>>from around the globe. It's the Cube with digital coverage of AWS Public Sector online brought to you by Amazon Web services. Oven Welcome back to the cubes. Virtual coverage of Amazon Web services. Eight. Of his public sector summit online. We couldn't be there in person, but we're doing remote interviews. I'm John Curry. Your host of the Cube got a great segment from Asia Pacific on the other side of the world from California about social impact, transforming, teaching and learning with cloud technology. Got three great guests. You go. Richard is the CEO and co founder of Guys Tech and Jean Te'o, CEO and founder of Solve Education Founders and CEOs of startups is great. This is squad was the AIPAC regional head. Education, health care, not for profit and research. Ray Ws, he head start big program Vincent. Thanks for coming on, Janine. And you go Thank you for joining. >>Thanks for having us, John. >>We're not there in person. We're doing remote interviews. I'm really glad to have this topic because now more than ever, social change is happening. Um, this next generation eyes building software and applications to solve big problems. And it's not like yesterday's problems there. Today's problems and learning and mentoring and starting companies are all happening virtually digitally and also in person. So the world's changing. So, um, I gotta ask you, Vincent, we'll start with you and Amazon. Honestly, big started builder culture. You got two great founders here. CEO is doing some great stuff. Tell us a little bit what's going on. A pack, >>A lot of >>activity. I mean, reinvent and some it's out. There are really popular. Give us an update on what's happening. >>Thank you. Thank you for the question, John. I think it's extremely exciting, especially in today's context, that we are seeing so much activities, especially in the education technology sector. One of the challenges that we saw from our education technology customers is that they are always looking for help and support in many off the innovation that they're trying to develop the second area off observation that we had waas, that they are always alone with very limited resources, and they usually do not know where to look for in terms, off support and in terms off who they can reach out to. From a community standpoint, that is actually how we started and developed this program called A W s. At START. It is a program specifically for education technology companies that are targeting delivering innovative education solutions for the education sector. And we bring specific benefits to these education technology companies when they join the program. Aws ed start. Yeah, three specific areas. First one is that we support them with technical support, which is really, really key trying to help them navigate in the various ranges off A W S services that allows them to develop innovative services. The second area is leaking them and building a community off like minded education technology founders and linking them also to investors and VCs and lastly, off course, in supporting innovation. We support them with a bit off AWS cop credits promotional credits for them so that they can go on experiment and develop innovations for their customers. >>That's great stuff. And I want to get into that program a little further because I think that's a great example of kind of benefits AWS provides actually free credits or no one is gonna turn away free credits. We'll take the free credits all the time all day long, but really it's about the innovation. Um, Jean, I want to get your thoughts. How would solve education? Born? What problems were you solving? What made you start this company and tell us your story? >>Thank you so much for the question. So, actually, my co founder was invited to speak at an African innovation forum a couple of years back on the topic that he was sharing with. How can Africa skip over the industrialization face and go direct to the knowledge economy? Onda, the discussion went towards in orderto have access to the knowledge economy, unique knowledge. And how do you get knowledge Well through education. So that's when everybody in the conference was a bit stuck right on the advice waas. In order to scale first, we need to figure out a way to not well, you know, engaging the government and schools and teachers, but not depend on them for the successful education initiated. So and that's was what pain walk away from the conference. And when we met in in Jakarta, we started talking about that also. So while I'm Singaporean, I worked in many developing countries on the problem that we're trying to solve this. It might be shocking to you, but UNESCO recently published over 600 million Children and you are not learning on. That is a big number globally right on out of all the SDG per se from U N. Education. And perhaps I'm biased because I'm a computer engineer. But I see that education is the only one that can be solved by transforming bites. But since the other stg is like, you know, poverty or hunger, right, actually require big amount of logistic coordination and so on. So we saw a very, um, interesting trend with mobile phones, particularly smartphones, becoming more and more ubiquitous. And with that, we saw a very, uh, interesting. Fortunately for us to disseminate education through about technology. So we in self education elevate people out of poverty, true, providing education and employment opportunities live urging on tech. And we our vision is to enable people to empower themselves. And what we do is that we do an open platform that provides everyone effected education. >>You could How about your company? What problem you're you saw And how did it all get started? Tell us your vision. >>Thanks, John. Well, look, it all started. We have a joke. One