with Procter & Gamble's money and MIT just up the road here and basically took the PowerPoint presentation with me all over the world commits other people to get on board big people buying a lot of media and there's a lot of discussion in politics about whether or not you know billionaires buying media are problems and what that's gonna mean in terms of the message that's gonna be reported to people that's gonna always be an issue but I think even with that that's why it's even more empowering that the individuals are taking more control over their own narratives biggest sort of takeaway is to see and actually joy is to see companies from different walks of life working together you have robotics companies you have AI companies you have industrial companies all of them are coming up with solutions together and that's basically what we want to see is breaking the barriers and multiple companies working together to moving you [Music]

>> (Announcer) From Boston, Massachusetts, it's the Cube! Covering LiveWorx 18. Brought to you by PTC. >> Welcome back to the Seaport in Boston, everybody. This is day one of the LiveWorx show, PTC's big IoT user conference, but it's much, much more than that. My name's Dave Vellante, Stu Miniman. You're watching the Cube, the leader in LiveTech coverage. It's really our pleasure to have Devin Cleary here, he's the Director of Events at PTC. Dev, thanks so much for coming on The Cube, and thanks for putting together such a great show. >> Oh, thank you so much for having me. This is great. >> You're welcome. So, I say it's a user conference, but it's so much more. I mean, talk about what your intent was and what you've created, you and your team at LiveWorx. >> Absolutely. So for us, we take a step back in corporate events. And we're really trying to bring sort of a unique flair to the corporate events world. In a nutshell, we at PTC have a 25 year legacy of doing really powerful user events, and it was really an inspiration two years ago to kind of shake the mold. And again, no pun intended, be disruptive in the marketplace. So for us, we sort of coined a new term or strategy that we call Industry Inclusiveness. And this is something where we wanted to sort of break down the four walls of the company, and invite industry influencers, individuals who are leading the charge, inclusive of actual competitors, 'cause for us, it's better together. And the whole story and talk track around LiveWorx is collaboration accelerates innovation. So for us, we want to make sure we embrace a lot of different people, walks of life, and diversity, and the intent is to create a one time a week a year, successful program that focuses and profiles nine of the most disruptive technologies on the planet. So this is everything from robotics to AI, to IoT, to AR, blockchain, and so much more. And for us, this is really the essence of what LiveWorx has become, which again for us, we want everyone to know that this event is sort of the world's most respected digital transformation conference. >> So, couple things I want to point out. Well, so over 6,000 people here, the kickoff was in the theater-in-the-round I've only seen that-- We do over a hundred events every year, I've only seen it done twice, and it's worked both times. I think it's a home run when you do the theater-in-the-round. The intro was like, I tweeted out this morning, it was like an Olympic opening ceremony. I mean really, where do you get your inspiration from that? >> So, you know what, for us, I have a really amazing team that works with me and collaboratively. And for us, we really want to sort of challenge the status quo. So, we always look for things actually outside of the tech bubble, if you will. We look at music. We look at fashion. We look at art. We look at a lot of pop culture sort of references and that sort of stems our ideas of how we sort of nurture and create what we call the apex, or LiveWorx or what you saw this morning. And for us, I'm all about what I call delight moments. So these are moments that frankly are sort of above and beyond the core content of what the conference offers and just making people have a great time. Showmanship and entertainment is just as much important as the core again content that we offer at LiveWorx. >> Dev, you've got a big tent here with a lot of different topics. There's a show I go to, we talk about the random collision of unusual suspects, which this reminded me of. Can you talk a little bit about how in these diverse communities, yet we should see some overlap and some bumping together. >> Yeah. Absolutely. So, again with LiveWorx, and sort of again profiling these nine to ten most disruptive technologies out there, we're always trying to recruit people that are very diverse from various backgrounds. You know, one specific goal that we have, just from a geographic persepective is making sure that over half our audience is from international markets outside of the United States. So again, when you're bumping shoulders or walking the halls everywhere around us, you're guaranteed to hear someone that comes from a different walk of life, a different experience, a different educational background and that adds a lot of value to the overall conference. Now, again, we target everyone from administrators to engineers, developers and more because really this show runs the gamut on everything from product design and sort of the ideas of what you want to do, all the way through service, manufacturing, it is the full scope of industry 4.0. So, to your point, there's a lot of intersection and a lot of overlapping because every company, every person, every individual, wants to experience and learn how to embrace what we call disruptive tech. >> You know, again, we do a lot of shows and the vast majority, when someone like you guys brings us to a show, they want to showcase their products and basically pimp up their own stuff. You chose a different approach. First of all, thank you for that. So, this today has been all about thought leadership. Stu and I were saying it reminds us of some of the stuff we do with MIT. Where you have professors, you have thought leaders, talking about not, kind of frankly, some boring products. >> And it's not a sales pitch. >> Right, it's not a sales pitch. But, why that decision and what's your vision for where you want to take this thing? >> Yeah, so again, I would say that a lot of conferences, and this is no offense to my brothers and my sisters in the events world out there, but people are so sick and tired of going to the standard trade show. The days of pipe-and-drape and aisles of just being pitched to and receiving free stress balls, and hiring staff that might not even be employed by the company, but they just frankly look good, those days are completely over. In our audience, the technologists who really matter in this world, who are doing a lot of great work, they want that substance and that core content. So, for us, it's really a vision about that's embraced and sort of evolved into give back and let the content lead your success. And that is going to help amplify the voice and further the mission. We look at LiveWorx as a catalyst well beyond the company that employs me and the people that work for just these companies. We have a vision to make Boston an epicenter, a headquarters, a world-renown attraction for technologists world-wide knowing this city for IoT and for AR. And for us, we embrace the innovation district as that pallet, that backdrop, that environment to allow us to really accomplish that. So, LiveWorx is growing exponentially. We experienced double digit growth this year, which was amazing. Starting where I was only with this company two years ago and less than 25 hundred attendees and we're at 6,100 right now live on the show floor at LiveWorx. So the future is really bright for us, and we're embracing this notion of the convention center is only going to be constricting for so long. It's time that we also implode those four walls and we embrace the outside. And what our plans are going for, which I'm really excited to sort of announce, is we're going to be now becoming more of an industrial innovation week in Boston, and taking our plans mainstream. So, that means taking the content that we focus on, and the partners that we work with, and the industry thought leaders and now you start to actually replicate these events throughout the entire seaport. So, think of it, and again most of you know South by Southwest, I'm a big fan and an avid follower, think of it South by Southwest meets Industrial, and that is the future of this show. >> Love it, and you know, we're thrilled to be part of it. And it's palpable. You actually see now, in the seaport... You know, we were talking off camera, you can't compete with Silicon Valley or on terms with Silicon Valley does. You shouldn't even try. We're bicoastal, we have an office in Palo Alto we know it well. It's a unique vortex. But certainly, IoT, Blockchain, VR, there really is some clear innovation going on here so, if you can focus on that, you can actually really blossom an ecosystem and that's really what you're doing. >> Oh, absolutely. And, again, PTC has been headquartered here for over 25 years, they're a leader in industrial innovation. They're a company that believes in giving back. We have curated and nurtured through partnerships with Harvard Business School, with MIT Innovation Lab, etc. We have cultivated some of the greatest startups of our time right now, who are creating groundbreaking technology in IoT, in AR, that is changing the world. We're even actually doing work right now in our backyard with Boston Children's Hospital, for example. Doing incredible work with our Vuforia product in AR that's helping actually find a cure for Alzheimer's. So, again, the possibilities are endless, and the innovation is limitless. >> Well, you're the hot company right now, obviously growing very rapidly, you're kind of like the Comeback Kid. You're clearly punching above your weight. The Scott Kirsner article in the Globe was unbelieveable. >> (Devin) Thank you I know we're very... Shout out to Scott. >> And so, you got to be thrilled with that. But, what's interesting to me, Dev, is you're not... You could ride that wave, and just pump up PTC but you're doing things that will allow you to sustain this as a community member, paying it forward, you know, it's kind of a cliche, but that's what I see. Thoughts? >> A hundred percent. And, again, the way that we sort of frame LiveWorx is I want you to think of PTC as the presenting sponsor. They are an investor in the vision that this team has to carry forward the community and the movement all around industrial innovation. And again, we feel that Boston being sort of our headquarters in our backyard, it's important that we're giving back and again, furthering that opportunity to further solidify our right as a rightful heir of IoT and AR, as a city, as a community and as the state of Massachusetts. >> Dev, wondering if you could give our audience that didn't come to this event