>> TheCUBE presents Ignite 22 brought to you by Palo Alto Networks. >> Welcome back to Las Vegas, everyone. We're glad you're with us. This is theCUBE live at Palo Alto Ignite 22 at the MGM Grant in Las Vegas. Lisa Martin here with Dave Vellante, day one of our coverage. We've had great conversations. The cybersecurity landscape is so interesting Dave, it's such a challenging problem to solve but it's so diverse and dynamic at the same time. >> You know, Lisa theCUBE started in May of 2010 in Boston. We called it the chowder event, chowder and Lobster. It was a EMC world, 2010. BJ Jenkins, who's here, of course, was a longtime friend of theCUBE and made the, made the transition into from, well, it's still data, data to, to cyber. So >> True. And BJ is back with us. BJ Jenkins, president Palo Alto Networks great to have you back on theCUBE. >> It is great to be here in person on theCube >> Isn't it great? >> In Vegas. It's awesome. >> And we can tell by your voice will be, will be gentle. You, you've been in Vegas typical Vegas occupational hazard of losing the voice. >> Yeah. It was one of the benefits of Covid. I didn't lose my voice at home sitting talking to a TV. You lose it when you come to Vegas. >> Exactly. >> But it's a small price to pay. >> So things kick off yesterday with the partner summit. You had a keynote then, you had a customer, a CISO on stage. You had a keynote today, which we didn't get to see. But talk to us a little bit about the lay of the land. What are you hearing from CISOs, from CIOs as we know security is a board level conversation. >> Yeah, I, you know it's been an interesting three or four months here. Let me start with that. I think, cybersecurity in general is still front and center on CIOs and CISO's minds. It has to be, if you saw Wendy's presentation today and the threats out there companies have to have it front and center. I do think it's been interesting though with the macro uncertainty. We've taken to calling this year the revenge of the CFO and you know these deals in cybersecurity are still a top priority but they're getting finance and procurements, scrutiny which I think in this environment is a necessity but it's still a, you know, number one number two imperative no matter who you talked to, in my mind >> It was interesting what Nikesh was saying in the last conference call that, hey we just have to get more approvals. We know this. We're, we're bringing more go-to-market people on board. We, we have, we're filling the pipeline 'cause we know they're going to split up deals big deals go into smaller chunks. So the question I have for you is is how are you able to successfully integrate those people so that you can get ahead of that sort of macro transition? >> Yeah I, you know, I think there's two things I'd say about uncertain macro situations and Dave, you know how old I am. I'm pretty old. I've been through a lot of cycles. And in those cycles I've always found stronger companies with stronger value proposition separate themselves actually in uncertain, economic times. And so I think there's actually an opportunity here. The message tilts a little bit though where it's been about innovation and new threat vectors to one of you have 20, 30, 40 vendors you can consolidate become more effective in your security posture and save money on your TCOs. So one of the things as we bring people on board it's training them on that business value proposition. How do you take a customer who's got 20 or 30 tools take 'em down to 5 or 10 where Palo is more central and strategic and be able to demonstrate that value. So we do that through, we're making a huge investment in our people but macroeconomic times also puts some stronger people back on the market and we're able to incorporate them into the business. >> What are the conditions that are necessary for that consolidation? Like I would imagine if you're, if you're a big customer of a big, you know, competitor of yours that that migration is going to be harder than if you're dealing with lots of little point tools. Do those, do those point tools, are they sort of is it the end of the subscription? Is it just stuff that's off the books now? What's, the condition that is ripe for that kind of consolidation? >> Look, I think the challenge coming into this year was skills. And so customers had all of these point products. It required a lot more human intervention as Nikesh was talking about to integrate them or make them work. And as all of us know finding people with cybersecurity skills over the last 12 months has been incredibly hard. That drove, if you know, if you think about that a CIO and a CISO sitting there going, I have all all this investment in tools. I don't have the people to operate 'em. What do I need to do? What we tried to do is elevate that conversation because in a customer, everybody who's bought one of those, they they bought it to solve a problem. And there's people with affinity for that tool. They're not just going to say I want to get consolidated and give up my tool. They're going to wrap their arms around it. And so what we needed to do and this changed our ecosystem strategy too how we leverage partners. We needed to get into the CIO and CISO and say look at this chaos you have here and the challenges around people that it's, it's presenting you. We can help solve that by, by standardizing, consolidating taking that integration away from you as Nikesh talked about, and making it easier for your your high skill people to work on high skill, you know high challenges in there. >> Let chaos reign, and then reign in the chaos. >> Yes. >> Andy Grove. >> I was looking at some stats that there's 26 million developers but less than 3 million cybersecurity professionals. >> Talked about that skills gap and what CISOs and CIOs are facing is do you consider from a value prop perspective Palo Alto Networks to be a, a facilitator of helping organizations deal with that skills gap? >> I think there's a short term and a long term. I think Nikesh today talked about the long term that we'll never win this battle with human beings. We're going to have to win it with automation. That, that's the long term the short term right here and now is that people need people with cybersecurity skills. Now what we're trying to do, you know, is multifaceted. We work with universities to standardize programs to develop skills that people can come into the marketplace with. We run our own programs inside the company. We have a cloud academy program now where we take people high aptitude for sales and technical aptitude and we will put them through a six month boot camp on cloud and they'll come out of that ready to really work with the leading experts in cloud security. The third angle is partners, right, there are partners in the marketplace who want to drive their business into high services areas. They have people, they know how to train. We give them, we partner with them to give them training. Hopefully that helps solve some of the short-term gaps that are out there today. >> So you made the jump from data storage to security and >> Yeah. >> You know, network security, all kinds of security. What was that like? What you must have learned a lot in the last better part of a decade? >> Yeah. >> Take us through that. >> You know, so the first jump was from EMC. I was 15 years there to be CEO of Barracuda. And you know, it was interesting because EMC was, you know large enterprise for the most part. At Barracuda we had, you know 250,000 small and mid-size enterprises. And it was, it's interesting to get into security in small and mid-size businesses because, you know Wendy today was talking about nation states. For small and mid-size business, it's common thievery right? It's ransomware, it's, and, those customers don't have, you know, the human and financial resources to keep up with the threat factor. So, you know, Nikesh talked about how it's taken 'em four and a half years to get into cybersecurity. I remember my first week at Barracuda, I was talking with a customer who had, you know, breached data shut down. There wasn't much bitcoin back then so it was just a pure ransom. And I'm like, wow, this is, you know, incredible industry. So it's been a good, you know, transition for me. I still think data is at the heart of all of this. Right? And I have always believed there's a strong connection between the things I learned growing up at EMC and what I put into practice today at Palo Alto Networks. >> And how about a culture because I, you know I know have observed the EMC culture >> Yeah. >> And you were there in really the heyday. >> Yeah. >> Right? Which was an awesome place. And it seems like Palo Alto obviously, different times but you know, similar like laser focus on solving problems, you know, obviously great, you know value sellers, you know, you guys aren't the commodity >> Yeah. For Product. But there seemed to be some similarities from afar. I don't know Palo Alto as well as I know EMC. >> I think there's a lot. When I joined EMC, it was about, it was 2 billion in in revenue and I think when I left it was over 20, 20, 21. And, you know, we're at, you know hopefully 5, 5 5 in revenue. I feel like it's this very similar, there's a sense of urgency, there's an incredible focus on the customer. you know, Near and Moche are definitely different individuals but the both same kind of disruptive, Israeli force out there driving the business. There are a lot of similarities. I, you know, the passion, I feel privileged as a, you know go to market person that I have this incredible portfolio to go, you know, work with customers on. It's a lucky position to be in, but very I feel like it is a movie I've seen before. >> Yeah. And but, and the course, the challenges from the, the target that you're disrupting is different. It was, you know, EMC had a lot of big, you know IBM obviously was, you know, bigger target whereas you got thousands of, you know, smaller companies. >> Yes. >> And, and so that's a different dynamic but that's why the consolidation play is so important. >> Look at, that's why I joined Palo Alto Networks when I was at Barracuda for nine years. It just fascinated me, that there was 3000 plus players in security and why didn't security evolve like the storage market did or the server market or network where working >> Yeah, right. >> You know, two or three big gorillas came to, to dominate those markets. And it's, I think it's what Nikesh talked about today. There was a new problem in best of breed. It was always best of breed. You can never in security go in and, you know, say, Hey it's good I saved us some money but I got the third best product in the marketplace. And there was that kind of gap between products. I, believe in why I joined here I think this is my last gig is we have a chance to change that. And this is the first company as I look from the outside in that had best of breed as, you know Nikesh said 13 categories. >> Yeah. >> And you know, we're in the leaders quadrant and it's a conversation I have with customers. You don't have to sacrifice best of breed but get the benefits of a platform. And I, think that resonates today. I think we have a chance to change the industry from that viewpoint. >> Give us a little view of the voice of the customer. You had, was it Sabre? >> Yeah. >> That was on >> Scott Moser, The CISO from Sabre. >> Give us a view, what are you hearing from the voice of the customer? Obviously they're quite a successful customer but challenges, concerns, the partnership. >> Yeah. Look, I think security is similar to industries where we come up with magic marketing phrases and, you know, things to you know, make you want to procure our solutions. You know, zero trust is one. And you know, you'll talk to customers and they're like, okay, yes. And you know, the government, right? Joe, Joe Biden's putting out zero trust executive orders. And the, the problem is if you talk to customers, it's a journey. They have legacy infrastructure they have business drivers that you know they just don't deal with us. They've got to deal with the business side who's trying to make the money that keeps the, the company going. it's really helped them draw a map from where they're at today to zero trust or to a better security architecture. Or, you know, they're moving their apps into the cloud. How am I going to migrate? Right? Again, that discussion three years ago was around lift and shift, right? Today it's about, well, no I need cloud native developed apps to service the business the way I want to, I want to service it. How do I, so I, I think there's this element of a trusted partner and relationship. And again, I think this is why you can't have 40 or 50 of those. You got to start narrowing it down if you want to be able to meet and beat the threats that are out there for you. So I, you know, the customers, I see a lot of 'em. It's, here's where I'm at help me get here to a better position. And they know it's, you know Scott said in our keynote today, you don't just, you know have layer three firewall policies and decide, okay tomorrow I'm going to go to layer seven. That, that's not how it works. Right? There's, and, and by the way these things are a mission critical type areas. So there's got to be a game plan that you help customers go through to get there. >> Definitely. Last question, my last question for you is, is security being a board level conversation I was reading some stats from a survey I think it was the what's new in Cypress survey that that Palo Alto released today that showed that while significant numbers of organizations think they've got a cyber resiliency playbook, there's a lot of disconnect or lack of alignment at the boardroom. Are you in those conversations? How can you help facilitate that alignment between the executive team and the board when it comes to security being so foundational to any business? >> Yeah, it's, I've been on three, four public company boards. I'm on, I'm on two today. I would say four years ago, this was a almost a taboo topic. It was a, put your head in the sand and pray to God nothing happened. And you know, the world has changed significantly. And because of the number of breaches the impact it's had on brand, boards have to think about this in duty of care and their fiduciary duty. Okay. So then you start with a board that may not have the technical skills. The first problem the security industry had is how do I explain your risk profile in a way you can understand it. I'm, I'm on the board of Generac that makes home generators. It's a manufacturing, you know, company but they put Wifi modules in their boxes so that the dealers could help do the maintenance on 'em. And all of a sudden these things were getting attacked. Right? And they're being used for bot attacks. >> Yeah. >> Everybody