of the co founder, Matthew, had a has a child with severe learning disorder and dyslexia, and he made a joke one day about having another one of them that would support those those kids on Duh. I took the joke seriously, So we're starting sitting down and, you know, trying to figure out how we could make this happen. Um, so it turns out that the dyslexia is the most common learning disorder in the world, with an estimated 10 to 20% off the worldwide population with the disorder between context between 750 million, up to 1.5 billion individual. With that learning disorder on DSO, where we where we sort of try and tackle. The problem is that we've identified that there's two key things for Children with dyslexia. The first one is that knowing that it is dislikes. Yeah, many being assessed. And the second is so what? What do we do about it? And so given or expertise in data science and and I, we clearly saw, unfortunately off, sort of building something that could assess individual Children and adults with dyslexia. The big problem with the assessment is that it's very expensive. We've met parents in the U. S. Specifically who paid up to 6000 U. S. Dollars for for diagnosis within educational psychologist. On the other side, we have parents who wait 12 months before having a spot. Eso What we so clearly is that the observable symptom of dyslexia are reading and everyone has a smartphone and you're smart. Smartphone is actually really good to record your voice. Eso We started collecting order recording from Children and adults who have been diagnosed with dyslexia, and we then trying a model to recognize the likelihood of this lecture by analyzing audio recording. So in theory, it's like diagnosed dyslexic, helping other undiagnosed, dyslexic being being diagnosed. So we have now an algorithm that can take about 10 minutes, which require no priors. Training cost $20. Andi, anyone can use it. Thio assess someone's likelihood off dyslexia. >>You know, this is the kind of thing that really changes the game because you also have learning progressions that air nonlinear and different. You've got YouTube. You got videos, you have knowledge bases, you've got community. Vincent mentioned that Johnny and you mentioned, you know making the bits driver and changing technology. So Jeannine and Hugo, please take a minute to explain, Okay? You got the idea. You're kicking the tires. You're putting it together. Now you gotta actually start writing code >>for us. We know education technology is not you. Right? Um, education games about you. But before we even started, we look at what's available, and we quickly realize that the digital divide is very real. Most technology out there first are not designed for really low and devices and also not designed for people who do not have Internet at hope so way. So with just that assessment, we quickly realized we need toe do something about on board, but something that that that problem is one eyes just one part of the whole puzzle. There's two other very important things. One is advocacy. Can we prove that we can teach through mobile devices, And then the second thing is motivation it again. It's also really obvious, but and people might think that, you know, uh, marginalized communities are super motivated to learn. Well, I wouldn't say that they are not motivated, but just like all of us behavioral changes really hard right. I would love to work out every day, but, you know, I don't really get identity do that. So how do we, um, use technology to and, um, you know, to induce that behavioral change so that date, so that we can help support the motivation to learn. So those are the different things that we >>welcome? >>Yeah. And then the motivated community even more impactful because then once the flywheel gets going and it's powerful, Hugo, your reaction to you know, you got the idea you got, You got the vision you're starting to put. Take one step in front of the other. You got a W s. Take us through the progression, understand the startup. >>Yeah, sure. I mean, what Jane said is very likely Thio what we're trying to do. But for us, there's there's free key things that in order for us to be successful and help as much people as we can, that is free things. The first one is reliability. The second one is accessibility, and the other one is affordability. Eso the reliability means that we have been doing a lot of work in the scientific approach as to how we're going to make this work. And so we have. We have a couple of scientific publications on Do we have to collect data and, you know, sort of published this into I conferences and things like that. So make sure that we have scientific evidence behind us that that support us. And so what that means that we had Thio have a large amount of data >>on and >>put this to work right on the other side. The accessibility and affordability means that, Julian said. You know it needs to be on the cloud because if it's on the cloud, it's accessible for anyone with any device with an Internet connection, which is, you know, covering most of the globe, it's it's a good start on DSO the clock. The cloud obviously allow us to deliver the same experience in the same value to clients and and parent and teacher and allied health professionals around the world. Andi. That's why you know, it's it's been amazing to to be able to use the technology on the AI side as well. Obviously there is ah lot of benefit off being able to leverage the computational power off off the cloud to to make better, argue with them and better training. >>We're gonna come back to both of you on the I question. I think that's super important. Benson. I want to come back to you, though, because in Asia Pacific and that side of the world, um, you still have the old guard, the incumbents around