>> Announcer: From around the globe it's theCUBE. Presenting the Convergence of File and Object brought to you by Pure Storage. >> Okay now we're going to get the customer perspective on object and we'll talk about the convergence of file and object, but really focusing on the object pieces this is a content program that's being made possible by Pure Storage and it's co-created with theCUBE. Christopher CB Bohn is here. He's a lead architect for MicroFocus the enterprise data warehouse and principal data engineer at MicroFocus. CB welcome good to see you. >> Thanks Dave good to be here. >> So tell us more about your role at Microfocus it's a pan Microfocus role because we know the company is a multi-national software firm it acquired the software assets of HP of course including Vertica tell us where you fit. >> Yeah so Microfocus is you know, it's like I can says it's wide, worldwide company that it sells a lot of software products all over the place to governments and so forth. And it also grows often by acquiring other companies. So there is there the problem of integrating new companies and their data. And so what's happened over the years is that they've had a number of different discreet data systems so you've got this data spread all over the place and they've never been able to get a full complete introspection on the entire business because of that. So my role was come in, design a central data repository and an enterprise data warehouse, that all reporting could be generated against. And so that's what we're doing and we selected Vertica as the EDW system and Pure Storage FlashBlade as the communal repository. >> Okay so you obviously had experience with with Vertica in your previous role, so it's not like you were starting from scratch, but paint a picture of what life was like before you embarked on this sort of consolidated approach to your data warehouse. Was it just dispared data all over the place? A lot of M and A going on, where did the data live? >> CB: So >> Right so again the data is all over the place including under people's desks and just dedicated you know their own private SQL servers, It, a lot of data in a Microfocus is one on SQL server, which has pros and cons. Cause that's a great transactional database but it's not really good for analytics in my opinion. So but a lot of stuff was running on that, they had one Vertica instance that was doing some select reporting. Wasn't a very powerful system and it was what they call Vertica enterprise mode where it had dedicated nodes which had the compute and storage in the same locus on each server okay. So Vertica Eon mode is a whole new world because it separates compute from storage. Okay and at first was implemented in AWS so that you could spin up you know different numbers of compute nodes and they all share the same communal storage. But there has been a demand for that kind of capability, but in an on-prem situation. Okay so Pure storage was the first vendor to come along and have an S3 emulation that was actually workable. And so Vertica worked with Pure Storage to make that all happen and that's what we're using. >> Yeah I know back when back from where we used to do face-to-face, we would be at you know Pure Accelerate, Vertica was always there it stopped by the booth, see what they're doing so tight integration there. And you mentioned Eon mode and the ability to scale, storage and compute independently. And so and I think Vertica is the only one I know they were the first, I'm not sure anybody else does that both for cloud and on-prem, but so how are you using Eon mode, are you both in AWS and on-prem are you exclusively cloud? Maybe you could describe that a little bit. >> Right so there's a number of internal rules at Microfocus that you know there's, it's not AWS is not approved for their business processes. At least not all of them, they really wanted to be on-prem and all the transactional systems are on-prem. And so we wanted to have the analytics OLAP stuff close to the OLTP stuff right? So that's why they called there, co-located very close to each other. And so we could, what's nice about this situation is that these S3 objects, it's an S3 object store on the Pure Flash Blade. We could copy those over if we needed it to AWS and we could spin up a version of Vertica there, and keep going. It's like a tertiary GR strategy cause we actually have a, we're setting up a second, Flash Blade Vertica system geo located elsewhere for backup and we can get into it if you want to talk about how the latest version of the Pure software for the Flash Blade allows synchronization across network boundaries of those Flash Blade which is really nice because if, you know there's a giant sinkhole opens up under our Koll of facility and we lose that thing then we just have to switch to DNS. And we were back in business of the DR. And then the third one was to go, we could copy those objects over to AWS and be up and running there. So we're feeling pretty confident about being able to weather whatever comes along. >> Yeah I'm actually very interested in that conversation but before we go there. you mentioned you want, you're going to have the old lab close to the OLTP, was that for latency reasons, data movement reasons, security, all of the above. >> Yeah it's really all of the above because you know we are operating under the same sub-net. So to gain access to that data, you know you'd have to be within that VPN environment. We didn't want to going out over the public internet. Okay so and just for latency reasons also, you know we have a lot of data and we're continually doing ETL processes into Vertica from our production data, transactional databases. >> Right so they got to be approximate. So I'm interested in so you're using the Pure Flash Blade as an object store, most people think, oh object simple but slow. Not the case for you is that right? >> Not the case at all >> Why is that. >> This thing had hoop It's ripping, well you have to understand about Vertica and the way it stores data. It stores data in what they call storage containers. And those are immutable, okay on disc whether it's on AWS or if you had a enterprise mode Vertica, if you do an update or delete it actually has to go and retrieve that object container from disc and it destroys it and rebuilds it, okay which is why you don't, you want to avoid updates and deletes with vertica because the way it gets its speed is by sorting and ordering and encoding the data on disk. So it can read it really fast. But if you do an operation where you're deleting or updating a record in the middle of that, then you've got to rebuild that entire thing. So that actually matches up really well with S3 object storage because it's kind of the same way, it gets destroyed and rebuilt too okay. So that matches up very well with Vertica and we were able to design the system so that it's a panda only. Now we have some reports that we're running in SQL server. Okay which we're taking seven days. So we moved that to Vertica from SQL server and we rewrote the queries, which were had, which had been written in TC SQL with a bunch of loops and so forth and we were to get, this is amazing it went from seven days to two seconds, to generate this report. Which has tremendous value to the company because it would have to have this long cycle of seven days to get a new introspection in what they call the knowledge base. And now all of a sudden it's almost on demand two seconds to generate it. That's great and that's because of the way the data is stored. And the S3 you asked about, oh you know it, it's slow, well not in that context. Because what happens really with Vertica Eon mode is that it can, they have, when you set up your compute nodes, they have local storage also which is called the depot. It's kind of a cache okay. So the data will be drawn from the Flash Blade and cached locally. And that was, it was thought when they designed that, oh you know it's that'll cut down on the latency. Okay but it turns out that if you have your compute nodes close meaning minimal hops to the Flash Blade that you can actually tell Vertica, you know don't even bother caching that stuff just read it directly on the fly from the from the Flash Blade and the performance is still really good. It depends on your situation. But I know for example a major telecom company that uses the same topologies we're talking about here they did the same thing. They just dropped the cache cause the Flash Blade was able to deliver the data fast enough. >> So that's, you're talking about that's speed of light issues and just the overhead of switching infrastructure is that, it's eliminated and so as a result you can go directly to the storage array? >> That's correct yeah, it's like, it's fast enough that it's almost as if it's local to the compute node. But every situation is different depending on your needs. If you've got like a few tables that are heavily used, then yeah put them in the cache because that'll be probably a little bit faster. But if you're have a lot of ad hoc queries that are going on, you know you may exceed the storage of the local cache and then you're better off having it just read directly from the, from the Flash Blade. >> Got it so it's >> Okay. >> It's an append only approach. So you're not >> Right >> Overwriting on a record, so but then what you have automatically re index and that's the intelligence of the system. how does that work? >> Oh this is where we did a little bit of magic. There's not really anything like magic but I'll tell you what it is I mean. ( Dave laughing) Vertica does not have indexes. They don't exist. Instead I told you earlier that it gets a speed by sorting and encoding the data on disk and ordering it right. So when you've got an append-only situation, the natural question is well if I have a unique record, with let's say ID one, two, three, what happens if I append a new version of that, what happens? Well the way Vertica operates is that there's a thing called a projection which is actually like a materialized columnar data store. And you can have a, what they call a top-K projection, which says only put in this projection the records that meet a certain condition. So there's a field that we like to call a discriminator field which is like okay usually it's the latest update timestamp. So let's say we have record one, two, three and it had yesterday's date and that's the latest version. Now a new version comes in. When the data at load time vertical looks at that and then it looks in the projection and says does this exist already? If it doesn't then it adds it. If it does then that one now goes into that projection okay. And so what you end up having is a projection that is the latest snapshot of the data, which would be like, oh that's the reality of what the table is today okay. But inherent in that is that you now have a table that has all the change history of those records, which is awesome. >> Yeah. >> Because, you often want to go back and revisit, you know what it will happen to you. >> But that materialized view is the most current and the system knows that at least can (murmuring). >> Right so we then create views that draw off from that projection so that our users don't have to worry about any of that. They just get oh and say select from this view and they're getting the latest greatest snapshot of what the reality of the data is right now. But if they want to go back and say, well how did this data look two days ago? That's an easy query for them to do also. So they get the best of both worlds. >> So could you just plug any flash array into your system and achieve the same results or is there anything really unique about Pure? >> Yeah well they're the only ones that have got I think really dialed in the S3 object form because I don't think AWS actually publishes every last detail of that S3 spec. Okay so it had, there's a certain amount of reverse engineering they had to do I think. But they got it right. When we've, a couple maybe a year and a half ago or so there they were like at 99%, but now they worked with Vertica people to make sure that that object format was true to what it should be. So that it works just as if Vertica doesn't care, if it is on AWS or if it's on Pure Flash Blade because Pure did a really good job of dialing in that format and so Vertica doesn't care. It just knows S3, doesn't know what it doesn't care where it's going it just works. >> So the essentially vendor R and D abstracted that complexity so you didn't have to rewrite the application is that right? >> Right, so you know when Vertica ships it's software, you don't get a specific version for Pure or AWS, it's all in one package, and then when you configure it, it knows oh okay well, I'm just pointed at the, you know this port, on the Pure storage Flash Blade, and it just works. >> CB what's your data team look like? How is it evolving? You know a lot of customers I talked to they complain that they struggled to get value out of the data and they don't have the expertise, what does your team look like? How is it, is it changing or did the pandemic change things at all? I wonder if you could bring us up to date on that? >> Yeah but in some ways Microfocus has an advantage in that it's such a widely dispersed across the world company you know it's headquartered in the UK, but I deal with people I'm in the Bay Area, we have people in Mexico, Romania, India. >> Okay enough >> All over the place yeah all over the place. So when this started, it was actually a bigger project it got scaled back, it was almost to the point where it was going to be cut. Okay, but then we said, well let's try to do almost a skunkworks type of thing with reduced staff. And so we're just like a hand. You could count the number of key people on this on one hand. But we got it all together, and it's been a traumatic transformation for the company. Now there's, it's one approval and admiration from the highest echelons of this company that, hey this is really providing value. And the company is starting to get views into their business that they didn't have before. >> That's awesome, I mean, I've watched Microfocus for years. So to me they've always had a, their part of their DNA is private equity I mean they're sharp investors, they do great M and A >> CB: Yeah >> They know how to drive value and they're doing modern M and A, you know, we've seen what they what wait, what they did with SUSE, obviously driving value out of Vertica, they've got a really, some sharp financial people there. So that's they must have loved the the Skunkworks, fast ROI you know, small denominator, big numerator. (laughing) >> Well I think that in this case, smaller is better when you're doing development. You know it's a two-minute cooks type of thing and if you've got people who know what they're doing, you know I've got a lot of experience with Vertica, I've been on the advisory board for Vertica for a long time. >> Right And you know I was able to learn from people who had already, we're like the second or third company to do a Pure Flash Blade Vertica installation, but some of the best companies after they've already done it we are members of the advisory board also. So I learned from the best, and we were able to get this thing up and running quickly and we've got you know, a lot of other, you know handful of other key people who know how to write SQL and so forth to get this up and running quickly. >> Yeah so I mean, look it Pure is a fit I mean I sound like a fan boy, but Pure is all about simplicity, so is object. So that means you don't have to ra, you know worry about wrangling storage and worrying about LANs and all that other nonsense and file names but >> I have burned by hardware in the past you know, where oh okay they built into a price and so they cheap out on stuff like fans or other things in these components fail and the whole thing goes down, but this hardware is super good quality. And so I'm happy with the quality of that we're getting. >> So CB last question. What's next for you? Where do you want to take this initiative? >> Well we are in the process now of, we're when, so I designed a system to combine the best of the Kimball approach to data warehousing and the inland approach okay. And what we do is we bring over all the data we've got and we put it into a pristine staging layer. Okay like I said it's a, because it's append-only, it's essentially a log of all the transactions that are happening in this company, just as they appear okay. And then from the Kimball side of things we're designing the data marts now. So that's what the end users actually interact with. So we're taking the, we're examining the transactional systems to say, how are these business objects created? What's the logic there and we're recreating those logical models in Vertica. So we've done a handful of them so far, and it's working out really well. So going forward we've got a lot of work to do, to create just about every object that the company needs. >> CB you're an awesome guest really always a pleasure talking to you and >> Thank you. >> congratulations and good luck going forward stay safe. >> Thank you, you too Dave. >> All right thank you. And thank you for watching the Convergence of File and Object. This is Dave Vellante for theCUBE. (soft music)

>> From theCUBE Studios in Palo Alto and Boston, bringing you data-driven insights from theCUBE and ETR. This is Breaking Analysis with Dave Vellante. >> UiPath has had a long, strange trip to IPO. How so you ask? Well, the company was started in 2005. But it's culture, is akin to a frenetic startup. The firm shunned conventions and instead of focusing on a narrow geographic area to prove its product market fit before it started to grow, it aggressively launched international operations prior to reaching unicorn status. Well prior, when it had very little revenue, around a million dollars. Today, more than 60% of UiPath business is outside of the United States. Despite its headquarters being in New York city. There's more, according to recent SEC filings, UiPath total revenue grew 81% last year. But it's free cash flow, is actually positive, modestly. Wait, there's more. The company raised $750 million in a Series F in early February, at a whopping $35 billion valuation. Yet, the implied back of napkin valuation, based on the number of shares outstanding after the offering multiplied by the proposed maximum offering price per share yields evaluation of just under 26 billion. (Dave chuckling) And there's even more to this crazy story. Hello everyone, and welcome to this week's Wikibon CUBE Insights, Powered by ETR. In this Breaking Analysis we'll share our learnings, from sifting through hundreds of pages (paper rustling) of UiPath's red herring. So you didn't have to, we'll share our thoughts on its market, its competitive position and its outlook. Let's start with a question. Mark Roberge, is a venture capitalist. He's a managing director at Stage 2 Capital and he's also a teacher, a professor at the B-School in Harvard. One of his favorite questions that he asks his students and others, is what's the best way to grow a company? And he uses this chart to answer that question. On the vertical axis is customer retention and the horizontal axis is growth to growth rate and you can see he's got modest and awesome and so forth. Now, so I want to let you look at it for a second. What's the best path to growth? Of course you want to be in that green circle. Awesome retention of more than 90% and awesome growth but what's the best way to get there? Should you blitz scale and go for the double double, triple, triple blow it out and grow your go to market team on the horizontal axis or should be more careful and focus on nailing retention and then, and only then go for growth? What do you think? What do you think most VCs would say? What would you say? When you want to maybe run the table, capture the flag before your competitors could get there or would you want to take a more conservative approach? What would Daniel Dines say the CEO of UiPath? Again, I'll let you think about that for a second. Let's talk about UiPath. What did they do? Well, I shared at the top that the company shunned conventions and expanded internationally, very rapidly. Well before it hit escape velocity and they grew like crazy and it got out of control and he had to reign it in, plug some holes, but the growth didn't stop, go. So very clearly based on it's performance and reading through the S1, the company has great retention. It uses a metric called gross retention rate which is at 96 or 97%, very high. Says customers are sticking with it. So maybe that's the right formula go for growth and grow like crazy. Let chaos reign, then reign in the chaos as Andy Grove would say. Go fast horizontally, and you can go vertically. Let me tell you what I think Mark Roberge would say, he told me you can do that. But churn is the silent killer of SaaS companies and perhaps the better path is to nail product market fit. And then your retention metrics, before you go into hyperbolic growth mode. There's all science behind this, which may be antithetical to the way many investors want to roll the dice and go for super growth, like go fast or die. Well, it worked for UiPath you might say, right. Well, no. And this is where the story gets even more interesting and long and strange for UiPath. As we shared earlier, UiPath was founded in 2005 out of Bucharest Romania. The company actually started as a software outsourcing startup. It called the company, DeskOver and it built automation libraries and SDKs for companies like Microsoft, IBM and Google and others. It also built automation scripts and developed importantly computer vision technology which became part of its secret sauce. In December 2015, DeskOver changed its name to UiPath and became a Delaware Corp and moved its headquarters to New York City a couple of years later. So our belief is that UiPath actually took the preferred path of Mark Roberge, five ticks North, then five more East. They slow-cooked for the better part of 10 years trying to figure out what market to serve. And they spent that decade figuring out their product market fit. And then they threw gas in the fire. Pretty crazy. All right, let's take a peak (chuckling) at the takeaways from the UiPath S1 the numbers are impressive. 