on their board had a manufacturing background. >> Ah. >> So how do you help that board understand the risk they have that's what's changed over the last four years. It's a constant discussion. It's one I have with CISOs where they're like help us put it in layman's terms so they understand they know what we're doing and they feel confident but at the same time understand the marketplace better. And that's a journey for us. >> That Generac example is a great one because, you know, think about IOT Technologies. They've historically been air gaped >> Yes. >> By design. And all of a sudden the business comes in and says, "Hey we can put wifi in there", you know >> Connect it to a home Wifi system that >> Make our lives so much easier. Next thing you know, it's being used to attack. >> Yeah. >> So that's why, as you go around the world are you discerning, I know you were just in Japan are you discerning significant differences in sort of attitudes toward, towards cyber? Whether it's public policy, you know things like regulation where you, they don't want you sharing data, but as as a cyber company, you want to share that data with you know, public and private? >> Look it, I, I think around the world we see incredible government activity first of all. And I think given the position we're in we get to have some unique conversations there. I would say worldwide security is an imperative. I, no matter where I go, you know it's in front of everybody's mind. The, on the, the governance side, it's really what do we need to adapt to make sure we meet local regulations. And I, and I would just tell you Dave there's ways when you do that, and we talk with governments that because of how they want to do it reduce our ability to give them full insight into all the threats and how we can help them. And I do think over time governments understand that we can anonymize the data. There's, but that, that's a work in process. Definitely there is a balance. We need to have privacy, we need to have, you know personal security for people. But there's ways to collect that data in an anonymous way and give better security insight back into the architectures that are out there. >> All right. A little shift the gears here. A little sports question. We've had some great Boston's sports guests on theCUBE right? I mean, Randy Seidel, we were talking about him. Peter McKay, Snyk, I guess he's a competitor now but you know, there's no question got >> He got a little funding today. I saw that. >> Down round. But they still got a lot of money. Not of a down round, but they were, but yeah, but actually, you know, he was on several years ago and it was around the time they were talking about trading Brady. He said Never trade Brady. And he got that right. We, I think we can agree Brady's the goat. >> Yes. >> The big question I have for you is, Belichick. Do you ever question Has your belief in him as the greatest coach of all time wavered, you know, now that- No. Okay. >> Never. >> Weigh in on that. >> Never, he says >> Still the Goat. >> I'll give you my best. You know, never In Bill we trust. >> Okay. Still. >> All right >> I, you know, the NFL is a unique property that's designed for parody and is designed, I mean actively designed to not let Mr. Craft and Bill Belichick do what they do every year. I feel privileged as a Boston sports fan that in our worst years we're in the seventh playoff spot. And I have a lot of family in Chicago who would kill for that position, by the way. And you know, they're in perpetual rebuilding. And so look, and I think he, you know the way he's been able to manage the cap and the skill levels, I think we have a top five defense. There's different ways to win titles. And if I, you know, remember in Brady's last title with Boston, the defense won us that Super Bowl. >> Well thanks for weighing in on that because there's a lot of crazy talk going on. Like, 'Hey, if he doesn't beat Arizona, he's got to go.' I'm like, what? So, okay, I'm sometimes it takes a good good loyal fan who's maybe, you know, has >> The good news in Boston is we're emotional fans too so I understand you got to keep the long term long term in mind. And we're, we're in a privileged position in Boston. We've got Celtics, we've got Bruins we've got the Patriots right on the edge of the playoffs and we need the Red Sox to get to work. >> Yeah, no, you know they were last, last year so maybe they're going to win it all like they usually do. So >> Fingers crossed. >> Crazy worst to first. >> Exactly. Well you said, in Bill we trust it sounds like from our conversation in BJ we trust from the customers, the partners. >> I hope so. >> Thank you so much BJ, for coming back on theCUBE giving us the lay of the land, what's new, the voice of the customer and how Palo Alto was really differentiated in the market. We always appreciate your, coming on the show you >> Honor and privilege seeing you here. Thanks. >> You may be thinking that you were watching ESPN just now but you know, we call ourselves the ESPN at Tech News. This is Lisa Martin for Dave Vellante and our guest. You're watching theCUBE, the Leader and live emerging in enterprise tech coverage. (upbeat music)

>> Narrator: Live from Las Vegas it's theCUBE. Covering UiPath Forward Americas 2019. Brought to you by UiPath. >> Welcome back everyone to theCUBE's live coverage of UiPath Forward here at the Bellagio in Las Vegas. I'm your host Rebecca Knight along with my co-host Dave Vellante. We are joined by Craig Le Clair, he is the vice president of Forrester and also the author of the book "Invisible Robots in the Quiet of the Night: How AI and Automation will Restructure the Workforce". Thank you so much for coming on theCUBE. >> Craig: Thank you! Thanks for having me. >> And congratulations, it's already made #11 on Amazon's AI and automation bestseller list. >> Wow, it's not quite best seller but OK, that's great, thank you, it's doing well. >> So if anyone calls your book a bestseller you just take 'em on that. >> (Craig) I'll just take it. >> So it is a, it's a bleak story right now, I mean there's a lot, there's so many changes going on in the workforce and there's so much anxiety on the part of workers that they're going to lose their job that all these technologies are going to take away their their livelihood, so how are companies managing this? Are they managing it well, would you say, or is the anxiety misplaced? Give us an overview. >> Yeah, so I don't think companies are really aware of the broader implications of the automation and AI that's developing. They tend to focus on the things that companies focus on. They focus on more efficiency and productivity and so forth, and underlying that is this digital anxiety that we call it, and the fact that a lot of the jobs that we, particularly the middle class have, the working class have, are the targets of the invisible robots, and that's really the point of the invisible robot book is that there's a lot of media attention on the hardware aspects of robotics, in fact the Super Bowl last year had 10 commercials with hardware robots. But if you look at this conference you look at the number of people here. What are these people doing? They're going back to their companies and saying "You know, this UiPath, and there are other providers "in the market, we can build software robotics, "we can build bots to do some of these tasks "that a lot of these humans are doing." And while there is elevation of the human capability in spirit for many of them, there's also a comfort level in employees that do things that they have control over, have incited. And when you extract those you are left with a series of more exciting moments, perhaps, but it's not going to make you more relaxed as an employee. And then you look at the overall job numbers, and our estimates are very conservative compared to some of the other reports, that are 45, 50% of workers over 10 years being displaced. We think it's 16%, but still, when you look at just the US numbers, that's of 160 workers today, 160 million workers, that's a lot of people. >> Rebecca: It is indeed. >> So, displaced and then sort of re-targeted or? >> A percentage, >> Vaporized. >> No, no, well the 16% is the automation, is the net loss of jobs. Now in that, automation's expensive, so there are a tremendous number of new jobs that are created by the work that's been going on here. So we have a formula to calculate that for these 12 different work personas, and the work personas have different relationships to AI and automation, so you would be crossed so many knowledge workers and be very well protected for a long time. >> Rebecca: All right, there we go. >> So you're good, but... for coordinators, people that have clip boards in their hands, for those who work in cubicles, they're going to have a lot of people leaving those cubicles that aren't going to be able to migrate to other personas. And so we have a changed management issue, we need to start driving more education from the workplace through certification, and that's a really critical thing I'll talk about tomorrow, that the refresh of technology with automation is 18 months to 24 months, you can't depend on traditional education to keep up, so we need a different way to look at training and education and for many it's going to be a much better life, but there's going to be many that it will not be. >> What was the time frame for your net 16% loss? >> 10 years. >> 10 years, okay, to me a lower net loss number makes sense, and in fact if you can elongate your timeline it probably shows a net job creation, you can make that argument anyway I don't know if you. >> Craig: It's being made. >> Dave: You don't buy it though? >> I don't, the world economic foundation and others are having huge net new numbers for jobs based on AI. Some of the large integration companies that want to build AI platforms for you are talking about trillions of dollars that would be added value to the world economy, I just don't buy it, and you know the reason I wrote this book was because what's going on here is very quietly preparing to displace a lot of efforts starting with relatively small tasks, it's called task automation but then expanding to more and more work and eventually adding a level of intelligence to the task automation going on here, that's going to take a lot of jobs. And for most of those 20 million cubicle workers, they have high school educations. You know, the bigger problem is this level of anxiety, you know, you go into almost any bookstore and there's a whole section For Dummy books, and it's not, is it because we have this sort of cognitive recession or because there's a, it's because the world's getting faster and more complicated. And unless you have the digital skills to adapt to that, the digital skills gap is growing. And we need to have as much focus that you see here and energy on building automation. We need to have an equal amount of focus on the societal problems. >> Yeah, it really comes down to education, too. I mean if I were able to snap my fingers and transform the educational system, there might be a different outcome but that's very unlikely to happen. Craig, one of the things we talked about last year was you had made the statement that some of these moonshot digital transformations aren't happening for a variety of reasons but our PA is kind of a practical way to achieve automation. >> Still very true. >> Have you seen sort of a greater awareness in your client base that, "You know, hey, maybe we should dial down "some of these moonshots and just try to "pick some clear winners." >> Yeah, we have a number of prediction reports coming out from Forrester and they're all saying basically that. I'm doing reports on what I'm calling the intelligent process automation market and that's really our PA plus AI, but not all aspects of AI. You know, it's AI that you can see in ROI around, you know it's AI that deals with unstructured documents and content and email. It's not the moonshot, more transformative AI that we have been very focused on for a number of years. Now all of that's very very important. You're not going to transform your business by doing task automation even if it's a little more intelligent and handles some decision management, you still need to think about "How do I instantiate "my business algorithmically," with AI that's going to make predictions and move decision management and change the customer experience. All that's still true, as true as it was in 2014/2015, we're just seeing a more realistic pull back in terms of the invested profile. >> Well, and so we've been talking about that all day, it is taking automating processes that have been around for a long time, and you, I think identified this as one of the potential blockers before, if you get old processes that are legacy and I think you, you gave the story of "Hey, I flew out here "on American Airlines in the old SABRE system." How old are those processes, you know? We've, you know the old term "paving the cow path." So the question is, given all the hype around RPA, the valuations, et cetera, what role do you see RPA having in those sort of transformative use cases? >> Well here's the interesting thing that was, I think, somewhat accidental by the, you know what really changed from having simple desktop automation? Well you needed some place to house and essentially manage that automation, so the RPA platforms had to build a central management capability. UiPath calls that the orchestrator, others call it the control tower, but when you think of all the categories of AI none of them have a orchestration capability, so the ability to use events to link in machine intelligence and dispatch digital workers or task automation to coordinate various AI building blocks as we call them and apply it to a use case, that orchestration ability is pretty unique to the RPA platforms. So the sort of secret value of RPA is not in everything that's being talked about here but eventually is going to be as a coordinating mechanism for bringing together machine learning that'll begin in the cloud, conversational intelligence that might be in Google. Having the RPA bots work in conjunction with those. >> But if I recall, I mean that's something that you pointed out last year as well that RPA today struggles with unstructured data that... >> Well it can't do it. >> You're right, we've talked about it NLP versus RPA, RPA, given structured data, I can go after it. >> That's the RPA plus AI bit, though. I mean, you take text analytics layer, and you combine it with RPA bots and now you have the unstructured capability plus the structured capability that RPA does so well. And, with the combination of the two, you can reach. I think what the industry needs to do or the buyers of RPA need to take the pressure