education and learning. But there is great penetration with mobile and broadband. You have great trends as a tailwind for Amazon and these kinds of opportunity with Head Start. What trends are you seeing that are now favoring you? Because with co vid, you know the world is almost kind of like been a line in the sand is before covert and after co vid. There's more demand for learning and education and community now than ever before, not just for education, the geopolitical landscape, everything around the younger generation. There's, um, or channels more data, the more engagement. How >>are you >>looking at this? What's your vision of these trends? Can you share your thoughts on how that's impacting learning and teaching? >>So there are three things that I want to quickly touch on number one. I think government are beginning to recognize that they really need to change the way they approach solving social and economic problems. The pandemic has certainly calls into question that if you do not have a digital strategy, you can't You can find a better time, uh, to now develop and not just developed a digital strategy, but actually to put it in place. And so government are shifting very, very quickly into the cloud and adopting digital strategy and use digital strategy to address some of the key problems that they are facing. And they have to solve them in a very short period of time. Right? We will talk about speed, three agility off the cloud. That's why the cloud is so powerful for government to adult. The second thing is that we saw a lot of schools closed down across the world. UNESCO reported what 1.5 billion students out of schools. So how then do you continue teaching and learning when you don't have physical classroom open? And that's where education, technology companies and, you know, heroes like Janine's Company and others there's so many of them around our ableto come forward and offer their services and help schools go online run classrooms online continue to allow teaching and learning, you know, online and and this has really benefited the overall education system. The third thing that is happening is that I think tertiary education and maybe even catch off education model will have to change. And they recognize that, you know, again, it goes back to the digital strategy that they got to have a clear digital strategy. And the education technology companies like, what? Who we have here today, just the great partners that the education system need to look at to help them solve some of these problems and get toe addressing giving a solution very, very quickly. >>Well, I know you're being kind of polite to the old guard, but I'm not that polite. I'll just say it. There's some old technology out there and Jenny and you go, You're young enough not to know what I t means because you're born in the cloud. So that's good for you. I remember what I t is like. In fact, there's a There's a joke here in the United States that with everyone at home, the teachers have turned into the I T department, meaning they're helping the parents and the kids figure out how to go on mute and how toe configure a network adds just translation. If they're routers, don't work real problems. I mean, this was technology. Schools were operating with low tech zooms out there. You've got video conferencing, you've got all kinds of things. But now there's all that support that's involved. And so what's happening is it's highlighting the real problems of the institutional technology. So, Vincent, I'll start with you. Um, this is a big problem. So cloud solves that one. You guys have pretty much helped. I t do things that they don't want to do any more by automation. This >>is an >>opportunity not necessary. There's a problem today, but it's an opportunity tomorrow. You just quickly talk about how you see the cloud helping all this manual training and learning new tools. >>We are all now living in a cloud empowered economy. Whether we like it or not, we are touching and using services. There are powered by the cloud, and a lot of them are powered by the AWS cloud. But we don't know about it. A lot of people just don't know, right Whether you are watching Netflix, um Well, in the old days you're buying tickets and and booking hotels on Expedia or now you're actually playing games on epic entertainment, you know, playing fortnight and all those kind of games you're already using and a consumer off the cloud. And so one of the big ideas that we have is we really want to educate and create awareness off club computing for every single person. If it can be used for innovation and to bring about benefits to society, that is a common knowledge that everyone needs to happen. So the first big idea is want to make sure that everyone actually is educated on club literacy? The second thing is, for those who have not embarked on a clear cloud strategy, this is the time. Don't wait for for another pandemic toe happen because you wanna be ready. You want to be prepared for the unknown, which is what a lot of people are faced with, and you want to get ahead of the curve and so education training yourself, getting some learning done, and that's really very, very important as the next step to prepare yourself toe face the uncertainty and having programs like AWS EC start actually helps toe empower and catalyzed innovation in the education industry that our two founders have actually demonstrated. So back to you Join. >>Congratulations on the head. Start. We'll get into that real quickly. Uh, head start. But let's first get the born in the cloud generation, Janine. And you go, You guys were competing. You gotta get your APS out there. You gotta get your solutions. You're born in the cloud. You have to go compete with the existing solutions. How >>do you >>view