(radio calls) >> Announcer: From around the globe, its theCUBE covering Space & Cybersecurity Symposium 2020, hosted by Cal poly. Hello, welcome back to theCUBE virtual coverage with Cal Poly for the Space and Cybersecurity Symposium, a day four and the wrap up session, keynote session with the Lieutenant Governor of California, Eleni Kounalakis. She's here to deliver her keynote speech on the topic of California's role in supporting America's Cybersecurity future. Eleni, take it away. >> Thank you, John, for the introduction. I am Lieutenant Governor Eleni Kounalakis. It is an honor to be part of Cal Poly Space and Cybersecurity Symposium. As I speak kind of Pierre with the governor's office of business and economic development is available on the chat, too ready to answer any questions you might have. California and indeed the world are facing significant challenges right now. Every day we are faced with the ongoing COVID-19 pandemic and the economic downturn that is ensued. We have flattened the curve in California and are moving in the right direction but it is clear that we're not out of the woods yet. It is also impossible right now to escape the reality of climate change from the fire sparked by exceptionally rare, dry lightening events to extreme heat waves threatening public health and putting a strain on our electricity grid. We see that climate change is here now. And of course we've been recently confronted with a series of brutal examples of institutionalized racism that have created an awakening among people of all walks of life and compelled us into the streets to march and protest. In the context of all this, we cannot forget that we continue to be faced with other less visible but still very serious challenges. Cybersecurity threats are one of these. We have seen cities, companies and individuals paralyzed by attacks costing time and money and creating an atmosphere of uncertainty and insecurity. Our state agencies, local governments, police departments, utilities, news outlets and private companies from all industries are target. The threats around cybersecurity are serious but not unlike all the challenges we face in California. We have the tools and fortitude to address them. That is why this symposium is so important. Thank you, Cal Poly and all the participants for being here and for the important contributions you bring to this conference. I'd like to also say a few words about California's role in America's future in space. California has been at the forefront of the aerospace industry for more than a century through all the major innovations in aerospace from wooden aircraft, to World War II Bombers, to rockets and Mars rovers. California has played a pivotal role. Today, California is the number one state in total defense spending, defense contract spending and total number of personnel. It is estimated the Aerospace and Defense Industry, provides $168 billion in economic impact to our state. And America's best trained and most experienced aerospace and technology workforce lives here in California. The fact that the aerospace and defense sector, has had a strong history in California is no accident. California has always had strong innovation ecosystem and robust infrastructure that puts many sectors in a position to thrive. Of course, a big part of that infrastructure is a skilled workforce. And at the foundation of a skilled workforce is education. California has the strongest system of public higher education in the world. We're home to 10 university of California campuses, 23 California State university campuses and 116 California Community Colleges. All told nearly 3 million students are enrolled in public higher education. We also have world renowned private universities including the California Institute of Technology and Stanford University numbers one and three in the country for aerospace engineering. California also has four national laboratories and several NASA facilities. California possesses a strong spirit of innovation, risk taking and entrepreneurship. Half of all venture capital funding in the United States, goes to companies here in California. Lastly, but certainly no less critical to our success, California is a diverse state. 27% of all Californians are foreign born, 27% more than one in four of our population of 40 million people are immigrants from another country, Europe central and South America, India, Asia, everywhere. Our rich cultural diversity is our strength and helps drive our economy. As I look to the future of industries like cybersecurity and the growing commercial space industry, I know our state will need to work with those industries to make sure we continue to train our workforce for the demands of an evolving industry. The office of the lieutenant governor has a unique perspective on higher education and workforce development. I'm on the UC Board of Regents, the CSU Board of Trustees. And as of about two weeks ago, the Community Colleges Board of Governors. The office of the lieutenant governor is now the only office that is a member of every governing board, overseeing our public higher education system. Earlier in the symposium, we heard a rich discussion with Undersecretary Stewart Knox from the California Labor and Workforce Development Agency about what the state is doing to meet the needs of space and cybersecurity industries. As he mentioned, there are over 37,000 job vacancies in cybersecurity in our state. We need to address that gap. To do so, I see an important role for public private partnerships. We need input from industry and curriculum development. Some companies like Lockheed Martin, have very productive partnerships with universities and community colleges that train students with skills they need to enter aerospace and cyber industries. That type of collaboration will be key. We also need help from the industry to make sure students know that fields like cybersecurity even exist. People's early career interests are so often shaped by the jobs that members of their family have or what they see in popular culture. With such a young and evolving field like cybersecurity, many students are unaware of the job opportunities. I know for my visits to university campuses that students are hungry for STEM career paths where they see opportunities for good paying jobs. When I spoke with students at UC Merced, many of them were first generation college students who went through community college system before enrolling in a UC and they gravitated to STEM majors. With so many job opportunities available to STEM students, cybersecurity ought to be one that they are aware of and consider. Since this symposium is being hosted by Cal Poly, I wanted to highlight the tremendous work they're doing as leaders in the space and cybersecurity industry. Cal Poly California Cybersecurity Institute, does incredible work bringing together academia, industry and government training the next generation of cyber experts and researching emerging cybersecurity issues. As we heard from the President of Cal Poly, Jeff Armstrong the university is in the perfect location to contribute to a thriving space industry. It's close to Vandenberg Air Force Base and UC Santa Barbara and could be home to the future permanent headquarters of US Space Command. The state is also committed to supporting this space industry in the Central Coast. In July, the State of California, Cal poly US-based force and the others signed a memorandum of understanding to develop a commercial space port at Vandenberg Air Force Base and to develop a master plan to grow the commercial space industry in the region. Governor Newsom has made a commitment to lift up all regions of the state. And this strategy will position the Central Coast to be a global leader in the future of the space industry. I'd like to leave you with a few final thoughts, with everything we're facing. Fires, climate change, pandemic. It is easy to feel overwhelmed but I remain optimistic because I know that the people of the State of California are resilient, persistent, and determined to address our challenges and show a path toward a better future for ourselves and our families. The growth of the space industry and the economic development potential of projects like the Spaceport at Vandenberg Air Force Base, our great example of what we can look forward to. The potential for the commercial space industry to become a $3 trillion industry by mid century, as many experts predict is another. There are so many opportunities, new companies are going to emerge doing things we never could have dreamed of today. As Lieutenant General John Thompson said in the first session, the next few years of space and cyber innovation are not going to be a pony ride at the state fair, they're going to be a rodeo. We should all saddle up. Thank you. >> Okay, thank you very much, Eleni. I really appreciate it. Thank you for your participation and all your support to you and your staff. You guys doing a lot of work, a lot going on in California but cybersecurity and space as it comes together, California's playing a pivotal role in leading the world and the community. Thank you very much for your time. >> Okay, this session is going to continue with Bill Britton. Who's the vice president of technology and CIO at Cal Poly but more importantly, he's the director of the cyber institute located at Cal Poly. It's a global organization looking at the intersection of space and cybersecurity. Bill, let's wrap this up. Eleni had a great talk, talking about the future of cybersecurity in America and its future. The role California is playing, Cal Poly is right in the Central Coast. You're in the epicenter of it. We've had a great lineup here. Thanks for coming on. Let's put a capstone on this event. >> Thank you, John. But most importantly, thanks for being a great partner helping us get this to move forward and really changing the dynamic of this conversation. What an amazing time we're at, we had quite an unusual group but it's really kind of the focus and we've moved a lot of space around ourselves. And we've gone from Lieutenant General Thompson and the discussion of the opposition and space force and what things are going on in the future, the importance of cyber in space. And then we went on and moved on to the operations. And we had a private company who builds, we had the DOD, Department Of Defense and their context and NASA and theirs. And then we talked about public private partnerships from President Armstrong, Mr. Bhangu Mahad from the DOD and Mr. Steve Jacques from the National Security Space Association. It's been an amazing conference for one thing, I've heard repeatedly over and over and over, the reference to digital, the reference to cloud, the reference to the need for cybersecurity to be involved and really how important that is to start earlier than just at the employment level. To really go down into the system, the K through 12 and start there. And what an amazing time to be able to start there because we're returning to space in a larger capacity and it's now all around us. And the lieutenant governor really highlighted for us that California is intimately involved and we have to find a way to get our students involved at that same level. >> I want to ask you about this inflection point that was a big theme of this conference and symposium. It was throughout the interviews and throughout the conversations, both on the chat and also kind of on Twitter as well in the social web. Is that this new generation, it wasn't just space and government DOD, all the normal stuff you see, you saw JPL, the Hewlett Foundation, the Defense Innovation Unit, Amazon Web Services, NASA. Then you saw entrepreneurs come in, who were doing some stuff. And so you had this confluence of community. Of course, Cal Poly had participated in space. You guys does some great job, but it's not just the physical face-to-face show up, gets to hear some academic papers. This was a virtual event. We had over 300 organizations attend, different organizations around the world. Being a virtual event you had more range to get more people. This isn't digital. This symposium isn't about Central California anymore. It's global. >> No, it really has gone. >> What really happened to that? >> It's really kind of interesting because at first all of this was word of mouth for this symposium to take place. And it just started growing and growing and the more that we talk to organizations for support, the more we found how interconnected they were on an international scale. So much so that we've decided to take our cyber competition next year and take it globally as well. So if in fact as Major General Shaw said, this is about a multinational support force. Maybe it's time our students started interacting on that level to start with and not have to grow into it as they get older, but do it now and around space and around cybersecurity and around that digital environment and really kind of reduce the digital dividing space. >> Yeah, General Thompson mentioned this, 80 countries with programs. This is like the Olympics for space and we want to have these competitions. So I got great vision and I love that vision, but I know you have the number... Not number, the scores and from the competition this year that happened earlier in the week. Could you share the results of that challenge? >> Yeah, absolutely. We had 83 teams participate this year in the California Cyber Innovation Challenge. And again, it was based around a spacecraft scenario where a spacecraft, a commercial spacecraft was hacked and returned to earth. And the students had to do the forensics on the payload. And then they had to do downstream network analysis, using things like Wireshark and autopsy and other systems. It was a really tough competition. The students had to work hard and we had middle school and high school students participate. We had an intermediate league, new schools who had never done it before or even some who didn't even have STEM programs but were just signing up to really get involved in the experience. And we had our ultimate division which was those who had competed in several times before. And the winner of that competition was North Hollywood. They've been the winning team for four years in a row. Now it's a phenomenal program, they have their hats off to them for competing and winning again. Now what's really cool is not only did they have to show their technical prowess in the game but they also have to then brief and out-brief what they've learned to a panel of judges. And these are not pushovers. These are experts in the field of cybersecurity in space. We even had a couple of goons participating from DefCon and the teams present their findings. So not only are we talking technical, we're talking about presentation skills. The ability to speak and understand. And let me tell you, after reading all of their texts to each other over the weekend adds a whole new language they're using to interact with each other. It's amazing. And they are so more advanced and ready to understand space problems and virtual problems than we are. We have to challenge them even more. >> Well, it sounds like North Hollywood got the franchise. It's likethe Patriots, the Lakers, they've got a dynasty developing down there in North Hollywood. >> Well, what happens when there's a dynasty you have to look for other talent. So next year we're going global and we're going to have multiple states involved in the challenge and we're going to go international. So if North Hollywood pulls it off again next year, it's going to be because they've met the best in the world than defeated >> Okay, the gauntlet has been thrown down, got to take down North Hollywood from winning again next year. We'll be following that. Bill, great to get those results on the cyber challenge we'll keep track and we'll put a plug for it on our site. So we got to get some press on that. My question to you is now as we're going digital, other theme was that they want to hire digital natives into the space force. Okay, the DOD is looking at new skills. This was a big theme throughout the conference not just the commercial partnerships with government which I believe they had kind of put more research and personally, that's my personal opinion. They should be putting in way more research into academic and these environments to get more creative. But the skill sets was a big theme. What's your thoughts on how you saw some of the highlight moments there around skill sets? >> John, it's really interesting 'cause what we've noticed is in the past, everybody thinks skill sets for the engineering students. And it's way beyond that. It's all the students, it's all of them understanding what we call cyber cognizance. Understanding how cybersecurity works whatever career field they choose to be in. Space, there is no facet of supporting space that doesn't need that cyber cognizance. If you're in the back room doing the operations, you're doing the billing, you're doing the contracting. Those are still avenues by which cybersecurity attacks can be successful and disrupt your space mission. The fact that it's international, the connectivities, all of those things means that everyone in that system digitally has to be aware of what's going on around them. That's a whole new thought process. It's a whole new way of addressing a problem and dealing with space. And again it's virtual to everyone. >> That's awesome. Bill, great to have you on. Thank you for including theCUBE virtual, our CUBE event software platform that we're rolling out. We've been using it for the event and thank you for your partnership in this co-creation opening up your community, your symposium to the world, and we're so glad to be part of it. I want to thank you and Dustin and the team and the President of Cal Poly for including us. Thank you very much. >> Thank you, John. It's been an amazing partnership. We look forward to it in the future. >> Okay, that's it. That concludes the Space and Cybersecurity Symposium 2020. I'm John Furrier with theCUBE, your host with Cal Poly, who put on an amazing virtual presentation, brought all the guests together. And again, shout out to Bill Britton and Dustin DeBrum who did a great job as well as the President of Cal poly who endorsed and let them do it all. Great event. See you soon. (flash light sound)

>>from around the globe. It's the Cube covering >>space and cybersecurity. Symposium 2020 hosted by Cal Poly >>Over On Welcome to this Special virtual conference. The Space and Cybersecurity Symposium 2020 put on by Cal Poly with support from the Cube. I'm John for your host and master of ceremonies. Got a great topic today in this session. Really? The intersection of space and cybersecurity. This topic and this conversation is the cybersecurity workforce development through public and private partnerships. And we've got a great lineup. We have Jeff Armstrong's the president of California Polytechnic State University, also known as Cal Poly Jeffrey. Thanks for jumping on and Bang. Go ahead. The second director of C four s R Division. And he's joining us from the office of the Under Secretary of Defense for the acquisition Sustainment Department of Defense, D O D. And, of course, Steve Jake's executive director, founder, National Security Space Association and managing partner at Bello's. Gentlemen, thank you for joining me for this session. We got an hour conversation. Thanks for coming on. >>Thank you. >>So we got a virtual event here. We've got an hour, have a great conversation and love for you guys do? In opening statement on how you see the development through public and private partnerships around cybersecurity in space, Jeff will start with you. >>Well, thanks very much, John. It's great to be on with all of you. Uh, on behalf Cal Poly Welcome, everyone. Educating the workforce of tomorrow is our mission to Cal Poly. Whether that means traditional undergraduates, master students are increasingly mid career professionals looking toe up, skill or re skill. Our signature pedagogy is learn by doing, which means that our graduates arrive at employers ready Day one with practical skills and experience. We have long thought of ourselves is lucky to be on California's beautiful central Coast. But in recent years, as we have developed closer relationships with Vandenberg Air Force Base, hopefully the future permanent headquarters of the United States Space Command with Vandenberg and other regional partners, we have discovered that our location is even more advantages than we thought. We're just 50 miles away from Vandenberg, a little closer than u C. Santa Barbara, and the base represents the southern border of what we have come to think of as the central coast region. Cal Poly and Vandenberg Air force base have partner to support regional economic development to encourage the development of a commercial spaceport toe advocate for the space Command headquarters coming to Vandenberg and other ventures. These partnerships have been possible because because both parties stand to benefit Vandenberg by securing new streams of revenue, workforce and local supply chain and Cal Poly by helping to grow local jobs for graduates, internship opportunities for students, and research and entrepreneurship opportunities for faculty and staff. Crucially, what's good for Vandenberg Air Force Base and for Cal Poly is also good for the Central Coast and the US, creating new head of household jobs, infrastructure and opportunity. Our goal is that these new jobs bring more diversity and sustainability for the region. This regional economic development has taken on a life of its own, spawning a new nonprofit called Reach, which coordinates development efforts from Vandenberg Air Force Base in the South to camp to Camp Roberts in the North. Another factor that is facilitated our relationship with Vandenberg Air Force Base is that we have some of the same friends. For example, Northrop Grumman has has long been an important defense contractor, an important partner to Cal poly funding scholarships and facilities that have allowed us to stay current with technology in it to attract highly qualified students for whom Cal Poly's costs would otherwise be prohibitive. For almost 20 years north of grimness funded scholarships for Cal Poly students this year, their funding 64 scholarships, some directly in our College of Engineering and most through our Cal Poly Scholars program, Cal Poly Scholars, a support both incoming freshman is transfer students. These air especially important because it allows us to provide additional support and opportunities to a group of students who are mostly first generation, low income and underrepresented and who otherwise might not choose to attend Cal Poly. They also allow us to recruit from partner high schools with large populations of underrepresented minority students, including the Fortune High School in Elk Grove, which we developed a deep and lasting connection. We know that the best work is done by balanced teams that include multiple and diverse perspectives. These scholarships help us achieve that goal, and I'm sure you know Northrop Grumman was recently awarded a very large contract to modernized the U. S. I. C B M Armory with some of the work being done at Vandenberg Air Force Base, thus supporting the local economy and protecting protecting our efforts in space requires partnerships in the digital realm. How Polly is partnered with many private companies, such as AWS. Our partnerships with Amazon Web services has enabled us to train our students with next generation cloud engineering skills, in part through our jointly created digital transformation hub. Another partnership example is among Cal Poly's California Cybersecurity Institute, College of Engineering and the California National Guard. This partnership is focused on preparing a cyber ready workforce by providing faculty and students with a hands on research and learning environment, side by side with military, law enforcement professionals and cyber experts. We also have a long standing partnership with PG and E, most recently focused on workforce development and redevelopment. Many of our graduates do indeed go on to careers in aerospace and defense industry as a rough approximation. More than 4500 Cal Poly graduates list aerospace and defense as their employment sector on linked in, and it's not just our engineers and computer sciences. When I was speaking to our fellow Panelists not too long ago, >>are >>speaking to bang, we learned that Rachel sins, one of our liberal arts arts majors, is working in his office. So shout out to you, Rachel. And then finally, of course, some of our graduates sword extraordinary heights such as Commander Victor Glover, who will be heading to the International space station later this year as I close. All of which is to say that we're deeply committed the workforce, development and redevelopment that we understand the value of public private partnerships and that were eager to find new ways in which to benefit everyone from this further cooperation. So we're committed to the region, the state in the nation and our past efforts in space, cybersecurity and links to our partners at as I indicated, aerospace industry and governmental partners provides a unique position for us to move forward in the interface of space and cybersecurity. Thank you so much, John. >>President, I'm sure thank you very much for the comments and congratulations to Cal Poly for being on the forefront of innovation and really taking a unique progressive. You and wanna tip your hat to you guys over there. Thank you very much for those comments. Appreciate it. Bahng. Department of Defense. Exciting you gotta defend the nation spaces Global. Your opening statement. >>Yes, sir. Thanks, John. Appreciate that day. Thank you, everybody. I'm honored to be this panel along with President Armstrong, Cal Poly in my long longtime friend and colleague Steve Jakes of the National Security Space Association, to discuss a very important topic of cybersecurity workforce development, as President Armstrong alluded to, I'll tell you both of these organizations, Cal Poly and the N S. A have done and continue to do an exceptional job at finding talent, recruiting them in training current and future leaders and technical professionals that we vitally need for our nation's growing space programs. A swell Asare collective National security Earlier today, during Session three high, along with my colleague Chris Hansen discussed space, cyber Security and how the space domain is changing the landscape of future conflicts. I discussed the rapid emergence of commercial space with the proliferations of hundreds, if not thousands, of satellites providing a variety of services, including communications allowing for global Internet connectivity. S one example within the O. D. We continue to look at how we can leverage this opportunity. I'll tell you one of the enabling technologies eyes the use of small satellites, which are inherently cheaper and perhaps more flexible than the traditional bigger systems that we have historically used unemployed for the U. D. Certainly not lost on Me is the fact that Cal Poly Pioneer Cube SATs 2020 some years ago, and they set the standard for the use of these systems today. So they saw the valiant benefit gained way ahead of everybody else, it seems, and Cal Poly's focus on training and education is commendable. I especially impressed by the efforts of another of Steve's I colleague, current CEO Mr Bill Britain, with his high energy push to attract the next generation of innovators. Uh, earlier this year, I had planned on participating in this year's Cyber Innovation Challenge. In June works Cal Poly host California Mill and high school students and challenge them with situations to test their cyber knowledge. I tell you, I wish I had that kind of opportunity when I was a kid. Unfortunately, the pandemic change the plan. Why I truly look forward. Thio feature events such as these Thio participating. Now I want to recognize my good friend Steve Jakes, whom I've known for perhaps too long of a time here over two decades or so, who was in acknowledge space expert and personally, I truly applaud him for having the foresight of years back to form the National Security Space Association to help the entire space enterprise navigate through not only technology but Polly policy issues and challenges and paved the way for operational izing space. Space is our newest horrifying domain. That's not a secret anymore. Uh, and while it is a unique area, it shares a lot of common traits with the other domains such as land, air and sea, obviously all of strategically important to the defense of the United States. In conflict they will need to be. They will all be contested and therefore they all need to be defended. One domain alone will not win future conflicts in a joint operation. We must succeed. All to defending space is critical as critical is defending our other operational domains. Funny space is no longer the sanctuary available only to the government. Increasingly, as I discussed in the previous session, commercial space is taking the lead a lot of different areas, including R and D, A so called new space, so cyber security threat is even more demanding and even more challenging. Three US considers and federal access to and freedom to operate in space vital to advancing security, economic prosperity, prosperity and scientific knowledge of the country. That's making cyberspace an inseparable component. America's financial, social government and political life. We stood up US Space force ah, year ago or so as the newest military service is like the other services. Its mission is to organize, train and equip space forces in order to protect us and allied interest in space and to provide space capabilities to the joint force. Imagine combining that US space force with the U. S. Cyber Command to unify the direction of space and cyberspace operation strengthened U D capabilities and integrate and bolster d o d cyber experience. Now, of course, to enable all of this requires had trained and professional cadre of cyber security experts, combining a good mix of policy as well as high technical skill set much like we're seeing in stem, we need to attract more people to this growing field. Now the D. O. D. Is recognized the importance of the cybersecurity workforce, and we have implemented policies to encourage his growth Back in 2013 the deputy secretary of defense signed the D. O d cyberspace workforce strategy to create a comprehensive, well equipped cyber security team to respond to national security concerns. Now this strategy also created a program that encourages collaboration between the D. O. D and private sector employees. We call this the Cyber Information Technology Exchange program or site up. It's an exchange programs, which is very interesting, in which a private sector employees can naturally work for the D. O. D. In a cyber security position that spans across multiple mission critical areas are important to the d. O. D. A key responsibility of cybersecurity community is military leaders on the related threats and cyber security actions we need to have to defeat these threats. We talk about rapid that position, agile business processes and practices to speed up innovation. Likewise, cybersecurity must keep up with this challenge to cyber security. Needs to be right there with the challenges and changes, and this requires exceptional personnel. We need to attract talent investing the people now to grow a robust cybersecurity, workforce, streets, future. I look forward to the panel discussion, John. Thank you. >>Thank you so much bomb for those comments and you know, new challenges and new opportunities and new possibilities and free freedom Operating space. Critical. Thank you for those comments. Looking forward. Toa chatting further. Steve Jakes, executive director of N. S. S. A Europe opening statement. >>Thank you, John. And echoing bangs thanks to Cal Poly for pulling these this important event together and frankly, for allowing the National Security Space Association be a part of it. Likewise, we on behalf the association delighted and honored Thio be on this panel with President Armstrong along with my friend and colleague Bonneau Glue Mahad Something for you all to know about Bomb. He spent the 1st 20 years of his career in the Air Force doing space programs. He then went into industry for several years and then came back into government to serve. Very few people do that. So bang on behalf of the space community, we thank you for your long life long devotion to service to our nation. We really appreciate that and I also echo a bang shot out to that guy Bill Britain, who has been a long time co conspirator of ours for a long time and you're doing great work there in the cyber program at Cal Poly Bill, keep it up. But professor arms trying to keep a close eye on him. Uh, I would like to offer a little extra context to the great comments made by by President Armstrong and bahng. Uh, in our view, the timing of this conference really could not be any better. Um, we all recently reflected again on that tragic 9 11 surprise attack on our homeland. And it's an appropriate time, we think, to take pause while the percentage of you in the audience here weren't even born or babies then For the most of us, it still feels like