(upbeat music) >> Hello, and welcome to this Cube conversation. I'm Dave Nicholson, and this is part of our continuing coverage of Google Cloud Next 2021. We have a very interesting subject to discuss. I have two special guests from Google to join me in a conversation about the financial services space. I'm joined by Yolande Piazza, vice president of financial services sales for Google Cloud and Zac Mauf, managing director for global financial services solutions for Google Cloud. Yolande and Zac, welcome to the Cube. >> Thank you for having us. Looking forward to it. >> Well it's great to have you here. You know, financial services is really an interesting area when you talk about cloud because I'm sure you both remember a time, not that long ago, when we could ask a financial services organization, what their plans for cloud or what their cloud strategy was, and they would give a one word answer and that answer was, never. (laughing) So Zac, let's start out with you, what has changed? Are you and Yolande going to tell us that in fact, financial services organizations are leveraging cloud now? >> Yeah, it's a very exciting time to be in the cloud space, in financial services, because you're exactly right David. People are starting to make the transition to cloud in a real way. And a lot has gone into that, as you know, it's a highly regulated space and so there were a lot of legitimate reasons around getting kind of the regulatory frameworks in place and making sure that the risk and compliance pieces were addressed. But then there was also, as you know, technology is a major backbone for financial services. And so there's also this question of, how do we transition? And a lot of work and time has gone into moving workloads, thinking about like, what is the sort of the right migration strategy for you to get from the current situation to a more cloud native world. And to your point, we're really early, we're really early, but we're very excited and we've been investing heavily on our side to get those foundational pieces in place. But we also realized that we have to think about what are the business cases, that we want to build on top of cloud. It's not just a kind of IT modernization, which is a big part of the story, but the other part of the story is once you get all of this, technology onto the cloud platform, there are things that you can do that you couldn't do in on-prem situations. And a lot of that for us is around the data, AI and ML space. And we really see that being the way to really unlock huge amounts of value. Both of them require massive amounts of compute and breaking down all of these silos that have really developed over time within financial institutions. And really moving to the cloud is the way to unlock a lot of that. So we're really excited about a lot of those use cases that are starting to come to life now. >> Yeah. So I want to dig a little deeper on some of that Zac, but before we do, Yolande make this real for us. Give me some examples of actual real-life financial services organizations and what they're doing with Google Cloud now. >> Yeah, absolutely. And I think we're really proud to be able to announce, a number of new partnerships across the industry. You think about Wells Fargo, you think about Scotia Bank, you think about what we're doing with HSBC. They really are starting to bring to life and recognized that it's not just internally, you have to look at that transformation to cloud, it's really, how do you use this platform to help you go on the journey with your customers? I think a move to a multi-cloud common approach for our customers and our clients, is exactly what we need to be focused on. And the other- >> Hold on, hold on, Yolande. I'm sorry. Did the Google person just say multi-cloud? Because multi- cloud doesn't sound like, only Google Cloud to me. Can you- >> No, and I think Wells, absolutely, and I think Wells announced it's taking a multi-cloud approach to its digital infrastructure strategy, leveraging both Google Cloud and Microsoft Azure. And the reason being is they've openly communicated that a locked in and preparatory systems, isn't the way to go for them. They want that open flexibility. They want the ability to be able to move workloads across the different industries. And I think it's well known that this aligns completely with our principles and at Google we've always said that we support open multi and hybrid cloud strategies because we believe our customers should be able to run what they want, where they want it. And that was exactly the philosophy that that Wells took. So, and if you look at what they were trying to do is they're looking to be able to serve their customers in a different way. I think that it's true now that customers are looking for personalized services, instant gratification, the ability to interact, where they want and when they want. So we're walking with the Wells teams to really bring to life through AI, our complex AI and data solutions to really enable them to move at speed and serve their customers in a rapidly changing world. >> So Yolande, part of the move to cloud includes the fact that we're all human beings and perception can become reality. Issues like security, which are always at the forefront of someone's mind in financial services space, there is the perception, and then there is the reality. Walk us through today where perception is in the financial services space. And then Zac, I'm going to go back to you to tell us what's the reality. And is there a disconnect? Because often technology in this space has been ahead of people's comfort level for rational reasons. So Yolande, can you talk about from a perception perspective where people are. >> So I have to tell you, we are having conversations with both the incumbents and traditional organizations, as well as, the uprising, the fintechs, and the neobanks around how does technology really unlock and unleash a new business model. So we're talking about things like how does technology and help them grow that organization. How does it take out costs in that organization? How do you use all cloud platform to think about managing risks, whether that's operational, whether it's reputational, industry or regulatory type risk? And then how do we enable our partners and our customers to be able to move at speed? So all of those conversations are now on the table. And I think a big shift from when Zac and I both were sitting on the other side of the table in those financial services industries is a recognition that this couldn't and shouldn't be done alone, that