(upbeat contemporary music) >> Announcer: Live from Barcelona, Spain It's theCUBE covering Cisco Live 2018 brought to you by Cisco, Veeam, and theCUBE's ecosystem partners. >> Hello everyone welcome back to theCUBE's live coverage here in Barcelona, Spain for Cisco Live 2018 in Europe. I'm John Furrier cofounder SiliconANGLE cohost of theCUBE with my cohost partner Stu Miniman this week analyst at Wikibon.com also cohost at many shows across the industry. Our next two guests talking about data, data privacy is Michelle Dennedy who's the vice-president chief privacy officer at Cisco and Robert Waitman who works for her. We've got a smashing new data report to share with you about some of the surveys and customers and impact of privacy in business. Michelle, Robert thanks for joining us. >> Thank you. >> Thanks for having us. >> Michelle, good to see you again. You were on the front pages of SiliconAngle.com as a feature story this week of the interview you had on the ground with theCUBE team, welcome back. >> You can't get rid of me. >> Well we love having you on because it's really important because not only is GDPR which we reported on for our last interview but the role of data, data driven organizations you hear that at every C-Sweep from security to user experience and everything in between down the data center. You're measuring everything certainly Cisco managing data center and everything else. But this really nuanced thing here about impacts to businesses because now users are in control of their data and you're seeing things like cryptocurrency and immutable block chain on one end and then just what are the rights of the users and the consumers in context to digital business? This is one of the most cutting-edge social and technical issues. I mean GDPR is a nightmare in and of itself just to figure out where the hell the data is. >> Some people's nightmare is other people's dreams. >> It's good for users but not good for database administrators, good for the tech industry. What are the current challenges right now from your perspective? What are you seeing as the core top three issues that you see around data and data privacy impacting business? >> Well I think you actually put your finger right in the heart of it. It is coming together of human rights, human needs, policy law meets technology capability and functionality. So I think understanding that the data is the common currency across all of these systems whether you're talking about human rights and ownership, whether you're talking about legal rights and management that data currency goes across educating people and making them understand that currency is absolutely critical to surviving this next new era. >> As always I tell my kids advice, I say that if you want to get into something cutting edge, get into data science meets societal, political science and social science. >> Michele: Exactly >> As that's coming together and you know Steve Jobs had that liberal arts meets social meets technology kind of intersection. What are some of the brightest minds in the industry that are in your area working on? I mean how are they attacking this? Are they looking at it from a big picture? Are they diving deep into it? What are the brightest minds doing in this area? >> Well so I have a deep bias and of course I hired some of the best minds here, right? I think the pragmatic mind, I'll put it that way rather than judging anybody's thing. If you're writing pretty policies like, brava to you. But what I really like to see is looking at what is a data inventory? Starting to look at data as a supply chain issue. And the reason I love supply chain and management and measurement is we know how to do it. So we're applying these common business schemas and strategies to this newer functionality of data as a piece of currency that changes and is contextual over time. So the pragmatic thinking I'll put it that way is to really look at privacy engineering as first a business use case requirements gathering exercise and then figuring out how does it work in the architecture. What's your industry? What kind of data do you have? And then you can figure out what are those granular features and requirements. And then the rest of your supply chain pulls through. So when you take kind of that management approach it sounds a little plodding but it's actually very exciting. There's a lot of innovation, it must happen. >> Another thing that we cover I was looking on our research side is nailing that exact point. How do you instrument the data? So talk about some of the confluence things that you just mentioned but then as business starts to look at how they value themselves so we really haven't seen any cutting edge data on this, would love to get your perspective on how data is impacting the valuation of a business. Because valuation techniques have been mostly financial, because you can measure it. >> Yup >> But now that you have data as currency as you mentioned, how are companies looking at the valuation of their enterprise? >> So I brought along a little friend today, because we really believe that the mantra in my working group within Cisco is values to value. So figuring out the instrumentation of the gear. You know I have a lot of support to do that within Cisco, we do engineering pretty good. But then figuring out we actually went out to some academics, we looked at what other people in the