(upbeat music) >> From our studios in the heart of Silicone Valley, Palo Alto, California, Nick is a Cube conversation. >> Hello, and welcome to the Palo Alto Cube Studios, I'm John Furrier, host of the Cube. We're here for great Cube conversation with Gilad Bracha who's a distinguished engineer at Shape Security, has a legacy in the programming world, one of the early folks working on Java, a variety of other great things: Small Talk, Newspeak, a variety of programming accomplishments. A legend in the industry, thanks for coming on. >> Well, thanks for having me, it's a pleasure to be here. >> You know, one of the things we always talk about on the Cube is how I work for a company, they do this, they do this great, here's our differentiator, here's our advantage, a lot of marketing speak, and then we also do a lot of interviews around disruption, around cloud computing, getting to DevOps, network effect, changes of network, moving packets around store and compute, all the benefits of cloud computing but we don't really talk about the underlying languages that are driving all the changes and this is something that you're an expert in and I want to get your thoughts on this because, you know, computer science is at an all time high. You can't go to Berkeley, you see what's going on at Berkeley, the number one major is computer science, the data classes, dreams of starting a company, but computer science is changing a lot. More people are coding but does that mean there still more computer science going on? So, a lot of people are trying to understand where the future is going to be and underneath it all is the programming languages themselves. >> Yeah, well-- >> Your thoughts on computer science and the languages out there. >> So, too much to say. But computer science is a lot, there are trends and there's a lot of emphasis now on machine learning and things like that. And it's interesting because that affects, which language you use can make these tasks a lot easier or a lot harder. And we've, you see certain languages being picked up for that purpose and new languages being done for numerical stuff like Julia, people are using R, God forbid and it's really interesting to see that. To me, it's interesting because there's a whole set of languages, the APL family of languages which really go back to the early 60s. But they're just phenomenally designed for these kind of large arrays of data for doing mathematical operations in parallel on large arrays or multi-dimensional arrays, essentially, tensors, back before that word was used in programming. And there's huge potential for doing better in terms of programming with those things. So that is one new, not new but area that's been kind of coming alive again. >> Yeah. >> That's really cool. >> You know, it's interesting, too, you bring up a point. We were talking before we came on camera about Lisp and all these other cool science out there. With, now, the advent of unlimited compute with cloud and, now, kind of new connected devices, a lot of the old science is coming back into vogue because of some of the use cases. I mean, I remember when I graduated college in the 80s, we had departments that were actually called data processing departments. And they used data processing, that's what they did, they processed data. That's the number one use case today is processing data. So, a lot of the old is coming back because it's relevant in this new era. So, I got to ask you, what is your favorite science and computer science that you think is relevant? You mentioned APL, what concepts, we TensorFlow with Google, things like that coming back, you see machine learning and AI, these are not new concepts. >> Well, some of them, I mean-- >> What's your thoughts? >> Machine learning, definitely, there have been breakthroughs in the past, I don't know, 10, 15 years and but the basis of it, the beauty of this is the basis of this is the real hardcore math in calculus and statistics, that stuff is golden and wherever it applies throughout the universe and you look at reasoning about these things and it comes up again. That's the root of it all. Making it so that you can manipulate things closer to level you can with math is really challenge for programming languages, so that you don't spend your life dealing with, sort of, irrelevant, boring details, oh, this has to be lowercase, that has to be tab, this tool doesn't work on that operating system. Most of our effort as software engineers goes, we're dealing with junk, really, and we should try and abstract over that and get over that. >> What are some of the exciting things that get you excited for programming language because there's a lot more excitement, a lot more opportunities now; you're seeing you can stand up software very quickly these days, and so there's some really quick and dirty ways to get software written with languages. Some want more principle-based design languages that have all the integrated components. What's the trade-off, what are some of the things you like around the new trends? >> So I'll give you something that meets both of the criteria that is both very principled but actually makes it much easier to put something together. One of my favorite new things that have come in the past few years is a thing called Elm which is a language, essentially, the main application, so far, has been to build websites, essentially, UI that's targeting a website but it is a functional programming language but it is much more approachable than the traditional academic stuff, even though the ideas are basically the same, but they're very well engineered. Actually, better engineered in many respects than a lot of the traditional stuff that you see like the Haskells and OCamls and stuff. And it started for the web, so it's a different game but it's a joy to use, it has great error messages, it has a time traveling debugger which is one of my favorite hobby horses, so you can actually go back and roll the computation back to where a problem occurred. And that, kind of, is interesting because it meets both of those points. >> Talk about this live programming, you mentioned rolling back and this is around live programming. >> Yeah. >> This is an exciting area. >> Oh, yeah. >> Your thoughts on live programming because we're seeing collaboration where I can have a screen open. I saw a demo at Amazon Reinvent last year or year before where people can be in different parts of the world or different offices in the same building and coding the same, I get the collaboration piece but there's also live programming languages that have built-in compile that's changing the old ways of debugging. Your thoughts. >> Right, so, definitely, that is something that people who have a heritage in small talk or Lisp, kind of, remember those systems or, if they're very lucky, still get to use them. And the thing is that most program languages don't have that level of interactivity when you work with them as a developer because there is too much of a feedback loop between when you actually specify what you want to happen by writing code and when you actually see what actually happen when you run your code and it typically doesn't do remotely what you wanted it to. That feedback loop is too long 'cause you have to go through compiles and bills and whatever, and the idea of live programming is to shorten that so that you, ideally, instantly see you change something and you can see the output and the output gets changed accordingly and you don't have to wait and, in particular, you don't have to go and rerun your program, get to the same point where you were, especially when you're debugging, right? That's the beauty of fix and continue debugging which is sort of a small but important piece of live programming where you can basically go and change a function and, immediately, proceed with the computation. You don't have to restart, you don't have to get to where you were, recreate the state, make sure the heap is in the same thing and that just, A, it's productive, it saves time. It's just a joy to watch and play with this thing, it's much more tactile, you actually feel-- >> It's faster, too, you don't have to, all the steps involved, classic debugging, restart, do it all over again. >> It's faster and it's less error prone 'cause those steps, you make mistakes, you went through all these steps and you forgot one thing or whatever or you did something wrong and didn't notice and you chased some, you know, went on a wild goose chase trying to figure out a bug, so it really is a huge H to product, a huge help to productivity and it's just so much fun to work with these systems. >> Well, I got to get this question for you while you're here because I get this question all the time and it's common. A lot of the young kids want to program, they see the future, they know that coding is a good skill to have. What's your advice to parents out there or kids, whether they're in elementary, or high school, or college, that might have a focus on, say, you know, I'm a neuroscience major or I'm doing this but I want to learn how to code? What's your advice for how to learn how to code because I've seen, oh, learn Java, I'm like, okay-- >> God, no. >> Not really my first choice. >> Eat spinach. Do 50 push-ups. No, it's not that comfortable. >> No, no. >> Java's not my first choice for recomm-- >> It's also 50 push-ups and spinach are better for you. Java is actually possibly damaging, at an early age, you should not be doing that. >> Doing Java, in particular? >> No, no. >> Why is that, it's just too complex? >> Because it's a lot of irrelevant boiler plate. It's a lot of stuff that should've been obsolete before and will be obsolete by the time you, hopefully, get to work for real and it's painful and if you aren't really into it, it'll just turn you off of the whole field. >> What's going to get someone excited, is it Elm, is it gaming, is it some sort of-- >> Yeah, so, Elm is good because you can run it, you don't need much setup, you can run in a web browser. I'm a Smalltalker and I still love the Smalltalk systems and they're still, overall, is a complete programming experience, they're still unmatched. Except for list machines which are kind of hard to come by. And so, I'd focus on those-- >> People tend to talk about Python, they talk about some of these languages. If someone's going to tinker around, what's going to be the addictive, if someone's going to-- >> So, people get addicted to all kinds of things but I would-- >> In terms of a good-- >> I tend to avoid the mainstream. People tend to latch on to the mainstream because they think it's a good career move or whatever. My advice is, you get good, learn the fundamentals in the cleanest way possible, then the mainstream stuff will be easy, rather than focusing on it, 'cause there's so much irrelevant detail in those systems and the programming experience is not that great. So, try something a little less meaty, closure is a lisp that you can use and there's closure script as a version that runs on the web. Try Elm. Try Smalltalk. >> And all these languages, they can actually produce something of value? >> Yeah, they can definitely, I think, still 70% of the world's container traffic is still run by a Smalltalk application. >> Really, I did not know that. >> Yeah, well, few people do. In Smalltalk, you find that that sort of heyday, in some sense, for commercial applications was in the 90s or 80s, whatever, but replacing those applications, a typical story is, someone says, ah, we should use Java 'cause everybody's using Java and we can get lots of programmers and they spend a lot of money and the new application doesn't work 'cause they can't actually rebuild the thing they built in Smalltalk at any reasonable cost, at any reasonable reliability. So, there are a lot of those systems out there, Morgan Stanley's still running Capital, their Smalltalk system for managing money. So, yeah, you can certainly build things. >> Well, Gilad, I love your commentary here, so I love that you're not shy to hold back. I've got to get your thoughts on cryptocurrency and the Blockchain world. >> Oh, dear. >> A lot of different languages, you got Ethereum, you have, some say, oh, I'm going to use Linux. If you're using Java, we're going to import it in, Javascript supports it, so there's been kind of like this, every kind of crypto currency, Blockchain, has their own language for decentralized applications. Your general thoughts on this. >> So, there's a need for, to slow down and be more careful, all right. Ethereum lost God knows how much money. I've heard quotes but I don't know if it's 50 million or 150 million but a fair amount of money due to problems that were classical distributed programming problems and could have been avoided by, essentially, more careful design of language in the system. There's a pressure now to turn things out in a hurry, right? In the old days, these systems took years and years of research in their little corner and, now, everybody has to do something too fast and that hurts. And, often, it's people who don't have the expertise and the background 'cause there's lots of research on all kinds of problems and smart people get snippets of those and they don't quite know what they're doing. And I don't think there's a cure for that because the incentives are there but that's why we're seeing these problems. >> So be careful, the message is be careful. >> Be careful. >> But they're rushing, all this cash is rolling in, they got to have some language. >> Sure, as long it's not their 150 million dollars that they lost, that's fine, but someone was probably upset. >> And, by the way, the security problem was software-error based. >> Most of them are. >> So, this transitions into Shape Security where you're not working as a distinguished engineer, working on some hard problems. I know it's pretty confidential but you guys do power 200 million iOS apps, this is from the PR statement. >> Probably more by now but yeah. >> Past 24 hours, you blocked more than two billion fraudulent login attempts, two million legitimate attempts. Essentially, defending intrusion detects and seems to be the company's value properties, but I don't want to get too much into the company because you're, obviously, on the engineering side. But security from a programming language side is software and people. >> Mm-hm. >> Right, software gets bugs. >> And people make them worse. >> And people make mistakes. >> People make them worse. >> Yeah. >> This is the central process problem in security. Your thoughts in computer science. >> So, most of the time, I mean, Shape does real security and this is fascinating to me but, most of the time, I've been looking at security at the programming language level because, you know, still, I think 70% of intrusions often, not the intrusions but, basically, these big software fiasco security problems get down to array buffer overflows. Which is ridiculous 'cause this is problem that was solved decades ago. Why are we still dealing with this? That's because, you know, programming language design, the whole approach to security, access control lists, whatever, there was another approach which was capability-based. And these two grew up together in the 60 and the world, as typically, it makes the wrong choices, it takes what seems appealing in the short term and not what is sort of a more thorough thing. So, object capabilities is a really interesting way of looking at this thing. There are people working on putting some of this into Javascript so that you could use it somehow. Great work by Mark Miller and company at Agoric. I'll do a shout-out to them. So, I've usually been on that side of things, but real security, there's a lot more to it, that's just one small layer of things and, above that, there's all the humans and the multiple systems they build. The configurations, they're just mistakes, the things that happen through social engineering about which, basically, I don't know much about but I will say that making things simpler is key because that's why people make mistakes. Things are too complicated. Every piece of the system has some bunch of clever engineers who really think it through and make it really sophisticated but when you compose these, it becomes, no one understands, a thing that no one understands what's going on and we need to simplify. My work is to try to simplify at that programming language level which the typical languages people use are too complex. >> And this is really where the software always has holes in it and you just got to be on top of it and make it tight, as it were. >> Right, basically, you can't understand the consequences when you have too many moving parts, as it were, too many constructs in the programming language. The composition is endless and you can't, it's very hard to foresee how they're going to interact and what someone will come up with, eventually. Oh, you could use this to attack that. Or, this crates this bad scenario that people don't notice. And, really, there's no remedy to that. You can work and you should be careful, you should test things, you should verify, if you can, formally, but if you just try and keep it simple, clean abstractions that are very simple and composed well, you will simply avoid, by definition, most of these problems. >> Final talk track around open source. It's been well-documented that proprietary software that's funded by companies when kind of stopped and innovating, kind of, dies on the vine. Open source is great, got leverage, you get out in the open, yeah, it's great. So, open source has been growing like a weed over the past couple decades and, recently, it's been phenomenal. The open source people say, oh, security is better in open source. At the same time, you bring up the notion of language security and those programming languages. How do you see that rectifying itself? How is the security paradigm with open source going to be stabler? What do companies need to do because open source is being used everywhere. >> Open source is used everywhere for good reason but open source is not, by itself, a magic thing, right. It's still, you get problems, open source is also open to malicious contributors, to problems, and the systems are too big for, even though there are code reviews and everything, so it's a double-edged sword, in some respects and sometimes the quality just suffers. These are social organization and each one is different and they have problems, so I don't know that that is, it's good that you shine light on something, it tends to purify it, and certainly that's a great strength of open source that you cant have things buried in there that you don't know. By the same token, it is not a panacea because the other thing is someone has to fund this somehow. All the open source models have to find somewhere to keep this going. So it's a more complicated thing to pull off. >> Especially with all these appliances now, okay, which version of Linux are you running, do I review the code? How do people ensure the security know that whether it's an appliance, or a device, or phone, or anything and it doesn't have some sort of back door or security vulnerability? >> Well, backdoor, I don't-- >> Backdoor, side door. >> Or just code-- >> This is a conspiracy theory. >> Or poor code. >> Poor code, well, poor code, you know, the open source is full of poor code is the truth. And the other thing is that, one problem with the open source is it also makes it easier for people to attack it because they can see how it's engineered. So, there is a reason that secure systems tend to, actually, maintain a certain level of secrecy. So I wouldn't go overboard on the open source ideology that it's inherently more secure. It has the advantage that you can see what you're getting. It has the disadvantage that everyone, including your adversaries, can see that. >> You don't know that going in, buyer beware kind of philosophy. >> Yes. >> And so, ultimately, you need to trust, like, it always comes down to trust at some level 'cause there's no way you're going to verify the software or the hardware, the bits, the you know. You can have problems in the hardware, this is a big problem nowadays, actually, with certain vendors. I don't want to get into those political footballs but-- >> Yeah, super micro. >> Yeah, and so, you really have to see who, you do have to take a risk in who do you trust. Who has a reputation, who is responsible for things that have worked? And there are no easy answers and it's beyond my pay grade. >> Let me get your thoughts on Capital One because we know that story, as of this week and they're on an Amazon estuary bucket, firewall filtering failed, someone just stumbled into it. I mean, the person that hacked it wasn't like, probably, a famous hacker, she was bragging on Twitter and message groups like, saying, hey, I just got in. So, door's open, keys are running in the car, walked right to the safe, safe was open. >> So, I don't know anything about that incident specifically and, I mean, beyond what you and I have read on the web or somewhere-- >> That's a human error. >> But they're usually there's always, almost always human error involved. It's also why you need, sort of, it's like countermeasures, right, and counter, counter, countermeasures. You simply have to monitor, right? So that when something, when you have an intrusion, you check it, now, that's not easy but there are lots of clever things that people are doing. You can have security as an afterthought. It's really hard. That's generally the problem is that people don't think about it early enough. >> Final question before we break: What's the human problem that you see most with developers? 'Cause if humans make mistakes, which they do, what's the common mistake developers, programmers make when coding that could be avoided with just a little bit sharper focus? >> Well, it's not about focus but I'd say null pointer exceptions are the biggest, like, after array buffers, they're the other, Tony Hoare called it billion dollar mistake in 1980 in his award speech, I think. And we're talking now, it's probably a trillion dollars, right? And this is something that can be mechanically checked by the programming language and it's probably the number bang-for-a-buck feature that you might throw in. >> Just say no to null? >> Yeah. >> That's the philosophy. >> Yeah. >> Gilad, thanks for coming on the Cube, appreciate the conversation. >> Thank you very much. >> I'm John Furrier, here in Palo Alto at the Cube Studios. This has been a Cube Conversation, thanks for watching. (upbeat music)

(bright intro music) >> Welcome to this "Cube Conversation". I'm your host, Lisa Martin. This is part of our third AWS Start-up Showcase. And I'm pleased to welcome two gentlemen from Rockset, Venkat Venkataramani is here, the CEO and co-founder and Dhruba Borthakur, CTO and co-founder. Gentlemen, welcome to the program. >> Thanks for having us. >> Thank you. >> Excited to learn more about Rockset, Venkat, talk to me about Rockset and how it's putting real-time analytics within the reach of every company. >> If you see the confluent IPO, if you see where the world is going in terms of analytics, I know, we look at this, real-time analytics is like the lost frontier. Everybody wants fast queries on fresh data. Nobody wants to say, "I don't need that. You know, give me slow queries on stale data," right? I think if you see what data warehouses and data lakes have done, especially in the cloud, they've really, really made batch analytics extremely accessible, but real-time analytics still seems too clumsy, too complex, and too expensive for most people. And we are on a mission to make, you know, real-time analytics, make it very, very easy and affordable for everybody to be able to take advantage of that. So that's our, that's what we do. >> But you're right, nobody wants a stale data or slower queries. And it seems like one of the things that we learned, Venkat, sticking with you in the last 18 months of a very strange world that we're living in, is that real-time is no longer a nice to have. It's really a differentiator and table stakes for businesses in every industry. How do you make it more affordable and accessible to businesses in so many different industries? >> I think that's a great question. I think there are, at a very high level, there are two categories of use cases we see. I think there is one full category of use cases where business teams and business units are demanding almost like business observability. You know, if you think about one domain that actually understood real-time and made everything work in real-time is the DevOps world, you know, metrics and monitoring coming out of like, you know, all these machines and because they really want to know as soon as something goes wrong, immediately, I want to, you know, be able to dive in and click and see what happens. But now businesses are demanding the same thing, right? Like a CEO wants to know, "Are we on track to hit our quarterly estimates or not? And tell me now what's happening," because you know, the larger the company, the more complex that have any operations dashboards are. And, you know, if you don't give them real-time visibility, the window of opportunity to do something about it disappears. And so they are really, businesses is really demanding that. And so that is one big use case we have. And the other strange thing we're also seeing is that customers are demanding real-time even from the products they are using. So you could be using a SaaS product for sales automation, support automation, marketing automation. Now I don't want to use a product if it doesn't have real-time analytics baked into the product itself. And so all these software companies, you know, providing a SaaS service to their cloud customers and clients, they are also looking to actually, you know, their proof of value really comes from the analytics that they can show within the product. And if that is not interactive and real-time, then they are also going to be left behind. So it's really a huge differentiator whether you're building a software product or your running a business, the real-time observability gives you a window of opportunity to actually do something about, you know, when something goes wrong, you can actually act on it very, very quickly. >> Right, which is absolutely critical. Dhruba, I want to get your take on this. As the CTO and co-founder as I introduced you, what were some of the gaps in the market back in 2016 that you saw that really necessitated the development of this technology? >> Yeah, for real-time analytics, the difference compared to what it was earlier is that all your things used to be a lot of batch processes. Again, the reason being because there was something called MapReduce, and that was a scanning system that was kind of a invention from Google, which talked about processing big data sets. And it was about scanning, scanning large data sets to give answers. Whereas for real-time analytics, the new trend is that how can you index these big datasets so that you can answer queries really fast? So this is what Rockset does as well, is that we have capabilities to index humongous amounts of data cheaply, efficiently, and economically feasible for our customers. And that's why query is the leverage the index to give fast (indistinct). This is one of the big changes. The other change obviously is that it has moved to the cloud, right? A lot of analytics have moved to the cloud. So Rockset is built natively for the cloud, which is why we can scale up, scale down resources when queries come and we can provide a great (indistinct) for people as data latency, and as far as query latencies comes on, both of these things. So these two trends, I think, are kind of the power behind moving, making people use more real-time analytics. >> Right, and as Venkat was talking about how it's an absolute differentiator for businesses, you know, last year we saw this really, this quick, all these quick pivots to survive and ultimately thrive. And we're seeing the businesses now coming out of this, that we're able to do that, and we're able to pivot to digital, to be successful and to out-compete those who maybe were not as fast. I saw that recently, Venkat, you guys had a new product release a few weeks ago, major product release, that is making real-time analytics on streaming data sources like Apache Kafka, Amazon Kinesis, Amazon DynamoDB, and data lakes a lot more accessible and affordable. Breakdown that launch for me, and how is it doing the accessibility and affordability that you talked about before? >> Extremely good question. So we're really excited about what we call SQL-based roll-ups, is what we call that release. So what does that do? So if you think about real-time analytics and even teeing off the previous question you asked on what is the gap in the market? The gap in the market is really, all that houses and lakes are built for batch. You know, they're really good at letting people accumulate huge volumes of data, and once a week, analyst asking a question, generating a report, and everybody's looking at it. And with real-time, the data never stops coming. The queries never stop coming. So how do you, if I want real-time metrics on all this huge volumes of data coming in, now if I drain it into a huge data lake and then I'm doing analytics on that, it gets very expensive and very complex very quickly. And so the new release that we had is called SQL-based roll-ups, where simply using SQL, you can define any real-time metric that you want to track across any dimensions you care about. It could be geo demographic and other dimensions you care about that and Rockset will automatically maintain all those real-time metrics for you in real-time in a highly accurate fashion. So you never have to doubt whether the metrics are valid and it will be accurate up to the second. And the best part is you don't have to learn a new language. You can actually use SQL to define those metrics and Rockset will automatically maintain that and scale that for you in the cloud. And that, I think, reduces the barrier. So like if somebody wants to build a real-time, you know, track something for their business in real-time, you know, you have to duct tape together multiple, disparate components and systems that were never meant to work with each other. Now you have a real-time database built for the cloud that is fully, you know, supports full feature SQL. So you can do this in a matter of minutes, which would probably take you days or weeks with alternate technologies. >> That's a dramatic X reduction in time there. I want to mention the Snowflake IPO since you guys mentioned the Confluent IPO. You say that Rockset does for real-time, what Snowflake did for batch. Dhruba, I want to get your perspective on that. Tell me about that. What do you mean by that? >> Yeah, so like we see this trend in the market where lot of analytics, which are very batch, they get a lot of value if they've moved more real-time, right? Like Venkat mentioned, when analytics powers, actual products, which need to use analytics into their, to make the product better. So Rockset very much plays in this area. So Rockset is the only solution. I shouldn't say solution. It's a database, it's a real-time database, which powers these kind of analytic systems. If you don't use Rockset, then you might be using maybe a warehouse or something, but you cannot get real-time because there is always a latency of putting data into the warehouse. It could be minutes, it could be hours. And then also you don't get too many people making concurrent queries on the warehouse. So this is another difference for real-time analytics because it powers applications, the query volume could be large. So that's why you need a real-time database and not a real-time warehouse or any other technologies for this. And this trend has really caught up because most people have either, are pretty much into this journey. You asked me this previous question about what has changed since 2016 as well. And this is a journey that most enterprises we see are already embarking upon. >> One thing too, that we're seeing is that more and more applications are becoming data intensive applications, right? We think of whether it's Instagram or DoorDash or whatnot, or even our banking app, we expect to have the information updated immediately. How do you help, Dhruba, sticking with you, how do you help businesses build and power those data intensive applications that the consumers are demanding? >> That's a great question. And we have booked, me and Venkat, we have seen these data applications at large scale when we were at Facebook earlier. We were both parts of the Facebook team. So we saw how real-time was really important for building that kind of a business, that was social media. But now we are taking the same kind of back ends, which can scale to like huge volumes of data to the enterprises as well. Venkat, do you have anything to add? >> Yeah, I think when you're trying to go from batch to real-time, you're 100% spot on that, a static report, a static dashboard actually becomes an application, becomes a data application, and it has to be interactive. So you're not just showing a newspaper where you just get to read. You want to click and deep dive, do slice and dice the data to not only understand what happened, but why it happened and come up with hypotheses to figure out what I want to do with it. So the interactivity is important and the real-timeliness now it becomes important. So the way we think about it is like, once you go into real-time analytics, you know, the data never stops coming. That's obvious. Data freshness is important. But the queries never stop coming also because one, when your dashboards and metrics are getting up to date real-time, you really want alerts and anomaly detection to be automatically built in. And so you don't even have to look at the graphs once a week. When something is off, the system will come and tap on your shoulder and say, "Hey, something is going on." And so that really is a real-time application at that point, because it's constantly looking at the data and querying on your behalf and only alerting you when something, actually, is interesting happening that you might need to look at. So yeah, the whole movement towards data applications and data intensive apps is a huge use case for us. I think most of our customers, I would say, are building a data application in one shape or form or another. >> And if I think of use cases like cutthroat customer 360, you know, as customers and consumers of whatever product or solution we're talking about, we expect that these brands know who we are, know what we've done with them, what we've bought, what to show me next is what I expect whether again, it's my bank or it's Instagram or something else. So that personalization approach is absolutely critical, and I imagine another big game changer, differentiator for the customers that use Rockset. What do you guys think about that? >> Absolutely, personalized recommendation is a huge use case. We see this all where we have, you know, Ritual is one of the customers. We have a case study on that, I think. They want to personalize. They generate offline recommendations for anything that the user is buying, but they want to use behavioral data from the product to personalize that experience and combine the two before they serve anything on the checkout lane, right? We also see in B2B companies, real-time analytics and data applications becoming a very important thing. And we have another customer, Command Alkon, who, you know, they have a supply chain platform for heavy construction and 80% of concrete in North America flows through their platform, for example. And what they want to know in real-time is reporting on how many concrete trucks are arriving at a big construction site, which ones are late and whatnot. And the real-time, you know, analytics needs to be accurate and needs to be, you know, up to the second, you know, don't tell me what trucks were, you know, coming like an hour ago. No, I need this right now. And so even in a B2B platform, we see that very similar trend trend where real-time reporting, real-time search, real-time indexing is actually a very, very important piece to the puzzle. And not just for B to C examples that you said, and the Instagram comment is also very appropriate because a hedge fund customer came to us and said, "I have kind of a dashboards built on top of like Snowflake. They're taking two to five seconds and I have certain parts of my dashboards, but I am actually having 50/60 visualizations. You do the math, it takes many minutes to load. And so they said, "Hey, you have some indexing deck. Can you make this faster?" Three weeks later, the queries that would take two to five seconds on a traditional warehouse or a cloud data warehouse came back in 18 milliseconds with Rockset. And so it is so fast that they said, you know, "If my internal dashboards are not as fast as Instagram, no one in my company uses it." These are their words. And so they are really, you know, the speed is really, really important. The scale is really, really important. Data freshness is important. If you combine all of these things and also make it simple for people to access with SQL-based, that's really the real unique value prop that we have a Rockset, which is what our customers love. >> You brought up something interesting, Venkat, that kind of made me think of the employee experience. You know, we always think of the customer 360. The customer experience with the employee experience, in my opinion, is inextricably linked. The employees have to have access to what they need to deliver and help these great customer relationships. And as you were saying, you know, the employees are expecting databases to be as fast as they see on Instagram, when they're, you know, surfing on their free time. Then adoption, I imagine, gets better, obviously, than the benefit from the end user and customers' perspective is that speed. Talk to me a little bit about how Rockset, and I would like to get both of your opinions here, is a facilitator of that employee productivity for your customers. >> This is a great question. In fact, the same hedge fund, you know, customer, I pushed them to go and measure how many times do people even look at all the data that you produce? (laughs) How many analysts and investors actually use your dashboards and ask them to go investigate at that. And one of the things that they eventually showed me was there was a huge uptake and their dashboards went from two to three second kind of like, you know, lags to 18 milliseconds. They almost got the daily active user for their own internal dashboards to be almost going from five people to the entire company, you know, so I think you're absolutely spot on. So it really goes back to, you know, really leveraging the data and actually doing something about it. Like, you know, if I ask a question and it's going to, you know, system is going to take 20 minutes to answer that, you know, I will probably not ask as many questions as I want to. When it becomes interactive and very, very fast, and all of a sudden, I not only start with a question and, you know, I can ask a follow-up question and then another follow-up question and make it really drive that to, you know, a conclusion and I can actually act upon it. And this really accelerates. So even if you kind of like, look at the macro, you hear these phrases, the world is going from batch to real-time, and in my opinion, when I look at this, people want to, you know, accelerate their growth. People want to make faster decisions. People want to get to, what can I do about this and get actionable insights. And that is not really going to come from systems that take 20 minutes to give a response. It's going to really come from systems that are interactive and real-time, and that's really the need for acceleration is what's really driving this movement from batch to real-time. And we're very happy to facilitate that and accelerate that moment. >> And it really drives the opportunity for your customers to monetize more and more data so that they can actually act on it, as you said, in real-time and do something about it, whether it's a positive experience or it is, you know, remediating a challenge. Last question guys, since we're almost out of time here, but I want to understand, talk to me about the Rockset-AWS partnership and what the value is for your customers. >> Okay, yeah. I'll get to that in a second, but I wanted to add something to your previous question. I think my opinion for all the customers that we see is that real-time analytics is addictive. Once they get used to it, they can go back to the old stuff. So this is what we have found with all our customers. So, yeah, for the AWS question, I think maybe Venkat can answer that better than me. >> Yeah, I mean, we love partnering with AWS. I think, they are the world's leader when it comes to public clouds. We have a lot of joint happy customers that are all AWS customers. Rockset is entirely built on top of AWS, and we love that. And there is a lot of integrations that Rockset natively comes with. So if you're already managing your data in AWS, you know, there are no data transfer costs or anything like that involved for you to also, you know, index that data in Rockset and actually build real-time applications and stream the data to Rockset. So I think the partnership goes in very, very deep in terms of like, we are an AWS customer, we are a partner and we, you know, our go-to market teams work with them. And so, yeah, we're very, very happy, you know, like, AWS fanboys here, yeah. >> Excellent, it sounds like a very great synergistic collaborative relationship, and I love, Dhruba, what you said. This is like, this is a great quote. "Real-time analytics is addictive." That sounds to me like a good addiction (all subtly laugh) for businesses and every industry to take out. Guys, it's been a pleasure talking to you. Thank you for joining me, talking to the audience about Rockset, what differentiates you, and how you're helping customers really improve their customer productivity, their employee productivity, and beyond. We appreciate your time. >> Thanks, Lisa. >> Thank you, thanks a lot. >> For my guests, I'm Lisa Martin. You're watching this "Cube Conversation". (bright ending music)

