>>Hey everybody. Welcome back. Good afternoon. Lisa Martin here with John Feer live in Detroit, Michigan. We are at Coon Cloud Native Con 2020s North America. John Thank is who. This is nearing the end of our second day of coverage and one of the things that has been breaking all day on this show is news. News. We have more news to >>Break next. Yeah, this next segment is a company we've been following. They got some news we're gonna get into. Managing Kubernetes life cycle has been a huge challenge when you've got large organizations, whether you're spinning up and scaling scale is the big story. Kubernetes is the center of the conversation. This next segment's gonna be great. It >>Is. We've got two guests from Specter Cloud here. Please welcome. It's CEO Chenery Fu and co-founder and it's c g a co-founder Sta Mallek. Guys, great to have you on the program. Thank >>You for having us. My pleasure. >>So Timary, what's going on? What's the big news? >>Yeah, so we just announced our Palace three this morning. So we add a bunch, a new functionality. So first of all we have a Nest cluster. So enable enterprise to easily provide Kubernete service even on top of their existing clusters. And secondly, we also support seamlessly migration for their existing cluster. We enable them to be able to migrate their cluster into our CNC for upstream Kubernete distro called Pallet extended Kubernetes, GX K without any downtime. And lastly, we also add a lot of focus on developer experience. Those additional capability enable developer to easily onboard and and deploy the application for. They have test and troubleshooting without, they have to have a steep Kubernetes lending curve. >>So big breaking news this morning, pallet 3.0. So you got the, you got the product. This is a big theme here. Developer productivity, ease of use is the top story here. As developers are gonna increase their code velocity cuz they're under a lot of pressure. This infrastructure's getting smarter. This is a big part of managing it. So the toil is now moving to the ops. Steves are now dev teams. Security, you gotta enable faster deployment of apps and code. This is what you guys solve while you getting this right. Is that, take us through that specific value proposition. What's the, what are the key things on in this news release? Yeah, >>You're exactly right. Right. So we basically provide our solution to platform engineering ship so that they can use our platform to enable Kubernetes service to serve their developers and their application ship. And then in the meantime, the developers will be able to easily use Kubernetes or without, They have to learn a lot of what Kubernetes specific things like. So maybe you can get in some >>Detail. Yeah. And absolutely the detail about it is there's a big separation between what operations team does and the development teams that are using the actual capabilities. The development teams don't necessarily to know the internals of Kubernetes. There's so much complexity when it comes, comes into it. How do I do things like deployment pause manifests just too much. So what our platform does, it makes it really simple for them to say, I have a containerized application, I wanna be able to model it. It's a really simple profile and from there, being able to say, I have a database service. I wanna attach to it. I have a specific service. Go run it behind the scenes. Does it run inside of a Nest cluster? Which we'll talk into a little bit. Does it run into a host cluster? Those are happen transparently for >>The developer. You know what I love about this? What you guys are doing in the news, it really points out what I love about DevOps. Because cloud, let's face a cloud early adopters, we're all the hardcore cloud folks as it goes mainstream. With Kubernetes, you start to see like words like platform engineering. I mean I love that term. That means as a platform, it's been around for a while. For people who are building their own stuff, that means it's gonna scale and enable people to enable value, build on top of it, move faster. This platform engineering is becoming now standard in enterprises. It wasn't like that before. What's your eyes reactions that, How do you see that evolving faster? Or do you believe that or what's your take on >>It? Yeah, so I think it's starting from the DevOps op team, right? That every application team, they all try to deploy and manage their application under their own ING infrastructure. But very soon all these each application team, they start realize they have to repeatedly do the same thing. So these will need to have a platform engineering team to basically bring some of common practice to >>That. >>And some people call them SREs like and that's really platform >>Engineering. It is, it is. I mean, you think about like Esther ability to deploy your applications at scale and monitoring and observability. I think what platform engineering does is codify all those best practices. Everything when it comes about how you monitor the actual applications. How do you do c i CD your backups? Instead of not having every single individual development team figuring how to do it themselves. Platform engineer is saying, why don't we actually build policy that we can provide as a service to different development teams so that they can operate their own applications at scale. >>So launching Pellet 3.0 today, you also had a launch in September, so just a few weeks ago. Talk about what these two announcements mean from Specter Cloud's perspective in terms of proof points, what you're delivering to the end users and the value that they're getting from that. >>Yeah, so our goal is really to help enterprise to deploy and around Kubernetes anywhere, right? Whether it's in cloud data center or even at Edge locations. So in September we also announce our HV two capabilities, which enable very easy deployment of Edge Kubernetes, right at at at any any location, like a retail stores restaurant, so on and so forth. So as you know, at Edge location, there's no cloud endpoint there. It's not easy to directly deploy and manage Kubernetes. And also at Edge location there's not, it's not as secure as as cloud or data center environment. So how to make the end to end system more secure, right? That it's temper proof, that is also very, very important. >>Right. Great, great take there. Thanks for explaining that. I gotta ask cuz I'm curious, what's the secret sauce? Is it nested clusters? What's, what's the core under the hood here on 3.0 that people should know about it's news? It's what's, what's the, what's that post important >>To? To be honest, it's about enabling developer velocity. Now how do you enable developer velocity? It's gonna be able for them to think about deploying applications without worrying about Kubernetes being able to build this application profiles. This NEA cluster that we're talking about enables them, they get access to it in complete cluster within seconds. They're essentially having access to be able to add any operations, any capabilities without having the ability to provision a cluster on inside of infrastructure. Whether it's Amazon, Google, or OnPrem. >>So, and you get the dev engine too, right? That that, that's a self-service provisioning in for environments. Is that, Yeah, >>So the dev engine itself are the capabilities that we offer to developers so that they can build these application profiles. What the application profiles, again they define aspects about, my application is gonna be a container, it's gonna be a database service, it's gonna be a helm chart. They define that entire structure inside of it. From there they can choose to say, I wanna deploy this. The target environment, whether it becomes an actual host cluster or a cluster itself is irrelevant to them. For them it's complete transparent. >>So transparency, enabling developer velocity. What's been some of the feedback so far? >>Oh, all developer love that. And also same for all >>The ops team. If it's easy and goods faster and the steps >>Win-win team. Yeah, Ops team, they need a consistency. They need a governance, they