it's going to require a partnership, it's going to require, really shifting to put technology at the forefront. And I think when you talk about perception, I would say a couple of years ago, I think it was more of a perception that they were really technology companies. And I think now we're really starting to see the shifts that these are technology companies serving their customers in a banking environment. >> So Zac, can you give us some- Yeah. Yeah. Zac, can you give us some examples of how that plays out from a solutions perspective? What are some of the things that you and Yolande are having conversations with these folks in? >> Yeah. - I mean, absolutely. I think there's three major trends that we're seeing, where I think we can bring the power of sort of the Google ecosystem to really change business models and change how things are done. The first is really this massive change that's been happening for like over 10 years now, but it's really this change in customers, expecting financial institutions to meet them where they are. And that started with information being delivered to them through mobile devices and online banking. And then it went to payments, and now it's going into lending and it's going into insurance. But it changes the way that financial services companies need to operate because now they need to figure out how to deliver everything digitally, embedded into the experience that their customers are having in all of these digital ecosystems. So there's lot that we're doing in that space. The second is really around modernizing the technology environment. There is still a massive amount of paper in these organizations. Most of it has been transferred to digital paper, but the workflows and the processes that are still needing to be streamlined. And there's a lot that we can do with our AI model and technology to be able to basically take unstructured data and create structured data. Thank Google Photos, you can now search for your photo library and find, pictures of you on bridges. The same thing we can now do with documents and routine interactions with chat bot. People are expecting 24/7 service. And a lot of people want to be able to interact through chat versus through voice. And the final part of this that we're seeing a lot of use cases in is in the kind of risk and regulatory space. Coming out of the financial crisis, there was this need to massively upgrade everybody's data capabilities and control and risk environments, because so much it was very manual, and a lot of the data to do a lot of the risk and control work was kind of glued together. So everybody went off and built data lakes and figured out that that was actually a really difficult challenge and they quickly became data swamps. And so really how do you unlock the value of those things? Those three use cases, and there's lots of things underneath those, are areas that we're working with customers on. And it's, like you said, it's really exciting because the perception has changed. The perception has changed that now cloud is the sort of future, and everybody is kind of now realized they have to figure out how to engage. And I think a lot of the partnership things that Yolande was talking about is absolutely true. They're looking for a strategic relationship versus a vendor relationship, and those are really exciting changes for us. >> So I just imagined a scenario where a Dave, Zac, and Yolande are at the cloud pub talking after hours over a few pints, and Dave says, "Wow, you know, 75%, 80% of IT is still on-premises." And Yolande looks at me and says, "On-premises? We're dealing with on-paper still." Such as the life of a financial services expert in this space. So Yolande, what would you consider sort of the final frontier or at least the next frontier in cloud meets financial services? What are the challenges that we have yet to overcome? I just mentioned, the large amount of stuff that's still on premises, the friction associated with legacy applications and infrastructure. That's one whole thing. But is there one thing that in a calendar year, 2022, if you guys could solve this for the financial services industry, what would it be? And if I'm putting you on the spot, so be it. >> No, no. I'm not going to hold it to just one thing. I think the shift, I think the shift to personalization and how does the power of, you know, AI and machine learning really start to change and get into way more predictive technologies. As I mentioned, customers want to be a segmentation of one. They don't want to be forced fit into the traditional banking ecosystems. There's a reason that customers have on average 14 different financial services apps on their phones. Yep. Less than three to 5% of their screen time is actually spent on them. It's because something is missing in that environment. There's a reason that you could go to any social media site and in no time at all, be able to pull up over 200 different communities of people trying to find out financial services information in layman's terms that is relevant to them. So the ability and where we're really doubling down is on this personalization. Being way more predictive, understanding where a customer is on their journey and being able to meet them at that point, whether that's the bright offers, whether that's recognizing, to Zac's point, that they've come in on one channel but they now want to switch to another channel. And how do they not have to start again every time? So these are some of the basics things, so we really doubled down on how do we start to solve in those areas. I think also the shift, I think in many cases, especially in the risk space, it's been very much what I would call, a people process technology approach, start to imagine what happens if you turn that around and think about how technology can help you be more predictive internally in your business and create better outcomes. So I think there's so many areas of opportunities, and what's really exciting is we're not restricted, we're having conversations that are titled, the art of the possible, or the future of, or help us come in and reinvent. So I think you're going to see a lot of shift probably in the next 12 to 18 months, I would say, and the capabilities and the ability to service the customer differently and meet them on their journey. >> Well, it sounds like the life of a cloud financial services person is much more pleasurable than back when it consisted of primarily running into brick walls constantly. This conversation five or 10 years ago would have been more like, please trust