[Music] hello welcome to this cube conversation i'm john furrier the palo alto studios for the cube i'm your host here with jeremy burton who's the ceo of observe inc just launched their product they launched their company before that they're doing great jeremy great to see you oh no thanks uh always great to be back on yeah there's there's certainly a lot going on the start of my day job which is running observing my night job which is uh obviously working with uh snowflake and it's not great to see both going on at the same time you've done very well with the snowflake relationship being a board member and all and being in that ecosystem and a lot of people are doing well in this shift you're part of it again you're on the inside but also now on the outside building a business and it's exciting because it's highly competitive it's a big category and it's really moving fast so give us a quick update on what's going on in the landscape and your recent launch you just had yeah i mean i i think most businesses be the you know new businesses cloud native businesses as we call it upon in the cloud businesses are old um that they're really uh trying to deliver like new services to reach customers and it's harder for an incumbent business because they've got to do a lot of reinvention or modernization or i guess the term de jure is digitization um and ultimately a lot of that means writing they've got to start writing software again you know it comes naturally maybe to the newer companies uh the sas companies uh but the biggest of the big have got you know really got to start riding software again and and as they push a new code into production every day they've got to make sure it works and so this new market for observability i think really uh helps people troubleshoot problems with this you know these new applications um and the goal obviously is to make sure that you know you avoid customer churn and any kind of a bad experience which um i think is what every sas company dreads um you know it's a big problem you know getting all these metrics in one place is really key i want to get into your launch 2.0 yeah we could bring in dave vellante my co-host was thecube always a favorite to bring on the analysis i know dave dug in heavily on the launch dave good to see you we'll get you hey guys how are you doing how are you doing jeremy good to see you yeah john i mean jeremy your your first launch was was really a company launch right and now now you're given the the product update so what do we need to know yeah so we i mean you're right when we first went out it was sort of like this is observing this is what observability um is we we sort of glossed over a lot of product details because i think like a lot of startups we you know we had a chunk of initial functionality but we knew there was a lot missing and so so previously you know in the last six months since we did that announcement we're now trying to you know fill out the product and a couple of the big features that we knew we needed um i mean one was metrics um and although we've always been able to ingest metrics uh most people maybe know you know time series type data we hadn't built all of the functionality you know in our language or in the user interface for the user to be able to manipulate them um so that was a big lift um which we got done and then and very closely related once you've got metrics the next thing people want to do is they want to start alerting on things hey tell me when this metric is is out of whack and one of our sort of big differentiators are one of the things that we always bring to bear on any kind of data we manage is to link data together so we're always trying to provide more context for the data that the user's looking at so metrics and alerts they sort of tie into our core value prop of being able to relate data jeremy if i don't mind you don't mind ask answering i'd like to get your take on this because one question i ask all these analytics companies is yeah data's great data lakes and it's all good about getting the data in this kind of environment but most people just want to shape the data and they want to just get insights out of it fast they don't want to they don't want to do a lot of prep they want to have it in position whether it's querying it or just having it available and sometimes it's not always there so they're constantly reshaping it and so the idea of just shaping it and making getting some insights which is basically quickly distill out of it turns into i got to reshape i got to go back to the well if you will or the lake in this case and pull out the data how are you guys solving that because this is like the um the simple construct make it easy yeah it's funny i mean even going right back to data warehouse in days of old the big frustration is is etl right it was so painful to transform the data into the right shape to get into the database i mean some of these projects i mean i think like 70 of those projects never even completed um the the big big difference now and certainly a lot of the data we deal with is it's unstructured inherently it's generated by machines we we just sort of dump it all into observe and then we let users pause it on the fly and so it can be one shape one day in a different shape the next and then we'll we'll backfill all of the data automatically into the new shape that the users define so these systems have really got to be set up to do um like ad hoc analysis you know when if you only did a couple of updates to your application uh a year the the environment wasn't that dynamic it didn't change very much and most of the problems you saw you you've seen before and now with code changing every day the application looks different every day so the issues that you see look different every day so it's really really important that these systems are incredibly dynamic and don't get locked into one particular shape from the get-go jeremy you you took a somewhat different approach i mean a lot of companies in this space will choose to do like a purpose-built database specifically for observability and metrics and so forth and that that's talking about a heavy lift that could take take many years you're choosing to put your emphasis do your heavy lift elsewhere yeah that obviously gives you a time to market advantage can you talk a little bit about that philosophy and what that gets you yeah it was probably one of the biggest decisions that we made when we founded observe was was do we build our own database like almost everyone who'd gone before um or do we go with a commercial offering and when we first started building against snowflake three years ago we we did we weren't actually sure it could do what we wanted to do and so it was one of the biggest areas of technical risk um but certainly at this point we've got ourselves very comfortable that it's going to be able to do what we need it to and it saves us building a database and uh i mean like this week at the snowflake summit i think snowflake just announced an additional 30 compression on data it's like okay so we did nothing and now you know all of those folks who are sending terabytes a day to us they get an extra 30 compression and and so that's the value of building on a commercial platform you know snowflake has got 300 engineers working away on on their database and they deliver benefits to us and we focus on the application so we know obviously frank we talk to him all the time and he's unequivocal about your cloud we're not doing a halfway house we're not doing on-prem but you're i'm sure familiar with the uh the a16z narrative from from an uh from from martin casado and sarah wong basically the premise for those of you don't know is you know for startups and as you're growing cloud is a no-brainer but at scale it becomes fifty percent of your cost of revenue it becomes uh an albatross to your operating leverage what do you think about that do you buy that uh do you ever see like a snowflake going going back on prem what's your thoughts on that i mean i feel like yeah i mean we used to put wells in our back gardens and generators in our basement and you know they're cheaper too right but the problem is i've got to dig a freaking well right and and then what am i not doing while i'm digging my well and and so i i don't know i i mean i get the general premise but i don't want half the company going and building not just like a database all of the infrastructure that's underneath why because it's not what our customers pay for like if we can add more value on top of that platform we can charge more so it's sort of like well if all those companies had actually started out building their own infrastructure and everything would they have would they have built the application experience that made them successful i mean you so the the i mean i i get the paper i think it's very very well written i'm just i'm just not sure it's a big distraction like we don't care about the underlying infrastructure we just want it to be there you know and you know and if we were doing that then we might observe might not be as good as it currently is you know well i think it's a question to me john is where's the customer value is the customer value in you know the valuation of the company or is it in what you can deliver and how fast you can hold on let me just put context to martin casado's little thing there it's the paradox um paper so there's a paradox there and his thesis is do you focus on cost of goods sold or do you drive more revenue and his whole part point was at some point you got to look at the cost right and and i then weaved into i hit him up on twitter immediately and i said oh so you must have a bunch of companies who aren't growing right so so because if you look at what's going on the mckinsey paper we covered this at our last startup event startup event is that the companies that are driving new revenue it's coming from a lot of re-platforming and refactoring but also net new use cases so a lot of clients are making more money by introducing new products so so that's a new revenue so you you are either going to be on one side of the paradox you're going to be inside of i'd rather refactor for new revenue yeah then save money by reducing costs so i still think we haven't cleared the runway on this growth so i think there's plenty of trillions left to create so i'm on the side of i'm on the side of you know if you're worried about pennies in the cloud to the well point that jeremy mentioned then you might either look at other things yeah it's about growth i mean i feel certainly younger companies and and observe and i mean also snowflake that we were just talking about i mean uh the snowpack announcement this week of going and running spark jobs well yeah they could do that or they could go build a data center i mean to reduce costs and to me um the right call is to do more with customers data um and and the the i don't know the somewhat um i mean the counterpoint to that would be well let's make it a more profitable business but you know to me that doesn't add up for the majority of new companies jeremy how should we look uh i'm gonna ask how should we think about this space because you have you got guys like splunk that have been doing log analytics for a while now you got you got the elk stack coming in with an open source and you know it's it's open source but it also brings complexity you've got big players now like cisco who's made you know the apple the acquisition of appd you've got kind of who's now a legacy a new relic we talked about purpose-built databases before so everybody's coming at this from all different sides how do you think about it look at it and where do you fit yeah i think you've got the big players i mean you've you've named quite a few of them then and and look most of my career i've i've been on that side right and and typically what you do as a big company is it's harder to innovate and so you use your balance sheet for innovation you go buy innovation and and then you try and integrate and um that that i mean it's very very doable and um but it just takes a long time and the risk is that as you integrate you're never really getting your architecture on a solid foot and you're sort of band-aiding things together and we're selling multiple things to the same customer versus really coming back to first principles and saying well how should this really have been built so i actually tend to worry a little bit less about the bigger companies um and then look there's a set of startups that have from like observed from first principles thought well if we were to build a system to to look at all the telemetry data that applications and infrastructure generate then then how would we do it um so you know we certainly uh banking on the fact that the more modern architecture um as time goes by because i still think we're you know we're in in baseball terms we're probably in the first inning still of observability um that that modern architecture will will come to bear over time we'll be able to do things that the other guys won't be able to do and and one of those is actually the simple task of relating data you know why because all of our data is in one place and it's in a relational database you know it's it's that simple i think one of the things that's worth calling out and it's pointing out is that you guys are also on the snowflake so you you're riding that wave to your point about i which i agree with by the way you're in you're focusing on innovation not kind of moving the deck chairs around on stuff but i want to get a question about this event you had because one of the things that you guys are becoming known for is to eliminate the headaches for sres and devops engineers who have been conditioned to accept you know the old ways of kind of handcrafting and the people who do it first tend to be the most bloody when they when they come out of it but as it becomes easier right and we discovered this at the red hat summit dave and jeremy is that this notion of an sre is becoming more prominent in engineering schools and computer science programs as kind of replacement for it i don't mean like i t is dead but like it's turning into ai ops git ups whatever people want to call it it's cloud native so the notion of an sre is on the teams of these modern development teams so you're seeing this end-to-end workflow visibility so so that means that if they're going to have that they're going to have these new team members sres and dev and sec together and they need the data so this is where you guys are and i think you guys hit this and correct me if i'm wrong if you don't mind explaining how does that the observability equation change when the teams change because teams are changing in the modern architecture yeah i mean it's it's it's probably a cliche but the the you know there's tooling and then this process change and as as as people move to things like continuous delivery um they get maniacally focused on uh delivery of of new features and new capabilities to the customer and then focused on the experience that the customers have in and i think the you know the role of the sre becomes critical because they try and understand not just what the customer is doing with the application but the problems that the customer is experiencing and that's going to work hand in glove you know with the engineering team who ultimately is going to implement the new features that the customers want and one of our sort of big missions here is to is to lessen the burden on the devops team which has been providing essentially infrastructure and tooling for for the sre and engineering teams to use right now they're overwhelmed to deliver just the basics and candidly the engineering and sre teams are not not happy with what's been delivered so we if we can lighten the burden on the devops team you should then get a richer experience for the sre and engineering teams for them to do ultimately what they want to do which is customer satisfaction and and engage their customers uh in in new ways and and there's just the quality of what is surface to those teams right now is just not very good because it's hard so jeremy you mentioned the first innings your uniforms are still white you you got the starting picture how's it how's it feeling how's the arm feel what's the early customer interactions like where are you getting traction yeah it's it's been interesting because um you know when you start with no customers i mean obviously we've been on the wall here at work our first customer 2500 bucks and i've never been so thrilled to get a sales order for twenty five hundred dollars um but no it it it's we we've targeted largely sas companies uh or tech tech centric companies and and one of the guys that we're going to be highlighting is uh topgolf which um i'm sure anyone who's been there and and you know enjoys going and hitting a golf ball around and playing angry birds but um look they're a tech centric company um customer experience for them is everything they're not in the in the it business per se but it enables them to deliver these amazing customer experiences and so you know when they've got issues when they need to troubleshoot problems they need to do it quickly and and so we tend to you know help those kind of companies um improve the experience they're providing um but yeah we've got about 20 paying customers so far um it's it's it's very different actually getting a customer paying you money versus a sort of friend a family member said yeah i'll give that a whirl um you know it certainly should happens the point on the feedback and and really that's what we need right now i mean i think every startup strives to get to what we call market fit which is can we sell this product repeatedly to thousands of customers um i don't think we're quite there yet but we certainly have got the volume of customers and the feedback coming back to engineering that that you know can get we know what to bill put it that way to get us to that point well smart what you do when you're starting with the sas companies the service providers you so you're not you know you're not jumping off the cliff into the enterprise for every custom deal you know get the product market fit and then understand the retention and then expand your tam from there yeah yeah you try and build a solid foundation and you know when you go to the enterprise you're going to need features like role-based access control and more of the manageability capabilities but you know if you were to build all of that out first then you wouldn't know whether you've got a compelling experience for an sre or an engineering team and so what you tend to do is is defer a lot of the management type capabilities try and build compelling features when you see the features are compelling then you sort of build out the supporting infrastructure that allows you to go to bigger companies so it's uh i mean it it the enterprise is what i've always dealt in sort of enterprise software is it's it's not easy um and and my old boss joe tucci had a great saying on this like you know if you're in a hurry take a bit more time and i think that that's sort of our mantra right now we're in a hurry everyone wants to go but like if we don't get the product right it'll it'll bite us later yeah the other expression in the enterprise is everyone makes it all complicated and everything it's all too complicated um which is the enterprise if it's not complicated they make it more complicated right so uh welcome to the edge too now there's every huge there's every edge case you can think of which is why you've got to be careful early on because we we can't afford we don't have time to deal with edge cases we've got to deal with you know what's up the power alley and then once we've got that going then you can start to deal with more of the edge cases yeah we're in the same boat on our end too jeremy i'd like to get uh to end the segment here by giving a quick update and recap of uh the event real quick and what you guys are doing as a company and and what you did at the launch and where your sweet spot is what are you looking for the what's the type of customers that you're looking for right now what is that power alley that you're focused on yeah three to four thousand sas companies in in north america is where we're after um and we tend to help folks on more efficient troubleshooting of applications we help them with tool consolidation um and we help them with security audit and compliance so there if you like the the key use cases that our initial customers have brought us into and um yeah we started off really focusing on on logging and log analytics and then you know yesterday we added to that you know the metrics the time series data analysis um and also the alerting and and we've also got really running in-house the the more apm-like visualizations around tracing so maybe a little bit of a hint at what's coming up later this year yeah i want to get your thoughts too there's been some commentary on twitter like you know we want to get things simpler a little bit more calmer i think there's a comment like it's not the mid we want more of the midwest vibe not so much that the coastal elite silicon valley shiny new toy yeah what's your take on that because it's culturally the shift people want to reduce the tools i mean they got the tool shed of you know every single tool that's been shipped every company comes out is selling a tool don't be the don't be a fool with a tool as the as the expression says no no if we're not careful observability we can define it to be this nichey thing and and you know in silicon valley out here it's probably the worst because there's almost this attitude of well i'm not sure you're smart enough to do observability you're doing it all wrong and our approach i think and i think the market in general wants like they've got issues and our approach needs to be well give show us what you're doing today give us the data that you're generating today we'll make that better and then we'll show you where the blind spots are and so you can have a much more iterative approach to getting to that desired end goal but we've got to stop defining observability as almost this this niche that silicon valley companies uh use i mean i i always joke that we want more of our customers watching netflix not listening to engineers from netflix explain observability yeah david call the flyover enterprise now it's a new category of enterprise yeah i i i i want to encourage people to go check out the the launch it's i presume it's up on your website jeremy so not the typical mumbo jumbo you guys have a lot of fun you started off you're like what and it's it's just it's pretty hilarious and then you know you get into the meat of it but so good job on that yeah thanks yeah we had a local san francisco comedian uh and that helped us out she was awesome i think and i think it's been a software engineer at uh surveymonkey back in the days right right always great stuff jeremy thanks for coming on thecube thanks for the update and uh we'll see you around see you in real life soon very soon great thanks guys always a pleasure to be on okay it's thecube conversation i'm john furrier dave vellante on analysis on this cube conversation segment soon we'll be in real life we'll be at mobile world congress for our first physical event in a long long time first event since 2019 for mobile world congress a lot has changed since that time and we'll be on there for the first hybrid event and then we have two more hybrid events coming up as well adf's reinforced as well as ada's reinvent cube virtual and cube physical all together stay with us thanks for watching [Music] you

>>from around the globe. It's the Cube presenting innovation for good, brought to you by on shape. >>Hello, everyone, and welcome to Innovation for Good Program, hosted by the Cuban. Brought to You by on Shape, which is a PTC company. My name is Dave Valentin. I'm coming to you from our studios outside of Boston. I'll be directing the conversations today. It's a very exciting, all live program. We're gonna look at how product innovation has evolved and where it's going and how engineers, entrepreneurs and educators are applying cutting edge, cutting edge product development techniques and technology to change our world. You know, the pandemic is, of course, profoundly impacted society and altered how individuals and organizations they're gonna be thinking about an approaching the coming decade. Leading technologists, engineers, product developers and educators have responded to the new challenges that we're facing from creating lifesaving products to helping students learn from home toe how to apply the latest product development techniques and solve the world's hardest problems. And in this program, you'll hear from some of the world's leading experts and practitioners on how product development and continuous innovation has evolved, how it's being applied toe positive positively affect society and importantly where it's going in the coming decades. So let's get started with our first session fueling Tech for good. And with me is John Hirschbeck, who is the president of the Suffers, a service division of PTC, which acquired on shape just over a year ago, where John was the CEO and co founder, and Dana Grayson is here. She is the co founder and general partner at Construct Capital, a new venture capital firm. Folks, welcome to the program. Thanks so much for coming on. >>Great to be here, Dave. >>All right, John. >>You're very welcome. Dana. Look, John, let's get into it for first Belated congratulations on the acquisition of Von Shape. That was an awesome seven year journey for your company. Tell our audience a little bit about the story of on shape, but take us back to Day zero. Why did you and your co founders start on shape? Well, >>actually, start before on shaping the You know, David, I've been in this business for almost 40 years. The business of building software tools for product developers and I had been part of some previous products in the industry and companies that had been in their era. Big changes in this market and about, you know, a little Before founding on shape, we started to see the problems product development teams were having with the traditional tools of that era years ago, and we saw the opportunity presented by Cloud Web and Mobile Technology. And we said, Hey, we could use Cloud Web and Mobile to solve the problems of product developers make their Their business is run better. But we have to build an entirely new system, an entirely new company, to do it. And that's what on shapes about. >>Well, so notwithstanding the challenges of co vid and difficulties this year, how is the first year been as, Ah, division of PTC for you guys? How's business? Anything you can share with us? >>Yeah, our first year of PTC has been awesome. It's been, you know, when you get acquired, Dave, you never You know, you have great optimism, but you never know what life will really be like. It's sort of like getting married or something, you know, until you're really doing it, you don't know. And so I'm happy to say that one year into our acquisition, um, PTC on shape is thriving. It's worked out better than I could have imagined a year ago. Along always, I mean sales are up. In Q four, our new sales rate grew 80% vs Excuse me, our fiscal Q four Q three. In the calendar year, it grew 80% compared to the year before. Our educational uses skyrocketing with around 400% growth, most recently year to year of students and teachers and co vid. And we've launched a major cloud platform using the core of on shape technology called Atlas. So, um, just tons of exciting things going on a TTC. >>That's awesome. But thank you for sharing some of those metrics. And of course, you're very humble individual. You know, people should know a little bit more about you mentioned, you know, we founded Solid Works, co founded Solid where I actually found it solid works. You had a great exit in the in the late nineties. But what I really appreciate is, you know, you're an entrepreneur. You've got a passion for the babies that you you helped birth. You stayed with the salt systems for a number of years. The company that quiet, solid works well over a decade. And and, of course, you and I have talked about how you participated in the the M I T. Blackjack team. You know, back in the day, a zai say you're very understated, for somebody was so accomplished. Well, >>that's kind of you, but I tend to I tend Thio always keep my eye more on what's ahead. You know what's next, then? And you know, I look back Sure to enjoy it and learn from it about what I can put to work making new memories, making new successes. >>Love it. Okay, let's bring Dana into the conversation. Hello, Dana. You look you're a fairly early investor in in on shape when you were with any A And and I think it was like it was a serious B, but it was very right close after the A raise. And and you were and still are a big believer in industrial transformation. So take us back. What did you see about on shape back then? That excited you. >>Thanks. Thanks for that. Yeah. I was lucky to be a early investment in shape. You know, the things that actually attracted me. Don shape were largely around John and, uh, the team. They're really setting out to do something, as John says humbly, something totally new, but really building off of their background was a large part of it. Um, but, you know, I was really intrigued by the design collaboration side of the product. Um, I would say that's frankly what originally attracted me to it. What kept me in the room, you know, in terms of the industrial world was seeing just if you start with collaboration around design what that does to the overall industrial product lifecycle accelerating manufacturing just, you know, modernizing all the manufacturing, just starting with design. So I'm really thankful to the on shape guys, because it was one of the first investments I've made that turned me on to the whole sector. And while just such a great pleasure to work with with John and the whole team there. Now see what they're doing inside PTC. >>And you just launched construct capital this year, right in the middle of a pandemic and which is awesome. I love it. And you're focused on early stage investing. Maybe tell us a little bit about construct capital. What your investment thesis is and you know, one of the big waves that you're hoping to ride. >>Sure, it construct it is literally lifting out of any what I was doing there. Um uh, for on shape, I went on to invest in companies such as desktop metal and Tulip, to name a couple of them form labs, another one in and around the manufacturing space. But our thesis that construct is broader than just, you know, manufacturing and industrial. It really incorporates all of what we'd call foundational industries that have let yet to be fully tech enabled or digitized. Manufacturing is a big piece of it. Supply chain, logistics, transportation of mobility or not, or other big pieces of it. And together they really drive, you know, half of the GDP in the US and have been very under invested. And frankly, they haven't attracted really great founders like they're on in droves. And I think that's going to change. We're seeing, um, entrepreneurs coming out of the tech world orthe Agnelli into these industries and then bringing them back into the tech world, which is which is something that needs to happen. So John and team were certainly early pioneers, and I think, you know, frankly, obviously, that voting with my feet that the next set, a really strong companies are going to come out of the space over the next decade. >>I think it's a huge opportunity to digitize the sort of traditionally non digital organizations. But Dana, you focused. I think it's it's accurate to say you're focused on even Mawr early stage investing now. And I want to understand why you feel it's important to be early. I mean, it's obviously riskier and reward e er, but what do you look for in companies and and founders like John >>Mhm, Um, you know, I think they're different styles of investing all the way up to public market investing. I've always been early stage investors, so I like to work with founders and teams when they're, you know, just starting out. Um, I happened to also think that we were just really early in the whole digital transformation of this world. You know, John and team have been, you know, back from solid works, etcetera around the space for a long time. But again, the downstream impact of what they're doing really changes the whole industry. And and so we're pretty early and in digitally transforming that market. Um, so that's another reason why I wanna invest early now, because I do really firmly believe that the next set of strong companies and strong returns for my own investors will be in the spaces. Um, you know, what I look for in Founders are people that really see the world in a different way. And, you know, sometimes some people think of founders or entrepreneurs is being very risk seeking. You know, if you asked John probably and another successful entrepreneurs, they would call themselves sort of risk averse, because by the time they start the company, they really have isolated all the risk out of it and think that they have given their expertise or what they're seeing their just so compelled to go change something, eh? So I look for that type of attitude experience a Z. You can also tell from John. He's fairly humble. So humility and just focus is also really important. Um, that there's a That's a lot of it. Frankly, >>Excellent. Thank you, John. You got such a rich history in the space. Uh, and one of you could sort of connect the dots over time. I mean, when you look back, what were the major forces that you saw in the market in in the early days? Particularly days of on shape on? And how is that evolved? And what are you seeing today? Well, >>I think I touched on it earlier. Actually, could I just reflect on what Dana said about risk taking for just a quick one and say, throughout my life, from blackjack to starting solid works on shape, it's about taking calculated risks. Yes, you try to eliminate the risk Sa's much as you can, but I always say, I don't mind taking a risk that I'm aware of, and I've calculated through as best I can. I don't like taking risks that I don't know I'm taking. That's right. You >>like to bet on >>sure things as much as you sure things, or at least where you feel you. You've done the research and you see them and you know they're there and you know, you, you you keep that in mind in the room, and I think that's great. And Dana did so much for us. Dana, I want to thank you again. For all that, you did it every step of the way, from where we started to to, you know, your journey with us ended formally but continues informally. Now back to you, Dave, I think, question about the opportunity and how it's shaped up. Well, I think I touched on it earlier when I said It's about helping product developers. You know, our customers of the people build the future off manufactured goods. Anything you think of that would be manufacturing factory. You know, the chair you're sitting in machine that made your coffee. You know, the computer you're using, the trucks that drive by on the street, all the covert product research, the equipment being used to make vaccines. All that stuff is designed by someone, and our job is given the tools to do it