off this immediacy of the ROI. In a sense, that's what's driven the value. I can deploy something, I can get value in a few months but, to really make it effective and transformative you need to combine it with these AI components, that's going to take a little longer, so this sort of impatience that you see in a lot of companies, they should really step back and take a look at the more end to end capabilities and take a little hit on the ROI immediately so that you can do that. >> No, I mean I can definitely see a step function, okay, great, we've absorbed that value, we get the quick ROI, but there's, to your point there's got to be some patient capital to allow you to truly transform in order for RPA, I don't want to put words in your mouth, to live up to the hype. >> Absolutely, I totally agree. And I am still very, very high on the market, I think it's going to do extremely well. >> Well, if you look at the spending data, it's quite interesting. I mean RPA as a category is off the charts. You know, UiPath, from the, your last wave kind of took the lead but, Automation Anywhere, Blue Prism spending, even in traditional incumbents, maybe not even RPA, maybe more "process automation" like Pegasystems. Their spending data suggests that this is the rising tide lifting all boats so, my question to you is, how do you see this all shaking out? I mean, huge evaluations, the bankers are swarming around. You saw them in the media yesterday. You know, at some point there's got to be a winner takes most. The number two guy will do pretty well and then everybody else kind of consolidates. What's your outlook? >> Well, there are a lot of emerging players coming into the market and, part of my life is having to fend them off and talk to them, and the RPA wave is coming out in a week. It's going to have four new players in it. Companies like SAP. >> Well, they acquired a company right? >> They acquired and they built internally, and have some interesting approaches to the market. So you are going to see the big players come into the market. Others I won't mention that'll be in the market in a month It's getting a lot of attention. But also I think that there are domains, business domains that, the different platforms can start to specialize in. The majors, the UiPaths to the world, will be horizontal and remain that way. And depend on partners to tailor it for a particular application area. But you're going to see RPA companies come into the testing market, software testing market. You're going to see them come into the contact centers to deal with attended mode in more sophisticated ways perhaps than those that don't have that background. You're going to see tailored robots that are going to be in these robot communities that are springing up. That'll give a lot of juice to others to come into the market. >> And like you say you're going to see, we've talked about this as well Rebecca, the best of breed versus the suite, right? Whether its SAP, Inforce talking about it, I'm sure Oracle will throw its hat in the ring I mean, why not, right? Hey, we have that too. >> Well, if you're those companies that the RPA bots are feasting on, they're slowing the upgrades to your core platforms, in some ways making them less relevant, because their argument has been, let's integrate, you get self integration when you buy SAP, when you buy Oracle, when you buy these big platforms. Well, the bots actually make that argument less powerful because you can use the bots to give you that integration, as a layer, and so they're going to have to come up with some different stories I think if they're going to continue to move forward on their platforms, move them to the cloud and so forth. >> So, finally, your best advice for workers in this new landscape and how it is going to alter their working lives. And also, your best advice for companies and managers who are, as you said, maybe not quite, they're grappling with this issue but maybe not and they're not being disingenuous to workers about who's going to lose their jobs, but this idea of as they're coming to terms with understanding quite all of the implications of this new world. >> Yeah, I know, I'm presenting data tomorrow that shows that organizations, employees, and leaders are not ready and I have data to show that. They're not understanding it. My best advice, I love the concept of, it's not a Forrester concept, it's called constructive ambition. This is the ability in an employee to want to go a little bit out of the box, and learn, and to challenge themselves, and move into more digital to close that digital skills gap. And, we have to get better at, companies need to get better at identifying constructive ambition in people they're hiring, and also, ways to draw it out. And to walk these employees up the mountain in a way that's good for their career and good for the company. I can tell you, I'll tell a few stories on the main stage last night, I interviewed Walmart employees and machinists that could no longer deal with their machine because they had to put codes into it so they had to set it up with programming steps and the digital anxiety was such that they quit the job. So a clear lack of constructive ambition. On the other hand, a Walmart employee graduated from one of their 200 academies and was able to take on more and more responsibility. Somebody with no high school degree at all. She said, "I've never graduated "from anything in my life. "My kids have never seen me "succeed at anything, and I got this certification "from Walmart that said that I was doing this level "of standard work and that felt really, really good." So, you know, we, companies can take a different view towards this but they have to have some model of future of work of what it's going to look like so they can take a more strategic view. >> Well Craig, thank you so much for coming on theCUBE. It was a really great talk. Another plug for the book, "Invisible Robots in the Quiet of the Night" you can buy it on Amazon. >> Craig: Thank you. >> I'm Rebecca Knight for Dave Vellante, stay tuned for more of theCUBE's live coverage of UiPath Forward. (techno music)

>> Live from Miami Beach, Florida, it's theCUBE. Covering UiPathForward Americas. Brought to you by UiPath. >> Welcome back to Miami everybody. You're watching theCUBE, the leader in live tech coverage. We go out to events, we extract the signal from the noise. A lot of noise here but the signal's all around automation and robotic process automation. I'm Dave Vellante, he's Stu Miniman, my co-host. Guy Kirkwood's here he's the UiPath chief evangelist otherwise known as the chief injector of Kool-Aid. Welcome. (guests chuckling) And Craig LeClair, the Vice President at Forrester. Covers this market, wrote the seminal document on this space. Knows it inside out. Craig, great to see you again. >> Yeah, nice to see you again. It's great to be back at theCUBE. >> So let's start with the analyst perspective. Take us back to when you first discovered RPA, why you got excited about it, and what Forrester Research is all about in that space. >> Yeah, it's been a very a interesting ride. Most of these companies, at least that are the higher value ones in the category they've been around for a long time. They've been around for over a decade, and no one ever heard of them three years ago. So I had covered at Forrester, business process management and some of the business rules engines, and I've always been in process. I just got this sense that there was a way that companies could make progress and digital transformation and overcome the technical debt that they had. A lot of the progress has been tepid in digital transformation because it takes tremendous amount of time and tons of consultants to modernize that core system that really runs the company. So along comes this RPA technology that allows you to build human equivalence that patch up the inefficiencies without touching. I came in on American Airlines and the system that cut my ticket was designed in 1960. It's the same Sabre reservation system. That's the big obstacle that a lot of companies have been struggling to really take advantage of AI in general. A lot of the more moonshot and more sophisticated promises haven't been realized. RPA is a very practical form of automation that companies can get a handle on right now, and move the dial for digital transformation. >> So Guy we heard a vision set forth by Daniel this morning. Basically a chicken in every pot, I call it, a robot for every person. Now what Craig was just saying about essentially cutting the line on technical debt, do you have clear evidence of that in your customer base? Maybe you could give some examples. >> What we're really seeing is that as organizations have to deal with the stresses, what Leslie Wilcox professor at LSE describes as the stresses within organizations and particularly in environments where the demographics are changing. What we're seeing is that organizations have to automate. So the best example of that is in Japan where the Japanese population peaked in 2010. It's now falling as a whole, plus all the baby boomers, people of Craig's and my age are now retiring. So we're now in a position where they measure levels of dangerous overwork as being more that 106 hours a week. That isn't 106 hour a week in total, that's 106 hours a week in addition to the 60 hours a week the Japanese people normally work. And there is a word in Japanese, which is (speaking in foreign language), which means to work oneself to death. So there really is no choice. So what we're seeing happening in Japan will be replicated in Western Europe and certainly in the US over the next few years. So what's driving that is the rise of the ecosystems of technologies of which RPA and AI are part, and that's really what we're seeing within the market. >> Craig, sometimes these big waves particularly in infrastructure, you kind of saw it with virtualization and some other wonky techs, like data reduction. They could be a one-time step function, and not an ongoing business value creator. Where does RPA fit in there? How can organizations make sure that this is a continuous business value generator as opposed to a one time hit? >> Good question. >> Well, I like the concept of RPA as a platform that can lead to more intelligence and more integration with AI components. It allows companies to build an automation center or a center of excellence focused on automation. But the next thing they're going to do after building some simple robots that are doing repetitive tasks, is they're going to say "Oh well wouldn't it be better "if my employee could have a textual chat with a chatbot "that then was interacting with the digital worker "that I built with the bot." Or they're going to say "You know what? I really want to use that machine learning algorithm "for my underwriting process, but I can use these bots "to go out and collect all the data from the core systems "and elsewhere and from the web and feed the algorithms "so that I could make a better decision." So again it goes back to that backing off the moonshot approach that we've been talking about that AI has been taking because of the tremendous amount of money spent by the major players to lay out the promise of AI has really been a little dysfunctional in getting organizations' eye off the ball in terms of what could be done with slightly more intelligent automation. So RPA will be a flash in the pan unless it starts to embed these more learning-capable AI modules. But I think it has a very good chance of doing that particularly now with so much investment coming into the category right. >> Craig, it's really interesting. When I heard you describe that it reminds me of the home automation. The Cortanas and Alexas and consumer side where you're seeing this. You've got the consumer side where you can build skills yourself, you know teenagers people can do that. One of the challenges always on the business side is how do you get the momentum when you don't have the consumer side. How do those interact? >> It's the technical debt issue and it's just like the mobile peak in 2011. Consumers in their hands had much better mobility right away than businesses. It took businesses five, they're still not there in building a great mobile environment. So these Alexa in our kitchen snooping on our conversation and to some extent Netflix that observes our behavior. That's a light form of AI. There is a learning from that behavior that's updating an algorithm autonomously in Netflix to understand what you want to watch. There's no one with a spreadsheet back there right. So this has given us in a sense a false sense of progress with all of AI. The reality is business is just getting started. Business is nowhere with AI. RPA is an initial foray on that path. We're in Miami so I'll call it a gateway drug. >> In fact there's also an element that the Siris, the Cortanas, the Alexas, are very poor at understanding specific ontologies that are required for industry, and that's where the limitation is right now. We're working with an organization called Humly, they're focused on those ontologies for specific industries. So if the robot doesn't understand something, then you could say to the robot Okay sit that in the Wells account, if you're in a bank, and it understands that Wells in that case means Wells Fargo it doesn't mean a hole in the ground with water at the bottom or a town in Somerset in the UK, 'cause they're all wells. So it's getting that understanding correct. >> I wonder if you guys could comment on this. Stu and I were at Splunk earlier this week and they were talking up NLP and we were saying one of the problems is that NLP is sometimes not that great. And they made a comment that I thought was very interesting. They said frankly a lot of the stuff that we're ingesting is text and it's actually pretty good. I would imagine the same is true for RPA. Is that what you see? >> You were talking about that on stage. With regards to the text analytics. >> Yes. So RPA doesn't handle unstructured content the way that NLP does. So NLP can handle voice, it can handle text. For the bots to work in RPA today you have to have a layer of analytics that understands those documents, understands those emails and creates a nice clean file that the bots can then work with. But what's happening is the text analytics layer is slowly merging with the RPA bots platforms so it's going to be viewed as one solution. But it's more about categories of use cases that deal with forms and documents and emails rather than natural language, which is where it's at. >> So known business processes really is the starting point. >> Known business-- >> One example we've got live is an insurance company in South Africa called Hollard, and they've used a combination of Microsoft