a quick flavor of what's going on, flavoring and I loved you had the Boston food trucks all right outside. They're a little warm. My friends from the west coast are like, "This isn't warm." But for Boston, it hit summer. But, give us a quick tour around what people missed. >> Yeah, so we're all about an immersive experience at LiveWorx. Again, you're going to have sort of a checklist of what you absolutely need to have at an event to sustain someone's expectations. So, the content, the networking, the value. But again, we like to take it a step further and things that I call delight moments. So, for example, this year in Extropolis, and Extropolis, for those of you at home, that is our sort of expectation shattering, ground-breaking, playground for adults in technology. So, every corner, every ounce, every inch of this show floor has something to engage, ignite the 5 senses and tell our story. And one example specifically that I love to highlight this year is I've actually created the vision with a whole slew of individuals from PTC and partners and whatnot. Something we call the X-factory. Manufacturing is one of the biggest industries in business in the world. Mostly every company at an enterprise level has some sort of manufacturing component to it. And what we wanted to do this year is create the factory of the future. Meaning, working with the leaders like McKinsey, and again HeroTech and global brands in Germany who are defining manufacturing and who founded manufacturing in our history, we have partnered with them to say, "What does that factory of the future look like? What are companies going to be doing five, ten, fifteen years from now and what can we expect?" You're getting that first at LiveWorx, which is awesome, and the whole process is "Let's not have a standard kiosk. Let's not do a laptop with a video. Let's actually build out a 20,000 square foot industrial factory with multiple stations from digital engineering to service to again, AR induced digital twins and everything else in between. And let's actually have every single attendee create, design and manufacture a smart connected product. We're working with our partner, Bell and Howell, from a shipping, service and supply chain perspective, and again, we are blowing the roof off this show on that one activation, and there's over a hundred in total throughout this entire show this week. So, that's a little bit of a flavor of LiveWorx. And beyond that, we do things, everything from a puppy daycare hour to sort of do a high tech low touch feel. We do incredible food presentations and we're going to be ending with a big bang tomorrow with our closing party called the Mix-It Six, which is one of my favorite programs the entire week. And that is actually a superhero themed event where we're actually having a guest host and a personal friend, Paul Rudd, who was the Ant Man for Marvel, he'll be hosting our event. And the whole notion around superheroes is that we tell everyone this week "Unleash your inner superhero". Take advantage of the technology that is on display, and realize how it can enable and empower you to now have superhuman powers. So, everything from AR giving you the power to see the invisible, to IoT helping you get the power to predict the future. Everything is possible and everything is creative at LiveWorx. >> Well, it's obviously working. And so, I'm sure the execs are seeing this going, "Great. Good Job. Way to go. We've got some momentum. Let's double down." But, you back up two years ago, how did you sell this to the folks? Cause we see a lot of guys like, "Alright, how many leads we going to get out. How much revenue we going to drive" How'd you get through that knothole? >> So, let's put it in this perspective. There's a lot of intrinsic and intangible ways to measure the success of a show, and the value and the impact brought to a company. One thing I would actually say, I've worked in the tech industry for over six years now, I've been in the events business for over a decade, I've worked for some of the most incredible and impressive, and media-driven startups in the world right now. PTC, though, is a very interesting ecosystem. Their executives actually embrace the notion of what I presented first and foremost, about again, industry inclusiveness as we call that term. And for us, we have a vision at PTC to be disruptive, to be ground-breaking. If we do not embrace that ourselves, as our culture and our business model, how do we hope someone else to believe in the product, and the vision and the mission that we set forth in the marketplace. >> And from that, you got a response of, "Yeah, let's do it." >> So, again, am I going to be a hundred percent honest and transparent? Was everyone embracing that a hundred percent? No. But again, I think the proof is in the pudding and I think again it's a leap of faith in saying, "Listen, take a chance. Be disruptive, and see what the product of our fruits of our labor could be." And again, here you have it three years later, triple the size of the audience, tripling the size of the success, seeing multiple customers, multiple partners multiple industry leaders now attaching themselves to this brand. So for us, LiveWorx is nothing greater than a record breaking success this year, and I'm so excited for the rest of you at home to experience on the live stream, or again check out 2019 June 10-13. >> June 10, right here. Right? >> (Devin) Right here again. >> Dev, first of all thanks so much for having The Cube here and making us a part of this awesome event and look forward to working with you in the future. Congratulations on all your success. >> Thank you so much. >> You're very welcome. By the way, check out thecube.net that's where all the videos here will be. Check out siliconangle.com all the editorial coverage. Wikibond.com is where the research is. We're a wrap here from LiveWorx day one. Dave Vellante, for Stu Miniman. Thanks so much for watching, we'll see you next time.

from Boston Massachusetts it's the cube covering LIBOR X 18 brought to you by ptc welcome back we're at the Seaport in Boston at live works PTC's big IOT show this is the cube the leader in live tech coverage I'm Dave Volante with my co-host to minimun Doug Smith is here is the CEO of Tech's market he's joined by Linda Salinas was the VP of Operations folks welcome to the cube great to see you happiness you're very welcome having us so what do you think Big Show here the first time we've been at live works a lot of good energy keynote this morning was like an Olympic you know opening ceremony how's the show been the show has been fantastic and again thank you for having us here for us at texmarq being able to see all the different technologies that are being employed here in the United States and around the world has just been fantastic for us that's been really exciting I enjoyed the keynote speakers in the opening session and I I got a lot of inspiration from that I just wanted to go right back to the planned and use some of the things that we saw early on already so we do a lot of these tech events as you know and we talk a lot of tech but people process technology it's the process and technolon process parts that we don't spend enough time on we kind of give it lip service say hey those are really important but let's talk tech let's talk about people and culture maybe the start yeah from an Operations standpoint how do you get people to think about change well we don't think of it as change we think of it as we are doing something now and we need a tool to do whatever it is that we're doing it better and early on when we partnered up with HPE and they said hey we have some IOT solutions to introduce you to I thought oh that's great and I said well why don't you and Doug come out to the our innovation laboratory and Tomball and take a look at the lab and see some ideas and I said well that's great can I bring some friends and they said sure said can I bring 15 friends and they said sure so we rented a party bus and we loaded up people from our ops and maintenance and engineering and lab and admin and we went there and we first sat in on a lecture about what IOT was and then when we saw the lab in the smart city and the medical applications and so forth that all of these all look familiar but then we saw the demo of the censored pump and that just saying to everyone they said wow we have a hundred of those in the plant let's go do that tell me about that and so it wasn't about us implementing changes saying hey here's this new thing go use it it was it was about them seeing what they wanted to do and bringing it back to the plan saying this is what we're going to do boss yes so Doug you guys are actually heading out to discover shortly right yes sir so I've talked about your relationship with those guys it sounds like it's it's growing how is it going sure so once again it's all about people and as Linda said this this journey began with a conversation with HPE and now we have a collection of 13 different ecosystem partners who are helping us with these five different use cases that are built on top of this technology foundation that was supported by HPE so we have CB technology we have a Deloitte we have Flo serve we have any number of people that can help PTC I mean this is a PTC event certainly how they are helping with these different use case solutions and so going out to Las Vegas Nevada we are going to continue this story about people I think the strongest part of this story is that it has been we have encountered bumps along the road where we've had to work together it isn't like the movies where the IOT saves the day we have to deal with it and struggle with it would you agree yeah and that it has been a journey but going back to the people it is about having the partners come to us and say this is what we need to do to implement it we need to install these sensors we need to install the antenna we need to have line of sight to the wireless access points and so forth but from the beginning it wasn't about a contractor or two or three or all of the partners coming in to texmarq and installing everything and then giving us the key and say turn it on we included our employees in the installation process so they know how the sensors went in they know how to adjust the antenna they know on a first name basis all the tech contacts within all of our ecosystem partners so this is not a Linda and Doug project it is their project they have ownership and what's been fun to see evolve over time is that now you know the refinery of the future has become a noun or a verb so they will say hey let's ROTF this problem how can our OTF help us make this process better more efficient so it's really been exciting to see that come back at us yeah so wonder if you could bring us inside a little bit I hear 13 partners and worried a little bit there's the integration there's the training there's the support it sounds like you're happy with it but for for those that haven't gone through it what what did you learn and you know how does that work sure