better. And I could see the problems that those product developers had that we're slowing them down with using the computing systems of the time. When we built solid works, that was almost 30 years ago. If people don't realize that it was in the early >>nineties and you know, we did the >>best we could for the early nineties, but what we did. We didn't anticipate the world of today. And so people were having problems with just installing the systems. Dave, you wouldn't believe how hard it is to install these systems. You need toe speck up a special windows computer, you know, and make sure you've got all the memory and graphics you need and getting to get that set up. You need to make sure the device drivers air, right, install a big piece of software. Ah, license key. I'm not making this up. They're still around. You may not even know what those are. You know, Dennis laughing because, you know, zero cool people do things like this anymore. Um, and it only runs some windows. You want a second user to use it? They need a copy. They need a code. Are they on the same version? It's a nightmare. The teams change, you know? You just say, Well, get everyone on the software. Well, who's everyone? You know, you got a new vendor today? A new customer tomorrow, a new employee. People come on and off the team. The other problem is the data stored in files, thousands of files. This isn't like a spreadsheet or word processor, where there's one file to pass around these air thousands of files to make one, even a simple product. People were tearing their hair out. John, what do we do? I've got copies everywhere. I don't know where the latest version is. We tried like, you know, locking people out so that only one person can change it At the time that works against speed, it works against innovation. We saw what was happening with Cloud Web and mobile. So what's happened in the years since is every one of the forces that product developers experience the need for speed, the need for innovation, the need to be more efficient with their people in their capital. Resource is every one of those trends have been amplified since we started on shape by a lot of forces in the world. And covert is amplified all those the need for agility and remote work cove it is amplified all that the same time, The acceptance of cloud. You know, a few years ago, people were like cloud, you know, how is that gonna work now They're saying to me, You know, increasingly, how would you ever even have done this without the cloud. How do you make solid works work without the cloud? How would that even happen? You know, once people understand what on shapes about >>and we're the >>Onley full SAS solution software >>as a service, >>full SAS solution in our industry. So what's happened in those years? Same problems we saw earlier, but turn up the gain, their bigger problems. And with cloud, we've seen skepticism of years ago turn into acceptance. And now even embracement in the cova driven new normal. >>Yeah. So a lot of friction in the previous environments cloud obviously a huge factor on, I guess. I guess Dana John could see it coming, you know, in the early days of solid works with, you know, had Salesforce, which is kind of the first major independent SAS player. Well, I guess that was late nineties. So his post solid works, but pre in shape and their work day was, you know, pre on shape in the mid two thousands. And and but But, you know, the bet was on the SAS model was right for Crick had and and product development, you know, which maybe the time wasn't a no brainer. Or maybe it was, I don't know, but Dana is there. Is there anything that you would invest in today? That's not Cloud based? >>Um, that's a great question. I mean, I think we still see things all the time in the manufacturing world that are not cloud based. I think you know, the closer you get to the shop floor in the production environment. Um e think John and the PTC folks would agree with this, too, but that it's, you know, there's reliability requirements, performance requirements. There's still this attitude of, you know, don't touch the printing press. So the cloud is still a little bit scary sometimes. And I think hybrid cloud is a real thing for those or on premise. Solutions, in some cases is still a real thing. What what we're more focused on. And, um, despite whether it's on premise or hybrid or or SAS and Cloud is a frictionless go to market model, um, in the companies we invest in so sass and cloud, or really make that easy to adopt for new users, you know, you sign up, started using a product, um, but whether it's hosted in the cloud, whether it's as you can still distribute buying power. And, um, I would I'm just encouraging customers in the customer world and the more industrial environment to entrust some of their lower level engineers with more budget discretionary spending so they can try more products and unlock innovation. >>Right? The unit economics are so compelling. So let's bring it, you know, toe today's you know, situation. John, you decided to exit about a year ago. You know? What did you see in PTC? Other than the obvious money? What was the strategic fit? >>Yeah, Well, David, I wanna be clear. I didn't exit anything. Really? You >>know, I love you and I don't like that term exit. I >>mean, Dana had exit is a shareholder on and so it's not It's not exit for me. It's just a step in the journey. What we saw in PTC was a partner. First of all, that shared our vision from the top down at PTC. Jim Hempleman, the CEO. He had a great vision for for the impact that SAS can make based on cloud technology and really is Dana of highlighted so much. It's not just the technology is how you go to market and the whole business being run and how you support and make the customers successful. So Jim shared a vision for the potential. And really, really, um said Hey, come join us and we can do this bigger, Better, faster. We expanded the vision really to include this Atlas platform for hosting other SAS applications. That P D. C. I mean, David Day arrived at PTC. I met the head of the academic program. He came over to me and I said, You know, and and how many people on your team? I thought he'd say 5 40 people on the PTC academic team. It was amazing to me because, you know, we were we were just near about 100 people were required are total company. We didn't even have a dedicated academic team and we had ah, lot of students signing up, you know, thousands and thousands. Well, now we have hundreds of thousands of students were approaching a million users and that shows you the power of this team that PTC had combined with our product and technology whom you get a big success for us and for the teachers and students to the world. We're giving them great tools. So so many good things were also putting some PTC technology from other parts of PTC back into on shape. One area, a little spoiler, little sneak peek. Working on taking generative design. Dana knows all about generative design. We couldn't acquire that technology were start up, you know, just to too much to do. But PTC owns one of the best in the business. This frustrated technology we're working on putting that into on shaping our customers. Um, will be happy to see it, hopefully in the coming year sometime. >>It's great to see that two way exchange. Now, you both know very well when you start a company, of course, a very exciting time. You know, a lot of baggage, you know, our customers pulling you in a lot of different directions and asking you for specials. You have this kind of clean slate, so to speak in it. I would think in many ways, John, despite you know, your install base, you have a bit of that dynamic occurring today especially, you know, driven by the forced march to digital transformation that cove it caused. So when you sit down with the team PTC and talk strategy. You now have more global resource is you got cohorts selling opportunities. What's the conversation like in terms of where you want to take the division? >>Well, Dave, you actually you sounds like we should have you coming in and talking about strategy because you've got the strategy down. I mean, we're doing everything said global expansion were able to reach across selling. We got some excellent PTC customers that we can reach reach now and they're finding uses for on shape. I think the plan is to, you know, just go, go, go and grow, grow, grow where we're looking for this year, priorities are expand the product. I mentioned the breath of the product with new things PTC did recently. Another technology that they acquired for on shape. We did an acquisition. It was it was small, wasn't widely announced. It, um, in an area related to interfacing with electrical cad systems. So So we're doing We're expanding the breath of on shape. We're going Maura, depth in the areas were already in. We have enormous opportunity to add more features and functions that's in the product. Go to market. You mentioned it global global presence. That's something we were a little light on a year ago. Now we have a team. Dana may not even know what we have. A non shape, dedicated team in Barcelona, based in Barcelona but throughout Europe were doing multiple languages. Um, the academic program just introduced a new product into that space that z even fueling more success and growth there. Um, and of course, continuing to to invest in customer success and this Atlas platform story I keep mentioning, we're going to soon have We're gonna soon have four other major PTC brands shipping products on our Atlas Saas platform. And so we're really excited about that. That's good for the other PTC products. It's also good for on shape because now there's there's. There's other interesting products that are on shape customers can use take advantage of very easily using, say, a common log in conventions about user experience there, used to invest of all they're SAS based, so they that makes it easier to begin with. So that's some of the exciting things going on. I think you'll see PTC, um, expanding our lead in SAS based applications for this sector for our our target, uh, sectors not just in, um, in cat and data management, but another area. PTC's Big and his augmented reality with of euphoria, product line leader and industrial uses of a R. That's a whole other story we should do. A whole nother show augmented reality. But these products are amazing. You can you can help factory workers people on, uh, people who are left out of the digital transformation. Sometimes we're standing from machine >>all day. >>They can't be sitting like we are doing Zoom. They can wear a R headset in our tools, let them create great content. This is an area Dana is invested in other companies. But what I wanted to note is the new releases of our authoring software. For this, our content getting released this month, used through the Atlas platform, the SAS components of on shape for things like revision management and collaboration on duh workflow activity. All that those are tools that we're able to share leverage. We get a lot of synergy. It's just really good. It's really fun to have a good time. That's >>awesome. And then we're gonna be talking to John MacLean later about that. Let's do a little deeper Dive on that. And, Dana, what is your involvement today with with on shape? But you're looking for you know, which of their customers air actually adopting. And they're gonna disrupt their industries. And you get good pipeline from that. How do you collaborate today? >>That sounds like a great idea. Um, Aziz, John will tell you I'm constantly just asking him for advice and impressions of other entrepreneurs and picking his brain on ideas. No formal relationship clearly, but continue to count John and and John and other people in on shaping in the circle of experts that I rely on for their opinions. >>All right, so we have some questions from the crowd here. Uh, one of the questions is for the dream team. You know, John and Dana. What's your next next collective venture? I don't think we're there yet, are we? No. >>I just say, as Dana said, we love talking to her about. You know, Dana, you just returned the compliment. We would try and give you advice and the deals you're looking at, and I'm sort of casually mentoring at least one of your portfolio entrepreneurs, and that's been a lot of fun for May on, hopefully a value to them. But also Dana. We uran important pipeline to us in the world of some new things that are happening that we wouldn't see if you know you've shown us some things that you've said. What do you think of this business? And for us, it's like, Wow, it's cool to see that's going on And that's what's supposed to work in an ecosystem like this. So we we deeply value the ongoing relationship. And no, we're not starting something new. I got a lot of work left to do with what I'm doing and really happy. But we can We can collaborate in this way on other ventures. >>I like this question to somebody asking With the cloud options like on shape, Wilmore students have stem opportunities s Oh, that's a great question. Are you because of sass and cloud? Are you able to reach? You know, more students? Much more cost effectively. >>Yeah, Dave, I'm so glad that that that I was asked about this because Yes, and it's extremely gratified us. Yes, we are because of cloud, because on shape is the only full cloud full SAS system or industry were able to reach. Stem education brings able to be part of bringing step education to students who couldn't get it otherwise. And one of most gratifying gratifying things to me is the emails were getting from teachers, um, that that really, um, on the phone calls that were they really pour their heart out and say We're able to get to students in areas that have very limited compute resource is that don't have an I T staff where they don't know what computer that the students can have at home, and they probably don't even have a computer. We're talking about being able to teach them on a phone to have an android phone a low end android phone. You can do three D modeling on there with on shape. Now you can't do it any other system, but with on shape, you could do it. And so the teacher can say to the students, They have to have Internet access, and I know there's a huge community that doesn't even have Internet access, and we're not able, unfortunately to help that. But if you have Internet and you have even an android phone, we can enable the educator to teach them. And so we have case after case of saving a stem program or expanding it into the students that need it most is the ones we're helping here. So really excited about that. And we're also able to let in addition to the run on run on whatever computing devices they have, we also offer them the tools they need for remote teaching with a much richer experience. Could you teach solid works remotely? Well, maybe if the student ran it had a windows workstation. You know, big, big, high end workstation. Maybe it could, but it would be like the difference between collaborating with on shape and collaborate with solid works. Like the difference between a zoom video call and talking on the landline phone. You know, it's a much richer experience, and that's what you need. And stem teaching stem is hard, So yeah, we're super super. Um, I'm excited about bringing stem to more students because of cloud yond >>we're talking about innovation for good, and then the discussion, John, you just had it. Really? There could be a whole another vector here. We could discuss on diversity, and I wanna end with just pointing out. So, Dana, your new firm, it's a woman led firm, too. Two women leaders, you know, going forward. So that's awesome to see, so really? Yeah, thumbs up on that. Congratulations on getting that off the ground. >>Thank you. Thank you. >>Okay, so thank you guys. Really appreciate It was a great discussion. I learned a lot and I'm sure the audience did a swell in a moment. We're gonna talk with on shaped customers to see how they're applying tech for good and some of the products that they're building. So keep it right there. I'm Dave Volonte. You're watching innovation for good on the Cube, the global leader in digital tech event coverage. Stay right there. >>Oh, yeah, it's >>yeah, yeah, around >>the globe. It's the Cube presenting innovation for good. Brought to you by on shape. >>Okay, we're back. This is Dave Volonte and you're watching innovation for good. A program on Cuba 3 65 made possible by on shape of PTC company. We're live today really live tv, which is the heritage of the Cube. And now we're gonna go to the sources and talkto on shape customers to find out how they're applying technology to create real world innovations that are changing the world. So let me introduce our panel members. Rafael Gomez Furberg is with the Chan Zuckerberg bio hub. A very big idea. And collaborative nonprofit was initiative that was funded by Mark Zuckerberg and his wife, Priscilla Chan, and really around diagnosing and curing and better managing infectious diseases. So really timely topic. Philip Tabor is also joining us. He's with silver side detectors, which develops neutron detective detection systems. Yet you want to know if early, if neutrons and radiation or in places where you don't want them, So this should be really interesting. And last but not least, Matthew Shields is with the Charlottesville schools and is gonna educate us on how he and his team are educating students in the use of modern engineering tools and techniques. Gentlemen, welcome to the Cuban to the program. This should be really interesting. Thanks for coming on. >>Hi. Or pleasure >>for having us. >>You're very welcome. Okay, let me ask each of you because you're all doing such interesting and compelling work. Let's start with Rafael. Tell us more about the bio hub and your role there, please. >>Okay. Yeah. So you said that I hope is a nonprofit research institution, um, funded by Mark Zuckerberg and his wife, Priscilla Chan. Um, and our main mission is to develop new technologies to help advance medicine and help, hopefully cure and manage diseases. Um, we also have very close collaborations with Universe California, San Francisco, Stanford University and the University California Berkeley on. We tried to bring those universities together, so they collaborate more of biomedical topics. And I manage a team of engineers. They by joining platform. Um, and we're tasked with creating instruments for the laboratory to help the scientist boats inside the organization and also in the partner universities Do their experiments in better ways in ways that they couldn't do before >>in this edition was launched Well, five years ago, >>it was announced at the end of 2016, and we actually started operation with at the beginning of 2017, which is when I joined, um, So this is our third year. >>And how's how's it going? How does it work? I mean, these things take time. >>It's been a fantastic experience. Uh, the organization works beautifully. Um, it was amazing to see it grow From the beginning, I was employee number 12, I think eso When I came in, it was just a nem P office building and empty labs. And very quickly we had something running about. It's amazing eso I'm very proud of the work that we have done to make that possible. Um And then, of course, that's you mentioned now with co vid, um, we've been able to do a lot of very cool work attire being of the pandemic in March, when there was a deficit of testing, uh, capacity in California, we spun up a testing laboratory in record time in about a week. It was crazy. It was a crazy project, Um, but but incredibly satisfying. And we ended up running all the way until the beginning of November, when the lab was finally shut down. We could process about 3000 samples a day. I think at the end of it all, we were able to test about 100 on the order of 100 and 50,000 samples from all over the state. We were providing free testing toe all of the Department of Public Health Department of Public Health in California, which at the media pandemic, had no way to do testing affordably and fast. So I think that was a great service to the state. Now the state has created that testing system that would serve those departments. So then we decided that it was unnecessary to keep going with testing in the other biopsy that would shut down. >>All right. Thank you for that. Now, Now, Philip, you What you do is mind melting. You basically helped keep the world safe. Maybe describe a little bit more about silver sod detectors and what your role is there and how it all works. >>Tour. So we make a nuclear bomb detectors and we also make water detectors. So we try and do our part thio keep the world from blowing up and make it a better place at the same time. Both of these applications use neutron radiation detectors. That's what we make. Put them out by import border crossing places like that. They can help make sure that people aren't smuggling. Shall we say very bad things. Um, there's also a burgeoning field of research and application where you can use neutrons with some pretty cool physics to find water so you could do things. Like what? A detector up in the mountains and measure snowpack. Put it out in the middle of the field and measure soil moisture content. And as you might imagine, there's some really cool applications in, uh, research and agronomy and public policy for this. >>All right, so it's OK, so it's a It's much more than, you know, whatever fighting terrorism, it's there's a riel edge or I kind of i o t application for what you guys >>do. We do both its's to plowshares. You might >>say a mat. I I look at your role is kind of scaling the brain power for for the future. Maybe tell us more about Charlottesville schools and in the mission that you're pursuing and what you do. >>Thank you. Um, I've been in Charlottesville City schools for about 11 or 12 years. I started their teaching, um, a handful of classes, math and science and things like that. But Thescore board and my administration had the crazy idea of starting an engineering program about seven years ago. My background is an engineering is an engineering. My masters is in mechanical and aerospace engineering and um, I basically spent a summer kind of coming up with what might be a fun engineering curriculum for our students. And it started with just me and 30 students about seven years ago, Um, kind of a home spun from scratch curriculum. One of my goals from the outset was to be a completely project based curriculum, and it's now grown. We probably have about six or 700 students, five or six full time teachers. We now have pre engineering going on at the 5th and 6th grade level. I now have students graduating. Uh, you know, graduating after senior year with, like, seven years of engineering under their belt and heading off to doing some pretty cool stuff. So it's It's been a lot of fun building a program and, um, and learning a lot in the process. >>That's awesome. I mean, you know, Cuba's. We've been passionate about things like women in tech, uh, diversity stem. You know, not only do we need more, more students and stem, we need mawr underrepresented women, minorities, etcetera. We were just talking to John Herstek and integrate gration about this is Do you do you feel is though you're I mean, first of all, the work that you do is awesome, but but I'll go one step further. Do you feel as though it's reaching, um, or diverse base? And how is that going? >>That's a great question. I think research shows that a lot of people get funneled into one kind of track or career path or set of interests really early on in their educational career, and sometimes that that funnel is kind of artificial. And so that's one of the reasons we keep pushing back. Um, so our school systems introducing kindergartners to programming on DSO We're trying to push back how we expose students to engineering and to stem fields as early as possible. And we've definitely seen the first of that in my program. In fact, my engineering program, uh, sprung out of an after school in Extracurricular Science Club that actually three girls started at our school. So I think that actually has helped that three girls started the club that eventually is what led to our engineering programs that sort of baked into the DNA and also our eyes a big public school. And we have about 50% of the students are under the poverty line and we e in Charlottesville, which is a big refugee town. And so I've been adamant from Day one that there are no barriers to entry into the program. There's no test you have to take. You don't have to have be taking a certain level of math or anything like that. That's been a lot of fun. To have a really diverse set of kids enter the program and be successful, >>that's final. That's great to hear. So, Philip, I wanna come back to you. You know, I think about maybe some day we'll be able to go back to a sporting events, and I know when I when I'm in there, there's somebody up on the roof looking out for me, you know, watching the crowd, and they have my back. And I think in many ways, the products that you build, you know, our similar. I may not know they're there, but they're keeping us safe or they're measuring things that that that I don't necessarily see. But I wonder if you could talk about a little bit more detail about the products you build and how they're impacting society. >>Sure, so There are certainly a lot of people who are who are watching, trying to make sure things were going well in keeping you safe that you may or may not be aware of. And we try and support ah lot of them. So we have detectors that are that are deployed in a variety of variety of uses, with a number of agencies and governments that dio like I was saying, ports and border crossing some other interesting applications that are looking for looking for signals that should not be there and working closely to fit into the operations these folks do. Onda. We also have a lot of outreach to researchers and scientists trying to help them support the work they're doing. Um, using neutron detection for soil moisture monitoring is a some really cool opportunities for doing it at large scale and with much less, um, expense or complication than would have been done. Previous technologies. Um, you know, they were talking about collaboration in the previous segment. We've been able to join a number of conferences for that, virtually including one that was supposed to be held in Boston, but another one that was held out of the University of Heidelberg in Germany. And, uh, this is sort of things that in some ways, the pandemic is pushing people towards greater collaboration than they would have been able to do. Had it all but in person. >>Yeah, we did. Uh, the cube did live works a couple years ago in Boston. It was awesome show. And I think, you know, with this whole trend toward digit, I call it the Force march to digital. Thanks to cove it I think that's just gonna continue. Thio grow. Rafael. What if you could describe the process that you use to better understand diseases? And what's your organization's involvement? Been in more detail, addressing the cove in pandemic. >>Um, so so we have the bio be structured in, Um um in a way that foster so the combination of technology and science. So we have to scientific tracks, one about infectious diseases and the other one about understanding just basic human biology, how the human body functions, and especially how the cells in the human body function on how they're organized to create tissues in the body. On Ben, it has this set of platforms. Um, mind is one of them by engineering that are all technology rated. So we have data science platform, all about data analysis, machine learning, things like that. Um, we have a mass spectrometry platform is all about mass spectrometry technologies to, um, exploit those ones in service for the scientist on. We have a genomics platform that it's all about sequencing DNA and are gonna, um and then an advanced microscopy. It's all about developing technologies, uh, to look at things with advanced microscopes and developed technologies to marry computation on microscopy. So, um, the scientists set the agenda and the platforms, we just serve their needs, support their needs, and hopefully develop technologies that help them do their experiments better, faster, or allow them to the experiment that they couldn't do in any other way before. Um And so with cove, it because we have that very strong group of scientists that work on have been working on infectious disease before, and especially in viruses, we've been able to very quickly pivot to working on that s O. For example, my team was able to build pretty quickly a machine to automatically purified proteins on is being used to purify all these different important proteins in the cove. It virus the SARS cov to virus Onda. We're sending some of those purified proteins all over the world. Two scientists that are researching the virus and trying to figure out how to develop vaccines, understand how the virus affects the body and all that. Um, so some of the machines we built are having a very direct impact on this. Um, Also for the copy testing lab, we were able to very quickly develop some very simple machines that allowed the lab to function sort of faster and more efficiently. Sort of had a little bit of automation in places where we couldn't find commercial machines that would do it. >>Um, eso Matt. I mean, you gotta be listening to this and thinking about Okay, So someday your students are gonna be working at organizations like like, like Bio Hub and Silver Side. And you know, a lot of young people they're just don't know about you guys, but like my kids, they're really passionate about changing the world. You know, there's way more important than you know, the financial angles and it z e. I gotta believe you're seeing that you're right in the front lines there. >>Really? Um, in fact, when I started the curriculum six or seven years ago, one of the first bits of feedback I got from my students is they said Okay, this is a lot of fun. So I had my students designing projects and programming microcontrollers raspberry, PiS and order we nose and things like that. The first bit of feedback I got from students was they said Okay, when do we get to impact the world? I've heard engineering >>is about >>making the world a better place, and robots are fun and all, but, you know, where is the real impact? And so um, dude, yeah, thanks to the guidance of my students, I'm baking that Maurin. Now I'm like day one of engineering one. We talk about how the things that the tools they're learning and the skills they're gaining, uh, eventually, you know, very soon could be could be used to make the world a better place. >>You know, we all probably heard that famous line by Jeff Hammer Barker. The greatest minds of my generation are trying to figure out how to get people to click on ads. I think we're really generally generationally, finally, at the point where young students and engineering a really, you know, a passionate about affecting society. I wanna get into the product, you know, side and understand how each of you are using on shape and and the value that that it brings. Maybe Raphael, you could start how long you've been using it. You know, what's your experience with it? Let's let's start there. >>I begin for about two years, and I switched to it with some trepidation. You know, I was used to always using the traditional product that you have to install on your computer, that everybody uses that. So I was kind of locked into that. But I started being very frustrated with the way it worked, um, and decided to give on ship chance. Which reputation? Because any change always, you know, causes anxiety. Um, but very quickly my engineers started loving it, Uh, just because it's it's first of all, the learning curve wasn't very difficult at all. You can transfer from one from the traditional product to entree very quickly and easily. You can learn all the concepts very, very fast. It has all the functionality that we needed and and what's best is that it allows to do things that we couldn't do before or we couldn't do easily. Now we can access the our cat documents from anywhere in the world. Um, so when we're in the lab fabricating something or testing a machine, any computer we have next to us or a tablet or on iPhone, we can pull it up and look at the cad and check things or make changes. That's something that couldn't do before because before you had to pay for every installation off the software for the computer, and I couldn't afford to have 20 installations to have some computers with the cat ready to use them like once every six months would have been very inefficient. So we love that part. And the collaboration features are fantastic, especially now with Kobe, that we have to have all the remote meetings eyes fantastic, that you can have another person drive the cad while the whole team is watching that person change the model and do things and point to things that is absolutely revolutionary. We love it. The fact that you have very, very sophisticated version control before it was always a challenge asking people, please, if you create anniversary and apart, how do we name it so that people find it? And then you end up with all these collection of files with names that nobody ever remembers, what they are, the person left. And now nobody knows which version is the right one. A mess with on shape on the version ING system it has, and the fact that you can go back in history off the document and go back to previous version so easily and then go back to the press and version and explore the history of the part that is truly, um, just world changing for us, that we can do that so easily on for me as a manager to manage this collection of information that is critical for our operations. It makes it so much easier because everything is in one place. I don't have to worry about file servers that go down that I have to administer that have to have I t taken care off that have to figure how to keep access to people to those servers when they're at home, and they need a virtual private network and all of that mess disappears. I just simply give give a person in accounting on shape and then magically, they have access to everything in the way I want. And we can manage the lower documents and everything in a way that is absolutely fantastic. >>Feel what was your what? What were some of the concerns you had mentioned? You had some trepidation. Was it a performance? Was it security? You know some of the traditional cloud stuff, and I'm curious as to how, How, whether any of those act manifested really that you had to manage. What were your concerns? >>Look, the main concern is how long is it going to take for everybody in the team to learn to use the system like it and buy into it? Because I don't want to have my engineers using tools against their will write. I want everybody to be happy because that's how they're productive. They're happy, and they enjoyed the tools they have. That was my main concern. I was a little bit worried about the whole concept of not having the files in a place where I couldn't quote unquote seat in some server and on site, but that That's kind of an outdated concept, right? So that took a little bit of a mind shift, but very quickly. Then I started thinking, Look, I have a lot of documents on Google Drive. Like, I don't worry about that. Why would I worry about my cat on on shape, right? Is the same thing. So I just needed to sort of put things in perspective that way. Um, the other, um, you know, the concern was the learning curve, right? Is like, how is he Will be for everybody to and for me to learn it on whether it had all of the features that we needed. And there were a few features that I actually discussed with, um uh, Cody at on shape on, they were actually awesome about using their scripting language in on shape to sort of mimic some of the features of the old cat, uh, in on, shaped in a way that actually works even better than the old system. So it was It was amazing. Yeah, >>Great. Thank you for that, Philip. What's your experience been? Maybe you could take us through your journey within shape. >>Sure. So we've been we've been using on shaped silver side for coming up on about four years now, and we love it. We're very happy with it. We have a very modular product line, so we make anything from detectors that would go into backpacks. Two vehicles, two very large things that a shipping container would go through and saw. Excuse me. Shape helps us to track and collaborate faster on the design. Have multiple people working a same time on a project. And it also helps us to figure out if somebody else comes to us and say, Hey, I want something new how we congrats modules from things that we already have put them together and then keep track of the design development and the different branches and ideas that we have, how they all fit together. A za design comes together, and it's just been fantastic from a mechanical engineering background. I will also say that having used a number of different systems and solid works was the greatest thing since sliced bread. Before I got using on shape, I went, Wow, this is amazing and I really don't want to design in any other platform. After after getting on Lee, a little bit familiar with it. >>You know, it's funny, right? I'll have the speed of technology progression. I was explaining to some young guns the other day how I used to have a daytime er and that was my life. And if I lost that daytime, er I was dead. And I don't know how we weigh existed without, you know, Google maps eso we get anywhere, I don't know, but, uh but so So, Matt, you know, it's interesting to think about, you know, some of the concerns that Raphael brought up, you hear? For instance, you know, all the time. Wow. You know, I get my Amazon bill at the end of the month that zip through the roof in, But the reality is that Yeah, well, maybe you are doing more, but you're doing things that you couldn't have done before. And I think about your experience in teaching and educating. I mean, you so much more limited in terms of the resource is that you would have had to be able to educate people. So what's your experience been with With on shape and what is it enabled? >>Um, yeah, it was actually talking before we went with on shape. We had a previous CAD program, and I was talking to my vendor about it, and he let me know that we were actually one of the biggest CAD shops in the state. Because if you think about it a really big program, you know, really big company might employ. 