Cognitive Toolkit, plus IBM Watson and it's orchestrated doing NLP and orchestrated by UiPath. So that's dealing with utterly unstructured data. That's the 1.5 million emails that that organization gets in a year. They've managed to automate 98% of that, so it never sees a human. And their reduction in cost is 91% cost in reduction per transaction. And that's done by one of our implementation partners, a company called LarcAI down there. It's superb. >> Yeah, so text analytics is hard. Last several years we have that sentiment out of it, but if I understand it correctly Craig, you're saying if you apply it to a known process it actually could have outcomes that can save money. >> Yes, absolutely yes. >> As Guy was just saying. >> I think it's moving from that rules-based activity to more experience-based activity as more of these technologies become merged. >> Will the technology in your view advance to the point, because the known processes. okay, there's probably a lot of work to be done there, but today there's so many unknown processes. It's like this messy, unpredictable thing. Will machine intelligence combined with robotic process automation get to the point, and if so when, that we can actually be more flexible and adapt to some of these unknown processes or is that just decades off? >> No, no, I think we talk at Forrester about the concept of convergence. Meaning the convergence of the physical world and the digital world. So essentially digital's getting embedded in everything physical that we have right. Think of IoT applications and so forth. But essentially that data coming from those physical devices is unstructured data that the machine learning algorithms are going to make sense of, and make decisions about. So we're very close to seeing that in factory environments. We're seeing that in self-driving cars. The fleet managers that are now understanding where things are based on the signals coming from them. So there's a lot of opportunity that's right here on the horizon. >> Craig, a lot of the technologies you mentioned, we may have had a lot of the technical issues sorted out, but it's the people interactions some things like autonomous vehicles, there's government policies going to be one of the biggest inhibitors out there. When you look at the RPA space, what should workers how do they prepare for this? How do companies, make sure that they can embrace this and be better for it? >> That's a really tough and thoughtful question. The RPA category really attacks what we call the cubicle population. And there are we're estimating four million cubicles will be emptied out in five years by RPA technology specifically. That's how we built the market forecast 'cause each one of the digital workers replacing a cubicle worker will cost $11,000 or what. That's how we built up the market forecast. They're going to be automation deficits. It's not all going to be relocating people. We think that there's going to be a lot of disruption in the outsource community first. So companies are going to look at contractors. They're going to look at the BPO contract. Then they're going to look at their internal staff. Our numbers are pretty clear. We think they're going to be four million automation deficits in five years due to RPA technology specifically. Now there will be better jobs for those that are remaining. But I think it's a big change management issue. When you first talk about robots to employees you can tell them that their jobs are going to get better, they're going to be more human. They're going to have a much more exhilarating experience. And their response to you is, What they're thinking is, "Damn robot's going to take my job." That's what they're thinking. So you have to walk them up the mountain and really understand what their career path is and move them into this motion of adaptive and continual learning and what we call constructive ambition. Which is another whole subject. But there are employees that have a higher level of curiosity and are more willing to adapt to get on the other side of the digital divide. Yep. >> You mentioned the market. You guys did a market forecast. I've seen, read stats, a little over a billion today. I don't know if that's consistent with your numbers? >> Yeah that's about right. >> Is this a 10X market? When does it get to 10 billion? Is it five, seven, 10 years? >> So we go out five years and have it be close to three billion. I think the numbers I presented on stage were 3.2 billion in five years. Now that's just software licenses and it's not the services community that surround that. >> You'd probably triple it if you add in services. >> I think two to three times service license ratio. There's always an issue at this point in emerging markets. Some of the valuations that are there, that market three billion has to be a bit bigger than that in eight or nine years to justify those valuations. That's always the fascinating capital structure questions we create with these sorts of things. >> So you describe this sort of one for one replacement. I'm presuming there's other potential use cases, or maybe not, that you forecast. Is that right? >> Oh no for the cubicles? >> Yes, it's not just cubicle replacement in that three billion right? It's other uplifts. >> No there are use cases that help in factory automation, in supply chain, in guys carrying around clipboards in warehouses. There are a tremendous number of use cases, but the primary focus are back office workers that tend to be in cubicles and contact center employees who are always in cubicles. >> And then we'll see if the non-obvious ones emerge. >> I think ultimately what's going to happen is the number of people doing back office corporate functions, so that's both finance and accounting procurement, HR type roles and indeed the industry specific roles. So claims processing insurance will diminish over time. But I think what we're going to see is an increase in the number of people doing customer experience, because it's the customer intimacy that is really going to differentiate organizations going forward. >> The market's moving very fast. Reading your report, it's like you were saying yesterday's features are now table steaks. Everybody's watching everybody else. You heard Daniel today saying, "Hey our competitors are watching. "We're open they're going to steal from us so be it." The rising tide lifts all boats. What do you advise clients in terms of where they should start, how they should get started? Obviously pick some quick wins. But what do you tell people? >> I always same pretty much the same advice you give almost on any emerging technology. Start with a good solution provider that you trust. Focus on a proof of concept, POC and a pilot. Start small and grow incrementally, and walk people up the mountain as you do that. That's the solution. I also have this report I call The Rule of Fives, that there are certain tasks that are perfect for RPA and they should meet these three rules of five. A relatively small number of decisions, relatively small number of applications involved, and a relatively small number of clicks in the click stream. 500 clicks, five apps, five decisions. Look for those in high volume that have high transaction volume and you'll hit RPA goal. You'll be able to offset 2 1/2 to four FTE's for one bot. And if you follow those rules, follow the proof of concept, good solution partner everyone's winning. >> You have practical advice to get started and actually get to an outcome. Anything you'd add to that? >> In most organizations what they're now doing, is picking one, two, or three different technologies to actually play with to start. And that's a really good way. So we recommend that organizations pick three, four, five processes and do a hackathon and very quickly they work out which organizations they want to work with. It's not necessarily just the technology and in a lot of cases UiPath isn't the right answer. But that is a very good way for them to realize what they want to do and the speed with which they'll want to do it. >> Great, well guys thanks for coming on theCUBE, sharing your knowledge. >> Thank you. >> Pleasure. >> Appreciate your time. >> Thanks very much indeed. >> Alright keep it right there everybody. Stu and I will be back from UiPathForward Americas. This is theCUBE. Be right back. (upbeat music)

>> Narrator: Live from Orlando, Florida. It's theCUBE! Covering .conf18. Brought to you by Splunk. >> Welcome back to Orlando, everybody. Splunk .conf18. This is theCUBE, the leader in live tech coverage. I'm Dave Vellante with my co-host, Stu Miniman. Carnival Cruise Lines is back. We heard from them yesterday, we heard them on the main stage of .conf. CEO is up there with Doug Merritt. Sheldon White is here. He's an enterprise architect at Carnival Cruise Line And Alex Taberras, who's the director of threat intelligence at Carnival. Gents, welcome to theCUBE. >> Thank you. >> Doing a lot of talk on security today. They've lined us up, which is great. We love the conversation. So much to learn. Alex, I'll start with you. When you think about security and threat intelligence, what are the big changes that you've seen over the last, whatever, pick a time. Half a decade? Decade? Couple of years even. >> Alex: So, it's just the amount of threats that are coming in now and how fast they're coming in, right? We can't seem to be keeping up with everything that's happening in the environment, everything that's happening outside, trying to get into our environment and cause all that damage, right? So, that's why Splunk is awesome, right? I get to see everything come in, real time. I'm able to quickly pinpoint any action I need to take, send it to my team and have them immediate right away. >> So, Sheldon, yesterday we had ship and shore from Carnival and he was talking about really different problems. You know, the folks on the ship, they got 250 thousand people on the ocean at any one point in time collecting data, trying to make a better experience, keep them connected. Folks on the shore, obviously, websites and things like that. Where do you fit into that mix of ship and shore? >> Sheldon: Right, so there's an entire value stream that we map out as enterprise architects. And so, what we do there is analyze all the customer touch points. And then we aggregate all of that information into a pipeline that we then address our audiences with those critical KPIs. Operational and infrastructure, the entire stack. >> Dave: You guys obviously have very strong relationship with Splunk. We heard from your CEO, Arnold Donald, right? >> Alex: Correct. >> Interesting name, I haven't messed that up yet so. (laughing) And so, where did that relationship start? Did it start in SecOps? Did it start in IT operations management? >> Alex: So, it really started in Devops, right? And they started... They purchased Splunk, I think back in like 2007, 2008. And they started looking at it, right? And I think I was talking to one of our other architects and it was one gig is what we started at, right? Now, we're upwards of 600 gigs. Just for security. So, it started there and it just kind of morphed into this huge relationship where we're partnering and touching all aspects of our business with Splunk. You know, and the Cloud and everything else. >> So, we heard, I don't know if you guys saw the key notes today, but we saw some announcements building on yesterday's Splunk next announcement. We heard some business workflow and some industrial IOT. I would think both of those are relevant for you guys. Not industrial IOT, but your IOT. Do you see Splunk permeating further into the organization? I guess, the answer's yes. You kind of already said that. But I'm interested in what role you guys play in facilitating that ? Are you kind of champions, evangelist, experts, consultants? How does that work? How do you see that (mumbles)? >> Sheldon: So, we see ourselves as internal consultants. We have our internal customers that depend on our guidance and our end-to-end view of the business processes. So, and now as enter our Cloud journey, into the second year of our Cloud journey, just we're able to accelerate our time to value for our internal customers to gain even greater insights into what's happening ship and shore. >> Dave: I wonder how, if you can talk about, how enterprise architecture has changed over the last decade even. You know, it used to be you were trying to harden the two tier or three tier architecture and harden top, don't touch it, it works. And then, of course, we all know, it created a lot of different stove pipes and a lot of data was locked into those stove pipes. That's changed, obviously. Cloud, now the Edge. Maybe because you guys were always sort of a distributed data company, you approached it differently. But I wondered if you could gives us (mumbles)? >> Sheldon: No, that's an interesting question. Because the evolution is not so much enterprise architect as it is eco system architect, right? So, now you have these massively distributed systems. So, you're really managing an eco system of internal and third party. And then all the relevant touch points, right? Like Alex mentioned, all that perimeters constantly shifting now. So, yeah, our focus is always aligning with the on-time business process and our internal customers. >> Yeah, wonder if we could dig into the Cloud a little. Alex, can we start with you? How does Cloud fit into your world of security? >> Alex: So, for me, the Cloud, as far as Splunk goes, it allows me to expand and contract as needed, right? So before, we used to have our on premise hardware, very finite RAM memory, I mean, disk space everything. So now, with the Cloud, I'm able to expand my environment as I move across all my North American brands, European brands, to be able to gather all that data, look at it and take action on it, right? >> Stu: And Sheldon, you're using AWS. We see they're, every software provider lives in AWS. It's often in the marketplace. We been seeing a lot this week that there's a deeper partnership. There's actually a lot of integration. Maybe give us your viewpoint on what you've seen on how Splunk and AWS work together to meet your requirements. >> Yeah. So, that's an interesting evolution as well of that partnership, right? So, you're starting to see things like the S3 API integration. So that you're removing storage from the critical path. And now that opens up different scale of possibilities, right? And internal opportunities. But yes, as you can see, leveraging the machine learning toolkit. I saw that one coming. It's going to be interesting to see how that keeps evolving, right? And also, like I was speaking to Alex, about the natural language capability. So, that also is well brought into the dimension of how our senior leadership