and this is kind of colloquial talk here but what we say at text mark is the first thing that we've learned is you have to get nekkid you have to say here are the problems that we have how can we all work together you have to have this honesty and you have to feel comfortable with the partners and we have set a standard from the get-go of here are our expectations clearly stating those expectations and we have had some partners that have come in and it just hasn't worked out so this clear communication setting achievable goals and when we encounter problems address them immediately and I think that's one of the things that's made us successful did it can we talk about the refinery the future paint a picture for us what's what's the refinery of the past and what was the for finery the future well I think the refinery in the past and the future at its core is still refining we have at texmarq chemicals where a petrochemical manufacturers so we primarily produced through distillation and reaction but at any refinery or petrochemical entire your distillation tower your crackers your reactors loading tank storage and so forth so that's a refinery past present and future but the future one I think employs IOT and technology to do what we're already doing today better you know I think about when I get a coupon in the mail and it's like hey you know one buy one get one free on potato chips so I don't even put a tow chips but that coupons gonna make me go buy potato chips well it's not that way with IOT we don't see a solution to go let's go start doing this in the plant because this IOT thing is really cool it's just the converse we're already have connected workers we're already using two-way radios and clipboards and spreadsheets and whatever but the refinery of the future uses IOT to connect us with technology so that we're doing it better and faster and safer how about the data agenda yeah 13 partners as Stu said you've got a desire to capture the data and analyze it make things better your partners do how do you guys approach the analytics side of this and the data side so I like to think of data I one of the meetings that we had when we started down this road I was sitting in my office and we had three different groups in there and there was one gentleman I was watching you is shaking his head and he goes this is a goldmine and I immediately focused in on them and said what what is this goldmine of what you speak here and and just being able to have for example our one of our main processes is for a chemical called dicyclopentadiene tea DCPD as we move along in this project we want to be able to censor the seven pumps that are involved in that process from putting it into the feed stock tank to put in it out on a railcar and being able to tweak it and find that sweet spot and to monetize that Linda could you go in yeah I think also too from a contract manufacturing standpoint we'll have one of the super majors that are that are that are refiners or chemical manufacturers themselves and want us to produce product for them on their behalf and I think that the data part part of our competitive edge is to be able to offer an IOT adder kind of like would you like fries with that to add IOT on to the project that they're approaching us with and say hey would you like IOT with that supersize it yes exactly yes and so and they're like oh tell me more and in fact we had a one-on-one meeting with a potential client when we discovered Madrid and and so now we're having commercial conversations with them about contract manufacturing but because they're so interested in IOT they want to add an IOT element to that and so then we can either surcharge or up charge for that contract manufacturing by the pound we will learn to optimize our processes on their behalf and then we share or sell the data to them they become the owners of it that's a that's a direct monetization as a value creation for the customer that they're willing to pay for yeah yeah that's cool well I think one of the altruistic aspects of what we're trying to do at texmarq is within multiple industries you have this this grain of the population so of the workforce is retiring out and with them they're taking years and years of tribal knowledge so you may have an operator who knows when you're doing this process you need to turn the that you need to adjust that valve this much and to be able to gain that information and pass it to the younger people coming in and then to show with in the petrochemical 'ti that we are utilizing technology this isn't the technology excuse me the refinery of the past this is a job in which you can use cutting-edge technology use this this feels like I was talking we were talking earlier one of our guest it but this whole IOT space it seems like it's not I mean it's disruptive in this in the sense that you seem to be doing a lot of things differently but as you were saying Linda refiners still a refinery so the ecosystem of that refinery to me anyway seems to like largely stay intact it's just a matter of embracing these new processes and changes in culture and obviously technology so the incumbents it feels like they're in a pretty good position is that a reasonable premise or am I missing something no I think I think I think you're right yeah yeah I think about one of the things that I heard in the keynote was that we are one of the early adopters and so I feel like it's part of our responsibility to share our story and to share the lessons learned right absolutely Linda and so she hits on something that humbles me is one of the things that we offer are these showcase tours where we have super majors come to texmarq and we have to censored pumps and there they are so enthralled about us showing it to them that to us we just say we want to show we want to be inclusive we want to be leaders and and so it's a great feeling so anytime we talk about IOT security something that comes up and you know in your line of work also we think safety for your workers but something that also of wonder if you could talk about those dual lasses paramount would you yes my eyes get big and that's where my heart is and I've been in with techsmartt for 23 years and I spent about 18 years doing environmental health and safety compliance and the thing about our five use cases is I can in my mind anyway tie them all back to reducing risk and improving worker safety and reducing our risk our environmental risk and impact the community so connected worker they're connected we either know where they are we know what they're doing we provide them information to make informed decision we have safety and security to be able to direct them in case of an emergency either to go towards emergency if you're a responder or away from it if you are not or if there's a person that fell from a height we know exactly where they are so we can go render aid because they can't raise their hand and say I'm hurt so all of these use cases advanced video analytics to know if we have a hydrocarbon leak or if there's someone crossing our property line whether it's a coyote or a person or someone that doesn't belong on our side of the fence they each have their own application but they all have some sort of tied to reducing risk and improving safety so it's sensors that can detect that type of movement you're not instrumenting humans right it's no no that's right same activity yeah what about now you've got everything connected now is there any concern that rogue agents could you know somehow do something malicious so we take a great deal or we pay a great deal of attention to security of data because that's our secret sauce that's how we are profitable within the world so we have we have put in all sorts of security measures from the sensor to the I walk to the the compute and what I continue to learn is it's a constant battle and so we have to it is something we have to be vigilant about so so what's next what should we look for from texmarq this whole space what are some of the milestones maybe that we should be paying attention to in terms of milestone I'm really excited about the the connected worker tool which allows different personas to approach for example an asset like a pump and Linda could be the CFO and I could be a millwright and we'd be looking at the same piece of equipment and I as a millwright would be getting data what type of service that pump needs and then Linda is the CFO could get financial information about when that pump fails or we're predicting failure in three months that pump will cost X number of dollars in the downtime will cost homesman exactly to the whole production procedure so and the other thing is I'd like to see us develop this use case to the video as a sensor we're working with Intel on that one and so they're excited about testing their equipment as well so and that's another area because we're looking at putting on our railcar loading area involving our railcar loaders on exactly where we should put them what we should look for what they think are the risks in the railcar loading area and so it's really just more of the same kind of continuing to involve our employees and having these projects and become theirs great well Linda and have a great trip to Vegas say hi to our friends from HPE and thanks so much for coming back in the cube really please so much you're welcome I keep it right there everybody stew and I'll be back where the next guest from Boston at live works we'll be right back [Music]

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

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