that? What's your strategy? What's your mindset? Janine will start with you. >>So for us, way are very aware that we're solving a problem that has never been solved, right? If not, we wouldn't have so many people who are not learning. So So? So this is a very big problem. And being able to liberate on cloud technology means that we're able to just focus on what we do best. Right? How do we make sure that learning is sufficient and learning is, um, effective? And how do we keep people motivated and all those sorts of great things, um, leveraging on game mechanics, social network and incentives. And then while we do that on the outside way, can just put almost out solved everything to AWS cloud technology to help us not worry about that. And you were absolutely right. The pandemic actually woke up a lot of people and hands organizations like myself. We start to get queries from governments on brother, even big NGOs on, you know, because before cove it, we had to really do our best to convince them until our troops are dry and way, appreciate this opportunity and and also we want to help people realized that in order to buy, adopting either blended approach are a adopting technology means that you can do mass customization off learning as well. And that's what could what we could do to really push learning to the next level. So and there are a few other creative things that we've done with governments, for example, with the government off East Java on top of just using the education platform as it is andare education platform, which is education game Donald Civilization. Um, they have added in a module that teaches Cove it because, you know, there's health care system is really under a lot of strain there, right and adding this component in and the most popular um mitigate in that component is this This'll game called hopes or not? And it teaches people to identify what's fake news and what's real news. And that really went very popular and very well in that region off 25 million people. So tech became not only just boring school subjects, but it can be used to teach many different things. And following that project, we are working with the federal government off Indonesia to talk about anti something and even a very difficult topic, like sex education as well. >>Yeah, and the learning is nonlinear, horizontally scalable, its network graft so you can learn share about news. And this is contextual data is not just learning. It's everything is not like, you know, linear learning. It's a whole nother ballgame, Hugo. Um, your competitive strategy. You're out there now. You got the covert world. How are you competing? How is Amazon helping you? >>Absolutely. John, look, this is an interesting one, because the current competitors that we have, uh, educational psychologist, they're not a tech, So I wouldn't say that we're competing against a competitive per se. I would say that we're competing against the old way of doing things. The challenge for us is to, um, empower people to be comfortable. We've having a machine, you know, analyzing your kids or your recording and telling you if it's likely to be dislikes. Yeah, and in this concept, obviously, is very new. You know, we can see this in other industry with, you know, you have the app that stand Ford created to diagnose skin cancer by taking a photo of your skin. It's being done in different industry. Eso The biggest challenge for us is really about the old way of doing things. What's been really interesting for us is that, you know, education is lifelong, you know, you have a big part in school, but when you're an adult, you learn on Did you know we've been doing some very interesting work with the Justice Department where, you know, we look at inmate and you know, often when people go to jail, they have, you know, some literacy difficulty, and so we've been doing some very interesting working in this field. We're also doing some very interesting work with HR and company who want to understand their staff and put management in place so that every single person in the company are empowered to do their job and and and, you know, achieve success. So, you know, we're not competing against attack. And often when we talk to other ethnic company, we come before you know, we don't provide a learning solution. We provide a assessment solution on e assessment solution. So, really, John, what we're competing against is an old way of doing things. >>And that's exactly why clouds so successful. You change the economics, you're actually a net new benefit. And I think the cloud gives you speed and you're only challenges getting the word out because the economics air just game changing. Right, So that's how Amazon does so well, um, by the way, you could take all our recordings from the Cube, interviews all my interviews and let me know how ideo Okay, so, um, got all the got all the voice recordings from my interview. I'm sure the test will come back challenging. So take a look at that e. I wanna come back to you. But I wanna ask the two founders real quick for the folks watching. Okay on Dhere about Amazon. They know the history. They know the startups that started on Amazon that became unicorns that went public. I mean, just a long list of successes born in the cloud You get big pay when you're successful. Love that business model. But for the folks watching that were in the virtual garages, air in their houses, innovating and building out new ideas. What does Ed start mean for them? How does it work? Would you would recommend it on what are some of the learnings that you have from work with Head Start? >>But our relationship X s start is almost not like client supplier relationship. It's almost like business partners. So they not only help us with protect their providing the technology, but on top