with interact with these operational platforms. >> Yeah, I got to thank you. You're going to have your customer's natural language has to get into some of their rooms. It's definitely future. >> Sheldon: Oh, it's going to be apart of that value chain. Yeah, for sure. >> Dave: How does the S3 API integration affect you guys? Obviously, you got to put Syntax in an object store, which is going to scale. What does that mean for you guys? >> Sheldon: So, using the Splunk developer Cloud, we could develop all sorts of solutions to manage it intelligently how our storage, right? In near real time. So, we can completely automate and that end-to-end just integration with Splunk, how it ingest, how long that data stays relevant and how we offload it into things like Glacier. >> Dave: In the enablement, there is the S3 API. So, you're taking advantage of all the AWS automation tooling. >> Sheldon: Correct. >> Is that right? >> Sheldon: Correct. >> Alright. >> Sheldon: That's another example of that side integration. Not only with the S3 API. Lex, for the natural language. Obviously, TensorFlow and the machine learning toolkit. So, I think you're going to see that type of... those type of capabilities expanding as Splunk evolves. Next year, I'm sure they're going to have a ton of more, you know, announcements around how this evolution continues, right? >> Dave: So, you know, I was interested in the TensorFlow and Spark integration. And Stu and I were talking in an earlier segment. It's great, developers love that. We saw a lot of demos today that was like, looks so simple. Anybody could do it. Even I might be able to do it. But as practitioners of Splunk, is it really going to be that easy? Are business users actually going to be able to pick this stuff up and what are they going to have to do in order to take advantage of Splunk? Some training involved? >> Sheldon: Right, right. >> What's the learning curve going to be like? >> Sheldon: That's a great question, because there's a dual focus to this, right? First, is offloading from the developer. All that heavy lifting of creating this user interface and the dashboards, per say. Now, its all API driven. So, as you saw, maybe in the keynote this morning, that within the demo, was an API driven dashboard came together in several minutes. But one is offloading that and the second part is just enabling the business user with other capabilities, like natural language process. And they don't necessarily need to be on that screen. They can get acception reporting through emails and voice commands. So, training is also part of it, obviously. So, it's a multifaceted approach to leveraging these new capabilities. >> Dave: Are you guys responsible for the physical infrastructure of your ships? I mean, is that part of your purview? Okay. So, really there's is an industrial IOT component big time for you guys. >> Absolutely. >> Alex: And there's a huge push now for Maritime security, right? We saw what happened with Maersk and NotPetya virus, right? So, how it took them out of operation for about three weeks. So, this IOT is very, I think, awesome, right? I was speaking to some of the Splunk guys yesterday about it. How we could leverage that on our ships to gather that data, right, from our SCADA systems. And from our bridge and engine control systems to be able to view any kind of threat. Any kind of vulnerability that we might be seeing in the environment. How we can control that and how we can predict anything from happening, right? So, that's going to be very key to us. >> Dave: So, Splunk is going to take that data right off the machines. Which Stu and I were talking, that to us is a huge advantage. So many IT companies are coming and saying, "Hey! We're going to put a box at the edge". That's nice, but what about the data? So, Splunk's starting with the data, but it's the standards of that data. They're really driven by engineers and operations technology folks. Is Splunk sort of standard agnostic? Can they be able to ingest that data? What has to be done for you guys to take advantage of that? >> So, we'll have to ingest that data. And we'll have to, you know, look at it and see what we're seeing, right? This is all brand new to us as well. >> Dave: Right. >> Right. This whole Maritime thing has risen up in the past year, year and a half. So, we're going to have to look at the data and then kind of figure out what we want to see. Normalize it, you know, we'll probably get some PS services or something to assist us. Some experts. And then we just go from there, right? We build our dashboards and our reports. >> Dave: And predictive maintenance is a huge use case for you guys. >> Alex: Absolutely. >> I mean, to me, it's as important as the airlines. >> Alex: Absolutely, yes. >> So, I would think, anytime you... Well, first of all, real time during a journey. But anytime that journey is completed, you must bring in the inspectors and, I'm sure, very time consuming and precise. >> So, I know that some of our senior leadership, especially in the Maritime space, has now looking towards Splunk to do some of that predictive maintenance. To make sure that we have that right nuts and bolts, right? Per say, on the ship. To be able to fix any issue that might arise at sea while we're on there. >> Dave: Now, it's expect that the drive is going to be for human augmentation and of drive efficiency. >> Alex: Correct. >> You're not just going to trust the machines right out of the box. No way, right? >> Alex: No. But it's empowering those engineers, right? As we see with some of the dashboards that they're coming up with at the keynote. Empowering some of the those engineers that are in the engine room. That are in bridge. To be able to see those issues come up, right? And be able to track. >> Dave: Plus, I would imagine this is the kind of thing like an airline pilot. You're double checking, you're triple checking. So, you might catch misses earlier on in the cycle. >> Alex: Yeah. I could see it having huge impact. >> Stu: Yeah. Sheldon, I was just thinking through the other next announcement. I wonder if Splunk business flows sounds like something that might fit into your data pipeline? Get insights, understand satisfaction. Seems like it might be a fit. Is that of interest to you? >> Sheldon: Yeah, it sure is. Because we definitely want to, since we've evolved with kind of fragmented systems. We still have main frames, we still have whole call center environment that we need to ensure that it's parts of the end-to-end guest experience. So, for sure, we're getting into the whole early adopter program on the process flow. >> Yeah. Can you give us little insight? What kind of back and forth do you have with Splunk? What sort of things are you asking that would help make your jobs easier going forward? >> So, going forward, I know they're addressing a lot so the ingestion and data standardization. And now, with the decoupling of the storage, which is awesome, makes our lives a lot easier. But the evolution of the natural language and the integration with AWS natively is huge for us, as well as our Cloud program matures. And we start enabling Serverless architectures, for example. So, yeah. No, it's a very important part. >> Stu: Yeah. I mean, Serverless is actually something we're pretty interested. What are some of the early places that you're finding value there? >> Well, many people don't know this, but Carnival's also one of the largest travel agencies in the United States. So, we have the whole... Well, it's the whole global air travel platform that we're currently migrating to a Serverless architecture, integrates with Sabre. So, we're looking at things like open trace for that. And I know that our friends at Splunk are enabling capabilities for that type of management. >> Dave: And what's the business impact of Serverless there? You're just better utilization of resources? Faster time to value? Maybe you could describe. >> Yeah. Near real time processing. Scaling up and scaling down seasonally. Our key aspects of that. Removing the constraints of CPU and storage and-- >> Dave: Alex, has it changed the security paradigm at all? Serverless? How does it change it? >> Alex: So, it does. It let's me not have to worry so much about on premise stuff, right? As I did before. So, that helps a lot, right? And being able to scale up and down quickly as much data as we're ingesting is very key for us. >> Dave: You guys are heavy into Cloud, it's obvious. I wonder if you could share with us how you decide, kind of, what goes? If you're not all in on Cloud, right? It's not 100 percent Cloud? >> Sheldon: No, we could never be all in. >> No. >> Dave: And we've put forth that notion for years. We call it "true private cloud". That what you want to do is bring the Cloud experience to your data, wherever that data lives. There's certain data and workloads that you're not just going to put into the Cloud. >> Sheldon: That's correct. >> So, you would confirm that. That's the case. Like, you just said it. >> Correct. >> Dave: You're never going to put some of these workloads on Cloud. >> Well, we have floating data centers. So, we'll always be in a hybrid model. But there is a decision framework around how we create those application, migration pipelines. And the complexity and interdependencies between these platforms, some are easier to move than others. So, yeah. No, we're quite aware of-- >> Dave: And so, my follow up question is are you trying to bring that Cloud experience to those... to the floating data centers, wherever possible? And how is the industry doing? If you had a grade them in terms of their success. I mean, you certainly hear this from the big tech suppliers. "Oh, yes! We've got private Cloud" and "It's just like the public Cloud". And we know it's not and it doesn't have to be. >> Sheldon: Right. >> But if it can substantially mimic that public Cloud experience, it's a win for you guys. So, how is the industry doing in your view? >> So, I think it's a crawl, walk, run type of thing. Obviously, you have these floating cities and satellite bandwidth is a precious resource that we have to use wisely, right? So, we definitely are Edge computing strategy is evolving rapidly. What do we act upon at the Edge? What do we send to the Cloud? When do we send it? There also some business drivers behind this. For example, one of our early Cloud forays was in replicating a guest activity aboard the ship. So, we know if somebody buys a margarita off the coast of Australia, we know it five seconds later. And then, we could act upon that data. Casino or whatever data it may be in near real time. >> So, a lot of data stays at the floating data center, obviously. >> Correct. >> Much of it comes back to the Cloud. When it comes back to the Cloud is a decision, 'cause of the expense of the bandwidth. What do you do? You part the ship at the data center and put a big fire hose in there? (laughing) >> Alex: I wish it was that easy. >> You got a bunch of disc drives that you just take and load up? That's got to be a challenge. >> So, there business requirements, right? So, we have to figure out what application is more important, right? So, usually like our ship property management system, right. Where we have all our guests data, as far as their names, birth dates, all that stuff. That takes priority over a lot of other things, right. So, we have to use, like Sheldon said, that bandwidth wisely. 'Cause we don't really own a lot of the ports that we go into. So, we can't, just like you say, plug in a cable and move on, right? We still rely heavily on our satellites. So, bandwidth is our number on constraint and we have to, you know, we share it with our revenue generating guests as well. So, obviously, they take priority and a lot of factors go into that. >> Dave: And data's not shrinking. So, I'll give you guys the last word, if you could just sort of summarize, in your view, some of the big challenges that you're going to try to apply Splunk towards solving in the next near to mid term. >> Alex: Well, I'm more security focused. So, for me, its just making sure that I can get that data as fast as possible. I know that I saw yesterday at the keynote, the mobile app. That for me is going to be like one of the things I'm going to go like, research right away, right? 'Cause for me, its' getting that alert right away when something's going on, so that I can mitigate quickly, move fast and stop those threats from hitting our environment. >> Dave: Sheldon? >> Yes, I think the challenges are, like you mentioned earlier, about the stove pipes and how organizations evolve. Now, with this massive influx of data, that just making sense of it from a people, technology and processes standpoint. So that we could manage the chaos, so to speak, right? And make sure that we have an orderly end-to-end view of all the activity on the ships. >> Dave: Well, thank you guys. Stu and I are like kids in a candy shop, 'cause we getting to talk to so many customers this week. So, we really appreciate your time and your insights and the inspiration for your peers. So, thank you. >> Oh, thank you very much. >> Alex: Thank you for having us. >> Dave: You're welcome. Alright, keep it right there everybody. Stu and I will be back right after this short break. You're watching theCUBE Live from .conf18. Be right back. (techno music)