us, please. Just give us a shot. >> I think Zac and I both reminisce that we couldn't have joined at a more exciting time. It's the locker or whatever you want to call it, but it is a completely different world and the conversations are fun and refreshing, and you can really start to see how we have the ability to partner to change the landscape, across all of the different financial services industries. And I think that's what keeps Zac and I going every day. >> And you said earlier that you alluded to the idea that you used to be on the other side of the table, in other words, in the financial services industry on the customer side. So you pick the right time to come across. >> Without a doubt, without a doubt. Yes. >> Well, with that, I want to thank both of you for joining me today. This is really fascinating. Financial services is something that touches all of us individually in our daily lives. It's something that everyone can relate to at some level. And it also represents, that tip of the spear, the cutting edge of cloud. So very interesting. Thank you both again, pleasure to meet you both. Next time, hopefully it will be in-person and we can compare our steps that we've taken during the conference. With that I'll sign off. This has been a fantastic Cube conversation, part of our continuing coverage of Google Cloud Next 2021. I'm Dave Nicholson, Thanks again for joining us. >> Thank you. (upbeat music)

>> Live from San Francisco, it's the Cube. Covering Google Cloud Next '19. Brought to you by Google Cloud and its ecosystem partners. >> Okay, welcome back everyone. We're here live in San Francisco on the ground floor here. Day 3 of Three Days of Wall to Wall Coverage, Cube coverage of Google Cloud Next 2019. I'm John Furman, co host Steve Alante. Steve looking good here. >> Thank you, John. I'm feeling good! >> Day three we're getting energy. Our next guest, Ulku Rowe, who is the technical director for financial services for Google Cloud. Thanks for joining us! >> Well thanks for having me, good to be here today. >> So, obviously all the verticals, the big theme here is that all the industries have opportunities with Anthos and all the data driven activities and open source greatness. But financial services is always kind of an early tell-sign. All the trends kind of happen in financial services because the data, whether its algorithmic trading or whatever, is clearly a competitive advantage. From fraud detection to competitive advantage revenue, big driver. That's your sweet spot. What's going on there? What's the signals from the marketplace? How is Google Cloud Next here impacted fina-- What's the big news? What's the big stories? >> It's a very exciting time in financial services. You know Google Cloud is enabling financial services customers across the globe, across all the sub-sectors. Whether you are in retail bank, in capital markets, or asset manager, or a hedge fund, insurance, FinTax. Cloud is enabling all of our customers to transform their businesses to reduce their cost, and to create better and new products. And it is very exciting for them. They're using our, you know, our data platforms to be able to look at the data that they have and understand their customers better to be able to create better experiences for them. Whether it's through chat box, or our contact centers, or better online experiences. They are able to provide more customized products for them. Especially on the trading site, on the retail banks and hedge funds, they're using our high performance compute environments, that our HPC offerings to be able to create better risk management systems to look at their portfolios and understands the risk. Whether it's a credit risk or a market risk, or fraud, or if they use it for anti-money laundering. We're seeing customers in the insurance space to create personalized products, they are streamlining their actual aerial processes. FinTex, obviously are using, you know they're Cloud native. It's very exciting for them to have this opportunity to challenge the big players. >> Don't forget blockchain. It's coming right around the corner, too. So you're a technical director. What does that mean? What is your job? What's your focus? >> It's a number of things. I sit mostly on the engineering side of the house to make sure that our product offering works for financial services. And it includes things like making sure our security offerings, or our compliance works, our data platforms, our computational platforms, higher level services, they do what financial services customers need them to do. I also have the privilege of spending a lot of time with our clients across the globe. And I get a view into what they're thinking about, how Cloud is changing their businesses. >> So we spend a lot of time in New York and 10 years ago when we started the Cube, when you talked to financial services company there were two narratives. One was "Cloud is evil, we're never going to go to Cloud." And the other was "Well we have global scale, "we're going to build on our own Cloud". A couple things have happened, as you know. They're obviously, going hard into Cloud. But they are building their own global Clouds, they're just building it on top of your Cloud. So, talk about that change, and what are some of the big trends that you're seeing today in terms of their adoption? >> Yeah, that has changed quite a bit, the narrative. You know it used to be that "We're never going there" to "Well, maybe we'll go there". And now it's, "How quickly can we get there". And customers are now using, now they're seeing the Cloud as a place to innovate and actually change their businesses. Initially they started maybe as a cost-play because they had big legacy platforms and Cloud came in and the ability to be able to reduce that cost-space especially under the competitive pressures they're in. It initially started with a cost-play. But then it very quickly turned into "This is now my innovation play". "This is how I can change my business. This is how I can stay competitive. This is actually how I can up level my security and compliance". So, it has become very much a partnership between us and our customers to actually think about how the future in financial services is going to be. >> Again, we've been in New York a lot. Back in my (mumbles) late 80s early 90s, I covered a lot, sold and did some system engineering with all the banks, all the financial institutions and other in New York. They're good customers but also they're tough customers. They buy a lot, early adopters on everything new, but they're tough