5, 10, 15, 20 cad guys, right? I mean, when I worked for a large defense contractor, I think there were probably 20 of us as the cad guys. I now have about 300 students doing cat. So there's probably more students with more hours of cat under their belt in my building than there were when I worked for the big defense contractor. Um, but like you mentioned, uh, probably our biggest hurdle is just re sources. And so we want We want one of things I've always prided myself and trying to do in this. Programs provide students with access two tools and skills that they're going to see either in college or in the real world. So it's one of the reason we went with a big professional cad program. There are, you know, sort of K 12 oriented software and programs and things. But, you know, I want my kids coding and python and using slack and using professional type of tools on DSO when it comes to cat. That's just that That was a really hurt. I mean, you know, you could spend $30,000 on one seat of, you know, professional level cad program, and then you need a $30,000 computer to run it on if you're doing a heavy assemblies, Um and so one of my dreams And it was always just a crazy dream. And I was the way I would always pitcher in my school system and say, someday I'm gonna have a kid on a school issued chromebook in subsidized housing, on public WiFi doing professional level bad and that that was a crazy statement until a couple of years ago. So we're really excited that I literally and you know, March and you said the forced march, the forced march into, you know, modernity, March 13th kids sitting in my engineering lab that we spent a lot of money on doing cad March 14th. Those kids were at home on their school issued chromebooks on public WiFi, uh, keeping their designs going and collaborating. And then, yeah, I could go on and on about some of the things you know, the features that we've learned since then they're even better. So it's not like this is some inferior, diminished version of Academy. There's so much about it. Well, I >>wanna I wanna ask you that I may be over my skis on this, but we're seeing we're starting to see the early days of the democratization of CAD and product design. It is the the citizen engineer, I mean, maybe insulting to the engineers in the room, But but is that we're beginning to see that >>I have to believe that everything moves into the cloud. Part of that is democratization that I don't need. I can whether you know, I think artists, you know, I could have a music studio in my basement with a nice enough software package. And Aiken, I could be a professional for now. My wife's a photographer. I'm not allowed to say that I could be a professional photographer with, you know, some cloud based software, and so, yeah, I do think that's part of what we're seeing is more and more technology is moving to the cloud. >>Philip. Rafael Anything you Dad, >>I think I mean, yeah, that that that combination of cloud based cat and then three d printing that is becoming more and more affordable on ubiquitous It's truly transformative, and I think for education is fantastic. I wish when I was a kid I had the opportunity to play with those kinds of things because I was always the late things. But, you know, the in a very primitive way. So, um, I think this is a dream for kids. Teoh be able to do this. And, um, yeah, there's so many other technologies coming on, like Arduino on all of these electronic things that live kids play at home very cheaply with things that back in my day would have been unthinkable. >>So we know there's a go ahead. Philip, please. >>We had a pandemic and silver site moved to a new manufacturing facility this year. I was just on the shop floor, talking with contractors, standing 6 ft apart, pointing at things. But through it all, our CAD system was completely unruffled. Nothing stopped in our development work. Nothing stopped in our support for existing systems in the field. We didn't have to think about it. We had other server issues, but none with our, you know, engineering cad, platform and product development in support world right ahead, which was cool, but also a in that's point. I think it's just really cool what you're doing with the kids. The most interesting secondary and college level engineering work that I did was project based, taken important problem to the world. Go solve it and that is what we do here. That is what my entire career has been. And I'm super excited to see. See what your students are going to be doing, uh, in there home classrooms on their chromebooks now and what they do building on that. >>Yeah, I'm super excited to see your kids coming out of college with engineering degrees because, yeah, I think that Project based experience is so much better than just sitting in a classroom, taking notes and doing math problems on day. I think it will give the kids a much better flavor. What engineering is really about Think a lot of kids get turned off by engineering because they think it's kind of dry because it's just about the math for some very abstract abstract concept on they are there. But I think the most important thing is just that hands on a building and the creativity off, making things that you can touch that you can see that you can see functioning. >>Great. So, you know, we all know the relentless pace of technology progression. So when you think about when you're sitting down with the folks that on shape and there the customer advisor for one of the things that that you want on shape to do that it doesn't do today >>I could start by saying, I just love some of the things that does do because it's such a modern platform. And I think some of these, uh, some some platforms that have a lot of legacy and a lot of history behind them. I think we're dragging some of that behind them. So it's cool to see a platform that seemed to be developed in the modern era, and so that Z it is the Google docks. And so the fact that collaboration and version ing and link sharing is and like platform agnostic abilities, the fact that that seems to be just built into the nature of the thing so far, That's super exciting. As far as things that, uh, to go from there, Um, I don't know, >>Other than price. >>You can't say >>I >>can't say lower price. >>Yeah, so far on P. D. C. S that work with us. Really? Well, so I'm not complaining. There you there, >>right? Yeah. Yeah. No gaps, guys. Whitespace, Come on. >>We've been really enjoying the three week update. Cadence. You know, there's a new version every three weeks and we don't have to install it. We just get all the latest and greatest goodies. One of the trends that we've been following and enjoying is the the help with a revision management and release work flows. Um, and I know that there's more than on shape is working on that we're very excited for, because that's a big important part about making real hardware and supporting it in the field. Something that was cool. They just integrated Cem markup capability. In the last release that took, we were doing that anyway, but we were doing it outside of on shapes. And now we get to streamline our workflow and put it in the CAD system where We're making those changes anyway when we're reviewing drawings and doing this kind of collaboration. And so I think from our perspective, we continue to look forward. Toa further progress on that. There's a lot of capability in the cloud that I think they're just kind of scratching the surface on you, >>right? I would. I mean, you're you're asking to knit. Pick. I would say one of the things that I would like to see is is faster regeneration speed. There are a few times with convicts, necessities that regenerating the document takes a little longer than I would like. It's not a serious issue, but anyway, I I'm being spoiled, >>you know? That's good. I've been doing this a long time, and I like toe ask that question of practitioners and to me, it It's a signal like when you're nit picking and that's what you're struggling to knit. Pick that to me is a sign of a successful product, and and I wonder, I don't know, uh, have the deep dive into the architecture. But are things like alternative processors. You're seeing them hit the market in a big way. Uh, you know, maybe helping address the challenge, But I'm gonna ask you the big, chewy question now. Then we maybe go to some audience questions when you think about the world's biggest problems. I mean, we're global pandemics, obviously top of mind. You think about nutrition, you know, feeding the global community. We've actually done a pretty good job of that. But it's not necessarily with the greatest nutrition, climate change, alternative energy, the economic divides. You've got geopolitical threats and social unrest. Health care is a continuing problem. What's your vision for changing the world and how product innovation for good and be applied to some of the the problems that that you all are passionate about? Big question. Who wants toe start? >>Not biased. But for years I've been saying that if you want to solve the economy, the environment, uh, global unrest, pandemics, education is the case. If you wanna. If you want to, um, make progress in those in those realms, I think funding funding education is probably gonna pay off pretty well. >>Absolutely. And I think Stam is key to that. I mean, all of the ah lot of the well being that we have today and then industrialized countries. Thanks to science and technology, right improvements in health care, improvements in communication, transportation, air conditioning. Um, every aspect of life is touched by science and technology. So I think having more kids studying and understanding that is absolutely key. Yeah, I agree, >>Philip, you got anything to add? >>I think there's some big technical problems in the world today, Raphael and ourselves there certainly working on a couple of them. Think they're also collaboration problems and getting everybody to be able to pull together instead of pulling separately and to be able to spur the ideas on words. So that's where I think the education side is really exciting. What Matt is doing and it just kind of collaboration in general when we could do provide tools to help people do good work. Uh, that is, I think, valuable. >>Yeah, I think that's a very good point. And along those lines, we have some projects that are about creating very low cost instruments for low research settings, places in Africa, Southeast Asia, South America, so that they can do, um, um, biomedical research that it's difficult to do in those place because they don't have the money to buy the fancy lab machines that cost $30,000 an hour. Um, so we're trying to sort of democratize some of those instruments. And I think thanks to tools like Kahn shape then is easier, for example, to have a conversation with somebody in Africa and show them the design that we have and discuss the details of it with them on. But it's amazing, right to have somebody, you know, 10 time zones away, Um, looking really life in real time with you about your design and discussing the details or teaching them how to build a machine, right? Because, um, you know, they have a three D printer. You can you can just give them the design and say like, you build it yourself, uh, even cheaper than and, you know, also billing and shipping it there. Um, so all that that that aspect of it is also super important. I think for any of these efforts to improve some of the hardest part was in the world for climate change. Do you say, as you say, poverty, nutrition issues? Um, you know, availability of water. You have that project at about finding water. Um, if we can also help deploy technologies that teach people remotely how to create their own technologies or how to build their own systems that will help them solve those forms locally. I think that's very powerful. >>Yeah, the point about education is right on. I think some people in the audience may be familiar with the work of Erik Brynjolfsson and Andrew McAfee, the second machine age where they sort of put forth the premise that, uh, is it laid it out. Look, for the first time in history, machines air replacing humans from a cognitive perspective. Machines have always replaced humans, but that's gonna have an impact on jobs. But the answer is not toe protect the past from the future. The answer is education and public policy that really supports that. So I couldn't agree more. I think it's a really great point. Um, we have We do have some questions from the audience. If if we could If I can ask you guys, um, you know, this one kind of stands out. How do you see artificial intelligence? I was just talking about machine intelligence. Um, how do you see that? Impacting the design space guys trying to infuse a I into your product development. Can you tell me? >>Um, absolutely, like, we're using AI for some things, including some of these very low cost instruments that will hopefully help us diagnose certain diseases, especially this is that are very prevalent in the Third World. Um, and some of those diagnostics are these days done by thes armies of technicians that are trained to look under the microscope. But, um, that's a very slow process. Is very error prone and having machine learning systems that can to the same diagnosis faster, cheaper and also little machines that can be taken to very remote places to these villages that have no access to a fancy microscope. To look at a sample from a patient that's very powerful. And I we don't do this, but I have read quite a bit about how certain places air using a Tribune attorneys to actually help them optimize designs for parts. So you get these very interesting looking parts that you would have never thought off a person would have never thought off, but that are incredibly light ink. Earlier, strong and I have all sort of properties that are interesting thanks to artificial intelligence machine learning in particular >>yet another. The advantage you get when when your work is in the cloud I've seen. I mean, there's just so many applications that so if the radiology scan is in the cloud and the radiologist is goes to bed at night, Radiologist could come in in the morning and and say, Oh, the machine while you were sleeping was using artificial intelligence to scan these 40,000 images. And here's the five that we picked out that we think you should take a closer look at. Or like Raphael said, I can design my part. My, my, my, my, my you know, mount or bracket or whatever and go to sleep. And then I wake up in the morning. The machine has improved. It for me has made it strider strider stronger and lighter. Um And so just when your when your work is in the cloud, that's just that's a really cool advantage that you get that you can have machines doing some of your design work for you. >>Yeah, we've been watching, uh, you know, this week is this month, I guess is AWS re invent and it's just amazing to see how much effort is coming around machine learning machine intelligence. You know Amazon has sage maker Google's got, you know, embedded you no ML and big query. Uh, certainly Microsoft with Azure is doing tons of stuff and machine learning. I think the point there is that that these things will be infused in tow R and D and in tow software product by the vendor community. And you all will apply that to your business and and build value through the unique data that your collecting, you know, in your ecosystems. And and that's how you add value. You don't have to be necessarily, you know, developers of artificial intelligence, but you have to be practitioners to apply that. Does that make sense to you, Philip? >>Yeah, absolutely. And I think your point about value is really well chosen. We see AI involved from the physics simulations all the way up to interpreting radiation data, and that's where the value question, I think, is really important because it's is the output of the AI giving helpful information that the people that need to be looking at it. So if it's curating a serious of radiation alert, saying, Hey, like these air the anomalies. You need to look at eyes it, doing that in a way that's going to help a good response on. In some cases, the II is only as good as the people. That sort of gave it a direction and turn it loose. And you want to make sure that you don't have biases or things like that underlying your AI that they're going to result in less than helpful outcomes coming from it. So we spend quite a lot of time thinking about how do we provide the right outcomes to people who are who are relying on our systems? >>That's a great point, right? Humans air biased and humans build models, so models are inherently biased. But then the software is hitting the market. That's gonna help us identify those biases and help us, you know? Of course. Correct. So we're entering Cem some very exciting times, guys. Great conversation. I can't thank you enough for spending the time with us and sharing with our audience the innovations that you're bringing to help the world. So thanks again. >>Thank you so much. >>Thank you. >>Okay. Welcome. Okay. When we come back, John McElheny is gonna join me. He's on shape. Co founder. And he's currently the VP of strategy at PTC. He's gonna join the program. We're gonna take a look at what's next and product innovation. I'm Dave Volonte and you're watching innovation for good on the Cube, the global leader. Digital technology event coverage. We'll be right back. >>Okay? Okay. Yeah. Okay. >>From around >>the globe, it's the Cube. Presenting innovation for good. Brought to you by on shape. >>Okay, welcome back to innovation. For good. With me is John McElheny, who is one of the co founders of On Shape and is now the VP of strategy at PTC. John, it's good to see you. Thanks for making the time to come on the program. Thanks, Dave. So we heard earlier some of the accomplishments that you've made since the acquisition. How has the acquisition affected your strategy? Maybe you could talk about what resource is PTC brought to the table that allowed you toe sort of rethink or evolve your strategy? What can you share with us? >>Sure. You know, a year ago, when when John and myself met with Jim Pepperman early on is we're we're pondering. Started joining PTC one of things became very clear is that we had a very clear shared vision about how we could take the on shape platform and really extended for, for all of the PTC products, particular sort of their augmented reality as well as their their thing works or the i o. T business and their product. And so from the very beginning there was a clear strategy about taking on shape, extending the platform and really investing, um, pretty significantly in the product development as well as go to market side of things, uh, toe to bring on shape out to not only the PTC based but sort of the broader community at large. So So So PTC has been a terrific, terrific, um, sort of partner as we've we've gonna go on after this market together. Eso We've added a lot of resource and product development side of things. Ah, lot of resource and they go to market and customer success and support. So, really, on many fronts, that's been both. Resource is as well a sort of support at the corporate level from from a strategic standpoint and then in the field, we've had wonderful interactions with many large enterprise customers as well as the PTC channels. So it's been really a great a great year. >>Well, and you think about the challenges of in your business going to SAS, which you guys, you know, took on that journey. You know, 78 years ago. Uh, it's not trivial for a lot of companies to make that transition, especially a company that's been around as long as PTC. So So I'm wondering how much you know, I was just asking you How about what PCP TC brought to the table? E gotta believe you're bringing a lot to the table to in terms of the mindset, uh, even things is, is mundane is not the right word, but things like how you compensate salespeople, how you interact with customers, the notion of a service versus a product. I wonder if you could address >>that. Yeah, it's a it's a really great point. In fact, after we had met Jim last year, John and I one of the things we walked out in the seaport area in Boston, one of things we sort of said is, you know, Jim really gets what we're trying to do here and and part of let me bring you into the thinking early on. Part of what Jim talked about is there's lots of, you know, installed base sort of software that's inside of PTC base. That's helped literally thousands of customers around the world. But the idea of moving to sass and all that it entails both from a technology standpoint but also a cultural standpoint. Like How do you not not just compensate the sales people as an example? But how do you think about customer success? In the past, it might have been that you had professional services that you bring out to a customer, help them deploy your solutions. Well, when you're thinking about a SAS based offering, it's really critical that you get customers successful with it. Otherwise, you may have turned, and you know it will be very expensive in terms of your business long term. So you've got to get customers success with software in the very beginning. So you know, Jim really looked at on shape and he said that John and I, from a cultural standpoint, you know, a lot of times companies get acquired and they've acquired technology in the past that they integrate directly into into PTC and then sort of roll it out through their products, are there just reached channel, he said. In some respects, John John, think about it as we're gonna take PTC and we want to integrate it into on shape because we want you to share with us both on the sales side and customer success on marketing on operations. You know all the things because long term, we believe the world is a SAS world, that the whole industry is gonna move too. So really, it was sort of an inverse in terms of the thought process related to normal transactions >>on That makes a lot of sense to me. You mentioned Sharon turns the silent killer of a SAS company, and you know, there's a lot of discussion, you know, in the entrepreneurial community because you live this, you know what's the best path? I mean today, You see, you know, if you watch Silicon Valley double, double, triple triple, but but there's a lot of people who believe, and I wonder, if you come in there is the best path to, you know, in the X Y axis. If if it's if it's uh, growth on one and retention on the other axis. What's the best way to get to the upper right on? Really? The the best path is probably make sure you've nailed obviously the product market fit, But make sure that you can retain customers and then throw gas on the fire. You see a lot of companies they burn out trying to grow too fast, but they haven't figured out, you know that. But there's too much churn. They haven't figured out those metrics. I mean, obviously on shape. You know, you were sort of a pioneer in here. I gotta believe you've figured out that customer retention before you really, You know, put the pedal to the >>metal. Yeah, and you know, growth growth can mask a lot of things, but getting getting customers, especially the engineering space. Nobody goes and sits there and says, Tomorrow we're gonna go and and, you know, put 100 users on this and and immediately swap out all of our existing tools. These tools are very rich and deep in terms of capability, and they become part of the operational process of how a company designs and builds products. So any time anybody is actually going through the purchasing process. Typically, they will run a try along or they'll run a project where they look at. Kind of What? What is this new solution gonna help them dio. How are we gonna orient ourselves for success? Longer term. So for us, you know, getting new customers and customer acquisition is really critical. But getting those customers to actually deploy the solution to be successful with it. You know, we like to sort of, say, the marketing or the lead generation and even some of the initial sales. That's sort of like the Kindle ing. But the fire really starts when customers deploy it and get successful. The solution because they bring other customers into the fold. And then, of course, if they're successful with it, you know, then in fact, you have negative turn which, ironically, means growth in terms of your inside of your install. Bates. >>Right? And you've seen that with some of the emerging, you know, SAS companies, where you're you're actually you know, when you calculate whatever its net retention or renew ALS, it's actually from a dollar standpoint. It's up in the high nineties or even over 100%. >>So >>and that's a trend we're gonna continue. See, I >>wonder >>if we could sort of go back. Uh, and when you guys were starting on shape, some of the things that you saw that you were trying to strategically leverage and what's changed, you know, today we were talking. I was talking to John earlier about in a way, you kinda you kinda got a blank slate is like doing another startup. >>You're >>not. Obviously you've got installed base and customers to service, but But it's a new beginning for you guys. So one of the things that you saw then you know, cloud and and sas and okay, but that's we've been there, done that. What are you seeing? You know today? >>Well, you know, So So this is a journey, of course, that that on shape on its own has gone through it had I'll sort of say, you know, several iterations, both in terms of of of, you know, how do you How do you get customers? How do you How do you get them successful? How do you grow those customers? And now that we've been part of PTC, the question becomes okay. One, There is certainly a higher level of credibility that helps us in terms of our our megaphone is much bigger than it was when we're standalone company. But on top of that now, figuring out how to work with their channel with their direct sales force, you know, they have, um, for example, you know, very large enterprises. Well, many of those customers are not gonna go in forklift out their existing solution to replace it with with on shape. However, many of them do have challenges in their supply chain and communications with contractors and vendors across the globe. And so, you know, finding our fit inside of those large enterprises as they extend out with their their customers is a very interesting area that we've really been sort of incremental to to PTC. And then, you know, they they have access to lots of other technology, like the i o. T business. And now, of course, the augmented reality business that that we can bring things to bear. For example, in the augmented reality world, they've they've got something called expert capture. And this is essentially imagine, you know, in a are ah, headset that allows you to be ableto to speak to it, but also capture images still images in video. And you could take somebody who's doing their task and capture literally the steps that they're taking its geo location and from their builds steps for new employees to be, we'll learn and understand how todo use that technology to help them do their job better. Well, when they do that, if there is replacement products or variation of of some of the tools that that they built the original design instruction set for they now have another version. Well, they have to manage multiple versions. Well, that's what on shape is really great at doing and so taking our technology and helping their solutions as well. So it's not only expanding our customer footprint, it's expanding the application footprint in terms of how we can help them and help customers. >>So that leads me to the tam discussion and again, as part of your strategist role. How do you think about that? Was just talking to some of your customers earlier about the democratization of cat and engineering? You know, I kind of joked, sort of like citizen engineering, but but so that you know, the demographics are changing the number of users potentially that can access the products because the it's so much more of a facile experience. How are you thinking about the total available market? >>It really is a great question, You know, it used to be when you when you sold boxes of software, it was how many engineers were out there. And that's the size of the market. The fact that matter is now when, When you think about access to that information, that data is simply a pane of glass. Whether it's a computer, whether it's a laptop, UH, a a cell phone or whether it's a tablet, the ability to to use different vehicles, access information and data expands the capabilities and power of a system to allow feedback and iteration. I mean, one of the one of the very interesting things is in technology is when you can take something and really unleash it to a larger audience and builds, you know, purpose built applications. You can start to iterate, get better feedback. You know there's a classic case in the clothing industry where Zara, you know, is a fast sort of turnaround. Agile manufacturer. And there was a great New York Times article written a couple years ago. My wife's a fan of Zara, and I think she justifies any purchases by saying, You know, Zara, you gotta purchase it now. Otherwise it may not be there the next time. Yet you go back to the store. They had some people in a store in New York that had this woman's throw kind of covering Shaw. And they said, Well, it would be great if we could have this little clip here so we can hook it through or something. And they sent a note back toe to the factory in Spain, and literally two weeks later they had, you know, 4000 of these things in store, and they sold out because they had a closed loop and iterative process. And so if we could take information and allow people access in multiple ways through different devices and different screens, that could be very specific information that, you know, we remove a lot of the engineering data book, bring the end user products conceptually to somebody that would have had to wait months to get the actual physical prototype, and we could get feedback well, Weaken have a better chance of making sure whatever product we're building is the right product when it ultimately gets delivered to a customer. So it's really it's a much larger market that has to be thought of rather than just the kind of selling A boxes software to an engineer. >>That's a great story. And again, it's gonna be exciting for you guys to see that with. The added resource is that you have a PTC, Um, so let's talk. I promise people we wanna talk about Atlas. Let's talk about the platform. A little bit of Atlas was announced last year. Atlas. For those who don't know it's a SAS space platform, it purports to go beyond product lifecycle management and you You're talking cloud like agility and scale to CAD and product design. But John, you could do a better job than I. What do >>we need to know about Atlas? Well, I think Atlas is a great description because it really is metaphorically sort of holding up all of the PTC applications themselves. But from the very beginning, when John and I met with Jim, part of what we were intrigued about was that he shared a vision that on shape was more than just going to be a cad authoring tool that, in fact, you know, in the past these engineering tools were very powerful, but they were very narrow in their purpose and focus. And we had specialty applications to manage the versions, etcetera. What we did in on shape is we kind of inverted that thinking. We built this collaboration and sharing engine at the core and then kind of wrap the CAD system around it. But that collaboration sharing and version ING engine is really powerful. And it was that vision that Jim had that he shared that we had from the beginning, which was, how do we take this thing to make a platform that could be used for many other applications inside of inside of any company? And so not only do we have a partner application area that is is much like the APP store or Google play store. Uh, that was sort of our first Stan Shih ation of this. This this platform. But now we're extending out to broader applications and much meatier applications. And internally, that's the thing works in the in the augmented reality. But there'll be other applications that ultimately find its way on top of this platform. And so they'll get all the benefits of of the collaboration, sharing the version ing the multi platform, multi device. And that's an extremely extremely, um, strategic leverage point for the company. >>You know, it's interesting, John, you mentioned the seaport before. So PTC, for those who don't know, built a beautiful facility down at the Seaport in Boston. And, of course, when PTC started, you know, back in the mid 19 eighties, there was nothing at the seaport s. >>So it's >>kind of kind of ironic, you know, we were way seeing the transformation of the seaport. We're seeing the transformation of industry and of course, PTC. And I'm sure someday you'll get back into that beautiful office, you know? Wait. Yeah, I'll bet. And, uh and but I wanna bring this up because I want I want you to talk about the future. How you how you see that our industry and you've observed this has moved from very product centric, uh, plat platform centric with sass and cloud. And now we're seeing ecosystems form around those products and platforms and data flowing through the ecosystem powering, you know, new innovation. I wonder if you could paint a picture for us of what the future looks like to you from your vantage point. >>Yeah, I think one of the key words you said there is data because up until now, data for companies really was sort of trapped in different applications. And it wasn't because people were nefarious and they want to keep it limited. It was just the way in which things were built. And, you know, when people use an application like on shape, what ends up happening is there their day to day interaction and everything that they do is actually captured by the platform. And, you know, we don't have access to that data. Of course it's it's the customer's data. But as as an artifact of them using the system than doing their day to day job, what's happening is they're creating huge amounts of information that can then be accessed and analyzed to help them both improve their design process, improve their efficiencies, improve their actual schedules in terms of making sure they can hit delivery times and be able to understand where there might be roadblocks in the future. So the way I see it is companies now are deploying SAS based tools like on shape and an artifact of them. Using that platform is that they have now analytics and tools to better understand and an instrument and manage their business. And then from there, I think you're going to see, because these systems are all you know extremely well. Architected allow through, you know, very structured AP. I calls to connect other SAS based applications. You're gonna start seeing closed loop sort of system. So, for example, people design using on shape, they end up going and deploying their system or installing it, or people use the end using products. People then may call back into the customers support line and report issues, problems, challenges. They'll be able to do traceability back to the underlying design. They'll be able to do trend analysis and defect analysis from the support lines and tie it back and closed loop the product design, manufacture, deployment in the field sort of cycles. In addition, you can imagine there's many things that air sort of as designed. But then when people go on site and they have to install it. There's some alterations modifications. Think about think about like a large air conditioning units for buildings. You go and you go to train and you get a large air conditioning unit that put up on top of building with a crane. They have to build all kinds of adaptors to make sure that that will fit inside of the particulars of that building. You know, with on shape and tools like this, you'll be able to not only take the design of what the air conditioning system might be, but also the all the adapter plates, but also how they installed it. So it sort of as designed as manufactured as stalled. And all these things can be traced, just like if you think about the transformation of customer service or customer contacts. In the early days, you used to have tools that were PC based tools called contact management solution, you know, kind of act or gold mine. And these were basically glorified Elektronik role in Texas. It had a customer names and they had phone numbers and whatever else. And Salesforce and Siebel, you know, these types of systems really broadened out the perspective of what a customer relationship? Waas. So it wasn't just the contact information it was, you know, How did they come to find out about you as a company? So all of the pre sort of marketing and then kind of what happens after they become a customer and it really was a 3 60 view. I think that 3 60 view gets extended to not just to the customers, but also tools and the products they use. And then, of course, the performance information that could come back to the manufacturer. So, you know, as an engineer, one of the things you learn about with systems is the following. And if you remember, when the CD first came out CDs that used to talk about four times over sampling or eight times over sampling and it was really kind of, you know, the fidelity the system. And we know from systems theory that the best way to improve the performance of a system is to actually have more feedback. The more feedback you have, the better system could be. And so that's why you get 16 60 for example, etcetera. Same thing here. The more feedback we have of different parts of a company that a better performance, The company will be better customer relationships. Better, uh, overall financial performance as well. So that's that's the view I have of how these systems all tied together. >>It's a great vision in your point about the data is I think right on. It used to be so fragmented in silos, and in order to take a system view, you've gotta have a system view of the data. Now, for years, we've optimized maybe on one little component of the system and that sometimes we lose sight of the overall outcome. And so what you just described, I think is, I think sets up. You know very well as we exit. Hopefully soon we exit this this covert era on John. I hope that you and I can sit down face to face at a PTC on shape event in the near term >>in the seaport in the >>seaport would tell you that great facility toe have have an event for sure. It >>z wonderful >>there. So So John McElhinney. Thanks so much for for participating in the program. It was really great to have you on, >>right? Thanks, Dave. >>Okay. And I want to thank everyone for participating. Today we have some great guest speakers. And remember, this is a live program. So give us a little bit of time. We're gonna flip this site over toe on demand mode so you can share it with your colleagues and you, or you can come back and and watch the sessions that you heard today. Uh, this is Dave Volonte for the Cube and on shape PTC. Thank you so much for watching innovation for good. Be well, Have a great holiday. And we'll see you next time. Yeah.