>> From Boston, Massachusetts, it's the Cube, covering LiveWorx 18, brought to you by PTC. (light electronic music) >> Welcome back to Boston, everybody. This is the Cube, the leader in live tech coverage. We're covering day one of the LiveWorx conference that's hosted by PTC. I'm Dave Vellante with my cohost Stu Miniman. Professor Linda A. Hill is here. She's the Wallace Brett Donham Professor of Business Administration at the Harvard Business School. Professor Hill, welcome to the Cube. Thanks so much for coming on. >> Thank you for having me. >> So, innovation, lot of misconceptions about innovation and where it stems from. People think of Steve Jobs, well, the innovation comes from a single leader and a visionary who gets us in a headlock and makes it all happen. That's not really how innovation occurs, is it? >> No, it is not, actually. Most innovation is the result of a collaboration amongst people of different expertise and different points of view, and in fact, unless you have that diversity and some conflict, you rarely see innovation. >> So this is a topic that you've researched, so this isn't just an idea that you had. You've got proof and documentation of this, so tell us a little more about the work that you do at Harvard. >> So really over 10 years ago, I began to look at the connection between leadership and innovation, because it turns out that like a lot of organizations, the academy is quite siloed, so the people studying innovation were very separate from the ones who studied leadership, and we look at the connection between the two. When you look at that, what you discover is that leading innovation is actually different from leading change. Leading change is about coming up with a vision, communicating that vision, and inspiring people to want to fulfill that vision. Leading innovation is not about that. It's really more about how do you create a space in which people will be willing and able to do the kind of collaborative work required for innovation to happen? >> Sometimes I get confused, maybe you can help me, between invention and innovation. How should we think about those two dimensions? >> Innovation and invention. The way I think about it is an innovation is something that's both an invention, i.e. new, plus useful. So it can be an innovation or it can be creative, but unless it's useful and addresses an opportunity or a challenge that an organization faces, for me, that's not an innovation. So you need both, and that is really the paradox. How do you unleash people's talents and passions so you get the innovation or the invention or the new, and then how do you actually combine that, or harness all of those different ideas so that you get something that is useful, that actually solves a problem that the collective needs solved? >> So there's an outcome that involves changing something, adoption, as part of that innovation. >> For instance, one of the things that we're doing a lot right now is we're working with organizations, incumbents, I guess you'd call them, that have put together these innovation labs to create digital assets. And the problem is that those digital assets get created, they're new, if you will, but unless the core business will adopt them and use them, they get implemented, they're not going to be useful. So we're trying to understand, how do you take what gets created in those innovation labs, those assets, if you will, and make sure that the organization takes them in and scales them so that you can actually solve a business problem? >> Professor Hill, a fascinating topic I love digging into here. Because you see so many times, startups are often people that get frustrated inside a large company. I've worked for some very large companies, so which have had labs, or research division, and even when you carve aside time for innovation, you do programs on that, there's the corporate antibodies that fight against that. Maybe talk a little bit about that dynamic. Can large companies truly innovate? >> Yes, large companies can truly innovate. We do see it happening, it is not easy by any means, and I think part of the dilemma for why we don't see more innovation is actually our mindset about what leadership is about and who can innovate. So if I could combine a couple of things you asked, invention, often when we talk to people about what is innovation, they think about technology, and they think about new, and if I'm not a technologist and I'm not creative, then I can't play the game. But what we see in organizations, big ones that can innovate, is they don't separate out the innovators from the executors. They tell everybody, guess what, your job no matter who you are, of course you need to deal with making sure we get done what we said we'd deliver, but if we're going to delight our customers or we're ever going to really get them to be sticky with us, you also need to think about not just what should you be doing, but what could you be doing. In the literature, in the research, that's called how do you close an opportunity gap and not just a performance gap? In the organizations we look at that are innovative, that can innovate time and again, they have a very democratic notion: everybody has a role to play. So our work, Collective Genius, is called Collective Genius because what we saw in Pixar was the touchstone for that work, is that they believe everybody has a slice of genius. They're not equally big or whatever, but everybody has a contribution to make, and you need to use yours to come up with what's new and useful. A lot of that will be incremental, but some of it will be breakthrough. So I think what we see with these innovation labs and the startups, if you will, is that often people do go to start them up, of course they eventually have to grow their business, so a part of what I find myself doing now is helping startups that have to scale, figure out how to maintain that culture, those capabilities, that allowed them to be successful in the first place, and that's tough one for startups, right? >> Yeah, I think Pixar's only about a 1,500 person company and they all have creativity in wat they do. I'm wondering if there's some basic training that's missing. I studied engineering and I didn't get design training in my undergraduate studies. It wasn't until I was out in the workforce that I learned about that. What kind of mindset and training do you have to do to make sure the people are open to this? >> One of the things that I did related to this is about five years ago, I told our dean of Harvard Business School that I needed to join the board of an organization called Arts Center. I don't know if you were aware of Arts Center in Pasadena. It's the number one school of industrial design in the U.S., and people don't know about it 'cause I always laugh at them. The man who designed the Apple store is a graduate there. The man who designed Tesla car and et cetera, so they're not so good at it, but one of the things that we've all come to understand is design thinking, lean startup, these are all tools that can help you be better at innovation, but unless you create an environment around that, people are going to be willing to use those tools and make the missteps, the failures that might come with it, know how to collaborate together, even when they're a large organization, I mean it's easier when you're smaller. But unless you know how to do all that, those tools, the lean startup or digital or design thinking or whatever, ' cause I'm working with a lot of the people who do that, and deep respect for them, nothing gets done. In the end, we are human, we all need to know first off that it's worthwhile to take the risk to get done whatever it is you want to get done, so what's the purpose of the work, how's it going to change the world? The second thing is we need to share a set of values about learning because we have to understand, as you well know, you cannot plan your way to an innovation, you have to act your way. And with the startup, you act as fast as you can, right, so somebody will give you enough money before you run out of money. Same similar process you have to do in a large company, an incumbent, but of course it's more complicated. The other thing that makes it more complicated is companies are global, and the other part of it that makes it more complicated that I'm seeing like in personalized medicine: you need to build an ecosystem of different kinds, of nanotechnologists, biotechnologists, different expertise to come together. All of this, frankly, you don't learn any of it in school. I remember learning that you can't teach anyone how to lead. You actually have to help people learn how to lead themselves and technologists will frequently say to me, i don't know why, you're a leadership professor? Well, this is a technical problem. We just haven't figured out the platform right, and once we get it right, all will be. No, once you get it right, humans are still going to resist change and not know how to necessarily learn together to get this done. >> I wonder if, are there any speacial leadership skills we need for digital transformation? Really kind of the overarching theme of the show here, help connect the dots for us. >> So the leading change piece is about having a vision, communicating it, and inspiring people. What it really does turn out when we look at exceptional leaders of innovation, and all of us would agree that they've done wonderful things time and again, not just once, they understand that is collective. They spend time building a culture and capabilities that really will support people collaborating together. The first one they build is, how do we know how to create a marketplace of ideas through debate and discourse? Yeah, you can brainstorm, but eventually, we have to abrade and have conflict. They know how to have healthy debates in which people are taught terms of skills, basic stuff, not just listening and inquiring, but how to actively advocate in a constructive way for your point of view, these leaders have to learn how to amplify difference, whereas many leaders learn how to minimize it. And as the founder of Pixar once said, you can never have too many cooks in the kitchen. Many people believe you can. It's like today, you need as much talent as you can get. Your job as a leader, what are the skills you need to get those top cooks to be able to cook a meal together, not to reduce the amount of diversity. You got to be prepared for the healthy fight. >> You've pointed this out in some of your talks is that you've got to have that debate. >> Yes, you have to. >> That friction, to create innovation, but at the same time it has to be productive. I know it can be toxic to an organization, maybe talk about that a little. >> I think one of the challenges is what skills do people need to learn? One is, how do you deal with conflict when people are very talented and passionate? I think many people avoid conflict or don't know how to engage that constructively, just truly don't, and they avoid it. I find that many times organizations aren't doing what they need to do because the leadrr is uncomfortable. The other thing, and I'm going to stereotype horribly here, but I'm an introvert, that book quiet is wonderful, but one of the challenges you have if you're more introverted or if you're more technical and you tend to look at things from a technical point of view, in some ways is that you often find the people with that kind of, that's what drives them, there's a right answer, there's a rational answer we need to get through or get to, as opposed to understanding that really innovative ideas are often the combination of ideas that look like they're in conflict initially, and by definition, you need to have the naive eye and the expert working together to come up with that innovative solution, so for someone who's a technologist to think they should listen to someone who's naive about a technical problem, just the very basic mindset you have about who's going to have the idea. So that's a tricky one, it's a mindset, it's not even just a skill level, it's more, who do you think actually is valuable? Where is that slice that you need at this moment going to come from? It may not be from that expert, it may be from the one who had no point of view. I heard a story that I was collecting my data, and apparently, Steve Jobs went to see Ed Land. We're here in Boston over Polaroid, which is one of our most innovative companies, right, in the history. And he said, what do I need to learn from you? And what Land said to