of that, they have their system architect to work with my tech team. And they have, you know, open technical hours for us to interact. And on top of that, they do many other things, like building a community where, you know, people like me and Google can meet and also other opportunities, like getting out the word out there. Right. As you know, all of their, uh, startups run on a very thin budget. So how do we not pour millions of dollars into getting out without there is another big benefit as well. So, um definitely very much recommend that start. And I think another big thing is this, right? Uh, what we know now that we have covert and we have demand coming from all over the place, including, like, even a lot of interest, Ally from the government off Gambia, you know? So how do we quickly deploy our technology right there? Or how do we deploy our technology from the the people who are demanding our solution in Nigeria? Right. With technology that is almost frameless. >>Yeah. The great enabling technology ecosystem to support you. And they got the region's too. So the region's do help. I love we call them Cube Region because we're on Amazon. We have our cloud, Hugo, um, and start your observations, experience and learnings from working with aws. >>Absolutely. Look, this is a lot to say, so I'll try and making sure for anyone, but but also for us on me personally, also as an individual and as a founder, it's really been a 365 sort of support. So like Johnny mentioned, there's the community where you can connect with existing entrepreneur you can connect with expert in different industry. You can ask technical expert and and have ah, you know office our every week. Like you said Jenny, with your tech team talking to cloud architect just to unlock any problem that you may have on day and you know, on the business side I would add something which for us has been really useful is the fact that when we when we've approached government being able to say that we have the support off AWS and that we work with them to establish data integrity, making sure everything is properly secured and all that sort of thing has been really helpful in terms off, moving forward with discussion with potential plant and and government as well. So there's also the business aspect side of things where when people see you, there's a perceived value that you know, your your entourage is smart people and and people who are capable of doing great things. So that's been also really >>helpful, you know, that's a great point. The APP SEC review process, as you do deals is a lot easier. When here on AWS. Vincent were a little bit over time with a great, great great panel here. Close us out. Share with us. What's next for you guys? You got a great startup ecosystem. You're doing some great work out there and education as well. Healthcare. Um, how's your world going on? Take a minute, Thio. Explain what's going on in your world, >>John, I'm part of the public sector Team Worldwide in AWS. We have very clear mission statements on by the first is you know, we want to bring about destructive innovation and the AWS Cloud is really the platform where so many off our techs, whether it's a text, healthtech golf text, all those who are developing solutions to help our governments and our education institutions or health care institutions to really be better at what they do, we want to bring about those disruptive innovations to the market as fast as possible. It's just an honor on a privilege for us to be working. And why is that important? It's because it's linked to our second mission, which is to really make the world a better place to really deliver. Heck, the kind of work that Hugo and Janina doing. You know, we cannot do it by ourselves. We need specialists and really people with brilliant ideas and think big vision to be able to carry out what they are doing. And so we're just honored and privileged to be part off their work And in delivering this impact to society, >>the expansion of AWS out in your area has been phenomenal growth. I've been saying to Teresa Carlson, Andy Jassy in the folks that aws for many, many years, that when you move fast with innovation, the public sector and the private partnerships come together. You're starting to see that blending. And you've got some great founders here, uh, making a social impact, transforming, teaching and learning. So congratulations, Janine and Hugo. Thank you for sharing your story on the Cube. Thanks for joining. >>Thank you. Thank >>you, John. >>I'm John Furry with the Cube. Virtual were remote. We're not in person this year because of the pandemic. You're watching a divest Public sector online summit. Thank you for watching

>> From the SiliconANGLE Media office in Boston, Massachusetts, it's the cube. Now, here's your host, Dave Vellante. >> Hello everyone and welcome to this week's Wikibon cube insights powered by ETR. In this breaking analysis ahead of the RSA conference, we want to update you on the cyber security sector. This year's event is underlined by coronavirus fears, IBM has pulled out of the event and cited the epidemic as the reason and it's also brings to the front the sale of RSA by Dell to STG partners and private equity firm. Now in our last security drill down, we cited several mega trends in the security sector. These included the ever escalating sophistication of the attacker, the increased risk from the data economy, the expanded attack surface with the huge number of IP addresses that are that are exploding out there, and the lack of skills and the number of cyber tools that are coming to the market. Now, as you know, in these segments, we'd like to share insights from the cube. And I want you to listen to two American statesman and what they said, on The Cube. Here's general