>> Announcer: Live from Las Vegas, it's theCUBE covering ServiceNow Knowledge 2018. Brought to you by ServiceNow. >> Welcome back to Las Vegas, everybody. This is theCUBE, the leader in live tech coverage. We go out to the events, and we extract the signal from the noise. We're here at Knowledge18, ServiceNow's big customer event. 18,000 ServiceNow practitioners and partners and constituents here. As I say, this is day three. This is our sixth year at Knowledge. Jeff Frick and I are co-hosting. When we started in 2013 early on, we saw this ecosystem grow, and one of the first CIOs we had on from the ServiceNow customer base was Link Alander, who is here. He's the Vice Chancellor of College Services at Lone Star College. Link, always a pleasure. Great to see you again. Thanks for coming back on. >> It's always great to get back and talk with you, see what's happening in the industry, and follow you. But, once again, great conference. >> It really is, I mean, wow. Last year was huge. The growth keeps coming. We said that Dan Rogers, the CMO, K18, 18,000. How ironic. >> Yeah, wow, let's see, your first was six years ago, right? >> Dave: Yep, it was 2013. So my first would have been New Orleans, which had been I think 2012, 2011. >> Right, right, the year before we met 'em. >> Three to four thousand in this conference. Actually, that might be the high count. >> Yeah, I mean, it's quite amazing. And the ecosystem has exploded. What's your take on how, not only ServiceNow and the ecosystem have grown, but how it's affected your business? >> Let's start with the, yeah, yeah, yeah. Let's start with the ecosystem part because, really, you've got so many more partners out there now. You've got so many more integration points. What was really exciting as we saw this morning with Pat, and some of the enhancements they're doing on the DevOps side, but also what we're going to see with the ability to integrate our cloud linkage, which is really the challenge for everybody as a practitioner today. How do you bring all these cloud services? I've got quite a few of them in my environment. How do I actually integrate those in with my ServiceNow, with my ERP, with all of the other instances? So, seeing what they're doing in that space is great. From the business standpoint, when we came onto ServiceNow, we came on like everybody else, a journey for IT service management. Can we improve our services? Can we help our customers out? In our case, that'd be our faculty and staff. What we didn't realize was the opportunity that came to us with the platform. And one of the first things we did when we brought the platform back to us was we built an app for students. We built a way to help students out with their student financial aid. Now I've got, I think we're roughly at about nine of our areas that are using Enterprise Service Management. I just came back from giving a presentation about legal, and what we've done in the legal space to where that's helped the organization to move forward faster. So that's really cool in what it does, but it also elevates the position of IT in the organization. It really does bring us forward. >> Yeah so, let's talk a little about Lone Star College, 'cause I love your model, you know, and we can both relate. Kids in college, and, you know, the cost of education, the ROI, which I think is a big focus of what you guys provide for your students, so how's that going? How's the model working? >> Well the model's working great. And you know, you hear the pressures out there, 'cause one of the first thing is, how do you help a student complete. So, we're really very focused on student completion, but then now, you've got another focus that, well, it's been there, but it's really getting stronger, on gainful employment. So not only that, how do you get a student in college, how do they complete on time, but then how do they come out and have a livable wage, an earnable wage? And so I'll give a plug on that always because that's what we're focused on. Whether you're just coming to us to transfer to another institution or whether you're coming in the workforce. And we have a very strong workforce development, and one of the things I got out of this conference that I've been working on for quite awhile was for us to become a ServiceNow train, to get that integrated into our curriculum. And I was really excited. We've talked to them before about this, and it's been a discussion, but now what we're looking at is a program that they put in France where they have a six week program that if people are going out of there, coming in, six weeks later, job retrained, 100% placement. A year later, they have 98% retention, and those 2% just went to another company. So I can't think of a better opportunity for us from our standpoints in our workforce development. And I'm really excited we're going to be starting to move that forward now. >> It's interesting to hear John Donahoe on Tuesday talk about their measurement of customer success. And we were asking him on theCUBE, well, your customers measure success in a lot of different ways, so how do you take that input? Your measurement of success is student success, as you just have indicated. >> Absolutely, absolutely. You know, my focus has always been is IT is just a support operation. We're not the mission of the college. And that's important. Because as long as we have that mindset, we realize that it's us helping the faculty to less stress on their life, or the staff, then we've improved their experience, which will improve the student experience. The same goes for the administrative systems. We want administrative systems to have a user interface that's intuitive to today's student. It wasn't designed by a person that was intuitive to today's student. So we have that challenge, and that's what I liked about the change this year and the user interface in ServiceNow and where they're going with UI and UX, and how much of an enhancement that makes for our customers. But it's also, that's the changes that are happening in industry right now. Coach K was at the CIO Decisions, and he was talking about he's headed to go through all this process, and 50 forward years of difference, and he's recruiting 18-year-olds, and he's sending emojis to them, his recruits. But like, yeah, because you have to relate to it. So, we started a process, and this is where coming to a conference like this helps me a lot, because it's like, yeah, I went down the right path. But my team came to me, and I've got a phenomenal team. They came to me and said, you know what, we really need to look at UI, UX, and design thinking. And I'm like, okay. Now let's discuss what we really want to do with this. One group was wanting design thinking to think about analytics. What does the customer need? How do they want to see this data come to them? And how can they make data-informed decisions? Well, we have then rolled that same design thinking into, how do we roll out the fluid technologies in our ERP? How do we become more of a user interface that today's student wants, to what we're trying to do next in mobile? >> That's a really interesting take, because we talk often about millennials entering the workforce, right? And consumerization of IT and expectations. But they're usually a pretty small and growing percentage of the workforce at a particular company. For you, it's like 90% of your customer base, right? And they're on the bleeding edge. They're coming in there 18, 17 years old. So you got to be way out front on this customer experience. So have you really taken that opportunity to redesign that UI, UX, and interface to the applications? That must be a giant priority. >> We've done a lot of incremental items, but really it's been a huge priority for us for the last, we have two really cool items coming down the path. One is the UI UX experience. How do we transform the student experience? The next is a process that our academic success side, the student services side have gone down, with guided pathways. Okay, you and I went to college. What did we do? We saw an advisor every single time we registered. Then we up to the thing, and we filled in a bubble sheet, right? >> Right, right. >> Well right now, the students are registering on a mobile phone while they're sitting down at a Starbucks. They're not seeing an advisor. We want them to see an advisor. So we push them those directions, but this guided pathway says, you know what, I want to do this degree. Then we just line out, here's the classes you're going to take, and whether we use program enrollment, whatever methodology, we can help guide them in their pathway to success and completion, which is a big difference. And that's what needs to happen today. >> Right, well it's interesting, I always like to talk about banking, right? 'Cause banking, you used to go see the banker, go into the teller, and, you know, deposit your check and get your cash. And now most people's experience with their bank is via electronic, whether it's online, on their phone, or their app. You have kind of the dichotomy, 'cause they still have their interaction with the teachers. So there's still a very people element, but I would imagine more and more and more of that administrative execution, as you just described, is now moving to the mobile platform. That's the way they interact with the administration of the school. >> Well, that's their expectation. So, that's what we have to deliver, and it's a challenge because we have resources, we have limitations in resources or capabilities, but it's really keeping that focus going to where you look at it. So as we're doing this UI UX right now, one of our major goals is going to be to bring students in the engagement as we go through the design process, and get their feedback. Not computer science people, not IT people. We want the normal student that's going to go register for a class. And since what you have is such a large transient population, you know, two years, they're in, they're done. 100,000 per semester. 160,000 unique each year. You've got to create that rich experience, but the engagement, the bonding to the institution. And I like the bank for an example because not too long ago I switched banks because I didn't like their app. >> Dave: Absolutely. >> And it's easy to do, it's real easy to do. >> Airlines, you appreciate the good apps. >> Link: Yeah, yeah, absolutely. >> How does ServiceNow contribute to that user experience, that, your customer experience? >> Well right now from the student side, they don't see much of ServiceNow. They can submit requests, and we can handle their incidents, and those types of items. They have certain things. We have the student financial aid. But it really is about the Enterprise Service Management philosophy. I think if you go back to one of theCUBEs, maybe two or three years ago, I said, "Who would have ever thought they would come to IT to talk about service delivery?" Okay? Now, everybody at Enterprise is like, okay, how do you do this? How do you not let things fall through the crack? So that the legal app was a great one, because that was a challenge that our general council or our COO had when he came in. Everything was falling through the crack. So they worked through their workflows. They built a process. And then they built, we built an app for them in ServiceNow that handles everything. Now when I'm in a cabinet meeting, I get to hear about how legal's doing so great. I'm like, what about me? I think we're still doing a good job. (laughing) >> Well, Link, I'm curious too on, kind of the big theme has always been at this show kind of low code, no code developing, right? Enable people that aren't native coders to build apps, to build workflows. How has that evolved over time within your organization? >> Well, we still want to make sure when we're putting out code. What it's enabled for us is, of course, our developers, it makes it easier to get to time to completion of a project. But we still want to make sure that whatever's built is production ready. You know, so we're not opening up the tool case to everybody. (laughing) But, sad to say, I actually still go in, and I'll build my dashboards, and I'll build my interaction, and I use my performance analytics, which does enable people. And we're seeing that in some of our heavier Enterprise Service Management side, but as far as letting them dive into the no code environment, I still have to put some protection on us. And like any organization, we always have to think of IT security. That's the other piece of it. What are they putting out there? What could be a violation of privacy? How do we handle that? >> Jeff: Right. >> So, we stay completely engaged, but the speed to deliver is what the change is. Our legal app was a three month development project. Three months to go from a, they had a separate system. And to go through the process, redesign it, build it, and put it in production. Three months. >> Three months? >> How many people, roughly? How many people did it take to get there? >> Well, we use a development partner that used three, and then I had two at the time on my own. I still have only three individuals that actually handle our, that are primary to ServiceNow in my organization, as large as our installation base is. >> Really? And that includes the permeation of ServiceNow into the rest of the organization, or? >> Link: Yes. >> Dave: Really? >> 'Cause I added, and before that, if it has been last year, it was one and a half. >> Dave: Wow. >> That's what I had then. And technically, I probably have only two and a half because one person has another job, which is running our call center. >> So what are you using now? You got obviously ITSM, what else is in there? >> ITSM, ITBM, we got a great presentation we gave earlier on project portfolio management, and what we've done with that. And where we're going next. Business operations. We're actually launching this summer, if everything goes right. This is more of an internal, us doing it, but what I've been doing is I've been taking our contract management piece, utilization, incidents request change, and project. Now I'm going to roll it in and then do analytics against it to come back with what is the total cost per service per month per individual. On every license contract I hold. >> It's funny, the contract management software licensing management piece is a huge untapped area that we hear over and over and over again. >> So, two years ago we talked a lot about security. I think ServiceNow just at that point had announced its intentions to get into that business. What do you make of their whole SecOps modules, and is it something you've looked at? State of security, any comments? >> Well this is one of those situations I think we're just a little bit too far ahead of them again. 'Cause we actually had built a modular ourself that handled what we needed. In my environment, I've got an ISO, but I also have the partners that support us. My SOC is operated by a third party. So they feed in the alerts. We ingest the alerts into the security module, and then we take action from there. So basically, they were about, a little bit behind us. And we had just looked at the model saying we need a better way to manage that event. >> So you got that covered. Yeah, I want to ask you, you know, a couple years ago we, when the big data meme was hitting, we were, of course, asking you all these data questions. Now the big theme is AI, and in some regards it's like, same wine, new bottle. But it's different. What's your thoughts on machine intelligence? Obviously ServiceNow talking about it a lot. How applicable is it to you? >> Okay, so. (laughing) >> You know why, that's good. I had to ask. >> Augmented intelligence. Let's just not make it artificial, okay? 