customers. They're very demanding because the stakes are high, money. >> I used to be one of those customers. >> Also risk management. So, they're pushing the envelope, with the RND, buying early. They have stringent demands in terms of performance, also risk and security all kind of come together. So how does that boil into today? What are they looking at? What tires are they kicking here at Google Cloud? What are some of their tough questions and requirements? And obviously security has got to be big then. Your thoughts. >> Exactly. I think financial services is a business of trust. So usually the conversation starts there. And trust is established through security and compliance and privacy and transparency. And that happens to be one of our differentiators. Our security offering actually allows them to create a product for them that is actually even more secure than our on premise settings. The second thing is Hybrid and Multi-Cloud. Especially if you are a financial services institution that's been around a while. You're carrying a lot of legacy. You've got a lot of technical debt. You want to be able to also have flexibility to be able to run your workloads wherever you want. So, Anthos, if I were to pick a word that dominated the conversations with our financial services customers over the last couple of days, it has been Anthos, our Multi Hybrid Cloud solution. The ability to run workloads on-premise, on Google Cloud and on other Clouds at the same time and have that flexibility to be able to choose where to put your workloads depending on your needs has been very exciting for them. >> What specific questions were they asking? Were there certain technical attributes of Anthos that was interesting to them? What was some of that, when they started to look under the hood, what are the conversations like there? >> Well I think the most commonly asked question is how soon can we start? >> So there's demand. >> There is definitely demand. There is definitely demand and excitement. And for the reasons that I've just laid out, to give them the flexibility that they want and the reality that the Prem set up is going to live for a while. So for them to be able to manage this across a single pane, no matter where their workloads are working, it's a big interesting proposition. >> I want to get your reactions on that. We've been doing a lot of customer digging into the requirements around on Prem, Hybrid, Multi-Cloud, and Pure Cloud, and there's a debate around cloud selection. And I was going to read a quote from one of my article that I'm writing right now. I won't say the customer name, we are currently over 500 existing planned cloud efforts across the company, and we're going to support. We've got thousands of networks, data centers, and more than 500 cloud efforts with lead industry leaders. But we want to manage it individually. So, the trend is hey I got a workload. This workload look works great on "X" cloud. This workload works great on "Y" cloud. This workload works great on this other cloud. So (mumbles) we multi-cloud. The workloads are dictating cloud selection. And they still want to manage themselves. So a little bit of control-freak action going on there. But also flexibility on cloud selection. So it's not a one cloud rules the world but, if the one cloud (mumbles) serve the workload. The workloads are driving it. Do you agree with that, are you seeing the same thing? Yeah, I think what's important to financial services clients is to be able to have skill and reliability. And they've started on this journey first with standardization and that standardization was offered by (rambles) containerization. So they already started taking their legacy workloads and started containerizing them so that they can actually now put them no matter where they want. And now, on top of that (rambles) and containerization availability, the services that Anthol springs, observability and security and a single control plane, is now, I think, an extension of the desire for standardization. Which brings the security and reliability across the board. >> Sounds like an operating system to me. Cloud operating system maybe? >> It is, yes. >> We talk about an operating-- >> Yes, yes. >> (rambling) clouds, its operating (rambling) clouds. >> No, it used to be Unix was the operating system, Anthos is the operating system of the Cloud. >> What's the disruption conversation like? Cause banking really hasn't been highly disrupted, but I've certainly heard CIO's in the banking world ask the question, "Well, do banks need physical bags?" and "We're becoming "a software company". But the industry itself hasn't been highly disrupted. The leaders are still really strong, lots of disruption scenarios but, is there a paranoia? Is there, they're obviously aggressive people, are they getting out ahead of the disruption? What's that like? >> Financial services is an industry that's been slow to move to the Cloud in many ways cause it is a very heavily regulated industry, it's got a lot of legacy. But disruption happened, right? FinTex have started happening everywhere. It's a reality of today. I don't think it's whether disruption is going to come, it's here. And I think it's actually creating a very healthy environment in the financial services sector because initially I think that financial services firms were saying, "Wait a minute, I need to "stay competitive." Then it turned into, "Wait a minute, maybe we can be collaborative." So now we're seeing the big players collaborating more and more for FinTex, and now we're seeing a lot more open systems where we've got open banking, open API's, where we're seeing a very healthy ecosystem being created in financial services. >> So I was going to ask you, do you think traditional banks will lose control of the payment systems, or do you feel like this new mindset is going to allow them to maintain their hold on that? >> I don't have a crystal ball, but I think it's going to be more of a collaboration. I think there's going to be more players, I think there's going to be healthy competition and also healthy collaboration across board. >> You mentioned blockchain before. We've had Nick Cucuru from Mastercard on many times. He's talked about their blockchain initiatives. But the other thing that's interesting is, they're actually, as they said, becoming a software company, providing services and becoming more marketing oriented, not just to consumers, but to other businesses. It's fascinating changes. >> One thing that I wanted to ask you is that you mentioned earlier ecosystems open, more collaborative, which