yesterday. And moreover, a tragedy like 9 11 has taught us a lot to include to be more vigilant, always keep our collective eyes and ears open to include those quote eyes and ears from space, making sure nothing like this ever happens again. So this conference is a key aspect. Protecting our nation requires we work in a cybersecurity environment at all times. But, you know, the fascinating thing about space systems is we can't see him. No, sir, We see Space launches man there's nothing more invigorating than that. But after launch, they become invisible. So what are they really doing up there? What are they doing to enable our quality of life in the United States and in the world? Well, to illustrate, I'd like to paraphrase elements of an article in Forbes magazine by Bonds and my good friend Chuck Beans. Chuck. It's a space guy, actually had Bonds job a fuse in the Pentagon. He is now chairman and chief strategy officer at York Space Systems, and in his spare time he's chairman of the small satellites. Chuck speaks in words that everyone can understand. So I'd like to give you some of his words out of his article. Uh, they're afraid somewhat. So these are Chuck's words. Let's talk about average Joe and playing Jane. Before heading to the airport for a business trip to New York City, Joe checks the weather forecast informed by Noah's weather satellites to see what pack for the trip. He then calls an uber that space app. Everybody uses it matches riders with drivers via GPS to take into the airport, So Joe has lunch of the airport. Unbeknownst to him, his organic lunch is made with the help of precision farming made possible through optimized irrigation and fertilization, with remote spectral sensing coming from space and GPS on the plane, the pilot navigates around weather, aided by GPS and nose weather satellites. And Joe makes his meeting on time to join his New York colleagues in a video call with a key customer in Singapore made possible by telecommunication satellites. Around to his next meeting, Joe receives notice changing the location of the meeting to another to the other side of town. So he calmly tells Syria to adjust the destination, and his satellite guided Google maps redirects him to the new location. That evening, Joe watches the news broadcast via satellite. The report details a meeting among world leaders discussing the developing crisis in Syria. As it turns out, various forms of quote remotely sensed. Information collected from satellites indicate that yet another band, chemical weapon, may have been used on its own people. Before going to bed, Joe decides to call his parents and congratulate them for their wedding anniversary as they cruise across the Atlantic, made possible again by communications satellites and Joe's parents can enjoy the call without even wondering how it happened the next morning. Back home, Joe's wife, Jane, is involved in a car accident. Her vehicle skids off the road. She's knocked unconscious, but because of her satellite equipped on star system, the crash is detected immediately and first responders show up on the scene. In time, Joe receives the news books. An early trip home sends flowers to his wife as he orders another uber to the airport. Over that 24 hours, Joe and Jane used space system applications for nearly every part of their day. Imagine the consequences if at any point they were somehow denied these services, whether they be by natural causes or a foreign hostility. And each of these satellite applications used in this case were initially developed for military purposes and continue to be, but also have remarkable application on our way of life. Just many people just don't know that. So, ladies and gentlemen, now you know, thanks to chuck beans, well, the United States has a proud heritage being the world's leading space faring nation, dating back to the Eisenhower and Kennedy years. Today we have mature and robust systems operating from space, providing overhead reconnaissance to quote, wash and listen, provide missile warning, communications, positioning, navigation and timing from our GPS system. Much of what you heard in Lieutenant General J. T. Thompson earlier speech. These systems are not only integral to our national security, but also our also to our quality of life is Chuck told us. We simply no longer could live without these systems as a nation and for that matter, as a world. But over the years, adversary like adversaries like China, Russia and other countries have come to realize the value of space systems and are aggressively playing ketchup while also pursuing capabilities that will challenge our systems. As many of you know, in 2000 and seven, China demonstrated it's a set system by actually shooting down is one of its own satellites and has been aggressively developing counter space systems to disrupt hours. So in a heavily congested space environment, our systems are now being contested like never before and will continue to bay well as Bond mentioned, the United States has responded to these changing threats. In addition to adding ways to protect our system, the administration and in Congress recently created the United States Space Force and the operational you United States Space Command, the latter of which you heard President Armstrong and other Californians hope is going to be located. Vandenberg Air Force Base Combined with our intelligence community today, we have focused military and civilian leadership now in space. And that's a very, very good thing. Commence, really. On the industry side, we did create the National Security Space Association devoted solely to supporting the national security Space Enterprise. We're based here in the D C area, but we have arms and legs across the country, and we are loaded with extraordinary talent. In scores of Forman, former government executives, So S s a is joined at the hip with our government customers to serve and to support. We're busy with a multitude of activities underway ranging from a number of thought provoking policy. Papers are recurring space time Webcast supporting Congress's Space Power Caucus and other main serious efforts. Check us out at NSS. A space dot org's One of our strategic priorities in central to today's events is to actively promote and nurture the workforce development. Just like cow calling. We will work with our U. S. Government customers, industry leaders and academia to attract and recruit students to join the space world, whether in government or industry and two assistant mentoring and training as their careers. Progress on that point, we're delighted. Be delighted to be working with Cal Poly as we hopefully will undertake a new pilot program with him very soon. So students stay tuned something I can tell you Space is really cool. While our nation's satellite systems are technical and complex, our nation's government and industry work force is highly diverse, with a combination of engineers, physicists, method and mathematicians, but also with a large non technical expertise as well. Think about how government gets things thes systems designed, manufactured, launching into orbit and operating. They do this via contracts with our aerospace industry, requiring talents across the board from cost estimating cost analysis, budgeting, procurement, legal and many other support. Tasker Integral to the mission. Many thousands of people work in the space workforce tens of billions of dollars every year. This is really cool stuff, no matter what your education background, a great career to be part of. When summary as bang had mentioned Aziz, well, there is a great deal of exciting challenges ahead we will see a new renaissance in space in the years ahead, and in some cases it's already begun. Billionaires like Jeff Bezos, Elon Musk, Sir Richard Richard Branson are in the game, stimulating new ideas in business models, other private investors and start up companies. Space companies are now coming in from all angles. The exponential advancement of technology and microelectronics now allows the potential for a plethora of small SAT systems to possibly replace older satellites the size of a Greyhound bus. It's getting better by the day and central to this conference, cybersecurity is paramount to our nation's critical infrastructure in space. So once again, thanks very much, and I look forward to the further conversation. >>Steve, thank you very much. Space is cool. It's relevant. But it's important, as you pointed out, and you're awesome story about how it impacts our life every day. So I really appreciate that great story. I'm glad you took the time Thio share that you forgot the part about the drone coming over in the crime scene and, you know, mapping it out for you. But that would add that to the story later. Great stuff. My first question is let's get into the conversations because I think this is super important. President Armstrong like you to talk about some of the points that was teased out by Bang and Steve. One in particular is the comment around how military research was important in developing all these capabilities, which is impacting all of our lives. Through that story. It was the military research that has enabled a generation and generation of value for consumers. This is kind of this workforce conversation. There are opportunities now with with research and grants, and this is, ah, funding of innovation that it's highly accelerate. It's happening very quickly. Can you comment on how research and the partnerships to get that funding into the universities is critical? >>Yeah, I really appreciate that And appreciate the comments of my colleagues on it really boils down to me to partnerships, public private partnerships. You mentioned Northrop Grumman, but we have partnerships with Lockie Martin, Boeing, Raytheon Space six JPL, also member of organization called Business Higher Education Forum, which brings together university presidents and CEOs of companies. There's been focused on cybersecurity and data science, and I hope that we can spill into cybersecurity in space but those partnerships in the past have really brought a lot forward at Cal Poly Aziz mentioned we've been involved with Cube set. Uh, we've have some secure work and we want to plan to do more of that in the future. Uh, those partnerships are essential not only for getting the r and d done, but also the students, the faculty, whether masters or undergraduate, can be involved with that work. Uh, they get that real life experience, whether it's on campus or virtually now during Covic or at the location with the partner, whether it may be governmental or our industry. Uh, and then they're even better equipped, uh, to hit the ground running. And of course, we'd love to see even more of our students graduate with clearance so that they could do some of that a secure work as well. So these partnerships are absolutely critical, and it's also in the context of trying to bring the best and the brightest and all demographics of California and the US into this field, uh, to really be successful. So these partnerships are essential, and our goal is to grow them just like I know other colleagues and C. S u and the U C are planning to dio, >>you know, just as my age I've seen I grew up in the eighties, in college and during that systems generation and that the generation before me, they really kind of pioneered the space that spawned the computer revolution. I mean, you look at these key inflection points in our lives. They were really funded through these kinds of real deep research. Bond talk about that because, you know, we're living in an age of cloud. And Bezos was mentioned. Elon Musk. Sir Richard Branson. You got new ideas coming in from the outside. You have an accelerated clock now on terms of the innovation cycles, and so you got to react differently. You guys have programs to go outside >>of >>the Defense Department. How important is this? Because the workforce that air in schools and our folks re skilling are out there and you've been on both sides of the table. So share your thoughts. >>No, thanks, John. Thanks for the opportunity responded. And that's what you hit on the notes back in the eighties, R and D in space especially, was dominated by my government funding. Uh, contracts and so on. But things have changed. As Steve pointed out, A lot of these commercial entities funded by billionaires are coming out of the woodwork funding R and D. So they're taking the lead. So what we can do within the deal, the in government is truly take advantage of the work they've done on. Uh, since they're they're, you know, paving the way to new new approaches and new way of doing things. And I think we can We could certainly learn from that. And leverage off of that saves us money from an R and D standpoint while benefiting from from the product that they deliver, you know, within the O D Talking about workforce development Way have prioritized we have policies now to attract and retain talent. We need I I had the folks do some research and and looks like from a cybersecurity workforce standpoint. A recent study done, I think, last year in 2019 found that the cybersecurity workforce gap in the U. S. Is nearing half a million people, even though it is a growing industry. So the pipeline needs to be strengthened off getting people through, you know, starting young and through college, like assess a professor Armstrong indicated, because we're gonna need them to be in place. Uh, you know, in a period of about maybe a decade or so, Uh, on top of that, of course, is the continuing issue we have with the gap with with stamps students, we can't afford not to have expertise in place to support all the things we're doing within the with the not only deal with the but the commercial side as well. Thank you. >>How's the gap? Get? Get filled. I mean, this is the this is again. You got cybersecurity. I mean, with space. It's a whole another kind of surface area, if you will, in early surface area. But it is. It is an I o t. Device if you think about it. But it does have the same challenges. That's kind of current and and progressive with cybersecurity. Where's the gap Get filled, Steve Or President Armstrong? I mean, how do you solve the problem and address this gap in the workforce? What is some solutions and what approaches do we need to put in place? >>Steve, go ahead. I'll follow up. >>Okay. Thanks. I'll let you correct. May, uh, it's a really good question, and it's the way I would. The way I would approach it is to focus on it holistically and to acknowledge it up front. And it comes with our teaching, etcetera across the board and from from an industry perspective, I mean, we see it. We've gotta have secure systems with everything we do and promoting this and getting students at early ages and mentoring them and throwing internships at them. Eyes is so paramount to the whole the whole cycle, and and that's kind of and it really takes focused attention. And we continue to use the word focus from an NSS, a perspective. We know the challenges that are out there. There are such talented people in the workforce on the government side, but not nearly enough of them. And likewise on industry side. We could use Maura's well, but when you get down to it, you know we can connect dots. You know that the the aspect That's a Professor Armstrong talked about earlier toe where you continue to work partnerships as much as you possibly can. We hope to be a part of that. That network at that ecosystem the will of taking common objectives and working together to kind of make these things happen and to bring the power not just of one or two companies, but our our entire membership to help out >>President >>Trump. Yeah, I would. I would also add it again. It's back to partnerships that I talked about earlier. One of our partners is high schools and schools fortune Margaret Fortune, who worked in a couple of, uh, administrations in California across party lines and education. Their fifth graders all visit Cal Poly and visit our learned by doing lab and you, you've got to get students interested in stem at a early age. We also need the partnerships, the scholarships, the financial aid so the students can graduate with minimal to no debt to really hit the ground running. And that's exacerbated and really stress. Now, with this covert induced recession, California supports higher education at a higher rate than most states in the nation. But that is that has dropped this year or reasons. We all understand, uh, due to Kobe, and so our partnerships, our creativity on making sure that we help those that need the most help financially uh, that's really key, because the gaps air huge eyes. My colleagues indicated, you know, half of half a million jobs and you need to look at the the students that are in the pipeline. We've got to enhance that. Uh, it's the in the placement rates are amazing. Once the students get to a place like Cal Poly or some of our other amazing CSU and UC campuses, uh, placement rates are like 94%. >>Many of our >>engineers, they have jobs lined up a year before they graduate. So it's just gonna take key partnerships working together. Uh, and that continued partnership with government, local, of course, our state of CSU on partners like we have here today, both Stephen Bang So partnerships the thing >>e could add, you know, the collaboration with universities one that we, uh, put a lot of emphasis, and it may not be well known fact, but as an example of national security agencies, uh, National Centers of Academic Excellence in Cyber, the Fast works with over 270 colleges and universities across the United States to educate its 45 future cyber first responders as an example, so that Zatz vibrant and healthy and something that we ought Teoh Teik, banjo >>off. Well, I got the brain trust here on this topic. I want to get your thoughts on this one point. I'd like to define what is a public private partnership because the theme that's coming out of the symposium is the script has been flipped. It's a modern error. Things air accelerated get you got security. So you get all these things kind of happen is a modern approach and you're seeing a digital transformation play out all over the world in business. Andi in the public sector. So >>what is what >>is a modern public private partnership? What does it look like today? Because people are learning differently, Covert has pointed out, which was that we're seeing right now. How people the progressions of knowledge and learning truth. It's all changing. How do you guys view the modern version of public private partnership and some some examples and improve points? Can you can you guys share that? We'll start with the Professor Armstrong. >>Yeah. A zai indicated earlier. We've had on guy could give other examples, but Northup Grumman, uh, they helped us with cyber lab. Many years ago. That is maintained, uh, directly the software, the connection outside its its own unit so that students can learn the hack, they can learn to penetrate defenses, and I know that that has already had some considerations of space. But that's a benefit to both parties. So a good public private partnership has benefits to both entities. Uh, in the common factor for universities with a lot of these partnerships is the is the talent, the talent that is, that is needed, what we've been working on for years of the, you know, that undergraduate or master's or PhD programs. But now it's also spilling into Skilling and re Skilling. As you know, Jobs. Uh, you know, folks were in jobs today that didn't exist two years, three years, five years ago. But it also spills into other aspects that can expand even mawr. We're very fortunate. We have land, there's opportunities. We have one tech part project. We're expanding our tech park. I think we'll see opportunities for that, and it'll it'll be adjusted thio, due to the virtual world that we're all learning more and more about it, which we were in before Cove it. But I also think that that person to person is going to be important. Um, I wanna make sure that I'm driving across the bridge. Or or that that satellites being launched by the engineer that's had at least some in person training, uh, to do that and that experience, especially as a first time freshman coming on a campus, getting that experience expanding and as adult. And we're gonna need those public private partnerships in order to continue to fund those at a level that is at the excellence we need for these stem and engineering fields. >>It's interesting People in technology can work together in these partnerships in a new way. Bank Steve Reaction Thio the modern version of what a public, successful private partnership looks like. >>If I could jump in John, I think, you know, historically, Dodi's has have had, ah, high bar thio, uh, to overcome, if you will, in terms of getting rapid pulling in your company. This is the fault, if you will and not rely heavily in are the usual suspects of vendors and like and I think the deal is done a good job over the last couple of years off trying to reduce the burden on working with us. You know, the Air Force. I think they're pioneering this idea around pitch days where companies come in, do a two hour pitch and immediately notified of a wooden award without having to wait a long time. Thio get feedback on on the quality of the product and so on. So I think we're trying to do our best. Thio strengthen that partnership with companies outside the main group of people that we typically use. >>Steve, any reaction? Comment to add? >>Yeah, I would add a couple of these air. Very excellent thoughts. Uh, it zits about taking a little gamble by coming out of your comfort zone. You know, the world that Bond and Bond lives in and I used to live in in the past has been quite structured. It's really about we know what the threat is. We need to go fix it, will design it says we go make it happen, we'll fly it. Um, life is so much more complicated than that. And so it's it's really to me. I mean, you take you take an example of the pitch days of bond talks about I think I think taking a gamble by attempting to just do a lot of pilot programs, uh, work the trust factor between government folks and the industry folks in academia. Because we are all in this together in a lot of ways, for example. I mean, we just sent the paper to the White House of their requests about, you know, what would we do from a workforce development perspective? And we hope Thio embellish on this over time once the the initiative matures. But we have a piece of it, for example, is the thing we call clear for success getting back Thio Uh, President Armstrong's comments at the collegiate level. You know, high, high, high quality folks are in high demand. So why don't we put together a program they grabbed kids in their their underclass years identifies folks that are interested in doing something like this. Get them scholarships. Um, um, I have a job waiting for them that their contract ID for before they graduate, and when they graduate, they walk with S C I clearance. We believe that could be done so, and that's an example of ways in which the public private partnerships can happen to where you now have a talented kid ready to go on Day one. We think those kind of things can happen. It just gets back down to being focused on specific initiatives, give them giving them a chance and run as many pilot programs as you can like these days. >>That's a great point, E. President. >>I just want to jump in and echo both the bank and Steve's comments. But Steve, that you know your point of, you know, our graduates. We consider them ready Day one. Well, they need to be ready Day one and ready to go secure. We totally support that and and love to follow up offline with you on that. That's that's exciting, uh, and needed very much needed mawr of it. Some of it's happening, but way certainly have been thinking a lot about that and making some plans, >>and that's a great example of good Segway. My next question. This kind of reimagining sees work flows, eyes kind of breaking down the old the old way and bringing in kind of a new way accelerated all kind of new things. There are creative ways to address this workforce issue, and this is the next topic. How can we employ new creative solutions? Because, let's face it, you know, it's not the days of get your engineering degree and and go interview for a job and then get slotted in and get the intern. You know the programs you get you particularly through the system. This is this is multiple disciplines. Cybersecurity points at that. You could be smart and math and have, ah, degree in anthropology and even the best cyber talents on the planet. So this is a new new world. What are some creative approaches that >>you know, we're >>in the workforce >>is quite good, John. One of the things I think that za challenge to us is you know, we got somehow we got me working for with the government, sexy, right? The part of the challenge we have is attracting the right right level of skill sets and personnel. But, you know, we're competing oftentimes with the commercial side, the gaming industry as examples of a big deal. And those are the same talents. We need to support a lot of programs we have in the U. D. So somehow we have to do a better job to Steve's point off, making the work within the U. D within the government something that they would be interested early on. So I tracked him early. I kind of talked about Cal Poly's, uh, challenge program that they were gonna have in June inviting high school kid. We're excited about the whole idea of space and cyber security, and so on those air something. So I think we have to do it. Continue to do what were the course the next several years. >>Awesome. Any other creative approaches that you guys see working or might be on idea, or just a kind of stoked the ideation out their internship. So obviously internships are known, but like there's gotta be new ways. >>I think you can take what Steve was talking about earlier getting students in high school, uh, and aligning them sometimes. Uh, that intern first internship, not just between the freshman sophomore year, but before they inter cal poly per se. And they're they're involved s So I think that's, uh, absolutely key. Getting them involved many other ways. Um, we have an example of of up Skilling a redeveloped work redevelopment here in the Central Coast. PG and e Diablo nuclear plant as going to decommission in around 2020 24. And so we have a ongoing partnership toe work on reposition those employees for for the future. So that's, you know, engineering and beyond. Uh, but think about that just in the manner that you were talking about. So the up skilling and re Skilling uh, on I think that's where you know, we were talking about that Purdue University. Other California universities have been dealing with online programs before cove it and now with co vid uh, so many more faculty or were pushed into that area. There's going to be much more going and talk about workforce development and up Skilling and Re Skilling The amount of training and education of our faculty across the country, uh, in in virtual, uh, and delivery has been huge. So there's always a silver linings in the cloud. >>I want to get your guys thoughts on one final question as we in the in the segment. And we've seen on the commercial side with cloud computing on these highly accelerated environments where you know, SAS business model subscription. That's on the business side. But >>one of The >>things that's clear in this trend is technology, and people work together and technology augments the people components. So I'd love to get your thoughts as we look at the world now we're living in co vid um, Cal Poly. You guys have remote learning Right now. It's a infancy. It's a whole new disruption, if you will, but also an opportunity to enable new ways to collaborate, Right? So if you look at people and technology, can you guys share your view and vision on how communities can be developed? How these digital technologies and people can work together faster to get to the truth or make a discovery higher to build the workforce? These air opportunities? How do you guys view this new digital transformation? >>Well, I think there's there's a huge opportunities and just what we're doing with this symposium. We're filming this on one day, and it's going to stream live, and then the three of us, the four of us, can participate and chat with participants while it's going on. That's amazing. And I appreciate you, John, you bringing that to this this symposium, I think there's more and more that we can do from a Cal poly perspective with our pedagogy. So you know, linked to learn by doing in person will always be important to us. But we see virtual. We see partnerships like this can expand and enhance our ability and minimize the in person time, decrease the time to degree enhanced graduation rate, eliminate opportunity gaps or students that don't have the same advantages. S so I think the technological aspect of this is tremendous. Then on the up Skilling and Re Skilling, where employees air all over, they can be reached virtually then maybe they come to a location or really advanced technology allows them to get hands on virtually, or they come to that location and get it in a hybrid format. Eso I'm I'm very excited about the future and what we can do, and it's gonna be different with every university with every partnership. It's one. Size does not fit all. >>It's so many possibilities. Bond. I could almost imagine a social network that has a verified, you know, secure clearance. I can jump in, have a little cloak of secrecy and collaborate with the d o. D. Possibly in the future. But >>these are the >>kind of kind of crazy ideas that are needed. Are your thoughts on this whole digital transformation cross policy? >>I think technology is gonna be revolutionary here, John. You know, we're focusing lately on what we call digital engineering to quicken the pace off, delivering capability to warfighter. As an example, I think a I machine language all that's gonna have a major play and how we operate in the future. We're embracing five G technologies writing ability Thio zero latency or I o t More automation off the supply chain. That sort of thing, I think, uh, the future ahead of us is is very encouraging. Thing is gonna do a lot for for national defense on certainly the security of the country. >>Steve, your final thoughts. Space systems are systems, and they're connected to other systems that are connected to people. Your thoughts on this digital transformation opportunity >>Such a great question in such a fun, great challenge ahead of us. Um echoing are my colleague's sentiments. I would add to it. You know, a lot of this has I think we should do some focusing on campaigning so that people can feel comfortable to include the Congress to do things a little bit differently. Um, you know, we're not attuned to doing things fast. Uh, but the dramatic You know, the way technology is just going like crazy right now. I think it ties back Thio hoping Thio, convince some of our senior leaders on what I call both sides of the Potomac River that it's worth taking these gamble. We do need to take some of these things very way. And I'm very confident, confident and excited and comfortable. They're just gonna be a great time ahead and all for the better. >>You know, e talk about D. C. Because I'm not a lawyer, and I'm not a political person, but I always say less lawyers, more techies in Congress and Senate. So I was getting job when I say that. Sorry. Presidential. Go ahead. >>Yeah, I know. Just one other point. Uh, and and Steve's alluded to this in bonded as well. I mean, we've got to be less risk averse in these partnerships. That doesn't mean reckless, but we have to be less risk averse. And I would also I have a zoo. You talk about technology. I have to reflect on something that happened in, uh, you both talked a bit about Bill Britton and his impact on Cal Poly and what we're doing. But we were faced a few years ago of replacing a traditional data a data warehouse, data storage data center, and we partner with a W S. And thank goodness we had that in progress on it enhanced our bandwidth on our campus before Cove. It hit on with this partnership with the digital transformation hub. So there is a great example where, uh, we we had that going. That's not something we could have started. Oh, covitz hit. Let's flip that switch. And so we have to be proactive on. We also have thio not be risk averse and do some things differently. Eyes that that is really salvage the experience for for students. Right now, as things are flowing, well, we only have about 12% of our courses in person. Uh, those essential courses, uh, and just grateful for those partnerships that have talked about today. >>Yeah, and it's a shining example of how being agile, continuous operations, these air themes that expand into space and the next workforce needs to be built. Gentlemen, thank you. very much for sharing your insights. I know. Bang, You're gonna go into the defense side of space and your other sessions. Thank you, gentlemen, for your time for great session. Appreciate it. >>Thank you. Thank you. >>Thank you. >>Thank you. Thank you. Thank you all. >>I'm John Furry with the Cube here in Palo Alto, California Covering and hosting with Cal Poly The Space and Cybersecurity Symposium 2020. Thanks for watching.