need visibility, but in the meantime, developers, they need the flexibility then theys or without a steep learning curve. So this really, >>So So I hear a lot of people say, I got a lot of sprawl, cluster sprawl. Yeah, let's get outta hand does, let's solve that. How do you guys solve that problem? Yeah, >>So the Neste cluster is a profit answer for that. So before you nest cluster, for a lot of enterprise to serving developers, they have to either create a very large TED cluster and then isolated by namespace, which not ideal for a lot of situation because name stay namespace is not a hard isolation and also a lot of global resource like CID and operator does not work in space. But the other way is you give each developer a separate, a separate ADE cluster, but that very quickly become too costly. Cause not every developer is working for four, seven, and half of the time your, your cluster is is a sit there idol and that costs a lot of money. So you cluster, you'll be able to basically do all these inside the your wholesale cluster, bring the >>Efficiency there. That is huge. Yeah. Saves a lot of time. Reduces the steps it takes. So I take, take a minute, my last question to you to explain what's in it for the developer, if they work with Spec Cloud, what is your value? What's the pitch? Not the sales pitch, but like what's the value pitch that >>You give them? Yeah, yeah. And the value for us is again, develop their number of different services and teams people are using today are so many, there are so many different languages or so many different libraries there so many different capabilities. It's too hard for developers to have to understand not only the internal development tools, but also the Kubernetes, the containers of technologies. There's too much for it. Our value prop is making it really easy for them to get access to all these different integrations and tooling without having to learn it. Right? And then being able to very easily say, I wanna deploy this into a cluster. Again, whether it's a Nest cluster or a host cluster. But the next layer on top of that is how do we also share those abilities with other teams. If I build my application profile, I'm developing an application, I should be able to share it with my team members. But Henry saying, Hey Tanner, why don't you also take a look at my app profile and let's build and collaborate together on that. So it's about collaboration and be able to move >>Really fast. I mean, more develops gotta be more productive. That's number one. Number one hit here. Great job. >>Exactly. Last question before we run out Time. Is this ga now? Can folks get their hands on it where >>Yes. Yeah. It is GA and available both as a, as a SaaS and also the store. >>Awesome guys, thank you so much for joining us. Congratulations on the announcement and the momentum that Specter Cloud is empowering itself with. We appreciate your insights on your time. >>Thank you. Thank you so much. Right, pleasure. >>Thanks for having us. For our guest and John Furrier, Lisa Martin here live in Michigan at Co con Cloud native PON 22. Our next guests join us in just a minute. So stick around.

>> Narrator: From around the globe. It's theCUBE covering space in cybersecurity symposium 2020 hosted by Cal Poly. >> Hello, everyone. Welcome to the space and cybersecurity symposium, 2020 hosted by Cal Poly where the intersection of space and security are coming together. I'm John Furrier, your host with theCUBE here in California. I want to welcome our featured guest, Lieutenant General, John F. Thompson with the United States Space Force approach to cybersecurity. That's the topic of this session. And of course he's the commander of the space and missile system center in Los Angeles Air Force Base. Also heading up Space Force. General, thank you for coming on. I really appreciate to you kicking this off. Welcome to the symposium. >> Hey, so thank you very much, John, for that very kind introduction. Also very much thank you to Cal Poly for this opportunity to speak to this audience today. Also a special shout out to one of the organizers, Dustin Debrun, for all of his work, helping get us to this point. Ladies and gentlemen as a John mentioned, I'm JT Thompson. I lead the 6,000 men and women of the United States Space Force's Space and Missile System Center, which is headquartered here at Los Angeles Air Force Base and El Segundo. If you're not quite sure where that's at, it's about a mile and a half from LAX. This is our main operating location, but we do have a number of other operating locations around the country. We're about 500 people at Kirtland Air Force Base in Albuquerque, New Mexico, and an about another 500 people on the front range of the Rockies between Colorado Springs and Denver plus a smattering of other much smaller operating locations nationwide. We're responsible for acquiring, developing and sustaining the United States Space Force's, critical space assets. That includes the satellites in the space layer and also on the ground layer our ground segments to operate those satellites. And we also are in charge of procuring launch services for the US Space Force and a number of our critical mission partners across the Department of Defense and the intelligence community. Just as a couple of examples of some of the things we do, if you're unfamiliar with our work we developed and currently sustain the 31 satellite GPS constellation that satellite constellation, while originally intended to help with global navigation, those GPS signals have provided trillions of dollars in unanticipated value to the global economy over the past three decades. GPS is everywhere. I think everybody realizes that. Agriculture, banking, the stock market, the airline industry, separate and distinct navigation systems. It's really pervasive across both capabilities for our Department of Defense and capabilities for our economy and individuals, billions of individuals across our country and the planet. Some of the other work we do for instance, in the communications sector, secure communications satellites that we designed and build that link America's sons and daughters serving in the military around the world and really enable real time support and comms for our deployed forces. And those of our allies. We also acquire infrared missile warning satellites that monitor the planet for missile launches that provide advanced warning to the US Homeland and to our allies in case some of those missile launches are nefarious. On a note, that's probably a lot closer to home, maybe a lot closer to home than many of us want to think about here in the state of California. In 2018, SMC jumped through a bunch of red tape and bureaucracy to partner with the US Forest Service during two of the largest wildfires in the state's history, the Camp and Woolsey fires in Northern California. As those fires spread out of control, we created processes on the fly to share data from our missile warning satellites. Those are satellites that are systems that are purpose built to see heat sources from thousands of miles above the planet. And we collaborated with the US Forest Service so that firefighters on the ground could track those fires more in real time and better forecast fires and where they were spreading, thereby saving lives and property by identifying hotspots and flareups for firefighters. That data that we were able to working with our contractors pass to the US Forest Service and authorities here in California, was passed in less than an hour as it was collected to get it into the hands of the emergency responders, the first responders as quickly as possible and doing that in an hour greatly surpassed what was available from some of the other assets in the airborne and ground-based fire spotters. It was really instrumental in fighting those fires and stopping their spread. We've continued that involvement in recent years, using multiple systems to support firefighters across the Western US this fall, as they battled numerous wildfires that unfortunately continue. Working together with the US Forest Service and with other