580 million ARR with 65% growth. That asterisk is there because like you, we thought ARR stood for annual recurring revenue. It really stands for annualized renewal run rate. annualized renewal run rate is a metric that is one of UiPath's internal KPIs and are likely communicate that publicly over time. We'll explain that further in a moment. UiPath has a very solid customer base. Nearly 8,000, I've interviewed many of them. They're extremely happy. They have very high retention. They get great penetration into the fortune 500, around 63% of the fortune 500 has UiPath. Most of UiPath business around 70% comes from existing customers. I always say you're going to get more money out of existing customers than new customers but everybody's trying to go out and get new customers. But UiPath I think is taking a really interesting approach. It's their land and expand and they didn't invent that term but I'll come back to that. It kind of reminds me of the early days of Tableau. Actually I think Tableau is an interesting example. Like UiPath, Tableau started out as pretty much a point tool and it had, but it had very passionate customers. It was solving problems. It was simplifying things. And it would have bid into a company and grow and grow. Now the market fundamentals for UiPath are very good. Automation is super hot right now. And the pandemic has created an automation mandate to date and I'll share some data there as well. UiPath is a leader. I'm going to show you the Gartner Magic Quadrant for RPA. That's kind of a good little snapshot. UiPath pegs it's TAM at 60 billion dollars based on some bottoms up calculations and some data from Bain. Pre-pandemic, we pegged it at over 30 billion and we felt that was conservative. Post-pandemic, we think the TAM is definitely higher because of that automation mandate, it's been accelerated. Now, according to the S1, UiPath is going to raise around 1.2 billion. And as we said, if that's an implied valuation that is lower than the Series F, so we suspect the Series F investors have some kind of ratchet in there. UiPath needed the cash from its Series F investors. So it took in 750 million in February and its balance sheet in the S1 shows about 474 million in cash and equivalent. So as I say, it needed that cash. UiPath has had significant expense reductions that we'll show you in some detail. And it's brought in some fresh talent to provide some adult supervision around 70% of its executive leadership team and outside directors came to the company after 2019 and the company's S1, it disclosed that it's independent accounting firm identified last year what it called the "material weakness in our internal controls over financial report relating to revenue recognition for the fiscal year ending 2018, caused by a lack of oversight and technical competence within the finance department". Now the company outlined the steps it took to remediate the problem, including hiring new talent. However, we said that last year, we felt UiPath wasn't quite ready to go public. So it really had to get its act together. It was not as we said at the time, the well-oiled machine, that we said was Snowflake under Mike Scarpelli's firm operating guidance. The guy's the operational guru, but we suspect the company wants to take advantage of this mock market. It's a good time to go public. It needs the cash to bolster its balance sheet. And the public offering is going to give it cache in a stronger competitive posture relative to its main new competitor, autumn newbie competitor Automation Anywhere and the big whales like Microsoft and others that aspire and are watching what UiPath is doing and saying, hey we want a piece of that action. Now, one other note, UiPath's CEO Daniel Dines owns 100% of the class B shares of the company and has a 35 to one voting power. So he controls the company, subject of course to his fiduciary responsibilities but if UiPath, let's say it gets in trouble financially, he has more latitude to do secondary offerings. And at the same time, it's insulated from activist shareholders taking over his company. So lots of detail in the S1 and we just wanted to give you some of those highlights. Here are the pretty graphs. If whoever wrote this F1 was a genius. It's just beautiful. As we said, ARR, annualized renewal run rate all it does is it annualizes the invoice amount from subscriptions in the maintenance portion of the revenue. In other words, the parts that are recurring revenue, it excludes revenue from support and perpetual license. Like one-time licenses and services is just kind of the UiPath's and maybe that's some sort of legacy there. It's future is that recurring revenue. So it's pretty similar to what we think of as ARR, but it's not exact. Lots of customers with a growing number of six and seven figure accounts and a dollar-based net retention of 145%. This figure represents the rate of net expansion of the UiPath ARR, from existing listing customers over a 12 month period. Translation. This says UiPath's existing customers are spending more with the company, land and expand and we'll share some data from ETR on that. And as you can see, the growth of 86% CAGR over the past nine quarters, very impressive. Let's talk about some of the fundamentals of UiPath's business. Here's some data from the Brookings Institute and the OECD that shows productivity statistics for the US. The smaller charts in the right are for Germany and Japan. And I've shared some similar data before the US showed in the middle there. Showed productivity improvements with the personal productivity boom in the mid to late 90s. And it spilled into the early 2000s. But since then you can see it's dropped off quite significantly. Germany and Japan are also under pressure as are most developed countries. China's labor productivity might show declines but it's level, is at level significantly higher than these countries, April 16th headline of the Wall Street Journal says that China's GDP grew 18% this quarter. So, we've talked about the snapback in post-COVID and the post-isolation economy, but these are kind of one time bounces. But anyway, the point is we're reaching the limits of what humans can do alone to solve some of the world's most pressing challenges. And automation is one key to shifting labor away from these more mundane tasks toward more productive and more important activities that can deliver lasting benefits. This according to UiPath, is its stated purpose to accelerate human achievement, big. And the market is ready to be automated, for the most part. Now the post-isolation economy is increasingly going to focus on automation to drive toward activity as we've discussed extensively, I got to share the RPA Magic Quadrant where nearly everyone's a winner, many people are of course happy. Many companies are happy, just to get into the Magic Quadrant. You can't just, you have to have certain criteria. So that's good. That's what I mean by everybody wins. We've reported extensively on UiPath and Automation Anywhere. Yeah, we think we might shuffle the deck a little bit on this picture. Maybe creating more separation between UiPath and Automation Anywhere and the rest. And from our advantage point, UiPath's IPO is going to either force Automation Anywhere to respond. And I don't know what its numbers are. I don't know if it's ready. I suspect it's not, we'd see that already but I bet you it's trying to get there. Or if they don't, UiPath is going to extend its lead even further, that would be our prediction. Now personally, I would have Pegasystems higher on the vertical. Of course they're not an IPO, RPA specialist, so I kind of get what Gartner is doing there but I think they're executing well. And I'd probably, in a broader context I'd probably maybe drop blue prism down a little bit, even though last year was a pretty good year for the company. And I would definitely have Microsoft looming larger up in the upper left as a challenger more than a visionary in my opinion, but look, Gartner does good work and its analysts are very deep into this stuff, deeper than I am. So I don't want to discount that. It's just how I see it. Let's bring in the ETR data and show some of the backup here. This is a candlestick chart that shows the components of net score, which is spending momentum, however, ETR goes out every quarter. Says you're spending more, you're spending less. They subtract the lesses from the mores and that's net score. It's more complicated than that, but that's that blue line that you see in the top and yes it's trending downward but it's still highly elevated. We'll talk about that. The market share is in the yellow line at the bottom there. That green represents the percentage of customers that are spending more and the reds are spending less or replacing. That gray is flat. And again, even though UiPath's net score is declining, it's that 61%, that's a very elevated score. Anything over 40% in our view is impressive. So it's, UiPath's been holding in the 60s and 70s percents over the past several years. That's very good. Now that yellow line market share, yes it dips a bit, but again it's nuanced. And this is because Microsoft is so pervasive in the data stat. It's got so many mentions that it tends to somewhat overwhelm and skew these curves. So let's break down net score a little bit. Here's another way to look at this data. This is a wheel chart we show this often it shows the components of net score and what's happening here is that bright red is defection. So look at it, it's very small that wouldn't be churn. It's tiny. Remember that it's churn is the killer for software companies. And so that forest green is existing customers spending more at 49%, that's big. That lime green is new customers. So again, it's from the S1, 70% of UiPath's revenue comes from existing customers. And this really kind of underscores that. Now here's more evidence in the ETR data in terms of land and expand. This is a snapshot from the January survey and it lines up UiPath next to its competitors. And it cuts the data just on those companies that are increasing spending. It's so that forest green that we saw earlier. So what we saw in Q1 was the pace of new customer acquisition for UiPath was decelerating from previous highs. But UiPath, it shows here is outpacing its competition in terms of increasing spend from existing customers. So we think that's really important. UiPath gets very high scores in terms of customer satisfaction. There's, I've talked to many in theCUBE. There's places on the web where we have customer ratings. And so you want to check that out, but it'll confirm that the churn is low, satisfaction is high. Yeah, they get dinged sometimes on pricing. They get dinged sometimes, lately on service cause they're growing so fast. So, maybe they've taken the eye off the ball in a couple of counts, but generally speaking clients are leaning in, they're investing heavily. They're creating centers of excellence around RPA and automation, and UiPath is very focused on that. Again, land and expand. Now here's further evidence that UiPath has a strong account presence, even in accounts where its competitors are presence. In the 149 shared accounts from the Q1 survey where UiPath, Automation Anywhere and Microsoft have a presence, UiPath's net score or spending velocity is not only highly elevated, it's relative momentum, is accelerating compared to last year. So there's some really good news in the numbers but some other things stood out in the S1 that are concerning or at least worth paying attention to. So we want to talk about that. Here is the income statement and look at the growth. The company was doing like 1 million dollars in 2015 like I said before. And when it started to expand internationally it surpassed 600 million last year. It's insane growth. And look at the gross profit. Gross margin is almost 90% because revenue grew so rapidly. And last year, its cost went down in some areas like its services, less travel was part of that. Now jump down to the net loss line. And normally you would expect a company growing at this rate to show a loss. The street wants growth and UiPath is losing money, but it's net loss went from 519 million, half a billion down to only 92 million. And that's because the operating expenses went way down. Now, again, typically a company growing at this rate would show corresponding increases in sales and marketing expense, R&D and even G&A but all three declined in the past 12 months. Now reading the notes, there was definitely some meaningful savings from no travel and canceled events. UiPath has great events around the world. In fact theCUBE, Knock Wood is going to be at its event in October, in Las Vegas at the Bellagio . So we're stoked for that. But, to drop expenses that precipitously with such high growth, is kind of strange. Go look at Snowflake's income statement. They're in hyper-growth as well. We like to compare it to Snowflake is a very well-run company and it's in hyper-growth mode, but it's sales and marketing and R&D and G&A expense lines. They're all growing along with that revenue. Now, perhaps they're growing at a slower rate. Perhaps the percent of revenue is declining as it should as they achieve operating leverage but they're not shrinking in absolute dollar terms as shown in the UiPath S1. So either UiPath has applied some magic automation mojo to it's business (chuckling). Like magic beans or magic grits with my cousin Vinny. Maybe it has found the Holy grail of operating leverage. It's a company that's all about automation or the company was running way too hot on the expense side and had a cut and clean up its income statement for the IPO and conserve some cash. Our guess is the latter but maybe there's a combination there. We'll give him the benefit of the doubt. And just to add a bit more to this long, strange trip. When have you seen an explosive growth company just about to go public, show positive cashflow? Maybe it's happened, but it's rare in the tech and software business these days. Again, go look at companies like Snowflake. They're not showing positive cashflow, not yet anyway. They're growing and trying to run the table. So you have to ask why is UiPath operating this way? And we think it's because they were so hot and burning cash that they had to reel things in a little bit and get ready to IPO. It's going to be really interesting to see how this stock reacts when it does IPO. So here's some things that we want you to pay attention to. We have to ask. Is this IPO, is it window dressing? Or did UiPath again uncover some new productivity and operating leverage model. I doubt there's anything radically new here. This company doesn't want to miss the window. So I think it said, okay, let's do this. Let's get ready for IPO. We got to cut expenses. It had a lot of good advisors. It surrounded itself with a new board. Extended that board, new management, and really want to take advantage of this because it needs the cash. In addition, it really does want to maintain its lead. It's got Automation Anywhere competing with it. It's got Microsoft looming large. And so it wants to continue to lead. It's made some really interesting acquisitions. It's got very strong vision as you saw in the Gartner Magic Quadrant and obviously it's executing well but it's really had to tighten things up. So we think it's used the IPO as a fortune forcing function to really get its house in order. Now, will the automation mandate sustain? We think it will. The forced match to digital worked, it was effective. It wasn't pleasant, but even in a downturn we think it will confer advantage to automation players and particularly companies like UiPath that have simplified automation in a big way and have done a great job of putting in training, great freemium model and has a culture that is really committed to the future of humankind. It sounds ambitious and crazy but talk to these people, you'll see it's true. Pricing, UiPath had to dramatically expand or did dramatically expand its portfolio and had to reprice everything. And I'm not so worried about that. I think it'll figure that pricing out for that portfolio expansion. My bigger concern is for SaaS companies in general. I don't like SaaS pricing that has been popularized by Workday and ServiceNow, and Salesforce and DocuSign and all these companies that essentially lock you in for a year or two and basically charge you upfront. It's really is a one-way street. You can't dial down. You can only dial up. It's not true Cloud pricing. You look at companies like Stripe and Datadog and Snowflake. It is true Cloud pricing. It's consumption pricing. I think the traditional SaaS pricing model is flawed. It's very unfairly weighted toward the vendors and I think it's going to change. Now, the reason we put cloud on the chart is because we think Cloud pricing is the right way to price. Let people dial up and dial down, let them cancel anytime and compete on the basis of your product excellence. And yeah, give them a price concession if they do lock in. But the starting point we think should be that flexibility, pay by the drink. Cancel anytime. I mentioned some companies that are doing that as well. If you look at the modern SaaS startups and the forward-thinking VCs they're really pushing their startups to this model. So we think over time that the term lock-in model is going to give way to true consumption-based pricing and at the clients option, allow them to lock-in for a better price, way better model. And UiPath's Cloud revenue today is minimal but over time, we think it's going to continue to grow that cloud. And we think it will force a rethink in pricing and in revenue recognition. So watch for that. How is the street going to react to Daniel Dines having basically full control of the company? Generally, we feel that that solid execution if UiPath can execute is going to outweigh those concerns. In fact, I'm very confident that it will. We'll see, I kind of like what the CEO says has enough mojo to say (chuckling) you know what, I'm not going to let what happened to for instance, EMC happen to me. You saw Michael Dell do that. You saw just this week they're spinning out VMware, he's maintaining his control. VMware Dell shareholders get get 40.44 shares for every Dell share they're holding. And who's the biggest shareholder? Michael Dell. So he's, you got two companies, one chairman. He's controlling the table. Michael Dell beat the great Icahn. Who beats Carl Icahn? Well, Michael Dell beats Carl Icahn. So Daniel Dines has looked at that and says, you know what? I'm not just going to give up my company. And the reason I like that with an if, is that we think will allow the company to focus more on the long-term. The if is, it's got to execute otherwise it's so much pressure and look, the bottom line is that UiPath has really favorable market momentum and fundamentals. But it is signing up for the 90 day short clock. The fact that the CEO has control again means they can look more long term and invest accordingly. Oftentimes that's easier said than done. It does come down to execution. So it is going to be fun to watch (chuckling). That's it for now, thanks to the community for your comments and insights and really always appreciate your feedback. Remember, I publish each week on Wikibon.com and siliconangle.com and these episodes are all available as podcasts. All you got to do is search for the Breaking Analysis podcast. You can always connect with me on Twitter @dvellante or email me at david.vellante@siliconangle.com or comment on my LinkedIn posts. And we'll see you in clubhouse. Follow me and get notified when we start a room, which we've been doing with John Furrier and Sarbjeet Johal and others. And we love to riff on these topics and don't forget, please check out etr.plus for all the survey action. This is Dave Vellante, for theCUBE Insights Powered by ETR. Be well everybody. And we'll see you next time. (gentle upbeat music)

>>Trump and low park California in the heart of Silicon Valley. It's the cube covering cloud now. Awards 2020 brought to you by Silicon angle media. Now here's Sonya to garden. >>Hi and welcome to the cube. I'm your host Sonia to Gary. And we're on the ground at Facebook headquarters in Menlo park, California covering cloud now's top women entrepreneurs in cloud innovation awards. Joining us today is modest to get day, the cofounder of branch motto. Welcome to the cube. Thank you so much for having me. So you're receiving an award today for being a top female entrepreneur in cloud innovation. How does that feel? >>It feels awesome. I'm humbled to be in such amazing company with some great ladies that have started really great companies, so pretty excited to be here. >>Great. So just give us a brief overview of your background. >>Sure. Uh, my background, well, I probably don't have the regular Silicon Valley background. I was born and raised in communist Romania, uh, in a pretty small town called Barco, uh, in the Rijo Romania called Moldavia. I was very good at math. Um, and my parents, uh, pushed me to explore applying to schools in the United States, which I did. Um, and I applied to 23 colleges and the DOB, uh, getting a full scholarship from Cornell where I studied computer engineering. Um, I dreamt of working for big companies, which I did for a while, uh, until one day when I remember I was doing a master's to Stanford and one professor told me I was, I told him, I was like, I don't think I could ever start a company. And he was like, what if you don't? Like, who do you think? Well, so I was like, Oh, I never thought about it that way. Um, and that's when I think my entrepreneurial dream started. And a few years later I started, um, phone co-founders and started a few different companies that eventually ended up being branch. That's a long answer to your question. >>No, that's perfect. So what inspired you to start branch and how did you navigate getting funding? >>Um, it's a, it's an interesting story. I think we came together, my cofounders and I were in business school, Stanford, we all want to start a company and we did what all business school students do. We just started something that sounded cool but maybe it didn't have such a big market. Um, and uh, then pivoted and ended up building an app. So we worked on an app or the mobile photo printing app called kindred. We worked on the Apple for quite some time. It was, um, over a year we sold over 10,000 photo books. I've seen a lot of images of babies and pets and we reviewed manually every single book and we had a really hard time growing. So if you think about the mobile ecosystem today, and if you compare it to the web on the web, the web is a pretty democratic system. >>You, um, you have the HTTP protocol and you are able to put together a website and make sure that the website gets found through social media to research to all this other platforms. Apps are much harder to discover. Um, the app ecosystem is owned by the platforms. And we had a really hard time applying. I was coming from the web world and all the things I had done to market websites just in the work with the apps. And it was hard. Uh, you know, you could only Mark at the top and how out all the content inside the app. That's a lot more interesting than the app itself. So we, we felt that we were like really, really struggling and we would need it to kind of shut the company down. And then we realized that one of the things that we were trying to build for us to a disability to allow people to share and get to content within the app, which is in our case was photo books was actually something that everyone in the ecosystem needed. >>So we, we asked a lot of people and it seemed like this was a much bigger need. Uh, then, you know, the photo books. And, uh, we had started to already build it to solve our own problem. So we started building a linking and attribution platform, um, to help other app. And mobile companies grow and understand their user journey and help build like interesting connections for the user. So, you know, our mission is to, um, to help people discover content within apps, uh, through links that always work. Uh, and it's been a wonderful, like an F pretty exciting journey ever since. That's really inspiring and, and solving a real world problem, a real world problem. >> So it's interesting when you ask about fundraising. Uh, it was so hard to raise money for the photo book app. And we raised actually from, uh, uh, pay our ventures and they actually, even now I remember, uh, the guy patch man sat us down in a very Silicon Valley fashion at the rosewoods and was a very hot day and there was like Persian tea being served and he gave us money and he said, you know, I just want to do something. >>I am not investing in the idea. I'm investing in you as a team. Uh, and if you pivot away from photo books, you know, uh, which we did and I think we pivoted the way because we ended up finding a much, much bigger problem. And we felt that, you know, we could actually make a, an actual change into the mobile cloud ecosystem. And that's how, that's how it all started. Uh, and it wasn't actually was easier to raise money after we had a really big problem. We had a good team that had been working together for almost two years. We had product market fit. >> So, uh, so yeah. So what are some things that have influenced you in your journey to become an entrepreneur? Um, some things interesting. Um, well I would say the Stanford design school. Um, I think I came from working for Siemens, which is a giant company. >>And I started doing this project and I remember one of the projects was we built, um, an, uh, a toolbar we were supposed to where we're doing a project for, um, Firefox, which, you know, Mozilla was utilize browser, uh, which was in some ways the precursor to Chrome. And we're trying to help it grow. And we didn't know. And one of the ideas was we, we built this toolbar for eBay and eBay hadn't had a toolbar for Firefox. And we, you know, we were some students for two weeks. We build this toolbar bar and then someone bought the car to our toolbar. And I was like, wow. Like how incredible is it that you can just kind of put your thoughts on something and just get something done and make an actual impact someone's life. And I think that's when the spark of the entrepreneurial spark, it was during that time that, um, Michael Dearing course, a professor and one of my D school courses also told me the thing that if I don't do it, who will? >>And I think that's when, that's when it all started. I think the things that have helped me along the way, I mean, my cofounders, I think I've been incredibly lucky to find cofounders that are incredibly eager to be good at what they do and also very different from me. So I think if you think about why many companies implode, it's usually because of the founding team. We've been together for almost seven years now. Uh, and it's been an interesting way to find balance through so many failed companies. So many stages of growth branches over 400 people now. So you know, our roles have shifted over time and it's been like, uh, an interesting journey and I think recently more in the past few years, I think one of the things that has helped me find balance has been having a group of female founder friends. Um, it's really interesting to have a peer group that you can talk about things with and be vulnerable with. >>And I didn't have that in the first few years and I wish I did. My cofounders are amazing, but I think in some ways we are also coworkers. So having an external group has been incredibly helpful in helping me find balance in my life. So I think a lot of women feel that way. They feel that it's really difficult to navigate in this male dominated workspace. So what advice would you give to female entrepreneurs in this space? Yeah, I mean it is really hard and I think confidence is something that I've noticed with myself, my peers, the women that I've invested in. I do investing on the side. Uh, I would say believe that you can do it. Uh, believe that the only, the sky's the limit believe that, um, you can do more than you think you can do. I think sometimes, uh, you know, our, our background and the society around us, um, doesn't necessarily believe that we can do the things that we can do as women. >>So I think believing in ourselves is incredibly important. I think the second part is making sure that we build networks around us. They can tell us that they believe in us. They can push us beyond what we think is possible. And I think those networks can be peers. Like my funeral founder group, we call each other for ministers or, uh, I think investors. Um, I think it can be mentors. And I've had, I've been lucky enough to have amazing women investors, uh, women mentors. Um, and I, it's been a really incredible to see how much they helped me grow. So I think the interesting thing is when I was just getting started, I didn't look for those communities. I didn't look for a guy. I just kinda felt, Oh, I can do it. But I didn't actually realize that being part of a community, being vulnerable, asking questions can actually go help me go so much further. Um, so the advice would be to start early and find a small group of people that you can actually rely on, and that can be your advocates and your champions. So, yeah. Well, thank you so much for those words of wisdom. Thanks for having me. Thank you for being on the cube. I'm your host, Sonia to Gary. Thanks for watching the cube. Stay tuned for more.