>> Announcer: From around the globe, it's The Cube, covering Space and Cybersecurity Symposium 2020, hosted by Cal Poly. >> Everyone, welcome to this special virtual conference, the Space and Cybersecurity Symposium 2020 put on by Cal Poly with support from The Cube. I'm John Furey, your host and master of ceremony's got a great topic today, and this session is really the intersection of space and cybersecurity. This topic, and this conversation is a cybersecurity workforce development through public and private partnerships. And we've got a great lineup, we've Jeff Armstrong is the president of California Polytechnic State University, also known as Cal Poly. Jeffrey, thanks for jumping on and Bong Gumahad. The second, Director of C4ISR Division, and he's joining us from the Office of the Under Secretary of Defense for the acquisition and sustainment of Department of Defense, DOD, and of course Steve Jacques is Executive Director, founder National Security Space Association, and managing partner at Velos. Gentlemen, thank you for joining me for this session, we've got an hour of conversation, thanks for coming on. >> Thank you. >> So we've got a virtual event here, we've got an hour to have a great conversation, I'd love for you guys to do an opening statement on how you see the development through public and private partnerships around cybersecurity and space, Jeff, we'll start with you. >> Well, thanks very much, John, it's great to be on with all of you. On behalf of Cal Poly, welcome everyone. Educating the workforce of tomorrow is our mission at Cal Poly, whether that means traditional undergraduates, masters students, or increasingly, mid-career professionals looking to upskill or re-skill. Our signature pedagogy is learn by doing, which means that our graduates arrive at employers, ready day one with practical skills and experience. We have long thought of ourselves as lucky to be on California's beautiful central coast, but in recent years, as we've developed closer relationships with Vandenberg Air Force Base, hopefully the future permanent headquarters of the United States Space Command with Vandenberg and other regional partners, We have discovered that our location is even more advantageous than we thought. We're just 50 miles away from Vandenberg, a little closer than UC Santa Barbara and the base represents the Southern border of what we have come to think of as the central coast region. Cal Poly and Vandenberg Air Force Base have partnered to support regional economic development, to encourage the development of a commercial space port, to advocate for the space command headquarters coming to Vandenberg and other ventures. These partnerships have been possible because both parties stand to benefit. Vandenberg, by securing new streams of revenue, workforce, and local supply chain and Cal Poly by helping to grow local jobs for graduates, internship opportunities for students and research and entrepreneurship opportunities for faculty and staff. Crucially, what's good for Vandenberg Air Force Base and for Cal Poly is also good for the central coast and the U.S., creating new head of household jobs, infrastructure, and opportunity. Our goal is that these new jobs bring more diversity and sustainability for the region. This regional economic development has taken on a life of its own, spawning a new nonprofit called REACH which coordinates development efforts from Vandenberg Air Force Base in the South to Camp Roberts in the North. Another factor that has facilitated our relationship with Vandenberg Air Force Base is that we have some of the same friends. For example, Northrop Grumman has as long been an important defense contractor and an important partner to Cal Poly, funding scholarships in facilities that have allowed us to stay current with technology in it to attract highly qualified students for whom Cal Poly's costs would otherwise be prohibitive. For almost 20 years, Northrop Grumman has funded scholarships for Cal Poly students. This year, they're funding 64 scholarships, some directly in our College of Engineering and most through our Cal Poly Scholars Program. Cal Poly scholars support both incoming freshmen and transfer students. These are especially important, 'cause it allows us to provide additional support and opportunities to a group of students who are mostly first generation, low income and underrepresented, and who otherwise might not choose to attend Cal Poly. They also allow us to recruit from partner high schools with large populations of underrepresented minority students, including the Fortune High School in Elk Grove, which we developed a deep and lasting connection. We know that the best work is done by balanced teams that include multiple and diverse perspectives. These scholarships help us achieve that goal and I'm sure you know Northrop Grumman was recently awarded a very large contract to modernize the U.S. ICBM armory with some of the work being done at Vandenberg Air Force Base, thus supporting the local economy and protecting... Protecting our efforts in space requires partnerships in the digital realm. Cal Poly has partnered with many private companies such as AWS. Our partnerships with Amazon Web Services has enabled us to train our students with next generation cloud engineering skills, in part, through our jointly created digital transformation hub. Another partnership example is among Cal Poly's California Cyber Security Institute College of Engineering and the California National Guard. This partnership is focused on preparing a cyber-ready workforce, by providing faculty and students with a hands on research and learning environment side by side with military law enforcement professionals and cyber experts. We also have a long standing partnership with PG&E most recently focused on workforce development and redevelopment. Many of our graduates do indeed go on to careers in aerospace and defense industry. As a rough approximation, more than 4,500 Cal Poly graduates list aerospace or defense as their employment sector on LinkedIn. And it's not just our engineers in computer sciences. When I was speaking to our fellow panelists not too long ago, speaking to Bong, we learned that Rachel Sims, one of our liberal arts majors is working in his office, so shout out to you, Rachel. And then finally, of course, some of our graduates soar to extraordinary heights, such as Commander Victor Glover, who will be heading to the International Space Station later this year. As I close, all of which is to say that we're deeply committed to workforce development and redevelopment, that we understand the value of public-private partnerships, and that we're eager to find new ways in which to benefit everyone from this further cooperation. So we're committed to the region, the state and the nation, in our past efforts in space, cyber security and links to our partners at, as I indicated, aerospace industry and governmental partners provides a unique position for us to move forward in the interface of space and cyber security. Thank you so much, John. >> President Armstrong, thank you very much for the comments and congratulations to Cal Poly for being on the forefront of innovation and really taking a unique, progressive view and want to tip a hat to you guys over there, thank you very much for those comments, appreciate it. Bong, Department of Defense. Exciting, you've got to defend the nation, space is global, your opening statement. >> Yes, sir, thanks John, appreciate that. Thank you everybody, I'm honored to be in this panel along with Preston Armstrong of Cal Poly and my longtime friend and colleague Steve Jacques of the National Security Space Association to discuss a very important topic of a cybersecurity workforce development as President Armstrong alluded to. I'll tell you, both of these organizations, Cal Poly and the NSSA have done and continue to do an exceptional job at finding talent, recruiting them and training current and future leaders and technical professionals that we vitally need for our nation's growing space programs, as well as our collective national security. Earlier today, during session three, I, along with my colleague, Chris Samson discussed space cyber security and how the space domain is changing the landscape of future conflicts. I discussed the rapid emergence of commercial space with the proliferation of hundreds, if not thousands of satellites, providing a variety of services including communications, allowing for global internet connectivity, as one example. Within DOD, we continued to look at how we can leverage this opportunity. I'll tell you, one of the enabling technologies, is the use of small satellites, which are inherently cheaper and perhaps more flexible than the traditional bigger systems that we have historically used and employed for DOD. Certainly not lost on me is the fact that Cal Poly pioneered CubeSats 28, 27 years ago, and they set a standard for the use of these systems today. So they saw the value and benefit gained way ahead of everybody else it seems. And Cal Poly's focus on training and education is commendable. I'm especially impressed by the efforts of another of Steven's colleague, the current CIO, Mr. Bill Britton, with his high energy push to attract the next generation of innovators. Earlier this year, I had planned on participating in this year's cyber innovation challenge in June, Oops, Cal Poly hosts California middle, and high school students, and challenge them with situations to test their cyber knowledge. I tell you, I wish I had that kind of opportunity when I was a kid, unfortunately, the pandemic changed the plan, but I truly look forward to future events such as these, to participate in. Now, I want to recognize my good friend, Steve Jacques, whom I've known for perhaps too long of a time here, over two decades or so, who was an acknowledged space expert and personally I've truly applaud him for having the foresight a few years back to form the National Security Space Association to help the entire space enterprise navigate through not only technology, but policy issues and challenges and paved the way for operationalizing space. Space, it certainly was fortifying domain, it's not a secret anymore, and while it is a unique area, it shares a lot of common traits with the other domains, such as land, air, and sea, obviously all are strategically important to the defense of the United States. In conflict, they will all be contested and therefore they all need to be defended. One domain alone will not win future conflicts, and in a joint operation, we must succeed in all. So defending space is critical, as critical as to defending our other operational domains. Funny, space is the only sanctuary available only to the government. Increasingly as I discussed in a previous session, commercial space is taking the lead in a lot of different areas, including R&D, the so-called new space. So cybersecurity threat is even more demanding and even more challenging. The U.S. considers and futhered access to and freedom to operate in space, vital to advancing security, economic prosperity and scientific knowledge of the country, thus making cyberspace an inseparable component of America's financial, social government and political life. We stood up US Space Force a year ago or so as the newest military service. Like the other services, its mission is to organize, train and equip space forces in order to protect U.S. and allied interest in space and to provide spacecape builders who joined force. Imagine combining that U.S. Space Force with the U.S. Cyber Command to unify the direction of the space and cyberspace operation, strengthen DOD capabilities and integrate and bolster a DOD cyber experience. Now, of course, to enable all of this requires a trained and professional cadre of cyber security experts, combining a good mix of policy, as well as a high technical skill set. Much like we're seeing in STEM, we need to attract more people to this growing field. Now, the DOD has recognized the importance to the cybersecurity workforce, and we have implemented policies to encourage its growth. Back in 2013, the Deputy Secretary of Defense signed a DOD Cyberspace Workforce Strategy, to create a comprehensive, well-equipped cyber security team to respond to national security concerns. Now, this strategy also created a program that encourages collaboration between the DOD and private sector employees. We call this the Cyber Information Technology Exchange program, or CITE that it's an exchange program, which is very interesting in which a private sector employee can naturally work for the DOD in a cyber security position that spans across multiple mission critical areas, important to the DOD. A key responsibility of the cyber security community is military leaders, unrelated threats, and the cyber security actions we need to have to defeat these threats. We talked about rapid acquisition, agile business processes and practices to speed up innovation, likewise, cyber security must keep up with this challenge. So cyber security needs to be right there with the challenges and changes, and this requires exceptional personnel. We need to attract talent, invest in the people now to grow a robust cybersecurity workforce for the future. I look forward to the panel discussion, John, thank you. >> Thank you so much, Bob for those comments and, you know, new challenges or new opportunities and new possibilities and freedom to operate in space is critical, thank you for those comments, looking forward to chatting further. Steve Jacques, Executive Director of NSSA, you're up, opening statement. >> Thank you, John and echoing Bongs, thanks to Cal Poly for pulling this important event together and frankly, for allowing the National Security Space Association be a part of it. Likewise, on behalf of the association, I'm delighted and honored to be on this panel of President Armstrong, along with my friend and colleague, Bong Gumahad. Something for you all to know about Bong, he spent the first 20 years of his career in the Air Force doing space programs. He then went into industry for several years and then came back into government to serve, very few people do that. So Bong, on behalf of the space community, we thank you for your lifelong devotion to service to our nation, we really appreciate that. And I also echo a Bong shout out to that guy, Bill Britton. who's been a long time co-conspirator of ours for a long time, and you're doing great work there in the cyber program at Cal Poly, Bill, keep it up. But Professor Armstrong, keep a close eye on him. (laughter) I would like to offer a little extra context to the great comments made by President Armstrong and Bong. And in our view, the timing of this conference really could not be any better. We all recently reflected again on that tragic 9/11 surprise attack on our homeland and it's an appropriate time we think to take pause. While a percentage of you in the audience here weren't even born or were babies then, for the most of us, it still feels like yesterday. And moreover, a tragedy like 9/11 has taught us a lot to include, to be more vigilant, always keep our collective eyes and ears open, to include those "eyes and ears from space," making sure nothing like this ever happens again. So this conference is a key aspect, protecting our nation requires we work in a cyber secure environment at all times. But you know, the fascinating thing about space systems is we can't see 'em. Now sure, we see space launches, man, there's nothing more invigorating than that. But after launch they become invisible, so what are they really doing up there? What are they doing to enable our quality of life in the United States and in the world? Well to illustrate, I'd like to paraphrase elements of an article in Forbes magazine, by Bongs and my good friend, Chuck Beames, Chuck is a space guy, actually had Bongs job a few years in the Pentagon. He's now Chairman and Chief Strategy Officer at York Space Systems and in his spare time, he's Chairman of the Small Satellites. Chuck speaks in words that everyone can understand, so I'd like to give you some of his words out of his article, paraphrase somewhat, so these are Chuck's words. "Let's talk about average Joe and plain Jane. "Before heading to the airport for a business trip "to New York city, Joe checks the weather forecast, "informed by NOAA's weather satellites, "to see what to pack for the trip. "He then calls an Uber, that space app everybody uses, "it matches riders with drivers via GPS, "to take him to the airport. "So Joe has launched in the airport, "unbeknownst to him, his organic lunch is made "with the help of precision farming "made possible to optimize the irrigation and fertilization "with remote spectral sensing coming from space and GPS. "On the plane, the pilot navigates around weather, "aided by GPS and NOAA's weather satellites "and Joe makes his meeting on time "to join his New York colleagues in a video call "with a key customer in Singapore, "made possible by telecommunication satellites. "En route to his next meeting, "Joe receives notice changing the location of the meeting "to the other side of town. "So he calmly tells Siri to adjust the destination "and his satellite-guided Google maps redirect him "to the new location. "That evening, Joe watches the news broadcast via satellite, "report details of meeting among world leaders, "discussing the developing crisis in Syria. "As it turns out various forms of "'remotely sensed information' collected from satellites "indicate that yet another banned chemical weapon "may have been used on its own people. "Before going to bed, Joe decides to call his parents "and congratulate them for their wedding anniversary "as they cruise across the Atlantic, "made possible again by communication satellites "and Joe's parents can enjoy the call "without even wondering how it happened. "The next morning back home, "Joe's wife, Jane is involved in a car accident. "Her vehicle skids off the road, she's knocked unconscious, "but because of her satellite equipped OnStar system, "the crash is detected immediately, "and first responders show up on the scene in time. "Joe receives the news, books an early trip home, "sends flowers to his wife "as he orders another Uber to the airport. "Over that 24 hours, "Joe and Jane used space system applications "for nearly every part of their day. "Imagine the consequences if at any point "they were somehow denied these services, "whether they be by natural causes or a foreign hostility. "In each of these satellite applications used in this case, "were initially developed for military purposes "and continued to be, but also have remarkable application "on our way of life, just many people just don't know that." So ladies and gentlemen, now you know, thanks to Chuck Beames. Well, the United States has a proud heritage of being the world's leading space-faring nation. Dating back to the Eisenhower and Kennedy years, today, we have mature and robust systems operating from space, providing overhead reconnaissance to "watch and listen," provide missile warning, communications, positioning, navigation, and timing from our GPS system, much of which you heard in Lieutenant General JT Thomson's earlier speech. These systems are not only integral to our national security, but also to our quality of life. As Chuck told us, we simply no longer can live without these systems as a nation and for that matter, as a world. But over the years, adversaries like China, Russia and other countries have come to realize the value of space systems and are aggressively playing catch up while also pursuing capabilities that will challenge our systems. As many of you know, in 2007, China demonstrated its ASAT system by actually shooting down one of its own satellites and has been aggressively developing counterspace systems to disrupt ours. So in a heavily congested space environment, our systems are now being contested like never before and will continue to be. Well, as a Bong mentioned, the United States have responded to these changing threats. In addition to adding ways to protect our system, the administration and the Congress recently created the United States Space Force and the operational United States Space Command, the latter of which you heard President Armstrong and other Californians hope is going to be located at Vandenberg Air Force Base. Combined with our intelligence community, today we have focused military and civilian leadership now in space, and that's a very, very good thing. Commensurately on the industry side, we did create the National Security Space Association, devoted solely to supporting the National Security Space Enterprise. We're based here in the DC area, but we have arms and legs across the country and we are loaded with extraordinary talent in scores of former government executives. So NSSA is joined at the hip with our government customers to serve and to support. We're busy with a multitude of activities underway, ranging from a number of thought-provoking policy papers, our recurring spacetime webcasts, supporting Congress's space power caucus, and other main serious efforts. Check us out at nssaspace.org. One of our strategic priorities and central to today's events is to actively promote and nurture the workforce development, just like Cal-Poly. We will work with our U.S. government customers, industry leaders, and academia to attract and recruit students to join the space world, whether in government or industry, and to assist in mentoring and training as their careers progress. On that point, we're delighted to be working with Cal Poly as we hopefully will undertake a new pilot program with them very soon. So students stay tuned, something I can tell you, space is really cool. While our nation's satellite systems are technical and complex, our nation's government and industry workforce is highly diverse, with a combination of engineers, physicists and mathematicians, but also with a large non-technical expertise as well. Think about how government gets these systems designed, manufactured, launching into orbit and operating. They do this via contracts with our aerospace industry, requiring talents across the board, from cost estimating, cost analysis, budgeting, procurement, legal, and many other support tasks that are integral to the mission. Many thousands of people work in the space workforce, tens of billions of dollars every year. This is really cool stuff and no matter what your education background, a great career to be part of. In summary, as Bong had mentioned as well, there's a great deal of exciting challenges ahead. We will see a new renaissance in space in the years ahead and in some cases it's already begun. Billionaires like Jeff Bezos, Elon Musk, Sir Richard Branson, are in the game, stimulating new ideas and business models. Other private investors and startup companies, space companies are now coming in from all angles. The exponential advancement of technology and micro electronics now allows a potential for a plethora of small sat systems to possibly replace older satellites, the size of a Greyhound bus. It's getting better by the day and central to this conference, cybersecurity is paramount to our nation's critical infrastructure in space. So once again, thanks very much and I look forward to the further conversation. >> Steve, thank you very much. Space is cool, it's relevant, but it's important as you pointed out in your awesome story about how it impacts our life every day so I really appreciate that great story I'm glad you took the time to share that. You forgot the part about the drone coming over in the crime scene and, you know, mapping it out for you, but we'll add that to the story later, great stuff. My first question is, let's get into the conversations, because I think this is super important. President Armstrong, I'd like you to talk about some of the points that was teased out by Bong and Steve. One in particular is the comment around how military research was important in developing all these capabilities, which is impacting all of our lives through that story. It was the military research that has enabled a generation and generation of value for consumers. This is kind of this workforce conversation, there are opportunities now with research and grants, and this is a funding of innovation that is highly accelerated, it's happening very quickly. Can you comment on how research and the partnerships to get that funding into the universities is critical? >> Yeah, I really appreciate that and appreciate the comments of my colleagues. And it really boils down to me to partnerships, public-private partnerships, you have mentioned Northrop Grumman, but we have partnerships with Lockheed Martin, Boeing, Raytheon, Space X, JPL, also member of an organization called Business Higher Education Forum, which brings together university presidents and CEOs of companies. There's been focused on cybersecurity and data science and I hope that we can spill into cybersecurity and space. But those partnerships in the past have really brought a lot forward. At Cal Poly, as mentioned, we've been involved with CubeSat, we've have some secure work, and we want to plan to do more of that in the future. Those partnerships are essential, not only for getting the R&D done, but also the students, the faculty, whether they're master's or undergraduate can be involved with that work, they get that real life experience, whether it's on campus or virtually now during COVID or at the location with the partner, whether it may be governmental or industry, and then they're even better equipped to hit the ground running. And of course we'd love to see more of our students graduate with clearance so that they could do some of that secure work as well. So these partnerships are absolutely critical and it's also in the context of trying to bring the best and the brightest in all demographics of California and the U.S. into this field, to really be successful. So these partnerships are essential and our goal is to grow them just like I know our other colleagues in the CSU and the UC are planning to do. >> You know, just as my age I've seen, I grew up in the eighties and in college and they're in that system's generation and the generation before me, they really kind of pioneered the space that spawned the computer revolution. I mean, you look at these key inflection points in our lives, they were really funded through these kinds of real deep research. Bong, talk about that because, you know, we're living in an age of cloud and Bezos was mentioned, Elon Musk, Sir Richard Branson, you got new ideas coming in from the outside, you have an accelerated clock now in terms of the innovation cycles and so you got to react differently, you guys have programs to go outside of the defense department, how important is this because the workforce that are in schools and/or folks re-skilling are out there and you've been on both sides of the table, so share your thoughts. >> No, thanks Johnny, thanks for the opportunity to respond to, and that's what, you know, you hit on the nose back in the 80's, R&D and space especially was dominated by government funding, contracts and so on, but things have changed as Steve pointed out, allow these commercial entities funded by billionaires are coming out of the woodwork, funding R&D so they're taking the lead, so what we can do within the DOD in government is truly take advantage of the work they've done. And since they're, you know, paving the way to new approaches and new way of doing things and I think we can certainly learn from that and leverage off of that, saves us money from an R&D standpoint, while benefiting from the product that they deliver. You know, within DOD, talking about workforce development, you know, we have prioritized and we have policies now to attract and retain the talent we need. I had the folks do some research and it looks like from a cybersecurity or workforce standpoint, a recent study done, I think last year in 2019, found that the cyber security workforce gap in U.S. is nearing half a million people, even though it is a growing industry. So the pipeline needs to be strengthened, getting people through, you know, starting young and through college, like Professor Armstrong indicated because we're going to need them to be in place, you know, in a period of about maybe a decade or so. On top of that, of course, is the continuing issue we have with the gap with STEM students. We can't afford not have expertise in place to support all the things we're doing within DoD, not only DoD but the commercial side as well, thank you. >> How's the gap get filled, I mean, this is, again, you've got cybersecurity, I mean, with space it's a whole other kind of surface area if you will, it's not really surface area, but it is an IOT device if you think about it, but it does have the same challenges, that's kind of current and progressive with cybersecurity. Where's the gap get filled, Steve or President Armstrong, I mean, how do you solve the problem and address this gap in the workforce? What are some solutions and what approaches do we need to put in place? >> Steve, go ahead., I'll follow up. >> Okay, thanks, I'll let you correct me. (laughter) It's a really good question, and the way I would approach it is to focus on it holistically and to acknowledge it upfront and it comes with our teaching, et cetera, across the board. And from an industry perspective, I mean, we see it, we've got to have secure systems in everything we do, and promoting this and getting students at early ages and mentoring them and throwing internships at them is so paramount to the whole cycle. And that's kind of, it really takes a focused attention and we continue to use the word focus from an NSSA perspective. We know the challenges that are out there. There are such talented people in the workforce, on the government side, but not nearly enough of them and likewise on the industry side, we could use more as well, but when you get down to it, you know, we can connect dots, you know, the aspects that Professor Armstrong talked about earlier to where you continue to work partnerships as much as you possibly can. We hope to be a part of that network, that ecosystem if you will, of taking common objectives and working together to kind of make these things happen and to bring the power, not just of one or two companies, but of our entire membership thereabout. >> President