partners we'd like to think that we've made a difference here, but there's still a lot more work to go. And I think that we should always be asking ourselves what else can space data be used for and how can we more rapidly get that space data to stakeholders so that they can use it for purposes of good, if you will. How else can we protect our nation? How else can we protect our friends and allies? I think a major component of the discussion that we will have throughout this conference is that the space landscape has changed rapidly and continues to change rapidly. Just over the past few years, John and I were talking before we went live here and 80 nations now have space programs. Nearly 80 space faring nations on the planet. If you just look at one mission area that the Department of Defense is interested in, and that's small launch, there are currently over 100 different small launch companies within the US industrial base vying for commercial DoD and civil payload capabilities, mostly to lower earth orbit. It's truly a remarkable time. If you factor in those things like artificial intelligence and machine learning, where we're revolutionizing really, the ways that we generate process and use data. It's really remarkable. In 2016, so if you think about this four years ago, NASA estimated that there were 28 terabytes of information transiting their space network each day. And that was four years ago. Obviously we've got a lot of desire to work with a lot of the people in the audience in this conference, we need to work with big thinkers, like many of you to answer questions on how best we apply data analytics to extract value and meaning from that data. We need new generations of thinkers to help apply cutting edge theories of data mining, cyber behaviorism, and Internet of Things 2.0, it's just truly a remarkable time to be in the space business and the cyber aspects of the space business are truly, truly daunting and important to all of us. Integrating cyber security into our space systems, both commercial and government is a mandate. it's no longer just a nice to have as the US Space Force and Department of the Air Force leadership has said many times over the past couple of years, space is becoming congested and contested. And that contested aspect means that we've got to focus on cyber security in the same way that the banking industry and cyber commerce focus on cybersecurity day in and day out. The value of the data and services provided is really directly tied to the integrity and availability of that data and services from the space layer, from the ground control segments associated with it. And this value is not just military, it's also economic and it's not just American, it's also a value for the entire world, particularly our allies, as we all depend upon space and space systems. Your neighbors and friends here in California that are employed at the space and missile system center work with network defenders. We work with our commercial contractors and our systems developers, our international allies and partners to try and build as secure and resilient systems as we can from the ground up that keep the global comments of space free and open for exploration and for commerce as John and I were talking earlier, before we came online, there's an aspect of cybersecurity for space systems, especially for some of our legacy systems, that's more, how do we bolt this on? Cause we fielded those space systems a number of years ago, and the challenges of cybersecurity in the space domain have grown. So we have a part that we have to worry about, bolting it on, but then we have to worry about building it in as we field new systems and build in a flexibility that realizes that the cyber threat or the cybersecurity landscape will evolve over time. It's not just going to be stagnant. There will always be new vulnerabilities and new threat vectors that we all have to look at. Look, as Secretary Barrett, who is our secretary of the air force likes to say most Americans use space before they have their first cup of coffee in the morning. The American way of life really depends on space. And as part of the United States Space Force, we work with defense leaders, our Congress joint, and international military teammates and industry to ensure American leadership in space. I really thank you for this opportunity to address the audience today, John, and thanks so much to Cal Poly for letting me be one of the speakers at this event. I've really looked forward to this for several months. And so with that, I look forward to your questions as we kind of move along here. >> General, thank you very much for those awesome introductory statement. For the folks watching on the stream, Brigadier General Carthan's going to be in the chat, answering any questions, feel free to chat away. He's the vice commander of Space and Missile System Center, he'll be available. A couple of comments from your keynote before I get to my questions. Cause it just jumped into my head. You mentioned the benefits of say space with the fires in California. We're living that here. That's really realtime. That's a benefit. You also mentioned the ability for more people launching payloads into space. I'm only imagined Moore's law smaller, faster, cheaper applies to rockets too. So I'm imagining you have the benefits of space and you have now more potential objects flying out sanctioned and maybe unsanctioned. So is it going to be more rules around that? This is an interesting question cause it's exciting Space Force, but for all the good there is potentially bad out there. >> Yeah. So John, I think the basics of your question is as space becomes more congested and contested, is there a need for more international norms of how satellites fly in space? What kind of basic features satellites have to perhaps de orbit themselves? What kind of basic protections should all satellites be afforded as part of a peaceful global commons of space? I think those are all fantastic questions. And I know that US and many allied policy makers are looking very, very hard at those kinds of questions in terms of what are the norms of behavior and how we field, and field as the military term. But how we populate using civil or commercial terms that space layer at different altitudes, lower earth orbit, mid earth orbit, geosynchronous earth orbit, different kinds of orbits, what the kind of mission areas we accomplished from space. That's all things that need to be definitely taken into account as the place gets a little bit, not a little bit as the place gets increasingly more popular day in and day out. >> I'm super excited for Space Force. I know that a new generation of young folks are really interested in it's an emerging, changing great space. The focus here at this conference is space and cybersecurity, the intersection. I'd like to get your thoughts on the approach that a space force is taking to cybersecurity and how it impacts our national goals here in the United States. >> Yeah. So that's a great question John, let me talk about it in two basic ways. At number one is an and I know some people in the audience, this might make them a little bit uncomfortable, but I have to talk about the threat. And then relative to that threat, I really have to talk about the importance of cyber and specifically cyber security, as it relates to that threat. The threats that we face really represented a new era of warfare and that new era of warfare involves both space and cyber. We've seen a lot of action in recent months from certain countries, notably China and Russia that have threatened what I referred to earlier as the peaceful global commons of space. For example, it threw many unclassified sources and media sources. Everybody should understand that the Russians have been testing on orbit anti-satellite capabilities. It's been very clear if you were following just the week before last, the Department of Defense released its 2020 military and security developments involving the People's Republic of China. And it was very clear that China is developing ASATs, electronic jammers, directed