>> Announcer: Live, from Miami Beach, Florida, it's theCUBE, covering UiPath Forward Americas. Brought to you by UiPath. >> Welcome back to Miami everybody, you're watching theCUBE, the leader in live tech coverage. We go out to events, we extract the signal from the noise. The signal here is all about automation, robotic process automation, software robots, we're seeing the ascendancy of that market space. I'm Dave Vellante with Stu Miniman. This is UiPath's Forward conference, big user conference, UiPath Forward Americas, about 1500 people here, Stu. They have conferences all over the world, I think I heard 14,000 people in the last year have attended such shows. They're intimate, there are a lot of partners here, they're loud, they're a lot of good energy. Ana Cinca is here, she's the Vice President of Enabling Technologies, and she's joined by old friend Tom Clancy, who's the Senior Vice President of UiPath Learning, both folks from UiPath, welcome. Thanks for coming to theCUBE. >> Thank you for having us. >> So Ana, let's start with you. VP of Enabling Technologies. What does that mean, what's that role? >> Well, my role in the organization is to generate a set of non-core products and programs that are creating an ecosystem that is actually contributing actively into accelerating the adoption of the core platform. And that would be through learning, through generating new products like the UiPath Go!, the Marketplace, or constantly engaging the community of users and so on. >> Okay, so you started the training program, correct? >> Ana: Yeah. >> How did that get started? What was your kind of mission, how'd you do it? >> Well it started from a very simple need. Back then, about two years ago, we were, a bunch of my team members were a bunch of RPA developers, who were losing their time only delivering training, so, two years ago about 500 trainings, five days per week, per year. That were a lot of training, so we said, we need to automate this, we need to do something about it. And the only thing that could come into our mind was to, we got inspired by the Udemy, by Coursera, by all the right courses out there, like platforms out there, which were very democratic in sharing the knowledge. So we said, how about we actually create a set of online courses that are really, really good, RPA focused, UiPath focused, courses, and put it out there? That's how it all started, we just wanted to get rid of these repetitive trainings, ultimately. >> Alright, so you had to do it for yourselves and then. >> Ana: Absolutely, yeah. >> So Stu, we heard today from Daniel, he kind of did the moon shot. He said we are going to train a million people in three years, right? >> Well, Tom, it seems like you've got a challenge in front of you to really scale this business. We've talked with you for years, back in your EMC days, your not just storage but new architectures, this convergent approach to the silos, and then cloud architects, really training kind of next generation of the work force in IT, give us a little bit, what's the same, what's different between what you did back at EMC and what you're doing now here with RPA? >> So the biggest difference between EMC and UiPath is EMC had a technology that a lot of people thought was kind of commodity, right? So, the excitement wasn't there when you started going outside of your partners and customers, right? This technology, there is passion about this throughout the entire globe. This is the next big wave, and so, if you're going to scale a program like this, you have to have a bunch of different factors on your side. What Ana just talked about is the academy, you have to bring value somehow, and that starts with having the right courses. If you don't have the courses built up, then you're starting from zero, right, from scratch. But, the other thing that's even more important, is the passion from the CEO. You know, when I first met with Daniel, it was actually sort of an interview, he was, he talked about, you know, employee training, partner training, customer training, but his passion and forty-five minutes of the hour was talking about educating the planet, right? And so he started with universities, which that was kind of a no brainer. And then he went to Youth in Action, under-represented groups, and so forth. The other factor that's really important is having the right team, so, at UiPath, the team is the company, everybody wants to do this. If you're the leader in India, Japan, China, the US, they're all coming to us saying "We need this program." Not just universities but all the way down to the youths. And then, you need a good academic alliance team. So the team that we're building is going to leverage academy, but we are bringing in some of those EMC academic alliance people, we're bringing in a person from Salesforce.com that was running a big piece of it, starts today. We're bringing in a VMware person, a Cisco person, so we're getting all the best. Those are the best programs in the industry. >> Tom, there's one underlying thing, that I saw, a similarity, is back when you talked about convergence or cloud, there was an underlying fear of "Oh my gosh, I'm not going to have the skills, I'm going to be out of a job." Automation's always been that thing "Oh wait, if I automate it, what's that mean for me?" How do you address that? >> Well, first of all, there's a report all that says by 2030, 1.5 billion jobs will be impacted. It doesn't say negative, it just says impacted. So, everybody is going to have to understand that this is coming, and how does it impact me? We're going to put together, as part of this, we'll have an upscaling rescaling, so everybody, it doesn't matter who you are, will be able to leverage the academy, and we'll be tweaking the academy courses, so if it's upscaling rescaling, they will take the courses in a different way, in a different format, than the university students, than the Youth in Action, so we'll target those different audiences, and the other, one other thing is marketing is hugely important, because you can't rely on the training group to get the word out. So, Bobby Patrick and his team, are working hand-in-hand with us to drive the awareness across the globe. >> So Ana, when we first heard about RPA and UiPath, we read the Forrester report, and said "Okay, there's a few leaders out there, let's "play with it, let's go download the software "and see how hard it is to do." Turned out, we could only get our hands on UiPath software, it was very easy to get our hands on the software, it was very open. Some of the other guys were like, "Why do you want to use it?" Forget it. But then we built some automations, and it was kind of, you know, it took a little, there was a little bit of a learning curve, but it was not a developer who did it, so it was relatively low code, or even no code. So, when you started this program and as you scale it, who are you targeting? Is it the hardcore developer, is it the, you know, RPA developer, is it the citizen developer, both? And how do you adjust the training correspondingly? >> Yeah, so, first of all, the way we set up the trainings, were, we wanted to make sure that, exactly like we did with the core platform, that was the first RPA software that had a trial version that was available for everyone, right? We had to do the same thing in learning and we're an academy, so what we said were we're launching courses which are free of charge, online, for everyone to use. But, moreover than that, what we wanted to do, is to, have courses that take someone from a very basic foundation level, of basic programming, and actually guide him or her through a learning curve that will get them to an expert level. So, the way we built the courses, are in such a matter that it is very easy to be followed by anyone, actually. And now, that's the reason why, now we're having not only courses for the RPA developers, the techie guys, or solution architects, or infrastructure engineers, but, moreover than that, we're tackling into the space of non-technical people who are equally very important in the RPA journey. Like business analysts, the RPA project managers, and so on. So we're trying to cover all the personas that are critical in an RPA COE set up. >> So it's interesting, Tom, hearing you say you're recruiting people from Cisco, Vmware, some EMC folks, a lot of the traditional, some would say legacy, enterprise companies, who are constantly in the process of reskilling, so I would think that these folks would be very receptive to that. Now you think about Vmware admin, Cisco certified engineers, Microsoft certifications, they sort of led to full employment for at least some period of time. Do you think RPA skills are going to be similar, in that they are going to be in such demand, if young people start to get trained in RPA they're going to essentially have full employment for life, or do you think it's more fleeting that that? You're thoughts? >> So I've been here for three months now, so I guess that makes me a veteran at UiPath, but robotics is going to be in everybody's job. So one of the things that it took me a while to kind of grasp when I was talking to Daniel the first time, the first meeting I mentioned, is he said that there will be at least one robot on every desktop moving forward. This is going to be, you know, when you had the flip phone before, well actually, when people went from the big cell phones and people were saying everybody's going to have a cell phone, you know, everybody looked like "That's kind of crazy," but then, next thing you know, you have a computer on your phone, and everybody has at least one phone. This is going to be the same way with robots. It's going to be ubiquitous across the entire industry. So, people will grow up understanding what robots are. That's why we're going after the youth, so they understand robots right from the get go. And then, it will integrated into everybody's job across the globe, so it's not fleeting at all, it's actually the complete opposite. >> How do you guys measure success? Obviously, you got to get to a million in three years, that's a lot of training. How else do you measure success? What kind of parameters do you set? Tests you take, how do you measure it? >> Want to take that one up for scaling? >> So, one of the things we did, well Ana, one of the things that Ana did before I got here, was they built certification. Certification is going to continue to get more and more important for us. You know, so, think Microsoft, Cisco, certification, and so forth, and so, we believe we will have the industry standard certification program, period. But one of the things we did, was we built our own certification platform, high stakes certification. So what that does is, we do not have to charge, or charge much, any of the people going through our courses and certification. So, today, because we had to go through a third party, we're charging 850 dollars per test. This quarter, through the end of the year, it's going to be zero, just to bring more people in. And then, going forward, it would be significantly lower than 150. What we want to do, and what we will do, is democratize learning and certification for robots. >> I think this is huge, go on you want to add something? >> Yeah, I really want to add one more thing, because what we're doing together, is actually, through the way we're approaching community, and through the spaces that we have already built so far like the academy, the forum, we're bringing now the UiPath Go! in October, the end of October, the project space, all holistically wrapped up in a new version of the community. What we're trying to get out there is an RPA developer getting trained on the academy, being certified, but then practicing within the UiPath universe. Ultimately, where we want to get to, is to measure success also through the number of community users, of end-users, who are not only certified, but we will be able to see what is their activity status, like reputation, and recognition, within the community itself. And, hence, ultimately, reaching up to a stage, where we will be able to pinpoint to a true UiPath expert elite of people throughout the world. >> I love that it's a community driven measurement. >> Everything goes into building up a holistic and global community. >> Very open-- >> If I could just say one thing on community if you just look at the education and the different audiences, you know, let's say, you know, people that do robotics and they get certified, all the way down to youth, we will have a community, where all these different organizations are talking to each other, and to professionals. So, you might have a ten year old in Bangladesh, that is on the community asking questions, and you might have an engineer in Romania at UiPath answering those questions because they're part of the community. Or, it could be a customer or partner, you know, in Philadelphia, but they're all part of the community, we're bringing all these people together. So, things like STEM, Women in Coding, one person came up to me last night, he was so excited, he said "I represent a lot of the black community when "it comes to education and I really want to get my teams "across the country involved in this." >> Phenomenal, now, the no cost training is available roughly when? >> Yeah, right now. >> It's today? >> Well no cost training has been available-- >> Since the beginning. >> That was a decision that Ana made 18 months ago. If somebody, if a customer wants to have a seminar, or something like that, we have third-party training companies that will go in, and they'll charge, but if you go online to the academy, 100 percent free. And the certification for the next quarter is going to be 100 percent free. >> That's unbelievable, because, you know, I got three kids in college and one of them is he's doing Python, he's doing R, he's doing Tableau and he's texting me, "Hey, these Tableau courses "are really expensive, can you pay for it?" And I'm like well, what's the ROI? And I'm sayin' learn about RPA, because it's going to change the world, you know, visualizations important and all that stuff's important, but that's, I think, a huge investment that you guys are making, and then also, helps me understand how you guys plan on staying ahead. So congratulations on getting this started, Tom, you basically came out of retirement, you know, quasi-retirement so it had to be pretty alluring. Extremely successful career at EMC, so great to have you back in the game. >> Thanks, it's great to be here. >> Thanks so much, you guys, for coming on theCUBE. >> Okay, thank you. >> Right there, everybody, you're watching theCUBE, live, from the Fontainebleau in Miami. We'll be right back, right after this short break, you're watching UiPathForward Americas, we'll be right back.

>> Narrator: Live, from Miami Beach, Florida it's theCUBE covering UiPathForward Americas. Brought to you by UiPath. >> Welcome back to Miami everybody. You're watching theCUBE, the leader in live tech coverage. I'm Dave Vellante with my cohost Stu Miniman. We got all the action going on behind us. We are seeing the ascendancy of Robotic Process Automation, software robots. one of the leader's in that industry, one of the innovators, Daniel Dines is here, he's the founder and CEO of UiPath. Hot off the keynote, Daniel, thanks for coming on theCUBE. >> Daniel: Thank you for inviting me. >> Dave: You're very welcome, so, the great setup here, the Fontainebleau in Miami's an awesome venue for a conference this size; about 1500 people. In your keynote, you talked about your vision and we want to get into that but, go back to why you started UiPath. >> Daniel: I started UiPath to have joy at work, to do what I like, and to build something big. >> Dave: And you're a Developer, right? I mean you code-- >> Daniel: I am a Software Engineer. >> Dave: I mean, I can tell by the way you're dressed. (laughter) Developer CEO. >> Daniel: Yeah. >> Dave: Yeah, okay, so but you have a vision. You talked about a robot for every person. You mentioned Bill Gates, the PC for every person. I said a chicken for every pot, Harry Truman. What is that vision? Tell us about it. >> Daniel: Well, in our old day they work, we do a lot of menial stuff, repetitive, boring stuff. It's-- that is not human-- it's not human-like. Why not having this robot that we can talk to, we can command and just do the boring stuff for us? I think it's no-brainer. >> Dave: Right. >> Daniel: We just didn't think it's possible. We showed with our technology this is possible, actually. This is an angle of automation that people didn't think it was possible before. >> Dave: Well, so I neglected to congratulate you on your early success, I mean, you said one of your tenants is you're humble. So you got a lot of work to do, we understand that. But you've raised over $400 million to date, you just had a giant raise, we had Carl Eschenbach on in our Palo Alto studios. He was-- he was one of the guys in the round. So that's confirmation that this is a big market, we've pegged it at around a billion dollars today, 10x growth by 2023, so very impressive growth potential. What's driving that growth? >> Daniel: It's all from the customers. When they see it working, it's a "wow," it's different, they won't go back to the same way of delivering work. It's changing how people really work. You see people becoming joyful when we show them the robot, and they say, "I don't need to do this stuff anymore? Wow." Imagine people doing the same reports every day, going through hundreds of page and clicking the same-- this is, this is nirvana. >> Dave: And we saw customers, UnitedHealth was on stage today, Mr. Yamamoto has a thousand robots, Wells Fargo's up there, you had some partners. So you're doing that hard integration work as well. Stu, you noted that the global presence of this company was impressing you. You're thoughts on that. >> Stu: Yeah, absolutely, I mean first of all, company started in Romania, we had-- you know you don't see too many American keynotes where there's a video up there in a foreign language. It's Japanese with English subtitles, you've got customers already starting with a global footprint. What's it like being a founder in a start-up from Europe playing in a global marketplace? >> Daniel: Well, actually it help us to become-- we've been born global. We are one of the first start-ups born global from day one. We've been this company, with Japanese talent, Indian talent, Romanian talent, American talent. And being from this remote part of Europe help us... think big, because really are-- we cannot build this start-up only with Romanians. That's clear, we don't have the pool of talent. So why not just go in global, get the best talent we can and spread global? And we are one of the few companies in the world that has their revenue split equally across the three big continents. >> Stu: Yeah, Daniel, the other thing that struck me-- you're growing the company very fast. We talked about the money, but you said you're going to have over 4,000 employees by 2019. You know, I play a lot in the open source world, it's often small-team, you've got to go marketplace, how come you need so many employees for a software company? Maybe explain a little bit that relationship with a customer, how much you, you're technical people, what they need to do to interact and help them to grow these; is it verticals, you know, what's that dynamic? >> Daniel: Well, first of all, we hire more than 1,000 people in last year alone. We started from 200 and now we are 1,400. We need all these people because this technology is at the intersection of software and services. We need to help our customers scale, and we need to inject a lot of customer success people making our customer successful. My, my way of building a company is customer first. We want to offer this boutique type of approach to our customers, and they are happy. And they-- and we build this trust relationship. This is why we need so many-- We have 2,000 customers. Next year, we have 5,000 customers. We need our people to help them grow. >> Dave: We're going to have Craig Le Clair on a little later. He's the Vice President of Forrester Research. They've done a deep dive in this marketplace in the last couple years now. UiPath has jumped from number three to number one in the Forrester wave, and when you look at that report, really, the feature and function analysis shows you guys lead in a number of places. In listening to your keynote, I discerned several things that I wonder if you could explain for our audience. It sounds like computer vision is a key linchpin to your architecture, and there seems to be an orchestrator and then maybe a studio to enable simple low code, or even no code automations to be developed. Can you describe, so a layperson-- your architecture, and why you've been able to jump into the lead. >> Daniel: Well, we've done everything wrong as a start-up. We spent like seven years building a computer vision technology that-- it was of little use, back then. We did it just because we liked it. And now, this is our powerful weapon, because, what's important for this robot is to be accurate, and to be able to work in any situations. Why our technology works better, is that we do way better the extra mile of automation. 80% of the job anyone can do, even with free software. But the last 20% is where the real issues is. And with the last 20% there is no automation. And we are doing way faster. So all our signal sources-- the fact that we've done something against Lean, against every principal in start-up, we had the lecture in building so many years technology, without even envisioning the use. But when we found the market, and it was a great product market, then we scale the company. >> Dave: There are a couple key statistics that I want to bring up and get your thoughts on. We know that there are now more jobs than there are people to fill those jobs. We also know that the productivity hasn't been increasing, so your vision is to really close that gap through RPA and automation. So your narrative is really that you're not replacing humans, you're augmenting humans, but at the same time, there's got to be some training involved. You guys are making a huge commitment in training. You're going to train a million people, that's the goal, within three years. We have Tom Clancy on next. We're going to ask him how he's going to do that. But talk about that skills gap and how you're embracing re-training. >> Daniel: Well, we realize that at some point that change management, it's kind of the key-- it's the cornerstone of delivering this technology. Because there is inertia, there is fear, and-- if we bring, at the same time, automation and training, it solves this-- that solve this issue. And we have to think big; this is why: one million is a big goal, but we will achieve it because we-- I love my way to think big. I was thinking small for so many years, and thinking big it's like, it's like liberty. You sat down and realize, "Yes, you can." >> Stu: Daniel, we talk a lot about digital transformation. The automation often doesn't get talked, but in big companies; Microsoft, Oracle, SAP, seems a natural fit, I saw some of them are your partners, you came from Microsoft, maybe talk about that dynamic about how some of the, you know, big players that, you know, have the business process applications, how your solution fits with them, you know, are they going to be paying attention to this space? >> Daniel: Well, digital transformation, it's a big initiative for everybody. And RPA, it's actually right now, recognizes the first step in digital transformation. And obviously that if was RPA, AI, big business applications, it's not one single angle, but we covered the last mile of automation. We've covered the impossible, before, before this. And our automation first view of the world is beyond digital transformation because companies will exist after they build for digital transformation. But automation first is a, is a mindset. It's rethinking your operations by applying automation first. >> Dave: You have an open mindset, which is interesting. You even said on stage that, "Look, our competitors are beginning to mimic "some of our features and functions and our approach." And you said, "That's okay." I was surprised by that, especially given your Microsoft background, which was like, grind competitors into the ground. What's changed? Why the open mindset and why do you believe that's the right approach? >> Daniel: Look at Microsoft, Microsoft has changed. This is the-- it's much better, it's-- you feel better as a human. When you can offer something, "This is up, take it, give me feedback." We've been able to build way faster than them, having our open and free community. Open the software-- It gives you more joy as a developer seeing thousands of people than just guarding my little secret just for fear someone will copy it. It's way better. >> Dave: Now, you said on stage that a lot of people laughed at you when you were starting this company, you dream big. Somebody once said, Stu, that, "If you believe you can do it, "or you don't believe you can do it, you're right." "So you got to believe," was one of the things that you said. >> Daniel: That's the first thing. >> Dave: Yeah, so share with the young people out here who are dreaming big, everybody in their early 20's, they're dreaming big. Tell us about your story, your dreams, people who laughed at you, what were they laughing about and how did you power through that? Where did you get your conviction? >> Daniel: Well, first of all, they don't dream big enough. It's very difficult to big dream enough because you have your, you know-- it's the common sense that comes into the picture and it's the fear of other people laughing at you. And we haven't dreamt big enough. For 10-- for the first 10 years, we just wanted to make a good technology, the best technology that we can but that's not big enough. Big enough is change the world, big enough is bring something that makes people life better. This is big enough. If they think making people lives better, that's big enough. Nothing else is big enough. >> Dave: Well I love the fact, Daniel, that your mission-driven; that's clear. You're having some fun. You know this-- these apps are really a lot of fun. Do you still code? >> Daniel: No but I do a lot of software design and review. >> Dave: Okay, so you help, so the coders, they-- how do-- what's that dynamic like? You have-- obviously experienced developer. Do you sort of, tell them which path to go down or which path not to go down? Do you challenge them? What's your style, as a leader? >> Daniel: I challenge them to do things faster, always. They-- I ask them, let's do this feature and they say, "Two month." "No, two days." Why not? And then we go and break that one and it's a lot of conversation but usually we will deliver. Fast-- fast is also a way of being. Fastest company wins, and fast is a-- it's not easy to change the mind. Because you want-- maybe you want to be very organized, very sophisticated. If you are fast, you have to be ready to make mistakes, reverse your decision going, but you will go fast in the end. >> Dave: So that is kind of Steve Jobs-like, set a really challenging goal, and people somehow will figure it out, but culturally, you seem friendlier, nicer. It's not grinding people anymore, it's inspiring them. Is that a fair assessment? >> Daniel: My goal is to have the happiest team employees everywhere. Hap-- I like to be happy. I started this company for the joy of doing what I like, why not, this is, this is what I want for everyone. And we are-- we recently scored in comparably as one of the best company in terms of people happiness. >> Dave: Well congratulations, thanks so much for coming on theCUBE. >> Daniel: Thank you very much for inviting me. >> Dave: Really a pleasure having you. Alright, Stu and I will be back with our next guest. Right after this short break, we're live from UiPath... in Miami, you're watching theCUBE. Stay right there. (electronic music)