Armstrong-- >> Yeah, I would also add it again, it's back to the partnerships that I talked about earlier, one of our partners is high schools and schools Fortune, Margaret Fortune, who worked in a couple of administrations in California across party lines and education, their fifth graders all visit Cal Poly, and visit our learned-by-doing lab. And you've got to get students interested in STEM at an early age. We also need the partnerships, the scholarships, the financial aid, so the students can graduate with minimal to no debt to really hit the ground running and that's exacerbated and really stress now with this COVID induced recession. California supports higher education at a higher rate than most states in the nation, but that has brought this year for reasons all understand due to COVID. And so our partnerships, our creativity, and making sure that we help those that need the most help financially, that's really key because the gaps are huge. As my colleagues indicated, you know, half a million jobs and I need you to look at the students that are in the pipeline, we've got to enhance that. And the placement rates are amazing once the students get to a place like Cal Poly or some of our other amazing CSU and UC campuses, placement rates are like 94%. Many of our engineers, they have jobs lined up a year before they graduate. So it's just going to take a key partnerships working together and that continued partnership with government local, of course, our state, the CSU, and partners like we have here today, both Steve and Bong so partnerships is the thing. >> You know, that's a great point-- >> I could add, >> Okay go ahead. >> All right, you know, the collaboration with universities is one that we put on lot of emphasis here, and it may not be well known fact, but just an example of national security, the AUC is a national centers of academic excellence in cyber defense works with over 270 colleges and universities across the United States to educate and certify future cyber first responders as an example. So that's vibrant and healthy and something that we ought to take advantage of. >> Well, I got the brain trust here on this topic. I want to get your thoughts on this one point, 'cause I'd like to define, you know, what is a public-private partnership because the theme that's coming out of the symposium is the script has been flipped, it's a modern era, things are accelerated, you've got security, so you've got all of these things kind of happenning it's a modern approach and you're seeing a digital transformation play out all over the world in business and in the public sector. So what is a modern public-private partnership and what does it look like today because people are learning differently. COVID has pointed out, which is that we're seeing right now, how people, the progressions of knowledge and learning, truth, it's all changing. How do you guys view the modern version of public-private partnership and some examples and some proof points, can you guys share that? We'll start with you, Professor Armstrong. >> Yeah, as I indicated earlier, we've had, and I could give other examples, but Northrop Grumman, they helped us with a cyber lab many years ago that is maintained directly, the software, the connection outside it's its own unit so the students can learn to hack, they can learn to penetrate defenses and I know that that has already had some considerations of space, but that's a benefit to both parties. So a good public-private partnership has benefits to both entities and the common factor for universities with a lot of these partnerships is the talent. The talent that is needed, what we've been working on for years of, you know, the undergraduate or master's or PhD programs, but now it's also spilling into upskilling and reskilling, as jobs, you know, folks who are in jobs today that didn't exist two years, three years, five years ago, but it also spills into other aspects that can expand even more. We're very fortunate we have land, there's opportunities, we have ONE Tech project. We are expanding our tech park, I think we'll see opportunities for that and it'll be adjusted due to the virtual world that we're all learning more and more about it, which we were in before COVID. But I also think that that person to person is going to be important, I want to make sure that I'm driving across a bridge or that satellite's being launched by the engineer that's had at least some in person training to do that in that experience, especially as a first time freshman coming on campus, getting that experience, expanding it as an adult, and we're going to need those public-private partnerships in order to continue to fund those at a level that is at the excellence we need for these STEM and engineering fields. >> It's interesting people and technology can work together and these partnerships are the new way. Bongs too with reaction to the modern version of what a public successful private partnership looks like. >> If I could jump in John, I think, you know, historically DOD's had a high bar to overcome if you will, in terms of getting rapid... pulling in new companies, miss the fall if you will, and not rely heavily on the usual suspects, of vendors and the like, and I think the DOD has done a good job over the last couple of years of trying to reduce that burden and working with us, you know, the Air Force, I think they're pioneering this idea around pitch days, where companies come in, do a two-hour pitch and immediately notified of, you know, of an a award, without having to wait a long time to get feedback on the quality of the product and so on. So I think we're trying to do our best to strengthen that partnership with companies outside of the main group of people that we typically use. >> Steve, any reaction, any comment to add? >> Yeah, I would add a couple and these are very excellent thoughts. It's about taking a little gamble by coming out of your comfort zone, you know, the world that Bong and I, Bong lives in and I used to live in the past, has been quite structured. It's really about, we know what the threat is, we need to go fix it, we'll design as if as we go make it happen, we'll fly it. Life is so much more complicated than that and so it's really, to me, I mean, you take an example of the pitch days of Bong talks about, I think taking a gamble by attempting to just do a lot of pilot programs, work the trust factor between government folks and the industry folks and academia, because we are all in this together in a lot of ways. For example, I mean, we just sent a paper to the white house at their request about, you know, what would we do from a workforce development perspective and we hope to embellish on this over time once the initiative matures, but we have a piece of it for example, is a thing we call "clear for success," getting back to president Armstrong's comments so at a collegiate level, you know, high, high, high quality folks are in high demand. So why don't we put together a program that grabs kids in their underclass years, identifies folks that are interested in doing something like this, get them scholarships, have a job waiting for them that they're contracted for before they graduate, and when they graduate, they walk with an SCI clearance. We believe that can be done, so that's an example of ways in which public-private partnerships can happen to where you now have a talented kid ready to go on day one. We think those kinds of things can happen, it just gets back down to being focused on specific initiatives, giving them a chance and run as many pilot programs as you can, like pitch days. >> That's a great point, it's a good segue. Go ahead, President Armstrong. >> I just want to jump in and echo both the Bong and Steve's comments, but Steve that, you know, your point of, you know our graduates, we consider them ready day one, well they need to be ready day one and ready to go secure. We totally support that and love to follow up offline with you on that. That's exciting and needed, very much needed more of it, some of it's happening, but we certainly have been thinking a lot about that and making some plans. >> And that's a great example, a good segue. My next question is kind of re-imagining these workflows is kind of breaking down the old way and bringing in kind of the new way, accelerate all kinds of new things. There are creative ways to address this workforce issue and this is the next topic, how can we employ new creative solutions because let's face it, you know, it's not the days of get your engineering degree and go interview for a job and then get slotted in and get the intern, you know, the programs and you'd matriculate through the system. This is multiple disciplines, cybersecurity points at that. You could be smart in math and have a degree in anthropology and be one of the best cyber talents on the planet. So this is a new, new world, what are some creative approaches that's going to work for you? >> Alright, good job, one of the things, I think that's a challenge to us is, you know, somehow we got me working for, with the government, sexy right? You know, part of the challenge we have is attracting the right level of skill sets and personnel but, you know, we're competing, oftentimes, with the commercial side, the gaming industry as examples is a big deal. And those are the same talents we need to support a lot of the programs that we have in DOD. So somehow we have do a better job to Steve's point about making the work within DOD, within the government, something that they would be interested early on. So attract them early, you know, I could not talk about Cal Poly's challenge program that they were going to have in June inviting high school kids really excited about the whole idea of space and cyber security and so on. Those are some of the things that I think we have to do and continue to do over the course of the next several years. >> Awesome, any other creative approaches that you guys see working or might be an idea, or just to kind of stoke the ideation out there? Internships, obviously internships are known, but like, there's got to be new ways. >> Alright, I think you can take what Steve was talking about earlier, getting students in high school and aligning them sometimes at first internship, not just between the freshman and sophomore year, but before they enter Cal Poly per se and they're involved. So I think that's absolutely key, getting them involved in many other ways. We have an example of upskilling or work redevelopment here in the central coast, PG&E Diablo nuclear plant that is going to decommission in around 2024. And so we have a ongoing partnership to work and reposition those employees for the future. So that's, you know, engineering and beyond but think about that just in the manner that you were talking about. So the upskilling and reskilling, and I think that's where, you know, we were talking about that Purdue University, other California universities have been dealing with online programs before COVID, and now with COVID so many more Faculty were pushed into that area, there's going to be a much more going and talk about workforce development in upskilling and reskilling, the amount of training and education of our faculty across the country in virtual and delivery has been huge. So there's always a silver linings in the cloud. >> I want to get your guys' thoughts on one final question as we end the segment, and we've seen on the commercial side with cloud computing on these highly accelerated environments where, you know, SAS business model subscription, and that's on the business side, but one of the things that's clear in this trend is technology and people work together and technology augments the people components. So I'd love to get your thoughts as we look at a world now, we're living in COVID, and Cal Poly, you guys have remote learning right now, it's at the infancy, it's a whole new disruption, if you will, but also an opportunity enable new ways to encollaborate, So if you look at people and technology, can you guys share your view and vision on how communities can be developed, how these digital technologies and people can work together faster to get to the truth or make a discovery, hire, develop the workforce, these are opportunities, how do you guys view this new digital transformation? >> Well, I think there's huge opportunities and just what we're doing with this symposium, we're filming this on Monday and it's going to stream live and then the three of us, the four of us can participate and chat with participants while it's going on. That's amazing and I appreciate you, John, you bringing that to this symposium. I think there's more and more that we can do. From a Cal Poly perspective, with our pedagogy so, you know, linked to learn by doing in-person will always be important to us, but we see virtual, we see partnerships like this, can expand and enhance our ability and minimize the in-person time, decrease the time to degree, enhance graduation rate, eliminate opportunity gaps for students that don't have the same advantages. So I think the technological aspect of this is tremendous. Then on the upskilling and reskilling, where employees are all over, they can re be reached virtually, and then maybe they come to a location or really advanced technology allows them to get hands on virtually, or they come to that location and get it in a hybrid format. So I'm very excited about the future and what we can do, and it's going to be different with every university, with every partnership. It's one size does not fit all, There's so many possibilities, Bong, I can almost imagine that social network that has a verified, you know, secure clearance. I can jump in, and have a little cloak of secrecy and collaborate with the DOD possibly in the future. But these are the kind of crazy ideas that are needed, your thoughts on this whole digital transformation cross-pollination. >> I think technology is going to be revolutionary here, John, you know, we're focusing lately on what we call visual engineering to quicken the pace of the delivery capability to warfighter as an example, I think AI, Machine Language, all that's going to have a major play in how we operate in the future. We're embracing 5G technologies, and the ability for zero latency, more IOT, more automation of the supply chain, that sort of thing, I think the future ahead of us is very encouraging, I think it's going to do a lot for national defense, and certainly the security of the country. >> Steve, your final thoughts, space systems are systems, and they're connected to other systems that are connected to people, your thoughts on this digital transformation opportunity. >> Such a great question and such a fun, great challenge ahead of us. Echoing my colleagues sentiments, I would add to it, you know, a lot of this has, I think we should do some focusing on campaigning so that people can feel comfortable to include the Congress to do things a little bit differently. You know, we're not attuned to doing things fast, but the dramatic, you know, the way technology is just going like crazy right now, I think it ties back to, hoping to convince some of our senior leaders and what I call both sides of the Potomac river, that it's worth taking this gamble, we do need to take some of these things you know, in a very proactive way. And I'm very confident and excited and comfortable that this is going to be a great time ahead and all for the better. >> You know, I always think of myself when I talk about DC 'cause I'm not a lawyer and I'm not a political person, but I always say less lawyers, more techies than in Congress and Senate, so (laughter)I always get in trouble when I say that. Sorry, President Armstrong, go ahead. >> Yeah, no, just one other point and Steve's alluded to this and Bong did as well, I mean, we've got to be less risk averse in these partnerships, that doesn't mean reckless, but we have to be less risk averse. And also, as you talk about technology, I have to reflect on something that happened and you both talked a bit about Bill Britton and his impact on Cal Poly and what we're doing. But we were faced a few years ago of replacing traditional data, a data warehouse, data storage, data center and we partnered with AWS and thank goodness, we had that in progress and it enhanced our bandwidth on our campus before COVID hit, and with this partnership with the digital transformation hub, so there's a great example where we had that going. That's not something we could have started, "Oh COVID hit, let's flip that switch." And so we have to be proactive and we also have to not be risk-averse and do some things differently. That has really salvaged the experience for our students right now, as things are flowing well. We only have about 12% of our courses in person, those essential courses and I'm just grateful for those partnerships that I have talked about today. >> And it's a shining example of how being agile, continuous operations, these are themes that expand the space and the next workforce needs to be built. Gentlemen, thank you very much for sharing your insights, I know Bong, you're going to go into the defense side of space in your other sessions. Thank you gentlemen, for your time, for a great session, I appreciate it. >> Thank you. >> Thank you gentlemen. >> Thank you. >> Thank you. >> Thank you, thank you all. I'm John Furey with The Cube here in Palo Alto, California covering and hosting with Cal Poly, the Space and Cybersecurity Symposium 2020, thanks for watching. (bright atmospheric music)

>> From the SiliconANGLE Media office in Boston, Massachusetts, it's theCUBE. Now, here's your host, Dave Vellante. >> Hi, everybody, welcome to this CUBE conversation. My name is Dave Vellante. You know the software industry is going through dramatic change. Obviously cloud is a piece of that. The drive towards simplification. Gone are the days of multi tens of millions of dollar implementations that take years and years with highly-customized software modifications. Those days are gone. People wanna simplify. They wanna be agile. Carter Lloyds is here. He's with QAD, an ERP manufacturing software specialist. Carter, thanks so much for coming on theCUBE. >> Thanks for having me here. I'm excited to talk to ya. >> Yeah, so I'm learning more about your company. Love the story and I'd like you to share it with our audience. Give us the brief overview of who QAD is. >> Absolutely, so maybe we should start with where we came from. So, it was about 40 years ago in 1979. Karl Lopker, our founder, and Pam Lopker, our co-founder, were in Santa Barbara, California. Karl had a company that was making sandals and he was running into some manufacturing problems and he needed some help and he needed some software to make it easier for him to manufacture. Pam came along, she wrote some software for him. He was very successful. That company turned into Deckers which now owns Uggs and is doing some great things and they decided along the way that although sandals are interesting, they thought software was more interesting. So they founded QAD and for 40 years we've been very focused on helping to make manufacturing easier through cloud ERP software now. >> That's a great story, so Pam is the coder. She's the alpha geek. >> Exactly. >> And they solved their own problem and then said, okay, let's take this to market. >> Exactly and that's why manufacturing, it's in our DNA. It's in our roots and it's what we're passionate about. >> Well so the obvious question that people are gonna have is how do you compete with the big whales in the market, particularly SAP? >> Okay, fantastic. I heard a quote recently that I've really locked onto and it's from the founder of the World Economic Forum and the quote is that in the old days, it used to be the big fish that would eat the small fish but in today's world, it's the fast fish that eats the slow fish and we see that not only as a metaphor for our position within the ERP industry, but what our customers are going through right now. That with all the rapid change that's going on, it's not about how big you are in economies of scale. It's about how resilient you are and how fast you can adapt. >> Well, that's interesting. So you're a smaller company, obviously, than the multi tens of billions of dollars that SAP and Oracle and others, but you're talking like a startup. >> Yep. >> Agile, speed. Is that how you think about yourselves? >> Absolutely, I think a startup mentality is always great to have, but rapid, agile, and effective. We believe that those are the requirements of our customers within the manufacturing business and that's what we need to be able to provide. >> So let's talk more about the differentiation. I mean you can't be all things to all people as a smaller company and a company that wants to be agile so what are some of the areas that you're focused on where you're having successes. >> Okay, absolutely, so historically, we focused on manufacturing, but that's too broad so we're focused on six verticals within manufacturing. So it's automotive, life sciences, food and beverage, consumer-packaged goods, electronics, and high tech. I'm sorry, industrial. So those are the main areas that we're focused on right now but within that, we're seeing a lot of challenges for manufacturers within that area. Again, it's this concept of change. We believe that the only constant is change and legacy ERP systems simply weren't designed for change. If there was no change, the system that you installed eight years ago would work just as well today as it did eight years ago, but that's not what's happening. We're seeing a disconnect between the business requirements and what the systems are able to provide. >> Now is your strategy to sort of build greater functionality into the software that sort of maps to companies' business processes or is it that the software is super flexible and can be adapted? Maybe you could describe that a little bit. >> It's both. So to start with, we want to not deliver to our customers a framework on which they need to build out their processes but realize that there are best practices and there are common processes within, amongst companies within a particular niche and so we want to come to the table with the very best industry best practices that we can and we do that. We also recognize, though, that each company is slightly different and to simply say adopt best practices and you must do that is not the right way to go. So we believe that our software can get our customers to 90% of their requirements and that's world-class but for that last 10%, don't ignore them. If that's where your competitive advantage is, where your differentiation is, then we need to give you a way to be able to meet those requirements and a way that is simple and does not lock you in to the software that you currently have. >> Mh-m, okay so Carter you're a global company. Maybe you could give us a sense of the sort of scope of your operations. >> Absolutely, so our customers are global and they've taken us global. We support over 65 countries in terms of the regulatory requirements so that out of the box, our software is able to do that. We believe that's industry-leading. We have operations all around the world, direct and through partners. >> So you guys have been around for a while. When you step back and think about some of the big trends, obviously cloud, everything is becoming, you know, about server size, what are the factors that you look at that are, you're trying to make tail winds for your company? >> Absolutely, so we've spent a lot of time over the last couple of years thinking about disruptors. So what are the common themes in these changes that our customers are facing and we've narrowed that down to three top disruptors. So the first one is anything is a service. So end users now are demanding not just products but what that product can do and the classic example is people don't want drills. They want holes. Why are we selling them drills? And we're seeing that sweep across manufacturing. We've got a customer that delivers industrial equipment to fast food chains and they don't wanna simply buy fryers. They want to be able to fry things so they're asking that vendor to be able to provide it as a service to be able to monitor and intervene so that they have more fryer up time which makes sense. That's the first one. The second one that we see is make to scale it order or mass customization. People want things the way that they want them and that's getting more pervasive throughout the supply chain. And then the third one is the digital transformation of manufacturing which many people call Industry 4.0. >> So on that last piece, very data-oriented >> Yes. >> And so maybe talk a little bit about how your customers are using data to transform their business and what role you guys play. >> Sure. It's absolutely critical when we think about how data has transformed the world of the consumer, it's incredible. What you are now able to do on the internet, even tied to anything as a service. The concept that we don't own movies anymore. We don't own music. We get it delivered as a service to us but the first step in doing that is to really digitize manufacturing. So it starts with the acquisition of company data and value chain data and then using that to be able to measure and optimize process to improve performance. >> So cloud is obviously another big trend in your business. You guys have moved to a cloud operating model whether it's on-prem or in your cloud but talk about your cloud strategy and what you guys are doing there, maybe some of your product portfolio. >> Absolutely, so we were very early to the cloud. Our first product went to the cloud in 2003 before it was even called the cloud. I think we called it on demand then and that was a supplier collaboration tool. We moved our flagship ERP system to the cloud in 2007 and since then, we've been building it for the cloud, optimizing, designing and it was an incredible experience for us that really had customer benefits because once you start to become a service-provider rather than a product-provider, you see it through your customers' eyes. So, depending on your viewpoint, you're either eating your own dog food or drinking your own champagne and it led us to understand some of the pains that people have in implementing ERP systems and upgrading them and then to design fixes so the software goes in faster, easier, and can be upgraded to a much greater extent. >> And so if you're gonna be in the cloud, your customers obviously wanna avoid a lot of custom modifications. We heard earlier that's sort of one of your differentiations and am I getting that right? As your customers move to the cloud, they're minimizing the need to do custom mods? >> So I would caveat that a little bit. I think the need still exists for that last-mile functionality to meet the individual requirements of the company but we think that customizations are evil. We want to eliminate customizations but still give them the ability to deliver on that need through extensions and new applications that are written in a non-intrusive way and can float above the system and therefore the system can be upgraded without breaking those connections. >> We're having to go back inside to the guts of those what you just called the last mile, right? >> Absolutely, so our customers are in the manufacturing business. They're not in the software business and part of the cloud-value proposition is allowing our customers to do what they do best which is to make great products and serve their customers and let us do what we do best which is delivering software through the cloud to them. >> And so your cloud products and your on-prem products are sort of identical from a code-based standpoint. Is that correct? >> They are, exactly. We do not believe that cloud should be a compromise. Our customers demand full-functionality ERP. That's what we had delivered previously on-premise and that's what we deliver on the cloud so it is identical software. >> So go back to this digital transformation for a minute 'cause you do a lot of conferences with theCUBE. You hear that. What does that mean to your customers? It's not just a buzz word. Every customer you talk to saying, digital, digital, digital. It's the number one driver of our business. What does that mean to your customer base? >> Absolutely, so for us it's not about the technology itself. It's about the use case and how it can make them better manufacturers and make manufacturing easier. So there are a couple of different areas that we've been exploring and we do that through a very pragmatic approach and we call that QAD Labs where we work with our customers around their use cases and how we can apply technology to it. So one of the areas that we're working on right now is around machine learning and it's to help automotive suppliers to take some of the signals that they're receiving from the OEMs in terms of what the requirements are and make sense of it so that what they are planning on delivering closely matches what the ultimate requirement will be from the OEMs. The OEM signals often jump around quite a bit and through machine learning, we can make better sense and not necessarily replace the planner, but provide additional information suggestions to the planner to make them more efficient. >> So the outcome is better predictability, sort of less heavy-lifting? >> Absolutely, so, much better customer service, less expediting of materials, and then also lower inventory. >> Talk about QAD Explore. It's coming up in May. When is it? What can people expect? What's it look like? >> Absolutely, so we have our user conference. Our global user conference in New Orleans, Louisiana, May sixth through ninth. It's a fantastic event. We get very excited about it. I guess we could say we get jazzed about it since it's in New Orleans. It allows us to really think about our customers, to meet with our customers, to have our customers network with each other, learn best practices, and see what we're doing and how we're trying to help them. >> What's the format of Explore? Like you've got obviously keynotes. Is it one-day, two-day? Maybe describe that a little bit. >> Absolutely, so it's a three-day event. The keynotes are fantastic. We try to do short, TED talk-type events with some of our executives so you can hear about our strategy and what we're releasing. We bring in industry experts and experts around the future of manufacturing and the future of business so that our customers can start to see where their area might be headed so that they can start to make decisions about where we're going and then in the afternoons we tend to go into breakouts where we can do deep dives into our solutions and businesses so that they can really understand the benefits that are available to them. >> So customers obviously attending. Will they present as well? >> We do have customers presenting. That's one of the main reasons our customers come actually is to hear from their peers and how they're solving problems. It's really a fantastic event. >> Well the Big Easy in May is a good place to be. It's a fun town. >> It's not a bad place to be and it actually starts the day after Jazz Fest so we can't complain about that either. >> Alright Carter Lloyds thanks so much for coming to theCUBE. >> Thank you very much for your time. >> And giving us the overview of QAD. Alright and thank you for watching everybody. This is Dave Vellante. We'll see ya next time. You're watching theCUBE. (light techno music)