marketplace as you say, not a lot of metrics about how to instead of saying how much have we lost, how do we know that there is progress? And so Robert Waitman joined my team about two years ago I stole him from the worlds of economy and finance and business preparation and he said, I don't know anything about privacy and data. He does now, but I said I don't really want you for that, I want to start to build a model that we can share with the world on how to value data and how to look at the upside as well as the downside. >> So Robert, I've got to ask you so one of the things we've been riffing on in theCUBE recently is with the role of decentralized applications and this kind of applies to network theory because Cisco has been a successful network company, the role of the chief economic officer a term that we made up because you're starting to see economics certainly with token economics with cryptocurrency that's all the rage right now so Facebook just recently banned all ads for the coin offerings, but that is the trend that's happening, right? So you're starting to see the role of an economist in business. So with data the valuation, this seems to be a new trend. Your thoughts and reaction to that. >> Yeah, well you know data's not on the balance sheets, so we don't typically valuate and manage it the way you'd manage all of our other assets. But data, especially when it's well curated which is one of the things that privacy enables with that unlocks a lot of values. But that's kind of the focus of our research. Say look, GDPR and all those other things can require you to do certain things, but by having data that's well curated, you can unlock value for your organization. And there are a lot of different ways to do that, whether it's operational or whether it's revenue upside you can get from better understanding curation of your data. >> Before we get into the reports, I just want to ask you one follow up question. Do you see a day where there is going to be a fiscal and monetary data policy? >> Michelle: Yes >> Yes and yes? >> Absolutely and you know, this was predicted. This is my favorite quote. I say it everyday and I'll say it again today. Grace Hopper, 1965 that one day information will be on the corporate balance sheet, because it's more valuable than the hardware that processes it. That day is now. We have enough granularity in the system to actually have big data and analytics. We have enough compute power. The day is now to understand and now we have to figure out what's that report look like and how do we ride on that trend? >> Do you that that's a strategic imperative for CEOs of companies to actually get the data on the balance sheet? >> If so, how? >> I'm going to say that here first. The ones who get it on first are the ones who win. Now they won't get it on the balance sheets first as Robert pointed out. You cannot under our current accounting rules; however, just like we took brand and we turned it into an asset and we valued that asset. It's not allowed on many balance sheets. It's definitely something to invest in or divest in and to curate and measure. So I could go on for a long time about this particular topic. >> We'd love to hear a whole segment on this cutting edge data concepts and currency. Stu wants to get a question in here, go ahead Stu. >> Robert, the keynote yesterday it was security is one of those headwinds you know preventing companies from innovators to slow them down. You've got some good data on privacy and want share what is the mindset of the customers? You know, we've been asking is GDPR just going to slow things to a grinding halt, you know in IT? We think there are some opportunities there, but what's the data telling you? What are you hearing from customers? >> Well I think the world that we're in the background is that customers are asking more questions about data and data privacy, but before they buy a product or service, they want to know who has access to my data? What's it being used for? Is it going to be deleted? How long is it kept? All of those questions are contemplated by GDPR but it's a broader issue of general having privacy controls around data. So in seeing that environment we were wondering as a team is to what extent can we measure how much business may be slowed down by those kinds of questions. And so the study we released last week quantified that for the first time. And what we learned is that 65% of companies globally, and this is based on a survey of 3000 corporations around the world double-blind so we don't know who they are, 65% of them said that we are in fact they are in fact experiencing sales delays due to data privacy issues. And remarkably the average delay is seven point eight weeks. That's almost two months on average across all of these companies having a delay due to customers' asking the right questions about where their data is. We find that remarkable again adding to the idea that organizations who invest and do a better job on this can manage that to a greater degree. >> Just a clarification here this is the germ of the Privacy Maturity Benchmark Study >> Michelle: Correct >> And you can check it out on Robert's Twitter handle which is Robert Waitman his full name no space RobertWaitman W-A-I-T-M-A-N, saw that pinned on your top tweet. Impact to business >> Right >> More cost, more value again unlocking the value we totally agree with you by the way. How