(energetic music) >> Live from Miami Beach, Florida. It's theCUBE covering UiPathForward Americas. Brought to you by UiPath. >> Welcome to Miami everybody. This is theCUBE the leader in live tech coverage. We're here covering the UiPathForward Americas conference. UiPath is a company that has come out of nowhere, really. And, is a leader in robotic process automation, RPA. It really is about software robots. I am Dave Vellante and I am here with Stu Miniman. We have one day of coverage, Stu. We are all over the place this weekend. Aren't we? Stu and I were in Orlando earlier. Flew down. Quick flight to Miami and we're getting the Kool-Aid injection from the RPA crowd. We're at the Fontainebleau in Miami. Kind of cool hotel. Stu you might remember, I am sure, you do, several years ago we did the very first .NEXT tour. .NEXT from Nutanix at this event. About this same size, maybe a little smaller. This is a little bigger. >> Dave, this is probably twice the size, about 1,500 people here. I remember about a year ago you were, started buzzing about RPA. Big growth in the market, you know really enjoyed getting into the keynote here. You know, you said we were at splunk and data was at the center of everything, and the CEO here for (mumbles), it's automation first. We talked about mobile first, cloud first, automation first. I know we got a lot of things we want to talk about because you know, I think back through my career, and I know you do too, automation is something we've been talking about for years. We struggle with it. There's challenges there, but there's a lot of things coming together and that's why we have this new era that RPA is striking at to really explode this market. >> Yeah, so I made a little prediction that I put out on Twitter, I'll share with folks. I said there's a wide and a gap between the number of jobs available worldwide and the number for people to fill them. That's something that we know. And there's a productivity gap. And the numbers aren't showing up. We're not seeing bump-ups in productivity even though spending on technology is kind of through the roof. Robotic Process Automation is going to become a fundamental component of closing that gap because companies, as part of the digital process transformation, they want to automate. The market today is around a billion. We see it growing 10 x over the next five to seven years. We're going to have some analysts on today from Forester, we'll dig into that a little bit, they cover this market really, really closely. So, we're hearing a lot more about RPA. We heard it last week at Infor, Charles Phillips was a big proponent of this. UiPath has been in this business now for a few years. It came out of Romania. Daniel Dines, former Microsoft executive, very interesting fellow. First time I've seen him speak. We're going to meet him today. He is a techy. Comes on stage with a T-shirt, you know. He's very sort of thoughtful, he's talking about open, about culture, about having fun. Really dedicated to listening to customers and growing this business. He said, he gave us a data point that they went from nothing, just a couple of million dollars, two years ago. They'll do 140 million. They're doing 140 million now in annual reccurring revenue. On their way to 200. I would estimate, they'll probably get there. If not by the end of year, probably by the first quarter next year. So let's take look at some of the things that we heard in the keynote. We heard from customers. A lot of partners here. Seen a lot of the big SIs diving in. That's always a sign of big markets. What did you learn today at the keynotes? >> Yeah, Dave, first thing there is definitely, one of the push backs about automation is, "Oh wait what is that "going to do for jobs?" You touched on it. There's a lot of staff they threw out. They said that RPA can really bring, you know, 75% productivity improvement because we know productivity improvement kind of stalled out over all in the market. And, what we want to do is get rid of mundane tasks. Dave, I spent a long time of my career helping to get, you know, how to we get infrastructure simpler? How do we get rid of those routine things? The storage robe they said if you were configuring LUNs, you need to go find other jobs. If you were networking certain basic things, we're going to automate that with software. But there are things that the automation are going to be able to do, so that you can be more creative. You can spend more time doing some higher level functions. And that's where we have a skills gap. I'm excited we're going to have Tom Clancy, who you and I know. I've got his book on the shelf and not Tom Clancy the fiction author, but you know the Tom Clancy who has done certifications and education through storage and cloud and now how do we get people ready for this next wave of how you can do people and machines. One of my favorite events, Dave, that we ever did was the Second Machine Age with MIT in London. Talking about it's really people plus machines, is really where you're going to get that boom. You've interviewed Garry Kasparov on this topic and it's just fascinating and it really excites me as someone, I mean, I've lived with my computers all my life and just as a technologist, I'm optimistic at how, you know, the two sides together can be much more powerful than either alone. >> Well, it's an important topic Stu. A lot of the shows that we go to, the vendors don't want to talk about that. "Oh, we don't want to talk about displacing humans." UiPath's perspective on that, and we'll poke them a little on that is, "That's old news. "People are happy because they're replacing their 'mundane tasks.'" And while that's true, there's some action on Twitter. (mumbles name) just tweeted out, replying to some of the stuff that we were talking about here, in the hashtag, which is UiPathForward, #UiPathForward, "Automation displaces unskilled workers, "that's the crux of the problem. "We need best algorithms to automate re-training and "re-skilling of workers. "That's what we need the most for best socio-economic "outcomes, in parallel to automation through "algorithm driven machines," he's right. That gap, and we talked about this at 2MA, is it going to be a creativity gap? It's an education issue, it's an education challenge. 'Cause you just don't want to displace, unskilled workers, we want to re-train people. >> Right, absolutely. You could have this hollowing out of the market place otherwise, where you have really low paid workers on the one end, and you have really high-end creative workers but the middle, you know, the middle class workers could be displaced if they are not re-trained, they're not put forward. The World Economic Forum actually said that this automation is going to create 60-million net new jobs. Now, 60-million, it sounds like a big number, but it is a large global workforce. And, actually Dave, one of the things that really struck me is, not only do you have a Romanian founder but up on stage we had, a Japanese customer giving a video in Japanese with the subtitles in English. Not something that you typically see at a U.S. show. Very global, in their reach. You talked about the community and very open source focus of something we've seen. This is how software grows very fast as you get those people working. It's something I want to understand. They've got, the UiPath that's 2,000 customers but they've got 114,000 certified RPA developers. So, I'm like, okay, wait. Those numbers don't make sense to me yet, but I'm sure our guests are going to be able to explain them. >> And, so you're right about the need for education. I was impressed that UiPath is actually spending some of it the money that it's raised. This company, just did a monster raise, 225-million. We had Carl Ashenbach on in theCUBE studio to talk about that. Jeff Freck interviewed him last week. You can find that interview on our YouTube play list and I think on out website as well. But they invested, I think it was 10-million dollars with the goal of training a million students in the next three years. They've hired Tom Clancy, who we know from the old EMC education world. EMC training and education world. So they got a pro in here who knows to scale training. So that's huge. They've also started a 20-million investment fund investing in start ups and eco-system companies, so they're putting their money where their mouth is. The company has raised over 400-million dollars to date. They've got a 3-billion dollar evaluation. Some of the other things we've heard from the keynote today, um, they've got about 1,400 employees which is way up. They were just 270, I believe, last year. And they're claiming, and I think it's probably true, they're the fastest growing enterprise software company in history, which is kind of astounding. Like you said, given that they came out of Romania, this global company maybe that's part of the reason why. >> I mean, Dave, they said his goal is they're going to have 4,000 employees by 2019. Wait, there are a software company and they raised huge amounts of money. AS you said, they are a triple unicorn with a three billion dollar valuation. Why does a software company need so many employees? And 3,000, at least 3,000 of those are going to be technical because this is intricate. This is not push button simplicity. There's training that needs to happen. How much do they need to engage? How much of this is vertical knowledge that they need to get? I was at Microsoft Ignite two weeks ago. Microsoft is going really deep vertically because AI requires specialized knowledge in each verticals. How much of that is needed from RPA? You've got a little booklet that they have of some basic 101 of the RPA skills. >> I don't know if you can see this, but... Is that the right camera? So, it's this kind of robot pack. It's kind of fun. Kind of go through, it says, you got to reliable friend you can automate, you know, sending them a little birthday wish. They got QR codes in the back you can download it. You know, waiters so you can order online food. There's something called Tackle, for you fantasy football players who help you sort of automate your fantasy football picks. Which is kind of cool. So, that's fun. There's fun culture here, but really it's about digital transformation and driving it to the heart of process automation. Daniel Dines, talked about taking things from hours to minutes, from sort of accurate to perfectly accurate. You know, slow to fast. From very time consuming to automated. So, he puts forth this vision of automation first. He talked about the waves, main frames, you know the traditional waves client server, internet, etc. And then, you know I really want to poke at this and dig into it a little bit. He talked about a computer vision and that seemed to be a technical enabler. So, I'm envisioning this sort of computer vision, this visual, this ability to visualize a robot, to visualize what's happening on the screen, and then a studio to be able to program these things. I think those are a couple of the components I discerned. But, it's really about a cultural shift, a mind shift, is what Daniel talked about, towards an automation first opportunity. >> And Dave, one of the things you said right there... Three things, the convergence of computer vision, the Summer of AI, and what he meant by that is that we've lived through a bunch of winters. And we've been talking about this. And, then the business.. >> Ice age of a, uh... >> Business, process, automation together, those put together and we can create that automation first era. And, he talked about... We've been talking about automation since the creation of the first computer. So, it's not a new idea. Just like, you know we've been talking on theCUBE for years. You know, data science isn't a new thing. We sometimes give these things new terms like RPA. But, I love digging into why these are real, and just as we've seen these are real indicators, you know, intelligence with like, whether you call it AI or ML, are doing things in various environments that we could not do in the past. Just borders of magnitude, more processing, data is more important. We could do more there. You know, are we on the cusp of really automation. being able to deliver on the things that we've been trying to talk about a couple of generations? >> So a couple of other stats that I thought were interesting. Daniel put forth a vision of one robot for every person to use. A computer for every person. A chicken for every pot, kind of thing (laughs) So, that was kind of cool. >> "PC for every person," Bill Gates. >> Right, an open and free mind set, so he talked a about, Daniel talked about of an era of openness. And UiPath has a market place where all the automations. you can put automations in there, they're all free to use. So, they're making money on the software and not on the automation. So, they really have this... He said, "We're making our competitors better. "They're copying what we're doing, "and we think that's a good thing. "Because it's going to help change the world." It's about affecting society, so the rising tides lift all boats. >> Yeah Dave, it reminds me a lot of, you know, you look at GitHub, you look at Docker Hub. There's lots of places. This is where code lives in these open market places. You know, not quite like the AWS or IBM market places where you can you can just buy software, but the question is how many developers get in there. They say they got 250,000 community members already there. So, and already what do they have? I think hundreds of processes that are built in there, so that will be a good metric we can see to how fast that scales. >> We had heard from a couple of customers, and Wells Fargo was up there, and United Health. Mr. Yamomoto from SNBC, they have 1,000 robots. So, they are really completely transforming their organization. We heard from a partner, Data Robot, Jeremy Atchins, somebody who's been on theCUBE before, Data Robot. They showed an automated loan processing where you could go in, talk to a chat bot and within minutes get qualified for a loan. I don't know if you noticed the loan amount was $7,000 and the interest rate was 13.6% so the applicant, really, must not of had great credit history. Cause that's kind of loan shark rates, but anyway, it was kind of a cool demo with the back end data robot munging all the data, doing whatever they had to do, transferring through a CSV into the software robot and then making that decision. So, that was kind of cool, those integrations seemed to be pretty key. I want to learn more about that. >> I mean it reminds me of chat box have been hot in a lot of areas lately, as how we can improve customer support and automate things on infrastructure in the likes of, we'll see how those intersections meet. >> Yeah, so we're going to be covering this all day. We got technologists coming on, customers, partners. Stu and I will be jamming. He's @Stu and I'm @Dvellante. Shoot us any questions, comments. Thanks for the ones we've had so far. We're here at the Fontainebleau in Miami Beach. Pretty crazy hotel. A lot of history here. A lot of pictures of Frank Sinatra on the wall. Keep it right there, buddy. You're watching theCUBE. We'll be right back after this short break. (energetic music)

(upbeat techno music) >> Announcer: Good morning ladies and gentlemen. This is Lenovo Transform. Please welcome to the stage Lenovo's Rod Lappin. (upbeat instrumental) >> Alright, ladies and gentlemen. Here we go. I was out the back having a chat. A bit faster than I expected. How are you all doing this morning? (crowd cheers) >> Good? How fantastic is it to be in New York City? (crowd applauds) Excellent. So my name's Rod Lappin. I'm with the Data Center Group, obviously. I do basically anything that touches customers from our sales people, our pre-sales engineers, our architects, et cetera, all the way through to our channel partner sales engagement globally. So that's my job, but enough of that, okay? So the weather this morning, absolutely fantastic. Not a cloud in the sky, perfect. A little bit different to how it was yesterday, right? I want to thank all of you because I know a lot of you had a lot of commuting issues getting into New York yesterday with all the storms. We have a lot of people from international and domestic travel caught up in obviously the network, which blows my mind, actually, but we have a lot of people here from Europe, obviously, a lot of analysts and media people here as well as customers who were caught up in circling around the airport apparently for hours. So a big round of applause for our team from Europe. (audience applauds) Thank you for coming. We have some people who commuted a very short distance. For example, our own server general manager, Cameron (mumbles), he's out the back there. Cameron, how long did it take you to get from Raleigh to New York? An hour-and-a-half flight? >> Cameron: 17 hours. >> 17 hours, ladies and gentleman. That's a fantastic distance. I think that's amazing. But I know a lot of us, obviously, in the United States have come a long way with the storms, obviously very tough, but I'm going to call out one individual. Shaneil from Spotless. Where are you Shaneil, you're here somewhere? There he is from Australia. Shaneil how long did it take you to come in from Australia? 25 hour, ladies and gentleman. A big round of applause. That's a pretty big effort. Shaneil actually I want you to stand up, if you don't mind. I've got a seat here right next to my CEO. You've gone the longest distance. How about a big round of applause for Shaneil. We'll put him in my seat, next to YY. Honestly, Shaneil, you're doing me a favor. Okay ladies and gentlemen, we've got a big day today. Obviously, my seat now taken there, fantastic. Obviously New York City, the absolute pinnacle of globalization. I first came to New York in 1996, which was before a lot of people in the room were born, unfortunately for me these days. Was completely in awe. I obviously went to a Yankees game, had no clue what was going on, didn't understand anything to do with baseball. Then I went and saw Patrick Ewing. Some of you would remember Patrick Ewing. Saw the Knicks play basketball. Had no idea what was going on. Obviously, from Australia, and somewhat slightly height challenged, basketball was not my thing but loved it. I really left that game... That was the first game of basketball I'd ever seen. Left that game realizing that effectively the guy throws the ball up at the beginning, someone taps it, that team gets it, they run it, they put it in the basket, then the other team gets it, they put it in the basket, the other team gets it, and that's basically the entire game. So I haven't really progressed from that sort of learning or understanding of basketball since then, but for me, personally, being here in New York, and obviously presenting with all of you guys today, it's really humbling from obviously some of you would have picked my accent, I'm also from Australia. From the north shore of Sydney. To be here is just a fantastic, fantastic event. So welcome ladies and gentlemen to Transform, part of our tech world series globally in our event series and our event season here at Lenovo. So once again, big round of applause. Thank you for coming (audience applauds). Today, basically, is the culmination of what I would classify as a very large journey. Many of you have been with us on that. Customers, partners, media, analysts obviously. We've got quite a lot of our industry analysts in the room. I know Matt Eastwood yesterday was on a train because he sent a Tweet out saying there's 170 people on the WIFI network. He was obviously a bit concerned he was going to get-- Pat Moorhead, he got in at 3:30 this morning, obviously from traveling here as well with some of the challenges with the transportation, so we've got a lot of people in the room that have been giving us advice over the last two years. I think all of our employees are joining us live. All of our partners and customers through the stream. As well as everybody in this packed-out room. We're very very excited about what we're going to be talking to you all today. I want to have a special thanks obviously to our R&D team in Raleigh and around the world. They've also been very very focused on what they've delivered for us today, and it's really important for them to also see the culmination of this great event. And like I mentioned, this is really the feedback. It's not just a Lenovo launch. This is a launch based on the feedback from our partners, our customers, our employees, the analysts. We've been talking to all of you about what we want to be when we grow up from a Data Center Group, and I think you're going to hear some really exciting stuff from some of the speakers today and in the demo and breakout sessions that we have after the event. These last two years, we've really transformed the organization, and that's one of the reasons why that theme is part of our Tech World Series today. We're very very confident in our future, obviously, and where the company's going. It's really important for all of you to understand today and take every single snippet that YY, Kirk, and Christian talk about today in the main session, and then our presenters in the demo sections on what Lenovo's actually doing for its future and how we're positioning the company, obviously, for that future and how the transformation, the digital transformation, is going ahead globally. So, all right, we are now going to step into our Transform event. And I've got a quick agenda statement for you. The very first thing is we're going to hear from YY, our chairman and CEO. He's going to discuss artificial intelligence, the evolution of our society and how Lenovo is clearly positioning itself in the industry. Then, obviously, you're going to hear from Kirk Skaugen, our president of the Data Center Group, our new boss. He's going to talk about how long he's been with the company and the transformation, once again, we're making, very specifically to the Data Center Group and how much of a difference we're making to society and some of our investments. Christian Teismann, our SVP and general manager of our client business is going to talk about the 25 years of ThinkPad. This year is the 25-year anniversary of our ThinkPad product. Easily the most successful brand in our client branch or client branch globally of any vendor. Most successful brand we've had launched, and this afternoon breakout sessions, obviously, with our keynotes, fantastic sessions. Make sure you actually attend all of those after this main arena here. Now, once again, listen, ask questions, and make sure you're giving us feedback. One of the things about Lenovo that we say all the time... There is no room for arrogance in our company. Every single person in this room is a customer, partner, analyst, or an employee. We love your feedback. It's only through your feedback that we continue to improve. And it's really important that through all of the sessions where the Q&As happen, breakouts afterwards, you're giving us feedback on what you want to see from us as an organization as we go forward. All right, so what were you doing 25 years ago? I spoke about ThinkPad being 25 years old, but let me ask you this. I bet you any money that no one here knew that our x86 business is also 25 years old. So, this year, we have both our ThinkPad and our x86 anniversaries for 25 years. Let me tell you. What were you guys doing 25 years ago? There's me, 25 years ago. It's a bit scary, isn't it? It's very svelte and athletic and a lot lighter than I am today. It makes me feel a little bit conscious. And you can see the black and white shot. It shows you that even if you're really really short and you come from the wrong side of the tracks to make some extra cash, you can still do some modeling as long as no one else is in the photo to give anyone any perspective, so very important. I think I might have got one photo shoot out of that, I don't know. I had to do it, I needed the money. Let me show you another couple of photos. Very interesting, how's this guy? How cool does he look? Very svelte and athletic. I think there's no doubt. He looks much much cooler than I do. Okay, so ladies and gentlemen, without further ado, it gives me great honor to obviously introduce our very very first guest to the stage. Ladies and gentlemen, our chairman and CEO, Yuanqing Yang. or as we like to call him, YY. A big round of applause, thank you. (upbeat techno instrumental) >> Good morning everyone. Thank you, Rod, for your introduction. Actually, I didn't think I was younger than you (mumbles). I can't think of another city more fitting to host the Transform event than New York. A city that has transformed from a humble trading post 400 years ago to one of the most vibrant cities in the world today. It is a perfect symbol of transformation of our world. The rapid and the deep transformations that have propelled us from the steam engine to the Internet era in just 200 years. Looking back at 200 years ago, there was only a few companies that operated on a global scale. The total value of the world's economy was around $188 billion U.S. dollars. Today, it is only $180 for each person on earth. Today, there are thousands of independent global companies that compete to sell everything, from corn and crude oil to servers and software. They drive a robust global economy was over $75 trillion or $1,000 per person. Think about it. The global economy has multiplied almost 450 times in just two centuries. What is even more remarkable is that the economy has almost doubled every 15 years since 1950. These are significant transformation for businesses and for the world and our tiny slice of pie. This transformation is the result of the greatest advancement in technology in human history. Not one but three industrial revolutions have happened over the last 200 years. Even though those revolutions created remarkable change, they were just the beginning. Today, we are standing at the beginning of the fourth revolution. This revolution will transform how we work (mumbles) in ways that no one could imagine in the 18th century or even just 18 months ago. You are the people who will lead this revolution. Along with Lenovo, we will redefine IT. IT is no longer just information technology. It's intelligent technology, intelligent transformation. A transformation that is driven by big data called computing and artificial intelligence. Even the transition from PC Internet to mobile Internet is a big leap. Today, we are facing yet another big leap from the mobile Internet to the Smart Internet or intelligent Internet. In this Smart Internet era, Cloud enables devices, such as PCs, Smart phones, Smart speakers, Smart TVs. (mumbles) to provide the content