>> From Sand Hill Road in the heart of Silicon Valley, it's theCUBE. Presenting, the People First Network; insights from entrepreneurs and tech leaders. >> Hello everyone, we are here for CUBE conversation in San Francisco. I'm John Furrier with siliconANGLE media theCUBE. We are in San Francisco with John Zimmer, who is the co-founder of president of Lyft, the famous ride sharing company that's dominating the world and changing the game in transportation. We all use Lyft, we love it. John, great to see you here for this People First Network special conversation. Thanks for spending the time. >> Thanks for having me. >> I know you're super busy, you guys are growing, billions of dollars in raised capital. You guys are growing like a weed on a rocket ship. A lot of things happening. But, you know, it's interesting, you guys are not that old of a company and the growth has just been fantastic. So, as you continue to ride the wave here, there's a lot of lessons that you've learned. So, tell the story about how you guys got started. You and your co-founder have a great relationship, and this has been a part of the culture at Lyft. How did it all get started? >> Yeah, so I'll start with Logan, my co-founder. He grew up in L.A. surrounded by traffic and he hated that. And he wanted to find a better way to get around. So when he went to college, he went to UC Santa Barbara, he did not take his car. He rode the bus, he car pooled, he had friends with cars. And then he went to start a car sharing program before Zipcar was around on college campuses. He got the attention of the local transit board, he got elected as the youngest member ever on the transit board. And he fell in love with the promise of public transportation. Affortable, accessible transportation for everyone. But frustrated by the reality that it was dependent on tax money. So, he wanted to create a better solution and he started coding his own website, named Zimride, named after a trip he took to Zimbabwe, for long distance car pooling. My own journey was I was on the east coast. I did not know Logan, was in love with hospitality, making people happy through great service. So I went to Cornell Hotel School, I took a city planning course, and I saw that the most important hospitality experience we have in society today is the city itself, and yet unfortunately we've designed cities for cars, and not people. What I mean by that is most of our cities are paved over. There's roads, there's parking lots, and if you design a city instead for people, pedestrians, safe places to bike, and don't need people to own cars in order to get around, then you could have a much more durable place to live. So we came together in 2007 to work on Zimride. And then a few years later, in 2012, we launched Lyft. >> So this is a transportation problem, ultimately, to solve. But the itch you guys were scratching was just the need for transportation. You saw it as more of a convenience thing as well. The hospitality thing kind of comes together, boom, Lyft is born. Then you guys enter the market, and the transportation problems are still there, and then you have the growth of mobile, so sort of a perfect storm coming together. What is the biggest challenge and exciting things that you guys see in this transportation scheme? Is it it's antiquated and inadequate? Is it a technical thing? What are some of the challenges that you guys are exited about? >> Well I think the biggest thing is this fact that the American dream has almost become, or been, historically, synonymous with a car in every garage. And that everyone should own a car. And that was your sense of freedom. But the reality is not quite that. American families spend more on their car than they do on food. It's the second highest household expense. A new car costs, on average, an American family $9,000 per year to own and operate. And so, there's a lot of ingrained behaviors, and designs of cities so that it does cater to needing to own a car. So we're trying to break that down piece by piece and making progress. But we're about 1% of the way there. >> Yeah, it's a cultural change too. But I also want to get to that in a second about culture, both with Lyft and and into your audience, which is the cities and the environments you guys deploy in, but also the users. But the founding and the story of you guys growing is interesting, because startups are all about execution and culture. You've had an interesting relationship with your co-founder. And this is the secret sauce of startups. It's documented somewhat, but it's a people first mindset, where you get a good team early on, you kind of feel your way through those first couple of years. Talk about that relationship with the founders, because this is something that's important. It's not just a number on a cap table, it's a little more than that. Talk about the relationship. >> I mean Logan has become my best friend. We actually carpool to work, still. Almost every day. And we weren't friends prior. So, a lot of times you have friends that start a company together. We were two people that were incredibly passionate about our mission, which is to improve people's lives with the best transportation. So we shared this passion, we share this vision, and we're two completely different people. So our approaches were different. His approach is often product-oriented and my approach is often hospitality-oriented. And the fact is, for transportation, you need to combine those two pieces. So it worked out really well for us. So I think having a co-founder is a massive advantage, because you can have two different people and then you want to find the thing in common, which is the thing you're fighting for, within our case the mission. >> How did you guys work together to play off each other, to get that innovation spark. Because when you get into the ride sharing, certainly it's a brand new category, huge demand, and there's a lot of build up, a lot of things you've got to stand up for the business. At the same time, you also want to differentiate and be innovative. You're kind of a first mover, with Uber, these guys are out there too. You guys are building a business, and growing really fast. So, how do you guys nurture that innovation? How do you put a twist on it? How do you keep it alive, versus the blocking and tackling and standing up the basic business activities? >> Well I think because we, you know at the beginning, we created a new category. We're the first to do peer-to-peer ride sharing. Uber existed, but they were doing cabs and limos. And we said, that may work for 1% of the population, but we wanted to use this under-utilized asset, which is the car that's sitting in everyone's parking spot or garage. And so that DNA of innovation, that DNA of being the underdog, the challenger, has always been true to us, but also the people that we we've brought on and hired. People and the hiring is something that, over the last ten years, is probably the one activity we've spent the most time on. Because that's the best way to keep those values, keep that focus on vision. >> And certainly these days, people want to work for a company that has a purpose. And that has a mission. When you hear the word people first, what pops into your head? >> Obvious. It just feels, in everything I've tried to do as a person, whether that was studying- like hospitality is the business of people first. How do you give people a great service and a great experience. And so I think often times, when people think about technology, they think about the what, which is I made this phone, I made this device, or I made this app, when way more important to that, is the why. Why did you do that? Who are you doing that for? And so we try to start everything we do with the person we're trying to- you know our mission is to improve people's lives with the world's best transportation. It's not to build the worlds best transportation. >> So that's your why. I was talking about how you guys scaled to a world-class organization. You guys have build a world-class team, certainly got great investors, Floodgate, Mayfield and then the rest is all on the web. You guys raised a lot of money, but you can't just throw money at the problem, you have to have that foundation and culture. How do you scale up a world-class organization? What's the learnings, can you share your perspective? >> Yeah, so first having clarity on the mission, which we've talked about, but also having clarity on core values. So we have three core values that have been true for a very long time. So, one is to be yourself. It also sounds very simple, like people first, but a lot of corporate environments have made spaces where people aren't comfortable being themselves, where there's group think, where people don't feel comfortable bringing their full self, and therefore their most productive self, to work. So be yourself, respecting the diversity of our team, has been critical from the beginning. The second is uplift others. So we use that both internally and externally. Life's short, we spend a lot of our time working. We might as well enjoy what we're doing. Again, all these values are both the right thing to do, make for a better place to work, and lead to better productivity and business success. And the last is make it happen. That's pretty self explanatory. Be an owner, go out and take action and get stuff done. And so with those three simple core values, looking for amazing, talented people, who also care about our mision. People are mission oriented, people want to care about what they're working on. And if you're fortunate to have a choice where you work, what we've seen is that people will follow a mission. >> Yeah, it's totally true. I can see that in culture here. And I've also seen you guys got kind of a cool factor too in the way I've seen some of your activations out in the marketplace. You kind of got a cool factor going on as well. But I think what's interesting, and I want to get your reaction to this, I think this points to some of the cultural discussions, just recently during the elections I saw you guys really wanted to make an effort to help people to get to the polls. Here in California, the disasters of wildfires are really tragic. You guys are doing some work there. This speaks to the culture. You say, hey, Lyft's available, and you're helping people out. Talk about what that means to you and the team here, and the culture at Lyft. >> Yeah, at the end of the day, when we look back on the work we've done, we want to make sure it has improved people's lives. And when we see opportunities to take our ability to provide transportation that will benefit people in a meaningful way, whether it was, you know, in the last- not this most recent election, but in the last election, in the last presidential election, I believe it was about 15 million people listed transportation as a reason why they couldn't vote. >> They've got a way, hey! >> Yeah, let's solve that. We can. When you think about unfortunate natural disasters, if we can help people get to safety, or help a horrible situation, then we should do that. I think that's just a moral and civic responsibility. It allows us to be aware and proud of the solution we've created, and I think it keeps our team extremely motivated. >> And I think it's one of those intangibles in terms of the mission, changing the transportation industry sounds academic and corporate. But here, you're changing lives by one, the voting, and two, saving lives potentially, with the disasters. So, great job. Okay, so what I thought, let's talk about the growth okay. I had a great conversation with the CEO of Amazon Web Services, Andy Jassy, a few years ago, talking about the early days of AWS. You have to be misunderstood for a while, and get through that early on, if you're going to be successful, because most big things are misunderstood. He also made a point about the key learnings during the early days. When you're trying to do stuff, things going so fast, that there's learnings that come out of it. And if you can persevere through it, that sets the culture. Share a story around something that you guys have been through at Lyft, where you persevered through it. It might have been some scar tissue. It might have been you got a little bloody, a little dirty. But you got through it and you learned from it. You applied it, and changed the culture. >> Well I think there's two main ones that come to mind. So, you know, people may think Lyft, in the last five years, has really come out of nowhere, but Logan and I have been working together for eleven years. And the first idea was Zimride, was long distance car pooling. And we built a team of 20, 25 people, we got this to break even. That's actually the company that Mayfield invested in, or the product. But it didn't have product-market fit in a massive way. It wasn't a massive success. And then so we tried to reinvent ourselves five years later, and that was Lyft. And at this point, that was a crazy idea. To have people riding in what everyone thought of as a stranger's other vehicle. And so that was a reinvention, an acknowledgement that the first solution we created did not fully work in the way that we wanted it to. The second was about four to five years ago, we wake up and Uber raises three billion dollars. And we have a hundred million dollars in the bank and about five months left. And everyone said Lyft is done. There is no way that they can survive this, it's a winner take all market, Uber is way more aggressive. And we proved that wrong. By focusing and staying true to our values and to our mission. By having an incredible team. An amazing community of drivers providing great service to our customers, we've gone from the early days of single digit market share to nearly 40% market share, amidst that pressure and belief that we couldn't survive. >> Game's on. Either rally or fold, right? It's a cultural test really. What's your mindset around the capital market. I know, I've done a lot of startups myself, I know a lot of fellow entrepreneurs, and when you raise that money, and you guys had that product-market fit, post the first venture, where you got through that. Then you get lightning in a bottle, whoa, let's double down on this. I want to go back to the early stages when you were thinking about investment. Was there any cautions around VC, cause a lot of startups have that conversation. What was the narrative for you guys at that time? Hey, let's go to Mayfield, should we raise money, should we bootstrap and make it cashflow positive. What was your mindset as founders, at that time when you were doing the venture round? >> Well, I think we knew that we needed a certain amount of capital to get to a scale that was interesting to us. So, not every business needs as much capital. But for they type of transportation infrastructure that we wanted to change, the type of scale we wanted to get to, we knew that it was important to raise VC money. So, money that was substantial and also understood the level of risk we were taking. So, at that point, we were fortunate to have a firm like Mayfield believe in us. And what we were looking for was people that care about who we were, cared about our mission, and understood what it was like to be an entrepreneur and an operator, not just an investor. >> What's the rallying call now for the team as you guys look out a6nd continue to have this growth? Obviously you guys cleared the runway in a big way. And there's still a lot more work to do, the market's still early. You know, you think about transportation and the regulatory environment and how technology and policy are coming together. A lot of forces out there, you got some tailwinds and some headwinds. How do you guys look at the future? What's the next mountain you're going to climb? >> Yeah, so, we've now done a billion rides. Since inception. And we're focused on providing a full alternative to car ownership. So I don't think people grasp that. The idea is not to provide an alternative to a taxi, or a late ride home. It's to completely replace car ownership. And so, we are 1% of the way there. Those that are joining our team and our mission get to be there for the 99% rest of that. And at the same time, as we go towards the next billion rides, we want to stay focused and rally around the individual stories behind each ride. So, every single week, we have over ten million rides happening, where two people are coming together. They could be two people that helped each other have a better day. They could be a Democrat and a Republican sitting next to each other and finding common ground. And so to us, yes we have big milestones and big opportunities ahead, but also care about each ride that's happening on the platform. >> And the other thing I love about your background in hospitality is you're bringing an experience as well. Not just math, in terms of the bottom line numbers. There's a lot of people doing the math and saying hmm, should I have a car? But I got to ask you a question. So what you learned at school, Cornell great school, great Lacrosse team, great Ivy League school, they teach you the textbook, the old hospitality. This is a new era we're living in. What is happening in your world that they don't teach you in the textbook from a hospitality standpoint? As you look at the experience of ride sharing and transportation for users, what is different, what's the twist in hospitality that has not yet been written in the textbooks, that you're exploring or thinking about? >> I actually think the old basics are more important than ever. There's all this flashy technology and opportunity to do it at larger scale, and to use data, that's new. To use data in ways that help inform providing great service. But, the basics of human interaction, communication, and treating people with respect, can get you pretty far. >> And happy customers, right? Final question, I know you got to go, I appreciate your time. Share a story or something about Lyft that people might not know about. First of all, everyone knows about your brass, you guys are doing a great job out there with the market share. But tell a story about Lyft, or something a datapoint, anecdotal piece of information, that they might not know about, that they should know about. Share an inside story or factoid about Lyft, that people should know about that they might not know about. >> I think it's really deep, deep in the mission. That people may not understand what gets us out of bed in the morning. You know, every time I have a new hire orientation, I try to talk to every new hire that comes to the company and really emphasize the importance of every driver, every passenger. And I read a story about a driver and passenger that really helped each other. And don't really want to provide the details because they're private to those individuals, but it's incredibly powerful to hear about. And so, I would just, we may look like a big company or brand at this point, but we care deeply about each individual that's on the platform. >> The fabric of society is being changed by you guys, really appreciate the work you've done, and congratulations, and a lot more work to do. Thanks for the conversation. >> Yeah, thanks. >> I'm John Furrier, here in San Francisco at Lyft's headquarters, talking with John Zimmer, who's the co-founder and President of Lyft, sharing his stories and successes, and a lot more work to do here at the People First conversations. With theCUBE, and Mayfield, I'm John Furrier, thanks for watching. (outro music)

>> (Narrator) From San Francisco, it's theCUBE. Covering Sumo Logic Illuminate 2018. Now, here's Jeff Frick. >> Hey, welcome back everybody. Jeff Frick here with theCUBE. We're at Sumo Logic Illuminate at the Hyatt Regency at San Francisco airport in Burlingame, about 600 people. The second year this conference, about triple the amount of people that they had last year. A lot of buzz, a lot of activities, some really creative things that I've never seen in the conference world with the silent disco kind of treatment for the training is pretty cool. Everyone's in the same room listening to their own, in training, I've never seen that before. We're excited to have, fresh off the keynote, the leader of this party, President and CEO of Sumo Logic, Ramin Sayar. Ramin, great job on the keynote today. >> Great, thank you for having me today. >> Absolutely. >> Thanks for being here. >> So, a lot of passion really came through. It struck me and it was palatable in your keynote, really reaching out to the community and talking about being on this mission together. I wonder if you can speak a little bit to how important community is to you, to the company, and what you guys are trying to accomplish. >> Well the interesting thing about that, Jeff, is that that's really innate in our culture and that's part of, one of the reasons why I actually joined Sumo. Specifically, one of our core values is we're in it with our customers. And that permeates all the way through to every action that every employee takes every single day, and ultimately, is seen and felt here at an event like Illuminate. So when we talked about community, is we're living and breathing the same thing that a lot of our customers are every single day. All the challenges that they're dealing with, the cloud, the cost, the migrations, the training. And so the more we get intelligent in terms of using our own service, the better it is for the rest of the users in our community, so that was a big theme for not just what we wanted people to take away, but also naturally as part of the announcements we made around some of the new intelligence. >> Right, right. I think it's an under-reported kind of attribute of SaaS-based business models, in that you are in bed with your customer because you're taking money from them every month, or whatever the frequency is, so you've got to have this ongoing relationship and continue to deliver value. And we've heard that time and time again, we heard it from the MLB guy on stage, we had another partner on-- >> Samsung, the smart things. >> The smartphone, but we had another one here. But just talking about working together with your teams collaboratively to execute on the objectives at hand. Not just here's some stuff, I'll take the money, good luck, we'll see you next year. >> Yeah, interesting enough you point out something that's a precursor to being successful in the SaaS business, and that is, you're having to get reelected every single year. But we don't wait 'til every single year, we try to make sure from the moment we land a new customer that we help them understand what it's going to take for them to get, not just instant value, but ongoing value out of our service. And we often times make sure they also understand they we're actually living and breathing the same experience they are, so there's that trusted advisor relationship, not just a vendor relationship. >> Right. The other great thing I'd love to see, and I think we first interviewed Sumo at our first AWS San Francisco 2013, You guys definitely picked the right rocket ship to strap onto. But one of the things that we love to watch is kind of the change of a company from an application space to a platform space. 'Cause nobody has a line item for new platform, nobody wants to buy a new platform. I tried to launch a platform company as a platform, it doesn't work, you got to have an app. So that's what you guys did, but you've got the infrastructure and the architecture in place that's now allowing you to get into the platform play and the slide that really jumped out to me, and I took a picture of it on my camera, was the diversity of roles in organizations that have Sumo Logic. After, I think they've had 60 months, you start seeing customer success people, design people, quality assurance people, these are not engineers. This is not reliability, this is a whole separate set of people that are using this great tool that you guys have built to solve some different business objectives, and maybe the ones when they started the company. >> Well, that's predicated on how we started the company. We never started the company to be a silo tool use for one part of the organization. It was always meant for how do we take what was typically in the back room only to select few of folks in security or operations to other parts of the organization, thereby democratizing like we've been talking about. And so, over the last few years, since you mentioned AWS and the reinvent show, we spent an enormous amount of energy and investment in terms of making sure that we're constantly listening to our users, we're constantly redesigning and iterating on a user experience, so that we can actually extend from the power users that might be in development or operations or security, into these other teams that you've been mentioning. And now we're seeing evidence of that, which is phenomenal. >> So it's, you know, we go to so many shows, we talk to a lot of smart people, it's really fun. And one of the things that I've come to believe in terms of how do you drive innovation... Some really simple things, you give more people access to more data with the tools to manipulate it and then the ability to make decisions based on that data. And that was really a big part of your theme, in terms of, you know, some of the new product releases that you announced and also again what we just talked about in terms of the use cases, is giving more people the tools and the data so they can actually make innovative steps instead of just funneling it through you know, asking somebody to run a BI report for me or this or that. That's not the way anymore. >> You're spot on. And I think we're still earning that right, to be honest with you. And while we've seen massive adoption in terms of various profiles of users and the types of data, I think we're honestly just scratching the surface here. And specifically what I mean by that is, we've announced some interesting things around industry benchmarks and community insights and obviously the modern app report that you talked about and covered before, but there's also a different subset of users that are now embarking on and leveraging a platform like this, and those are the data engineers, and those are the data scientists, because they don't want to be left on the back room. They also want, just like security operations or analysts or development teams, to be able to collaborate, be able to iterate, be able to share their own experience with not just the service, but how they're to getting value out of this. And so what's most refreshing, and honestly something that we pay very close attention to, is the types of roles and users that are here. And you see people from interesting enough product or finance or success report to your comment, but that's innate in the value of something like this that we're referring to in terms of machine data analytics platform. >> Right. So you guys are in such a good spot with the machine data. The MLB guy was interesting. He just threw up a slide with a whole bunch of really big numbers. But even more than that, we were at an AT&T show on Monday that the conversation's all about 5G, and the big thing about 5G 100X, 100X more throughput than 4G, designed for machine-to-machine interaction. I mean, the tsunami of data that we've been living through up 'til now is going to be dwarfed by this continuing tsunami when we get 5G internet of things, industrial internet of things. You guys are pretty well positioned to take advantage of this big, giant trend. >> We are. But we're also being very conscious and prescriptive how we approach it. So we've been maniacally focused first on the new applications, and therefore the new architectures associated with these applications that are being built and born and bred in the cloud. Then we extended it to those that are being lifted and shifted, because we had to earn the trust and the right there, particularly those that were running traditionally on-prem, we want to rewrite the front end, and in doing so, we had to often times interface and interact and get sign-off by security. And so that naturally led us into the CISO, in the security operations analyst teams starting to understand, "What's going on over there? "Why are those guys using that service, and why aren't we?" So then we extended our opportunity to security analytics play, and you naturally pointed out there's other opportunities into connected devices, industrial IOT, and what we heard from some of our customers today, in consumer IOT. But we're going to go to it gradually. We're also going to go to it through partners, and really extend the platform as customers use it for those use cases, not necessarily how we see fit always. >> I wonder if you can dig a little deeper into how security has changed. You've been in the industry for a long time, go Gauchos, I saw you went to Santa Barbara, my daughter's at Santa Barbara now, so we're all about the Gauchos. But you've seen how security has changed from this walled garden or moat around the castle, however you wanted to describe it, into being baked everywhere, up and down the stack, throughout the applications, throughout the infrastructure, and how that's really changed everyone being involved in security, regardless of what your day job is or what