>>from around the globe. It's the Cube presenting innovation for good, brought to you by on shape. >>Hello, everyone, and welcome to Innovation for Good Program, hosted by the Cuban. Brought to You by on Shape, which is a PTC company. My name is Dave Valentin. I'm coming to you from our studios outside of Boston. I'll be directing the conversations today. It's a very exciting, all live program. We're gonna look at how product innovation has evolved, where it's going and how engineers, entrepreneurs and educators are applying cutting edge, cutting edge product development techniques and technology to change our world. You know, the pandemic is, of course, profoundly impacted society and altered how individuals and organizations they're gonna be thinking about and approaching the coming decade. Leading technologists, engineers, product developers and educators have responded to the new challenges that we're facing from creating lifesaving products to helping students learn from home toe how to apply the latest product development techniques and solve the world's hardest problems. And in this program, you'll hear from some of the world's leading experts and practitioners on how product development and continuous innovation has evolved, how it's being applied toe positive, positively affect society and importantly where it's going in the coming decades. So let's get started with our first session fueling Tech for good. And with me is John Herstek, who is the president of the Suffers, a service division of PTC, which required on shape just over a year ago, where John was the CEO and co founder. And Dana Grayson is here. She is the co founder and general partner at Construct Capital, a new venture capital firm. Folks, welcome to the program. Thanks so much for coming on. Great >>to be here, Dave. >>All right, John. You're very welcome. Dana. Look, John, let's get into it for first. A belated congratulations on the acquisition of Von Shape. That was an awesome seven year journey for your company. Tell our audience a little bit about the story of on shape, but take us back to Day zero. Why did you and your co founders start on shape? Well, >>actually, start before on shaping the You know, David, I've been in this business for almost 40 years. The business of building software tools for product developers and I had been part of some previous products in the industry and companies that had been in their era. Big changes in this market and about, you know, a little Before founding on shape, we started to see the problems product development teams were having with the traditional tools of that era years ago, and we saw the opportunity presented by Cloud Web and Mobile Technology. And we said, Hey, we could use Cloud Web and Mobile to solve the problems of product developers make their Their business is run better. But we have to build an entirely new system, an entirely new company, to do it. And that's what on shapes about. >>Well, so notwithstanding the challenges of co vid and difficulties this year, how is the first year been as, Ah, division of PTC for you guys? How's business? Anything you can share with us? >>Yeah, our first year of PTC has been awesome. It's been, you know, when you get acquired, Dave, you never You know, you have great optimism, but you never know what life will really be like. It's sort of like getting married or something, you know, until you're really doing it, you don't know. And so I'm happy to say that one year into our acquisition, a TPI TC on shape is thriving. It's worked out better than I could have imagined a year ago. Along always, I mean sales are up. In Q four, our new sales rate grew 80% vs Excuse me, our fiscal Q four Q three. In the calendar year, it grew 80% compared to the year before. Our educational uses skyrocketing with around 400% growth, most recently year to year of students and teachers and co vid. And we've launched a major cloud platform using the core of on shape technology called Atlas. So, um, just tons of exciting things going on a TTC. >>That's awesome. But thank you for sharing some of those metrics. And of course, you're very humble individual. You know, people should know a little bit more about you mentioned, you know, we founded solid works, go founded solid, where I actually found it solid works. You had a great exit in the late nineties. But what I really appreciate is, you know, you're an entrepreneur. You've got a passion for the babies that you helped birth. You stayed with the salt systems for a number of years. The company that quiet, solid works well over a decade. And and, of course, you and I have talked about how you participated in the M I t blackjack team. You know, back in the day a Z I say you're very understated, for somebody was so accomplished. So well, >>that's kind of you. But I tend to I tend Thio always keep my eye more on what's ahead. You know what's next then? And you know, I look back Sure to enjoy it and learn from it about what I can put toe work, making new memories, making new successes. >>I love it. Okay, let's bring Dana into the conversation. Hello, Dana. And you Look, you were fairly early investor in on shape when you were with any A. And I think it was like it was a Siri's B. But it was very right close after the A raise. And and you were and still are a big believer in industrial transformation. So take us back. What did you see about on shape back then? That that excited you? >>Thanks. Thanks for that. Yeah. I was lucky to be a early investment in shape. You know, the things that actually attracted me. Don shape were largely around John and, uh, the team. They're really setting out to do something, as John says humbly, something totally new, but really building off of their background was a large part of it. Um, but, you know, I was really intrigued by the design collaboration side of the product. Um, I would say that's frankly what originally attracted me to it. What kept me in the room, you know, in terms of the industrial world was seeing just if you start with collaboration around design what that does to the overall industrial product lifecycle accelerating manufacturing just, you know, modernizing, manufacturing, just starting with design. So I'm really thankful to the on shape guys, because it was one of the first investments I've made that turned me on to the whole sector. And, wow, just such a great pleasure to work with with John and the whole team there. Now see what they're doing inside PTC, >>and you just launched construct capital this year, right in the middle of a pandemic and which is awesome. I love it. And you're focused on early stage investing. Maybe tell us a little bit about construct capital. What? Your investment thesis is and you know, one of the big waves that you're hoping to ride. >>Sure, it construct it is literally lifting out of any what I was doing there, um uh, you're on shape. I went on to invest in companies such as desktop metal and Tulip, to name a couple of them form labs, another one in and around the manufacturing space. But our thesis it construct is broader than just, you know, manufacturing and industrial. It really incorporates all of what we'd call foundational industries that have let yet to be fully tech enabled or digitized. Manufacturing is a big piece of it. Supply chain, logistics, transportation and mobility or not, or other big pieces of it. And together they really drive, you know, half of the GDP in the US and have been very under invested. And frankly, they haven't attracted really great founders like Iran in droves. And I think that's going to change. We're seeing, um, entrepreneurs coming out of the tech world or staggolee into these industries and then bringing them back into the tech world, which is which is something that needs to happen. So John and team were certainly early pioneers and I think, you know, frankly, obviously, that voting with my feet that the next set, a really strong companies are going to come out of this space over the next decade. >>I think there's a huge opportunity to digitize the sort of traditionally non digital organizations. But Dana, you focused. I think it's it's accurate to say you're focused on even Mawr early stage investing now. And I want to understand why you feel it's important to be early. I mean, it's obviously riskier and reward e er, but what do you look for in companies and and founders like John >>Mhm, Um, you know, I think they're different styles of investing all the way up to public market investing. I've always been early stage investors, so I like to work with founders and teams when they're, you know, just starting out. Um, I happened to also think that we were just really early in the whole digital transformation of this world. You know, John and team have been, you know, back from solid works, etcetera around the space for a long time. But again, the downstream impact of what they're doing really changes the whole industry and and so we're pretty early and in digitally transforming that market. Um, so that's another reason why I wanna invest early now, because I do really firmly believe that the next set of strong companies and strong returns for my own investors will be in the spaces. Um, you know, what I look for in Founders are people that really see the world in a different way. And, you know, sometimes some people think of founders or entrepreneurs is being very risk seeking. You know, if you asked John probably and another successful entrepreneurs, they would call themselves sort of risk averse, because by the time they start the company, they really have isolated all the risk out of it and think that they have given their expertise or what they're seeing their just so compelled to go change something, eh? So I look for that type of attitude experience a Z. You can also tell from John. He's fairly humble. So humility and just focus is also really important. Um, that there's a that's a lot of it. Frankly, >>excellent. Thank you. And John, you got such a rich history in the space in one of you could sort of connect the dots over time. I mean, when you look back, what were the major forces that you saw in the market in in the early days? Uh, particularly days of on shape on how is that evolved? And what are you seeing today? Well, I >>think I touched on it earlier. Actually, could I just reflect on what Dana said about risk taking for just a quick one and say, throughout my life, from blackjack to starting solid works on shape, it's about taking calculated risks. Yes, you try to eliminate the risk sa's much as you can, but I always say, I don't mind taking a risk that I'm aware of, and I've calculated through as best I can. I don't like taking risks that I don't know I'm taking. >>That's right. You like to bet on >>sure things as much sure things, or at least where you feel you. You've done the research and you see them and you know they're there and you know, you, you you keep that in mind in the room, and I think that's great. And Dana did so much for us. Dana, I want to thank you again for all that you did it every step of the way from where we started. Thio, Thio You know your journey with us ended formally but continues informally. Now back to you. Um, Dave, I think question about the opportunity and how it's shaped up. Well, I think I touched on it earlier when I said It's about helping product developers. You know, our customers of the people build the future of manufactured goods. Anything you think of that would be manufacturing factory. You know, the chair you're sitting in machine that made your coffee. You know, the computer you're using that trucks that drive by on the street, all the covert product research, the equipment being used to make vaccines. All that stuff is designed by someone, and our job is given the tools to do it better. And I could see the problems that those product developers had that we're slowing them down with using the computing systems of the time. When we built solid works, that was almost 30 years ago. People don't realize that it was in the early >>nineties, and, you know, we did the >>best we could for the early nineties, but what we did, we didn't anticipate the world of today. And so people were having problems with just installing the systems. Dave, you wouldn't believe how hard it is to install these systems. You need a spec up a special windows computer, you know, and make sure you've got all the memory and graphics you need and getting to get that set up. You need to make sure the device drivers air, right, install a big piece of software. Ah, license key. I'm not making this up. They're still around. You may not even know what those are. You know, Dennis laughing because, you know, zero cool people do things like this anymore on but only runs some windows. You want a second user to use it? They need a copy. They need a code. Are they on the same version? It's a nightmare. The teams change. You know? You just say, Well, get everyone on the software. Well, who's everyone? You know? You got a new vendor today? A new customer tomorrow, a new employee. People come on and off the team. The other problem is the data stored in files, thousands of files. This isn't like a spreadsheet or word processor where there's one file to pass around these air thousands of files to make one, even a simple product. People were tearing their hair out. John, what do we do? I've got copies everywhere. I don't know where the latest version is. We tried like, you know, locking people out so that only one person can change it at the time that works against speed. It works against innovation. We saw what was happening with Cloud Web and mobile. So what's happened in the years since is every one of the forces that product developers experience the need for speed, the need for innovation, the need to be more efficient with their people in their capital. Resource is every one of those trends have been amplified since we started on shape by a lot of forces in the world. And covert is amplified all those the need for agility and remote work cove it is amplified all that the same time, The acceptance of cloud. You know, a few years ago, people were like cloud, you know, how is that gonna work now They're saying to me, you know, increasingly, how would you ever even have done this without the cloud? How do you make solid works Work without the cloud? How would that even happen? You know, And once people understand what on shapes about >>and we're the >>Onley full SAS solution software as a service, full SAS solution in our industry. So what's happened in those years? Same problems we saw earlier, but turn up the gain, their bigger problems. And with cloud, we've seen skepticism of years ago turn into acceptance. And now even embracement in the cova driven new normal. >>Yeah. So a lot of friction in the previous environments cloud obviously a huge factor on, I guess. I guess Dana John could see it coming, you know, in the early days of solid works with Salesforce, which is kind of the first major independent SAS player. Well, I guess that was late nineties. So it was post solid works, but pre in shape and their work day was, you know, pre on shape in the mid two thousands. And and but But, you know, the bet was on the SAS model was right for Crick had and and product development, you know, which Maybe the time wasn't a no brainer. Or maybe it was I don't know, but Dana is there. Is there anything that you would invest in today that's not Cloud based? >>Um, that's a great question. I mean, I think we still see things all the time in the manufacturing world that are not cloud based. I think you know, the closer you get to the shop floor in the production environment. Um, e think John and the PTC folks would agree with this, too, but that it's, you know, there's reliability requirements. There's performance requirements. There's still this attitude of, you know, don't touch the printing press. So the cloud is still a little bit scary sometimes. And I think hybrid cloud is a real thing for those or on premise. Solutions, in some cases is still a real thing. What, what were more focused on. And, um, despite whether it's on premise or hybrid or or SAS and Cloud is a frictionless go to market model, um, in the companies we invest in so sass and cloud, or really make that easy to adopt for new users, you know, you sign up, start using a product, um, but whether it's hosted in the cloud, whether it's as you can still distribute buying power. And, um, I would I'm just encouraging customers in the customer world and the more industrial environment to entrust some of their lower level engineers with more budget discretionary spending so they can try more products and unlock innovation. >>Right? The unit economics are so compelling. So let's bring it, you know, toe today's you know, situation. John, you decided to exit about a year ago. You know? What did you see in PTC? Other than the obvious money? What was the strategic fit? >>Yeah, Well, David, I wanna be clear. I didn't exit anything. Really? You >>know, I love you and I don't like that term exit. I >>mean, Dana had exit is a shareholder on and so it's not It's not exit for me. It's just a step in the journey. Um, what we saw in PTC was a partner. First of all, that shared our vision from the top down at PTC. Jim Hempleman, the CEO. He had a great vision for for the impact that SAS can make based on cloud technology. And really is Dana of highlighted so much. It's not just the technology is how you go to market and the whole business being run and how you support and make the customers successful. So Jim shared a vision for the potential. And really, really, um said Hey, come join us and we can do this bigger, Better, faster. We expanded the vision really to include this Atlas platform for hosting other SAS applications. That P D. C. I mean, David Day arrived at PTC. I met the head of the academic program. He came over to me and I said, You know, and and how many people on your team? I thought he'd say 5 40 people on the PTC academic team. It was amazing to me because, you know, we were we were just near about 100 people were required are total company. We didn't even have a dedicated academic team and we had ah, lot of students signing up, you know, thousands and thousands. Well, now we have hundreds of thousands of students were approaching a million users, and that shows you the power of this team that PTC had combined with our product and technology whom you get a big success for us and for the teachers and students to the world. We're giving them great tools. So so many good things were also putting some PTC technology from other parts of PTC back into on shape. One area, a little spoiler, little sneak peek. Working on taking generative design. Dana knows all about generative design. We couldn't acquire that technology were start up, you know, just to too much to do. But PTC owns one of the best in the business. This frustrated technology we're working on putting that into on shaping our customers. Um, will be happy to see it, hopefully in the coming year sometime. >>It's great to see that two way exchange. Now, you both know very well when you start a company, of course, a very exciting time. You know, a lot of baggage, you know, our customers pulling you in a lot of different directions and asking you for specials. You have this kind of clean slate, so to speak in it. I would think in many ways, John, despite you know, your install base, you have a bit of that dynamic occurring today especially, you know, driven by the forced march to digital transformation that cove it caused. So when you sit down with the team PTC and talk strategy, you now have more global resource is you got cohorts selling opportunities. What's the conversation like in terms of where you want to take the division? >>Well, Dave, you actually you sounds like we should have you coming in and talking about strategy because you've got the strategy down. I mean, we're doing everything said global expansion were able to reach across selling. We've got some excellent PTC customers that we can reach reach now and they're finding uses for on shape. I think the plan is to, you know, just go, go, go and grow, grow, grow where we're looking for this year, priorities are expand the product. I mentioned the breath of the product with new things PTC did recently. Another technology that they acquired for on shape. We did an acquisition. It was it was small, wasn't widely announced. It, um, in an area related to interfacing with electrical cad systems. So? So we're doing We're expanding the breath of on shape. We're going Maura. Depth in the areas were already in. We have enormous opportunity. Add more features and functions that's in the product. Go to market. You mentioned it global global presence. That's something we were a little light on a year ago. Now we have a team. Dana may not even know what we have a non shape, dedicated team in Barcelona, based in Barcelona but throughout Europe were doing multiple languages. Um, the academic program just introduced a new product into that space. That's that's even fueling more success and growth there, Um, and of course, continuing to to invest in customer success. And this Atlas platform story I keep mentioning, we're going to soon have We're gonna soon have four other major PTC brands shipping products on our Atlas Saas platform. And so we're really excited about that. That's good for the other PTC products. It's also good for on shape because now there's there's. There's other interesting products that are on shape customers can use take advantage of very easily using, say, a common log in conventions about user experience there used to invest of all their SAS based, so they that makes it easier to begin with. So that's some of the exciting things going on. I think you'll see P. D. C. Um expanding our lead in saas based applications for this sector for our target sectors, not just in in cat and data management. But another area, PTC's Big and his augmented reality with of euphoria, product line leader and industrial uses of a R. That's a whole other story we should do. A whole nother show augmented reality. But these products are amazing. You can You can help factory workers people on, uh, people who are left out of the digital transformation. Sometimes we're standing from machine >>all day. >>They can't be sitting like we are doing Zoom. They could wear a R headset in our tools. Let them create great content. This is an area Dana is invested in in other companies, but what I wanted to note is the new releases of our authoring software. For this, our content getting released this month, used through the Atlas platform, the SAS components of on shape for things like revision management and collaboration on duh workflow activity. All that those are tools that we're able to share leverage. We get a lot of synergy. It's just really good. It's really fun to We'll have a good time, >>that's awesome. And then we're gonna be talking to John MacLean later about Atlas and do a little deeper dive on that. And, Dana, what is your involvement today with with on shape? But you're looking for you know, which of their customers air actually adopting, and they're gonna disrupt their industries. You get good pipeline from that. How do you collaborate today? >>That sounds like a great idea. Um, a Z John will tell you I'm constantly just ask him for advice and impressions of other entrepreneurs and picking his brain on ideas. No formal relationship clearly, but continue to count John and and John and other people in on shaping in the circle of experts that I rely on for their opinions. >>All right, so we have some questions from the crowd here. Uh, one of the questions is for the dream team. You know, John and Dana. What's your next next collective venture? I don't think we're there yet, are we? No. I >>just say, as Dana said, we love talking to her about. You know, Dana, you just returned the compliment. We would try and give you advice and the deals you're looking at, and I'm sort of casually mentoring at least one of your portfolio entrepreneurs, and that's been a lot of fun for May on hopefully a value to them. But also Dana, We uran important pipeline to us in the world of some new things that are happening that we wouldn't see if you know you've shown us some things that you've said. What do you think of this business? And for us, it's like, Wow, it's cool to see that's going on And that's what's supposed to work in an ecosystem like this. So we we deeply value the ongoing relationship. And no, we're not starting something new. I got a lot of work left to do with what I'm doing and really happy. But we can We can collaborate in this way on other ventures. >>I like this question to somebody asking with the cloud options like on shape, Wilmore students have stem opportunities s Oh, that's a great question. Are you because of sass and cloud? Are you able to reach? You know, more students? Much more cost effectively. >>Yeah, Dave, I'm so glad that that that I was asked about this because Yes, and it's extremely gratifying us. Yes, we are because of cloud, because on shape is the only full cloud full SAS system. Our industry were able to reach stem education brings able to be part of bringing step education to students who couldn't get it otherwise. And one of most gratifying gratifying things to me is the emails were getting from teachers, um, that that really, um, on the phone calls that were they really pour their heart out and say We're able to get to students in areas that have very limited compute resource is that don't have an I T staff where they don't know what computer that the students can have at home, and they probably don't even have a computer. We're talking about being able to teach them on a phone to have an android phone a low end android phone. You could do three D modeling on there with on shape. Now you can't do it any other system, but with on shape, you could do it. And so the teacher can say to the students, They have to have Internet access, and I know there's a huge community that doesn't even have Internet access, and we're not able, unfortunately to help that. But if you have Internet and you have even an android phone, we can enable the educator to teach them. And so we have case after case of saving a stem program or expanding it into the students that need it most is the ones we're helping here. So really excited about that. And we're also able to let in addition to the run on run on whatever computing devices they have, we also offer them the tools they need for remote teaching with a much richer experience. You know, could you teach solid works remotely? Well, maybe if the student ran it had a windows workstation, you know, big, big, high and workstation. Maybe it could, but it would be like the difference between collaborating with on shape and collaborate with solid works. Like the difference between a zoom video call and talking on the landline phone. You know, it's a much richer experience, and that's what you need in stem teaching. Stem is hard. So, yeah, we're super super excited about bringing stem to more students because of clouds. >>Yeah, we're talking about innovation for good, and then the discussion, John, you just had it. Really? There could be a whole another vector here. We could discuss on diversity, and I wanna end with just pointing out So, Dana, your new firm. It's a woman led firm, too. Two women leaders, you know, going forward. So that's awesome to see, so really? Yeah, thumbs up on that. Congratulations on getting that off the ground. Yeah. Thank you. Okay. So thank you guys. Really appreciate It was a great discussion. I learned a lot, and I'm sure the audience did a swell in a moment. We're gonna talk with on shape customers to see how they're applying tech for good and some of the products that they're building. So keep it right there. I'm Dave Volonte. You're watching innovation for good on the Cube, the global leader in digital tech event coverage. Stay right there. Yeah.

>>from around the globe. It's the Cube presenting innovation for good. Brought to you by on shape. >>Okay, we're back. This is Dave Volonte and you're watching innovation for good. A program on Cuba 3 65 made possible by on shape of BTC company. We're live today really live TV, which is the heritage of the Cuban. Now we're gonna go to the sources and talkto on shape customers to find out how they're applying technology to create real world innovations that are changing the world. So let me introduce our panel members. Rafael Gomez Fribourg is with the Chan Zuckerberg bio hub. A very big idea. And collaborative nonprofit was initiative that was funded by Mark Zuckerberg and his wife, Priscilla Chan, and really around diagnosing and curing and better managing infectious diseases. So really timely topic. Philip Tabor is also joining us. He's with silver side detectors which develops neutron detective detection systems. Yet you want to know if early if neutrons and radiation or in places where you don't want them, so this should be really interesting. And last but not least, Matthew Shields is with the Charlottesville schools and is gonna educate us on how he and his team are educating students in the use of modern engineering tools and techniques. Gentlemen, welcome to the Cuban to the program. This should be really interesting. Thanks for coming on. >>Hi. Or pleasure >>for having us. >>You're very welcome. Okay, let me ask each of you because you're all doing such interesting and compelling work. Let's start with Rafael. Tell us more about the bio hub and your role there, please. >>Okay. Yes. As you said, the Bio Hope is a nonprofit research institution, um, funded by Mark Zuckerberg and his wife, Priscilla Chan. Um and our main mission is to develop new technologies to help advance medicine and help, hopefully cure and manage diseases. Um, we also have very close collaborations with Universe California, San Francisco, Stanford University and the University California Berkeley on. We tried to bring those universities together, so they collaborate more of biomedical topics. And I manage a team of engineers in by joining platform. Um, and we're tasked with creating instruments for the laboratory to help the scientist boats inside the organization and also in the partner universities do their experiments in better ways in ways that they couldn't do before >>in this edition was launched five years ago. It >>was announced at the end of 2016, and we actually started operations in the beginning of 2017, which is when I joined um, so this is our third year. >>And how's how's it going? How does it work? I mean, these things >>take time. It's been a fantastic experience. Uh, the organization works beautifully. Um, it was amazing to see it grow from the beginning. I was employee number 12, I think eso When I came in, it was just a nem p off his building and MP labs. And very quickly we had something running about from anything. Eso I'm very proud of the work that we have done to make that possible. Um And then, of course, that's you mentioned now, with co vid, um, we've been able to do a lot of very cool work, um, very being of the pandemic In March, when there was a deficit of testing, uh, capacity in California, we spun up a testing laboratory in record time in about a week. It was crazy. It was a crazy project. Um, but but incredibly satisfying. And we ended up running all the way until the beginning of November, when the lab was finally shut down, we could process about 3000 samples a day. I think at the end of it all, we were able to test about 100 on the road, 150,000 samples from all over the state. We were providing free testing toe all of the Department of Public Health Department of Public Health in California, which, at the media pandemic, had no way to do testing affordably and fast. So I think that was a great service to the state. Now the state has created a testing system that will serve those departments. So then we decided that it was unnecessary to keep going with testing in the other biopsy that would shut down, >>right? Thank you for that. Now, Now, Philip, you What you do is mind melting. You basically helped keep the world safe. Maybe you describe a little bit more about silver side detectors and what your role is there and how it all works. >>Tour. So we make a nuclear bomb detectors and we also make water detectors. So we try and do our part. Thio Keep the world from blowing up and make it a better place at the same time. Both of these applications use neutron radiation detectors. That's what we make. Put them out by a port border crossing Places like that they can help make sure that people aren't smuggling, shall we say, very bad things. Um, there's also a burgeoning field of research and application where you can use neutrons with some pretty cool physics to find water so you can do things like but a detector up in the mountains and measure snowpack. Put it out in the middle of the field and measure soil moisture content. And as you might imagine, there's some really cool applications in, uh, research and agronomy and public policy for this. >>All right, so it's OK, so it's It's much more than you know, whatever fighting terrorism, it's there's a riel edge, or I kind of i o t application for what you guys do. >>You do both Zito shares. You might >>say a mat. I I look at your role is kind of scaling the brain power for for the future. Maybe tell us more about Charlottesville schools and in the mission that you're pursuing and what you do. >>Thank you. Um, I've been in Charlottesville city schools for about 11 or 12 years. I started their teaching, Um, a handful of classes, math and science and things like that. But Thescore board and my administration had the crazy idea of starting an engineering program about seven years ago. My background is an engineering is an engineering. My masters is in mechanical and aerospace engineering. And, um, I basically spent a summer kind of coming up with what might be a fun engineering curriculum for our students. And it started with just me and 30 students about seven years ago, Um, kind of a home spun from scratch curriculum. One of my goals from the outside was to be a completely project based curriculum, and it's now grown. We probably have about six or 700 students, five or six full time teachers. We now have pre engineering going on at the 5th and 6th grade level. I now have students graduating. Uh, you know, graduating after senior year with, like, seven years of engineering under their belt and heading off to doing some pretty cool stuff. So it's It's been a lot of fun building up a program and, um, and learning a lot in the process. >>That's awesome. I mean, you know, Cuba's. We've been passionate about things like women in tech, uh, diversity stem. You know, not only do we need more more students in stem, we need mawr underrepresented women, minorities, etcetera. We were just talking to John her stock and integrate Grayson about this is do you do you feel is though you're I mean, first of all, the work that you do is awesome, but but I'll go one step further. Do you feel as though it's reaching, um, or, you know, diverse base and And how is that going? >>That's a great question. I think research shows that a lot of people get funneled into one kind of track or career path or set of interests really early on in their educational career. And sometimes that that funnels kind of artificial. And so that's one of the reasons we keep pushing back. Um, so our school systems introducing kindergartners to programming on DSO. We're trying to push back how we expose students to engineering and to stem fields as early as possible, and we've definitely seen the fruits of that in my program. In fact, my engineering program, uh, sprung out of an after school in Extracurricular Science Club that actually three girls started at our school. So I think that actually has helped that three girls started the club That eventually is what led our engineering programs that sort of baked into the DNA and also are a big public school. And we have about 50% of the students are under the poverty line, and we should I mean, Charlottesville, which is a big refugee town. And so I've been adamant from Day one that there are no barriers to entry into the program. There's no test you have to take. You don't have to have be taking a certain level of math or anything like that. That's been a lot of fun. To have a really diverse set of kids and or the program and be successful, >>that's phenomenal. That's great to hear. So, Philip, I wanna come back to you. You know, I think about maybe some day we'll be able to go back to a sporting events, and I know when I when I'm in there, there's somebody up on the roof looking out for me, you know, watching the crowd. And they have my back. And I think in many ways, the products that you build, you know, our similar I may not know they're there, but they're keeping us safe or they're measuring things that that that I don't necessarily see. But I wonder if you could talk about a little bit more detail about the products you build and how they're impacting society. >>Sure, So there are certainly a lot of people who are who are watching, trying to make sure things were going well in keeping you safe that you may or may not be aware of. And we try and support ah lot of them. So we have detectors that are that are deployed in a variety of variety of uses with a number of agencies and governments that dio like I was saying, ports and border crossing some other interesting applications that are looking for looking for signals that should not be there and working closely to fit into the operations these folks do Onda. We also have ah lot of outreach to researchers and scientists trying to help them support the work they're doing, um, using neutron detection for soil moisture monitoring is a some really cool opportunities for doing it at large scale and with much less, um, expense or complication then would have been done previous technologies. Mhm. You know, they were talking about collaboration in the previous segment. We've been able to join a number of conferences for that, virtually including one that was supposed to be held in Boston. But another one that was held, uh, of the University of Heidelberg in Germany. And, uh, this is sort of things that in some ways, the pandemic is pushing people towards greater collaboration than there would have been able to do. Had it all but in person. >>Yeah, we did. Uh, the cube did live works a couple years ago in Boston. It was awesome show. And I think, you know, with this whole trend toward digit, I call it the forced march to digital. Thanks to cove it I think that's just gonna continue. Thio grow Raphael one. If you could describe the process that you used to better understand diseases and what's your organization's involvement? Been in more detail, addressing the cove in pandemic. >>Um, so so we have the bio be structured in, Um um, in a way that foster So the combination of technology and science. So we have to scientific tracks, one about infectious diseases and the other one about understanding just basic human biology how the human body functions and especially how the cells in the human body function on how they're organized to create teachers in the body. Um, and then it has the set of platforms. Um, mind is one of them by engineering that are all technology. Read it. So we have data science platform, all about data analysis, machine learning, things like that. Um, we have a mass spectrometry platform is all about mass spectrometry technologies to, um, exploit those ones in service for the scientists on. We have a genomics platform. That is all about sequencing DNA in our DNA. Um, and then an advanced microscopy. It's all about developing technologies, uh, to look at things with advanced microscopes and the little technologies to marry computation on microscope. So, um, the scientists said the agenda and the platforms we just serve their needs, support their needs, and hopefully develop technologies that help them do their experiments better, faster, or allow them to the experiment that they couldn't do in any other way before. Um And so with cove, it because we have that very strong group of scientists that work on. I have been working on infectious disease before, and especially in viruses, we've been able to very quickly pivot to working on that s O, for example, my team was able to build pretty quickly a machine to automatically purified proteins, and it's being used to purify all these different important proteins in the cove. It virus the SARS cov to virus on Dwyer, sending some of those purified proteins all over the world. Two scientists that are researching the virus and trying to figure out how to develop vaccines, understand how the virus affects the body and all that. So some of the machines we built are having a very direct impact on this. Um, Also for the copy testing lab, we were able to very quickly develop some very simple machines that allowed the lab to function sort of faster and more efficiently. Sort of had a little bit of automation in places where we couldn't find commercial machines that would do it. >>Um, God s o mat. I mean, you gotta be listening to this in thinking about, Okay? Some. Someday your students are gonna be working at organizations like Like like Bio Hub and Silver Side. And you know, a lot of young people that just have I don't know about you guys, but like my kids, they're really passionate about changing the world. You know, there's way more important than, you know, the financial angles and that z e I gotta believe you're seeing that you're right in the front lines there. >>Really? Um, in fact, when I started the curriculum six or seven years ago, one of the first bits of feedback I got from my students is they said Okay, this is a lot of fun. So I had my students designing projects and programming microcontrollers raspberry, PiS and order We nose and things like that. The first bit of feedback I got from students was they said Okay, when do we get to impact the world? I've heard engineering is about making the world a better place, and robots are fun and all, but, you know, where is the real impact? And so, um do Yeah, thanks to the guidance of my students, I'm baking that Maurin. Now I'm like Day one of engineering one. We talk about how the things that the tools they're learning and the skills they're gaining eventually you know, very soon could be could be used to make the world a better place. >>You know, we all probably heard that famous line By Jeff Hammond Barker. The greatest minds of my generation are trying to figure out how to get people to click on ads. E. I think we're really generally generationally finally, at the point where you know young students and engineering and really you know it passionate about affecting society. I wanna get into the product, you know, side and understand how each of you are using on shape and and the value that that it brings. Maybe Raphael, you could start how long you've been using it. You know, what's your experience with it? Let's let's start there. >>I begin for about two years, and I switched to it with some trepidation. You know, I was used to always using the traditional product that you have to install on your computer, that everybody uses that. So I was kind of locked into that, but I started being very frustrated with the way it worked, um, and decided to give on ship chance. Which reputation? Because any change always, you know, causes anxiety. But very quickly my engineers started loving it. Uh, just because it's it's first of all, the learning curve wasn't very difficult at all. You can transfer from one from the traditional product to entree very quickly and easily. You can learn all the concepts very, very fast. It has all the functionality that we needed, and and what's best is that it allows to do things that we couldn't do before or we couldn't do easily. Um, now we can access the our cat documents from anywhere in the world. Um, so when we're in the lab fabricating something or testing a machine, any computer we have next to us or a tablet or on iPhone, we can pull it up and look at the cad and check things or make changes that something that couldn't do before because before you had to pay for every installation off the software for the computer, and I couldn't afford to have 20 installations to have some computers with the cat ready to use them like once every six months would have been very inefficient. So we love that part. And the collaboration features are fantastic. Especially now with Kobe, that we have to have all the remote meetings, eyes fantastic, that you can have another person drive the cad while the whole team is watching that person change the model and do things and point to things that is absolutely revolutionary. We love it. The fact that