energy weapons, and most relevant to today's discussion, offensive cyber capabilities. There are kinetic threats that are very, very easy to see, but a cyber attack against a critical command and control site or against a particular spacecraft could be just as devastating to the system and our war fighters in the case of GPS and important to note that that GPS system also impacts many civilians who are dependent on those systems from a first response perspective and emergency services, a cyber attack against a ground control site could cause operators to lose control of a spacecraft or an attacker could feed spoofed data to assist them to mislead operators so that they sent emergency services personnel to the wrong address. Attacks on spacecraft on orbit, whether directly via a network intrusion or enabled through malware introduced during the system's production while we're building the satellite can cripple or corrupt the data. Denial-of-service type attacks on our global networks obviously would disrupt our data flow and interfere with ongoing operations and satellite control. If GPS went down, I hesitate to say it this way, cause we might elicit some screams from the audience. But if GPS went down a Starbucks, wouldn't be able to handle your mobile order, Uber drivers wouldn't be able to find you. And Domino's certainly wouldn't be able to get there in 30 minutes or less. So with a little bit of tongue in cheek there from a military operations perspective, it's dead serious. We have become accustomed in the commercial world to threats like ransomware and malware. And those things have unfortunately become commonplace in commercial terrestrial networks and computer systems. However, what we're seeing is that our adversaries with the increased competition in space these same techniques are being retooled, if you will, to use against our national security space systems day in and day out. As I said, during my opening remarks on the importance of cyber, the value of these systems is directly tied to their integrity. If commanders in the field, firefighters in California or baristas in Starbucks, can't trust the data they're receiving, then that really harms their decision making capabilities. One of the big trends we've recently seen is the move towards proliferated LEO constellations, obviously Space X's Starlink on the commercial side and on the military side, the work that DARPA and my organization SMC are doing on Blackjack and Casino, as well as some space transport layer constellation work that the space development agency is designing are all really, really important types of mesh network systems that will revolutionaries how we plan and field war fighting systems and commercial communications and internet providing systems. But they're also heavily reliant on cybersecurity. We've got to make sure that they are secured to avoid an accident or international damage. Loss of control of these constellations really could be catastrophic from both a mission perspective or from a satellites tumbling out of low earth orbit perspective. Another trend is introductions in artificial intelligence and machine learning, onboard spacecraft are at the edge. Our satellites are really not so much hardware systems with a little software anymore in the commercial sector and in the defense sector, they're basically flying boxes full of software. And we need to ensure that data that we're getting out of those flying boxes full of software are helping us base our decisions on accurate data and algorithms, governing the right actions and that those systems are impervious to the extent possible to nefarious modifications. So in summation, cybersecurity is a vital element of everything in our national security space goals. And I would argue for our national goals, writ large, including economic and information dimensions, the Space Force leadership at all levels from some of the brand new second lieutenants that general Raymond swore in to the space force this morning, ceremonially from the air force associations, airspace and cyberspace conference to the various highest levels, General Raymond, General DT Thompson, myself, and a number of other senior leaders in this enterprise. We've got to make sure that we're all working together to keep cyber security at the forefront of our space systems cause they absolutely depend on it. >> You mentioned hardware, software threats, opportunities, challenges. I want to ask you because you got me thinking of the minute they're around infrastructure. We've heard critical infrastructure, grids here on earth. You're talking about critical infrastructure, a redefinition of what critical infrastructure is, an extension of what we have. So I'd love to get your thoughts about Space Force's view of that critical infrastructure vis-a-vis the threat vectors, because the term threat vectors has been kicked around in the cyberspace. Oh you have threat vectors. They're always increasing the surface area. If the surface area is from space, it's an unlimited service area. So you got different vectors. So you've got new critical infrastructure developing real time, really fast. And you got an expanded threat vector landscape. Putting that in perspective for the folks that aren't really inside the ropes on these critical issues. How would you explain this and how would you talk about those two things? >> So I tell you, just like, I'm sure people in the security side or the cybersecurity side of the business in the banking industry feel, they feel like it's all possible threat vectors represent a dramatic and protect potentially existential threat to all of the dollars that they have in the banking system, to the financial sector. On the Department of Defense side, we've got to have sort of the same mindset. That threat vector from, to, and through space against critical space systems, ground segments, the launch enterprise, or transportation to orbit and the various different domains within space itself. Like I mentioned before, LEO, MEO and GEO based satellites with different orbits, all of the different mission areas that are accomplished from space that I mentioned earlier, some that I did mention like a weather tactical or wide band communications, various new features of space control. All of those are things that we have to worry about from a cyber security threat perspective. And it's a daunting challenge right now. >> Yeah, that's awesome. And one of the things we've been falling on the hardware side on the ground is the supply chain. We've seen, malware being, really put in a really obscure hardware. Who manufactures it? Is it being outsourced? Obviously government has restrictions, but with the private sector, you mentioned China and the US kind of working together across these peaceful areas. But you got to look at the supply chain. How does the supply chain in the security aspect impact the mission of the US space Force? >> Yeah. Yeah. So how about another, just in terms of an example, another kind of California based historical example. The very first US Satellite, Explorer 1, was built by the jet propulsion laboratory folks, not far from here in El Segundo, up in Pasadena, that satellite, when it was first built in the late 50s weighing a little bit, over 30 pounds. And I'm sure that each and every part was custom made and definitely made by US companies. Fast forward to today. The global supply chain is so tightly coupled, and frankly many industries are so specialized, almost specialized regionally around the planet. We focus every day to guarantee the integrity of every component that we put in our space systems is absolutely critical to the operations of those satellites and we're dependent upon them, but it becomes more difficult and more difficult to understand the heritage, if you will, of some of the parts that are used, the thousands of parts that are used in some of our satellites that are literally school bus sized. The space industry, especially national security space sector is relatively small compared to other commercial industries. And we're moving towards using more and more parts from