and the services. But the evolution does not stop them. Ultimately, almost everything around us will become Smart, with building computing, storage, and networking capabilities. That's what we call the device plus Cloud transformation. These Smart devices, incorporated with various sensors, will continuously sense our environment and send data about our world to the Cloud. (mumbles) the process of this ever-increasing big data and to support the delivery of Cloud content and services, the data center infrastructure is also transforming to be more agile, flexible, and intelligent. That's what we call the infrastructure plus Cloud transformation. But most importantly, it is the human wisdom, the people learning algorithm vigorously improved by engineers that enables artificial intelligence to learn from big data and make everything around us smarter. With big data collected from Smart devices, computing power of the new infrastructure under the trend artificial intelligence, we can understand the world around us more accurately and make smarter decisions. We can make life better, work easier, and society safer and healthy. Think about what is already possible as we start this transformation. Smart Assistants can help you place orders online with a voice command. Driverless cars can run on the same road as traditional cars. (mumbles) can help troubleshoot customers problems, and the virtual doctors already diagnose basic symptoms. This list goes on and on. Like every revolution before it, intelligent transformation, will fundamentally change the nature of business. Understanding and preparing for that will be the key for the growth and the success of your business. The first industrial revolution made it possible to maximize production. Water and steam power let us go from making things by hand to making them by machine. This transformed how fast things could be produced. It drove the quantity of merchandise made and led to massive increase in trade. With this revolution, business scale expanded, and the number of customers exploded. Fifty years later, the second industrial revolution made it necessary to organize a business like the modern enterprise, electric power, and the telegraph communication made business faster and more complex, challenging businesses to become more efficient and meeting entirely new customer demands. In our own lifetimes, we have witnessed the third industrial revolution, which made it possible to digitize the enterprise. The development of computers and the Internet accelerated business beyond human speed. Now, global businesses have to deal with customers at the end of a cable, not always a handshake. While we are still dealing with the effects of a digitizing business, the fourth revolution is already here. In just the past two or three years, the growth of data and advancement in visual intelligence has been astonishing. The computing power can now process the massive amount of data about your customers, suppliers, partners, competitors, and give you insights you simply could not imagine before. Artificial intelligence can not only tell you what your customers want today but also anticipate what they will need tomorrow. This is not just about making better business decisions or creating better customer relationships. It's about making the world a better place. Ultimately, can we build a new world without diseases, war, and poverty? The power of big data and artificial intelligence may be the revolutionary technology to make that possible. Revolutions don't happen on their own. Every industrial revolution has its leaders, its visionaries, and its heroes. The master transformers of their age. The first industrial revolution was led by mechanics who designed and built power systems, machines, and factories. The heroes of the second industrial revolution were the business managers who designed and built modern organizations. The heroes of the third revolution were the engineers who designed and built the circuits and the source code that digitized our world. The master transformers of the next revolution are actually you. You are the designers and the builders of the networks and the systems. You will bring the benefits of intelligence to every corner of your enterprise and make intelligence the central asset of your business. At Lenovo, data intelligence is embedded into everything we do. How we understand our customer's true needs and develop more desirable products. How we profile our customers and market to them precisely. How we use internal and external data to balance our supply and the demand. And how we train virtual agents to provide more effective sales services. So the decisions you make today about your IT investment will determine the quality of the decisions your enterprise will make tomorrow. So I challenge each of you to seize this opportunity to become a master transformer, to join Lenovo as we work together at the forefront of the fourth industrial revolution, as leaders of the intelligent transformation. (triumphant instrumental) Today, we are launching the largest portfolio in our data center history at Lenovo. We are fully committed to the (mumbles) transformation. Thank you. (audience applauds) >> Thanks YY. All right, ladies and gentlemen. Fantastic, so how about a big round of applause for YY. (audience applauds) Obviously a great speech on the transformation that we at Lenovo are taking as well as obviously wanting to journey with our partners and customers obviously on that same journey. What I heard from him was obviously artificial intelligence, how we're leveraging that integrally as well as externally and for our customers, and the investments we're making in the transformation around IoT machine learning, obviously big data, et cetera, and obviously the Data Center Group, which is one of the key things we've got to be talking about today. So we're on the cusp of that fourth revolution, as YY just mentioned, and Lenovo is definitely leading the way and investing in those parts of the industry and our portfolio to ensure we're complimenting all of our customers and partners on what they want to be, obviously, as part of this new transformation we're seeing globally. Obviously now, ladies and gentlemen, without further ado once again, to tell us more about what's going on today, our announcements, obviously, that all of you will be reading about and seeing in the breakout and the demo sessions with our segment general managers this afternoon is our president of the data center, Mr. Kirk Skaugen. (upbeat instrumental) >> Good morning, and let me add my welcome to Transform. I just crossed my six months here at Lenovo after over 24 years at Intel Corporation, and I can tell you, we've been really busy over the last six months, and I'm more excited and enthusiastic than ever and hope to share some of that with you today. Today's event is called "Transform", and today we're announcing major new transformations in Lenovo, in the data center, but more importantly, we're celebrating the business results that these platforms are going to have on society and with international supercomputing going on in parallel in Frankfurt, some of the amazing scientific discoveries that are going to happen on some of these platforms. Lenovo has gone through some significant transformations in the last two years, since we acquired the IBM x86 business, and that's really positioning us for this next phase of growth, and we'll talk more about that later. Today, we're announcing the largest end-to-end data center portfolio in Lenovo's history, as you heard from YY, and we're really taking the best of the x86 heritage from our IBM acquisition of the x86 server business and combining that with the cost economics that we've delivered from kind of our China heritage. As we've talked to some of the analysts in the room, it's really that best of the east and best of the west is combining together in this announcement today. We're going to be announcing two new brands, building on our position as the number one x86 server vendor in both customer satisfaction and in reliability, and we're also celebrating, next month in July, a very significant milestone, which will we'll be shipping our 20 millionth x86 server into the industry. For us, it's an amazing time, and it's an inflection point to kind of look back, pause, but also share the next phase of Lenovo and the exciting vision for the future. We're also making some declarations on our vision for the future today. Again, international supercomputing's going on, and, as it turns out, we're the fastest growing supercomputer company on earth. We'll talk about that. Our goal today that we're announcing is that we plan in the next several years to become number one in supercomputing, and we're going to put the investments behind that. We're also committing to our customers that we're going to disrupt the status quo and accelerate the pace of innovation, not just in our legacy server solutions, but also in Software-Defined because what we've heard from you is that that lack of legacy, we don't have a huge router business or a huge sand business to protect. It's that lack of legacy that's enabling us to invest and get ahead of the curb on this next transition to Software-Defined. So you're going to see us doing that through building our internal IP, through some significant joint ventures, and also through some merges and acquisitions over the next several quarters. Altogether, we're driving to be the most trusted data center provider in the industry between us and our customers and our suppliers. So a quick summary of what we're going to dive into today, both in my keynote as well as in the breakout sessions. We're in this transformation to the next phase of Lenovo's data center growth. We're closing out our previous transformation. We actually, believe it or not, in the last six months or so, have renegotiated 18,000 contracts in 160 countries. We built out an entire end-to-end organization from development and architecture all the way through sales and support. This next transformation, I think, is really going to excite Lenovo shareholders. We're building the largest data center portfolio in our history. I think when IBM would be up here a couple years ago, we might have two or three servers to announce in time to market with the next Intel platform. Today, we're announcing 14 new servers, seven new storage systems, an expanded set of networking portfolios based on our legacy with Blade Network Technologies and other companies we've acquired. Two new brands that we'll talk about for both data center infrastructure and Software-Defined, a new set of premium premiere services as well as a set of engineered solutions that are going to help our customers get to market faster. We're going to be celebrating our 20 millionth x86 server, and as Rod said, 25 years in x86 server compute, and Christian will be up here talking about 25 years of ThinkPad as well. And then a new end-to-end segmentation model because all of these strategies without execution are kind of meaningless. I hope to give you some confidence in the transformation that Lenovo has gone through as well. So, having observed Lenovo from one of its largest partners, Intel, for more than a couple decades, I thought I'd just start with why we have confidence on the foundation that we're building off of as we move from a PC company into a data center provider in a much more significant way. So Lenovo today is a company of $43 billion in sales. Absolutely astonishing, it puts us at about Fortune 202 as a company, with 52,000 employees around the world. We're supporting and have service personnel, almost a little over 10,000 service personnel that service our servers and data center technologies in over 160 countries that provide onsite service and support. We have seven data center research centers. One of the reasons I came from Intel to Lenovo was that I saw that Lenovo became number one in PCs, not through cost cutting but through innovation. It was Lenovo that was partnering on the next-generation Ultrabooks and two-in-ones and tablets in the modem mods that you saw, but fundamentally, our path to number one in data center is going to be built on innovation. Lastly, we're one of the last companies that's actually building not only our own motherboards at our own motherboard factories, but also with five global data center manufacturing facilities. Today, we build about four devices a second, but we also build over 100 servers per hour, and the cost economics we get, and I just visited our Shenzhen factory, of having everything from screws to microprocessors come up through the elevator on the first floor, go left to build PCs and ThinkPads and go right to build server technology, means we have some of the world's most cost effective solutions so we can compete in things like hyperscale computing. So it's with that that I think we're excited about the foundation that we can build off of on the Data Center Group. Today, as we stated, this event is about transformation, and today, I want to talk about three things we're going to transform. Number one is the customer experience. Number two is the data center and our customer base with Software-Defined infrastructure, and then the third is talk about how we plan to execute flawlessly with a new transformation that we've had internally at Lenovo. So let's dive into it. On customer experience, really, what does it mean to transform customer experience? Industry pundits say that if you're not constantly innovating, you can fall behind. Certainly the technology industry that we're in is transforming at record speed. 42% of business leaders or CIOs say that digital first is their top priority, but less than 50% actually admit that they have a strategy to get there. So people are looking for a partner to keep pace with that innovation and change, and that's really what we're driving to at Lenovo. So today we're announcing a set of plans to take another step function in customer experience, and building off of our number one position. Just recently, Gartner shows Lenovo as the number 24 supply chains of companies over $12 billion. We're up there with Amazon, Coca-Cola, and we've now completely re-architected our supply chain in the Data Center Group from end to end. Today, we can deliver 90% of our SKUs, order to ship in less than seven days. The artificial intelligence that YY mentioned is optimizing our performance even further. In services, as we talked about, we're now in 160 countries, supporting on-site support, 50 different call centers around the world for local language support, and we're today announcing a whole set of new premiere support services that I'll get into in a second. But we're building on what's already better than 90% customer satisfaction in this space. And then in development, for all the engineers out there, we started foundationally for this new set of products, talking about being number one in reliability and the lowest downtime of any x86 server vendor on the planet, and these systems today are architected to basically extend that leadership position. So let me tell you the realities of reliability. This is ITIC, it's a reliability report. 750 CIOs and IT managers from more than 20 countries, so North America, Europe, Asia, Australia, South America, Africa. This isn't anything that's paid for with sponsorship dollars. Lenovo has been number one for four years running on x86 reliability. This is the amount of downtime, four hours or more, in mission-critical environments from the leading x86 providers. You can see relative to our top two competitors that are ahead of us, HP and Dell, you can see from ITIC why we are building foundationally off of this, and why it's foundational to how we're developing these new platforms. In customer satisfaction, we are also rated number one in x86 server customer satisfaction. This year, we're now incentivizing every single Lenovo employee on customer satisfaction and customer experience. It's been a huge mandate from myself and most importantly YY as our CEO. So you may say well what is the basis of this number one in customer satisfaction, and it's not just being number one in one category, it's actually being number one in 21 of the 22 categories that TBR talks about. So whether it's performance, support systems, online product information, parts and availability replacement, Lenovo is number one in 21 of the 22 categories and number one for six consecutive studies going back to Q1 of 2015. So this, again, as we talk about the new product introductions, it's something that we absolutely want to build on, and we're humbled by it, and we want to continue to do better. So let's start now on the new products and talk about how we're going to transform the data center. So today, we are announcing two new product offerings. Think Agile and ThinkSystem. If you think about the 25 years of ThinkPad that Christian's going to talk about, Lenovo has a continuous learning culture. We're fearless innovators, we're risk takers, we continuously learn, but, most importantly, I think we're humble and we have some humility. That when we fail, we can fail fast, we learn, and we improve. That's really what drove ThinkPad to number one. It took about eight years from the acquisition of IBM's x86 PC business before Lenovo became number one, but it was that innovation, that listening and learning, and then improving. As you look at the 25 years of ThinkPad, there were some amazing successes, but there were also some amazing failures along the way, but each and every time we learned and made things better. So this year, as Rod said, we're not just celebrating 25 years of ThinkPad, but we're celebrating 25 years of x86 server development since the original IBM PC servers in 1992. It's a significant day for Lenovo. Today, we're excited to announce two new brands. ThinkSystem and ThinkAgile. It's an important new announcement that we started almost three years ago when we acquired the x86 server business. Why don't we run a video, and we'll show you a little bit about ThinkSystem and ThinkAgile. >> Narrator: The status quo is comfortable. It gets you by, but if you think that's good enough for your data center, think again. If adoption is becoming more complicated when it should be simpler, think again. If others are selling you technology that's best for them, not for you, think again. It's time for answers that win today and tomorrow. Agile, innovative, different. Because different is better. Different embraces change and makes adoption simple. Different designs itself around you. Using 25 years of innovation and design and R&D. Different transforms, it gives you ThinkSystem. World-record performance, most reliable, easy to integrate, scales faster. Different empowers you with ThinkAgile. It redefines the experience, giving you the speed of Cloud and the control of on-premise IT. Responding faster to what your business really needs. Different defines the future. Introducing Lenovo ThinkSystem and ThinkAgile. (exciting and slightly aggressive digital instrumental) >> All right, good stuff, huh? (audience applauds) So it's built off of this 25-year history of us being in the x86 server business, the commitment we established three years ago after acquiring the x86 server business to be and have the most reliable, the most agile, and the most highest-performing data center solutions on the planet. So today we're announcing two brands. ThinkSystem is for the traditional data center infrastructure, and ThinkAgile is our brand for Software-Defined infrastructure. Again, the teams challenge themselves from the start, how do we build off this rich heritage, expanding our position as number one in customer satisfaction, reliability, and one of the world's best supply chains. So let's start and look at the next set of solutions. We have always prided ourself that little things don't mean a lot. Little things mean everything. So today, as we said on the legacy solutions, we have over 30 world-record performance benchmarks on Intel architecture, and more than actually 150 since we started tracking this back in 2001. So it's the little pieces of innovation. It's the fine tuning that we do with our partners like an Intel or a Microsoft, an SAP, VMware, and Nutanix that's enabling us to get these world-record performance benchmarks, and with this next generation of solutions we think we'll continue to certainly do that. So today we're announcing the most comprehensive portfolio ever in our data center history. There's 14 servers, seven storage devices, and five network switches. We're also announcing, which is super important to our customer base, a set of new premiere service options. That's giving you fast access directly to a level two support person. No automated response system involved. You get to pick up the phone and directly talk to a level two support person that's going to have end-to-end ownership of the customer experience for ThinkSystem. With ThinkAgile, that's going to be completely bundled with every ThinkAgile you purchase. In addition, we're having white glove service on site that will actually unbox the product for you and get it up and running. It's an entirely new set of solutions for hybrid Cloud, for big data analytics and database applications around these engineered solutions. These are like 40- to 50-page guides where we fine-tuned the most important applications around virtual desktop infrastructure and those kinds of applications, working side by side with all of our ISP partners. So significantly expanding, not just the hardware but the software solutions that, obviously, you, as our customers, are running. So if you look at ThinkSystem innovation, again, it was designed for the ultimate in flexibility, performance, and reliability. It's a single now-unified brand that combines what used to be the Lenovo Think server and the IBM System x products now into a single brand that spans server, storage, and networking. We're basically future-proofing it for the next-generation data center. It's a significantly simplified portfolio. One of the big pieces that we've heard is that the complexity of our competitors has really been overwhelming to customers. We're building a more flexible, more agile solution set that requires less work, less qualification, and more future proofing. There's a bunch of things in this that you'll see in the demos. Faster time-to-service in terms of the modularity of the systems. 12% faster service equating to almost $50 thousand per hour of reduced downtime. Some new high-density options where we have four nodes and a 2U, twice the density to improve and reduce outbacks and mission-critical workloads. And then in high-performance computing and supercomputing, we're going to spend some time on that here shortly. We're announcing new water-cooled solutions. We have some of the most premiere water-cooled solutions in the world, with more than 25 patents pending now, just in the water-cooled solutions for supercomputing. The performance that we think we're going to see out of these systems is significant. We're building off of that legacy that we have today on the existing Intel solutions. Today, we believe we have more than 50% of SAP HANA installations in the world. In fact, SAP just went public that they're running their internal SAP HANA on Lenovo hardware now. We're seeing a 59% increase in performance on SAP HANA generation on generation. We're seeing 31% lower total cost to ownership. We believe this will continue our position of having the highest level of five-nines in the x86 server industry. And all of these servers will start being available later this summer when the Intel announcements come out. We're also announcing the largest storage portfolio in our history, significantly larger than anything we've done in the past. These are all available today, including some new value class storage offerings. Our network portfolio is expanding now significantly. It was a big surprise when I came to Lenovo, seeing the hundreds of engineers we had from the acquisition of Blade Network Technologies and others with our teams in Romania, Santa Clara, really building out both the embedded portfolio but also the top racks, which is around 10 gig, 25 gig, and 100 gig. Significantly better economics, but all the performance you'd expect from the largest networking companies in the world. Those are also available today. ThinkAgile and Software-Defined, I think the one thing that has kind of overwhelmed me since coming in to Lenovo is we are being embraced by our customers because of our lack of legacy. We're not trying to sell you one more legacy SAN at 65% margins. ThinkAgile really was founded, kind of born free from the shackles of legacy thinking and legacy infrastructure. This is just the beginning of what's going to be an amazing new brand in the transformation to Software-Defined. So, for Lenovo, we're going to invest in our own internal organic IP. I'll foreshadow: There's some significant joint ventures and some mergers and acquisitions that are going to be coming in this space. And so this will be the foundation for our Software-Defined networking and storage, for IoT, and ultimately for the 5G build-out as well. This is all built for data centers of tomorrow that require fluid resources, tightly integrated software and hardware in kind of an appliance, selling at the rack level, and so we'll show you how that is going to take place here in a second. ThinkAgile, we have a few different offerings. One is around hyperconverged storage, Hybrid Cloud, and also Software-Defined storage. So we're really trying to redefine the customer experience. There's two different solutions we're having today. It's a Microsoft Azure solution and a Nutanix solution. These are going to be available both in the appliance space as well as in a full rack solution. We're really simplifying and trying to transform the entire customer experience from how you order it. We've got new capacity planning tools that used to take literally days for us to get the capacity planning done. It's now going down to literally minutes. We've got new order, delivery, deployment, administration service, something we're calling ThinkAgile Advantage, which is the white glove unboxing of the actual solutions on prem. So the whole thing when you hear about it in the breakout sessions about transforming the entire customer experience with both an HX solution and an SX solution. So again, available at the rack level for both Nutanix and for Microsoft Solutions available in just a few months. Many of you in the audience since the Microsoft Airlift event in Seattle have started using these things, and the feedback to date has been fantastic. We appreciate the early customer adoption that we've seen from people in the audience here. So next I want to bring up one of our most important partners, and certainly if you look at all of these solutions, they're based on the next-generation Intel Xeon scalable processor that's going to be announcing very very soon. I want to bring on stage Rupal Shah, who's the corporate vice president and general manager of Global Data Center Sales with Intel, so Rupal, please join me. (upbeat instrumental) So certainly I have long roots at Intel, but why don't you talk about, from Intel's perspective, why Lenovo is an important partner for Lenovo. >> Great, well first of all, thank you very much. I've had the distinct pleasure of not