we agree. We see that a hundred percent as well. But the interesting dynamic of these big financial institutions is they've had a huge build-out on data centers over the years. Just go back a couple decades, all they've been is gearing up and building out. And now in comes the Cloud, they're not going to just let that on-prem go away, I get that. But now you got new white spaces emerging with Cloud. What Cloud is operating in is not so much knock the big guys off their perch, it's more of white space opportunities for point solutions that could be funded and grow by just being creative. Whether its slinging API's together, or using glue layer software, or some sort of connective tissue around data. >> Yes. >> How does that evolve? Cause New York's got a new renaissance around its entrepreneur ecosystem. >> Yes, New York's becoming the next home of FinTex. >> What are these white space opportunities? Do you see that either service providers, either global service providers, or ecosystem partners could take advantage of. Cause white space is where the opportunities are that's where the ecosystem will develop. Your thoughts? >> So I think you're absolutely right. I think as financial services providers are using Cloud to be able to bring their cost down and handle their legacy, now they have more resources than they can use to create new products, new solutions, new opportunities to be able to reach maybe different kinds of clients that they haven't considered in the past or weren't able to address. Because I think it's all about using their data. Whether its data about their customers to be able to create new products for those customers. Or using market data, I mentioned market data, cause financial services has always been a very data heavy industry looking at the market data to create new trading opportunities, to create new portfolios to understand how the market behaves. What are the correlation differences between different instruments. All of those capabilities, now they can build on Google Cloud with our Cloud partners as well. >> I want to get your thoughts on (rambles) an interview with Apache earlier. Mitt Zavy came on, he's new to the company, only a couple months in, but clearly Apache is going to be a real interesting opportunity because API marketplace is going to evolve from just connecting API (rambles), it'll be much more programmable. This is going to be a big part of it. How do you see that playing into your role, because you're brokering API's now, you're adding more codability to it. Coding API's is now the next level up. What's your thoughts on that? >> Exactly, API is becoming the connective tissue between all the players and the financial services market. I mean, that's how you create the ecosystem. You need a language to talk to each other. And the API's are the ones that are creating that language. And I think it's helping in two ways. One, it is creating this universal language for the providers, and the consumers, and the different players to talk to each other. It is also enabling financial institutions now to expose some of their Legacy systems without having to completely re-engineer them. But to put a veneer on it, containerize them, put an API layer on them so that they can actually be agile in this new world without having to rewrite everything. >> And the business model opportunities or having new business models are emerging from this. We saw AccuWeather came on, was talking about this. This is potentially a money-making opportunity. >> Absolutely. Absolutely. >> We're not just (mumbling) partners. >> Yeah, that's exactly what I mean. >> What are some of the harder technical problems that maybe ten years ago were unsolvable that you've helped customers solve, or that Google is in a best position to solve that you're working on? >> When you think about Google's differentiators one of the places is data analytics NAI. As we talked about it, financial services is a very data heavy business, but unfortunately the data had been sitting in different silos for a very, very long time. And Google's data analytics tools to be able to take all of that data, put it together, and then put that data in front of business people that doesn't necessarily have to have a computer science degree. And to be able to get insights from that data is creating a massive shift in the market. And of course the next stage from that is using our AI and email capabilities to create new insights from that data. At Google we've been using ML and machine learning and I've been embedding them into our products for a very long time. And now our focus is to be able to make it as easy for our customers to do the same in their systems. Everything from how you source that data, how you process that data, and then how do you build the models, how do you train them, how do you execute them and how do you create control over those models? And those are the places that are very attractive to financial services because as you've rightly said, it is a data business and it's important to the core of their business. >> One of the things I want to get your thoughts on. This may or may not be in your wheelhouse, but given your experience I think you might have a comment on this because technology's a big part of the shift. Culture is a big part of the shift. In terms of either mindset, whether its not an age thing, it's more of a mindset thing. But one of the things we're seeing from customers telling us that slowing down adoption on the innovation curve is procurement, and that a lot of these companies have 1995 procurement rules. That's client server, that was before the web started. So procurement, how do you procure a modern Apache API marketplace programmability (rambles) infrastructure's code completely different application renaissance is happening. So you got modern application, multi-cloud, hyper-cloud. There's no rules on procurement. There's no, "Well, split the deal amongst three vendors." You can't do that anymore. Google's great for this Cloud, why even look another cloud, or Amazon. Or Amazon for this, Google for that. So procurement has lagged. >> Yes. >> And so does that get in the way? Do you (rambles) into that? Just generally, what's your comment? How does your procurement evolve? >> I think especially in financial services like procurement takes a long time. In some cases rightly so because you got to make sure you have the right security, you got the right processing in place. But I think it's probably time for us to modernize our procurement processes as well. >> Make it faster. I mean, a lot