non US companies. Cybersecurity and cyber awareness have to be baked in from the beginning if we're going to be using parts that maybe we don't necessarily understand 100% like an Explorer one, the lineage of that particular part. The environmental difficulties in space are well known. The radiation environment, the temperature extremes, the vacuum, those require specialized component. And the US military is not the only customer in that space. In fact, we're definitely not the dominant customer in space anymore. All those factors require us along with our other government partners and many different commercial space organizations to keep a very close eye on our supply chains, from a quality perspective, a security perspective and availability. There's open source reporting on supply training intrusions from many different breaches of commercial retailers to the infectious spread of compromised patches, if you will. And our adversaries are aware of these techniques. As I mentioned earlier, with other forms of attack, considering our supply chains and development networks really becomes fair game for our adversaries. So we have to take that threat seriously. Between the government and industry sectors here in the US. We're also working with our industry partners to enact stronger defenses and assess our own vulnerabilities. Last fall, we completed an extensive review of all of our major contracts here at Space and Missile System Center to determine the levels of cyber security requirements we've implemented across our portfolio. And it sounds really kind of businessy geeky, if you will. Hey, we looked at our contracts to make sure that we had the right clauses in our contracts to address cybersecurity as dynamically as we possibly could. And so we found ourselves having to add new language to our contracts, to require system developers, to implement some more advanced protective measures in this evolving cyber security environment. So that data handling and supply chain protections from contract inception to launch and operations were taken into account. Cyber security really is a key performance parameter for us now. Performance of the system, It's as important as cost, it's as important as schedule, because if we deliver the perfect system on time and on cost, it can perform that missile warning or that communications mission perfectly, but it's not cyber secure. If it's doesn't have cyber protections built into it, or the ability to implement mitigations against cyber threats, then we've essentially fielded a shoe box in space that doesn't do the CA the war fighter or the nation any good. Supply chain risk management is a major challenge for us. We're doing a lot to coordinate with our industry partners. We're all facing it head on to try and build secure and trusted components that keep our confidence as leaders, firefighters, and baristas as the case may be. But it is a challenge. And we're trying to rise to that challenge. >> This is so exciting this new area, because it really touches everything. Talk about geeking out on the tech, the hardware, the systems but also you put your kind of MBA hat on you go, what's the ROI of extra development and how things get built. Because the always the exciting thing for space geeks is like, if you're building cool stuff, it's exciting, but you still have to build. And cybersecurity has proven that security has to be baked in from the beginning and be thought as a system architecture. So you're still building things, which means you got to acquire things, you got to acquire parts, you got acquire build software and sustain it. How is security impacting the acquisition and the sustainment of these systems for space? >> Yeah. From initial development, through planning for the acquisition, design, development, our production fielding and sustainment, it impacts all aspects of the life cycle, John. We simply, especially from the concept of baking in cybersecurity, we can't wait until something is built and then try and figure out how to make it cyber secure. So we've moved way further towards working side by side with our system developers to strengthen cybersecurity from the very beginning of a systems development, cyber security, and the resilience associated with it really have to be treated as a key system attribute. As I mentioned earlier, equivalent with data rates or other metrics of performance. We like to talk in the space world about mission assurance and mission assurance has always sort of taken us as we technically geek out. Mission assurance has always taken us to the will this system work in space. Can it work in a vacuum? Can it work in as it transfers through the Van Allen radiation belt or through the Southern hemisphere's electromagnetic anomaly? Will it work out in space? And now from a resiliency perspective, yeah, it has to work in space. It's got to be functional in space, but it's also got to be resistant to these cybersecurity threats. It's not just, I think a General D.T Thompson quoted this term. It's not just widget assurance anymore. It's mission assurance. How does that satellite operator that ground control segment operate while under attack? So let me break your question a little bit, just for purposes of discussion into really two parts, cybersecurity, for systems that are new and cybersecurity for systems that are in sustainment are kind of old and legacy. Obviously there's cyber vulnerabilities that threatened both, and we really have to employ different strategies for defensive of each one. For new systems. We're desperately trying to implement across the Department of Defense and particularly in the space world, a kind of a dev sec ops methodology and practice to delivering software faster and with greater security for our space systems. Here at SMC, we have a program called enterprise ground services, which is a toolkit, basically a collection of tools for common command and control of different satellite systems, EGS as we call it has an integrated suite for defensive cyber capabilities. Network operators can use these tools to gain unprecedented insight to data flows and to monitor space network traffic for anomalies or other potential indicators of a bad behavior, malicious behavior, if you will, it's rudimentary at this point, but because we're using DevSecOps and that incremental development approach, as we scale it, it just becomes more and more capable. Every product increment that we feel. Here at LA Air Force Base, we have the United Space Force's West Coast Software Factory, which we've dubbed the Kobayashi Maru. They're using those agile DevOps software development practices to deliver a space awareness software to the combined space operations center. Affectionately called the CSpock that CSpock is just on the road from Cal Poly there in San Luis Obispo at Vandenberg Air Force Base. They've so securely linked the sea Spock with other space operation centers around the planet, our allies, Australia, Canada, and the UK. We're partnering with all of them to enable secure and enhanced combined space operations. So lots of new stuff going on as we bake in new development capabilities for our space systems. But as I mentioned earlier, we've got large constellations of satellites on orbit right now. Some of them are well in excess of a decade or more or old on orbit. And so the design aspects of those satellites are several decades old. But we still have to worry about them cause they're critical to our space capabilities. We've been working with an air force material command organization called CROWS, which stands for the Cyber Resiliency Office for Weapon Systems to assess all of those legacy platforms from a cyber security perspective and develop defensive strategies and potential hardware and software upgrades to those systems to better enable them to live through this increasingly cybersecurity concerned era that we currently live in. Our industry partners have been critical to both of those different avenues. Both new systems and legacy systems. We're working closely with them to defend and upgrade national assets and develop the