your title is. >> See that's what's the interesting thing. You heard it from MLB and Neil. There's a shortage of security professionals that are out there, so it's no longer just a duty and a responsibility of security operations or analysts; it's everyone upstream. And that's the power of what Sumo provides. It can't be an afterthought. And so what we're helping understand for our customers to understand is, as you architect these new workloads, specifically looking at micro services or containers or cloud, put some forethought and insight into what does that mean from not just an operational perspective, how do you instrument, collect, and log and events and metrics, but also from a security perspective. And so when you're able to leverage one platform to do so, it actually is a connecting mechanism, meaning that it's bringing these teams together versus isolating and siloing them like in the past. >> Right, right. I'd love to jump... You did a little bit in your report and now you announced some of the benchmarks and stuff about how you're able to aggregate, anonymize and aggregate back end data from a lot of different customers to start to share that information. To use BI and machine intelligence to optimize. To use benchmarks and to help your customers do a better job. And you're sitting on a boatload of data. And it's really a great way to provide another layer of value, beyond just the core functions of the products. >> I totally agree. And we are still early in that journey, though. And as I mentioned earlier in the announcements today, one of the ways that we're fixated on making sure we continue to get more data is constantly look for ways that we can bend that cost curve down for our customers. So that they can start to ingest more their tier-two, tier-three data or their lower-performing data so we can get more intelligent, more smart, and also provide that value, add back into the community and the service. So we felt that we weren't ready before because we needed to see multiple sets of years across multiple different types of data sets to be able to launch and release something like global insights. We started actually three years ago with a modern app report, because that was usage-based, not survey-based. And it's really interesting-- >> Real data. >> Because it's real data, right? But we were contemplating, even three years ago when we did the report, do we start to put out some of these benchmarks? And we felt that we were too early, because we needed more data, we needed different types of data from across different geographies, different types of usage, different technologies, and so we held off. And so that was one of the things that we've been paying very close attention to, and what the announcement today was all centered on is, yes, we've been talking about some insights around the industry, but you as the community of users here are helping us get smart and helping each other get smarter, and we're going to start to allow you guys to compare yourselves, back to your question, around, "Am I best in class from an operational KPI perspective?" And what does that mean? From utilization versus cost. And, "Am I best in class from a key risk perspective?" From a security perspective, for example. And how does that compare to others? And when you're staring the reality of that type of data in your face, it forces you to do something, take action. And the whole premise here is insights and intelligence. And so the more forthcoming, transparent we are with our customers in terms of these types of insights and intelligence, the more they're going to be using and adopting the platform, and hopefully, together as a community, getting smarter, more efficient. >> The graphic you showed, you get a whole bunch of green lights and one yellow light, all the eyes go right to... "What the heck, what's my yellow light?" Alright, I give you the last word on a word that you used again a number of times in your keynote, and that's trust. >> Yes. >> At the end of the day, that is such an important word in all types of relationships, but certainly in business relationships. Why're you putting the focus on that? Clearly it's important, you're highlighting trust. In fact I think you said, "We are your trusted steward for your data." Really important attribute for this company. >> Well that's been something early on, Jeff, in our architecture and things we did in terms of guaranteeing data sovereignty, privacy, encryption. We took no short change or shortcuts in terms of how we architect the service, eight-plus years ago. And we don't take any of those now. And the trust comment is because we have to trust, we have to build the trust and relationship, not just in terms of the value they're getting out of using the service, but that we're going to make sure that we keep their data safe and secure. Because we are PCI certified. We are also HIPAA certified, SOC type one, type two, we're doing GPR, all these other attestations and stuff that our customers have to face, we're also facing. So together, we're actually creating a trusted network, and that's the strategy here, is to create that trusted network. To share the insights. >> Well the passion comes through. And again, congratulations on the show, and the success, and we continue to enjoy watching the ride. >> Thank you very much for being part of it. It's great to be here with you. >> He's Ramin, I'm Jeff, you're watching theCUBE. We're at Sumo Logic Illuminate 2018. Thanks for watching. (inquisitive electronic music)

(orchestral string music) >> Welcome to this special Cube Conversation here in our Palo Alto studios, the Cube office here. I'm John Furrier, the co-founder of SiliconAngle Media, and also the co-host of the Cube. Our next guest is Jeremy Almond who is the CEO of PayStand, a hot startup doing some really new things in and around Blockchain, decentralized, and really targeting the B to B space on a really compelling and an interesting topic that a lot of people are interested in. Jeremy, welcome to this Cube Conversation. >> Awesome, thank you John. >> John: Hey, so tell me a little bit about the company and set the table for us...Paystand, what you guys are doing, why you were founded, and what's the disruptive enabler you guys are taking? What's the angle of your business? >> Jeremy: Yeah, sure...so Paystand, like you mentioned, is a B to B software platform specifically focused on payment. So you can imagine what PayPal or Venmo does from the consumer level. We do for complicated commercial transactions between accounts receivable and accounts payable departments that normally would be paying with paper checks in a manual process. >> John: So basically, accounting, ledger, I'm kind of guessing...nice fit for Blockchain... >> Correct, yeah, yeah. So what we do is we apply Blockchain technology to help a company speed up their time-to-cash, automate their business process, and dramatically lower their transaction costs. >> I'll get your thoughts on this...I interviewed Don Tapscott at an event and we were riffing on this notion of the nature of the firm, right? People would come to an office, you'd have accounting, all these things that you'd have to put in place of systems. Now with this decentralized world we're living in, internet, and with Blockchain in particular, and a crypto-currency market that's pretty frothy but, you know, you look at Blockchain and separate those two for a minute, you really can look at ways to change how work is organized. How do you guys view that? I mean, it's obviously a new, big wave coming. Then you got businesses who are just trying to operate and make money, right? Keep the lights on, but they almost have to start rethinking about the future. So, what is this block wave...Blockchain wave coming? How do you talk about that? Is it that disruptive? I mean, certainly centralized databases aren't going away anytime soon, but it's coming. What's your thoughts in reaction to that? >> It's coming, you know...I think it's... It will affect the enterprise which is where we spend our time and space, in a lot of ways like Cloud did, right? So I've spent probably 15 years doing un-sexy B to B tech, in some way, shape, or form. And what we've seen is digital transformation in the enterprise has happened in a few key areas. CRM is now in the Cloud, right? You have companies like SalesForce that have become significant. ERP is now in the Cloud, your financial software is now automated, right? Kind of ironically, the last mile piece, that part that lubricates the business, the core of the business, the money-movement piece, is actually still really, really manual. So, you have humans that sit around and they take an invoice and then a paper check and then they move it, and that process is very, very ineffecient. And so, having a more automatic, smart financial system can improve the business's life in really significant ways. >> Also, you know, one of the things we've been commenting on and opining here on the Cube is... I made a statement a couple weeks ago, "Oh, MarTech"...you know, marketing technology wave, all those logos on those landscape slides, "didn't really pan out 'cause the Cloud kind of changes that." I mean, it's panning out, but not the way people thought. FinTech...financial tech...is also certainly important. Banks, subsidy trading, you see that. What is the inhibitor for these new trends? Because you mentioned they're moving paper around. I mean, it's money, they probably don't want to mess with an operational system that's core to their business. Is it fear? Is it tech? Both? What's your view on why it's taking so long? Or is it moving along at a speed you think it's going to... Be adopted? >> Jeremy: Yeah, it's actually kind of a unique point in time right now. I think on one hand, financial services in general, part of their job is to manage risk, right? And so they're going to be a lagging, in some ways, industry. And so, digital transformation, right? The internet has opened up and democratized media. It's opened up so many other areas. Blockchain now is the entry point for digital transformation of financial services, and so the time is probably right, right now. We've been in the space...we started the company in 2014. And, you know, I've seen over the last three years, hearing banks, other large institutions, large enterprises, go from skepticism to curiosity. >> John: What's the technology stack look like? Obviously four years is, like, decades in the Blockchain world, and obviously, people are running as fast as they can. It's kind of a moving train at many levels. Business model side as well as a tech stack. And this is really the opportunity. A lot of these systems... I mean, some of the e-commerce systems are 20-year-old tech stacks, some are even older. >> Jeremy: Yeah. >> Just going back four years, since you were founded... What's the big moving glacier, if you will, of change and how are you guys managing that? How should people think about managing the risk of the tech stack? >> Jeremy: Yeah, I mean I think...you know... On the Blockchain-specific side... in the early days, a lot of it was about currency, and actual payment, right? I think what we're seeing now is the opportunity for Blockchain, particularly in the enterprise, to actually dramatically improve their operations side, right? Ethereum, private Blockchains... actually have the ability to not just decentralize how money movement or networks operate, but how an internal system operates. I'll give you an example...we used the Blockchain to... A private Blockchain to actually control approval workflow. So when a payment goes out, oftentimes you need your accounts payable person to send a payment out, but the controller or the treasury or someone else has to sign off on it, right? So that signature, you need it to be valid, trusted, the identity around it, right? And you want an audit record. And so Blockchain's a really, really good use case for something like that. That's not peer-play payments, it's not peer-play settlement. It doesn't require, you know, a million people to get on. It just can operate in the business in a really critical function, in a better way than the current technology does. >> John: It's interesting, I love these new technology opportunities 'cause... There's always going to be a tipping point and the famous Steve Jobs quote is, "Hey if I was asked to build a better "phone in 2005, I would have built an excellent... "better Blackberry." But he...then he built the iPhone, so he thought differently. No one was really asking for the iPhone. The question I get a lot from skeptics in Blockchain is, "No one's really asking for Blockchain." So, again, this is kind of like...you could always say, "I'm building a better centralized database system "in a distributed computing environment." Okay, we've done that. >> Yeah. >> Are people asking for Blockchain, or are they just asking for it in a different way? What's your thoughts to that? >> Yeah, I would say that there's... There's a big picture question of, "Are people asking for it." And I'd say society's actually asking for it. Part of my personal story is, you know, my family, blue collar family, they... My mother's side immigrated here, her generation. My brick-layer father, they spent their entire lives getting their first home. And you know, 800 square foot home, that's nothing special, but it was their American dream. In 2008, in the financial crisis, they lost the house. And so I think, you know, society said, "Financial services and core parts of our economy "actually could...we could do better, right?" And I think the magic thing about technology is we get to imagine the world not as it is but as it ought to be. So one, I think society is actually asking for... Can the core parts of our economy actually do better? Can we dream up something better? And I think that's the purest part of what the folks in the Blockchain movement are trying to do. That's, you know, at a very high level. And then I think, practically, right, for businesses like we operate day in and day out...you know... If there's technology that allows them to be able to operate their business more efficiently, drop their costs and grow faster, you know... How would that work, right? It's in some ways like Cloud. How does Cloud work? You know, I think... now we're really getting into the deep mess of it, but you know, Cloud was transformative to the business, right? VOIP was transformative to some businesses. Inbound marketing was transformative to some businesses. Blockchain is the same kind of concept. >> I mean, and Cloud, too...there was a lot of naysayers. I remember I used the first EC2 instances of Amazon when it came out, being an entrepreneur, I'm like, "I don't have to provision servers? "This is amazing, I can put my credit card down "and pay a few bucks..." And then even still, up until, I would say, even three or four years ago they were dismissed as relevant. >> Jeremy: Yeah. >> And again, the rest is history, look what they've done. So there's always going to be those naysayers. But to the point about Cloud and Blockchains, and even crypto, this is a wave, and we've, you know... We're very bullish on this movement because we see the wave coming way out there and it's huge. This is probably bigger than the other waves combined, in our opinion. So you mentioned societal change. This is a big deal. I mean, you're seeing regulations right now in GDPR in Europe, kind of trying to govern an old database market that's...it's a mess, database wise. But it makes sense from a society standpoint. People want to pull their data out. This is a trend. You got societal forces, and then technical legacy. I mean, this could be an opportunity for Blockchain to say, "Hey, optimize for the new wave." Don't try to retrofit, say, an old wave. What's your thoughts? >> Jeremy: Correct, yeah, I mean I think there's a... ...a number of areas... Even in the data cyber society. Take an Enron scandal, right? That happened a decade plus ago. Out of that came regulation called Sarbanes-Oxley, right? And Sarbanes-Oxley's concept, right, is to ensure that companies publicly account for their records in a proper way, right? If there's an audit trail, that they don't sort of take their financial systems and misrepresent them, right? Blockchain, because it's a source of truth that's immutable, meaning it can't be changed, is a great way, right, to have more efficiency in that process. Today there's a whole industry that's popped up just for Sarbanes-Oxley, just to regulate the financial system, just to ensure that the books actually say what they're supposed to say, right? That's kind of the definition of what a smart contract can and should do. >> John: This is really an opportunity for entrepreneurs, if you think about it. I mean, a lot of alpha entrepreneurs are really licking their chops on Blockchain because they can see how it could disrupt industries. And I showed you some of the things we're working on, and what we're thinking about for SiliconAngle about media and data. But it brings up things that we obviously see every day in the press: the election, weaponizing content for bad things. Facebook's having a challenge right now on how they optimize their data for their own self-service reasons. This is a problem, this is a revolution. People are kind of tired, so...what's your view of the role of data to the human? I mean, obviously, you know, the cliche: "Oh, the users are in charge, "they should own their own data." Okay I got that. But how...how do you see that vision playing out? I mean not just from a Facebook which is a social network example, but how does data impact a user going forward in your vision? Because they could really change from the outside in. >> Yeah, I mean I think...part of what's critical with data is two things: one, identity really matters, right? How do you manage identity? And so I think there's a number of really fascinating Blockchain companies that are specifically focused on the identity question, right? And that's...that's true around the social media side, it's true around...how do I actually manage where I move... Identity around? So I think that's one side that's really, really critical to solve. I don't know that we've got a crystal ball yet on what it will ultimately look like. But the Blockchain model for identity allows us to... rethink the fabrics of what privacy is, what permission looks like, and what trust looks like with people I want to engage with and with people I don't want to engage with. It's interesting, you talk about the Blockchain culture being more societal and mission-driven. My word, but you're kind of implying that. I remember when the Cloud came out, it was... The network guys were in charge, and the app guys were like, have to feed off the network requirements. And then that sea-change flipped around. The app guys are in charge, data driving requirements for the network. Question for you is: Do you see a day, soon, where societal requirements will dictate technology? I mean, you're seeing... you're seeing that pattern kind of emerging now, it's kind of not yet been fully thought through in public commentary but, you know...we see these pressure points potentially impacting tech design. >> Jeremy: Yeah, yeah...I think there's actually a good tug-of-war or balance, right? So entrepreneurs naturally are going to run as fast as they can to see innovation hopefully with means of improving society, right? And then, you know, you have regulators and you have government agencies who are looking and saying, "Okay, you might be thinking about one myopic view "and we need to make sure "we're looking at the good of society." And so I think that tug-of-war you saw with the internet, right, where how much do we regulate the internet, right? And I think the balance was mostly healthy. And we're sort of seeing that through today with Blockchain as well, where...you know, things like ICOs have good and bad implications. The regulators have been watching it relatively closely. But they also haven't completely came down and clamped down on it, you know, even this week there's... There was a relative balance in the discussions that came out. >> John: The SEC's done a good job, they've... >> Correct. >> John: They whipped a few people in shape to send the signal, but they weren't foreclosing any innovation. >> Jeremy: That's correct, yeah. >> And ICOs...certainly there're some scams. What's the good sides of ICO? Obviously the scams are out there. What's the good side? The fundraising? Democratization? What's your take on the ICO? Initial coin offering opportunity. >> Yeah, you know, I think...in some ways, democratization has become such a buzzword it's lost its meaning, right? But if you think about what it really is, it's so powerful, because it's this concept, right, that we distribute power and control to the hands of many. And so, you know, I think there are a lot of public good technologies that actually can use that concept, right? The internet is a public good. You could argue Wikipedia is a public good, right? And so, utility-type tokens actually are valuable because they can have a dual nature to them. I think the other thing that I'm particularly interested in watching how ICOs evolve is...I think there's some danger in ICOs...coming in and... in the early stage market. Because early stage companies tend to be... They're so nascent that they need guidance, right? And I actually...I might be contradictory here to most people in the Blockchain space, but I actually think early stage investors have a lot of value in that space. And so, I am actually fascinated about what happens in later stage rounds and what do ICOs become there. So I think utility, and later stage rounds are actually two fascinating areas of ICOs. >> John: Sure, that's a great point. I would also say that the trend that we're seeing is... There's an early stage component that needs mentoring and needs some nurturing, I would agree with that. That's a classic VC, maybe some token economics in there, but again, different playbook. The tokenization of business is really interesting 'cause now you have token economics being applied to a preexisting, proven business, with a disruptive nature on the other side, is super interesting. So I have to ask you: Are we going to have a chief economic officer as a new role soon? Or, is that going to be...'cause remember, if you think about token economics, it's about opening up and changing the distribution of data and wealth, you can argue both are the same, but...how do you view that? Because that's a trend we're seeing. The tokenization of a business to disrupt an industry incumbent...set of incumbents. >> Correct, yeah, and I think it's a... it's really, really early days and what... You have really early stage companies that are thinking about tokenizing their business before they exist, right? And then you have other companies which are maybe past the innovation curve and they're trying to apply tokens to their business. >> A pivot of an existing business. >> Yeah, so we've seen these, right? Public companies that have added Blockchain to the name. I think the fascinating thing will become where... Fast-growing, real businesses, where there's a there there, they've crossed the chasm, go, "Okay how do we apply "tokenization to our company? "And how do we think about it, from both a... "commercial economic part of the business, "and then how do we think about it "from tokenizing the business?" And we haven't seen many cases yet, but I actually think that's one of the next waves we'll see. >> John: Great insight. I got to ask you on a personal level. You're doing some talking, obviously the founder of the company, CEO. What's going on? What do you talk about these days? What are you passionate about? I know you were talking to some folks at UC Santa Barbara. You mentioned going to teach down there. What are you talking about? What are you sharing publicly? what's on your mind these days? >> Yeah, I mean, I think...I'm personally deeply motivated every day by waking up and going, you know, "The financial service industry can go through a massive transformation, right? And I think there's a lot of really good companies that are doing that at the consumer level, and so, you know, I think our space...we have a unique place in time to be working at the commercial level. So the commercial level affects big parts of our economic infrastructure in ways that we don't think about. The Equifax breach was a pretty big deal to people, right? The financial crisis was a big deal to people. So, how do we imagine those kinds of industries, right? Supply chain, title, logistics, right? And how do we think about those industries, democratizing them with Blockchain? Those, to me, are the unsung heroes of what Blockchain will ultimately help transform society. >> John: It's interesting, you said you were kind of humble when you came on earlier. "I'm in boring areas of B to B..." But I got to say to your point about Cloud earlier, there's a calm before the storm, these boring areas that are, say, calm are really the grounds where you see disruption, and I think that's an area... Not just high-frequency trading, that's going to be, you know, always an issue, but in terms of real financial plumbing. >> Yeah. >> Perfect for a ledger, perfect for those things. Okay, take a plug for your company. How are people using you guys? What's the value proposition? What are some of the things that you guys are involved in? How does someone engage with you guys? Give the plug for PayStand. >> Yeah, so at PayStand, we tend to work with companies where there are high volumes of paper checks in the process. So if you have a $100,000 invoice that goes out, for example, with a company that you've been working at for a decade, and you have a contract that says it's a Net 60 contract, right? The challenge is, it's a paper check, you want to move it digitally, what do you move it digitally to? And the reality is the consumer payment companies that are focused on credit cards are not really an ideal solution for that because their business model is a percentage business model. There's nothing wrong with a percentage business model that charges a company two or three percent if I'm swiping for a five dollar cup of coffee, right? If it's a $100,000 payment that I owe someone that I know, and I have contract terms, I'm not going to pay the bank $3,000 to move ones and zeroes from this bank database to this bank database. So what we do with our network is we make that money movement fast, instant, automatic, verified, validated, right, with control, in a way where we can automate the process. >> It's so funny what jumped in my mind is punch cards to computers, tape to storage. This is interesting. So paper checks, probably big, I don't know what the numbers are, you might have them handy. People are doing paper checks, so you're building a system around paper checks, did I get that right? >> Yeah, so we digitize what would have been a paper check. Today over 50 percent of all commercial payments are still done in paper checks. So they're gone in our digital world, right? Like, you and I, we Venmo each other. But when a business goes to write a check, when they get an invoice, they send out a check. And so we digitize the whole process. The moment that the invoice is ready to go, to the moment it gets in the bank, it all becomes digital space. >> John: And the alternative is what, I got to go check when it was mailed, was it received, was it cashed, did it get put into the accounting system? And that's kind of... >> Jeremy: That's correct. >> That's the manual... >> Jeremy: That's the manual. So they spend...they'll spend a week tracking down the payment from the moment the controller says, "Okay to pay," to the time it sits in their bank account, that's humans, time, money. >> And an old, antiquated system that doesn't change because of...what? >> Jeremy: Well, it's legacy infrastructure in one way. But in another, you know, even the banking infrastructure, the...most of the banking infrastructure that are for commercial payments was designed in the 60s and 70s. And last time I checked, the 60s and 70s was before the internet of today. So they weren't really designed for digital realtime payments. And they weren't designed for commercial use cases like today. >> Is fraud a factor, or is that not a factor? Is that part of it, or...yes? >> Jeremy: Yeah and I think a key thing with what we do, enterprise payments, security is really, really important. We take it very, very seriously. And this is, again, one of the downsides to the legacy commercial infrastructure. When you have a check, right? You have this checking and routing number on it. Anybody takes that, in theory, that's all that identifies you and your company and your account. And so money can actually be moved and ran against in that case. With a network like ours, we can validate that you are who you say you are, you have the money in your account, it moved when it should, and you've actually authorized it. These are all things that we should know, but we just don't. >> John: And you take the data around it, you take that check, put it into the system. Okay so when does a company want...should be calling you. Is it like, "I'm overloaded with paper, "I want a new system, I'm doing a refresh." I mean, when do people call PayStand? What's the signals that would give your buyer some indicator of time to call PayStand? >> Yeah, so generally it's after...it's when they have high-volumes of checks and they're growing, and/or that they've basically taken their ERP, and they've done an ERP Cloud migration, right? And so now they've got their general ledger, and that financial system's not in a shoebox anymore, right? It's in a critical core ERP system. And so what they're finding is they've bought digital transformation for financial services and their accountant only sort of has half the solution. And so they come in and they use us to close the last mile. >> John: Okay, so I'm going to put my naysayer hat on and ask you the question: I love it, but what's this Blockchain thing? I'm an accounting guy, took one computer class, whatever, I get blockchained. How do you stay up to date, how do you ensure that I'm going to have a system that's going to be working? I know that Blockchain standards are changing. How do you guys mitigate that? How do you handle that question? >> Jeremy: Yeah, I mean I think the critical thing for our customers, right, is... For us, our customers, money moves in dollars, right? It leaves their bank account, and goes into their supplier's bank account, the supplier's bank account goes into their customer's bank account, right? Their financial system does not change. We're actually very, very sensitive to that. We think about this very different than a consumer solution, which is...consumer solutions almost have a... A critical mass question. They need everybody to get into the system for it to work. For commercial, you don't actually want to change the business process of your partners, right? It's really important, they've been doing this...so... So we are very thoughtful about our software doesn't change business process, it doesn't require you to enter into some kind of new economy or a new currency. You simply do what you're always doing, with the systems you're already using, right? And we just digitize the process to make them faster, cheaper, and automated. >> Awesome. Talk about your goals for the year at PayStand. Where are you guys at, company-wise? Funding, goals, hiring, what's going on? Give a quick final word on the company. >> Jeremy: Yeah, I mean I think we...you know... We're blessed right now, I would say we're one of, if not the fastest B to B payment company... fastest-growing B to B payment company today. So, you know, I think we have a long way to go... I would call this inning two for us, right? We ultimately...I think much more about what does 10 years look like than 12 months look like. Because this is the beginning of the commercial financial service wave. And so, you know, I think we ultimately believe the digital transformation is going to reinvent our industry. And if we can go lead the way, we'll be very happy. QAnd for us that just means continue growing, continue serving our customers, continue hiring, you know. I think if we do all that, you know, right place right time. >> John: Awesome...final question for you. To the folks out there watching, you're an expert in the industry...again, fintech as well as computer engineering. If my sister who is not savvy says, "Jeremy, what is Blockchain?" How would you describe Blockchain to someone who's interested and needs to know the definition and importance of Blockchain? >> Jeremy: Okay, so Blockchain, to me, is basically a way to be able to take information like you might have on your checkbook, or you might have in a spreadsheet, and use it where anybody can access it in a way that's actually easily, controllable, visible, secure, and automated. That doesn't sound very sexy, but the important thing is how we keep records affects all of society, right? We have records of who owns their houses, we have records of how much money we have in our account, we have records of who did we vote on, right? Those records are the foundation for our society. Currently companies own those records. Companies are fallible, right? And so what Blockchain does is it allows us to make a more infallible system to keep access to those records you and I care about. >> John: And this is an infrastructure opportunity, not so much crypto currency... kind of a distinction between the two, right? >> That's right, that's right. I would say crypto currency and money is like the first pillar app on top of Blockchain. >> John: Jeremy Almond, CEO, founder of PayStand, hot company, doing something really good in a growing, changing market called checks, paper checks, and if you have them and groan, digitize them. Great entry strategy for Blockchain. Thanks for coming on this Cube Conversation. And thanks for joining us here in Palo Alto. I'm John Furrier in the Cube Studios for Cube Conversations. Thanks for watching. (exciting orchestral music)