Keith Alexander, who's the former director of the NSA, along with Dr. Robert Gates, who's the former director of the CIA and former Secretary of Defense, play the clip. >> When you think about threats, you think about nation states, so you can go to Iran, Russia, China, North Korea, and then you think about criminal threats, and all the things like ransomware. Some of the nation state actors are also criminals at night, so they can use nation state tools and my concern about all the evolution of cyber threats is that the attacks are getting more destructive. >> I think cyber and the risks associated with cyber, and IT need to be a regular part of every board's agenda. >> So you hear General Alexander really underscore the danger, as well, Dr. Gates is articulating what we've said many times on the cube that cyber security is a board level agenda item. Now, the comments from both of these individuals represent what I would consider tailwinds for cyber technology companies. Now we're going to drill into some of those today. But it's not all frictionless. There are headwinds to in this market space, cloud migration, the shift from north south south to East West network traffic, its pressure traditional appliance based perimeter security solutions, increase complexity and lack of skills and other macro factors, including questions on ROI. CFO saying, hey, we spend all this cash, why aren't we more secure? Now, I want you to hear from two chief information security officers officers on both the challenges that they face and how they're dealing with them. Roll the clip. >> Lack of talent, I mean, we're starving for talent. Cybersecurity is the only field in the world with negative unemployment. We just don't have the actual bodies to actually fill the gaps that we have and in that lack of talent Cecil's are starving. >> I think that the public cloud offers us a really interesting opportunity to reinvent security right. So if you think about all of the technologies and processes and many of which are manual over the years, I think we have an opportunity to leverage automation to make our work easier in some ways. >> Now I featured Brian Lozada and Katie Jenkins before and breaking analysis segments, and you can hear it from the cyber leaders, we lack the talent, and cloud computing and automation are areas we're pursuing. So this challenges security companies to respond. But at the end of the day, companies have no no choice. In other words, organizations buying security solutions, the sophistication of the attacker is very high and the answer to my CFO and ROI is fear based. If you don't do this, you might lose billions in market cap. Now, I want you to take a listen to these cubilam talking about the attacker of sophistication and the importance of communication skills in order to fund cyber initiatives, really to keep up with the bad guys, please play the clip. >> The adversary is talented and they're patient, they're well funded okay, that's that's where it starts. And so, you know why why bring an interpreter to a host when there's already one there right? Why write all this complicated software distribution when I can just use yours. And so that's that's where the play the game starts. And and the most advanced threats aren't leaving footprints because the footprints already there, you know, they'll get on a machine and behaviorally they'll check the cash to see what's hot. And what's hot in the cash means that behaviorally, it's a fast they can go they're not cutting a new trail most of the time, right? So living off the land is not only the tools that they're using the automation, your automation they're using against you, but it's also behavioral. >> That's why the most the most important talent or skill that a security professional needs is communication skills. If you can't articulate technical risk into a business risk to fund your program, it's, you know, it's very hard for you to actually be successful in security. >> Now, the really insidious thing about what TK Keanini just said is the attackers are living off the land, meaning they're using your tools and your behaviors to sneak around your data unnoticed. And so as Brian Lozada said, as a security Pro, you need to be a great communicator in order to get the funding that you need to compete with the bad guys. Which brings me to the RSA conference. This is why you as a security practitioner attend, you want to learn more, you want to obtain new skills, you want to bring back ideas to the organization. Now one of the things I did to prepare for this segment is to read the RSA conference content agenda, which was co authored by Britta Glade and I read numerous blogs and articles about what to expect at the event and from all that I put together this word cloud, which conveys some of the key themes that I would expect you're going to hear at the shows. Look at skills jump right out, just like Brian was saying, the human element is going to be a big deal this year. IoT and the IT OT schism, everyone's talking about the Olympics, and seeing that as a watershed event for cyber, how to apply machine learning and AI is a big theme, as is cloud with containers and server less. phishing, zero trust and frameworks, framework for privacy, frameworks for governance and compliance, the 2020 election and weaponizing social media with deep fakes, and expect to hear a lot about the challenges of securing 5G networks, open source risks, supply chain risks, and of course, the need for automation. And it's no surprise there's going to be a lot of talk about cyber technology, the products and of course, the companies that sell them. So let's get into the market and unpack some of the ETR spending data and drill into some of these companies. The first chart I want to show you is spending