of the times its on the customer too, not just you guys. Self-services changed the game, certainly. But even just the procurement rules. Well, we're running out of time. Thanks for coming out, I appreciate the insights. >> Great interview. >> Final question. What is the biggest learnings of the past couple of years, now you're starting to see complete visibility into programmability networking layer. Now you get (rambling) service, (rambling) right around the corner. What's the big revelation in your mind of where we are? >> Well, I think, especially for financial services, we've been on this journey for a while. I think the conversation has shifted, I think that was the very first question that you have asked. And I think we are now at the place where it's no longer just experimentation or just doing proof release systems. We now have the customers that are doing mission critical, global systems on Google Cloud. HSBC has been on us with the stage, Scotia Bank, (mumbles), some of the biggest customers. So what have we learned from that experience? I think one, you got to start. You got to start getting your hands dirty. Because it is a different paradigm and it does take a while to learn that. And it is not just a technical paradigm shift, it is a cultural paradigm shift. If you don't start early, its going to take you a while to bring the entire organization with you. Start the technology early, start the cultural transformation early as well. >> Ulku, thank you for come sharing the insights. Congratulations, good work. Financial service, it's a tough business. You guys do a good job, thanks. >> Thank you very much, thanks for having me. >> Live Cube Coach here in San Francisco. I'm John Furrier with Dave Vellante. Stay tuned for more live coverage after the short break. Day three, of Three Days of Wall to Wall Coverage here on The Cube in San Francisco, stay with us.

>> Announcer: Live from Las Vegas, it's theCUBE. Covering InterConnect 2017. Brought to you by, IBM. >> Hey, welcome back everyone. Live in Las Vegas, the Mandalay Bay. We're at the IBM Interconnect 2017. This is CUBE's exclusive coverage of three days of wall to wall. Day three winding down here at the event. Great show about cloud, data, and blockchain. Our next guest is Marie Wieck, who's the general manager of the Blockchain group within IBM, and Greg Wolfond, who's the chairman and CEO of SecureKey Technologies, announced a partnership with IBM. A lot of great success of blockchain. It's now a business unit in IBM. Marie, great to see you. Congratulations on the new role. >> Absolutely, we're really excited. We've seen so much momentum in blockchain that we really are investing heavily, created a new division, part of our Industry Platforms team, and we're off to the races. >> Exciting. >> So six weeks in the role now. >> Six weeks, I guess the business model is keeping running hard, (laughter) 'cause you guys have made great success. We had Ramesh, one of your workers in your division, on early, he came from the labs, or the research team, >> Marie: Right, research. >> and now he's in Solutions. The traction has been pretty amazing, so take us through, from a business standpoint, obviously you're now got the P&L applet running, you're going, engaging customers on use cases. Where'd this progress come from? Was it just, the internal coalesce of IBMers and customers coming together, give us why this is at its point today. >> I mean I think the most important point about blockchain, is that it really is a network effect. The whole idea of a shared distributed ledger, where everybody has visibility to the appropriate parts of data that they want, gives you some really interesting new business models, but you can't have a network effect, you can't have a community and an ecosystem if you don't have a common set of standards, and a way to drive interoperability. So just 15 months ago, we launched with 30 other people, the Hyperledger Project, in the Linux Foundation. It's been the fastest growing open source project since the Linux Foundation started, so really impressive momentum, and, you know if you think back just a year, at InterConnect last year in February, we had this little demo of trading marbles. This year, fast forward a year, we have a new division, we have 400 clients that we're working with on real production level use cases. We have eight networks in production. We've got now version one of the standard, which really brings a lot of the enterprise requirements, and we're seeing all kinds of new use cases. Supply chain, health care, government, financial services, all where we're really talking about being real now and trusted for business. >> And I would add that Ginni Rometty on stage, hammering home the focus, >> Exactly. >> like big time, at a Watsonesque level, >> Marie: Absolutely. >> so that must to mobilizing the IBMers new division. What's the buzz internally? (laughter) People want to come work for your division now, I mean what's happening? >> I do get an awful lot of emails from a lot of people who are very interested, but I always know when there's real momentum, when there are people who are doing it that we didn't tell to do it, you know, so we're starting with a pretty small team internally, my group itself Direct Line, is about 200 people. There's about 600 people in the extended team across the different functions across IBM, but when I do a search on our internal directory and search for blockchain, there's over a thousand people who have that name already in their title or in their description because they're working on it, and they see the power of it. >> Innovative people get intoxicated by blockchain, because they can just see the disruption elements. Greg, I want to ask you, because you're actually doing it, not only is it intoxicating to kind of grok what blockchain can be, this some real use cases right now, really jamming hard on blockchain with the ledger, can you just share quickly how that's playing out in context IBM and in the marketplace. >> Yeah, so SecureKey's a digital ID company. So we started in Canada years ago doing this login service for government. You show up, you want to see your taxes, your unemployment, your pension, any of 80 different departments, we made it easy for citizens to go there. You can redirect into a federated login with your TD login, or your Royal Bank login. We have millions of Canadians who use that, and we had hundreds of thousands a month, but it's really a login service, and it saved the federal government I think eight hundred million dollars to get that