and at what cost? >> Well, that cost of sales delay translates into many things that affect the company's bottom line. You might miss quarterly or annual forecast because you're not making revenue. It could be that you lose sales. Once you delay a sale, you're more likely to lose a sale, so every company would be in a different situation as to how much impact it has on their product portfolio and to what degree they're seeing these delays. What we did find is that privacy and investments in privacy maturity can help manage it, so those organizations that are immature from a privacy standpoint are seeing the longest delays on average 16.8 weeks of the most immature and for the companies that are privacy mature according to the standard model only three point four weeks. So think about the difference. Sixteen point eight or three point four by having investments in privacy and we show that correlation and it makes sense because companies can manage their data better >> We've been also riffing on the notion that security was handled in the early days with perimeter based security and now, you know, it's no perimeter. It's the wild west. Security is a great example. You know, of all the vendors no one has more than four percent market share. It's a disaster and we know that. We have friends working on it. Privacy is the same way, it's almost like we got to cover the check box you know compliance. We have a privacy statement, we handle the data. It's more reactive more protection oriented not proactive. So the question is what should companies be doing to be more proactive in driving privacy oriented investments which now we see that translate to more of a business impact certainly at valuation and capability. >> Yup >> Thoughts? >> Well, I mean I would start by saying that what we're trying to put out there is that it's not just about compliance. So this is about both business value on the revenue or cost side as well as the ethical standards that we're trying to set. So we should be doing these privacy controls, because it's the right things to do regardless of the GDPR environment that we're in currently. So that's kind of the overall missioning and it's much longer term than just the GDPR timetable but it's trying to get companies to do the right things to protect the data and also because it's good for their businesses. >> Any anecdotal data on investment thesis, orientation posture from CEOs? What is the investment climate? Are they putting money into it or are they just kind of holding the line? Right now I'm trying to figure things out. Thoughts? >> Thoughts on this one? >> Million dollar question >> Yeah, so and it's a billion dollar question actually which is an important one. I think where we are seeing investment and when when we talk about privacy maturity you can come at it from a number of different vectors. So privacy engineering to Cisco is critical we sell IT things and we depend upon data as an asset, so you would expect us to do heavy investments in raising our security baseline. We've done it. We're having specific training for developers. We've done it and my team actually does not live in legal. I have a wonderful legal support team. I live in operations. So one of the investments you can make is to operationalize your working so you understand which of your business requirements are data sensitive and adding them on. The other piece of the study that is correlated again no causality yet, but we're correlating the number, mix and the complexity of your vendor set with the trend and reporting of the actual harm after a breach. >> Right, so we looked at the privacy maturity and also compared to companies who had been breached and how much they reported they had lost on this. And so interestingly again the privacy immature companies many more of them had lost enough metric here we used was over half a million dollars due to data breaches so 74% of those immature versus only 39% of the mature guys. Now why is that? We can speculate that those who are protecting their data, only keeping the data they need for their business purposes deleting it when they're done with it and having the right knowledge and inventory of where they are, are doing a better job at protecting that critical data asset. So it makes sense, but we need to learn more about what really is behind it and causing that. >> It's so interesting because there's a relationship with security, because that's where people react to what happens if there's a breach in security but they're also separate, decoupled in their own way, and it's interesting that you mention it in your organization and that's I think that is really notable and something I'd like to just double-click on. Most companies' viewed security in the early days metaphor for security in an organizational setting it's part of IT. Now it reports to the C-suite. >> Yes You're getting at a different angles. You're thinking about privacy and data as a separate group not being subservient as say legal or administration function. It's more central to the C-Suite. >> Absolutely >> Are you recommending that companies think differently? >> Absolutely >> Can you explain why? >> Oh I think and again it varies company to company, so I would love to say you know, I'm a legal person by training or I ran away from home from legal a long time ago, so I'm a business person. It's valuable to have lawyers we're nice