you have very, very sophisticated version control before it was always a challenge asking people, please, if you create anniversary and apart, how do we name it so that people find it? And then you end up with all these collection of files with names that nobody remembers, what they are, the person left and now nobody knows which version is the right one m s with on shape on the version ING system it has, and the fact that you can go back in history off the document and go back to previous version so easily and then go back to the press and version and explore the history of the part that is truly, um, just world changing for us, that we can do that so easily on for me as a manager to manage this collection of information that is critical for our operations. It makes it so much easier because everything is in one place. I don't have to worry about file servers that go down that I have to administer that have to have I t taken care off that have to figure how to keep access to people to those servers when they're at home. And they need a virtual private network and all of that mess disappears. I just simply give give a personal account on shape. And then, magically, they have access to everything in the way I want. And we can manage the lower documents and everything in a way, that is absolutely fantastic. >>Rafael, what was your what? What were some of the concerns you had mentioned? You had some trepidation. Was it a performance? Was it security? You know, some of the traditional cloud stuff and I'm curious as to how How whether any of those act manifested were they really that you had to manage? What were your concerns? >>Look, the main concern is how long is it going to take for everybody in the team? to learn to use the system like it and buy into it because I don't want to have my engineers using tools against their will write. I want everybody to be happy because that's how they're productive. They're happy and they enjoyed the tools they have. That was my main concern. I was a little bit worried about the whole concept of not having the files in a place where I couldn't quote unquote seat in some serving on site, but that that's kind of an outdated concept, right? So that took a little bit of a mind shift. But very quickly. Then I started thinking, Look, I have a lot of documents on Google Drive like I don't worry about that. Why would I worry about my cat on on shape? Right is the same thing. So I just needed to sort of put things in perspective that way. Um, the other, um, you know, their concern was the learning curve right is like how is he will be for everybody to and for me to learn it on whether it had all of the features that we needed and there were a few features that I actually discussed with, um uh, Cody at on shape on. They were actually awesome about using their scripting language in on shape to sort of mimic some of the features of the old cat, uh, in on shaped in a way that actually works even better than the old system. So it was It was amazing. Yeah. >>Great. Thank you for that, Phillip. What's your experience been? Maybe you could take us through your journey with on shape? >>Sure. So we've been we've been using on shaped Silver Side for coming up on about four years now, and we love it. We're very happy with it. We have a very modular product line, so and we make anything from detectors that would go into backpacks? Two vehicles, two very large things that a shipping container would go through and saw. Excuse me. Shape helps us to track and collaborate faster on the design, have multiple people working a same time on a project. And it also helps us to figure out if somebody else comes to us and say, Hey, I want something new. How we congrats modules from things that we already have. Put them together and then keep track of the design development and the different branches and ideas that we have, how they all fit together. A za design comes together and it's just been fantastic from a mechanical engineering background. I will also say that having used a number of different systems and solid works was the greatest thing since sliced bread. Before I got using on shape, I went, Wow, this is amazing. And I really don't want to design in any other platform after after getting on Lee a little bit familiar with it. >>You know, it's funny, right? I will have the speed of technology progression. I was explaining to some young guns the other day how e used to have a daytime er and that was my life. And if I lost that day, timer, I was dead. And I don't know how we weigh existed without, you know, Google Maps. Eso did we get anywhere? I don't know, but, uh, but so So, Matt, you know, it's interesting to think about, um, you know, some of the concerns that Raphael brought up, you hear? For instance, you know, all the time. Wow. You know, I get my Amazon bill at the end of the month It's through the roof in. But the reality is that Yeah, well, maybe you are doing more, but you're doing things that you couldn't have done before. And I think about your experience in teaching and educating. I mean, you so much more limited in terms of the resource is that you would have had to be able to educate people. So what's your experience been with With on shape and what is it enabled? >>Um, yeah, it was actually talking before we went with on shape. We had a previous CAD program and I was talking to my vendor about it, and he let me know that we were actually one of the biggest CAD shops in the state. Because if you think about it a really big program, you know, really big company might employ 5, 10, 15, 20 cad guys, right? I mean, when I worked for a large defense contractor, I think there were probably 20 of us as the cad guys. I now have about 300 students doing cat. So there's probably more students with more hours of cat under their belt in my building than there were when I worked for the big defense contractor. Um, but like you mentioned, uh, probably our biggest hurdle is just re sources. And so we want We want one of things I've always prided myself and trying to do in this programs provide students with access two tools and skills that they're going to see either in college or in the real world. So it's one of the reason we went with a big professional cad program. There are, you know, sort of k 12 oriented software and programs and things. But, you know, I want my kids coding and python and using slack and using professional type of tools on DSO when it comes to cat. That's just that that was a really hurt. I mean, you know, you could spend $30,000 on one seat of, you know, professional level cad program, and then you need a $30,000 computer to run it on if you're doing a heavy assemblies, Um, and so one of my dreams and it was always just a crazy dream. And I was the way I would always pitcher in my school system and say someday I'm gonna have a kid on a school issued chromebook in subsidized housing on public WiFi doing professional level bad and that that was a crazy statement until a couple of years ago. So we're really excited that I literally and, you know, march in, um, you said the forced march the forced march into, you know, modernity, March 13th kids sitting in my engineering lab that we spent a lot of money on doing. Cad March 14th. Those kids were at home on their school shoot chromebooks on public WiFi, uh, keeping their designs going and collaborating. And then, yeah, I could go on and on about some of the things you know, the features that we've learned since then they're even better. So it's not like this is some inferior, diminished version of the cat. And there's so much about it, E >>wanna I wanna ask you that I may be over my skis on this, but we're seeing we're starting to see the early days of the democratization of CAD and product design. It is the the citizen engineer. I mean, maybe insulting to the engineers in the room, but but is that we're beginning to see that >>I have to believe that everything moves into the cloud. Part of that is democratization that I don't need. I can whether you know, I think artists, you know, I could have a music studio in my basement with a nice enough software package. And Aiken, I could be a professional for now. My wife's a photographer. I'm not allowed to say that I could be a professional photographer with, you know, some cloud based software. And so, yeah, I do think that's part of what we're seeing is more and more technology is moving to the cloud >>Philip or Rafael anything. Your dad, >>I think I mean yeah, that that that combination of cloud based cat and then three D printing that is becoming more and more affordable on ubiquitous It's truly transformative, and I think for education is fantastic. I wish when I was a kid I had the opportunity to play with those kinds of things because I was always the late things. But, you know, the in a very primitive way. So, um, I think there's a dream for kids Thio to be able to do this. And, um, yeah, there's so many other technologies coming on, like Arduino and all of these electronic things that live. Kids play at home very cheaply with things that back in my day would have been unthinkable. >>So we know there's a go ahead. Philip Way >>had a pandemic and silver site moved to a new manufacturing facility this year. I was just on the shop floor, talking with contractors, standing 6 ft apart, pointing at things. But through it all, our CAD system was completely unruffled. Nothing stopped in our development work. Nothing stopped in our support for existing systems in the field. We didn't have to think about it. We had other server issues, but none with our, you know, engineering cad, platform and product development and support world right ahead, which was cool, but also a That's point. I think it's just really cool what you're doing with the kids. The most interesting secondary and college level engineering work that I did was project based. It's an important problem to the world. Go solve it and that is what we do here. That is what my entire career has been. And I'm super excited to see See what your students are gonna be doing, uh, in there home classrooms on their chromebooks now and what they do. Building on that. >>Yeah, I'm super excited to see your kids coming out of college with engineering degrees because yeah, I think that project based experience is so much better than just sitting in a classroom, taking notes and doing math problems on. And I think he will give the kids a much better flavor What engineering is really about. Think a lot of kids get turned off by engineering because they think it's kind of dry because it's just about the math for some very abstract abstract concept, and they are there. But I think the most important thing is just that. Hands on a building and the creativity off, making things that you can touch that you can see that you can see functioning. >>Great. So you know, we all know the relentless pace of technology progression. So when you think about when you're sitting down with the folks that on shape and there the customer advisor for one of the things that you want on shape to do that it doesn't do today >>I could start by saying, I just love some of the things that does do because it's such a modern platform and I think some of these, uh, some some platforms that have a lot of legacy and a lot of history behind them. I think we're dragging some of that behind them. So it's cool to see a platform that seemed to be developed in a modern era. And so that's, you know, it is the Google docks. And so the fact that collaboration and version ing and link sharing is, and, like, platform agnostic abilities the fact that that seems to be just built into the nature of the thing so far, that's super exciting as far as things that it to go from there, Um, I don't know. >>Other than price, >>you can't say I >>can't say lower price. >>Yeah, so far on a PTC s that worked with us. Really well, so I'm not complaining. There. You there? >>Yeah. Yeah. No Gaps, guys. Whitespace, Come on. >>We've been really enjoying the three week update Cadence. You know, there's a new version every three weeks and we don't have to install it. We just get all the latest and greatest goodies. One of the trends that we've been following and enjoying is the the help with a revision management and release work flows. Um, and I know that there's more than on shape is working on that we're very excited for, because that's a big important part about making real hardware and supporting it in the field. Um, something that was cool. They just integrated Cem markup capability In the last release that took, we were doing that anyway, but we were doing it outside of on shapes, and now we get to streamline our workflow and put it in the CAD system where we're making those changes anyway, when we're reviewing drawings and doing this kind of collaboration. And so I think from our perspective, we continue to look forward toa further progress on that. There's a lot of capability in the cloud that I think they're just kind of scratching the surface on you. >>I would. I mean, you're you're asking to knit. Pick. I would say one of the things that I would like to see is is faster regeneration speed. There are a few times with comics necessities that regenerating the document takes a little longer than I would like to. It's not a serious issue, but anyway, I'm being spoiled, >>you know. That's good. I've been doing this a long time and I like toe Ask that question of practitioners and to me, it it's a signal like when you're nit picking and that you're struggling to knit. Pick that to me is a sign of a successful product. And And I wonder, I don't know, uh, have the deep dive into the architecture, But are things like alternative processors? You're seeing them hit the market in a big way. Uh, you know, maybe a helping address the challenge, But I'm gonna ask you the big, chewy question now, then would maybe go to some audience questions when you think about the world's biggest problems. I mean, we're global pandemics. Obviously top of mind. You think about nutrition, you know, feeding the global community. We've actually done a pretty good job of that. But it's not necessarily with the greatest nutrition climate change, alternative energy, the economic divides. You've got geopolitical threats and social unrest. Health care is a continuing problem. What's your vision for changing the world and how product innovation for good can be applied to some of the the problems that that you all are passionate about? Big question. But who wants toe start >>not biased. But for years I've been saying that if you want to solve the economy, the environment, uh, global unrest, pandemics education is the case If you wanna if you want to, um, make progress in those in those realms, I think funding funding education is probably gonna pay off pretty well. >>Absolutely. And I think stem is key to that. I mean, all of the, ah lot of the well being that we have today and then industrialized countries, thanks to science and technology, right, improvements in health care, improvements in communication, transportation, air conditioning. Um, every aspect of life is touched by science and technology. So I think having more kids studying and understanding that is absolutely key. Yeah, I agree, >>Philip, you got anything they had? >>I think there's some big technical problems in the world today, Raphael and ourselves there certainly working on a couple of them. Think they're also collaboration problems and getting everybody doing ableto pull together instead of pulling, pulling separately and to be able to spur the idea is onwards. So that's where I think the education side is really exciting. What Matt is doing and and it just kind of collaboration in general when we could do provide tools to help people do good work? Uh, that is, I think, valuable. >>Yeah, I think that's a very good point. And along those lines, we have some projects that are about creating very low cost instruments for low research settings places in Africa, Southeast Asia, South America so that they can do, um, um, biomedical research that it's difficult to do in those place because they don't have the money to buy the fancy lab machines that cost $30,000 an hour. Um, so we're trying to sort of democratize some of those instruments. And I think thanks to tools like Kahn shaped and is easier, for example, to have a conversation with somebody in Africa and show them the design that we have and discuss the details of it with them. Andi, that's amazing. Right? To have somebody you know, 10 time zones away, Um, looking really life in real time with you about your design and discussing the details or teaching them how to build a machine. Right? Because, um, you know, they have a three d printer. You can you just give them the design and say, like, you build it yourself, uh, even cheaper than and, you know, also billing and shipping it there. Um, so all that that that aspect of it is also so super important, I think, for any of these efforts to improve, um, some of the hardest part was in the world from climate change. Do you say, as you say, poverty, nutrition issues? Um, you know, availability of water. You have that project at about finding water. Um, if we can also help deploy technologies that teach people remotely how to create their own technologies or how to build their own systems that will help them solve those forms locally. I think that's very powerful. >>Yeah, that point about education is right on. I think some people in the audience may be familiar with the work of Erik Brynjolfsson and Andrew McAfee, the second machine age where they sort of put forth the premise that, uh, is it laid it out. Look, for the first time in history, machines air replacing humans from a cognitive perspective. Machines have always replaced humans, but that's gonna have an impact on jobs. But the answer is not toe protect the past from the future. Uh, the answer is education and public policy. That really supports that. So I couldn't agree more. I think it's a really great point. Um, we have We do have some questions from the audience. If if we can. If I can ask you guys, um, you know, this one kind of stands out. How do you see artificial intelligence? I was just talking about machine intelligence. Um, how do you see that? Impacting the design space guys trying to infuse a I into your product development. What can you tell me? >>Um, absolutely. Like, we're using AI for some things, including some of these very low cost instruments that will hopefully help us diagnose certain diseases, especially this is that are very prevalent in the Third World. Um, and some of those diagnostics are these days done by thes armies of technicians that are trained to look under the microscope. But, um, that's a very slow process. Is very error prone and having machine learning systems that can, to the same diagnosis faster, cheaper and also little machines that can be taken to very remote places to these villages that have no access to a fancy microscope to look at a sample from a patient that's very powerful, and I we don't do this. But I have read quite a bit about how certain places air, using a Tribune attorneys to actually help them optimize designs for parts. So you get these very interesting looking parts that you would have never thought off. A person would have never thought off, but that are incredibly light ink earlier strong and I have all sort of properties that are interesting thanks to artificial intelligence machine learning in particular, >>yet another, uh, advantage you get when when your work is in the cloud I've seen. I mean, there's just so many applications that so if the radiology scan is in the cloud and the radiologist is goes to bed at night, radiologist could come in in the morning and and say, Oh, the machine while you were sleeping was using artificial intelligence to scan these 40,000 images. And here's the five that we picked out that we think you should take a closer look at or like Raphael said. I can design my part. My, my, my, my, my you know, mount or bracket or whatever and go to sleep. And then I wake up in the morning. The machine has improved. It for me has made it strider strider stronger and lighter. Um And so just when your when your work is in the cloud, that's just that's a really cool advantage that you get that you can have machines doing some of your design work for you. >>Yeah, we've been watching, uh, you know, this week is this month, I guess is aws re invent and it's just amazing to see how much effort is coming around machine learning machine intelligence. You know, Amazon has sage maker Google's got, you know, embedded you no ML and big query. Certainly Microsoft with Azure is doing tons of stuff and machine learning. I think the point there is that that these things will be infused in tow R and D and in tow software products by the vendor community. And you all will apply that to your business and and build value through the unique data that your collecting you know, in your ecosystems. And and that's how you add value. You don't have to be necessarily, you know, developers of artificial intelligence, but you have to be practitioners to apply that. Does that make sense to you, Philip? >>Yeah, absolutely. And I think your point about value is really well chosen. We see AI involved from the physics simulations all the way up to interpreting radiation data, and that's where the value question, I think, is really important because it's is the output of the AI giving helpful information that the people that need to be looking at it. So if it's curating a serious of radiation alert, saying, Hey, like these are the anomalies you need to look at eyes it, doing that in a way that's going to help a good response on. In some cases, the II is only as good as the people. That sort of gave it a direction and turn it loose. And you want to make sure that you don't have biases or things like that underlying your AI that air going to result in, uh in less than helpful outcomes coming from it. So we spend quite a lot of time thinking about how do we provide the right outcomes to people who are who are relying on our systems? >>That's a great point, right? Humans, air biased and humans build models, so models are inherently biased. But then software is hitting the market. That's gonna help us identify those biases and help us, you know? Of course. Correct. So we're entering Cem some very exciting times, guys. Great conversation. I can't thank you enough for spending the time with us and sharing with our audience the innovations that you're bringing to help the world. So thanks again. >>Thank you so much. >>Thank you. >>Okay. You're welcome. Okay. When we come back, John McElheny is gonna join me. He's on shape. Co founder. And he's currently the VP of strategy at PTC. He's gonna join the program. We're gonna take a look at what's next and product innovation. I'm Dave Volonte and you're watching innovation for good on the Cube, the global leader. Digital technology event coverage. We'll be right back

>>from around the globe. It's the Cube presenting innovation for good. Brought to >>you by on shape. Okay, welcome back to innovation. For good. With me is John McElheny, who is one of the co founders of on Shape and is now the VP of strategy at PTC. John, good to see you. Thanks for making the time to come on the program. Thanks, Dave. So we heard earlier some of the accomplishments that you've made since the acquisition. How has the acquisition affected your strategy? Maybe you could talk about what resource is PTC brought to the table that allowed you toe sort of rethink or evolve your strategy? What can you share with us? >>Sure. You know, a year ago when John and myself met with Jim Hempleman early on is we're we're pondering started joining PTC. One of things became very clear is that we had a very clear shared vision about how we could take the on shape platform and really extended for for all of the PTC products, particular sort of their augmented reality as well as their their thing works or the i o. T business and their product. And so from the very beginning, there was a clear strategy about taking on shape, extending the platform and really investing, um, pretty significantly in the product development as well as go to market side of things, uh, toe to bring on shape out to not only the PTC based but sort of the broader community at large. So So So PTC has been terrific. Terrific, um, sort of partner as we've we've gonna go on after this market together. Eso we've added a lot of resource and product development side of things. Ah, lot of resource and to go to market and customer success and support. So really, on many fronts, that's with both resource is, as well a sort of support at the corporate level from from a strategic standpoint and then in the field, we've had wonderful interactions with many large enterprise customers as well as the PTC channels. So it's been really a great a great year. >>Well, and you think about the challenges of your business going to sas what you guys, you know, took on that journey, you know, 78 years ago. Uh, it's not trivial for a lot of companies to make that transition, especially company. That's been around as long as PTC. So So I'm wondering how much you know, I was just asking you what PC PTC brought the table. E gotta believe you're bringing a lot to the table to in terms of the mindset, uh, even things is, is mundane is not the right word. But things like how you compensate sales people, how you interact with customers, the notion of a service versus a product. I wonder if you could address >>that. Yeah, it's a It's a really great point. In fact, after we had met Jim last year, John and I one of the things we walked out in the seaport area in Boston one of things we sort of said is you know, Jim really gets what we're trying to do here and and part of let me bring you into the thinking early on. Part of what Jim talked about is there's lots of, you know, installed base sort of software that's inside of PTC base. That helped literally thousands of customers around the world. But the idea of moving to sass and all that it entails both from a technology standpoint, but also a cultural standpoint, like how do you not not just compensate the sales people as an example? But how do you think about customers? Success? In the past, it might have been that you had professional services that you bring out to a customer, help them deploy your solutions. Well, when you're thinking about a SAS based offering, it's really critical that you get customers successful with it. Otherwise, you may have turned, and you know it will be very expensive in terms of your business long term. So you've got to get customers success with software in the very beginning. So you know, Jim really looked at on shape and he said that John and I from a cultural standpoint, you know, a lot of times companies get acquired and they've acquired technology in the past that they integrate directly into into PTC and then sort of roll it out through their products or their distribution channels, he said. In some respects, John John, think about it as we're gonna take PTC and we want to integrate it into on shape because we want you to share with us both on the sales side and customer success on marketing on operations, you know, all the things because long term, we believe the world is a SAS world, that the whole industry is gonna move too. So, really, it was sort of an inverse in terms of the thought process related to normal transactions >>on that makes a lot of sense to me. You mentioned Sharon turns the silent killer of a SAS company. And you know, there's a lot of discussion, you know, in the entrepreneurial community because you live this, you know, what's the best path? I mean, today, you see, you know, you you watch Silicon Valley double, double, triple triple. But but there's a lot of people who believe, and I wonder, if you come in there is the best path to, you know, in the X Y axis. If if it's if it's, uh, growth on one and retention on the other axis, what's the best way to get to the upper right on? Really, the the best path is probably make sure you've nailed obviously the product market fit, but make sure that you can retain customers and then throw gas on the fire. You see a lot of companies they burn out trying to grow too fast, but they haven't figured out, you know that. But there's too much churn. They haven't figured out those metrics. I mean, obviously on shape. You know, you were sort of a pioneer in here. I gotta believe you've figured out that customer retention before you really? You know, put the pedal to the >>metal. Yeah. And you know, growth growth can mask a lot of things, but getting getting customers, especially the engineering space. Nobody goes and sits there and says, Tomorrow we're gonna go and and, you know, put 100 users on this and and immediately swap out all of our existing tools. These tools are very rich and deep in terms of capability, and they become part of the operational process of how a company designs and builds products. So any time anybody is actually going through the purchasing process, typically they will run a try along or they'll run a project where they look at Kind of What? What is this new solution gonna help them dio. How are we gonna orient ourselves for success? Longer term. So for us, you know, getting new customers and customer acquisition is really critical. But getting those customers to actually deploy the solution to be successful with it. You know, we like to sort of, say, the marketing or the lead generation and even some of the initial sales. That's sort of like the Kindle ing. But the fire really starts when customers deploy it and get successful with the solution because they bring other customers into the fold. And then, of course, if they're successful with it, you know, then in fact, you have negative turn which, ironically, means growth in terms of your inside of your install Bates. >>Right? And you've seen that with some of the emerging, you know, SAS companies, where you're you're actually you know, when you calculate whatever its net retention or renew ALS, it's actually from a dollar standpoint that's up in the high nineties or even over 100% >>so and >>that's a trend we're gonna continue. See, I wonder if we could sort of go back. Uh, and when you guys were starting on shape, some of the things that you saw that you were trying to strategically leverage and what's changed, you know, today we were talking. I was talking to John earlier about in a way, you kinda you kinda got a blank slate is like doing another startup. You're not. Obviously you've got installed base and customers to service, but but it's a new beginning for you guys. So one of the things that you saw then you know, cloud and and sas and okay, but that's we've been there, done that. What are you seeing? You know, today? >>Well, you know, So So this is a journey, of course, that that on shape on its own has gone through. And had, I'll sort of say, you know, several iterations, both in terms of of of, you know, how do you How do you get customers? How do you How do you get them successful? How do you grow those customers? And now that we've been part of PTC, the question becomes okay, One, there is certainly a higher level of credibility that helps us in terms of our our megaphone is much bigger than it was when we're standalone company. But on top of that now, figuring out how to work with their channel with their direct sales force, you know, they have, um, for example, you know, very large enterprises. Well, many of those customers are not gonna go in forklift out their existing solution to replace it with with on shape. However, many of them do have challenges in their supply chain and communications with contractors and vendors across the globe. And so, you know, finding our fit inside of those large enterprises as they extend out with their their customers is a very interesting area that we've really been sort of incremental to to PTC. And then, you know, they they have access to lots of other technology, like the i O. T business. And now, of course, the augmented reality business that that we can bring things to bear. For example, in the augmented reality world they've they've got something called expert capture. And this is essentially imagined, you know, in a are, ah, headset that allows you to be ableto to speak to it but also capture images, still images in video, and you could take somebody who's doing their task and capture literally the steps that they're taking its geo location and from their builds steps for new employees. We'll learn and understand how todo use that technology to help them do their job better. Well, when they do that if there is replacement products or variation of of some of the tools that that they built the original design instruction set for they now have another version. Well, they have to manage multiple versions. Well, that's what on shape is really great at doing and so taking our technology and helping their solutions as well. So it's not only expanding our customer footprint, it's expanding the application footprint in terms of how we can help them and help customers. >>So that leads me to the tam discussion. And again, it was part of your strategist role. How do you think about that? Was just talking to some of your customers earlier about the democratization of cat and engineering. You know, I kind of joked, sort of like citizen engineering, but but so that, you know, the demographics are changing the number of users potentially that can access the products because the it's so much more of a facile experience. How are you thinking about the total available market? >>It really is a great question, you know, It used to be when you when you sold boxes of software, it was how many engineers were out there, and that's the size of the market. The fact that matter is now when, When you think about access to that information, that data is simply a pane of glass. Whether it's a computer, whether it's a laptop, uh, a cell phone or whether it's a tablet, the ability to to use different vehicles, access information and data expands the capabilities and power of a system to allow feedback and iteration. I mean, one of the one of the very interesting things is in technology is when you can take something and really unleash it to a larger audience and builds, you know, purpose built applications. You can start to iterate, get better feedback. You know, there's a classic case in the clothing industry where Zara, you know, is a fast, sort of turnaround agile manufacturer. And there was a great New York Times article written a couple years ago. My wife's a fan of Zara, and I think she justifies any purchases by saying, you know, was Are you gotta purchase it now. Otherwise it may not be there the next time. Yet you go back to the store. They had some people in the store in New York that had this woman's throw kind of covering Shaw, and they said, Well, it would be great if we could have this little clip here so we could hook it through or something. And they sent a note back toe to the factory in Spain and literally two weeks later they had, you know, 4000 of these things in store, and they sold out because they had a closed loop and iterative process. And so if we could take information and allow people access in multiple ways through different devices and different screens, that could be very specific information that, you know, we remove a lot of the engineering data book, bring the end user products conceptually to somebody that would have had to wait months to get the actual physical prototype, and we could get feedback. Well, Weaken have a better chance of making sure whatever product we're building is the right product when it ultimately gets delivered to a customer. So it's really it's a much larger market that has to be thought of rather than just the kind of selling a boxes off where to an engineer, >>that's a great story, and and again, it's gotta be exciting for you guys to see that on day with the added resource is that you have a PTC eso. Let's talk. I promise people we want to talk about Atlas. Let's talk about the platform. A little bit of Atlas was announced last year. Atlas. For those who don't know it's a SAS space platform, it purports to go beyond product lifecycle management and you you're talking cloudlike agility and scale to CAD and product design. But, John, you could do a better job than I. What do >>we need to know about Atlas? Well, I think Atlas is a great description because it really is metaphorically, sort of holding up all of the PTC applications themselves. But from the very beginning, when John and I met with Jim, part of what we were intrigued about was that he shared a vision that on shape was more than just going to be a cad authoring tool that, in fact, you know, in the past, these engineering tools were very powerful, but they were very narrow in their purpose and focus, and we had specialty applications to manage diversions, etcetera. What we did in on shape is we kind of inverted that thinking we built this collaboration and sharing engine at the core and then kind of wrap the CAD system around it. But that collaboration sharing and version ING engine is really powerful. And it was that vision that Jim had that he shared that we had from the beginning, which was, how do we take this thing to make a platform that could be used for many other applications inside of inside of any company? And so not only do we have a partner application area that is is much like the APP store or Google play store. Uh, that was sort of our first misty initiation of this this this platform. But now we're extending out to broader applications and much meatier applications. And internally, that's the thing works in the in the augmented reality. But there'll be other applications that ultimately find its way on top of this platform, and so they'll get all the benefits of of the collaboration, sharing the version ing the multi platform multi device. And that's an extremely extremely, um, strategic leverage point for the company. >>You know, it's interesting, John, you mentioned the seaport before, So PTC For those who don't know built a beautiful facility down at the seaport in Boston. And of course, when PTC started back in the mid 19 eighties, this there was nothing at the seaport s. >>So it's >>kind of kind of ironic, you know, we were way seeing the transformation of the seaport. We're seeing the transformation of industry and of course, PTC. And I'm sure someday you'll get back into that beautiful office, you know? Wait. Yeah, I'll Bet. And, uh and but I wanna bring this up because I want I want you to talk about the future. How you how you see that our industry and you've observed this has moved from very product centric, uh, plat platform centric with sass and cloud. And now we're seeing ecosystems form around those products and platforms and in data flowing through the ecosystem, powering you new innovation. I wonder if you could paint a picture for us of what the future looks like to you from your vantage point. >>Yeah, I think one of the key words you said there is data because up until now, data for companies really was sort of trapped in different applications. And it wasn't because people with nefarious and they want to keep it limited. It was just the way in which things were built, and you know, when people use an application like on shape, what ends up happening is there their day to day interactions and everything that they dio is actually captured by the platform. And you know, we don't have access to that data. Of course it's it's the customer's data. But as as an artifact of them using the system than doing their day to day job, what's happening is they're creating huge amounts of information that can then be accessed and analyzed to help them both improve their design process, improve their efficiencies, improve their actual schedules in terms of making sure they can hit delivery times and be able to understand where there might be roadblocks in the future. So the way I see it is, companies now are deploying SAS based tools like an shape and an artifact of them. Using that platform is that they have now analytics and tools to better understand and an instrument and manage their business. And then from there, I think you're going to see, because these systems are all you know extremely well. architected allow through, you know, very structured AP. I calls to connect other SAS based applications. You're gonna start seeing closed loop sort of system. So, for example, people design using on shape. They end up going and deploying their system or installing it, or people use the end using products. People then may call back into the customers support line and report issues problems, challenges. They'll be able to do traceability back to the underlying design. They'll be able to do trend analysis and defect analysis from the support lines and tie it back and closed loop the product design, manufacture, deployment in the field sort of cycles. In addition, you can imagine there's many things that air sort of as designed. But then when people go on site and they have to install it, there's some alterations modifications. Think about think about like a large air conditioning units for buildings. You go and you go to train and you get a large air conditioning unit that put up on the top of building with a crane. They have to build all kinds of adaptors to make sure that that will fit inside of of of the particulars of that building. You know, with on shape and tools like this, you'll be able to not only take the design of what the air conditioning system might be, but also the all the adapter plates, but also how they installed it. So it sort of as designed as manufactured as stalled. And all these things can be traced just like if you think about the transformation of customer service or customer contacts. In the early days, you used to have tools that were PC based tools called contact management solution, you know, kind of act or gold mine. And these were basically glorified Elektronik role in Texas. It had a customer names, and they had phone numbers and whatever else. And Salesforce and Siebel, these types of systems really broadened out the perspective of what a customer relationship waas. So it wasn't just the contact information it was, you know, How did they come to find out about you as a company? So all the pre sort of marketing and then kind of what happens after they become a customer and it really was a 3 60 view. I think that 3 60 view gets extended to not just to the customers, but also tools and the products they use. And then, of course, the performance information that could come back to the manufacturer. So, you know, as an engineer, one of the things you learn about with systems is the following. And if you remember, when the 501st came out CDs that used to talk about four times over sampling or eight times over sampling and it was really kind of, you know, the fidelity the system. And we know from systems theory that the best way to improve the performance of a system is to actually have more feedback. The more feedback you have, the better system could be. And so that's why you got 16 60 for example, etcetera. Same thing here. The more feedback we have of different parts of a company that a better performance. The company will be better customer relationships, better overall financial performance as well. So that's that's the view I have of how these systems all tied together. >>The great vision in your point about the data is, I think, right on. It used to be so fragmented in silos, and in order to take a system view, you've gotta have a system view of the data. Uh, for years we've optimized maybe on one little component of the system and that sometimes we lose sight of the overall outcome. And so what you just described, I think is, I think sets up. You know very well as we exit. Hopefully soon we exit this this covert era on John. I hope that you and I can sit down face to face at a PTC on shape event in the near term. Who's >>in the seaport in the >>seaport Would tell you that great facility toe have have an event for sure. It >>z wonderful >>there. So So, John McElhinney. Thanks so much for for participating in the program. It was really great to have you on. >>Right. Thanks, Dave. >>Okay. And I want to thank everyone for participating. Today. We have some great guest speakers. And remember, this is a live program, so give us a little bit of time. We're gonna flip this site over to on demand mode so you can share it with your colleagues and you, or you can come back and and watch the sessions that you heard today. Uh, this is Dave Volonte for the Cube and on shape PTC. Thank you so much for watching innovation for good. Be well, have a great holiday and we'll see you next time.