him is, whenever my scientist and technologist get stuck, I have some of the art students or the humanities students come in and spend time in the lab. They will ask the stupid question because they don't know it's stupid. The expert's not going to ask the stupid question, particularly the tech expert, not going to ask it. They will ask the question that gets the first principles. I think, but I wouldn't want to be held to this, the person who was telling me the story, that's partly how they came up with the instant camera. Some naive person said, why do I have to wait? Why can't I have it now? And of course, silly so-and-so, you don't know it takes this, that, and the others. Then someone else thought, why does she have to wait? I think it was really a she who asked the question, the person telling me this, and they came up with a different way. Who said it has to be done in a darkroom in that way? I think that there's certain things about our mindset independently of our skill, that get in the way of our actually hearing all the different voices we need to hear to get that abrasion going in the right way. >> Listening to those Columbo questions, you say, can sometime lead to an outcome that is radically different. There's a lot of conversation in our industry, the technology industry, about, we call it the cordially shock clock, the companies are on a cordially reporting mechanism or requirement from the SEC. A lot of complaints about that, but at the same time, it feels like at least in the tech business, that U.S. companies tend to be more innovative. But again, you hear a lot of complaints about, well, they can't think for the long term. Can you help us square that circle? >> It's funny, so one thing is you rarely ever get innovation without constraint. If you actually talk to people who are trying to innovate, there needs to be the boundaries around it in which they're doing the constraint. To be completely free rarely leads to, it is the constraint. Now we did do a study of boards to try to understand when is a board facilitating innovation and when is a board interfering with it? We interviewed CEOs and lead directors of a number of companies and wrote an article about that last year, and what we did find is many boards actually are seen as being inhibitors. They don't help management make the right decision. Then of course the board would say now management's the one that's too conservative, but this question about how the board, with guidance, and all of these issues have come up when you're looking at research analysts and who you play to, and I've been on corporate boards. One thing is that the CEO needs to know that the board is actually going to be supportive of his or her choices relative to how you communicate why you're making the choices you're making. So there is pressure, and I think it's real. We can't tell CEOs, no, you don't need to care about it, 'cause guess what, they do get in trouble if they don't. On the other hand, if they don't know how to make the argument for investing in terms of helping the company grow, so in the long run, innovation is not innovation for innovation's sake, it's to meet customer needs so you can grow, so you need to have a narrative that makes sense and be able to talk with people, the different stakeholders, about why you're making certain choices. I must say that I think that many times companies may be making the right choice for the long haul, and get punished in the short run, for sure that happens, but I also think that there are those companies that get a way with a lot of investment in the long haul, partly because they do, over time, deliver, and there is evidence that they're making the right choices or have built a culture where people think what they're saying might actually happen or be delivered. What's happening right now because of the convergence of industries, is I think a lot of CEOS, it's a frightening time, it is difficult to sustain success these days, because what you have to do is innovate at low cost. Going back to some other piece about boards, one of the things we've found is so many board members define innovation as being technology. Technology has a very important enabling role to play in otherwise, but they have such a narrow definition of it in a way that again, they create a culture to let the people in the innovation lab innovate, but not one where everybody understands that all of us, together, need to innovate in ways that will also prepare us to execute better. They don't see the whole culture transformation, digital transformation often requires cultural transformation for you to be able to get this stuff done, and that's what takes a long time. Takes a long time to get rid of your legacy systems and put in these new, or get that balance right, but what takes even longer is getting the culture to be receptive to using that new data capability they have and working in different ways and collaborating when they've been very siloed and they're paid to be very siloed. I think that unless you show, as a CEO, that you are actually putting all of those building blocks in place, and that's what you're about, you understand it's a transformation at that level, you're just talking to the analysts about, we're going to do x, and there's no evidence about your culture or anything else going on, how you're going to lead to attract and retain the kind of talent you need, no one's buying that, I think that that's the problem. There's not a whole story that they're telling about how this goes together and they're going to move forward on it. >> To your other point, is there data to suggest, can you quantify the relationship between diversity and innovation? >> There are some data about that, I don't have it. I find it's very funny, as you can see, I'm an African-American woman. My work is on leadership globalization and innovation. I do a lot of work on how you deliver global strategies. I often find when I'm working with senior teams, they'll ask me, would you help us with our inclusion effort? And I think it's partly because of who I am and diversity comes up in our work, and if you actually build the environments for talking about, they tend to be more inclusive about diversity of thought. Not demographic diversity, those can be separate as we well know because we know Silicon Valley is not a place where you see a lot of demographic diversity, but you might see diversity of thought. I haven't asked, it's interesting, I have had some invitations by governments, too. Japan, which has womenomics, which is a part of their policy If they need to get more women in the economy, frankly, otherwise they can't grow as an economy. It turns out that the innovation story is the business case that many businesses or business people find one that they can buy into, doesn't feel like you're doing it 'cause it's the right thing, or not that you shouldn't do the right thing, but helping them understand how you really, really make sure that the minority voice is heard, and I mean minority of thought, independent of demographic, but if you create an environment as a leader where you actually run your team so that people do feel they can speak up, as you all know. It's so often, I'll talk to people afterwards and they'll say, I didn't say what I really thought about those ideas because I didn't want to be punished or I didn't want to step in that person's territory. People are making decisions based on varying complete information everyone knows. What often happens is it gets escalated up. We had this one senior team complaining, everything is so slow here, a very big bank, not the one I'm on the board of, another very big bank we're working with. Everything's so slow, people won't do anything. So when we actually ask people, what's happening? Why aren't you making decisions? First off, decisions making rights are very fuzzy in this organization, except for at the very top, so what they say is all decisions, actually, they're made on the 34th floor. We escalate 'cause if you make a decision, they're going to turn it over anyway, so we've backed off, or we don't say what we think 'cause I don't want them to say what they think about my ideas 'cause we actually have very separate business units here. >> We might get shot. >> You might get shot. That's the reality that many people live in, so we're not surprised to see that not very many organizations can innovate time and again when we think about the reality of what our contexts are. The good news for us is that in part, millennials won't tolerate some of these environments in the same way, which is going to be a good thing. I think they're marvelous to work with, I'm not one of them obviously, but I think a lot of what they're requesting, the transparency, the understanding the connections between what they do and are they having impact, the desire to be developed and be learning, and wanting to be an organization they're not ashamed of but in fact they're very proud to be a part of what's happening there, I think that that requires businesses and leaders to behave differently. One of the businesses we studied, if the millennial wants to know who's on the front line, he or she is making a difference. They had to do finance differently to be able to show, to draw the cause and effect between what that person was doing every day and how it impacted the client's work. That ended up being a really interesting task. Or a supply chain leader, who really needed them to think very differently about supply chain so they could innovate. What he ended up doing is, instead of thinking about our customers being the pharmaceutical company, the CBS or the big hospital chain or whatever it is, think about the end customer. What would we have to do with supply chain to ensure that that end patient took his or her pill on time and got better? And when they shifted the whole meaning of the work to that individual patient in his or her home, he was able, over time, to get the whole supply chain group organization to understand, we're not doing what we need to do if we're really going to reduce diabetes in the world because the biggest problem we have is not when they go and get their medication, it's whether they actually use it properly when they're there. So when you switched it to that being the purpose of the work, the mindset that everyone had to have, that's what we're delivering on. Everyone said, oh, this is completely appropriate, we needed digital, we need different kind of data to know what's going on there. >> Don't get me started on human health. Professor Hill, for an introvert, you're quite a storyteller, and we appreciate you sharing your examples and your knowledge. Thanks so much for coming on the Cube. It was great to meet you. >> Been my pleasure, glad to know you, thank you. >> Keep it right there, everybody, Stu and I will be back right after this short break. You're watching the Cube from LiveWorx in Boston. We'll be right back. (light electronic music)

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