capabilities to do similar with new national assets coming online. The vulnerabilities of our space systems really kind of threatened the way we've done business in the past, both militarily and in the case of GPS economically. The impacts of that cybersecurity risk are clear in our acquisition and sustainment processes, but I've got to tell you, as the threat vectors change, as the vulnerabilities change, we've got to be nimble enough, agile enough, to be able to bounce back and forth. We can't just say, many people in the audience are probably familiar with the RMF or the Risk Management Framework approach to reviewing the cyber security of a system. We can't have program managers and engineers just accomplish an RMF on a system. And then, hey, high five, we're all good. It's a journey, not a destination, that's cybersecurity. And it's a constant battle rhythm through our weapon systems lifecycle, not just a single event. >> I want to get to this commercial business needs and your needs on the next question. But before I go there, you mentioned agile. And I see that clearly because when you have accelerated innovation cycles, you've got to be faster. And we saw this in the computer industry, mainframes, mini computers, and then we started getting beyond maybe when the internet hit and PCs came out, you saw the big enterprises, the banks and government start to work with startups. And it used to be a joke in the entrepreneurial circles is that, there's no way if you are a startup you're ever going to get a contract with a big business enterprise. Now that used to be for public sector and certainly for you guys. So as you see startups out there and there's acquisition involved, I'm sure would love to have a contract with Space Force. There's an ROI calculation where if it's in space and you have a sustainment view and it's software, you might have a new kind of business model that could be attractive to startups. Could you share your thoughts on the folks who want to be a supplier to you, whether they're a startup or an existing business that wants to be agile, but they might not be that big company. >> John, that's a fantastic question. We're desperately trying to reach out to those new space advocates, to those startups, to those what we sometimes refer to, within the Department of Defense, those non traditional defense contractors. A couple of things just for thinking purposes on some of the things that we're trying to highlight. Three years ago, we created here at Space and Missile System Center, the Space Enterprise Consortium to provide a platform, a contractual vehicle, really to enable us to rapidly prototype, development of space systems and to collaborate between the US Space Force, traditional defense contractors, non traditional vendors like startups, and even some academic institutions. SPEC, as we call it, Space Enterprise Consortium uses a specialized contracting tool to get contracts awarded quickly. Many in the audience may be familiar with other transaction agreements. And that's what SPEC is based on. And so far in just three years, SPEC has awarded 75 different prototyping contracts worth over $800 million with a 36% reduction in time to award. And because it's a consortium based competition for these kinds of prototyping efforts, the barrier to entry for small and nontraditional, for startups, even for academic institutions to be able to compete for these kinds of prototyping has really lowered. These types of partnerships that we've been working through on spec have really helped us work with smaller companies who might not have the background or expertise in dealing with the government or in working with cyber security for their systems, both our developmental systems and the systems that they're designing and trying to build. We want to provide ways for companies large and small to partner together in support kind of mutually beneficial relationships between all. Recently at the Annual Air Force Association conference that I mentioned earlier, I moderated a panel with several space industry leaders, all from big traditional defense contractors, by the way. And they all stressed the importance of building bridges and partnerships between major contractors in the defense industry and new entrance. And that helps us capture the benefits of speed and agility that come with small companies and startups, as well as the expertise and specialized skill sets of some of those larger contractors that we rely on day in and day out. Advanced cyber security protections and utilization of secure facilities are just a couple of things that I think we could be prioritizing more so in those collaborations. As I mentioned earlier, the SPEC has been very successful in awarding a number of different prototyping contracts and large dollar values. And it's just going to get better. There's over 400 members of the space enterprise consortium, 80% of them are non traditional kinds of vendors. And we just love working with them. Another thing that many people in the audience may be familiar with in terms of our outreach to innovators, if you will, and innovators that include cyber security experts is our space pitch day events. So we held our first event last November in San Francisco, where we awarded over a two day period about $46 million to 30 different companies that had potentially game changing ideas. These were phase two small business innovative research efforts that we awarded with cash on the spot. We're planning on holding our second space pitch day in the spring of 2021. We're planning on doing it right here in Los Angeles, COVID-19 environment permitting. And we think that these are fantastic venues for identifying and working with high-speed startups, and small businesses who are interested in really, truly partnering with the US Air Force. It's, as I said before, it's a really exciting time to be a part of this business. And working with the innovation economy is something that the Department of Defense really needs to do in that the innovation that we used to think was ours. That 80% of the industrial base innovation that came from the Department of Defense, the script has been flipped there. And so now more than 70%, particularly in space innovation comes from the commercial sector, not from the defense business itself. And so that's a tsunami of investment and a tsunami of a capability. And I need to figure out how to get my surfboard out and ride it, you know what I mean? >> Yeah, It's one of those things where the script has been flipped, but it's exciting because it's impacting everything. When you're talking about systems architecture? You're talking about software, you're talking about a business model. You're talking about dev sec opsx from a technical perspective, but now you have a business model innovation. All the theaters are exploding in innovation, technical, business, personnel. This brings up the workforce challenge. You've got the cyber needs for the US Space Force, It's probably great ROI model for new kinds of software development that could be priced into contracts. That's a entrepreneurial innovation, you've got the business model theater, you've got the personnel. How does the industry adopt and change? You guys are clearly driving this. How does the industry adjust to you? >> Yeah. So I think a great way to answer that question is to just talk about the kind of people that we're trying to prioritize in the US Space Force from an acquisition perspective, and in this particular case from a cybersecurity perspective. As I mentioned earlier, it's the most exciting time to be in space programs, really since the days of Apollo. Just to put it in terms that maybe have an impact with the audience. From 1957 until today, approximately 9,000 satellites have been launched from the various space varying countries around the planet. Less than 2000 of those 9,000 are still up on orbit and operational. And yet in the new space regime players like Space X have plans to launch, 12,000 satellites for some of their constellations alone. It really is a remarkable time in terms of innovation and