(orchestral music) >> Welcome to the special Cube Conversation here at Palo Alto studios, at the Cube office yeah I'm John Furrier, the co-founder of SiliconANGLE Media, and also co-host the Cube. Our next guest is Jeremy Almond is the CEO of Paystand, hot startup doin' some really new things in and around blockchain, decentralize, and really targeting the B2B space on a really compelling and interesting topic that a lot of people are interested in. Jeremy welcome to this Cube conversation. >> Awesome, thank you John. >> Hey so talk a little about the company, set the table for us, PayStand, what you guys are doing, why you were founded, and what's the disruptive enabler that you guys are taking, and what's the angle of your business? >> Yeah sure so, PayStand like you mentioned, is a B2B software platform, specifically focused on payment. So, you can imagine what Paypal or Venmo does from the consumer level, we do for complicated commercial transactions between accounts receivable and accounts payable departments that normally would be paying with paper checks in manual process. >> So basically accounting, ledger, I'm kind of guessing. Nice bit for blockchain. >> Correct, yeah, yeah. So, what we do is we apply blockchain technology to help a company speed up their time to cash, automate their business process and dramatically lower their transaction cost. >> I'll get your thoughts on this. I interviewed Don Tapscott at an event and we were riffing on this notion of the nature of the firm, right? People would come to an office, you'd have accounting, all these things that you'd have to put in place as systems. Now with this decentralized world we're living in, internet and with blockchain in particular, and a cryptocurrency market that's pretty frothy. But, you look at blockchain and you separate those two for a minute. You really can look at ways to change how work is organized. How do you guys view that, I mean, It's obviously a new, big wave coming. Then you've got businesses who are just trying to operate and make money, right? So, keep the lights on, but they also have to start rethinking about the future. So, what is this block wave, blockchain wave coming? How do you talk about that? Is it that disruptive? I mean, certainly centralized databases aren't going a away any time soon, but it's coming. What's your thoughts and reaction to that? >> It's coming. You know, I think it's... It will effect the enterprise, which is where we spend our time and space. In a lot of ways like cloud did. So, I've spent probably 15 years doing unsexy B2B tech in some way shape or form. And what we've seen is digital transformation in the enterprise has happened in a few key areas. CRM is now in the cloud. You have companies like Salesforce that have become significant. ERP is now in the cloud, you're financial software is now automated. Kind of ironically the last mile piece, the part that lubricates the business, the core of the business, the money movement piece, is actually still really, really manual. So, you have humans that sit around and they take an invoice and then a paper check and then they move it. And that process is very, very inefficient. And so, having a more automatic, smart financial system can improve the business's life in really significant ways. >> Also, you know, one of the things we've been commenting on opining here on the Cube is, I made a statement a couple weeks ago, OMAR tech, marketing technology, Wave, all those logos on those landscape slides, didn't really pan out cause the cloud kind of changed that. It's panning out, but not the way people thought. FinTech, financial tech, is also certainly important. Banks of safe trading, you see that. What is the inhibitor for these new trends? Because you mentioned moving paper around. I mean it's money, they probably don't want to mess with an operational system that's a quarter of their business. Is it fear? Is it tech? Both? What's your view on why it's taking so long? Or is it moving along at a speed you think is going to... Being adopted? >> Yeah, it's actually kind of a unique point in time right now. I think in one hand, financial services in general, part of their job is to manage risk. And so, they're going to be a lagging, in some ways, industry. And so, digital transformation, the internet has opened up and democratized media. It's opened up so many other areas. Blockchain, now, is the entry point for digital transformation of financial services. And so, the time is probably right now. We've been in the space. We started the company in 2014. I'd seen over the last three years, hearing banks, other large institutions, large enterprises go from skepticism to curiosity. >> What's the technology stack look like? Obviously, four years is like decades in the blockchain world. Obviously, people are running as fast as they can. It's kind of a moving train, at many levels, business model side, as well as the tech stack. And this is really the opportunity a lot of these systems-- I mean some of the e-commerce systems are 20 year old tech stacks, some are even older. Just going back four years since you were founded, what's the big moving glacier, if you will, of change and how are you guys managing that? And how should people think about managing the risk of the tech stack? >> Yeah, I mean, I think on the blockchain specific side, in the early days a lot of it was about currency and actual payment. I think what we're seeing now is the opportunity for blockchain, particularly in the enterprise, to actually dramatically improve their operations side. So, Ethereum, private blockchains, actually have the ability to, not just decentralize how money movement or networks operate, but how an internal system operates. I'll give you an example, we used the blockchain to-- A private blockchain to actually control approval work flow. So when a payment goes out, often times you need your accounts payable person to send a payment out, but the controller or the treasury or someone else has to sign off on it. So that signature, you need it to be valid, trusted, the identity around it, right? And you want an audit record. And so blockchains a really, really good use case for something like that. That's not pure play payments, it's not pure play settlement, it doesn't require a million people to get on. It just can operate in the business in a really critical function in a better way than the current technology does. >> It's interesting. I love these new technology opportunities, cause there's always going to be a tipping point and the famous Steve Jobs quote is, "Hey, if I was asked to build a better phone "in 2005 I would've built an excellent, better Blackberry" But then he built the Iphone, so he thought differently. No one was really asking for the Iphone. So, the question I get a lot from skeptics in blockchain is, no one's really asking for blockchain. So, again, this is kind of like, you could always say, I'm building a better centralized database system in a distributive computing environment. Okay, we've done that. >> Yeah >> Are people asking for blockchain? Or are they just asking for it in a different way? What's your thoughts to that? >> Yeah, I would say that there's a big picture question of are people ask for it? And I'd say, society is actually asking for it. Part of my personal story is, my family, blue collar family, my mother's side immigrated here, her generation. My brick layer father, they spent their entire lives getting their first home. 800 square foot home, it was nothing special, but it was their American dream. In 2008, in the financial crisis, they lost that house. And so I think society said financial services and core parts of our economy actually could-- we could do better. And I think the magic thing about technology is we get to imagine the world not as it is, but as it ought to be. So, one, I think society is actually asking for can the core parts of our economy actually do better? Can we dream up something better? I think that's the purest part of what the folks in the blockchain movement are trying to do. That's at a very high level. And then I think practically, right, for businesses like we operate day in and day out, if there's technology that allows them to be able to operate their business more efficiently, drop their costs and grow faster, how would that work? It's in some ways like cloud. How does cloud work? I think now we're really getting into the deep mess of it. But cloud was transformative to the business. VOIP was transformative to some businesses. Inbound marketing was transformative to some businesses. Blockchain is the same kind of concept. >> And cloud too, there's a lot of naysayers. I remember I use the first EC2 instances of Amazon, when it came out being an entrepreneur I don't have to have provision servers. This is amazing. And I can put credit card down and pay a few bucks? And then even still, up until three or four years ago, they were dismissed as relevant. And, again, the rest is history. Look what they've done. So, there's always going to be those naysayers. But, to the point about cloud and blockchain, and say even crypto, this is a wave and we are very bullish on this movement because we see the waves coming way out there and it's huge. And this is probably bigger than the other waves combined, in our opinion. So, you mentioned societal change. This is a big deal. You're seeing regulations right now in GDPR, in Europe. Trying to govern an old database market, that's even in an own problem. It's a mess database wise. But it makes sense from a society standpoint. People want to pull their data out. This is a trend. You've got societal forces and then technical legacy. This could be an opportunity for a blockchain to saying, hey optimize for the new wave, don't try to retrofit, say, an old wave. What's your thoughts? >> Correct. Yeah, I think there's a number of areas, even in the data side with society. Take an Enron scandal that happened a decade plus ago. Out of that came regulation called Sarbanes-Oxley. And Sarbanes-Oxley's concept is to ensure that companies publicly account for their records in the proper way. That there's an audit trail. That they don't, sort of, pick their financial systems and misrepresent them. The blockchain, because it's a source of truth that's immutable, meaning it can't be changed, is a great way to have more efficiency in that process. Today, there's a whole industry that's popped up just for Sarbanes-Oxley, just to regulate the financial system, just to ensure that the books actually say what their supposed to say. That's kind of the definition of what a smart contract can and should do. >> This is though, really an opportunity for entrepreneurs when you think about it. A lot of alpha entrepreneurs are really lickin' their chops on blockchain, because they can see how it could disrupt industries. And this is really, again, I showed you some things we're working on and what we're thinking about with SiliconANGLE about media and data. But it brings up things that we, obviously, see every day in the press. The election, weaponizing content for bed, things-- Facebooks having a challenge right now in how they optimize their data for their own self service reasons. This is a problem. This is a revolution. People are kind of tired. So, what's your view of the role of data to the human? Obviously the cliche, oh the users are in charge, they should own their own data. Okay, I get that, but how do you see that vision playing out? Not just from Facebook, that's just a social network example. But how does data impact a user going forward in your vision? Because they could really change from the outside in. >> Yeah, I think part of what's critical with data is two things. One, identity really matters. How do you manage identity? So, I think there's a number of really fascinating blockchain companies that are specifically focused on the identity question. And that's true around the social media side. It's true around, how do I actually manage where I move identity around? So, I think that's one side that's really, really critical to solve. I don't know that we've got a crystal ball yet on what it will ultimately look like. But the blockchain model for identity allows us to rethink the fabrics of what privacy is, what permission looks like and what trust looks like with people I want to engage with and with people I don't want to engage with. >> That's interesting. You talk about the blockchain culture being more societal and mission driven, my word, but you're kind of implying that. I remember when the cloud came out. It was, the network guys were in charge and the app guys had to feed off the network requirements. And then that seat changed, flipped around. The app guys are in charge, data is driving requirements for the network. Question for you is do you see a day soon where societal requirements will dictate technology? You're seeing that pattern kind of emerging now, kind of not yet been fully thought through in public commentary. We see the pressure points potentially impacting tech design. >> Yeah, I think there's actually a good tug of war balance. So, entrepreneurs naturally are going to run as fast as they can to see innovation. Hopefully with means of improving society. And then you have regulators and you have government agencies who are looking and saying okay, you might be thinking about one myopic view and we need to make sure we're looking at the good of society. And so, I think that tug of war you saw with the internet, where how much do we regulate the internet? And I think the balance was mostly healthy. And we're sort of seeing that through today with blockchain as well. Where things like ICOs have good and bad implications. The regulators have been watching it relatively closely. But they also haven't completely came down and clamped down on it. Even this week there's... There was a relative balance in the discussions that came out. >> The SECs done a great job. >> Correct. >> They've whipped a few people into shape, sent the signal, but they weren't foreclosing any innovation. >> That's correct. >> And ICOs certainly had some scams. What's the good sides of ICOs? Obviously the scams are out there. What's the good sides? The fundraising, democratization? What's your take on the ICO, initially coin offering opportunity? >> Yeah, I think in some ways democratization has become such a buzz word it's lost it's meaning. But if you think about what it really is it's so powerful, because it's this concept that we distribute power and control to the hands of many. And so, I think there are a lot of public, good technologies that actually can use that concept. The internet is a public good. You could agree Wikipedia is a public good. And so, utility type tokens actually are valuable, because they can have a dual nature to them. I think the other thing, that I'm particularly interested in watching how ICOs evolve, is-- I think there's some danger in ICOs coming in, in the early stage market. Because early stage companies tend to be... They're so nascent that they need guidance. And I actually, I might be contradictory here to most people in the blockchain space, but I actually think early stage investors have a lot of value in that space. And so, I am actually fascinated about what happens in later stage rounds and what do ICOs become there. So, I think utility and later stage rounds are actually two fascinating areas of ICOs. >> Jeremy, that's a great point. I would also say that the trend that we're seeing is: there's an early stage component that needs mentoring and needs some nurturing, I would agree with that. That's a classic VC-- Maybe some token economics in there, but again different playbook. The tokenization of business is really interesting, cause now you have token economics being applied to a pre-existing proven business with a disruptive nature on the other side. >> Correct. >> Is super interesting. So, I have to ask you. Are we going to have a chief economic officer as a new role soon? Or is that going to be-- Cause it made me think about token economics it's about opening up and changing the distribution, or data and wealth, you could argue both are the same. But how do you view that? Because that's a trend were seeing. The tokenization of a business to disrupt an industry incumbent, set of incumbents. >> Correct, yeah. And I think it's really, really early days in what... You have really early stage companies that are thinking about tokenizing their business before they exist. And then you have other companies which are maybe past the innovation curve and their trying to apply tokens to their business. >> A pivot of an old, existing business. >> Yeah, so we've seen these, right? Public companies that have added blockchain to their name. I think the fascinating thing will become where fast growing, real businesses where there's a there, there. They've crossed the chasm. Go, okay, how do we apply tokenization to our company? And how do we think about it, from both a commercial economic part of the business and then how do we think about it from tokenizing the business? We haven't seen many cases yet, but I actually think that's one of the next waves we'll see. >> Great. Great insight. I got to ask you, on a personal level, you're doing some talking, obviously your the founder of the company, CEO, what's goin' on? What are you talking about these days? What are you passionate about? I know your talking to some folks at University of Santa Barbara. You mentioned going to teach down there. What are you talking about? What are you sharing publicly? What's on your mind these days? >> Yeah, I think I'm personally deeply motivated every day by waking up and going. The financial service industry can go through a massive transformation. And I think there's a lot of really good companies doing that at the consumer level. And so, I think our space, we have a unique place and time to be working at the commercial level. So, the commercial level effects big parts of our economic infrastructures in ways that we don't think about. The Equifax breach was a pretty big deal to people, right? The financial crisis was a big deal to people. So, how do we imagine those kinds of industries? Supply chain, title, logistics. And how do we think about those industries democratizing them with blockchain? Those, to me, are the unsung heroes of what blockchain will ultimately help transform society. >> That's interesting. You said you were kind of humble when you came on earlier. I'm in boring areas of B2B, but I got to say, to see your point about cloud earlier. There's a calm before the storm, these boring areas that are, say, calm, are really the grounds where you see disruption. I think that's an area-- Not just high frequency trading, that's going to be always an issue, but in terms of real financial plumbing. Perfect for a ledger, perfect for those things. Okay, explain-- Take a plug for your company. How are people using you guys? What's the value proposition? What are some of the things you guys are involved in? How does someone engage with you guys? Give the plug for Paystand. >> Yeah, so at Paystand we tend to work with companies where there are high volumes of paper checks in the process. So if you have a hundred thousand dollar invoice that goes out, for example, with a company you've been working out with for a decade. And you have a contract that says it's a net 60 contract. The challenge is, it's paper check. You want to move it digitally. What do you move it digitally to? And the reality is, the consumer payment companies that are focused on credit cards are not really an ideal solution for that because their business model is a percentage business model. And there's nothing wrong with a percentage business model that charges a company two or three percent if I'm swiping for a five dollar cup of coffee. If it's a hundred thousand dollar payment that I owe someone that I know and I have a contract terms. I'm not going to pay the bank 3,000 dollars to move ones and zeros from this bank database to this bank database. So, what we do with our network is we make that money movement fast, instant, automatic, verified, validated with control, in a way that we can automate the process. >> It's so funny. What jumps into my mind is punchcards to computers, tape to duck storage. This is interesting. So, paper checks, probably big, I don't know what the numbers are, you might have them handy. People are doing paper checks. So, you're doing a system around paper checks, did I get that right? >> Yeah, so we digitized what would have been a paper check. Today, over 50 % of all commercial payments are still done in paper checks. So, they're gone in our digital world. You and I, we Venmo each other. But when the business goes to write a check, when they get an invoice they send out a check. And so we digitized the whole process. The moment that the invoice is ready to go to the moment it gets in the bank. It all becomes digital space. >> And the alternative is what? I got to go check when it was mailed, was it received, was it cashed, did it get put into the accounting system? And that's kind of, that's the manual-- >> That's the manual. So, they'll spend a week tracking down the payment. From the moment the controller says okay to pay, to the time it sits in their bank account. That's humans, time, money. >> And an old antiquated system that doesn't change because of what? >> Well it's legacy infrastructure in one way. But in another, even the banking infrastructure-- Most of the banking infrastructure that are for commercial payments was designed in the 60s and 70s. And last time I checked, the 60s and 70s was before the internet today. So, they weren't really designed for digital real time payments. And they weren't designed for commercially used cases like today. >> Is fraud a factor or is that not a factor? Or is that not a part of it? Or yes? >> Yeah, I think a key thing with what we do, enterprise payments, is security is really, really important. We take it very, very seriously. And this is, again, one of the down sides to the legacy commercial infrastructure is when you have a check, you have this checking and routing number on it. Anybody takes that, in theory, that's all that identifies you and your company and your account. Money can actually be moved and ran against in that case. With a network like ours, we can validate that you are who you say you are, you have the money in your account, it moved when it should and you've actually authorized it. These are all things that we should know, but we just don't. >> And you put the data around it. You take that payload, aka check, put it into the system. So, when does a company want-- Should be calling you? Is it like, I'm overloaded with paper. I want a new system. I'm doing a refresh. When do people call Paystand? What's the signals that would give your buyer some indicator of time to call Paystand? >> Yeah, so generally it's after-- It's when they have high volumes of checks and they're growing. And, or, that they've basically taken their ERP and they've done an ERP cloud migration. So, now they've got their general ledger and that financial system is not in a shoebox anymore, it's in a critical, core ERP system. And so, what they're finding is they bought digital transformation for financial services and their accountant only sort of has half the solution. And so they come in and they use us to close the last mile. >> Okay, so I'm going to put my naysayer hat on and ask you the question. I love it, but what's this blockchain thing? I'm an accounting guy. Look at one computer class or whatever, I get blockchain. How do you stay up to date? How do you ensure that I'm going to have a system that's going to be working? I know that blockchain standards are changing. How do you guys mitigate that? How do you handle that question? >> Yeah, I think the critical thing for our customers is for us, our customers, money moves in dollars. It leaves their bank account and goes into their supplier's bank account. The supplier's bank account goes into their customer's bank account. Their financial system does not change. We're actually very, very sensitive to that. We think about this very different than a consumers solution. Which is, consumer solutions almost have a critical mass question. They need everybody to get into the system for it to work. For commercial, you don't actually want to change the business process of your partners. It's really important, they've been doing this. So, we are very thoughtful about our software. It doesn't change business process. It doesn't require you to enter into come kind of new economy or new currency. You simply do what your always doing with the systems you're already using. And we just digitize the process to make them faster, cheaper and automated. >> Awesome. Talk about your goals for the year with Paystand. Where you guys at company wise? Funding? Goals? Hiring? What's going on? Give a quick final word on the company. >> Yeah, I think we're blessed right now. I would say we're one of, if not the fastest B2B payment companies, fastest growing B2B payment companies today. I think we have a long way to go. I would call this inning two for us. We ultimately-- I think much more about what does ten years look like than twelve months look like because this is the beginning of the commercial financial service way. And so, I think we ultimately believe that digital transformation is going to reinvent our industry. And if we can go lead the way we'll be very happy. And for us that just means continue growing, continue serving our customers, continue hiring. I think if we do all that... Right place, right time. >> Awesome. Final question for you. The folks out there watching, your an expert in the industry, again, FinTech as well as computer engineering. If my sister, who is not savvy, says Jeremy what is blockchain? How would you describe blockchain to someone who's interested and needs to know the importance definition and the importance of blockchain? >> Okay, so blockchain to me is basically a way to be able to take information like you might have on your techbook or you might have in a spreadsheet and use it where anybody can access it in a way that's actually easily controllable, visible, secure and automated. That doesn't sound very sexy, but the important thing is how we keep records effects all of society. We have records of who owns our houses. We have records of how much money we have in our account. We have records of who did we vote on. Those records are the foundation for our society. Currently, companies own those records. Companies are fallible And so, what blockchain does, is it allows us to make a more infallible system to keep access to those records you and I care about. >> And this is an infrastructure opportunity, not so much cryptocurrency, kind of a distinction between those two, right? >> That's right. I would say, cryptocurrency and money is like the first pillar app on top of blockchain. >> Jeremy Almond, CEO, founder of Paystand, hot company doing something really good in a growing, changing market called checks, paper checks. And if you have um', grow um', digitize them. Great entry strategy for blockchain. Thanks for coming on this Cube Conversation. Thanks for joining us here in Palo Alto. I'm John Furrier in the Cube studios For Cube conversation, thanks for watching. (orchastral music)