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

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

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

>> From Boston Massachusetts, it's The Cube! Covering LiveWorx 18. Brought to you by PTC. >> Welcome to Boston everybody. You're watching The Cube, the leader in live tech coverage. And we're here with a special presentation in coverage of the LiveWorx show sponsored by PTC of Needham, soon to be of Boston. My name is Dave Vellante. I'm here with my co-host Stu Miniman. And Stu, this is quite a show. There's 6,000 people here. Jim Heppelmann this morning was up giving the keynote. PTC is a company that kind of hit the doldrums in the early 2000s. A company that as manufacturing moved offshore, its core business was CAD software for manufacturers, and it went through a pretty dramatic transformation that we're going to be talking about today. Well, fast forward 10 years, 12 years, 15 years on, this company is smokin, the stock's up 50 percent this year. They got a billion dollars plus in revenue. They're growing at 10 to 15 percent a year. They've shifted their software business from a perpetual software license to a recurring revenue model. And they're booming. And we're here at the original site of The Cube, as you remember well in 2010, the Boston Convention Center down at the seaport. And Stu, what are your initial impressions of LiveWorx? >> Yeah, it's great to be here, Dave. Good to be here with you and they dub this the largest digital transformation conference in the world. (laughing) So, I mean, Dave, you and I have been to much bigger conferences and we've been to a lot of conferences that are talking about digital transformation. But, IOT, AI, Augmented Reality, Block Chain, Robotics, all of these things really are about software, it's about digital transformation, and a really interesting space as you mentioned kind of the legacy of PTC. I have been around long enough. I remember when we used to call them Parametric Technologies. They kind of rebranded themselves as PTC. Windchill brings back some memories for me. When I worked for a high tech manufacturing company, it was that's the life cycle management tool that we used back in the early 2000s. So, I had a little bit of background in them. And, as you said, they're based in Needham, and they're moving to the Seaport. Hot area, especially, as we've said Dave, Boston has the opportunity to be the hub of IOT. And it's companies like PTC that are going to help bring those partnerships and lots of companies to an event like this. >> Well PTC has always been an inquisitive company, as you were pointing out to me off camera. They brought Prime Computer, Computer Vision. A number of acquisitions that they made back in the late 90s, which essentially didn't pan out the way they had hoped. But now again, fast forward to the modern era, Jim Heppelmann came in I think around 2010, exceeded ThingWorx, a company called Cold Light, Kept Ware is another company that they purchased. And took these really sort of independent software components and put them together and created a platform. Everybody talks about platform. We'll be talking about that a lot today, where the number of customers and partners of PTC. And we even have some folks from PTC on. But, basically, talking about digital transformation earlier, Stu, IOT is a huge tailwind for a company like PTC. But they had to really deliberately pivot to take advantage of this market. And if you think about it, yes, it's about connecting and instrumenting devices and machines, it's about reaching them, creating whatever wireless connections. But it's also about the data. We talk about that all the time. And constructing data that goes from edge to core, and even into the cloud, whether that cloud's on prem or in the data center. So you're seeing the transformation of this company. Obviously, I talked about some of the financials. We'll go into some of that. But an evolving ecosystem we heard Accenture's here, Infosys is here, Deloitte is here. As I like to say, the SI's like to eat at the trough. If the SI's are here, that means there's money here, right? >> Yeah Dave and actually a number that jumped out at me when Microsoft was up on stage, and it wasn't that Microsoft is investing five billion dollars in diode, the number that caught my ear was the 20 to 25 partners that it takes to deploy a single IOT solution. So, anybody that's been in tech for a long time, when you see these complicated stack solutions, the SIs need to be here. It takes a long time to work through them, and integration is a big challenge. How do I get all of these pieces together? It's not something that I just tit buy off the shelf. It's not shrink wrap software. This is complicated solution. It is very fragmented in how we make them up. Very specific to the industry that we're building, so really fascinating stuff that's going on. But we are still very early in the life-cycle of IOT. Huge, huge, huge opportunities but big players like Microsoft, like Google, like Amazon are going to be here making sure that they're going to simplify that environment over time. Huge, you know Dave, what's the original forecast I think we did at Wiki Bon, was a 1.2 trillion dollar opportunity, which most of that, that was actually for the industrial Internet, which is not the commercial things that we think about all the time, when we talk about the home sensors and some of the things, some of the consumer stuff, but also the industrial here. >> Well, I think a couple of key points that you're making here. First of all, the market is absolutely enormous. It's almost impossible to size. I mean you're talking about a trillion dollars in sort of spending on hardware, software, services, virtually everything. But to your point, Stu. It's highly highly fragmented, virtually every industry. And a lot of different segmented technologies. But it's also important to point out this is the mashing together of operations technology, OT with Information Technology, IT, and those four leading companies IT is actually leaning in and embracing this notion of edge, computing, and IOT. Now, I wouldn't even say that IT and OT are Hatfield and McCoy's. They're not. They're parts of the organization that don't talk to each other. So they are cultural differences. They use different languages. They think differently. One is largely engineers who make machines work. The other IT guys, which we obviously know what they do, they keep information technology systems running. They deploy a lot of new IT projects. So, really different worlds that have to start coming together. Jim Heppelmann today I thought did a really good job in his keynote. He talked about innovation. Usually you start with okay we're here at point A, we want to go here. We want to get to point B. And we're going to take a straight line and have a bunch of linear steps and milestones to get there. He pointed out that innovation today is really sort of a non-linear process. And he talked about the combinatorial effects of really three things. Machines, or the physical, computers and humans. Machines are strong, they can do heavy lifting. Computers are fast, and they can do repetitive tasks very accurately. And humans are creative. And he talked about innovation in this new world coming together by combining those three aspects, finding new ways to attack problems, to solve nature's challenges. And bringing nature into that problem solving. He gave a lot of examples of how mother nature mimicking mother nature is now possible with AI and other technologies. Pretty cool. >> Yeah, absolutely Dave. I'm sure we'll be talking a lot today about the fourth Industrial Revolution. A lot of discussion as to what jobs are Robots going to take. I look around the show floor here and there's a lot of cool robotics going on. But as Eric Manou said and Aaron McAfee, the folks from MIT that we've interviewed a couple of times talked about the second machine age. Really the marring of people and machines that are going to be powerful. And absolutely Jim Heppelmann talked about that a lot. It's humans, it's physical, and it's digital. Putting those together and then, the other thing that he talked about is we're talking a lot about voice lightly with all of these assistants, but, you're really limited as to how much input and how fast you can take information in from an auditory standpoint. I mean, I know that I listen to podcasts at 1.5 to 2 X to try to get more information in faster, but it is sight that we're going to get 80 percent of the information in, and therefore, it's the VR and AR that are huge opportunities. I know when I've been talking to some of the large manufacturers, what they used to have in written documentations and then they went digital with, they're now getting you inside to be able to configure the systems with the hollow lens, or some of the AR headsets, the VR headsets, to be able to play with that. So, we're really early but excited to see where this technology has come so far. >> Yeah, we're seeing a lot of practical applications of VR and AR. We go to a lot of these shows and they'll have the demos, and you go, okay, what will I do with this? Well, you're really seeing here at LiveWorx some of the things you actually can do. One good example I thought they did was BEA Systems up in Nashua, actually showing the folks that are doing the manufacturing, little tutorial in how to do that. We're going to see some surgical examples today. Remote surgery. There are thousands, literally thousands of examples. In the time we have remaining, I want to just do the rundown on PTC. Cause it really is quite an amazing transformation story. You're talking about a company with 1.1 billion dollars in revenue. Their aspiration is by 2021 to be a two billion dollar company. They're growing at ten percent a year, their software business has grown at 12 to 15 percent a year. 15 percent is that annual recurring revenue. So this is an example of a company that has successfully shifted from that perpetual model to that recurring model. They got 200 million dollars this year in free cash flow. Their stock, as I said, is up 50 percent this year. They got 350 million dollars in cash, but they just got a billion dollar investment from Rockwell Automation that took about 8.4 percent of the company given them an implied evaluation of almost 11 billion dollars, which has got a little uplift from the stock market there. They're selling a lot of seven figure deals. Really, the core is manufacturing product life-cycle management, CAD. That's the stuff that we know PTC well from. And I talked about some of those acquisitions that they made. They sell products like Creo, which is their 3D CAD software. I think they're on Rev five or six by now. So they've taken their sort of legacy software and sort of updated that for the digital world. >> Yep ,it is version five that they were just announced today. Talking about really the 3D effort they're doing there. Some partnerships around it, and like every other software Dave that we've