only working with Kirk for many many years, but also working with Lenovo for many years, so it's great to be here. Lenovo is not only a fantastic supplier and leader in the industry for Intel-based servers but also a very active partner in the Intel ecosystem. In the Intel ecosystem, specifically, in our partner programs and in our builder programs around Cloud, around the network, and around storage, I personally have had a long history in working with Lenovo, and I've seen personally that PC transformation that you talked about, Kirk, and I believe, and I know that Intel believes in Lenovo's ability to not only succeed in the data center but to actually lead in the data center. And so today, the ThinkSystem and ThinkAgile announcement is just so incredibly important. It's such a great testament to our two companies working together, and the innovation that we're able to bring to the market, and all of it based on the Intel Xeon scalable processor. >> Excellent, so tell me a little bit about why we've been collaborating, tell me a little bit about why you're excited about ThinkSystem and ThinkAgile, specifically. >> Well, there are a lot of reasons that I'm excited about the innovation, but let me talk about a few. First, both of our companies really stand behind the fact that it's increasingly a hybrid world. Our two companies offer a range of solutions now to customers to be able to address their different workload needs. ThinkSystem really brings the best, right? It brings incredible performance, flexibility in data center deployment, and industry-leading reliability that you've talked about. And, as always, Xeon has a history of being built for the data center specifically. The Intel Xeon scalable processor is really re-architected from the ground up in order to enhance compute, network, and storage data flows so that we can deliver workload optimized performance for both a wide range of traditional workloads and traditional needs but also some emerging new needs in areas like artificial intelligence. Second is when it comes to the next generation of Cloud infrastructure, the new Lenovo ThinkAgile line offers a truly integrated offering to address data center pain points, and so not only are you able to get these pretested solutions, but these pretested solutions are going to get deployed in your infrastructure faster, and they're going to be deployed in a way that's going to meet your specific needs. This is something that is new for both of us, and it's an incredible innovation in the marketplace. I think that it's a great addition to what is already a fantastic portfolio for Lenovo. >> Excellent. >> Finally, there's high-performance computing. In high-performance computing. First of all, congratulations. It's a big week, I think, for both of us. Fantastic work that we've been doing together in high-performance computing and actually bringing the best of the best to our customers, and you're going to hear a whole lot more about that. We obviously have a number of joint innovation centers together between Intel and Lenovo. Tell us about some of the key innovations that you guys are excited about. >> Well, Intel and Lenovo, we do have joint innovation labs around the world, and we have a long and strong history of very tight collaboration. This has brought a big wave of innovation to the marketplace in areas like software-defined infrastructure. Yet another area is working closely on a joint vision that I think our two companies have in artificial intelligence. Intel is very committed to the world of AI, and we're committed in making the investments required in technology development, in training, and also in R&D to be able to deliver end-to-end solutions. So with Intel's comprehensive technology portfolio and Lenovo's development and innovation expertise, it's a great combination in this space. I've already talked a little bit about HPC and so has Kirk, and we're going to hear a little bit more to come, but we're really building the fastest compute solutions for customers that are solving big problems. Finally, we often talk about processors from Intel, but it's not just about the processors. It's way beyond that. It's about engaging at the solution level for our customers, and I'm so excited about the work that we've done together with Lenovo to bring to market products like Intel Omni-Path Architecture, which is really the fabric for high-performance data centers. We've got a great showing this week with Intel Omni-Path Architecture, and I'm so grateful for all the work that we've done to be able to bring true solutions to the marketplace. I am really looking forward to our future collaboration with Lenovo as we have in the past. I want to thank you again for inviting me here today, and congratulations on a fantastic launch. >> Thank you, Rupal, very much, for the long partnership. >> Thank you. (audience applauds) >> Okay, well now let's transition and talk a little bit about how Lenovo is transforming. The first thing we've done when I came on board about six months ago is we've transformed to a truly end-to-end organization. We're looking at the market segments I think as our customers define them, and we've organized into having vice presidents and senior vice presidents in charge of each of these major groups, thinking really end to end, from architecture all the way to end of life and customer support. So the first is hyperscale infrastructure. It's about 20% on the market by 2020. We've hired a new vice president there to run that business. Given we can make money in high-volume desktop PCs, it's really the manufacturing prowess, deep engineering collaboration that's enabling us to sell into Baidu, and to Alibaba, Tencent, as well as the largest Cloud vendors on the West Coast here in the United States. We believe we can make money here by having basically a deep deep engineering engagement with our key customers and building on the PC volume economics that we have within Lenovo. On software-defined infrastructure, again, it's that lack of legacy that I think is propelling us into this space. We're not encumbered by trying to sell one more legacy SAN or router, and that's really what's exciting us here, as we transform from a hardware to a software-based company. On HPC and AI, as we said, we'll talk about this in a second. We're the fastest-growing supercomputing company on earth. We have aspirations to be the largest supercomputing company on earth, with China and the U.S. vying for number one in that position, it puts us in a good position there. We're going to bridge that into artificial intelligence in our upcoming Shanghai Tech World. The entire day is around AI. In fact, YY has committed $1.2 billion to artificial intelligence over the next few years of R&D to help us bridge that. And then on data center infrastructure, is really about moving to a solutions based infrastructure like our position with SAP HANA, where we've gone deep with engineers on site at SAP, SAP running their own infrastructure on Lenovo and building that out beyond just SAP to other solutions in the marketplace. Overall, significantly expanding our services portfolio to maintain our number one customer satisfaction rating. So given ISC, or International Supercomputing, this week in Frankfurt, and a lot of my team are actually over there, I wanted to just show you the transformation we've had at Lenovo for delivering some of the technology to solve some of the most challenging humanitarian problems on earth. Today, we are the fastest-growing supercomputer company on the planet in terms of number of systems on the Top 500 list. We've gone from zero to 92 positions in just a few short years, but IDC also positions Lenovo as the fast-growing supercomputer and HPC company overall at about 17% year on year growth overall, including all of the broad channel, the regional universities and this kind of thing, so this is an exciting place for us. I'm excited today that Sergi has come all the way from Spain to be with us today. It's an exciting time because this week we announce the fastest next-generation Intel supercomputer on the planet at Barcelona Supercomputer. Before I bring Sergi on stage, let's run a video and I'll show you why we're excited about the capabilities of these next-generation supercomputers. Run the video please. >> Narrator: Different creates one of the most powerful supercomputers for the Barcelona Supercomputer Center. A high-performance, high-capacity design to help shape tomorrow's world. Different designs what's best for you, with 25 years of end-to-end expertise delivering large-scale solutions. It integrates easily with technology from industry partners, through deep collaboration with the client to manufacture, test, configure, and install at global scale. Different achieves the impossible. The first of a new series. A more energy-efficient supercomputer yet 10 times more powerful than its predecessor. With over 3,400 Lenovo ThinkSystem servers, each performing over two trillion calculations per second, giving us 11.1 petaflop capacity. Different powers MareNostrum, a supercomputer that will help us better understand cancer, help discover disease-fighting therapies, predict the impact of climate change. MareNostrom 4.0 promises to uncover answers that will help solve humanities greatest challenges. (audience applauds) >> So please help me in welcoming operations director of the Barcelona Supercomputer Center, Sergi Girona. So welcome, and again, congratulations. It's been a big week for both of us. But I think for a long time, if you haven't been to Barcelona, this has been called the world's most beautiful computer because it's in one of the most gorgeous chapels in the world as you can see here. Congratulations, we now are number 13 on the Top500 list and the fastest next-generation Intel computer. >> Thank you very much, and congratulations to you as well. >> So maybe we can just talk a little bit about what you've done over the last few months with us. >> Sure, thank you very much. It is a pleasure for me being invited here to present to you what we've been doing with Lenovo so far and what we are planning to do in the next future. I'm representing here Barcelona Supercomputing Center. I am presenting high-performance computing services to science and industry. How we see these science services has changed the paradigm of science. We are coming from observation. We are coming from observation on the telescopes and the microscopes and the building of infrastructures, but this is not affordable anymore. This is very expensive, so it's not possible, so we need to move to simulations. So we need to understand what's happening in our environment. We need to predict behaviors only going through simulation. So, at BSC, we are devoted to provide services to industry, to science, but also we are doing our own research because we want to understand. At the same time, we are helping and developing the new engineers of the future on the IT, on HPC. So we are having four departments based on different topics. The main and big one is wiling to understand how we are doing the next supercomputers from the programming level to the performance to the EIA, so all these things, but we are having also interest on what about the climate change, what's the air quality that we are having in our cities. What is the precision medicine we need to have. How we can see that the different drugs are better for different individuals, for different humans, and of course we have an energy department, taking care of understanding what's the better optimization for a cold, how we can save energy running simulations on different topics. But, of course, the topic of today is not my research, but it's the systems we are building in Barcelona. So this is what we have been building in Barcelona so far. From left to right, you have the preparation of the facility because this is 160 square meters with 1.4 megabytes, so that means we need new piping, we need new electricity, at the same time in the center we have to install the core services of the system, so the management practices, and then on the right-hand side you have installation of the networking, the Omni-Path by Intel. Because all of the new racks have to be fully integrated and they need to come into operation rapidly. So we start deployment of the system May 15, and we've now been ending and coming in production July first. All the systems, all the (mumbles) systems from Lenovo are coming before being open and available. What we've been installing here in Barcelona is general purpose systems for our general workload of the system with 3,456 nodes. Everyone of those having 48 cores, 96 gigabytes main memory for a total capacity of about 400 terabytes memory. The objective of this is that we want to, all the system, all the processors, to work together for a single execution for running altogether, so this is an example of the platinum processors from Intel having 24 cores each. Of course, for doing this together with all the cores in the same application, we need a high-speed network, so this is Omni-Path, and of course all these cables are connecting all the nodes. Noncontention, working together, cooperating. Of course, this is a bunch of cables. They need to be properly aligned in switches. So here you have the complete presentation. Of course, this is general purpose, but we wanted to invest with our partners. We want to understand what the supercomputers we wanted to install in 2020, (mumbles) Exascale. We want to find out, we are installing as well systems with different capacities with KNH, with power, with ARM processors. We want to leverage our obligations for the future. We want to make sure that in 2020 we are ready to move our users rapidly to the new technologies. Of course, this is in total, giving us a total capacity of 13.7 petaflops that it's 12 times the capacity of the former MareNostrum four years ago. We need to provide the services to our scientists because they are helping to solve problems for humanity. That's the place we are going to go. Last is inviting you to come to Barcelona to see our place and our chapel. Thank you very much (audience applauds). >> Thank you. So now you can all go home to your spouses and significant others and say you have a formal invitation to Barcelona, Spain. So last, I want to talk about what we've done to transform Lenovo. I think we all know the history is nice but without execution, none of this is going to be possible going forward, so we have been very very busy over the last six months to a year of transforming Lenovo's data center organization. First, we moved to a dedicated end-to-end sales and marketing organization. In the past, we had people that were shared between PC and data center, now thousands of sales people around the world are 100% dedicated end to end to our data center clients. We've moved to a fully integrated and dedicated supply chain and procurement organization. A fully dedicated quality organization, 100% dedicated to expanding our data center success. We've moved to a customer-centric segment, again, bringing in significant new leaders from outside the company to look end to end at each of these segments, supercomputing being very very different than small business, being very very different than taking care of, for example, a large retailer or bank. So around hyperscale, software-defined infrastructure, HPC, AI, and supercomputing and data center solutions-led infrastructure. We've built out a whole new set of global channel programs. Last year, or a year passed, we have five different channel programs around the world. We've now got one simplified channel program for dealer registration. I think our channel is very very energized to go out to market with Lenovo technology across the board, and a whole new set of system integrator relationships. You're going to hear from one of them in Christian's discussion, but a whole new set of partnerships to build solutions together with our system integrative partners. And, again, as I mentioned, a brand new leadership team. So look forward to talking about the details of this. There's been a significant amount of transformation internal to Lenovo that's led to the success of this new product introduction today. So in conclusion, I want to talk about the news of the day. We are transforming Lenovo to the next phase of our data center growth. Again, in over 160 countries, closing on that first phase of transformation and moving forward with some unique declarations. We're launching the largest portfolio in our history, not just in servers but in storage and networking, as everything becomes kind of a software personality on top of x86 Compute. We think we're very well positioned with our scale on PCs as well as data center. Two new brands for both data center infrastructure and Software-Defined, without the legacy shackles of our competitors, enabling us to move very very quickly into Software-Defined, and, again, foreshadowing some joint ventures in M&A that are going to be coming up that will further accelerate ourselves there. New premiere support offerings, enabling you to get direct access to level two engineers and white glove unboxing services, which are going to be bundled along with ThinkAgile. And then celebrating the milestone of 25 years in x86 server compute, not just ThinkPads that you'll hear about shortly, but also our 20 million server shipping next month. So we're celebrating that legacy and looking forward to the next phase. And then making sure we have the execution engine to maintain our position and grow it, being number one in customer satisfaction and number one in quality. So, with that, thank you very much. I look forward to seeing you in the breakouts today and talking with many of you, and I'll bring Rod back up to transition us to the next section. Thank you. (audience applauds) >> All right, Kirk, thank you, sir. All right, ladies and gentlemen, what did you think of that? How about a big round of applause for ThinkAgile, ThinkSystems new brands? (audience applauds) And, obviously, with that comes a big round of applause, for Kirk Skaugen, my boss, so we've got to give him a big round of applause, please. I need to stay employed, it's very important. All right, now you just heard from Kirk about some of the new systems, the brands. How about we have a quick look at the video, which shows us the brand new DCG images. >> Narrator: Legacy thinking is dead, stuck in the past, selling the same old stuff, over and over. So then why does it seem like a data center, you know, that thing powering all our little devices and more or less everything interaction today is still stuck in legacy thinking because it's rigid, inflexible, slow, but that's not us. We don't do legacy. We do different. Because different is fearless. Different reduces Cloud deployment from days to hours. Different creates agile technology that others follow. Different is fluid. It uses water-cooling technology to save energy. It co-innovates with some of the best minds in the industry today. Different is better, smarter. Maybe that's why different already holds so many world-record benchmarks in everything. From virtualization to database and application performance or why it's number one in reliability and customer satisfaction. Legacy sells you what they want. Different builds the data center you need without locking you in. Introducing the Data Center Group at Lenovo. Different... Is better. >> All right, ladies and gentlemen, a big round of applause, once again (mumbles) DCG, fantastic. And I'm sure all of you would agree, and Kirk mentioned it a couple of times there. No legacy means a real consultative approach to our customers, and that's something that we really feel is differentiated for ourselves. We are effectively now one of the largest startups in the DCG space, and we are very much ready to disrupt. Now, here in New York City, obviously, the heart of the fashion industry, and much like fashion, as I mentioned earlier, we're different, we're disruptive, we're agile, smarter, and faster. I'd like to say that about myself, but, unfortunately, I can't. But those of you who have observed, you may have noticed that I, too, have transformed. I don't know if anyone saw that. I've transformed from the pinstripe blue, white shirt, red tie look of the, shall we say, our predecessors who owned the x86 business to now a very Lenovo look. No tie and consequently a little bit more chic New York sort of fashion look, shall I say. Nothing more than that. So anyway, a bit of a transformation. It takes a lot to get to this look, by the way. It's a lot of effort. Our next speaker, Christian Teismann, is going to talk a lot about the core business of Lenovo, which really has been, as we've mentioned today, our ThinkPad, 25-year anniversary this year. It's going to be a great celebration inside Lenovo, and as we get through the year and we get closer and closer to the day, you'll see a lot more social and digital work that engages our customers, partners, analysts, et cetera, when we get close to that birthday. Customers just generally are a lot tougher on computers. We know they are. Whether you hang onto it between meetings from the corner of the Notebook, and that's why we have magnesium chassis inside the box or whether you're just dropping it or hypothetically doing anything else like that. We do a lot of robust testing on these products, and that's why it's the number one branded Notebook in the world. So Christian talks a lot about this, but I thought instead of having him talk, I might just do a little impromptu jump back stage and I'll show you exactly what I'm talking about. So follow me for a second. I'm going to jaunt this way. I know a lot of you would have seen, obviously, the front of house here, what we call the front of house. Lots of videos, et cetera, but I don't think many of you would have seen the back of house here, so I'm going to jump through the back here. Hang on one second. You'll see us when we get here. Okay, let's see what's going on back stage right now. You can see one of the team here in the back stage is obviously working on their keyboard. Fantastic, let me tell you, this is one of the key value props of this product, obviously still working, lots of coffee all over it, spill-proof keyboard, one of the key value propositions and why this is the number one laptop brand in the world. Congratulations there, well done for that. Obviously, we test these things. Height, distances, Mil-SPEC approved, once again, fantastic product, pick that up, lovely. Absolutely resistant to any height or drops, once again, in line with our Mil-SPEC. This is Charles, our producer and director back stage for the absolute event. You can see, once again, sand, coincidentally, in Manhattan, who would have thought a snow storm was occurring here, but you can throw sand. We test these things for all of the elements. I've obviously been pretty keen on our development solutions, having lived in Japan for 12 years. We had this originally designed in 1992 by (mumbles), he's still our chief development officer still today, fantastic, congratulations, a sand-enhanced notebook, he'd love that. All right, let's get back out front and on with the show. Watch the coffee. All right, how was that? Not too bad (laughs). It wasn't very impromptu at all, was it? Not at all a set up (giggles). How many people have events and have a bag of sand sitting on the floor right next to a Notebook? I don't know. All right, now it's time, obviously, to introduce our next speaker, ladies and gentlemen, and I hope I didn't steal his thunder, obviously, in my conversations just now that you saw back stage. He's one of my best friends in Lenovo and easily is a great representative of our legendary PC products and solutions that we're putting together for all of our customers right now, and having been an ex-Pat with Lenovo in New York really calls this his second home and is continually fighting with me over the fact that he believes New York has better sushi than Tokyo, let's welcome please, Christian Teismann, our SVP, Commercial Business Segment, and PC Smart Office. Christian Teismann, come on up mate. (audience applauds) >> So Rod thank you very much for this wonderful introduction. I'm not sure how much there is to add to what you have seen already back stage, but I think there is a 25-year of history I will touch a little bit on, but also a very big transformation. But first of all, welcome to New York. As Rod said, it's my second home, but it's also a very important place for the ThinkPad, and I will come back to this later. The ThinkPad is thee industry standard of business computing. It's an industry icon. We are celebrating 25 years this year like no other PC brand has done before. But this story today is not looking back only. It's a story looking forward about the future of PC, and we see a transformation from PCs to personalized computing. I am privileged to lead the commercial PC and Smart device business for Lenovo, but much more important beyond product, I also am responsible for customer experience. And this is what really matters on an ongoing basis. But allow me to stay a little bit longer with our iconic ThinkPad and history of the last 25 years. ThinkPad has always stand for two things, and it always will be. Highest quality in the industry and technology innovation leadership that matters. That matters for you and that matters for your end users. So, now let me step back a little bit in time. As Rod was showing you, as only Rod can do, reliability is a very important part of ThinkPad story. ThinkPads have been used everywhere and done everything. They have survived fires and extreme weather, and they keep surviving your end users. For 25 years, they have been built for real business. ThinkPad also has a legacy of first innovation. There are so many firsts over the last 25 years, we could spend an hour talking about them. But I just want to cover a couple of the most important milestones. First of all, the ThinkPad 1992 has been developed and invented in Japan on the base design of a Bento box. It was designed by the famous industrial designer, Richard Sapper. Did you also know that the ThinkPad was the first commercial Notebook flying into space? In '93, we traveled with the space shuttle the first time. For two decades, ThinkPads were on every single mission. Did you know that the ThinkPad Butterfly, the iconic ThinkPad that opens the keyboard to its size, is the first and only computer showcased in the permanent collection of the Museum of Modern Art, right here in New York City? Ten years later, in 2005, IBM passed the torch to Lenovo, and the story got even better. Over the last 12 years, we sold over 100 million ThinkPads, four times the amount IBM sold in the same time. Many customers were concerned at that time, but since then, the ThinkPad has remained the best business Notebook in the industry, with even better quality, but most important, we kept innovating. In 2012, we unveiled the X1 Carbon. It was the thinnest, lightest, and still most robust business PC in the world. Using advanced composited materials like a Formula One car, for super strengths, X1 Carbon has become our ThinkPad flagship since then. We've added an X1 Carbon Yoga, a 360-degree convertible. An X1 Carbon tablet, a detachable, and many new products to come in the future. Over the last few years, many new firsts have been focused