fielding of space capabilities and all of those space capabilities, whether they're commercial, civil, or defense are going to require appropriate cybersecurity protections. It's just a really exciting time to be working in stuff like this. And so folks like the folks in this audience who have a passion about space and a passion about cybersecurity are just the kind of people that we want to work with. Cause we need to make sure our systems are secure and resilient. We need folks that have technical and computing expertise, engineering skills to be able to design cyber secure systems that can detect and mitigate attacks. But we also, as you alluded to, we need people that have that business and business acumen, human networking background, so that we can launch the startups and work with the non traditional businesses. Help to bring them on board help, to secure both their data and our data and make sure our processes and systems are free as much as possible from attack. For preparation, for audience members who are young and maybe thinking about getting into this trade space, you got to be smart on digital networking. You got to understand basic internet protocols, concepts, programming languages, database design. Learn what you can for penetration or vulnerability testing and a risk assessment. I will tell you this, and I don't think he will, I know he will not mind me telling you this, but you got to be a lifelong learner and so two years ago, I'm at home evening and I get a phone call on my cell phone and it's my boss, the commander of Air Force Space command, General, J. Raymond, who is now currently the Chief of Space Operations. And he is on temporary duty, flying overseas. He lands where he's going and first thing he does when he lands is he calls me and he goes JT, while I was traveling, I noticed that there were eBooks available on the commercial airliner I was traveling on and there was an ebook on something called scrumming and agile DevSecOps. And I read it, have you read it? And I said, no, sir. But if you tell me what the title of the book is, I will read it. And so I got to go to my staff meeting, the very next week, the next time we had a staff meeting and tell everybody in the staff meeting, hey, if the four star and the three star can read the book about scrumming, then I'm pretty sure all of you around this table and all our lieutenants and our captains our GS13s, All of our government employees can get smart on the scrumming development process. And interestingly as another side, I had a telephone call with him last year during the holidays, where he was trying to take some leave. And I said, sir, what are you up to today? Are you making eggnog for the event tonight or whatever. And the Chief of Space Operations told me no, I'm trying to teach myself Python. I'm at lesson two, and it's not going so well, but I'm going to figure this out. And so that kind of thing, if the chief of staff or the Chief of Space Operations can prioritize scrumming and Python language and innovation in his daily schedule, then we're definitely looking for other people who can do that. And we'll just say, lower levels of rank throughout our entire space force enterprise. Look, we don't need people that can code a satellite from scratch, but we need to know, we need to have people that have a basic grasp of the programming basics and cybersecurity requirements. And that can turn those things into meaningful actions, obviously in the space domain, things like basic physics and orbital mechanics are also important spaces, not an intuitive domain. So under understanding how things survive on orbit is really critical to making the right design and operational decisions. And I know there's probably a lot, because of this conference. I know there's probably a whole lot of high speed cybersecurity experts out in the audience. And I need those people in the US Space Force. The country is counting on it, but I wouldn't discount having people that are just cyber aware or cyber savvy. I have contracting officers and logisticians and program managers, and they don't have to be high end cybersecurity experts, but they have to be aware enough about it to be able to implement cyber security protections into our space systems. So the skill set is really, really broad. Our adversaries are pouring billions of dollars into designing and fielding offensive and destructive space, cybersecurity weapons. They repeatedly shown really a blatant disregard of safety and international norms for good behavior on orbit. And the cyber security aspects of our space systems is really a key battleground going forward so that we can maintain that. As I mentioned before, peaceful global comments of space, we really need all hands on deck. If you're interested in helping in uniform, if you're interested in helping, not in uniform, but as a government employee, a commercial or civil employee to help us make cyber security more important or more able to be developed for our space systems. And we'd really love to work with you or have you on the team to build that safe and secure future for our space systems. >> Lieutenant General John Thompson, great insight. Thank you for sharing all that awesome stories too, and motivation for the young next generation. The United States Space Force approach to cybersecurity. Really amazing talk, thank you for your time. Final parting question is, as you look out and you have your magic wand, what's your view for the next few years in terms of things that we could accomplish? It's a super exciting time. What do you hope for? >> So first of all, John, thanks to you and thanks to Cal Poly for the invitation and thanks to everybody for their interest in cybersecurity, especially as it relates to space systems, that's here at the conference. There's a quote, and I'll read it here from Bernard Schriever, who was the founder, if you will, a legend in a DoD space, the founder of the Western development division, which was a predecessor organization to Space and Missile System Center, General Schriever, I think captures the essence of how we see the next couple of years. "The world has an ample supply of people "who can always come up with a dozen good reasons "why new ideas will not work and should not be tried, "but the people who produce progress are breed apart. "They have the imagination, "the courage and the persistence to find solutions." And so I think if you're hoping that the next few years of space innovation and cybersecurity innovation are going to be upon a pony ride at the County fair, then perhaps you should look for another line of work, because I think the next few years in space and cybersecurity innovation are going to be more like a rodeo and a very dynamic rodeo as it goes. It is an awesome privilege to be part of this ecosystem. It's really an honor for me to be able to play some small role in the space ecosystem and trying to improve it while I'm trying to improve the chances of the United States of America in a space war fighting environment. And so I thank all of you for participating today and for this little bit of time that you've allowed me to share with you. Thank you. >> Sir, thank you for your leadership and thank you for the time for this awesome event, Space and Cyber Cybersecurity Symposium 2020, I'm John Furrier on behalf of Cal Poly, thanks for watching. (mellow music)