>> From the SiliconANGLE Media Office in Boston, Massachusetts, it's theCUBE. Now, here's your host, Dave Vellante. >> Hello everyone and welcome to this week's episode of theCUBE Insights, powered by ETR. In this Breaking Analysis I want to lay out my 2020 predictions using insights gleaned from theCUBE blended with ETR spending data. You know, 2019 marked our 10th year of doing theCUBE. Over that time we've had the pleasure of covering nearly 1000 events and milestones, including the exit from the great softness of 2008 and 2009. You know theCUBE has extensively tracked a 10 year bull market. We've covered the era of data. We saw the rise and profitless prosperity of the big data and opensource Hadoop movement, where we predicted the practitioners, not vendors, would benefit the most from big data. We've covered many dozens of acquisitions including the 60 billion dollar chess move made by Michael Dell acquiring EMC, and a launch of hundreds of startups in flash, hyper-converged, big data, AI, blockchain, crypto, security and SaaS. There'll be other days to talk about theCUBE and review that, today's all about predicting the future, using spending data and insights from the thousands of interviews we've done on theCUBE. So let's get right into the ETR data and start with the high-level spending. Remember in October, ETR released its survey results and stated that we're coming out of a multiyear investment cycle in digital transformation. Enterprise IT buyers have learned what works, and on which technologies they're going to double down. They're now narrowing their investments on emerging technologies, picking those winners for the next gen tech, and at the same time, they're cutting redundancies from legacy players that they were keeping on as a hedge. Buyers are picking bundled suites from a handful of mega vendors, and solidifying their investments. We're seeing a multi-generational dynamic repeat itself, where buyers are creating a balance between the convenience of packaged offerings, i.e. bundles, and leveraging best of breed technologies to drive innovation. So on balance, the ETR data shows that a contraction in spending and tepid CIO sentiment is impacting both emerging vendors as well as traditional players, and these trends are most pronounced in the very largest organizations, which have always been the best bellwether in ETR's data sets. Let me share with you what one IT executive said recently that I think really sums up the situation quite well. He said, "ETR's findings mirror what we're doing today, "in that we spend most of 2018 bringing in "a lot of the new, core technology. "I believe what you're seeing now is not a lull in spend, "but an operationalization of what we've already purchased. "We're not spending on what's next yet, "because we're still rolling out what we just bought." This is from a VP of global IT at a large public manufacturing company, I said he, it could be a she as well. I think that she's summing it up correctly, and it reflects many of what customers on theCUBE tell us. Now, let's take a look at the macroeconomy. GDP growth is going to come in at about 2.3% this year, give or take. It's not going to hit the Trump administration's goal of 3% plus, but consumers are clearly powering steady growth. At least for now. IT spending should grow at about a point or two above GDP, so let's put that at, say, 4%. We're right in the middle of a Santa Claus rally, and the S&P is above 3200 today. Tech has been a powerful tailwind for stocks, and I think stocks, tech stock's going to take a breath in early 2020, but I expect continued strong growth in the economy and tech spending after a Q1 pause. I could see the S&P flirting with 3700 or even higher in 2020, and I think the tech sector will be a benefactor of that momentum, providing an impetus for continued growth. Here's my thinking on that. So much of 2020 is going to be about the election, and to me the election is going to be really about the economy. And I predict the economy is going to remain steady. And as the IT leader I quoted earlier said, customers will be operationalizing what's been previously purchased. Here's what's different in 2020. Tech projects have historically been very risky investments, and have required higher internal rates of return, IRRs, to get approved by CFOs. But the cloud has altered two factors. One, is that it's allowed more experimentation for way less money. The second is cloud, by shifting CAPEX to OPEX, allows for much more incremental, lower risk investments. So I think you'll see continued steady growth, powered by the cloud, which allows experimentation, and importantly higher hit rates of success. These successful projects will throw off cash for companies, and CFOs are getting on board because they realize it's driving innovation. They also realize that IT does matter, maybe not in the form that Nick Carr envisioned, but a new generation of IT that creates competitive advantage. This brings me to my first main prediction, which is the growth of cloud computing is going to moderate, but the cloud will continue to steal significant share from on-prem spending. Now the narrative that the pendulum is swinging back in my view, is a false narrative. Rather, the pendulum has swung, and the cloud is the underpinning of innovation. Now having said that, I do think we're seeing a bit of an equilibrium in spending, where buyers have identified those workloads that are going to remain on-prem, which is why you see, for example, AWS, Azure, and Google making moves in hybrid. Hybrid slash on-prem offerings. What this chart here shows from ETR, so from 2010 through October '19 survey on cloud spending, I had to block out the 2020 survey as it's currently in the field, I'm not allowed to show that data. The yellow line is market share, which in ETR parlance, as you remember, is pervasiveness, or mentions in their survey. The blue line is spending momentum, measured as net score, which essentially subtracts the percent of customers spending less from those spending more. The long, steady march of cloud, as you can see, continues, and there's no indication that it's going to abate. That said, the penetration of cloud has become much more meaningful, so share gains will be more hard-fought for the cloud guys. Now, you may see this as a non-prediction, or a hedge. It's not, let me be clear. Cloud will continue to steal share from on-prem, but share gains for the cloud vendors will be more difficult. Which brings me to part B of this prediction. What I'm showing in this chart is market share from ETR's January 2016 survey through October '19. And I'm showing spending for three on-prem vendors within AWS, Azure, and Google Cloud accounts. And I'm picking on Oracle, IBM, and Dell EMC as three prominent on-prem proxies, and you can see the steady decline in market share for these companies. And even though there's a bit of an uptick in October, I don't see this as a reversal. What's going to happen is that traditional on-prem vendors are going to step up their cloud strategies. Specifically with multicloud management. This is going to be the case with Dell, who's going to leverage VMware, and in the case of IBM, they'll try to take advantage of Red Hat in that multicloud game. Now both IBM and Oracle, who each have public clouds are going to dig their heels in, they're going to get customers in a headlock, and provide big financial incentives for them to use their captive clouds. All right, so with the high-level spending comments that I made earlier, and that cloud discussion that we just had as a backdrop, the question is, which companies will do well in the coming year? I'm going to call out five companies, that I want to highlight where the ETR data intersects what we're seeing on theCUBE. The prediction is these five players will do well in 2020, they're going to power through any downturn in spending, and they're going to thrive in the face of the cloud share shift. So the chart here shows data from the ETR October 2019 survey, and it lays out net score or spending momentum for these companies, that I am predicting will be winners in 2020 and beyond. And the five companies are UIPath, Snowflake, Databricks, HashiCorp, and Rubrik. Let me start with UIPath. They are the leader in robotic process automation. I think RPA is going to do well even in a downturn, because more companies will be looking to automate and save money, even in a softer climate. Automation Anywhere is another player in this space, they're doing pretty well, and I predict that UIPath will come out on top of this space, but both UIPath and Automation Anywhere can thrive. Next company is Snowflake, they are changing the analytic database market, and I've covered them before in previous Breaking Analysis segments. They are going to continue to grow nicely in my view. They are 100% cloud-based, and they participate in all popular cloud platforms. Now ironically, they compete with AWS RedShift, who continues to copy some of the innovations that Snowflake has popularized. But AWS and Snowflake are strong partners, so there's room for both companies to thrive. Snowflake especially, as they play in clouds other than just AWS. Which brings me to Databricks. We're seeing a new type of workload emerge in the cloud for modern analytic databases, where organizations are taking all this data that they have, lots of it in the cloud, and they're structuring it within a Snowflake database, or RedShift, and they're bringing Databricks tooling to the equation to be able to query and visualize the data in near real time. Now of course, as I say, AWS plays here with RedShift, and they're selling a lot of EC2, so they love Snowflake. All major cloud players are seeing this type of workload enter the mix, and it's going to be a strong area of growth in 2020 and beyond. Next thing I want to talk about is HashiCorp. HashiCorp is capitalizing on this trend toward cloud-native computing. The company provides opensource tooling for developers, and is all about simplifying application deployment independent of the underlying platform, whether it's virtual, container, or cloud. Five years ago, the players in the space that got all the attention on theCUBE were Chef, Puppet, Ansible and Salt, and today, especially again on theCUBE, you hear the most about Hashi and Ansible, and in fact we were at AnsibleFest with theCUBE, and we heard lots about HashiCorp, so they both complement and compete with the older players. To me, this reminds me of Spark within the Hadoop ecosystem. Hashi has raised about 174 million in VC, and as you can see they have very strong spending momentum in the ETR dataset, with a net score, as shown, of 63%. Now finally, I want to talk about Rubrik, which has been a consistent performer in the ETR dataset. They're trying to transform backup into data management as a discipline. They compete with established players in the data protection space, guys like Veritas, Dell EMC, IBM and CommVault. Now Rubrik is not the only new or newish player here, that's doing very well, Cohesity, who's relatively new, Veeam, which has been around for a decade, both doing very well and showing up strong in ETR surveys, especially Veeam, but Rubrik has been a consistently strong performer and has been outpacing the others, so I want to call them out. Look for these five to do very well in 2020, and into the next decade. So that brings me to my next prediction, I want to talk about Kubernetes. This prediction is twofold. Kubernetes is going to continue its strong showing as this data from ETR shows. This is Kubernetes' market share in the October 2019 survey, so Kubernetes spend had a 76% net score. So very very strong. But the other part of the prediction is that Kubernetes will become embedded into virtually every platform, and people will stop thinking about it as a separate market. Already today, there's little discussion of the idea of a Kubernetes distro, I mean Anthos is an example of a Kubernetes stack, but it can be run in the cloud, it can be run on-prem, anywhere. VMware Tanzu, Microsoft Azure Arc are other examples, they're really not stacks, but they're management platforms that can manage anyone's Kubernetes instances. I like to think of this as kind of like flash. You remember when everyone looked at flash storage as a separate market, well today it's just embedded everywhere. And that's kind of what's happening with Kubernetes. So spending momentum is going to continue to be strong, but by 2023, Kubernetes will be ubiquitous, and not really thought of as a separate entity. All right, for my next prediction, I want to talk about cybersecurity. I did a Breaking Analysis earlier this year on security, and I showed this slide. And as you can see, I've added a little something in the red stars for my prediction. So what this chart shows is two views of net score, the left-hand side shows the ranking by net score, and you can see CrowdStrike, Okta, Shape Security, which was just, by the way, bought by F5, that was an announcement. Twistlock, which is now Palo Alto Networks, and you can see the others down that list. On the right-hand side is net score, but it's ranked by shared N, which is a measure of pervasiveness in the ETR dataset. What I've added is the four star companies, that is those companies that have both spending momentum and are pervasive in the ETR survey. So the prediction is 2020 we'll see the four star companies maintain their position and gain strength in 2020. These include established players with portfolios where they can bundle like Microsoft, Cisco, Palo Alto Networks, Splunk, Proofpoint, Fortinet, and CyberArk Software. And then the newer companies like Okta and CrowdStrike are going to continue to gain share faster than the larger players. Now you also may see companies like SailPoint, Illumio, and SentinelOne emerge as four star companies over the next 24 months. Now the one company that's not on this list that is a major player in security is AWS. AWS is the cloud security leader, and is in a category all by itself in many ways. As I said in my security segment earlier this year, the market is incredibly fragmented, and it's going to stay that way. Each year we look back and say "Did we spend more on security?" and "Are we more safe?" And every year the answer is yes, and no. And 2020 will be no different. Now if you look at the various data sources, we spend approximately 120 billion dollars annually on cybersecurity. The worldwide economy is about 85 trillion in dollar terms, so on balance, we spend about .14% on securing our economy, so we're barely scratching the surface. The market is going to remain highly fragmented, the rich will get richer if they have four stars, new players will continue to enter the space, and M&A will continue to be robust. Now if you exclude my long shot that the S&P will break through 3700 next year, that makes nine predictions. For my 10th and final prediction, I don't have hard data from ETR, but I have a strong opinion on this, and that is that the edge will be won by developers, you've heard me talk about this before. Specifically, platforms like Outposts, which are essentially programmable infrastructure which bring a cloud development platform to the edge, is how that space will evolve. It won't be won by shoving traditional servers and storage boxes out to the edge. Rather, it will grow by coders being able to build new applications and workloads on top of infrastructure as code. Okay, that wraps up my 2020 predictions. I'd very much like to hear your opinion, so you can leave your thoughts or your own predictions in the comments sections of this video, or go to my LinkedIn posts. You can reach me @DVellante on Twitter, love to hear your thoughts. And don't forget, this series is available on iTunes, Spotify, and other podcast platforms for your listening pleasure. I'd like to wish everyone a safe and restful holiday season and a prosperous, healthy 2020. Enjoy your families, enjoy this time, this is Dave Vellante, signing out from the latest episode of theCUBE Insights powered by ETR, thanks for watching, everybody. We'll see you next time. (techno music)

>> from Boston, Massachusetts. It's the queue covering active eo 2019. Data driven you by activity. >> Welcome back to Boston. Everybody watching the Cube, the leader and on the ground tech coverage money was David wanted here with my co host. A student of John for is also in the house. This is active FiOS data driven 19 conference. They're second year, John. Her stick is here is the co founder and CEO of on shape John. Thanks for coming in the Cube. Great to have you great to be here. So love the cofounder. I always ask your father. Why did you start the company? Well, we found it on shape because >> we saw an opportunity to improve how every product on Earth gets developed. Let people who develop products do it faster, B'more, innovative, and do it through a new generation software platform based in the cloud. That's our vision for on shape, That's why. Okay, >> so that's great. You start with the widened. The what is just new generation software capabilities to build the great products visualized actually create >> way took the power of cloud web and mobile and used it to re implement a lot of the classic tools for product development. Three d cad Data management Workflow Bill of Materials. He's may not mean anything to you, but they mean a lot to product developers, and we believe by by moving in the cloud by rethinking them for the cloud we can give people capabilities they've never had before. >> John, bring us in tight a little bit. So you know, I think I've heard a lot the last few years. It's like, Well, I could just do everything a simulation computer simulation. We can have all these models. They could make their three D printings changing the way I build prototypes. So what's kind of state of the state and in your fields? So >> the state of the Art R field is to model product in three dimensions in the computer before you build it for lots of reasons. For simulation for three D printing, you have to have a CAD model to do it, to see how it'll look, how parts fit together, how much it will cost. Really, every product today is built twice. First, it's built in the computer in three dimensions, is a digital model, then it's built in the real world, and what we're trying to do is make those three D modeling and data management collaboration tools to take them to a whole nother level to turbo charge it, if you will, so that teams can can work together even if they're distribute around the world. They work faster. They don't have to pay a tax to install and Karen feed for these systems. You're very complicated, a whole bunch of other benefits. So we talk about the cloud model >> you're talking about a sass model, a subscription model of different customer experience, all of the above, all of the above. Yeah, it's definitely a sass model we do on Ly SAS Way >> hosted and, uh, Amazon. Eight of us were all in with Amazon. It's a it's a subscription model, and we provide a much better, much more modern, better, more productive experience for the user CIA disrupting the traditional >> cad business. Is that Is that right? I mean more than cat cat Plus because there's no such thing as a cad company anymore. We're essentially disrupting the systems that we built because I've been in this business 30 38 years now. I've been doing this. I feel like I'm about half done. Really, really talking about >> your career. Way to start out. Well, I grew up in Chicago. I went to M I t and majored in mechanical engineering and knew howto program computers. And I go to get an internship in 1981 and they say computers, mechanical injury. You need to work on CAD. And I haven't stopped since, you know, because Because we're not done, you know, still still working here. You would >> have me, right? You can't let your weight go dynamic way before we get off on the M I t. Thing you were part of, you know, quite well known group. And Emmet tell us a little bit >> about what you're talking about. The American society of Mechanical Engineer >> has may I was actually an officer and and as any I know your great great events, but the number 21 comes to >> mind you're talking about the MIT blackjack team? Yes, I was, ah, player on the MIT blackjack team, and it's the team featured in movies, TV shows and all that. Yeah, very exciting thing to be doing while I was working at the cath lab is a grad student, you know, doing pursuing my legitimate career. There is also also, uh, playing blackjack. Okay, so you got to add some color to that. So where is the goal of the M I T. Blackjack team? What did you guys do? The goal of the M I t blackjack team was honestly, to make money using legal means of skill to Teo obtain an edge playing blackjack. And that's what we did using. Guess what? The theme of data which ties into this data driven conference and what active Eo is doing. I wish we had some of the data tools of today. I wish we had those 30 years ago. We could have We could have done even more, but it really was to win money through skill. Okay, so So you you weren't wired. Is that right? I mean, it was all sort of No, at the time, you could not use a computer in the casino. Legally, it was illegal to use a computer, so we didn't use it. We use the computer to train ourselves to analyze data. To give a systems is very common. But in the casino itself, we were just operating with good old, you know, good. This computer. Okay. And this computer would what you would you would you would count cards you would try to predict using your yeah, count cards and predict in card. Very good observation there. Card counting is really essentially prediction. In a sense, it's knowing when the remaining cards to be dealt are favorable to the player. That's the goal card counting and other systems we used. We had some proprietary systems to that were very, very not very well known. But it was all about knowing when you had an edge and when you did betting a lot of money and when you didn't betting less double doubling down on high probability situations, so on, So did that proceed Or did that catalyze like, you know, four decks, eight decks, 12 12 decks or if they were already multiple decks. So I don't think we drove them to have more decks. But we did our team. Really. Some of the systems are team Pioneer did drive some changes in the game, which are somewhat subtle. I could get into it, you know, I don't know how much time we have that they were minor changes that our team drove. The multiple decks were already are already well established. By the time my team came up, how did you guys do you know it was your record? I like to say we won millions of dollars during the time I was associated with the team and pretty pretty consistently won. We didn't win every day or every weekend, but we'd run a project for, say, six months at a time. We called it a bank kind of like a fund, if you will, into no six months periods we never lost. We always won something, sometimes quite a bit, where it was part of your data model understanding of certain casinos where there's certain casinos that were more friendly to your methodology. Yes, certain casinos have either differences in rules or, more commonly, differences in what I just call conditions like, for instance, obviously there's a lot of people betting a lot of money. It's easier to blend in, and that's a good thing for us. It could be there there. Their aggressiveness about trying to find card counters right would vary from casino to casino, those kinds of factors and occasionally minor rule variations to help us out. So you're very welcome at because he knows is that well, I once that welcome, I've actually been been Bardet many facilities tell us about that. Well, you get, you get barred, you get usually quite politely asked toe leave by some big guy, sometimes a big person, but sometimes just just honestly, people who like you will just come over and say, Hey, John, we'd rather you not play blackjack here, you know that. You know, we only played in very upstanding professional kind of facilities, but still, the message was clear. You know, you're not welcome here in Las Vegas. They're allowed to bar you from the premises with no reason given in Las Vegas. It's just the law there in Atlantic City. That was not the law. But in Vegas they could bar you and just say you're not welcome. If you come back, we'll arrest you for trespassing. Yeah, And you really think you said everything you did was legal? You know, we kind of gaming the system, I guess through, you know, displaying well probabilities and playing well. But this interesting soothe casinos. Khun, rig the system, right? They could never lose, but the >> players has ever get a bet against the House. >> How did >> you did you at all apply that experience? Your affinity to data to you know, Let's fast forward to where you are now, so I think I learned a lot of lessons playing blackjack that apply to my career and design software tools. It's solid works my old company and now death. So System, who acquired solid words and nowt on shape I learned about data and rigor, could be very powerful tools to win. I learned that even when everyone you know will tell you you can't win, you still can win. You know that a lot of people told me Black Jack would never work. A lot of people told me solid works. We never worked. A lot of people told me on shape would be impossible to build. And you know, you learn that you can win even when other people tell you, Can't you learn that in the long run is a long time? People usually think of what you know, Black Jack. You have to play thousands of hands to really see the edge come out. So I've learned that in business sometimes. You know, sometimes you'll see something happened. You just say, Just stay the course. Everything's gonna work out, right? I've seen that happen. >> Well, they say in business oftentimes, if people tell you it's impossible, you're probably looking at a >> good thing to work on. Yeah. So what's made it? What? What? What was made it ostensibly impossible. How did you overcome that challenge? You mean, >> uh, on >> shape? Come on, Shake. A lot of people thought that that using cloud based tools to build all the product development tools people need would be impossible. Our software tools in product development were modeling three D objects to the precision of the real world. You know that a laptop computer, a wristwatch, a chair, it has to be perfect. It's an incredibly hard problem. We work with large amounts of data. We work with really complex mathematics, huge computing loads, huge graphic loads, interactive response times. All these things add up to people feeling Oh, well, that would never be possible in the cloud. But we believe the opposite is true. We believe we're going to show the world. And in the future, people say, you know We don't understand how you do it without the cloud because there's so much computing require. >> Yeah, right. It seems you know where we're heavy in the cloud space. And if you were talking about this 10 years ago, I could understand some skepticism in 10 2019. All of those things that you mentioned, if I could spin it up, I could do it faster. I can get the resources I need when I needed a good economics. But that's what the clouds built for, as opposed to having to build out. You know, all of these resource is yourself. So what >> was the what was the big technical challenge? Was it was it? Was it latent? See, was it was tooling. So performance is one of the big technical challenges, As you'd imagine, You know, we deliver with on shape we deliver a full set of tools, including CAD formal release management with work flow. If that makes sense to you. Building materials, configurations, industrial grade used by professional companies, thousands of companies around the world. We do that all in a Web browser on any Mac Windows machine. Chromebook Lennox's computer iPad. I look atyou. I mean, we're using. We run on all these devices where the on ly tools in our industry that will run on all these devices and we do that kind of magic. There's nothing install. I could go and run on shape right here in your browser. You don't need a 40 pound laptop, so no, you don't need a 40 pound laptop you don't need. You don't need to install anything. It runs like the way we took our inspiration from tools like I Work Day and Sales Force and Zen Desk and Nets. Sweet. It's just we have to do three D graphics and heavy duty released management. All these complexities that they didn't necessarily have to do. The other thing that was hard was not only a technical challenge like that, but way had to rethink how workflow would happen, how the tools could be better. We didn't just take the old tools and throw him up in a cloud window, we said, How could we make a better way of doing workflow, release management and collaboration than it's ever been done before? So we had to rethink the user experience in the paradigms of the systems. Well, you know, a lot of talk about the edge and if it's relevant for your business. But there's a lot of concerns about the cloud being able to support the edge. But just listening to you, John, it's It's like, Well, everybody says it's impossible. Maybe it's not impossible, but maybe you can solve the speed of light problem. Any thoughts on that? Well, I think all cloud solutions use edge to some degree. Like if you look at any of the systems. I just mentioned sales for us workday, Google Maps. They're using these devices. I mean, it's it's important that you have a good client device. You have better experience. They don't just do everything in the cloud. They say There, there. To me, they're like a carefully orchestrated symphony that says We'll do these things in the core of the cloud, these things near the engineer, the user, and then these things will do right in the client device. So when you're moving around your Google map or when you're looking this big report and sales force you're using the client to this is what are we have some amazing people on her team, like R. We have the fellow who was CTO of Blade Logic. Robbie Ready. And he explains these concepts to make John Russo from Hey came to us from Verizon. These are people who know about big systems, and they helped me understand how we would distribute these workloads. So there's there's no such thing is something that runs completely in the cloud. It has to send something down. So, uh, talk aboutthe company where you're at, you guys have done several raises. You've got thousands of customers. You maybe want to add a couple of zeros to that over time is what's the aspirations? Yeah, correct. We have 1000. The good news is we have thousands of customer cos designing everything you could imagine. Some things never would everything from drones two. We have a company doing nuclear counter terrorism equipment. Amazing stuff. Way have people doing special purpose electric vehicles. We have toys way, have furniture, everything you'd imagined. So that's very gratifying. You us. But thousands of companies is still a small part of the world. This is a $10,000,000,000 a year market with $100,000,000,000 in market cap and literally millions of users. So we have great aspirations to grow our number of users and to grow our tool set capability. So let's talk to him for a second. So $10,000,000,000 current tam are there. Jason sees emerging with all these things, like three D printing and machine intelligence, that that actually could significantly increase the tam when you break out your binoculars or even your telescope. Yes, there are. Jason sees their increasing the tam through. Like you say, new areas drive us So So obviously someone is doing more additive manufacturing. More generative design. They're goingto have more use for tools like ours. Cos the other thing that I observed, if I can add one, it's my own observations. I think design is becoming a greater component of GDP, if you will, like if you look at how much goods in the world are driven by design value versus a decade or two or when I was a child, you know, I just see this is incredible amount, like products are distinguished by design more and more, and so I think that we'll see growth also through through the growth in design as an element of GDP on >> Jonah. I love that observation actually felt like, you know, my tradition. Engineering education. Yeah, didn't get much. A lot of design thing. It wasn't until I was in industry for years. That had a lot of exposure to that. And it's something that we've seen huge explosion last 10 years. And if you talk about automation versus people, it's like the people that designed that creativity is what's going to drive into the >> absolutely, You know, we just surveyed almost 1000 professionals product development leaders. Honestly, I think we haven't published our results yet, So you're getting it. We're about to publish it online, and we found that top of mind is designed process improvements over any particular technology. Be a machine learning, You know, the machine learning is a school for the product development. How did it manufacturers a tool to develop new products, but ultimately they have to have a great process to be competitive in today's very competitive markets. Well, you've seen the effect of the impact that Apple has had on DH sort of awakening people to know the value of grace. Desire absolutely have to go back to the Sony Walkman. You know what happened when I first saw one, right? That's very interesting design. And then, you know, Dark Ages compared to today, you know, I hate to say it. Not a shot at Sony with Sony Wass was the apple? Yeah, era. And what happened? Did they drop the ball on manufacturing? Was it cost to shoot? No. They lost the design leadership poll position. They lost that ability to create a world in pox. Now it's apple. And it's not just apple. You've got Tesla who has lit up the world with exciting design. You've got Dyson. You know, you've got a lot of companies that air saying, you know, it's all about designing those cos it's not that they're cheaper products, certainly rethinking things, pushing. Yeah, the way you feel when you use these products, the senses. So >> that's what the brand experience is becoming. All right. All right, John, thanks >> so much for coming on. The Cuban sharing your experiences with our audience. Well, thank you for having me. It's been a pleasure, really? Our pleasure. All right, Keep right. Everybody stupid demand. A volonte, John Furry. We've been back active, eo active data driven 19 from Boston. You're watching the Cube. Thanks