'Cause I, when Fred had that conversation during the fireside and he said, you know, a computer takes 10,000 images to know what a cat is. And of course, the computer's a mundane object that can look at 10,000 images to determine that's a cat. You showed me the other ones earlier today, I about rolled over laughing. >> It's allowed on the blueberry, check it out. >> You know, augmented intelligence is going to be a driver. There's no question about it. What we saw on the interface about it abled to, as the machine learning goes through the process, it's picking up the information, and it's helping the agent to get to the resolution faster, that's great. Knowledge bases that are integrated in with that. Can you think about how much quicker it would be for somebody like myself who's going to go to a chatbot, and I'm going to run through a chatbot in automated intelligence and do that type of work. So that's going to make a significant difference. One of the areas we think they will be dramatic, for especially this generation, the millennials coming into the school, will be to put that augmented intelligence in, in that process. Because, trying to explain to a student, you know, yeah, you go to the registrar's office to take care of this, and you go to the bursar's office to take, they have no clue what those mean. Well, if we can take it to their language, but then also add in augmented intelligence to guide them through those navigation points. So augmented intelligence over the next years, it's taking that big data now, it's actually put into use, all that machine learning, and making something happen out of it. >> You know, digital is one of those things where I actually think the customers led the vendor community. So often in the IT business, and the technology business in general, a lot of vendor hype, whether it's hyper converged or software to fund, they kind of jam it down our throats, and then sort of get it adopted. I almost feel like, you've been doing digital for awhile now because your student force has sent you in that direction. And I feel like the vendor community is now catching up, but is that a right perception? I mean that, the digital is certainly real, and then you guys are leaning in in a big way. >> I think between the three of us we could probably come up with all the different hype words that have been used, and probably fill this room with every one of those words, right? But the reality is, as practitioners, you're looking at what is your customer base, what do you need to be able to deal with. So, we've been into digital transformation, absolutely. Is it a good definition? Was cloud a good definition? I mean, what am I really? It's either I'm going to use software as a surface, a platform as a sur, I have a gigantic private cloud. Okay, that's great. We're talking about high availability and scalability. But when you put all those in, we've been in a digital transformation everywhere. Your banks did it, that's why you have a bank app. Airplanes did it because, you know, what was that ticketing system they used to use? >> Dave: Yeah, Sabre. >> Sabre, that's what it was, oh yeah. It's probably still out there somewhere. But the reality is, is that, if you're not transforming digitally, you're going to get left behind. And even some big IT companies, and I'm sure we got a list of those bit IT companies also, that have fallen off the face of the earth, or are struggling to stay on because they didn't go through that digital transformation. They tried to do the same thing the same way and move forward. You can't do that. >> You know, you just reminded me. I just got a, hey, it's been awhile since I goofed on Nick Carr, but you remember, as a CIO, Does IT Matter? Right, in the early 2000s, that book. I mean, IT matters more than ever, right? I mean, Nick Carr obviously very accomplished, but missed it by a mile. >> Well, it's funny 'cause then IT was a support organization. Now that IT is an integrated piece in the way that everything just happens, right? It's not keeping the lights on and support so much anymore. >> I can't remember who brought that up in the keynote. Talking about the fact that, basically, we permeate the organization, okay? 'Cause there's not a function that they're doing that doesn't have some type of IT. And the question is are you sewing it together correctly. Because in the end, what are they going to want? Well, you want a seamless student experience. You want a seamless employee experience. Nobody's perfect, everything needs improvement. I'll always say that. But then at the same time is, you want that data to be all tied together so you can take advantage of big data. You can take advantage of machine learning. And then you can come back and report on it. You know, what we've done, so I guess three years ago is when I took over. I was put in charge of our analytics team. And our focus was unlocking the data so that people could have access and make decisions that are informed. You know, it's not data driven. We need to see the data, look at it, and come forward from there. So things like what ServiceNow did in performance analytics. Our general council highlighted the performance analytics as soon as we, we missed it, as he said. We put it in the first app, we didn't do it. We needed to add it. So we added it in. And he's like, wow, what I always thought was one thing. But now that I'm seeing the data, and I'm seeing the patterns, it's totally different. Because we have assumptions just 'cause we think we're busy. Performance analytics is letting him see exactly what's happening in his organization. >> Let me ask you a question. If somebody on your staff, let's say somebody that you mentored, came up to you and said, "Listen, Link, I really want to be a CIO. I mean, it's my aspiration. What advice would you give me?" >> Well, it's kind of hard when you ask this one, because I've mentored and then partnered, I wouldn't even call it mentored anymore, a great friend of mine, and he's now a CIO at Spellman in Georgia, yeah. In fact I was just chatting with him earlier because I saw something, I was like, hey, you need to check this out. It'll solve your problem. You know, it's a simple key fact. If you want to be in IT, you've got to be agile. You really have to be agile. You can't be rigid. You can't close those doors and keep your focus, and you have to constantly learn. If you don't just constantly learn, then you fall off. And that's something, when we talk about digital transformation and these companies that haven't made the transformation, that aren't here anymore, they stopped learning. They thought they had it. It's the companies that have actually continued to learn, or the CIOs or people coming up the ranks that look at it. And they look at things differently. It really is. The digital transformation is about keeping the CIO transformed, and every one of the staff. Had a discussion not too long ago with one CIO about how does he energize his staff. He's trying to do a transformation, but his staff is entrenched in the old way we did things. And, you know, sometimes you just have to shake things and get 'em excited about this piece of it. And a lot of times, if you're especially in a college, I have the luck of bringing a student in. What was your experience with that application? What did you think about it? They think it's the greatest thing they've ever created. But when you get it in front of a student, it can be something totally different. So, the biggest one right there, you got to have agility, you got to constantly learn, and you really, you know I might have a laser focus about things, I have a very agile planning model I use, but at the same time is I try to keep the door open to any possibilities. >> Well, Link, you're a great leader, and a friend of theCUBE. Can't thank you enough for making some time out of your busy schedule to come back on. Great to see you again. >> Jeff: Good seeing ya. >> It was great seeing you again, as always. As always. >> Alright, keep it right here, everybody. We'll be back with our next guest. We're live from Las Vegas, ServiceNow Knowledge18. You're watching theCUBE. (upbeat music)

>> Narrator: Live from Las Vegas, it's the Cube. Covering Interconnect 2017. Brought to you by IBM. >> OK, welcome back everyone. We're here live in Las Vegas. I'm wearing the Blockchain Revolution hat right here. Of course, I'm John Furrier with the Cube, and my co host Dave Vellante, we're excited to have celebrity author, thought leader, futurist and fill in the blank on the title Don Tapscott, who's the author of the Blockchain Revolution. Legend in the industry, thought leader, you and your son a compelling new book, but you've been on the fringe of all the game changing technologies going back with social media, we've been following your work, it's been great. Now we're at the front range of Blockchain, OK? Now it's becoming pretty clear to some of the innovators like IBM and others that it's not about Bitcoin alone, it's about the Blockchain Revolution, the Blockchain itself. Welcome to the Cube and what's going on? What is Blockchain? (laughing) >> Well, it's great to hear, be here. The one thing you didn't mention is I play keyboards in a rock band. So. >> The most interesting man on the Cube right now. >> We used to do a concert every year whether our public demanded it or not, but no, we're a charity event. We've raised a few million dollars for good causes. Anyway. I think, along with my son Alex, we figured this out a couple of years ago that this is the second era of the internet. For the first few decades, we've had the internet of information. And if I send you some information, PDF, PowerPoint, E-mail, even with the website, I keep the original. I'm sending you a copy. That doesn't work so great for assets. Like money, stocks, bonds. Identities, votes. Music, art. Loyalty points. If I send you $100, it's really important I don't still have the money, and I can't send it to you. So this has been called the double spend problem by cryptographers for a long time. And Blockchain solves this problem. We've had the internet of information, now we're getting the internet of value. Where anything of value, from money to votes to music can be exchanged peer to peer. And where we can transact, keep records, and trust each other without powerful intermediaries. Now that doesn't mean intermediaries are going to go away, but they're going to have to embrace this technology or they will be toast. >> I mean, this is clear, you see the distributive computing paradigm, I mean, we're all network guys and by training, you can follow this revolution. But now when you start thinking about trust and value and you talk about digitizing the world. So, if you go to digital transformation, that's the thesis, that we're in this digital transformation, you're digitizing money, you're digitizing transactions. Explain more on the value piece because now if everything's going digital, there now needs to be a new model around how to handle the transactions at scale, and with security problems, hackers. >> Yeah, OK. Well that gets to a couple of really good points. First of all, what is digital? You know, you think, "Well, I tap my card at Starbucks "and bits go through all these networks and different "companies with different computer systems and three "days later a settlement occurs." But that's actually a bunch of messages. It's not money. Money, cash, is a bare instrument. If you have cash in your pocket, you are the bearer of that instrument, which means that you own it. And what we're talking about is something very different here, of creating digital cash. That's stored on a global ledger. So, rather than there being a three day settlement period, there's no settlement period because you're just making a change in the database. And this is a very revolutionary concept. And as for security, I mean, think about, I don't know, you're right, it's not about Bitcoin. But if we took the case of the Bitcoin Blockchain. If I wanted to hack that, I'd have to hack that 10 minute block that has all those transactions, which is linked to the previous block and the previous block, I'd have to hack the entire history of commerce on that Blockchain, not just on one computer, but simultaneously across millions of computers, all using the highest level of cryptography, while the most powerful computing resource in the world, the minors are watching me to make sure I don't mess around. Now, I won't say it's impossible, just like I suppose it's not impossible to take a Chicken McNugget and turn it back into a chicken, but it's really hard to do. A lot, and so these systems are way more secure than our current systems. >> Yes, it fundamentally impossible, and you don't have a third party verification system that's also an exposure area, it's globally distributed, right, so let's go back to what is Blockchain? What's the Blockchain 101? >> Well, Blockchain is a distributed ledger where anything of value, from money to votes, and music can be stored, transacted, managed, in a secure and confidential way, and where trust between parties is established, not by a big intermediary, but by cryptography, by collaboration, and some clever code. >> So, talk about the premise of the book. Sort of why you wrote it and what the fundamental premise is. >> Well, three years ago, three years and five weeks ago, at a father son ski trip, over a large piece of beef, and a very nice bottle of wine, Alex and I started thinking about what all this means. And we decided to work together. And he wrote a very cogent paper about how this new ecosystem could govern itself and my publisher got wind of it and said, "That sounds like a book." So we launched a dozen projects, couple of years ago, on how this technology changes, not just financial services, how it changes the corporation and the deep structure and architecture of the firm. How it changes every industry. How it changes government. Democracy, there's an opportunity to end the crisis of legitimacy of our democratic institutions. But what it means for culture and so on. And then we wrote the book. And it was published in May 10th last year, it's been a big best seller, it's the best selling book on Blockchain. It's actually the only real book on Blockchain. In some countries it was ridiculous. For a while, in Canada, it was competing with Harry Potter and an adult coloring book, as the best selling book in the country. >> That's the state of our culture right there. (laughing) >> What is an adult coloring book, anyway? (laughing) >> That's the million dollar question right there. >> There are a lot of geeky books on Blockchain, but this-- >> Well, actually, there aren't, there are books on crypto currency, on Bitcoin. >> Yeah, absolutely. >> And but the only real book on Blockchain is Blockchain Revolution. >> So, but you're really focusing on the business impact, organizational impact, even societal impact, so explain the premise. >> Well, where do we start? Let's start with the firm. Corporation, foundation of capitalism, based on double entry accounting. That's what enabled capitalism. Well, with Blockchain, you get a third entry onto the ledger, so you have triple entry accounting, so you don't need, say, audits. Every year, because there's an