>> Announcer: From Milpitas, California, at the edge of Silicon Valley, it's theCUBE, covering autonomous vehicles, brought to you by Western Digital. >> Hey, welcome back here everybody. Jeff Frick here with theCUBE. We're in Milpitas, California at the Western Digital event. It's the Autotech Council Autonomous Vehicle event. About 300 people talking about all these really complicated issues around autonomous vehicles, a wide variety of start ups and enterprises and it's a really interesting space 'cause there's, as somebody said in the keynote there's literally thousands of problems to solve. But one of the angles is really on the public transportation side. Really excited to have a really innovative start up and welcome Emmanuele Spera. He is the CEO of NEXT Future Transportation. Emmanuele, welcome. >> Hi Jeff, thanks for inviting me out. >> Absolutely, so for the folks that aren't familiar, you can go to the website, there's a great demo video that you guys have this session. What are you guys building? >> We're building something very particular, because, so far, you see all those company presenting what is, well known as an autonomous car. So, let's build something that can let us read our newspaper while we are commuting, and very nice, lot of money that's been invested in that. But the reality is that how we... Are we taking care of the gridlocks that are affecting our city? Are we moving around enough people? Are we solving the problem of congestion? I'll say, no. Because it doesn't matter if we have an EV, an autonomous driving vehicle, or an SUV or a car, you still have congestion, you still need to have large number of car to move around people. >> Jeff: Right, right. So the only viable solution is to use buses. Buses has been there in the last hundred years and they are very expensive, actually the most expensive asset that cities and municipalities are using. So they using taxpayer money to pay those asset, and they are underutilized. Because you have a high demand in peak time, so people use buses, but on the rest of the day, when there are no peak time, there is very low usage rate. I'll say around 20, 25%. So take a look at those buses, they are empty all the time. So our solution is about modularizing this kind of transportation. So, literally, we took a bus and we divided the bus in section, so you have six module that are coupled together, are the same length and capacity of a standard city bus. But we do modularization. We can create a system which literally breathe, because we have longer vehicle in peak time when there is high demand, and shorter vehicle when there is very low demand when you have just a few passenger. The magic is that when those pods are connected, one to another, they share the internal space. By the way, all of that can be done autonomously. >> Jeff: Right. The coupling is already done autonomously, and we can start from tomorrow, because we can't have a driver when we begin using the system. When the technology allows us to be autonomous, we're going to run the autonomous operating system on that. >> Jeff: Right. This can be done autonomously now, in close environment when you don't have a mix traffic environment. But we demonstrated that this could be done. >> That's funny that you came at the problem from a bus, and breaking the bus into modular pieces. When I was prepping for our interview, and doing some research, I looked at it more as kind of a combination of a bunch of individual passenger vehicles that then create almost more like a train. But it's the same concept and it made me think of really kind of IP networks where, when you can bring them all together into an autonomous unit and they operate as one. Much more efficient. >> Emmanuele: Exactly. >> They don't need space in between. And then, really an interesting concept where that packet can kind of jump onto another network if it needs to go down another route. So the fact that these things can couple and uncouple, the fact the people can change units within the structure, you're really adding kind of a smart transportation that then can come together and really act like a city bus. Really fascinating way to look at that problem. >> Absolutely, it's simple, so. The technology to create that, if you look at those parts, seem like very far away, but we were able to create this now using off the shelf components. >> Jeff: Right. Literally, when you give people, passenger, an option, this kind of option, they're going to love it. >> Jeff: Right. Think about now when you need to go from point A to point B, you need to take a taxi, ride a bicycle, take new burr, to change and have an intermodal transportation to reach your destination and it's going to take a while to reach your destination. With this system, you just jump on another pod and you change your destination within the same system. >> Jeff: Right. It can all be controlled by an app that you carry or by screen that are on the pods, that tell you you need to go northbound to go on pod number one, you need to go eastbound go on pod number two. >> Jeff: Right. So the system is able to reorganize itself based on the user's needs, literally. >> So, we're here, we're sponsored by Western Digital, this is part of their whole Data Makes Possible program. From a data perspective and a AI perspective, how did you have to approach that problem a little bit differently and what were some of the challenges that enabled you to overcome, to create this unique solution? >> So, before, you were saying that we are all here at this conference and we'll need to solve, like, thousands of problem. We actually have to solve, like, millions of problem, billions of problem, I mean we are... And AI is the only way we can overcome such problem in some area. Obviously we need to take control of the basics, of the beginning of this journey. Clearly the AI will be amazing when the system is fully working and you can predict information, you can connect with the passenger, with the user of the system directly, and predict behavior, predict needs on the passenger side. And then also, you're going to use the AI to predict how the system is flowing, meaning how the vehicle are using the lane, if there are gridlock somewhere, so how you can, on the fly, reorganize the way those vehicles, those pods, are going to move around the city, to go over obstacle and reach a destination faster and ultimately, in our case, where is the best place to couple with another vehicle based on passenger destination and lengths of the journey. >> Right. So, Emmanuele, this isn't just a concept. You guys actually have working prototypes out in the field, so where, how many do you have deployed? What's your road map and hope for kind of a roll out or do you have, is it a partner strategy? What's your plan to scale? >> We had this concept, the company was made in 2015, we were showing this concept in 2016, the beginning of 2017. In one year, we were able to deliver to our first customer, which is the Dubai government. Last February, during the World Government Summit in Dubai, we showcase two full spec vehicle that were able to couple and uncouple autonomously and move around the venue. We had been testing them since January in Dubai, in a closed area or in particular events where we could showcase and have passengers on both and drive them for a small route. Clearly, our solution is not for OEM car maker. It's for municipalities that really need to solve a problem and have been stuck, literally, with the bus in the last hundred year. There have been no major innovation in bus industry. The only innovation I see now, there are electrifying buses, so now you have way more expensive assets which is still underutilized. >> Right. >> So I spend more and it's still no one use it. So what you are doing, we are going to provide fleets to municipalities and Dubai will be the first, especially since they're having their Dubai 2020 Exhibition. We can provide them with a fleet by that time. Think about that, 120 pods are the same as 20 buses. >> Right, right. That's your targeted first deploy, something like that? >> Yeah, exactly, and the cost is even lower than a bus. >> Alright. Well, Emmanuele, it's really cool technology. >> Emmanuele: Thank you, Jeff. >> I just love the innovation in terms of kind of slicing the problem in a slightly different way, being really innovative and partnering. As you said, you have not raised $100 million in all this craziness, and actually deploying, so. Really exciting story, thanks for sharing with it and we're excited to watch it unfold over the next couple of years. >> Absolutely, thank you, Jeff. >> Alright, he's Emmanuele, I'm Jeff. We're at the Autotech Council, part of Western Digital's Data Makes Possible. Thanks for watching, catch you next time. (techno 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)