on cyber relative to other initiatives. What this chart shows is the spending on cyber security highlighted in the green in relation to other sectors in the ETR taxonomy. Notice the blue dot. It shows the change in spending expected in 2020 versus 2019. Now, two points here. First, is that despite the top of my narrative that we always hear, the reality is that other initiatives compete for budget and you just can't keep throwing cash at the security problem. As I've said before, we spend like .014% percent of our global GDP on cyber, so we barely scratched the surface. The second point is there's there's there's a solid year on year growth quite high at 12% for a sector that's estimated at 100 to 150 billion dollars worldwide, according to many sources. Now let's take a look at some of the players in this space, who are going to be presenting at the RSA conference. You might remember to my 2020 predictions in that breaking analysis I focused on two ETR metrics, Net Score, which is a measure of spending velocity and Market Share, which measures pervasiveness in the data set. And I anointed nine security players as four star players. These were Microsoft, Cisco, Palo Alto Networks, Splunk, Proofpoint, Fortinet, Oka, Cyber Ark and CrowdStrike. What we're showing here is an update of that data with the January survey data. My four star companies were defined as those in the cyber security sector that demonstrate in both net scores or spending momentum, that's the left hand chart and market share or pervasiveness on the right hand chart. Within the top 22 companies, why did I pick 22? Well, seemed like a solid number and it fit nicely in the screen and allowed more folks. So a few takeaways here. One is that there are a lot of cyber security companies in the green from the standpoint of net score. Number two is that Fortinet and Cisco fell off the four star list because of their net scores. While still holding reasonably well, they dropped somewhat. Also, some other companies like Verona's and Vera code and Carbon Black jumped up on the net score rankings, but Cisco and Fortinet are still showing some strength in the market overall, I'ma talk about that. Cisco security businesses up 9% in the quarter, and Fortinet is breaking away from Palo Alto Networks from a valuation perspective, which I'm going to drill into a bit. So we're going to give Cisco and Fortinet two stars this survey period. But look at Zscaler. They made the cut this time their net score or spending momentum jumped from 38% last quarter to nearly 45% in the January survey, with a sizable shared in at 123. So we've added Zscaler to the four star list, they have momentum, and we're going to continue to watch that quarterly horse race. Now, I'd be remiss if I didn't point out that Microsoft continues to get stronger and stronger in many sectors including cyber. So that's something to really pay attention to. Okay, I want to talk about the valuations a bit. Valuations of cyber security space are really interesting and for reasons we've discussed before the market's hot right now, some people think it's overvalued, but I think the space is going to continue to perform quite well, relative to other areas and tech. Why do I say that? Because cyber continues to be a big priority for organizations, the software and annual recurring revenue contribution ARR continues to grow, M&A is going to continue to be robust in my view, which is going to fuel valuations. So Let's look at some of the public companies within cyber. What I've compiled in this chart is eight public companies that were cited as four star or two star firms, as I defined earlier, now ranked this by market value. In the columns, we show the market cap and trailing 12 month revenue in billions, the revenue multiple and the annual revenue growth. And I've highlighted Palo Alto Networks and Fortinet because I want to drill into those two firms, as there's a valuation divergence going on between those two names, and I'll come back to that in just a minute. But first, I want to make a few points about this data. Number one is there's definitely a proportional relationship between the growth rate and the revenue multiple or premium being paid for these companies. Generally growth ranges between one and a half to three times the revenue multiple being paid. CrowdStrike for example has a 39 x revenue multiple and is growing at 110%, so they're at the high end of that range with a growth at 2.8 times their revenue multiple today. Second, and related, as you can see a wide range of revenue multiples based on these growth rates with CrowdStrike, Okta and now Zscaler as the standouts in this regard. And I have to call at Splunk as well. They're both large, and they have high growth, although they are moving beyond, you know, security, they're going into adjacencies and big data analytics, but you you have to love the performance of Splunk. The third point is this is a lucrative market. You have several companies with valuations in the double digit billions, and many with multi billion dollar market values. Cyber chaos means cash for many of these companies, and, of course for their investors. Now, Palo Alto throw some of these ratios out of whack, ie, why the lower revenue multiple with that type of growth, and it's because they've had some execution issues lately. And this annual growth rate is really not the best reflection of the stock price today. That's really being driven by quarterly growth rates and less robust management guidance. So why don't we look into that a bit. What this chart shows is the one year relative stock prices of Palo Alto Networks in the blue and compared to Fortinet in the red. Look at the divergence in the two stocks, look at they traded in a range and then you saw the split when Palo