done, but we wanted to move to the next step, which is sharing identity, so digital identity and how do I share my attributes from TD Bank or Royal Bank or my data from Equifax or TransUnion in a trusted way with parties I want to, and not share it in other ways. And we couldn't do that without Hyperledger. So we can talk a little bit about why we went to it, but we have a network in Canada, we tested already phase one, we're launching later this year with Royal Bank, TD Bank, Bank of Montreal, Scotia. Where a citizen can show up at a Telco to create a new account. Is it okay to share my name and address and my credit score? Yes, done, account's open in seconds. FINTRAC changed the rules in Canada so you can open a bank account. Can I show up at a bank and share my attributes from the province and from a credit agency, and create my bank account in seconds. And we've all had this problem, right? I talk to my wife... >> I mean we live it everyday, I mean identity theft is I think front and center in mainstream life. Everyone has either someone close to them or themselves get the phone call, the credit score's dropping, or hey, someone's had my identity for a couple weeks, this is brutal, even the credit cards are gettin'... >> It's funny, when I started this business two of my friends had their identity taken over and someone put mortgages on their homes, and I said there had to be a better way to do it. With blockchain if we can take data from different sources, that the bank knows it's me and I can log in right now, that I possess this phone, that the province knows it's me and I can turn on the camera and check it's me, we can raise the ID validation score for everyone in the whole industry. For healthcare, to government, to banking, and we not only raise the ID validation we also raise the AuthScore, because I'm not just logging in with my bank, I must have this phone, with this SIM in it, and if it's canceled it's not me. And normally people would put that through brokers in the middle, but NIST in the U.S. said, we don't want brokers in the middle. They could peek, they could see your data. I have single points of failure. If this is identity for health here's how it goes down. I have honeypots of data. People are collecting all of my stuff in one place, it's encrypted, but the bad guy's going to get that, right? They could go after the person, and say I need the keys, I have a member of your family... >> I mean we're living in a world, in cloud, Marie knows, there's no perimeter anymore. >> Marie: Right right. The security experts that are state of the art right now, are saying, even saying theCUBE in day one here, data is the new perimeter. So there it is, right, this is fundamental, what you're saying, this is the new perimeter, the data, and you distribute it. >> So no broker right, means less of a threat matrix for people to hack. You don't need a trusted third party to arbitrate. >> You shouldn't have to get other credentials and things to go right, if I can login at my bank right now` and prove I've got the mobile device, can I release data from different sources? Ten percent of Americans move every year, if I show up at an apartment, can I share that I'm Greg and my bank says I'm me, that I have this device from my mobile company, can I share a background check to say that it's me? We're going to do that in about eight seconds, compared to the landlord having to go and pay a real estate agent one month's rent to vet you. And then when you do that, imagine the power now right? Would you like to sign up for internet? Share your data, yes, click. Would you like contents insurance, click. Totally taking friction out for consumers, but making sure that the parties who provide that data, whether it's my bank, whether it's my government, they can't track me. I don't want my government or my bank knowing if I go to mental health, or if I go to a cancer clinic. Really important that they don't know, right? >> Yeah, healthcare here, I don't know what it's like in Canada, but certainly in the United States you can't get information about yourself (laughter). >> And it's a perfect connection to blockchain, 'cause the whole notion of blockchain in our mind is about a trusted network, and how do you get trust if you don't know who the people are who are participating. So, we signed an agreement with the Food and Drug Administration in the United States, to focus on leveraging blockchain for exchange of information around patients, privately and securely for clinical drug trials. You know, it's just one example of now, you bring that trust element, that's built on a blockchain already, as a new interoperable component of these new supply chain networks. Whether it's around supply chain in global sourcing, whether it's the providence of food or diamonds, there's some really interesting aspects that you can now add on top. And we're now even connecting, you mentioned Cognitive, you know, now apply Watson on top of that. How do you increase the trust level in our new version one delivery of Hyperledger on the IBM cloud, we actually provide a trust score for the network, scale, a one to a hundred. What if Watson could actually look at your use case and hear the recommendations and suggestions for how to improve the trust level? Improving it means getting more members, so it's more distributed, and there's more sharing of information. But they're not going to want to share that information if there isn't a trust model. >> So give us a glimpse as to, sort of, your business. You got 200 people, but you've got thousands of people within IBM that you can tap, in addition to the huge portfolio of things like Cognitive. So you've got this startup (laughs), >> Marie: Right. >> inside of IBM. >> Marie: A startup in IBM. >> And you said it's inside the Industry Platform's team, so what is that, and what are you actually building out? >> So, we are building, we're taking, and contributing, we're investing really, in the Hyperledger project ourselves. We are one of now 122 members of the open source and open community project, and we're actually developing and contributing content there. >> Dave: Big committer there. >> Big committer, and we provide a support model for anybody who wants to use just Hyperledger, but we take Hyperledger back, and now we're delivering it as a secure platform on our high security network, that is production grade, you know enterprise strong, would be Ginni's word for that, right, and delivering that on our cloud, or letting you take a container and put it on your own enterprise if you really want your