>>The cube at IBM. Impact 2014 is brought to you by headline sponsor. IBM. Here are your hosts, John furrier and Paul Gillin. Okay, welcome back. Everyone live in Las Vegas at IBM impact. This is the cube, our flagship program. We go out to the events, instruct us to live in the noise. I'm John Ferrari, the founder of SiliconANGLE Joe, my close Paul Gillen. And our next special guest is great bushes as a legend in the software development community. And then she went to st this school in Santa Barbara. My son goes there, he's a freshman, but there's a whole nother conversation. Um, welcome to the cube. Thank you. Uh, one of the things we really exciting about when we get all the IBM guys get the messaging out, you know, the IBM talk, but the groundbreaking work around, um, computer software where hardware is now exploding and capability, big data's instrumentation of data. >>Um, take us to a conversation around cognitive computing, the future of humanity, society, the societal changes that are happening. There's a huge, uh, intersection between computer science and social science. Something that's our tagline for Silicon angle. And so we are passionate about. So I want to, I just want to get your take on that and, and tell about some of the work you're doing at IBM. Um, what does all this, where's all this leading to? Where is this unlimited compute capacity, the mainframe in the cloud, big data instrumentation, indexing, human thought, um, fit, Fitbit's wearable computers, um, the sensors, internet of things. This all taking us in the direction. What's your vision? There are three things that I think are inevitable and they're irreversible, that have unintended consequences, consequences that, you know, we can't, we have to attend to and they will be in our face eventually. >>The first of these is the growth of computational power in ways we've only begun to see. The second is the development of systems that never forget with storage beyond even our expectations now. And the third is a pervasive connectivity such that we see the foundations for not just millions of devices, but billions upon billions of devices. Those three trends appear to be where technology is heading. And yet if you follow those trends out, one has to ask. The question is you begin to, what are the implications for us as humans? Um, I think that the net of those is an interesting question indeed to put in a personal blog. My wife and I are developing a documentary or the computer history with the computer history museum for public television on that very topic, looking at how computing intersects with the human experience. So we're seeing those changes in every aspect of it too, that I'll dwell upon here, which I think are germane to this particular conference are some of the ethical and moral implications. >>And second, what the implications are for cognitive systems. On the latter case we saw on the news, I guess it was today or yesterday, there's a foundation led by the Gates foundation. It's been looking at collecting data for kids in various schools. A number of States set up for it. But as they begin to realize what the implications of aggregating that information were for the privacy of that child, the parents became, became cognizant of the fact that, wow, we're disclosing things for which there can be identification of the kid in ways that maybe we wouldn't want to do that. So I think the explosion of big data and explosion of computational power has a lot of us as a society to begin asking those questions, what are the limits of ownership and the rights of that kind of information. And that's a dialogue that will continue on in the cognitive space. >>It kind of follows on because one of the problems of big data, and it's not just you know, big, big data, but like you see in at CERN and the like, but also these problems of aggregation of data, there are, there are such an accumulation information at such a speed in ways that an individual human cannot begin to reason about it in reasonable ways. Thus was born. What we did with Watson a few years ago, Watson jeopardy. I think the most important thing that the Watson jeopardy experience led us to realize is that theory is an architectural framework upon which we can do many interesting reasoning things. And now that Watson has moved from research into the Watson group, we're seeing that expand out in so many domains. So the journey is really just beginning as we take what we can know to do in reason with automated systems and apply it to these large data systems. >>It's going to be a conversation we're going to have for a few generations. You were beginning to see, I mean computing has moved beyond the, the, the role of automate or of automating rote manual tasks. We're seeing, uh, it's been, uh, I've seen forecast of these. Most of the jobs that will be automated out of existence in the next 20 years will be, will be, uh, knowledge jobs and uh, even one journalism professor of forecasting, the 80% of journalism jobs will go away and be replaced by computer, uh, over the next couple of decades. Is this something for people to fear? I'm not certain fear will do us any good, especially if the change like that is inevitable. Fear doesn't help. But I think that what will help is an understanding as to where those kinds of software systems will impact various jobs and how we as individuals should relate to them. >>We as a society, we as individuals in many ways are slowly surrendering ourselves to computing technology. And what describe is one particular domain for that. There's been tremendous debate in the economic and business community as to whether or not computing has impacted the jobs market. I'm not an economist, I'm a computer scientist, but I can certainly say from my input inside perspective, I see that transformational shift and I see that what we're doing is radically going to change the job market. There was, you know, if you'd go back to the Victorian age where people were, were looking for a future in which they had more leisure time because we'd have these devices to give us, you know, free us up for the mundane. We're there. And yet the reality is that we now have so many things that required our time before. It means yours in a way, not enough work to go around. >>And that's a very different shift than I think what anyone anticipated back to the beginnings of the industrial age. We're coming to grips with that. Therefore, I say this, don't fear it, but begin to understand those areas where we as humans provide unique value that the automated systems never will. And then ask ourselves the question, where can we as individuals continue to add that creativity and value because there and then we can view these machines as our companions in that journey. Great. You want to, I want to ask you about, um, the role, I mean the humans is great message. I mean that's the, they're driving the car here, but I want to talk about something around the humanization piece. You mentioned, um, there's a lot of conversations around computer science does a discipline which, um, the old generation when a hundred computer science school was, it was code architecture. >>But now computer science is literally mainstreams. There's general interest, hence why we built this cube operation to share signal from the noise around computer science. So there's also been a discussion around women in tech tolerance and different opinions and views, freedom of speech, if you will, and sensors if everything's measured, politically correctness. All of this is now kind of being fully transparent, so, so let's say the women in tech issue and also kids growing up who have an affinity towards computer science but may not know us. I want to ask you the question. With all that kind of as backdrop, computer science as a discipline, how is it going to evolve in this space? What are some of those things for the future generation? For the, my son who's in sixth grade, my son's a freshman in college and then in between. Is it just traditional sciences? >>What are some of the things that you see and it's not just so much coding and running Java or objective C? I wish you'd asked me some questions about some really deep topics. I mean, gosh, these are, these are, I'm sorry. It's about the kids. In the early days of the telephone, phone, telephones were a very special thing. Not everybody had them and it was predicted that as the telephone networks grew, we were going to need to have many, many more telephone operators. What happened is that we all became, so the very nature of telephony changed so that now I as an individual have the power to reach out and do the connection that had to be done by a human. A similar phenomenon I think is happening in computing that it is moved itself into the interstitial spaces of our world such that it's no longer a special thing out there. We used to speak of the programming priesthood in the 60s where I lost my thing here. Hang on. >>Here we go. I think we're good. We're good. I'm a software guy. I don't do hardware so my body rejects hardware. So we're moving in a place where computing very much is, is part of the interstitial spaces of our world. This has led to where I think the generation after us, cause our, our median age is, let me check. It's probably above 20, just guessing here. Uh, a seven. I think you're still seven. Uh, we're moving to a stage where the notion of computational thinking becomes an important skill that everyone must have. My wife loves to take pictures of people along the beach, beautiful sunset, whales jumping and the family's sitting there and it did it again. My body's rejecting this device. Clearly I have the wrong shape. i-Ready got it. Yeah. There we go. Uh, taking pictures of families who are seeing all these things and they're, they're very, with their heads in their iPhones and their tablets and they're so wedded to that technology. >>We often see, you know, kids going by and in strollers and they've got an iPad in front of them looking at something. So we have a generation that's growing up, uh, knowing how to swipe and knowing how to use these devices. It's part of their very world. It's, it's difficult for me to relate to that cause I didn't grow up in that kind of environment. But that's the environment after us. So the question I think you're generally asking is what does one need to know to live in that kind of world? And I think it says notions of computational thinking. It's an idea that's come out of uh, the folks at Carnegie Mellon university, which asks the question, what are some of the basic skills we need to know? Well, you need to know some things about what an algorithm is and a little bit behind, you know, behind the screen itself. >>One of the things we're trying to do with the documentary is opening the curtain behind just the windows you say and ask the question, how do these things actually work because some degree of understanding to that will be essential for anyone moving into, into, into life. Um, you talked about women in tech in particular. It is an important question and I think that, uh, I worked with many women side by side in the things that I do. And you know, frankly it saddens me to see the way our educational system in a way back to middle school produces a bias that pushes young women out of this society. So I'm not certain that it's a bias, it's built into computing, but it's a bias built in to culture. It's bias built into our educational system. And that obviously has to change because computing, you know, knows no gender or religious or sexual orientation boundaries. >>It's just part of our society. Now. I do want to, everyone needs to contribute. I'm sorry. I do want to ask you about software development since you're devoted your career to a couple of things about to defining, uh, architectures and disciplines and software development. We're seeing software development now as epitomized by Facebook, perhaps moving to much more of a fail fast mentality. Uh, try it. Put it out there. If it breaks, it's okay. No lives were lost. Uh, pull it back in and we'll try it again. Is this, is there a risk in, in this new approach to software? So many things here are first, is it a new approach? No, it's part of the agile process that we've been talking about for well over a decade, if not 15 years or so. You must remember that it's dangerous to generalize upon a particular development paradigm that's applied in one space that apply to all others. >>With Facebook in general, nobody, no one's life depends upon it. And so there are things that one can do that are simplifying assumptions. If I apply that same technique to the dialysis machine, to the avionics of a triple seven, a simple fly, you know, so one must be careful to generalize those kinds of approaches to every place. It depends upon the domain, depends upon the development culture. Ultimately depends upon the risk profile that would lead you to high ceremony or low ceremony approaches. Do you have greater confidence in the software that you see being developed for mission critical applications today than you did 10 years ago? Absolutely. In fact, I'll tell you a quick story and I to know we need to wind down. I had an elective open heart surgery or a few years ago elective because every male in my family died of an aneurysm. They are an aneurism. >>So I went in and got checked and indeed I had an aneurysm developing as well. So we had, you know, hi my heart ripped open and then dealt with before it would burst on me. I remember laying there in the, in the, uh, in the CT scan machine looking up and saying, this looks familiar. Oh my God, I know the people that wrote the software where this thing and they use the UML and I realized, Oh this is a good thing. Which is your creation. Yes. Yes. So it's a good thing because I felt confidence in the software that was there because I knew it was intentionally engineered. Great. I want to ask you some society questions around it. And computing. I see green as key and data centers take up a lot of space, right? So obviously we want to get to a smarter data center environment. >>And how do you see the role of software? I see with the cognitive all things you talked about helping businesses build a physical plant, if you will. And is it a shared plan is a Terminus, you seeing open power systems here from IBM, you hear him about the open sources source. Um, what, what does that future look like from your standpoint? May I borrow that cup of tea or coffee? I want to use it as a aid. Let's presume, Oh, it's still warm. Let's say that this is some tea and roughly the energy costs to boil water for a cup of tea is roughly equivalent to the energy costs needed to do a single Google search. Now imagine if I multiply that by a few billion times and you can begin to see the energy costs of some of the infrastructure, which for many are largely invisible. >>Some studies suggest that computing is grown to the place releasing the United States. It's consuming about 10% of our electrical energy production. So by no means is it something we can sweep under the rug. Um, you address I think a fundamental question, which is the hidden costs of computing, which believe people are becoming aware of the meaning. Ask the question also. Where can cognitive systems help us in that regard? Um, we live in, in Maui and there's an interesting phenomenon coming on where there are so many people using solar power, putting into the power grid that the electrical grid companies are losing money because we're generating so much power there. And yet you realize if you begin to instrument the way that people are actually using power down to the level of the homes themselves, then power generation companies can start making much more intelligent decisions about day to day, almost minute to minute power production. >>And that's something that black box analytics would help. But also cognitive systems, which are not really black box analytic systems, they're more learn systems, learning systems can then predict what that might mean for the energy production company. So we're seeing even in those places, the potential of using cognitive systems for, for uh, attending to energy costs in that regard. The future is a lot of possibilities. I know you've got to go, we're getting the hook here big time cause you gotta well we really appreciate it. These are important future decisions that are, we're on track to, to help solve and I really appreciate it. Looking for the documentary anytime table on that, uh, sometime before I die. Great. Thanks for coming on the, we really appreciate this. This SiliconANGLE's we'll be right back with our next guest at to nature. I break.

bye okay welcome back everyone this is SiliconANGLE and Mookie bonds to cube our flagship program we got the advances reconsider from the noise I'm John foreach n with Dave vellante here for just a conversation Dave about what's going on oracle openworld day one of three days of live coverage here in San Francisco what's your take dick well first of all John miss you yes I had furrier withdrawals here so welcome back them first segment we've done together all day I was out at Santa Barbara last night in checking out the scene down there made it back not going to miss an Oracle OpenWorld for the world I love a work eloping world because it's like Isla Vista in Santa Barbara except it's tech people going crazy over the technology so mas coyote is draped in Red John well different in a few weeks ago at vmworld but I mean it's always great because you know Oracle has the muscle Dave as you know we always talk about every year Oracle's so you know transitioning from that telco role of extracting value from the ecosystem Oracle's making moves Larry Ellison really is a gamer he wants to make his mark on the industry he sees himself as the heir apparent to steve jobs in the end the end the historic hall fame of tech industry and he's here to win it's a game to him and I think you see oracle just in the past four years since we've been covering them being kind of a this is a throwaway game for them to like really being in the game they're making the announcements they're heavy and cloud they're making a faster more relevant timely announcements again they're a monster they're in there a huge accounts huge dollars and a rounding number on their sales spreadsheet would take a company public these days so you know those startups are doing well Oracle still has the muscle and they have huge clients and I'm going to watch and I think you know you ask me might take perform over here a consistent story from Oracle it's engineered software engineered heart with hardware it's vertical integration it's trying to develop best to breed its spending on R&D now they've basically co-op to the Big Data theme you know we hear a lot about their cloud so you know it's fun to criticize Oracle right they charge a lot a you know coops industry terms and act like they invented it on and on but here's the deal they spent a lot of money on R&D Allison's like a start-up CEO I mean he's that engage them I resisted this session talking to some executives and in the infrastructure business and they're telling me I Larry's call me every week wants to know the update on the new product and output when it's coming when it's ready you know herds the same way so you guys are intense focus on as you said winning that is all about winning it's a zero-sum game to Oracle it's the chest it's a chess board for Larry and I think you know one of the things we're seeing some news here we had our guys at the press conference mark hurd made an announcement about the human capital management software you know they're you know it's classic Oracle swiping at the competition work day has been booming of late and you know they're under pressure you know and you know workday asli the PeopleSoft guides have a huge chip on their shoulder they're winning they're doing well and Oracle's not happy about it so I mean obviously they're going to be moving very very aggressive against that and then just in all fronts the chessboard of conversion infrastructure the Sun acquisition really the ultimate cherry on top for Oracle relative to their future positioning they are betting the ranch on an apple-like strategy where containing the hardware focusing on the software and bundling in the hardware to the software as a fully enclosed system purpose-built hardening it out is ultimately their big bet David I'm telling you it will work for some companies and that lock in is a small price to pay for the functionality if they can deliver well and I think they I think Oracle can deliver you know the question is is as we're talking about with ray Wang can they deliver both on the promise of integrated systems I have no doubt Oracle can do that because they're spending a lot of money on it they got good technology people they've got good technology and and so eventually they're going to make that integration play work and they already are making Network the big question I have John is can they innovate and be best to breed at each layer of the stack that's something that's really hard to do guys like EMC and Cisco and VMware have chosen to partner to do that that's always been IBM's big challenge right i mean what's IBM number one at what product is IBM number one besides mainframes it's hard to come up with one okay then same question of Oracle what product is Oracle number one at besides database that's Oracle's challenge you know can they be best in storage can they be best in servers can they be best in applications they would argue their best in applications and I think big date is a big challenge here we heard inside the cube here day one that people don't want to pay licenses for data that's not being used and there's a big issue around the how data works how people using their computing environment it's not a monolithic environment anymore relative to the database there's new unstructured environments most of the data is not stored in relational databases why should I pay an Oracle lights of them I got virtualization I got scale-out open source these are new environments that are putting great pressure on Oracle and if you look at Mark Hurd and how he reports to the street all he talks about is our revenues licenses are up x percent barrel tins of the market well if demarcus declining and you're up what does that mean maybe this shifting to another area so Dave this is a concern that I have about Oracle is their core business metrics might not be on the right numbers yes software's growing relative to what I'm a declining market or shifting market those are the open questions we will find out this backdoor I think that well here's here's something I want to share with you so we did some wheat research and Wikibon fifty percent of the customers that we talked to in the Wikibon community said they're willing to risk lock-in to get integration and function so then and only fifteen percent said we're dogmatic about open source now over time that open source crowd as you well know is going to build up the capabilities but fifteen percent is the toehold for the start of startup crowd Oracle's working on that fat middle and that's really where they do let's talk about the dogmen the dogma for IT enterprises simply there's contract negotiations all posturing for contract negotiations almost every single CIO I talk to and we've talked to Dave have either told us publicly and privately hey at the end of the day I care about the cost structure the environment and to if there's a hardened top unlock in it doesn't it's irrelevant then and the example that we've always using the cube is you the Intel microprocessor do you really care about the proprietary software involved in an Intel processor no just gets the job done and it enables other things that's the key question that we're looking at right now in the computer industry is where is that hardened environment where being collapse elation of the complexity has been taken away to the point where it's absolutely functional that is ultimately to be the key and I think that's going to have to enable data fabric layer and then top of stack of applications I think that's a VMware strategy is a good one I think of Oracle can pull that off they could be the Intel of this cloud error well the other big battle is the organizational battle because Oracle obviously sells the dbas and application heads and everybody else in the hardware business sells to infrastructure people and let's face it the dba's and the application heads have all the juice in the marketplace so that's those guys are driving the buying decisions now as companies like VMware become more strategic they can maybe get some access to those individuals but still Oracle an essay p own that it all you do skoda you go to sa p sapphire you come to oracle openworld a lot of suits you go to emc world and you're seeing you know a lot of infrastructure people so that's a big battle that people taking on but i would if i'm a customer i would absolutely have some alternative infrastructure around wouldn't go just all red stack there might be some situations where i want to do that i guess the point I'm making is a lot of the application heads don't care if they spend more on infrastructure they don't care if they get locked in because they care about how fast the application runs how easy it is deploy how agile it is what their service experience is like that's what they care about I think ultimately it's going to come down at ability to be flexible have the application support so Oracle obviously will have the ability in most their companies to do that the question is do they have the right product mix and I think giving the customer's choice that's what we've seen with OpenStack in particular and you look at OpenStack what that's done is given this choice to the enterprise's to do whatever they want relative to having a private and public and hybrid cloud environment and that's ultimately going to help with the kind of the choice option so I mean that's kind of we've heard Oracle's portfolio or has got one of everything we heard you were in the cards so you didn't hear Thomas curing this morning but I mean you would have thought they were invent big data I mean it was a dupe connectors in-memory databases you're talking oh you know no sequel key value stores we got at all and they do actually have a lot of that hey so the portfolio is very robust they can tick the boxes they can they can play that functionality game with anybody and the real advantages they talk to the CIO now over here you've got the walk-off the marc andreessen crowd right none of my startups by Oracle hey stuff so it's those guys it's the open source crowd that ultimately is going to get leverage in the marketplace and you know John you and I have talked about this in the cube a lot ultimately long term open source wins Gary Blum was on the cube earlier CEO of now CEO president MarkLogic Dave he's been a I think 17 years of Oracle insane amount of years he's been there from the beginning he goes back to veritas as well you know he had an interesting point he said that in MarkLogic they have a half a DBA for ten dba's that are on staff for oracle that's a nine and a half labor pool reduction in cost and you're granted some of those guys might retire kind of like mainframe guys in the old days but like still you don't know about a massive amount of restricting of resources I want to get your take on the data economy type role I mean the data economy we're talking about new economics what's your take on I mean that ratio is really the kind of magnitude we're seeing relative the big data so here's my take on that is is I think that rightly so the startups are doing what Larry always does he compares his state of the art to somebody else's n minus 2 and that's what the startups are doing right there's a lot of legacy Oracle environments very easy to go in and say okay I can reduce your operating expense here's the challenge Oracle knows this and they see that threat so what Oracle's trying to do is is is cut that you know to whatever degree it can cut that and and close that gap and then you know have the cios bet on oracle because their quote unquote less risky right nobody ever get fired for bringing on IBM so the game that they have to play I heard Gary say we have a five-year lead on the competition so it's like fusion-io and EMC right EMC it lead on on emc we had packed LC on the QB said hey we're behind we're going to catch up how did they catch up they went out and they bought a company now I haven't caught up yet but they went out bought a company they started investing R&D but they're closing that gap and so that's the game that they play okay we're here inside the cube this is SiliconANGLE Yvonne's coverage of the cube stay with us we're going to be going to come back with Jeff Kelly Dave next we have any more guests coming in we're done this is a wrap for the day okay we'll be back tomorrow on Tuesday stay here SiliconANGLE guns the cue our flagship program day one wrap up here at Oracle OpenWorld yes my goal she's coming on we got a bunch of guys coming on from emc emc has 80,000 oracle customers oracle itself says it has 40,000 hardware customers so that's going to be an interesting we want having a special thanks out the qlogic for letting us stay in their booth again fourth consecutive year the legacy SiliconANGLE and CNBC are broadcasting live here at oracle openworld this is day one coverage with new Act tomorrow with the keynote in the middle of the afternoon all day coverage starting at nine at ten o'clock tomorrow morning here from the cube stay with us and see you tomorrow