on providing the best end-user experience. The first dual-screen mobile workstation. The first Windows business tablet, and the first business PC with OLED screen technology. History is important, but a massive transformation is on the way. Future success requires us to think beyond the box. Think beyond hardware, think beyond notebooks and desktops, and to think about the future of personalized computing. Now, why is this happening? Well, because the business world is rapidly changing. Looking back on history that YY gave, and the acceleration of innovation and how it changes our everyday life in business and in personal is driving a massive change also to our industry. Most important because you are changing faster than ever before. Human capital is your most important asset. In today's generation, they want to have freedom of choice. They want to have a product that is tailored to their specific needs, every single day, every single minute, when they use it. But also IT is changing. The Cloud, constant connectivity, 5G will change everything. Artificial intelligence is adding things to the capability of an infrastructure that we just are starting to imagine. Let me talk about the workforce first because it's the most important part of what drives this. The millennials will comprise more than half of the world's workforce in 2020, three years from now. Already, one out of three millennials is prioritizing mobile work environment over salary, and for nearly 60% of all new hires in the United States, technology is a very important factor for their job search in terms of the way they work and the way they are empowered. This new generation of new employees has grown up with PCs, with Smart phones, with tablets, with touch, for their personal use and for their occupation use. They want freedom. Second, the workplace is transforming. The video you see here in the background. This is our North America headquarters in Raleigh, where we have a brand new Smart workspace. We have transformed this to attract the new generation of workers. It has fewer traditional workspaces, much more meaning and collaborative spaces, and Lenovo, like many companies, is seeing workspaces getting smaller. An average workspace per employee has decreased by 30% over the last five years. Employees are increasingly mobile, but, if they come to the office, they want to collaborate with their colleagues. The way we collaborate and communicate is changing. Investment in new collaboration technology is exploding. The market of collaboration technology is exceeding the market of personal computing today. It will grow in the future. Conference rooms are being re-imagined from a ratio of 50 employees to one large conference room. Today, we are moving into scenarios of four employees to one conference room, and these are huddle rooms, pioneer spaces. Technology is everywhere. Video, mega-screens, audio, electronic whiteboards. Adaptive technologies are popping up and change the way we work. As YY said earlier, the pace of the revolution is astonishing. So personalized computing will transform the PC we all know. There's a couple of key factors that we are integrating in our next generations of PC as we go forward. The most important trends that we see. First of all, choose your own device. We talked about this new generation of workforce. Employees who are used to choosing their own device. We have to respond and offer devices that are tailored to each end user's needs without adding complexity to how we operate them. PC is a service. Corporations increasingly are looking for on-demand computing in data center as well as in personal computing. Customers want flexibility. A tailored management solution and a services portfolio that completes the lifecycle of the device. Agile IT, even more important, corporations want to run an infrastructure that is agile, instant respond to their end-customer needs, that is self provisioning, self diagnostic, and remote software repair. Artificial intelligence. Think about artificial intelligence for you personally as your personal assistant. A personal assistant which does understand you, your schedule, your travel, your next task, an extension of yourself. We believe the PC will be the center of this mobile device universe. Mobile device synergy. Each of you have two devices or more with you. They need to work together across different operating systems, across different platforms. We believe Lenovo is uniquely positioned as the only company who has a Smart phone business, a PC business, and an infrastructure business to really seamlessly integrate all of these devices for simplicity and for efficiency. Augmented reality. We believe augmented reality will drive significantly productivity improvements in commercial business. The core will be to understand industry-specific solutions. New processes, new business challenges, to improve things like customer service and sales. Security will remain the foundation for personalized computing. Without security, without trust in the device integrity, this will not happen. One of the most important trends, I believe, is that the PC will transform, is always connected, and always on, like a Smart phone. Regardless if it's open, if it's closed, if you carry it, or if you work with it, it always is capable to respond to you and to work with you. 5G is becoming a reality, and the data capacity that will be out there is by far exceeding today's traffic imagination. Finally, Smart Office, delivering flexible and collaborative work environments regardless on where the worker sits, fully integrated and leverages all the technologies we just talked before. These are the main challenges you and all of your CIO and CTO colleagues have to face today. A changing workforce and a new set of technologies that are transforming PC into personalized computing. Let me give you a real example of a challenge. DXC was just formed by merging CSE company and HP's Enterprise services for the largest independent services company in the world. DXC is now a 25 billion IT services leader with more than 170,000 employees. The most important capital. 6,000 clients and eight million managed devices. I'd like to welcome their CIO, who has one of the most challenging workforce transformation in front of him. Erich Windmuller, please give him a round of applause. (audience applauds). >> Thank you Christian. >> Thank you. >> It's my pleasure to be here, thank you. >> So first of all, let me congratulation you to this very special time. By forming a new multi-billion-dollar enterprise, this new venture. I think it has been so far fantastically received by analysts, by the press, by customers, and we are delighted to be one of your strategic partners, and clearly we are collaborating around workforce transformation between our two companies. But let me ask you a couple of more personal questions. So by bringing these two companies together with nearly 200,00 employees, what are the first actions you are taking to make this a success, and what are your biggest challenges? >> Well, first, again, let me thank you for inviting me and for DXC Technology to be a part of this very very special event with Lenovo, so thank you. As many of you might expect, it's been a bit of a challenge over the past several months. My goal was really very simple. It was to make sure that we brought two companies together, and they could operate as one. We need to make sure that could continue to support our clients. We certainly need to make sure we could continue to sell, our sellers could sell. That we could pay our employees, that we could hire people, we could do all the basic foundational things that you might expect a company would want to do, but we really focused on three simple areas. I called it the three Cs. Connectivity, communicate, and collaborate. So we wanted to make sure that we connected our legacy data centers so we could transfer information and communicate back and forth. We certainly wanted to be sure that our employees could communicate via WIFI, whatever locations they may or may not go to. We certainly wanted to, when we talk about communicate, we need to be sure that everyone of our employees could send and receive email as a DXC employee. And that we had a single-enterprise directory and people could communicate, gain access to calendars across each of the two legacy companies, and then collaborate was also key. And so we wanted to be sure, again, that people could communicate across each other, that our legacy employees on either side could get access to many of their legacy systems, and, again, we could collaborate together as a single corporation, so it was challenging, but very very, great opportunity for all of us. And, certainly, you might expect cyber and security was a very very important topic. My chairman challenged me that we had to be at least as good as we were before from a cyber perspective, and when you bring two large companies together like that there's clearly an opportunity in this disruptive world so we wanted to be sure that we had a very very strong cyber security posture, of which Lenovo has been very very helpful in our achieving that. >> Thank you, Erich. So what does DXC consider as their critical solutions and technology for workplace transformation, both internally as well as out on the market? >> So workplace transformation, and, again, I've heard a lot of the same kinds of words that I would espouse... It's all about making our employees productive. It's giving the right tools to do their jobs. I, personally, have been focused, and you know this because Lenovo has been a very very big part of this, in working with our, we call it our My Style Workplace, it's an offering team in developing a solution and driving as much functionality as possible down to the workstation. We want to be able, for me, to avoid and eliminate other ancillary costs, audio video costs, telecommunication cost. The platform that we have, the digitized workstation that Lenovo has provided us, has just got a tremendous amount of capability. We want to streamline those solutions, as well, on top of the modern server. The modern platform, as we call it, internally. I'd like to congratulate Kirk and your team that you guys have successfully... Your hardware has been certified on our modern platform, which is a significant accomplishment between our two companies and our partnership. It was really really foundational. Lenovo is a big part of our digital workstation transformation, and you'll continue to be, so it's very very important, and I want you to know that your tools and your products have done a significant job in helping us bring two large corporations together as one. >> Thank you, Erich. Last question, what is your view on device as a service and hardware utility model? >> This is the easy question, right? So who in the room doesn't like PC or device as a service? This is a tremendous opportunity, I think, for all of us. Our corporation, like many of you in the room, we're all driven by the concept of buying devices in an Opex versus a Capex type of a world and be able to pay as you go. I think this is something that all of us would like to procure, product services and products, if you will, personal products, in this type of a mode, so I am very very eager to work with Lenovo to be sure that we bring forth a very dynamic and constructive device as a service approach. So very eager to do that with Lenovo and bring that forward for DXC Technology. >> Erich, thank you very much. It's a great pleasure to work with you, today and going forward on all sides. I think with your new company and our lineup, I think we have great things to come. Thank you very much. >> My pleasure, great pleasure, thank you very much. >> So, what's next for Lenovo PC? We already have the most comprehensive commercial portfolio in the industry. We have put the end user in the core of our portfolio to finish and going forward. Ultra mobile users, like consultants, analysts, sales and service. Heavy compute users like engineers and designers. Industry users, increasingly more understanding. Industry-specific use cases like education, healthcare, or banking. So, there are a few exciting things we have to announce today. Obviously, we don't have that broad of an announcement like our colleagues from the data center side, but there is one thing that I have that actually... Thank you Rod... Looks like a Bento box, but it's not a ThinkPad. It's a first of it's kind. It's the world's smallest professional workstation. It has the power of a tower in the Bento box. It has the newest Intel core architecture, and it's designed for a wide range of heavy duty workload. Innovation continues, not only in the ThinkPad but also in the desktops and workstations. Second, you hear much about Smart Office and workspace transformation today. I'm excited to announce that we have made a strategic decision to expand our Think portfolio into Smart Office, and we will soon have solutions on the table in conference rooms, working with strategic partners like Intel and like Microsoft. We are focused on a set of devices and a software architecture that, as an IoT architecture, unifies the management of Smart Office. We want to move fast, so our target is that we will have our first product already later this year. More to come. And finally, what gets me most excited is the upcoming 25 anniversary in October. Actually, if you go to Japan, there are many ThinkPad lovers. Actually beyond lovers, enthusiasts, who are collectors. We've been consistently asked in blogs and forums about a special anniversary edition, so let me offer you a first glimpse what we will announce in October, of something we are bring to market later this year. For the anniversary, we will introduce a limited edition product. This will include throwback features from ThinkPad's history as well as the best and most powerful features of the ThinkPad today. But we are not just making incremental adjustments to the Think product line. We are rethinking ThinkPad of the future. Well, here is what I would call a concept card. Maybe a ThinkPad without a hinge. Maybe one you can fold. What do you think? (audience applauds) but this is more than just design or look and feel. It's a new set of advanced materials and new screen technologies. It's how you can speak to it or write on it or how it speaks to you. Always connected, always on, and can communicate on multiple inputs and outputs. It will anticipate your next meeting, your next travel, your next task. And when you put it all together, it's just another part of the story, which we call personalized computing. Thank you very much. (audience applauds) Thank you, sir. >> Good on ya, mate. All right, ladies and gentlemen. We are now at the conclusion of the day, for this session anyway. I'm going to talk a little bit more about our breakouts and our demo rooms next door. But how about the power with no tower, from Christian, huh? Big round of applause. (audience applauds) And what about the concept card, the ThinkPad? Pretty good, huh? I love that as well. I tell you, it was almost like Leonardo DiCaprio was up on stage at one stage. He put that big ThinkPad concept up, and everyone's phones went straight up and took a photo, the whole audience, so let's be very selective on how we distribute that. I'm sure it's already on Twitter. I'll check it out in a second. So once again, ThinkPad brand is a core part of the organization, and together both DCG and PCSD, what we call PCSD, which is our client side of the business and Smart device side of the business, are obviously very very linked in transforming Lenovo for the future. We want to also transform the industry, obviously, and transform the way that all of us do business. Lenovo, if you look at basically a summary of the day, we are highly committed to being a top three data center provider. That is really important for us. We are the largest and fastest growing supercomputing company in the world, and Kirk actually mentioned earlier on, committed to being number one by 2020. So Madhu who is in Frankfurt at the International Supercomputing Convention, if you're watching, congratulations, your targets have gone up. There's no doubt he's going to have a lot of work to do. We're obviously very very committed to disrupting the data center. That's obviously really important for us. As we mentioned, with both the brands, the ThinkSystem, and our ThinkAgile brands now, highly focused on disrupting and ensuring that we do things differently because different is better. Thank you to our customers, our partners, media, analysts, and of course, once again, all of our employees who have been on this journey with us over the last two years that's really culminating today in the launch of all of our new products and our profile and our portfolio. It's really thanks to all of you that once again on your feedback we've been able to get to this day. And now really our journey truly begins in ensuring we are disrupting and enduring that we are bringing more value to our customers without that legacy that Kirk mentioned earlier on is really an advantage for us as we really are that large startup from a company perspective. It's an exciting time to be part of Lenovo. It's an exciting time to be associated with Lenovo, and I hope very much all of you feel that way. So a big round of applause for today, thank you very much. (audience applauds) I need to remind all of you. I don't think I'm going to have too much trouble getting you out there, because I was just looking at Christian on the streaming solutions out in the room out the back there, and there's quite a nice bit of lunch out there as well for those of you who are hungry, so at least there's some good food out there, but I think in reality all of you should be getting up into the demo sessions with our segment general managers because that's really where the rubber hits the road. You've heard from YY, you've heard from Kirk, and you've heard from Christian. All of our general managers and our specialists in our product sets are going to be out there to obviously demonstrate our technology. As we said at the very beginning of this session, this is Transform, obviously the fashion change, hopefully you remember that. Transform, we've all gone through the transformation. It's part of our season of events globally, and our next event obviously is going to be in Tech World in Shanghai on the 20th of July. I hope very much for those of you who are going to attend have a great safe travel over there. We look forward to seeing you. Hope you've had a good morning, and get into the sessions next door so you get to understand the technology. Thank you very much, ladies and gentlemen. (upbeat innovative instrumental)

>> Announcer: Live from New Orleans. It's theCUBE covering VeeamON 2017, brought to you by Veeam. >> Welcome back to New Orleans everybody, this is theCUBE the leader in live tech coverage. We go out to the events, we extract the signal from the noise. A lot of noise on cloud, a lot of signal on cloud, and we've been unpacking that. I'm Dave Vellante with Stu Miniman. Alexander Kozlyaev is here. He's the Head of IT Architecture at MTS. He's joined by Konstantin Yakovlev, who is the lead System Architect at MTS, a telecommunications company in Ukraine. Gentlemen, welcome to theCUBE. Thank you for coming on. >> Thank you. >> Not Ukraine, in Russia. >> Oh, it's not Ukraine. Oh sorry, just hear Ukraine. >> We had some bad data. We'll make sure to clean that up. >> Yeah, yeah, we have a data quality problem here. Sorry about that. Okay, yes my apologies. Okay, let's start with Alexander. Maybe you could describe MTS and tell us a little bit about the company. >> Yeah, surely. MTS is one of the largest mobile operator in Russia. It represents the Russian market for the last 23 years. So currently, our subscribers in Russia only maybe counted by the number of 80 million. We have subsidiaries in different countries like Belarussia, like Romania, and other countries. So we are putting forward our digital services, cellular services and others. Me, personally, working from the first day of MTS so I'm roughly 20 years in MTS staff, starting as system administrator. >> Okay, so you've seen the evolution of the various backup and we'll come back to that. But I wanted to ask Konstantin, it's a long way to come to a show like this. How are you enjoying the show? What has it been like for you? >> It's a nice conference but main thing for us, I think it's backup of physical servers. Because now we have different systems to backup physical servers and virtual servers. Maybe we hope in the future to join these systems, and have only one backup for all our services. So it's good step for Veeam to make a physical backup also. I think it's main goal for us here in this conference. >> Okay, so that was one of the big announcements this week. Of course, Veeam is oftentimes been pointing out that up until this point has not backup bare metal servers, physical servers as you say, and now that happens. So that allows you to consolidate your backup architecture, is that right? >> Maybe, we hope. It's a first step. It's a first step, so now we have to look how Veeam will backup bare metal servers. >> We would like to harmonize our backup software because currently we have three or more even backup software featuring like Symantec, like Network Error. So we would like to join them, and to choose best of breed of them. Currently Veeam software now can play this role as being the big player like them. >> Alexander, you have the history of MTS. You've seen the backup systems of all from before virtualization. >> Alexander: Yeah, all the way through. >> Can you share with us the MTS backup and data protection journey? >> Backup and data protection journey. Surely, it started from very simple tape drives staying on top of the table. I am personally was who repairing them from jammed tapes and so on, (faint) tape, autoloaders and others, and others. But nowadays, we have a huge amount of data. Okay, it's very big amount of data. So simple tapes cannot operate properly. So we have historically a different software solutions to which we acquired with different companies which were merged with us. So currently, we would like to harmonize all these suite of software features. So the how big way was passed by. >> So from an IT architecture perspective, Konstantin, what are the big challenges in the telecommunications industry in terms of high availability? We hear a lot about always on. What does that mean to your business? >> I think it's maybe always on is not a first main goal today. Maybe for us, main goal is NFE, if you heard about it. It's virtualization of network part of telecommunication company. This is a first and main question. After that, we can talk about always on, and data protection because in telecommunication world, it's very important part of our business. >> Dave: So NF-- >> So just NFE is really about being able to deliver software services to your users. >> I would like to say NFE is being like a tool. But real goal is agility of the business because we are challenging very different range of tasks, and we need to act very fast. So the only way to withstand such threats is to react very fast by means of very flexible infrastructure. So the only way is to build NFE infrastructure NFE radius so. >> It's a shift in mind. >> Yeah, I think back, I worked in telecommunications 20 years ago. Lots of big gear, and cabling, and it's a software world now. NFE is just part of the term to help you deliver agility sounds right. >> Just to (accented) into solutions, which are built everywhere. >> I've talked to many of the large telecommunication vendors over the years. The whole cloud wave, some telecommunication players try to be a cloud provider. Most of them, NFE is an exciting thing they're looking at. How does cloud impact your journey? >> It doesn't impact us very, how to say, I guess. So currently, what do impact us most of all is the need to reorganize our internal processes. Currently we are not cloud oriented in our minds, and our process have other dimensions that our company more than 20 years old. All the processes from the very beginning. So most of them should be re-in full completely and build up from scratch. So currently it's a big, big task, and we are trying to work with that. We are talking with helps, you know the tool. For example, to state the tasks in different ways, to work different, think different as we probably should. >> Where does Veeam fit in? You mentioned you have a lot of different flavors of backup software because you have to support both physical servers and virtual servers. Where does Veeam fit in, and where do you see it going? >> Veeam is our main solution for backup of virtualized systems. In IT, we already virtualized most part of our systems but now we start this NFE process in telecommunication part. So Veeam will play more, and more important role in our life because we start to transform our telecommunication part to move it to IT-like world. In IT, the Veeam is main solution for backup virtual machines. So in all other part of our company, Veeam will start to play this role as a main solution of data protection for the virtual machines. So when more and more virtual servers will appear in our life, Veeam will play more, and more important role. So this is a Veeam role in our life. This is a main solution for backup virtual machines so. >> Yeah, it's got to be more and more reliant on that platform to support your future. >> Less and less physical servers but still as head of one of the division in Veeam said, we cannot virtualize 100%. So always will be some small part of physical servers. >> Okay, good, well we're out of time. Thank you very much for coming on theCUBE. >> Stu: Appreciate it. >> Alexander: Thank you. >> Thank you, thank you very much. >> All right, keep it right there buddies. Stu and I will be back to wrap right after this short break. Be right back. (enlightening music)