own private cloud. But we're also building industry solutions on top of that. So we announced a partnership with Maersk, for global shipping on global trade digitization to provide greater visibility. >> But on that deal, just to interrupt, that Ramesh was put in, that wasn't a solution specifically for them, that was an industry scope solution. >> Correct. So it's really a partnership. So in this case again, it's that network effect, it's that ecosystem, it's not Maersk, the customer, it's Maersk and IBM the partners, who are now bringing forward as the anchor tenants in this new network, the rest of our ecosystems, and we were interested 'cause we have a big supply chain business for all our hardware as well. >> And you're selling a SAS product, is that right? >> Correct. >> So it's a subscription based model? >> Correct. >> And then services on top of that? >> And services both to develop new blockchain applications, we've had a number of our clients here from the 20 thousand at InterConnect, that've come up with new ideas. We're going to help them build that, in a services kind of model, but many of these are going to be essentially SAS networks where either they're going to pay a membership fee or they're going to pay per transaction, a percentage of the price, or they're going to participate in the savings, because this is actually going to streamline the opportunity. In the case of SecureKey, the model we see customers willing to buy, the validation of an identity for an individual if they're participating in a critical transaction. A bank would certainly be willing to pay to increase the confidence that Greg is Greg, if he was applying for a mortgage online. >> And the consumption is through the IBM cloud, correct? >> Yeah, so there's a toolkit, we're big believers in open source. It's open at the ends, really easy using things like Bluemix to connect to the endpoints. And for us, it's just a magnificent coming together, because things like the high security network to turn banks on quickly, where they trust it, and they can put their data in a secure and trusted way, make this all go faster. >> Dave: But that's the only place in the world I can get this, correct? >> Marie: It is certainly the only place that you can get that level of security in a blockchain network. >> But from a competitive standpoint, somebody else has to build this out, and create as a competitive product as IBM has, and run it on somebody else's cloud, for them to compete, correct? >> That is correct. >> The strategy is not to spam the world's clouds, it's to say hey, we've got this solution, here's how you get it, here's how you consume it. >> And we really firmly believe that if this is an interoperable set of standards, there will be other networks, there will be other participants. We want them all to be interoperable. We want a global identity standard for interlocking networks, because that is actually the tide that raises all boats. So if they want to take Hyperledger and put it on their own private cloud or somebody else's cloud, we support that thoroughly. We think that the most enterprise grade cloud though, is with IBM. >> You just got thousands of people doing it, and you say, go for it. >> Exactly. >> Dave: Bring it on baby! >> First of all, you had me at blockchain beginning the interview. I love blockchain, and I think it's very intoxicating from a disruption standpoint. Any entrepreneur, any innovator... This is a bulldozer on existing business models, and of how people do things. So, I'm sure the organic growth that you guys see is proving it, internal IBM and external. How do people get involved? What's your plans on building the ecosystem now, because you got a tiger by the tail here as the GM of this division now. You got to run hard, you got to embrace people, you got to have events, what's your plan, and how do I get involved if I'm someone watching and we want to get involved? >> So, great simple ways to get involved, the developers, we want 'em to be involved directly through the cloud and through developerWorks. You get free access, you can get started quickly. In three clicks you can have a four peer Hyperledger network up and running on Bluemix, and you can start your own services and create. If you are a customer, what we're really suggesting is come and bring us your use case. Bring the participants in your network as well. Come into one of our IBM garages, and we'll work that out for you. And I think it's important that, we think blockchain has a huge potential or I wouldn't be in this new role, but we also think it's not for everything. It's not the panacea for every business problem. We want to make sure the people are using it in the right way for areas where it really makes the most impact, and then we'll help you implement that and develop it. And then we really see the whole ecosystem around our partners, you're going to onboard people into a blockchain network. You're going to have to integrate with your back ends. You're going to extend your mobile devices to provide these new services through apps. So our GSI community is really helping with the integration and the onboarding. Our ISVs are developing new services that run on those blockchain networks, and we just launched our new IBM Cloud for Financial Services, has a blockchain zone, for all those fintech startups to get access and reuse components, so that we can accelerate the effect. >> Alright, well, congratulations Marie, great to see you in the new role, congratulations, >> Marie: Thank you. >> We're super excited for you, and looking forward to getting the update soon at our new studio. We'll try to rope you into our new Palo Alto studio. Greg, great to hear your success. This is the nirvana, I mean, secure ID is like, the big, I mean easily, not like with some either token or engineered identity system, and this is a home run. >> It's privacy, and it's as we talked about before the broadcast. Facebook, would you trust Facebook to go see your medical records? Would you unlock your title using Facebook? You want things that are private, where people aren't tracking you and are more secure than that, so this is really... >> Don Tapscott called Facebook data fracker. (laughing) We provide all our data for Facebook, they've got billionaires on it. Thanks so much for spending the time. >> Thank you. >> Blockchain revolution here inside theCUBE, bringing you really trusted content here on theCUBE. Distribute it out around the world, I'm John Furrier, Dave Vellante, thanks for watching. More great coverage coming up here, stay with us.