Alto missed its quarter last year. So let me share what I think is happening. First, Palo Alto has been a very solid performance since an IPO in 2012. It's delivered more than four Rex returns to shareholders over that period. Now, what they're trying to do is cloud proof their business. They're trying to transition more to an AR model, and rely less on appliance centric firewalls, and firewalls are core part of the business and that has underperformed expectations lately. And you just take Legacy Tech and Cloud Wash and Cloud native competitors like Zscaler are taking advantage of this and setting the narrative there. Now Palo Alto Network has also had some very tough compares in 2019 relative to 2018, that should somewhat abate this year. Also, Palo Alto has said some execution issues during this transition, especially related to sales and sales incentives and aligning that with this new world of cloud. And finally, Palo Alto was in the process of digesting some acquisitions like Twistlock, PureSec and some others over the past year, and that could be a distraction. Fortinet on the other hand, is benefiting from a large portfolio refresh is capitalizing on the momentum that that's bringing, in fact, all the companies I listed you know, they may be undervalued despite, of all the company sorry that I listed Fortinet may be undervalued despite the drop off from the four star list that I mentioned earlier. Fortinet is one of those companies with a large solution set that can cover a lot of market space. And where Fortinet faces similar headwinds as Palo Alto, it seems to be executing better on the cloud transition. Now the last thing I want to share on this topic is some data from the ETR regression testing. What ETR does is their data scientists run regression models and fit a linear equation to determine whether Wall Street earnings consensus estimates are consistent with the ETR spending data, they started trying to line those up and see what the divergence is. What this chart shows is the results of that regression analysis for both Fortinet and Palo Alto. And you can see the ETR spending data suggests that both companies could outperform somewhat expectations. Now, I wouldn't run and buy the stock based on this data as there's a lot more to the story, but let's watch the earnings and see how this plays out. All right, I want to make a few comments about the sale of the RSA asset. EMC bought RSA for around the same number, roughly $2 billion that SDG is paying Dell. So I'm obviously not impressed with the return that RSA has delivered since 2006. The interesting takeaway is that Dell is choosing liquidity over the RSA cyber security asset. So it says to me that their ability to pay down debt is much more important to Dell and their go forward plan. Remember, for every $5 billion that Dell pays down in gross debt, it dropped 25 cents to EPS. This is important for Dell to get back to investment grade debt, which will further lower its cost. It's a lever that Dell can turn. Now and also in thinking about this, it's interesting that VMware, which the member is acquiring security assets like crazy and most recently purchased carbon black, and they're building out a Security Division, they obviously didn't paw on the table fighting to roll RSA into that division. You know maybe they did in the financial value of the cash to Dell was greater than the value of the RSA customers, the RSA product portfolio and of course, the RSA conference. But my guess is Gelsinger and VMware didn't want the legacy tech. Gelsinger said many times that security is broken, it's his mission to fix it or die trying. So I would bet that he and VMware didn't see RSA as a path to fixing security, it's more likely that they saw it as a non strategic shrinking asset that they didn't want any part of. Now for the record, and I'm even won't bother showing you the the data but RSA and the ETR data set is an unimpressive player in cyber security, their market share or pervasiveness is middle of the pack, so it's okay but their net score spending velocities in the red, and it's in the bottom 20th percentile of the data set. But it is a known brand, certainly within cyber. It's got a great conference and it's been it's probably better that a PE company owns them than being a misfit toy inside of Dell. All right, it's time to summarize, as we've been stressing in our breaking analysis segments and on the cube, the adversaries are very capable. And we should expect continued escalation. Venture capital is going to keep pouring into startups and that's going to lead to more fragmentation. But the market is going to remain right for M&A With valuations on the rise. The battle continues for best of breed tools from upstarts like CrowdStrike and Okta and Zscaler versus sweets from big players like Cisco, Palo Alto Networks and Fortinet. Growth is going to continue to drive valuations. And so let's keep our eyes on the cloud, remains disruptive and for some provides momentum for others provides friction. Security practitioners will continue to be well paid because there's a skill shortage and that's not going away despite the push toward automation. Got in talk about machine intelligence but AI and ML those tools, there are two edged sword as bad actors are leveraging installed infrastructure, both tools and behaviors to so called live off the land, upping the stakes in the arms race. Okay, this is Dave Vellante for Wikibon's CUBE Insights powered by ETR. Thanks for watching this breaking analysis. Remember, these episodes are all available as podcasted Spotfire or wherever you listen. Connect with me at david.vellante at siliconangle.com, or comment on my LinkedIn. I'm @dvellante on Twitter. Thanks for watching everybody. We'll see you next time. (upbeat music).