been hearing about AI is getting infused in here because with so many devices and so much data, we really need the machines to help us process that and do things that humans can't keep up with. >> And the ecosystem's grown. This is a complicated marketplace. If you look at the Gartner Magic Quadrant, there is no leader, even though PTC is the leader. But there is no leader. They're all sort of in the lower right, PTC is up highest. GE is interestingly is not in there, because it doesn't have an on prem solution. I don't know why GE doesn't have an on prem solution. And I don't know why they're not in there. >> Is there another version of the magic quadrant that includes the Amazons and GEs of the world? >> I don't know. So that's kind of interesting. We'll try to unpack that as we go on here. PTC announced today a relationship with a company called Ansys, which does simulation software. Normally, simulation comes sort of after the design. They're bringing those two worlds together. The CAD design piece and the simulation piece, sort of closer to real time. So, there's a lot of stuff going on. As you said, it's data, analytics, edge computing. It's cloud, it's on prim, it's block chain for security. We haven't talked about security. A lot bigger threat metrix, so block chain comes into play. >> Yeah, Dave. I saw a great joke. Do you realize that the S in IOT stands for security? Did you know that? (laughing) Oh wait, there's no S in IOT. Well, that's the point. >> All right, good. So Stu and I will be here all day today. This is actually a three day conference. The Cube will only be there for day one. Keep right there everybody. And we'll be right back. You're watching The Cube, Live from Liveworx in Boston. (upbeat music)

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

(intro music) >> "theCUBE's" live coverage is made possible by funding from Dell Technologies, creating technologies that drive human progress. (upbeat music) >> We're not going to- >> Hey everybody, welcome back to the Fira in Barcelona. My name is Dave Vellante, I'm here with Dave Nicholson, day four of MWC23. I mean, it's Dave, it's, it's still really busy. And you walking the floors, you got to stop and start. >> It's surprising. >> People are cheering. They must be winding down, giving out the awards. Really excited. Pier, look at you and Elias here. He's the vice president of Engineering Technology for Edge Computing Offers Strategy and Execution at Dell Technologies, and he's joined by Dan Cummins, who's a fellow and vice president of, in the Edge Business Unit at Dell Technologies. Guys, welcome. >> Thank you. >> Thank you. >> I love when I see the term fellow. You know, you don't, they don't just give those away. What do you got to do to be a fellow at Dell? >> Well, you know, fellows are senior technical leaders within Dell. And they're usually tasked to help Dell solve you know, a very large business challenge to get to a fellow. There's only, I think, 17 of them inside of Dell. So it is a small crowd. You know, previously, really what got me to fellow, is my continued contribution to transform Dell's mid-range business, you know, VNX two, and then Unity, and then Power Store, you know, and then before, and then after that, you know, they asked me to come and, and help, you know, drive the technology vision for how Dell wins at the Edge. >> Nice. Congratulations. Now, Pierluca, I'm looking at this kind of cool chart here which is Edge, Edge platform by Dell Technologies, kind of this cube, like cubes course, you know. >> AK project from here. >> Yeah. So, so tell us about the Edge platform. What, what's your point of view on all that at Dell? >> Yeah, absolutely. So basically in a, when we create the Edge, and before even then was bringing aboard, to create this vision of the platform, and now building the platform when we announced project from here, was to create solution for the Edge. Dell has been at the edge for 30 years. We sold a lot of compute. But the reality was people want outcome. And so, and the Edge is a new market, very exciting, but very siloed. And so people at the Edge have different personas. So quickly realize that we need to bring in Dell, people with expertise, quickly realize as well that doing all these solution was not enough. There was a lot of problem to solve because the Edge is outside of the data center. So you are outside of the wall of the data center. And what is going to happen is obviously you are in the land of no one. And so you have million of device, thousand of million of device. All of us at home, we have all connected thing. And so we understand that the, the capability of Dell was to bring in technology to secure, manage, deploy, with zero touch, zero trust, the Edge. And all the edge the we're speaking about right now, we are focused on everything that is outside of a normal data center. So, how we married the computer that we have for many years, the new gateways that we create, so having the best portfolio, number one, having the best solution, but now, transforming the way that people deploy the Edge, and secure the Edge through a software platform that we create. >> You mentioned Project Frontier. I like that Dell started to do these sort of project, Project Alpine was sort of the multi-cloud storage. I call it "The Super Cloud." The Project Frontier. It's almost like you develop, it's like mission based. Like, "Okay, that's our North Star." People hear Project Frontier, they know, you know, internally what you're talking about. Maybe use it for external communications too, but what have you learned since launching Project Frontier? What's different about the Edge? I mean you're talking about harsh environments, you're talking about new models of connectivity. So, what have you learned from Project Frontier? What, I'd love to hear the fellow perspective as well, and what you guys are are learning so far. >> Yeah, I mean start and then I left to them, but we learn a lot. The first thing we learn that we are on the right path. So that's good, because every conversation we have, there is nobody say to us, you know, "You are crazy. "This is not needed." Any conversation we have this week, start with the telco thing. But after five minutes it goes to, okay, how I can solve the Edge, how I can bring the compute near where the data are created, and how I can do that secure at scale, and with the right price. And then can speak about how we're doing that. >> Yeah, yeah. But before that, we have to really back up and understand what Dell is doing with Project Frontier, which is an Edge operations platform, to simplify your Edge use cases. Now, Pierluca and his team have a number of verticalized applications. You want to be able to securely deploy those, you know, at the Edge. But you need a software platform that's going to simplify both the life cycle management, and the security at the Edge, with the ability to be able to construct and deploy distributed applications. Customers are looking to derive value near the point of generation of data. We see a massive explosion of data. But in particular, what's different about the Edge, is the different computing locations, and the constraints that are on those locations. You know, for example, you know, in a far Edge environment, the people that service that equipment are not trained in the IT, or train, trained in it. And they're also trained in the safety and security protocols of that environment. So you necessarily can't apply the same IT techniques when you're managing infrastructure and deploying applications, or servicing in those locations. So Frontier was designed to solve for those constraints. You know, often we see competitors that are doing similar things, that are starting from an IT mindset, and trying to shift down to cover Edge use cases. What we've done with Frontier, is actually first understood the constraints that they have at the Edge. Both the operational constraints and technology constraints, the service constraints, and then came up with a, an architecture and technology platform that allows them to start from the Edge, and bleed into the- >> So I'm laughing because you guys made the same mistake. And you, I think you learned from that mistake, right? You used to take X86 boxes and throw 'em over the fence. Now, you're building purpose-built systems, right? Project Frontier I think is an example of the learnings. You know, you guys an IT company, right? Come on. But you're learning fast, and that's what I'm impressed about. >> Well Glenn, of course we're here at MWC, so it's all telecom, telecom, telecom, but really, that's a subset of Edge. >> Yes. >> Fair to say? >> Yes. >> Can you give us an example of something that is, that is, orthogonal to, to telecom, you know, maybe off to the side, that maybe overlaps a little bit, but give us an, give us an example of Edge, that isn't specifically telecom focused. >> Well, you got the, the Edge verticals. and Pierluca could probably speak very well to this. You know, you got manufacturing, you got retail, you got automotive, you got oil and gas. Every single one of them are going to make different choices in the software that they're going to use, the hyperscaler investments that they're going to use, and then write some sort of automation, you know, to deploy that, right? And the Edge is highly fragmented across all of these. So we certainly could deploy a private wireless 5G solution, orchestrate that deployment through Frontier. We can also orchestrate other use cases like connected worker, or overall equipment effectiveness in manufacturing. But Pierluca you have a, you have a number. >> Well, but from your, so, but just to be clear, from your perspective, the whole idea of, for example, private 5g, it's a feature- >> Yes. >> That might be included. It happened, it's a network topology, a network function that might be a feature of an Edge environment. >> Yes. But it's not the center of the discussion. >> So, it enables the outcome. >> Yeah. >> Okay. >> So this, this week is a clear example where we confirm and establish this. The use case, as I said, right? They, you say correctly, we learned very fast, right? We brought people in that they came from industry that was not IT industry. We brought people in with the things, and we, we are Dell. So we have the luxury to be able to interview hundreds of customers, that just now they try to connect the OT with the IT together. And so what we learn, is really, at the Edge is different personas. They person that decide what to do at the Edge, is not the normal IT administrator, is not the normal telco. >> Who is it? Is it an engineer, or is it... >> It's, for example, the store manager. >> Yeah. >> It's, for example, the, the person that is responsible for the manufacturing process. Those people are not technology people by any means. But they have a business goal in mind. Their goal is, "I want to raise my productivity by 30%," hence, I need to have a preventive maintenance solution. How we prescribe this preventive maintenance solution? He doesn't prescribe