annual audit. That's just the beginning. Because the reason that we have firms, according to the Nobel Prize winning economist Ronald Coase, is that the transaction costs in an open market, like the cost of search, finding all the right people and information, the cost of contracting, for every little activity we're contract prohibitive. The cost of coordination, getting all these people to work together, didn't know each other. The cost of establishing trust, all of that in an open market is prohibitive, so we bring that inside the boundaries of a firm. Well, Blockchain will devastate those transaction costs. So we're talking about a fundamental change in how we orchestrate capability, in our economy, to innovate, to create goods and services. And for that matter, to create public value. So this is not some interesting little technology. This is the second era of the internet. I think it's going to be bigger than the first era was. >> So the internet, I mean, the value creation side. So let's take that additional asset side. So assume everything's digitized, got IOTs out there, industrial IOT, wearables, smart cars, smart cities, smart everything, but now you've got to create value as a firm, so let's roll that forward, we have the now somewhat frictionless transactional environment in an open market, how do firms create value out of those digital assets? >> Well, they'll create value in some ways that are radically different than today. So let me give you an example. Who are the big digital value disrupters today? Well, you can start with the so called sharing economy. You know, Uber, Airbnb, Lyft. >> The Cube. >> Sorry? >> The Cube. (laughing) We're disrupting the world right now. >> Well, you're actually not a sharing economy company in the sense that I think. >> In the traditional sense. >> Actually, I don't think they are, either. I mean, the reason that Uber's successful is precisely because it doesn't share. It's a service aggregator. So, why do you need a $70,000,000,000 corporation to do what Uber does? It could be done by a distributed ledger with some smart contracts and autonomous agents. Everything that the corporation does could be done by software. Airbnb. You know, how about, we'll call it B Airbnb, Blockchain Airbnb. So, you go onto your mobile device, and you're looking for a place, and you're going to be in Vegas, and all the hotels are booked because of IBM, and then you find a place, you book it, and then you show up, you turn your key that starts a smart contract payment to the owner of the apartment or the room, and you check out, you turn your key, it's closed. The software has a payment system built into it. So the renter of the room gets paid. You enter a five star on your device. And that's immutable, and it's a five star rating on a Blockchain. Everything that Airbnb as a company does could actually be done by this software. So, Bob Dylan, there's something going on here and you don't know what it is, I mean, people are all locked in an old paradigm about what's disruption. Get ready for this. >> So what's the impact, I mean, not the impact, what's the inhibitor, so, obviously, any new technology you see all the naysayers, so obviously this is a great vision, what's going to be the impediment? >> Well, they are all kinds of impediments and inhibitors, and there are all kinds of ways that this can get messed up. A big one is that we're overcoming now is that people think, well this is about Bitcoin, well, it's not. The real pony here is the underlying technology of Blockchain, and that's the biggest innovation in computer science in a generation, I think. But also, you know, I wrote this 1992 in Paradigm Shift, I said, when you get a new paradigm, it's a new mental model, and these things cause dislocation and disruption and uncertainty, and they're nearly always received with coolness. I mean, you guys know what it's like to be received with coolness as you introduce a new idea as do I, going back to the '70s. But, and vested interests fight against change. And leaders of old paradigms have great difficulties embracing the new. So you think about a company like Western Union that can charge 10% for remittances that take four to seven days. Well, with new tools, they don't take four to seven days, they take minutes, and they charge, based on Blockchain, they charge a point and a half. So, it's the old-- >> The inhibitors, they got to get their solutions out there so that they could go after and eat some of the lunch of the older guys. >> Well, they have to eat their own lunch, that's-- >> Western Union could be disrupted by a new entrant, right? So you got a new entrant coming in, they got to cannibalize themselves-- >> And at that point, it tips, there are enough disruptive entrants, right? >> So, it's all those inhibitors to change and for the IT people that are at this event, this is an exciting opportunity, but you do need to learn a new kind of knowledge base to function in this distributed ledger environment. You need to learn about hyper ledger, for starters, because that's the real enterprise platform. >> All right, so folks watching, like my son who helps us out sometimes as well, you have a father son relationship, which is super inspirational. He's, say he wants to get involved in Blockchain. He wants to jump right in, he's kind of a hacker type, what does he do? How does he get involved? Obviously read the book, Blockchain Revolution, get the big picture. Is there other things you'd advise? >> Well, buying the book in massive volume is always a good first step, no. Seriously. Well, one thing I always say to people is personal use is a precondition for any kind of comprehension. So just go get yourself a wallet for some crypto currency and download it and you'll learn all about public key encryption and so on. But I think in a company there are a number of things that managers need to do. Need to start doing pilots, sandboxes, developing and understanding use cases, and our new Blockchain research institute is going to be a big help in that. But also, for an IT person, is your son an IT guy or he's more an entrepreneur? >> No, he's 21 years old. >> He's 21. >> He doesn't know anything about IT. >> He's a computer science guy. >> He's born in the cloud. IT, can't spell IT. >> Well. (laughing) >> IT's for old guys like us. (laughing) >> We're telling him what he should do, he should be here telling us what we should do. >> John: That's why we hired him, he's a little guinea pig. >> Digital natives, you know, we're digital immigrants, we had to learn the language. But, for the IT people, it's all about not just experimenting, but about moving towards operational systems and about architecture. Because our architectures are based on traditional computing environments and this is something from Paradigm Shift, you remember, I interviewed Max Hopper who invented the Sabre Reservation System for American Airlines, and he says, "The big problem, Don, "is that if I don't have a target architecture, "every time I spend a dollar, I'm building up my legacy "and making it worse by investing in IT." And so that's where I came up with this formulation, yeah, God may have created the world in six days, but he didn't have an installed base to start with. (laughing) So, what we need to do is to start to think about architectures that embrace Blockchain. And this is an historic new opportunity for anybody who cares about IT. >> Is the disruptive enabler for Blockchain the fact that we're now fully connected as a society, or is it something else that we don't see? What's your view on, what's the real wealth creating disruptive enabler? >> Well, you can sense that the rate of change is a lot faster for the second generation than the first. 1993, '94, when I wrote the Digital Economy, it was dial-up. Ebay. >> 14 four. >> Amazon didn't exist. >> Actually 98 I think it was. >> When I wrote that book. Google was five years away. Facebook was 10 years away, so but now we've got wireless, we've got IP everywhere. We've got mobility. We've got the cloud, we've got all the preconditions for this new innovation to happen a lot faster. And that's why, I mean, a year ago, there wasn't a lot of talk at this event about Blockchain. Today it's the big buzz. >> I wonder if you could talk about other applications. You talk about hyper ledger, it's a great place for a starting point, especially for IBM, but one of the areas I'm excited about is security. You know, like the MIT Enigma Project, and there are others, you know, security is such a problem. Every year we look back, John and I, we say, do we feel more secure? And no, we feel less secure. What about the application of Blockchain in security use cases? >> Well, Blockchains are more secure in a number of ways. One is they're harder to hack than traditional servers. And people say, "No, our company, we're bulletproof." Right, tell that to JP Morgan and Home Depot-- >> Target fidelity-- >> The Democratic National Convention, but also tell it to the CIA. I mean, if the CIA can be hacked, then any of these traditional server technologies can be hacked. So that, alone, is a huge case to move towards hyper ledger and these other type platforms. But you said, "I feel less secure these days." And that's a really interesting statement. Because I think that, in many ways, the security of the person has been undermined by the internet of information, as well. That, first of all, we don't own the data that we create. That's a crazy situation. We all create this massive new asset. It's a new asset class. Probably more important than industrial plant, in the industrial age. Maybe more important than land in the agrarian age. We create it, but these data frackers, you know, like-- >> Facebook. >> --Facebook. Own it and that's a big problem. The virtual you is not owned by you. So we need to get our identity back and to manage it responsibly, and people who say to me, "Well, Don, privacy's dead, get over it." This is foolishness. Privacy is the foundation of freedom. And all these things are happening in our world today that undermine our basic security. Our identity's being taken away from us. Or the fact that things happen in this digital world that we don't know, what are the underlying algorithms? If I take this, and I drop it, that's called gravity. I know what's going to happen. But if I go onto Facebook and I do certain things, I have no idea what are the algorithms that's determining what's happening with that and how the data is used. So-- >> Hello fake news. That's how fake news came about. >> Well, yeah, totally. >> People don't know what to trust and it's like, wait a minute. >> Exactly, and well, this has led, also, to a total fragmentation of public discourse, where we've all ended up in these little self reinforcing echo chambers where the purpose of information is not to inform us, it's to, I don't know, give us comfort. >> Divide people. >> Yeah. So, I'm not saying that Blockchains can fix everything, in fact, they can't fix anything, it's humans that fix things. But the key point that Alex and I make in the book is that once again the technology genie has escaped from the bottle, and it was summoned by this person that we don't even know who they are. At a very uncertain time in history. But it's giving us another kick at the can. To sort of fix these problems. To make a world where trust is embedded in everything and where things are trustworthy, and where people are trustworthy, and maybe we can rewrite the whole economic power grid and the old order of things for the better. And that's really important. >> My final question for you, and this is kind of a thought provoking question. Every major revolution, you see, big one, you've seen a counter culture, '60s, computer revolution, PC revolution, are we on the edge now of a new counter culture developing? Because the things you're kind of teasing out is this new generation, is it the '60s version of tech hippies or is there going to be a, because you're getting at radical reconfiguration, radical value creation, this is good evolution, and fast. So you can almost see the young generation, like my son, you're talking about, teaching us how to do it, that's a counter culture. Do you see that happening? >> Well, first of all, I see this change in culture profoundly, so artists can get fairly compensated for the work they create. Imogen Heap puts her song on a Blockchain platform, and the song's inside a smart contract that specifies the IP rights. And you want to listen to it, maybe it's free, you want to put it in your movie, it costs more. The way she describes it is the song acts as a business, and it has a bank account. So, we can profoundly change many aspects of culture, bringing more justice to our culture. But I'm not sure there'll be a counter culture in the traditional sense because you've got people embracing Blockchain that want to fix a bunch of problems, but also people who want to make large organizations more competitive and more effective. The smart banks are embracing this because they know they can cut their transaction costs in half, probably. And they know that if they don't do it, somebody else will. >> And IBM's embracing it because they write software and they service all those firms with technology. >> Well, IBM, the case of IBM is really interesting, and I'll end on that one. That if you think about it, and I go back, I mean, there were only main frames when I started, and IBM was the leader of the bunch, right? And then all the bunch died, but IBM somehow reinvented itself and it got into mini computers and then we saw the rise of the PC and IBM invented the IBM PC, and then we got into the internet, and once again, all these companies died off but somehow IBM was able to find within itself the leadership to transform itself. And I'm, I won't say I'm shocked, but I have to tell you, I'm really delighted that IBM has figured this one out and is driving hard to be a leader of this next generation of the internet. >> And they're driving open source, too, to give IBM a plug, Don Tapscott, great to have you on the Cube. Good luck with your speech today. A legend in the industry, great thinker, futurist. Amazing work. Blockchain is the next revolution, it will impact, it's an opportunity for entrepreneurs, this is a disruptive enabler, you can literally take down incumbent businesses. Changing the nature of the firm, radical economical change. Thanks so much for sharing the insight. >> Nice hat, too. >> I got a nice hat. I got a free bowl of soup with this hat, as they say-- >> Don: It's all about the Blockchain, baby. >> It's all about the Blockchain. >> It's all about the Blockchain. >> More Blockchain Cube analysis as we disrupt you with more coverage, I'm John Furrier, Dave Velante, stay with us. (musical sting)