>> Narrator: Live from Boston, Massachusetts, it's The Cube, covering Red Hat Summit 2017, brought to you by Red Hat. >> Welcome back to The Cube's coverage of the Red Hat Summit here in Boston, Massachusetts. I'm your host, Rebecca Knight, along with my cohost, Stu Miniman. We are joined by Kirk Skaugen, he is the Executive Vice President and President of Lenovo Data Center group, Lenovo. So thanks so much for joining us, Kirk. >> Thanks for having me. >> I want to start out by talking about Lenovo's commitment to open source, right. We're hearing a lot about this in this summit, It's the real deal! >> Yeah, well I was at for 24 years and had a long partnership with Red Hat there so as I moved over to Lenovo on that, open source is a key aspect of our strategy. Kind of foundational for us and where we sit with the days in our company, because we don't have this legacy. We're not someone who's trying to protect an old router business or an old storage business. So as we look at open source as part of our, kind of, open partnerships commitment, it's pretty foundational to what we're doing. >> Kirk, could you help us unpack that a little bit? We heard in Keynote this morning they talked about open source hardware. I know you guys have been involved in OCP. How much is software, how much is hardware? Where do you guys put commitment in? How much of it is partners? >> Yeah, so I think we're in about over 30 different standards bodies now committed to open source. It really happened after our acquisition of the IBM xSeries server business, so now we're the third largest x86 server provider in the world and we're expanding ahead in the data center, so we're participating about 30 standards bodies. We have about 12 open source projects going on with Red Hat, and we're really at the base level, announcing today something called Open Platform at Lenovo. It's something we said we would do a year ago at this conference, and now here at the Red Hat summit we're showing it in our booth actually there. It's a base open platform with an optimized stack which you can put NFE and other solutions on top of, so that's one example of things we said we were going to do a year ago today and then are doing today. It's really about, from our perspective, optimizing the base hardware for all these platforms. >> Interesting, we look at things. I hear people look at open source and there's more transparency. It's not like '08; there's a secret project we're working on and here it is. You worked at Intel. Everybody kind of understood the tick-tock that went on there, how does open source influence the planing that you guys go into and do you feel the road maps at a company like Lenovo are more transparent since you're part of open source? I mean, again, what you should expect from us is we're a leader in x86 system technology but we've also acquired assets like blade network technologies in the past as well. We're expanding as a company out of our server routes into networking and storage. We think containerization is going to be the future. Today we're sitting with, something like 32 world record benchmarks and our theme is kind of "different is better" which means it's the little things that we're doing with all these partners to tune out the best performance of these systems working with our partners. We're not trying to go far up the stack and compete with our partners. I think that makes us a little bit unique. We're in trying to be the best x86 system provider in the world. Expand that into storage and networking as we get the software defined. >> Great, and absolutely. It would be useful to kind of explain your role in the data center group itself. As you said, you've got in some pieces. >> Some came from the IBM, there's various acquisitions. >> Kirk: Mmmhmm. >> Lay out a little bit more of what you guys do and what your partner does. >> Sure, so I think a lot of people know Lenovo as being number one in PCs. This is the 25th year of ThinkPad and we look at our Think Server brand today and our X series brand that we acquired from IBM. >> So we're, again, the third largest server provider but expanding that into storage and networking and then we acquired the Motorola phone business, so we just crossed to be number four in the world outside of China, with a presence in India. So we basically have three businesses within Lenovo but Data Center group, we believe, is a big growth driver for the future. A lot of people I think, 25 years ago, would have never thought Lenovo would be number one in PCs worldwide. I think we're kind of sitting there as a server provider with number one in customer satisfaction, number one in server reliability, number one in quality by all these third party measures. Our biggest issue is people don't realize we acquired this amazing asset from IBM so we're here at the summit basically showing and promoting our brand, but also promoting the proof points underneath that. >> This event is very global, multicultural. Lenovo's also a global company. Maybe speak a little bit to that; where your teams live, where development happens and what your customer base looks like. >> I live in Raleigh. We have a dual headquarters in Raleigh and Beijing, but we operate in over 160 countries. We have over 10,000 IT professionals now within the data center group. We have manufacturing in the United States, in Mexico, in Hungary, in China, so we can basically globally ship everywhere. When I looked at moving from Intel to another company, number one this enabled me to get one step closer to the customer, but I thought Lenovo's one of the best companies I saw that we're partnering. I think in the data center group, you look at our list of partners and it's unprecedented partly because we don't have a legacy business, so almost every startup and everybody who wants to do something new ends up wanting access to our presence in China, being number one in China, but also because we're not protecting a legacy so they see us as someone interesting and unique to partnership with. So open source is one of those areas where I think, now that we separated from IBM we're clearly an x86 provider committed to open source and the way we're getting into telecom, where we hadn't been, and competing with our big customers is because we're open and ideally we're more agile and partner better. >> I'm wondering if you could comment on the culture of these culture of these various places. As you said, you've been in Portland for a long time. You're now new to Raleigh. Your company is Beijing and Raleigh and you do business all over the world. How do you experience how these engineers, are they different in different parts of the world? Or is open source really transcending that and there is a much more of an openness and a transparency? >> Yeah, I thought I'd fit really well into the Lenovo culture. I think six months into the job, I feel like it's exceeded my expectations. If you look at the executive staff at Lenovo there's something like seven different nationalities on there from Italy, and Switzerland, and Australia, and the U.S., and China, Hong Kong, Singapore, India. >> Rebecca: And that's by design. >> Yeah, by design. So I think it provides a really unique perspective as you're looking at market trends, and then customers and things like that. When you look at the engineering aspect of it I'm looking at this efficiencies of the PC, the cost economics of the PC, having some of these factors. We're actually one of the last companies who's designing our own systems and putting them in our own factory, so from that perspective we get the efficiencies of being part of a larger PC company, but listen, data center's very different, right? We have a completely autonomous data center group now but we get the efficiencies of that, so we can kind of get the best of all the cultures that we participate in with development in Romania, in India, in China, Raleigh and again, we can manufacture in any place the customer wants us to manufacture pretty much. >> You mentioned that you're one of the last companies that's designing your own systems and putting them into your machines. Is that going to go by the wayside? You're one of the last, so all these other companies have decided it's just not sustainable. Can you comment on that? >> Well I think consolidation is absolutely key. If you look at the PC industry, and I managed the PC business at Intel the last three years. There's absolutely been consolidation in that market. You should look at some of the Japanese suppliers going away, but that's what enabled Lenovo to continue to grow in a multi-hundred million unit market. Today we ship about 100 servers a minute. A hundred servers an hour, rather, about one a minute. If you look at the consolidation trends I think still going to be a lot of consolidation in the market around that, so we believe we can grow in that market. PCs through consolidation, and if the PC market flattens out, even in the data center space where I think there'll be fewer and fewer players that will be able to compete. It really gets down to just uber-efficiency. When you're running in a factory that's building as the number one PC company, you get manufacturing efficiencies that other people can't do at our subscale. So as an example, when we look at things like supercomputing we're now the fastest growing supercomputing company on the planet. 99 of the top 500 supercomputers. That's because we can build very, very efficient products in a market that typically runs on razor-thin margins, right. >> Kirk, we talk about that huge volume of servers. Can you speak to where Lenovo's playing in the service provider and cloud marketplace? >> Sure, I think we just reorganized into kind of, four customer-centric markets. So first is in hyperscale, we participate with Baidu, Alibaba, Tencent and we're expanding across some of the largest hyperscale providers in the West Coast. We believe designing our own board, putting in our own factories gives us the cost economics to compete with the largest data centers in the world, just 'cause we can make money in PC desktop towers which is a pretty commoditized business. We think we can make money there. Software-defined, I think what we're seeing is because of our lack of legacy hardware whether it's a legacy SAN or a legacy routing business, we can leap ahead there both through our own stack but also our partner's stack. Third is supercomputing, so this is something where we brought a lot of that application knowledge over from IBM to the acquisition, and our goal is to continue to be the fastest growing supercomputing company on the planet and right now we're number two in the world, so we're building our Barcelona supercomputer right now to be 12 times more powerful that what it is today. With the University of Adelaide, 30 times more powerful than their last computer. Supercomputing's the third, and then the fourth is just traditional data center. So there you look at things like SAP HANA, where we were solutions-lead. We're trying to not just ship the hardware, but deliver optimized solutons so we feel like the little things don't mean a lot, the little things mean everything. So why does Lenovo have 32 worldwide per benchmarks? 'Cause we're tuning things with SAP, and now, for example, SAP just went public that they're running their own internal HANA on Lenovo. So I think it's a testament, it's the fine tuning of the application. It's hyperscale, software-defined, supercomputing, and then legacy data center infrastructure lead by solutions. Those are our four segments. >> Kirk, you talked about, it was 25 years for ThinkPad. As I look out towards the future, the data center group, what's kind of the touchstone? What are people going to really understand and know that group for in the future? >> Well, I think we want to be most trusted from a data center provider, right. We're not trying to contain anyone in a legacy thinking. We want to leap ahead into software-defined. We think we have the base hardware, customer satisfaction, reliability to do that. So I think, number one, we want to be most trusted. Number two, we're trying to be incredibly agile. Much faster than companies that are larger than us. That's been an innovation culture that's lead us to be number one in PCs, not through cost, but through innovation. We want to be known for innovation and being faster to deploy innovation both with us, but as well was with our partners. So if you go into our both, you showcasing with Intel. We're showcasing with Juniper. We're showcasing with Red Hat. So that's a very decent foundation. I think we can leap ahead, not be encumbered by the past, and be trusted, innovative, cost-effective, and make a lead to software-defined. What's interesting to me is, I think when I joined Intel in 1992, there was something like 100 gigabytes a day. When I joined Lenovo 24 years later, it was like 250 million gigabytes a day of data, if I have my numbers correctly. It's going to leapfrog up just in a massive way over the next 10 years with 5G and the whole internet buildup so you hear that from almost every keynote speaker, but what it means to me is that, we're just at the beginning of cloud transformation. A company like Lenovo, we didn't invent the PC, we just became number one in it over 25 years. We didn't invent servers, but we acquired amazing people. They can then leap us ahead over the next, now, 25 years. (laughing) >> Well Kirk, thank you so much for joining us. Thank you for your time. >> Yeah. Thank you It's a pleasure, it's a great event. So thank you. >> I'm Rebecca Knight for Stu Miniman. We'll be more with the Red Hat summit after this. (electronic music)

>> Announcer: Live, from Boston, Massachusetts, it's The Cube, covering Red Hat Summit 2017. Brought to you by Red Hat. >> Welcome to more of The Cube's coverage of the Red Head Summit 2017, I'm your host, Rebecca Knight. I'm joined today by DeLisa Alexander, she is the Chief People Officer here at Red Hat and then, joining us also, are the women in Open Source Technology winners. We have Jigyasa Grover and we also have Avni Khatri. So congratulations. >> Thank you. >> Thank you. >> I'm looking forward to hearing more about why you were bestowed with this honor but I want to start with you, DeLisa. >> DeLisa: Thank you. >> Why this award? Why did Red Hat feel that highlighting women and what they're doing in Open Source was worthy and we needed to showcase these women? >> Red Hat believes this is incredibly important. We all know that there are not nearly enough females in the technology industry and as the Open Source leader, we felt like we had a responsibility to begin to make a difference in that way. >> So tell us about the process. How do you find these women? How do you then winnow it down to who deserves it? >> So it's community based. It's a power of participation. >> So it's the Open Source way. >> It is the Open Source way. So the nominees come in from whomever would like to make a nomination. We do have a panel of judges that narrow down the nominations so there's five of each, the academic and the community And then we put it out to the community to vote. And so the community selects our award winners. >> Great, okay. So let's start with you, Anvi. So you, you're based here in Cambridge. >> Anvi: I am. >> And you were talking about how you had a five year goal. >> Yes. So, I was working at Yahoo! at the time and my boss at that time had asked us to make one year, five year, and 10 year goals. And in my five year plan, I had listed I wanted to set up computer labs for underserved populations. I wanted to travel, I wanted to see other cultures and I wanted to bring technology to other cultures. And I went to this awesome conference, the Grace Hopper Conference for Women in Computing. >> The Cube has a great partnership and long-term partnership with Grace Hooper. >> Awesome, it's a great conference. I was there and I met ... I reconnected with some folks and I was so inspired by all the women that were there and I came back and I was looking at my goals and I was like, why do I have to wait five years to do this? And I looked online and I saw that someone I had reconnected with, Stormy Peters at Grace Hopper, was running Kids on Computers and so I emailed her and the rest is really history. I found one of my passions in life is to bring technology to people who don't have access to it and doing it with Open Source so that it's accessible to everyone who needs it. >> So tell me about some of the stories, some of the kids that you're working with, and how it is, in fact, changing their lives. I just got back Monday night from a trip to Oaxaca, Mexico for Kids on Computers. We were there for a whole week. But we were setting up computer labs for these local rural communities. Most of them don't have internet. Some of them are now starting to get internet but what we do is we take donated equipment and grant money and Red Hat has also been ... Has awarded Kids on Computers a grant for contributing to some of the labs we set up last week. But we set up two new labs, we took donated equipment and we purchased equipment in country and we worked in the small towns of Antequera and Constitución. Those are actually the school names. We worked in the city of ... It's a suburb of Oaxaca City, Santa Cruz Xoxocotlán and working with them is really enlightening. So, some of the teachers have never used a computer before. Some of the kids have but most of them have not. So just seeing them trying to use a mouse, learning how to do single-click, double-click and going from the point where they haven't used it to the point where they have and where the understand it and getting to the point where one kid is teaching another kid is just really ... Just seeing that makes you feel, like, wow. I've actually made an impact and then, hopefully, by providing accessed technology and also providing access to educational content. So the offline content pieces for schools that don't have internet, working with a partner of Kids on Computers, Internet in a Box, providing offline Wikipedia, Khan Academy, MEDLINE content, offline books, that we give them a pathway to bettering their own lives and bettering the lives of their communities. >> That's really incredible and it will be this really big leveling of the playing field. >> Yes, I hope so. I really hope so and I am hopeful that will come to fruition 'cause I think education is one of the most sustainable ways to improve communities and I think Open Source is an avenue to get them there. >> Thank you. Jigyasa, so you are the academic winner. You are still a college student and with this wonderful award so congratulations. >> Jigyasa: Thank you so much. >> I want to talk to you. So you went to an all-girls high school in India and then got to university in New Delhi and weren't very happy with what you saw when you got to university. Can you tell us a little bit more. >> So I told you what was at the end. What I see is ... I am doing my undergraduation in Computer Science and Technology. In my batch, 80% of them are boys and the rest, girls, and not much interested in pursuing a career in technology, as such. They're pursuing different stuff like arts, designing, or even going for civil services back home. So when I came, I wanted to actually pursue a career in technology and do something apart from cataclysm. Not just books, but do something so that I can apply the concepts somewhere. We were just studying different mordents of software engineering but I wanted to be a part of a team, which actually implements it. So Open Source was the only way because I had internet, I had a good internet connection, I had a laptop and lots of free time. So one day I came across Pharaoh. The name itself fascinated me because it reminded me of Egyptian mummies and all. So that's how I actually got into Pharaoh. I've been contributing to it since three years now and also been apart of different world wide programs like Google Summer of Code and to give back to the community which has helped me so much, starting right from scratch. I tried to meet 13 rich developers and budding programmers through programs, like one of them is Learn IT Girl. So it pairs females, both mentors and mentees, worldwide. So not only do you get to know about technology but you can also know about their culture by being a team and knowing about how it works, how are their working styles and temperaments. Also, I wanted to be a part of something local so that I could interact with them physically so I'm the Director for Delhi Network of Women who Code which has more than 400 plus members back in New Delhi and I organize code labs, teach them, or randomly give pep talks sot that they do not feel bogged down and have enough to look forward to. It's been a pretty exciting journey, as I say. >> It's just beginning. >> And this is the thing is that we are bombarded with headlines about how difficult it is for women in the technology industry because it is such a male-dominated industry. There's a lot of sexism, there's a lot of discrimination, a lot of biases where people just don't put women and technology together. You think of a technologist, you think of an engineer, you think of a guy. So how do you think that these awards, DeLisa, are changing things? What are your hopes and dreams for women in this sector? >> Well, we've come so far in terms of the way we think about supporting women just in our conference alone. And so, I think that when we're really, really successful we won't need this award anymore. But we have a long way to go between now and then. Women like these women are just so inspiring and by sharing their stories and showing what women can do future generations of girls, hopefully, will be inspired to join. Men will understand the contributions that women are making today and it will help really generate the next leaders in Open Source that are women. >> Anvi, five years from now, what do you hope? How many labs do you hope to have opened? What's your grand plan? >> So we have 22 labs right now, which is so exciting, in five countries. >> In how long? >> So, we're eight years old. We were a 501(c)(3) in 2009, so super exciting. So my hope is that ... We are currently focusing in Oaxaca and we just formed a partnership with a local university down there to provide support because, as we know, technology is just one piece of the puzzle. We need the community, we need the support, we need the education pieces along with the technology to really fulfill the project. So my hope is that ... At this point, we've kind of figured out how to deploy one lab at a time and my hope is that now we can do this at scale. That we can work with local universities, governments, and actually get .... Reach out to kids who need it because I think Oaxaca has one of the lowest literacy rates in all of Mexico. This is definitely communities where most of the kids do not go on to high school and definitely most do not go on to college. So if we can make an impact, show the measure, like be able to measure the impact that we're making, longitudinally, I think that then we can grow and we can scale. So, very hopeful. But this is my passion, right. So it's going back to as a woman, how do you find your passion. I think, find what you're passion is and go for it and that makes things so much easier. And I think there's a lot of opportunities for growth and look for people that will support efforts that you're doing, like DeLisa. And Jigyasa, she's mentoring girls already. >> And I think that that's also a great point too. This is the Open Source way because it is about community building and it's about collaboration and that is also, you're doing these things ... The software is a metaphor for what you're doing in life. >> [Jigyasa and Anvi] Yes. >> Jigyasa, what's next for you? So first, graduate from college, that would be >> Yes. (laughing) >> A big priority. But then where do you hope to work? >> Actually, I want to learn lots and travel the world, know more about everything. That's what Jigyasa means. So Jigyasa means curiousity in Hindi and Sanskrit so I hope I live up to my name and the next few years, I just want to keep the learning mode switched on, be curious, and if I want to do something, at least I'll give it a try so that I do not regret that I never gave a try. So always be curious, interact, and give a try. >> Do you want to continue working in technology or do you want to come to the States? Where do you see your career path? My career path, it's like I'm trying to balance everything. I want to learn more theoretically about computer science and technology. Maybe do a Master's degree further and then move on to industry. Also, I am pretty excited about the research work. I've done a couple of them in Europe, Asbarez, and Canada so I want to do something which is a mix of everything so that it keeps me going. >> Do you see ... These are really social initiatives that you're both working on. Do you see that as sort of a real future for Open Source innovation and technology? We know that Open Source is helping companies grow, get more customers, make more money, improve their bottom lines, but we also see it having this big impact on global and social progress. I mean, how untapped is this, where are we in this? Open Source is a way, it's not a technology, it's a way. It's a way of doing things and thinking about the world. Transparency, using the best ideas, innovating rapidly. We have a lot of complex problems to solve, now and in the future. Using the Open Source way, we will solve those problems more rapidly. Whether it's a technology issue or something entirely outside of technology. >> I agree with that completely. Open Source is a mechanism by which we can accomplsih not just technical innovations, but also social innovations. We have to look at it wholistically. We have to look at the ecosystem wholistically. It's not just technology, it's also society, it's also community, education and how do all the puzzle pieces fit together. JeLisa, we talked a little bit about the challenges of recruiting and retaining women in this industry. What is Red Hat doing to get the best and the brightest and the most talented women engineers? Well, we've come a long way. We have a long way to go. The first thing we wanted to do is to create an ecosystem within Red Hat that was very welcoming and inclusive because if you are recruiting people and they come in and they have an experience that isn't positive, they're going to go right out the door. So the most important thing was shoring up our community and creating an environment. So we focused on that, really, in the beginning. Then we started thinking about outreach. Now, the problem is so complex to solve, right. So we started realizing there's not enough people to outreach to. So now our next step has been to start to go deeper into the school systems and start partnering, We have a partnership with BU and also the city of Boston where we supported girls coming from middle school into a lab environment and doing some fun stuff, they get introduced to technology and we're going to keep our eyes on them and we'd like to recreate this type of experience in multiple places so really go deeper in to help create an interest at the middle school age with girls. Because that's what we understand that's when we need to get them interested. >> And that's when research shows confidence falls off and women, young girls, start raising their hands less in class. >> And all that stuff. Yeah, it's such a difficult issue but we hope that we will make a difference by reaching into the pipeline and then certainly retaining. We develop our women, we really focus on that. We want to support them as leaders and so it's the whole pathway. >> And Jigyasa, are you finding that your mentorship is making a difference for the young women you're working with? Young girls? >> It certainly is because even after the program ends I receive messages and emails from girls and boys alike about the program or how they want to build their own product. So, I remember one of the girls from Romania. I mentored her during a program sponsored by Google and all she wanted to build was a website for herself and she's very young. So she used to text me about what technologies she should use and how is it shaping up. Can I test it for her? So I really liked that even after the program ended, she kept up her spirit and is still continuing with it. >> And as DeLisa says, now you got to keep an eye on her and make sure she stays with it and everything. Well, DeLisa, Anvi, Jigyasa, thank you so much for joining us. Congratulations. >> Thank you so much. >> Well-deserved. >> Thank you. >> Thank you. >> This has been Rebecca Knight at the Red Hat Summit in Boston, Massachusetts. We''ll be back with more after this. (electronic beat)