the preventive maintenance solution. He goes out, he has to, a consult or himself, to deploy that solution, and he choose different fee. Now, the example that I was doing from the houses, all of us, we have connected device. The fact that in my house, I have a solar system that produce energy, the only things I care that I can read, how much energy I produce on my phone, and how much energy I send to get paid back. That's the only thing. The fact that inside there is a compute that is called Dell or other things is not important to me. Same persona. Now, if I can solve the security challenge that the SI, or the user need to implement this technology because it goes everywhere. And I can manage this in extensively, and I can put the supply chain of Dell on top of that. And I can go every part in the world, no matter if I have in Papua New Guinea, or I have an oil ring in Texas, that's the winning strategy. That's why people, they are very interested to the, including Telco, the B2B business in telco is looking very, very hard to how they recoup the investment in 5g. One of the way, is to reach out with solution. And if I can control and deploy things, more than just SD one or other things, or private mobility, that's the key. >> So, so you have, so you said manufacturing, retail, automotive, oil and gas, you have solutions for each of those, or you're building those, or... >> Right now we have solution for manufacturing, with for example, PTC. That is the biggest company. It's actually based in Boston. >> Yeah. Yeah, it is. There's a company that the market's just coming right to them. >> We have a, very interesting. Another solution with Litmus, that is a startup that, that also does manufacturing aggregation. We have retail with Deep North. So we can do detecting in the store, how many people they pass, how many people they doing, all of that. And all theses solution that will be, when we will have Frontier in the market, will be also in Frontier. We are also expanding to energy, and we going vertical by vertical. But what is they really learn, right? You said, you know you are an IT company. What, to me, the Edge is a pre virtualization area. It's like when we had, you know, I'm, I've been in the company for 24 years coming from EMC. The reality was before there was virtualization, everybody was starting his silo. Nobody thought about, "Okay, I can run this thing together "with security and everything, "but I need to do it." Because otherwise in a manufacturing, or in a shop, I can end up with thousand of devices, just because someone tell to me, I'm a, I'm a store manager, I don't know better. I take this video surveillance application, I take these things, I take a, you know, smart building solution, suddenly I have five, six, seven different infrastructure to run this thing because someone say so. So we are here to democratize the Edge, to secure the Edge, and to expand. That's the idea. >> So, the Frontier platform is really the horizontal platform. And you'll build specific solutions for verticals. On top of that, you'll, then I, then the beauty is ISV's come in. >> Yes. >> 'Cause it's open, and the developers. >> We have a self certification program already for our solution, as well, for the current solution, but also for Frontier. >> What does that involve? Self-certification. You go through you, you go through some- >> It's basically a, a ISV can come. We have a access to a lab, they can test the thing. If they pass the first screen, then they can become part of our ecosystem very easily. >> Ah. >> So they don't need to spend days or months with us to try to architect the thing. >> So they get the premature of being certified. >> They get the Dell brand associated with it. Maybe there's some go-to-market benefits- >> Yes. >> As well. Cool. What else do we need to know? >> So, one thing I, well one thing I just want to stress, you know, when we say horizontal platform, really, the Edge is really a, a distributed edge computing problem, right? And you need to almost create a mesh of different computing locations. So for example, even though Dell has Edge optimized infrastructure, that we're going to deploy and lifecycle manage, customers may also have compute solutions, existing compute solutions in their data center, or at a co-location facility that are compute destinations. Project Frontier will connect to those private cloud stacks. They'll also collect to, connect to multiple public cloud stacks. And then, what they can do, is the solutions that we talked about, they construct that using an open based, you know, protocol, template, that describes that distributed application that produces that outcome. And then through orchestration, we can then orchestrate across all of these locations to produce that outcome. That's what the platform's doing. >> So it's a compute mesh, is what you just described? >> Yeah, it's, it's a, it's a software orchestration mesh. >> Okay. >> Right. And allows customers to take advantage of their existing investments. Also allows them to, to construct solutions based on the ISV of their choice. We're offering solutions like Pierluca had talked about, you know, in manufacturing with Litmus and PTC, but they could put another use case that's together based on another ISV. >> Is there a data mesh analog here? >> The data mesh analog would run on top of that. We don't offer that as part of Frontier today, but we do have teams working inside of Dell that are working on this technology. But again, if there's other data mesh technology or packages, that they want to deploy as a solution, if you will, on top of Frontier, Frontier's extensible in that way as well. >> The open nature of Frontier is there's a, doesn't, doesn't care. It's just a note on the mesh. >> Yeah. >> Right. Now, of course you'd rather, you'd ideally want it to be Dell technology, and you'll make the business case as to why it should be. >> They get additional benefits if it's Dell. Pierluca talked a lot about, you know, deploying infrastructure outside the walls of an IT data center. You know, this stuff can be tampered with. Somebody can move it to another room, somebody can open up. In the supply chain with, you know, resellers that are adding additional people, can open these devices up. We're actually deploying using an Edge technology called Secure Device Onboarding. And it solves a number of things for us. We, as a manufacturer can initialize the roots of trust in the Dell hardware, such that we can validate, you know, tamper detection throughout the supply chain, and securely transfer ownership. And that's different. That is not an IT technique. That's an edge technique. And that's just one example. >> That's interesting. I've talked to other people in IT about how they're using that technique. So it's, it's trickling over to that side of the business. >> I'm almost curious about the friction that you, that you encounter because the, you know, you paint a picture of a, of a brave new world, a brave new future. Ideally, in a healthy organization, they have, there's a CTO, or at least maybe a CIO, with a CTO mindset. They're seeking to leverage technology in the service of whatever the mission of the organization is. But they've got responsibilities to keep the lights on, as well as innovate. In that mix, what are you seeing as the inhibitors? What's, what's the push back against Frontier that you're seeing in most cases? Is it, what, what is it? >> Inside of Dell? >> No, not, I'm saying out, I'm saying with- >> Market friction. >> Market, market, market friction. What is the push back? >> I think, you know, as I explained, do yourself is one of the things that probably is the most inhibitor, because some people, they think that they are better already. They invest a lot in this, and they have the content. But those are again, silo solutions. So, if you go into some of the huge things that they already established, thousand of store and stuff like that, there is an opportunity there, because also they want to have a refresh cycle. So when we speak about softer, softer, softer, when you are at the Edge, the software needs to run on something that is there. So the combination that we offer about controlling the security of the hardware, plus the operating system, and provide an end-to-end platform, allow them to solve a lot of problems that today they doing by themselves. Now, I met a lot of customers, some of them, one actually here in Spain, I will not make the name, but it's a large automotive. They have the same challenge. They try to build, but the problem is this is just for them. And they want to use something that is a backup and provide with the Dell service, Dell capability of supply chain in all the world, and the diversity of the portfolio we have. These guys right now, they need to go out and find different types of compute, or try to adjust thing, or they need to have 20 people there to just prepare the device. We will take out all of this. So I think the, the majority of the pushback is about people that they already established infrastructure, and they want to use that. But really, there is an opportunity here. Because the, as I said, the IT/OT came together now, it's a reality. Three years ago when we had our initiative, they've pointed out, sarcastically. We, we- >> Just trying to be honest. (laughing) >> I can't let you get away with that. >> And we, we failed because it was too early. And we were too focused on, on the fact to going. Push ourself to the boundary of the IOT. This platform is open. You want to run EdgeX, you run EdgeX, you want OpenVINO, you want Microsoft IOT, you run Microsoft IOT. We not prescribe the top. We are locking down the bottom. >> What you described is the inertia of, of sunk dollars, or sunk euro into an infrastructure, and now they're hanging onto that. >> Yeah. >> But, I mean, you know, I, when we say horizontal, we think scale, we think low cost, at volume. That will, that will win every time. >> There is a simplicity at scale, right? There is a, all the thing. >> And the, and the economics just overwhelm that siloed solution. >> And >> That's inevitable. >> You know, if you want to apply security across the entire thing, if you don't have a best practice, and a click that you can do that, or bring down an application that you need, you need to touch each one of these silos. So, they don't know yet, but we going to be there helping them. So there is no pushback. Actually, this particular example I did, this guy said you know, there are a lot of people that come here. Nobody really described the things we went through. So we are on the right track. >> Guys, great conversation. We really appreciate you coming on "theCUBE." >> Thank you. >> Pleasure to have you both. >> Okay. >> Thank you. >> All right. And thank you for watching Dave Vellante for Dave Nicholson. We're live at the Fira. We're winding up day four. Keep it right there. Go to siliconangle.com. John Furrier's got all the news on "theCUBE.net." We'll be right back right after this break. "theCUBE," at MWC 23. (outro music)