>> Narrator: Live from Las Vegas It's The Cube covering Adobe Summit 2019 brought to you by Adobe. >> Hello everyone, welcome back to The Cube's live coverage here in Las Vegas for Adobe Summit 2019. I'm John Furrier with Jeff Frick. Our next guest is Jason Woosley, Vice President of Commerce Product and Platform for Adobe, part of the big keynote display this morning and news on the announcement of the Commerce Cloud, formerly Magento. Congratulations. Welcome to The Cube. >> Hey, thanks so much for having me. It's great to be here. >> Love the commerce angle because now that's a big part of a journey, people buy stuff. >> Absolutely. >> That's the most important, one of the most important parts. >> So when you think about an experience end to end, right it culminates hopefully in a transaction, and that's one of the pieces that makes the Magento acquisition fit so well into the Adobe family. We actually kind of finished that last mile of the transition getting to actual ownership. >> You know, I love this event because it feels a little like Woodstock, as Steve Lucas said on stage because you've got the best of big data all the intoxicating conversations and discussions. You get the best of the cloud, all the geek stuff under the hood. >> Oh, yeah. >> Then you've got the applications which are super relevant. So, it's really kind of, I love the content, love that you guys are in the middle of, I think, a great wave of innovation coming. But if you look at the big picture, you're seeing the same kind of themes, latency, relevance. I mean, these are tech terms used on your product in commerce a lot different than other things. So, you start to see these geek terms kind of weaving into this new cloud. >> I think you're really starting to see a convergence of some of the terminology and what really matters and that's the customer experience, right. It's really about answering what the customer wants and getting that is, that's the magic. >> It's accepting the fact that it's a disjointed journey. I love the journey conversation but it's not the straight pipe like it used to be. You're in and out, you're looking on a website, you're jumping over from a tweet, you know, there's so many kind of in's and out's, in's and out's, in's and outs before you get to that buy. >> And consumers are so sophisticated now, right. I mean they absolutely take advantage of all of those channels and that's why it's so important for merchants who are trying to be relevant. You've got to be present at every point where your customers are and it's a tough thing to do because there's just a proliferation of channels, I mean, you know, we've got digital kiosks, we've got buy online pick up in store, all these omnichannels operations coming together now. So it becomes even more important for merchants to make that investment and make sure that not only are they at the place where their customers are but they're there with a relevant and personalized message. >> Jason, I've got to ask you a question. I bring this up in a lot of these kind of user experience conversations. When you have new things coming on the market that are hard to operationalize out of the gate. It takes some time. We're starting to see that with you guys that built the platform. People are starting to operationalize new capabilities. But on the consumer side, the user side, expectations become the new experience. It's kind of a cliche in the tech world. What are some of those experiences that you're seeing that's becoming the new expectations. To your point about, the old way, I can smell a marketing funnel a mile away. I'm trying to buy something and all this other distractions that are not relevant to me are there. So you start to see some frustration but now users expect something new. What is that expectation that's converting it to experience? >> It's across the board and expectation are sky high, right. And it seems like every time we see something innovative you think about Amazon Prime, right, two day shipping. That was crazy back in the day and now, two day shipping is considered standard shipping, right. If you wanna be fast, you're doing same day. And that kind of, it's so hard to keep up with that pace of innovation and it happens all over the place. It's not just in logistics. People are expecting to be able to take advantage of omnichannel operations, right. Millennials especially. 60% of them really prefer to be able to have a tangible interaction with the product before they buy it. But they still want to buy online. So now they do buy online pick up in store or click and collect, they call it in Europe. And it's just become a huge fad. We've seen a 250% increase of the largest retailers of buy online pick up in store in the last year. Absolutely crazy. >> It's pretty wild when Best Buy gets on stage and says, we're not a brick and mortar retailer. (laughing) >> It actually changes the game, right. What else is interesting though is these brick and mortars that have an online presence, they actually have a distinct advantage because of that tangibility, right. You've got the opportunity to do all of your shopping online but you've also got a place to go do showcasing and actually interact with some of those especially more high tech tools. >> Right. >> You guys have been out front on the Magento side. We covered your event last year for the acquisition. And a couple things popped out at me that I want to get your reaction to now. One is obviously the role of the community. But as you started getting into the cloud kind of play the economics are changing, too, right. So you have community, economics and then large scale. These are new table stakes. So what's your reaction to that? How is Adobe and how are your customers adjusting to this new normal? Your thoughts on this shift? >> Yeah, I think that they adjust faster than we expect them to. It's really interesting because as you see these demands for things like cloud operations. Really, that's taking a whole set of responsibilities away from the merchant and allowing a single vendor to provide that as a service and we're seeing that again and again, right. This service based economy that's just becoming much, much more prevalent. What it means for our community and I'm glad you brought that up because our commerce community is the largest in the world, it's highly engaged. We have a tremendous amount of participation from those guys. And they're actually helping lead the way. They help merchants feel good about adopting new technologies. They're also incredibly innovative and they take our product and do things that we would never have thought of. >> They provide product feedback, too, the developers, that creates a nice fly wheel. >> It is a great fly wheel. >> It's a great use case. Congratulations, you guys done some nice work there. >> Oh, thanks, thanks. >> And Adobe's certainly gonna get the benefits of that. The other question I wanna ask you is something I noticed on digital over the years is that, it's gotten more prevalent now that everyone's connected. You know, the old days of buying tech. Let's buy this great project, we'll build it out and multiple year payback and everyone nerds out. It's like a project and they have fun doing it. And then, like, what was the value. When the value today is about money. When people lose money, the friction, all those other kinds of coolness, the shiny new toy, it goes away. >> Yeah, it falls away. >> You're in the middle of that. You see more of that now. People whose businesses are on the line. Security breach or revenue. >> Jason: Yeah. >> I mean, the optimization around the new way just goes right to the problem right there. >> The very best way to tackle that is an iterative experimental way. You've go to be able to make small bets. Learn from those bets and then pivot. This concept that we can take an idea, go into our back rooms and code it for three years and come back out with something that meets the market, it's a fallacy. It's never gonna work, right? So you've gotta start delivering shippable increments much faster, smaller pieces and then make sure that you've got that feedback loop closed so that you can actually respond to your customers. >> Jeff: Right, the other piece which you just talked on briefly but I wanna unpack it in reference to what you just said, two big words. Open source and ecosystem. >> Jason: Yeah. >> And as you said, you can't just go in the back room. Even if you knew the product, you can't necessarily go in the back room and build it yourself. >> Jason: Yeah. >> Fundamentally, believe that not all the experts are in your four walls and that there's, by rule, a lot more outside and leveraging that capability is really a game-changer. >> Yeah, absolutely, I mean, we have three hundred thousand developers that call themselves Magento engineers and don't take a paycheck from Adobe. It's phenomenal what they're able to do and they help us move very, very quickly. We saw last year when the Amazon patent expired for one-click checkout on the day that it expired one of our community members created a pool request that made every Magento store able to take advantage of it. >> John: They were probably waiting right there on that clock. >> Oh no, they were waiting. (John laughing) Because the licensing fees were extortion. >> That's innovation. >> It is. >> That's our example of community driven innovation. >> And that's a great place to go get that, right. Within your four walls, you've got lots of expertise but you always end up with some blinders on. We've got profit margins to go chase. We've got all kinds of good business things to go do. The community, however, completely unfettered. They've got the ability to go try all kinds of cool stuff. >> Two questions on that thread. One is community. A lot of people try the buzzword. Hey, let's get a community. You can't buy a community. You've got to earn it. Talk about that dynamic and then talk about how Adobe's reacted to Magento's community because Adobe's pretty open. >> Yeah. >> They're creatives. I don't think they'd be anti-community. They have developers. They got a bunch of community themselves. So, community, buying a community versus earning it, and then the impact of Magento's community to Adobe. >> You cannot buy it. 100% you cannot buy a community. And you have to deserve it. And really, you have to think about yourselves as custodians of a community rather than, I mean, we're members. We used to have this saying, we are Magento. Everybody inside Magento, in the ecosystem, our partners, our developers. Everybody is part of that solution so trying to own it, trying to exert control over it, it's a recipe for not having it at all, right. So you have to be very cautious and it really is a custodianship. It's an honor and it's a privilege and you have to kind of take it seriously. >> If you get it right, the benefits are multi-fold. >> That's exactly it. >> Now, Adobe, obviously they have, we heard and we see that they're open to that and working with it. >> Adobe has been terrific and it was, I think, one of the biggest fears from our community as acquisition unfolded was hey, Adobe, big corporate company not a lot of open source projects. They've got some but their core isn't about open source and what was gonna happen to our community as we came in. It's been absolutely terrific because Adobe has been absolutely investing and making sure that we continue to be terrific custodians of this community and in fact, they're trying now to expand that community to the rest of their products. They would love to have our community members that are able to go out and innovate so rapidly, do so across the entire Adobe portfolio. >> Well, it's interesting, too. If you have a platform play in the cloud scale and some of these cross functional connection tissue points that's recipe for robust ecosystem development. >> Exactly. >> Because they means there's white space, there's opportunities to build on top of. That's a platform. >> Right, and you will see innovation and ingenuity from that you'll never expect. It's just phenomenal. >> So I'm curious to get your take on a specific feature I wanna dive into which is dynamic pricing. Right, hotels have been doing dynamic pricing forever. You give the authorization to the kid working at the front counter if it's 11 o'clock, you got a open room take whatever walks in the door. >> Jason: Yeah. >> To the airline, it's got very sophisticated but most companies haven't really be able to excuse dynamic pricing. Just curious, when you bring in capabilities that you get now with the Adobe suite and the data now that you have around the customer and the data that you now have around the context, I mean, are we gonna see much better execution of things like dynamic pricing. >> We're gonna see democratization of a lot of those things that were typically reserved to the very, very big industries, right. I think you're looking at airlines, they did a great job. But they invested hundreds of millions of dollars into systems to go do that. Now, with things like Sensei and artificial intelligence our machine learning capabilities, we can actually bring those capabilities to small merchants and everyday folks to go out and do those experiments with your pricing and understand where you have elasticity and where you don't. Once you have that information, you're making much better decisions across the board for your business. >> And that's actually the benefits of the Magento platform and scale that you have. So the question is, as you guys continue to get this cloud scale going, what are some of the platforms priorities for you guys? What product areas you looking at? What white spaces are gonna leap for the ecosystem? Can you share a little insight into what you guys are thinking? >> Yeah, I mean, one, we try to open everything to the ecosystem. There's really not a lot of advantage for us to have anything that's super closed off and secret sauce. We try to make sure that everything is available and so what you'll see is investments in things like SDK's. An SDK is software development kit basically lets you use any language, any tool that you're comfortable with to go ahead and integrate, extend and contribute to our core capabilities. You'll see us continue to invest in making sure that everybody that wants to participate has a very, very easy path to do so. >> And in terms of the developer program, you mention SDK, what's your impression of that? Can you give an update? We're not really familiar with that much, we're learning Adobe. What do you guys have for developer programs within Adobe? >> Well, it is terrific. We have a project called Adobe I/O that actually does a terrific job at sort of standardizing the API and interfaces between all of the different components within the digital experience suite. So, you'll continue to see us investing in that. Certainly, commerce is gonna start participating in that Adobe I/O model and that's going to make it even more broadly available to these great folks. >> Even one of the things we had on The Cube today was a historic moment. We been doing this for 10 years, hundreds of shows a year. We had our first guest on, one of your customers from Metlite. His title was Marketing CIO and I'm like, okay. He's part of the global technology operations team of Metlite. But I think the bigger story there is that we think we'll be a bigger trend than just one-off. We think, we're seeing the connection between the IT world, data, developers, applications coming together where marketing is like a CIO. >> And it's exactly right. We look at the CMO and the CIO as two sides of the same coin. And more often than not they have the same objectives. They're coming at it from a slightly different perspective and so you really do end up having to marry the message so that it resonates not only with the IT folks and usually that's about cloud processes, ease of use, ease of deployment, low cost operation and then on the marketing side it's really about feature availability and visual merchandising and being able to bring their great products to life. >> And an interesting quote, he said, what's it like, to be a marketing CIO, share to others who might to be that. He goes, well, I'm kind of a matchmaker and a translator. (laughing) >> I think that's pretty good a way to put it. Yeah, that makes good sense. >> He puts projects together, translating jargon to business benefits. Emphasis was on the business. You got to know the business. We had Dollar Shape Club on earlier, another one of your Adobe's customers. They were like, no, we need to know the business. It's about the data, data processing, the data systems, business. It has to be blended. It's the art and science of business and technology. >> Yeah, the only get that right when you put the customer right in the middle. You have to build all of those business processes and all of those systems around what that customer's looking for. >> So I'm just curious, Jason, what's changed over the last couple of years, 'cos we've been talking about the 360 view of the customer since, I don't when, but a while. >> A while, yeah. >> And we've been talking about omnichannel marketing and touching the customer for a while but it seems like we've hit a tipping point. Maybe I'm misreading the tealeaves but you know, what are the kind of critical factors that are making that much more a reality than just talk it was a couple years back? >> Well, on omnichannel, we're certainly seeing a maturity, an understanding of what it takes to do omnichannel. It's not just a commerce operation. omnichannel actually stretches back into your supply chain. To be able to really think about the way you deliver to customers as a single channel. Your supply chain has to be highly flexible. Your logistic capabilities have to be extremely flexible and they have to be able to tuned for the things that are important to your customers. Either speed of delivery or cost of delivery. All of those kinds of things. In the omnichannel space, I think we're finally starting to see the maturity of, okay, how do we make these things real. And that's critically important. And the other one. >> 360, 360 view of the customer. >> 360 view of the customer. Almost the same thing there, right. We're finally seeing the technology start to catch up and the big challenge there was we always had one view or the other. You either had a behavioral view of your customer, how they interact with your content. Or you had this great transactional view, the dollar and cents behind a relationship. Now, we're starting to see companies especially like Adobe, that have made these incredible investments to bring those two houses of data together, and that really starts to tell the full story. Again, going back to that customer journey, you need to be able to observe that entire journey in order to make those kinds of decisions. >> Jason, I wish we had more time. I wanna get one more question. I know we might wanna break here. Maybe we can follow up as a separate conversation in Palo Alto. You know, having a digital footprint you hear that buzzword, I'll get a digital footprint out there. It makes a lot of sense but a world that has been dominated by silos, it's hard to have footprint when you have siloed entities. So, in your mind, your reaction between something that's foundational and then data silos. Maybe silos could be okay at the app level but what's the foundational footprint? I mean, foundation's everything. >> Jason: It is. >> Without a foundation, you clearly can't build on. >> Yeah, and we talked a little bit about the Adobe experience platform this morning. Eric Shantenu and Anje will come on and talk about, we've got this amazing capability now to really take that data, standardize it and make it available for all kinds of systems and processes. And I think that's where you're going to see the real foundation for all of these siloed efforts. It's gonna be in this kind of common data understanding, what they call a XDM. >> And customers got silos, too. They've got agencies. All kinds of things out there. >> Absolutely. >> Data everywhere. Jason, thanks for coming on. We really appreciate it. >> Hey, guys, I really appreciate it. Thanks so much. >> Jason Woosley on The Cube here at Adobe Summit 2019. I'm John Furrier. Day one of two days of wall-to-wall live coverage. Stay with us for more coverage after this short break. (electronic music)

>> From the Hard Rock Hotel in Las Vegas, it's theCUBE covering HoshoCon 2018. Brought to you by Hosho. >> Okay, welcome back everyone. It's theCUBE live coverage here in Las Vegas for the first annual blockchain security conference. The brightest minds in the industry coming together, it's called HoshoCon, and it's presented by, and sponsored by Hosho. But it's not their event, it's an industry event. And we're here with the co-founder and president, Hartej Sawhney, who is theCUBE alumni. Great to see you. You guys are doing a great event. Thanks for coming on. >> Yeah, it's always good to see you, and I'm so glad theCUBE is here at HoshoCon. >> So you've talked with us many times, but recently in Toronto about this event. This is not your company's event. You guys are putting it together. You're holding it because there's no other conferences that do this, but it's not just you guys. You guys are bringing the industry brains together. >> Yeah, I mean, we see ourselves as being on the intersection of cybersecurity and blockchain. And (coughs) just getting over a cold, but not a lot of conferences are out there that have a open discussion about cyber security in the blockchain industry. And hundreds of millions of dollars are stolen from exchanges. And 10% of all the money in the ICO space has been lost or stolen. And there's simply not enough platforms for this to be discussed. So, we figured we'd start the first conference that solely focuses on being a blockchain security conference. We chose not to have any ICO pitch competition. And it feels like there's more and more typical blockchain conferences out there, but it's important to be home base for anyone who wants to affiliate themselves with cyber security and the blockchain industry. >> And the depth and breadth of security is changing. We are hearing talks with, unfortunately I won't be able to attend the sessions, we're interviewing people all day, but amazing talks. How to hack an exchange, all these new surface areas. I mean, people kind of generally know they're unsecure, but this growth going on. There's new things happening. This is exposing some of the security vulnerabilities. What is the hot topics in the talk tracks here at HoshoCon? >> We have Anand Prakash, who runs a company called AppSecure. He's one of the worlds best white hat hackers. Who has hacked into the likes of Linkedin, Facebook, Google, all the top names. And to have someone walk us through today, Anand Prakash said, "Here's how you hack into a crypto "currency exchange and here's how they actually did it." And to have a white hat hacker walk us through that, it opens up our eye balls as to how easy it actually was for a Japanese exchange to loose 500 million dollars. That's no small sum of money. And this industry is only going to survive if we together as a community come together and evaluate how was it that 500 million dollars got stolen? And how can we as a community of global lovers of bitcoin make sure that this does not happen moving forward? >> On that exchange hack, 500 million dollars in Japan, was that white hat done or was that black hat? >> It was black hat. Unfortunately the money's not been given back. >> So it's not given back. So that's a half a billion dollars? >> It's half a billion dollars stolen, yeah you know. How many industries are worth just about that much? >> Yes, you could feed a couple countries. This is legit, right? Obviously it's like total, you know, wild west if you want to call it. Stage coach robberies they got the mask on. No one knows who it is. This is real, this is absolutely real. What are you guys doing as an industry? What's happening here to prevent this? What are the key, you know hygiene or social, anti-social engineering? What are the key things that are going on that are solving this problem? >> So, every exchange needs to value security and get a penetration test. Every company needs to make sure that somebody at their company is in charge of their in house security practices. Most companies when you ask them, "Who's in charge of security?" They point their finger at the CTO. The CTO is in charge of architecting the software. You need to have somebody full time, in house taking care of the security. Ideally a CISO and if you can afford it, pay someone five to ten thousand dollars a month as a consultant to come in for a couple of months and take care of your in house security. These are basic things that, you know, surprisingly most bitcoin exchanges often times when they're hacked, they're hacked by a basic phishing attack. That one of your employees opened up the wrong email. They opened up a PDF and the hacker gained access to your computer and is now monitoring your keyboard strokes and stole millions of dollars. Or the exchange didn't get an actual penetration test of their exchange. Or exchanges are listing contracts that have not gone through a professional smart contract audit. These things are now, also we're seeing them service in regulation with central governments. And it seems that all the smaller island nations are spearheading the way in terms of writing clarity on regulation. In Malta, Bermuda, Gibraltar, all of them are trying to spearhead the way. I'm much more excited, to be honest, about some of the larger nations bringing clarity on regulation in the next two to three years. We all can't just move to a small island off the coast of Italy that is infamous for actually laundering money in the gaming space. Yes, now they're trying to bring clean clarity doing KYC and AML in Malta and write a actual regulation about security. And if you're domiciled in Malta and you're a exchange then you can only list a token that's been audited. It's wonderful but at the end of the day Malta is also a part of the EU and if the EU changes their mind, things can change Malta. I just feel like it shows the immaturity of the space. If very legitimate companies are all going to flee to small countries like Malta or to islands like Bermuda. Good on those island nations for being so pragmatic and forward thinking and for bringing legal clarity. I mean if I was in an exchange today, arguably yes you have to go to Malta if you want clarity on regulation and you don't want to be in the United States. Right now, Malta is your choice. I'm just personally a little bit much more excited about the next three years where, I make a joke to my co-founder and I say, "The suits are coming." That we look around these conferences and you don't see that many suits but the fortunate 500, many of them are either writing private blockchains, they're evaluating how they're going to leverage blockchain technology in their major businesses and they're going to leverage decentralized applications and tokenization for already running products that have millions of customers, that are already profitable and then when they get tokenized they're going to be up and running right away. So the next two to three years are going to be very interesting. From Hosho's perspective we've taken a big turn towards catering towards more publicly traded large sophisticated companies. We've partnered up with Telefonica. Telefonica is a Fortune 200 company. Its wonderful to be able to leverage that kind of a brand. To deal with major world wide entities that are publicly traded come to Telefonica and evaluate how they can leverage blockchain technology and get one bundled security package that includes Hosho, Rivets, and Telefonica. >> Yeah the Rivets solution is interesting. It's a hardware based solution. So the subscriber of the phone becomes the entity. It's really interesting and I think this points to new paradigms of security, which I want to get to in a second but I want to just unpack what you said about the small country, big country dynamic. Great for the small countries to be opportunistic. To be creative and capture this opportunity. But people want stability. They want clarity on regulations, yes, but also standards, technical standards. >> We can't all just move to the small country of Malta. >> Yeah I'll be in a plane the whole time. >> It just doesn't work. >> Yeah and by the way the game changes too. Whats the implications of say, Malta decides one day, "You know what?" "We're getting out, we're changing things." A company would have to move their domicile again. So it's a moving train, you don't know what you're going to get. It might be stable now but it's not a scalable opportunity. >> Yeah, people have families and they want to stay where they are. Simple as that. We have large countries that have a strong crypto community that's growing and let's see how they pan out. Singapore seems like a likely next candidate. You have Korea. I would argue to say that the worlds first decentralized application that will be massively adopted will be in Korea. Korea is going to be the place where we have the worlds first decentralized application launched with mass adoption, a paradigm shift. The kind of shift where you forgot what it was like before you used Gmail regularly. >> Yeah, total, total infrastructure change. Alright so I got to ask you the hallway conversation question. Obviously you're very popular here. It's you event, you're sponsoring with the community. I see you talking to a lot of people at the VIP dinner last night. What are some of the hallway conversations that you're having? A lot of interesting people here from diverse backgrounds, in security, technology, some policy, some regulatory, some business, and legal, but really bright minds. What's the hallway conversation like? What are you talking about? >> We're talking about how all of us are going to survive crypto winter that we just entered. We've entered a time where fund raising has become extremely difficult. A lot of funds are simply bleeding. They lost a lot of money and they're not cutting checks right now. So the companies that are going to survive and stick around through this crypto winter, they're making a strong statement and they're going to be the ones that are going to stick around. And a lot of them are here at this conference at HoshoCon. And it amazing to have discussions to see what are the problems that fellow founders are facing? Building companies that will survive this crypto winter. Another thing has been just what are we going to do as a community to self-regulate? Are we going to create self-regulatory organizations? Are we going to let another Moody's get created? What is our viewpoint on regulation in the space overall, right? We love Max Keiser. His viewpoint on regulation is very extreme where he believes bitcoin is a self-regulatory technology. And on the other hand we have people saying, "No, we need to quickly move to regulate the space. "Work with central banks, work with central governments, "and write out the regulations." That's been lot of the hallway conversation. And a lot of other ones that have been really intriguing to me has been people talking about what are things that they have done within their company to protect their employees. Because the reality is in the crypto currency space every single employee of a major company in this industry is a target by naturally being in this industry. And this includes you. We are all naturally targets. And it's not about how much bitcoin you have maybe its about how much bitcoin someone thinks you have. And all of a sudden you become a target. And we need to think about things like our physical security. So some of the more interesting conversations I've been having with people have been around, along the lines of what are you doing to protect you and your family in regards to your physical security? On top of that your online presences. >> So ransoms, people getting kidnapped and or extorted. These kinds of physical pressures? >> Yeah, like ShapeShift has a lot of great stories. Michael Perklin from, the CIS of ShapeShift is here. You should totally talk to him and get him on theCUBE. Michael Perklin has a long list of war stories that ShapeShift has been through. Some of them they went through before he was actually hired as a CISO. And ShapeShift would've also not been hacked of millions of dollars if they had brought on a CISO earlier such as Michael Perklin. I believe they had hired him as a consultant. Did not renew the contract, got hacked, and brought him on as CISO. And he was like, "If you had continued working with me "I would of, this would of been avoided." And that's really-- >> It's foolish. >> One other thing I've seen with ShapeShift actually is online you'll notice that all the employees of ShapeShift, their last names are not online. So on the website it says, their chief marketing officers name is Emily, it says "Emily Shape Shift". And their badges at conferences also says "Emily Shape Shift". These are interesting things to learn from other companies that this is what you're doing to protect your employees from them being hacked. It's very interesting for us to all exchange notes-- >> Shoot I'm out there, (mumbles) everywhere pretty much online. >> Well I'm out there as well. We just got to protect ourselves and we got to think about things like our physical security. People feel uncomfortable thinking about their physical security. They think that, "Oh no we're in America, "we'll just call the cops." What about when we travel? What about when you and I are in a village in Thailand hanging out? We are microorganisms and when microorganisms are hungry they'll do what ever it takes to eat. So if they smell abundance, you and I are in trouble. >> Yeah, we got to be careful. And this is something that you really got to worry about because there's been tons of war stories. Now ultimately when you get back down to the wallet, it's one of the things we've been talking a lot this morning on, with Rivets, was on about the notion of how hard it is for mainstream to use tokens. Where's my private key? This has always been the crypto problem, even with private key encryption. >> Yeah, or should we build a multi-sig wallet to store your tokens in a secure manner? People have been asking us for a long time, Crypto funds, ICO's, "How do we store our tokens!" And our problem was that A, we've either hacked into the other wallets that are available and we saw that they're insecure or the UI and UX completely sucks. So we said lets build our own and so we built our own. >> Are you open sourcing that, is that-- >> No, we're going to be, this is going to be a unique multi-sig wallet that we release, it's not. You're open sourcing the actual code of the wallet or else it's not going to be considered legitimate. >> Yeah, it's good, it's a goldmine. >> It's a profitable venture. >> And that's going to be 100% bullet proof? >> It's going to be very secure. >> Let's talk about Meadow Suite. >> So, we came to a point where our engineers needed better tooling to find security vulnerabilities in smart contracts. And what is available, Truffle, is weak and slow. And so we built Meadow Suite. We built in a long list of tools and a full suite of tooling that we believe are going to be used by a long list of people that are building on the Ethereum blockchain. Including a lot of our competitors. And so we've open sourced it and we're excited for people to check out Meadow Suite. It's on GitHub and our engineers have put a lot of time and effort into it. We even have our own logo for it. >> And the goal is to automate things, make it easier? What's the main, main initial goals? >> I would say, long story short, is to find security vulnerabilities in smart contracts and to build tooling around that. And to effectively build and find vulnerabilities in smart contracts. >> So they build it into their development process natively? >> Correct. >> Alright Hartej great to have you on and hey congratulations for putting on this event. I know we've talked about >> Awesome to be here. it in the past, it actually happened. It's the first inaugural one. >> We had this vision and I'm glad it came through. We had a great global events team. Gabriel Shepherd, and Ryan Shewchuk, and Brad Horspool, and Michelle Yon. And like they've put on conference's the size of Southwest by Southwest. And our vision is, look we're not in the events business. And we're a cyber security business at the end of the day. But we found it necessary that there has to be a conference where there's a platform for people to talk about cyber security intersecting with the blockchain industry. There's got to be a platform for someone to get on stage and say, "Hey here's lessons that "we learned from getting hacked" And if this industry is going to survive, this topic needs to survive. And the brands that want to affiliate themselves with blockchain security and that want to be apart of the discussion. This will be a go to conference every single year. We're going to keep doing it and I look forward to having you at every single one, coming. >> It's been great. And you know what's key is having reputable people working together in a community, building an open community, sharing data, sharing best practices, and having candid conversations. >> Yep, it's the only way to get someone as epic as Andreas Antonopoulos to your conference. I mean my co-founder and I have been looking up to Andreas for so long. Watching videos of Andreas. Watching videos of Max Keiser, Stacy Herbert. To have them here is really just truly remarkable and I'm grateful, I'm honored, I'm touched. I'm touched to have you here. I miss David Vellante, I wish he was here. >> He's in San Francisco, he says hi. He was going to fly in tonight but-- >> He texted me. >> He did, okay. >> Hartej it's great to see you. >> Great to see you >> Congratulations. as well. thank you. >> Great event. Okay we're here live with theCUBe coverage for HoshoCon 2018, the first inaugural security conference on blockchain. Industry leaders coming together. The brilliant, bright minds of the industry working out the solutions, trying to pedal faster. Better security, check it out HoshoCon.com. I'm John Furrier stay with us for more coverage after this short break. (techno music)