people. We can be funny sometimes, but typically most companies it is like Bob, Joe, Sally and legal. Now what kind of an innovation posture are you taking? The other part is you know in our lawyers' defenses there is such a plethora and complexity of the laws that they have to be determinative and say this is just enough and this is the gray area. Innovators don't think like that. I don't want my innovators to think like that. I want to do the experimentation so in addition to the work we do in house with our economic guru we actually partner with universities to do financial studies to say where you're having potential breaches at every layer of the network what's the quanta? The other side is I have a seat at the table with all of our engineering teams and our business development teams so that makes a huge difference. >> I totally agree. Robert, I want to ask you a question. Back to my theory that we'll have a C-E-O chief economist officer as a standard role in a similar way not just call in the strategy guy, right? >> Michelle: Yes >> So it's like strategy hey you know whatever. This is really becoming a decentralized world global impact whether it's GDPR or other compliance economic impact is a really critical thing. >> Robert: Right >> What is your view for companies to think about the role of a company and or group to be like a economist center? Like a C-T-O is really important but you also have a V-P of engineering. So C-T-O, V-P of engineering Chief economist officer and group How do you look at that world and how do you envision it in unfolding? >> Well, I think that one element that most companies don't have today is somebody who really thinks about data and the economic value of it today and what it means. Again, because it's not on the balance sheet it's not treated the same way but it's one of our most important assets. So having someone who at least focuses on what is the value and importance of this data to my organization and all the ways that do. Whether it's my value you know in driving my ongoing operations whether it's allowing me to cut costs, whether it's unlocking value that my organization could uncover by inventorying and developing that. So I think that economic value piece of data you know is something that we're going to see more of and because data is being recognized as such an important asset I think there will be some progress in that. >> I think Michelle you made a great point about supply chain. We've been seeing the same trend in that. Block chain has been a great example where not so much bitcoin and a theory of encrypto, block chain as a technology has been impacting the supply chain. That's a data driven trend. >> Michelle: It's exclusively a data driven trend. I mean what you're talking about is indelible auth. And so there's always a place for authentication. Sometimes you just want a watermark. Sometimes you want a dossier. That's I mean that's the whole mystique of block chain is gorgeous but the reality is it's a wonderful tool if you want to authenticate something in the clair. Just like we were talking about P-K-I in the old days now if you apply that to data, so what you're calling a chief economic officer I would call a chief data officer. >> So again economics, ledger, hyper-ledger, block chain are we looking at maybe the world is going to circumvent existing standards with you know disruption with like a block chain, crypto centralized does that come together? I mean it's a collision course, no one knows the answer. Observation? >> Well, there may be some opportunities to do that. But I'm sure that we'll try to have the right ways to have controls around it as well. So not just to birth the system but to do it in a way that makes sense to protect the values that we are all trying to hold onto in terms of individual values you know as well as having the right monitoring and systems around them. >> You know Cisco disrupted the entire network protocols back in the 80s by unlocking value. And again value is the key driver of making change not just for the sake of subverting. >> I love that you're saying that because disruption has always bothered me. That's like me grabbing the chair and watching you fall down and going oh look I have a softer chair. I'd rather like have a more reductionist point of view and say what is essential value. Let's clear out the gunk that's getting in your way. >> Value is the north star for all >> It is. I think it's madly innovative and will it change businesses radically? Yes. If we want to call that disruption we can, but I think it's actually enablement of what we wanted in the first place but don't have yet. >> Well people know me I'm very bullish on crypto and block chain as a unlocking value and changing patterns and offering a new re-imagining industries that are just not moving fast enough >> Wow >> To capture the value >> Yeah >> John: Thanks so much guys for coming on. I know we slotted you in because it's a super important conversation to hear at Cisco Live and the industry. Love to have more time. Maybe we can do a follow-up with you guys. Great to see you again. >> Yeah, you too! >> It's theCUBE talking data privacy, investment, valuing data on the balance sheet. A lot of radical, progressive, cool value opportunities for the industry out there and enterprises. Yeah, this is theCUBE live coverage from Barcelona. More after this short break. (techno music)