(upbeat techno music) >> Hello, everyone. Welcome to theCUBE here live in Detroit for KubeCon + CloudNativeCon 2022. I'm John Furrier, host of theCUBE. This is our seventh consecutive KubeCon + CloudNativeCon. Since inception, theCube's been there every year. And of course, theCUBE continues to grow. So does the community as well as our host roster. I'm here with my co-host, Lisa Martin. Lisa, great to see you. And our new theCube host, Savannah Peterson. Savannah, welcome to theCUBE. >> Thanks, John. >> Welcome. >> Welcome to the team. >> Thanks, team. It's so wonderful to be here. I met you all last KubeCon and to be sitting on this stage in your company is honestly an honor. >> Well, great to have you. Lisa and I have done a lot of shows together and it's great to have more cadence around. You know, more fluid around the content, and also the people. And I would like you to take a minute to tell people your background. You know the community here. What's the roots? You know the Cloud Native world pretty well. >> I know it as well as someone my age can. As we know, the tools and the tech is always changing. So hello, everyone. I'm Savannah Peterson. You can find me on the internet @SavIsSavvy. Would love to hear from you during the show. Big fan of this space and very passionate about DevOps. I've been working in the Silicon Valley and the Silicon Alley for a long time, helping companies scale internationally as a community builder as well as a international public speaker. And honestly, this is just such a fun evolution for my career and I'm grateful to be here with you both. >> We're looking forward to having you on theCUBE. Appreciate it. Lisa? >> Yes. >> KubeCon. Amazing again this year. Just keeps growing bigger and bigger. >> Yes. >> Keynote review, you were in there. >> Yup. >> I had a chance to peek in a little bit, but you were there and got most of the news. What was the action? >> You know, the action was really a big focus around the maintainers, what they're doing, giving them the props and the kudos and the support that they deserve. Not just physically, but mentally as well. That was a really big focus. It was also a big focus on mentoring and really encouraging more people- >> Love that. >> I did, too. I thought that was fantastic to get involved to help others. And then they showed some folks that had great experiences, really kind of growing up within the community. Probably half of the keynote focus this morning was on that. And then looking at some of the other projects that have graduated from CNCF, some of these successful projects, what they're doing, what folks are doing. Cruise, one of the ones that was featured. You've probably seen their driverless cars around San Francisco. So it was great to see that, the successes that they've had and where that's going. >> Yeah. Lisa, we've done how many shows? Hundreds of shows together. When you see a show like this grow and continue to mature, what's your observation? You've seen many shows we've hosted together. What jumps out this year? Is it just that level of maturization? What's your take on this? >> The maturization of the community and the collaboration of the community. I think those two things jumped out at me even more than last year. Last year, obviously a little bit smaller event in North America. It was Los Angeles. This year you got a much stronger sense of the community, the support that they have for each other. There were a lot of standing ovations particularly when the community came out and talked about what they were doing in Ukraine to support fellow community members in Ukraine and also to support other Ukrainians in terms of getting in to tech. Lot of standing ovations. Lot of- >> Savannah: Love that, yeah. >> Real authenticity around the community. >> Yeah, Savannah, we talked on our intro prior to the event about how inclusive this community is. They are really all in on inclusivity. And the Ukraine highlight, this community is together and they're open. They're open to everybody. >> Absolutely. >> And they're also focused on growing the educational knowledge. >> Yeah, I think there's a real celebration of curiosity within this community that we don't find in certain other sectors. And we saw it at dinner last night. I mean, I was struck just like you Lisa walking in today. The energy in that room is palpably different from last year. I saw on Twitter this morning, people are very excited. Many people, their first KubeCon. And I'm sure we're going to be feeding off of that, that kind of energy and that... Just a general enthusiasm and excitement to be here in Detroit all week. It's a treat. >> Yeah, I even saw Stu Miniman earlier, former theCube host. He's at Red Hat. We were talking on the way in and he made an observation I thought was interesting I'll bring up because this show, it's a lot "What is this show? What isn't this show?" And I think this show is about developers. What it isn't is not a business show. It's not about business. It's not about industry kind of posturing or marketing. All the heavy hitters on the dev side are here and you don't see the big execs. I mean, you got the CEOs of startups here but not the CEOs of the big public companies. We see the doers. So, I mean, I think my take is this show's about creating products for builders and creating products that people can consume. And I think that is the Cloud Native lanes that are starting to form. You're either creating something for builders to build stuff with or you're creating stuff that could be consumed. And that seems for applications. So the whole app side and services seem to be huge. >> They also did a great job this morning of showcasing some of the big companies that we all know and love. Spotify. Obviously, I don't think a day goes by where I don't turn on Spotify. And what it's done- >> Me neither. >> What it's done for the community... Same with Intuit, I'm a user of both. Intuit was given an End User Award this morning during the keynote for their contributions, what they're doing. But it was nice to see some just everyday companies, Cloud Native companies that we all know and love, and to understand their contributions to the community and how those contributions are affecting all of us as end users. >> Yeah, and I think those companies like Intuit... Argo's been popular, Arlo now new, seeing those services, and even enterprises are contributing. You know, Lyft is always here, popular with Envoy. The community isn't just vendors and that's the interesting thing. >> I think that's why it works. To me, this event is really about the celebration of developer relations. I mean, every DevRel from every single one of these companies is here. Like you said, in lieu of the executive, that's essentially who we're attracting. And if you look out over the show floor here, I mean, we've probably got, I don't know, three to four extra vendors that we had last year. It totally is a different tone. This community doesn't like to be sold to. This community likes to be collaborative. They like to learn and they like to help. And I think we see that within the ecosystem inside the room today. >> It's not a top down sales pitch. It's really consensus. >> No. >> Do it out in the open transparency. Don't sell me stuff. And I think the other thing I like about this community is that we're starting to see that... And then we've said this in theCube before. We'll say it again. Maybe be more controversial. Digital transformation is about the developer, right? And I think the power is going to shift in every company to the developer because if you take digital transformation to completion, everything happens the way it's happening, the company is the application. It's not IT who serves the organization- >> I love thinking about it like that. That's a great point, John. >> The old phase was IT was a department that served the business. Well, the business is IT now. So that means developer community is going to grow like crazy and they're going to be in the front lines driving all the change. In my opinion, you going to see this developer community grow like crazy and then the business side on industry will match up with that. I think that's what's going to happen. >> So, the developers are becoming the influencers? >> Developers are the power source for all companies. They're in charge. They're going to dictate terms to how businesses will run because that's going to be natural 'cause digital transformation's about the app and the business is the app. So that mean it has to be coded. So I think you're going to see a lot of innovation around app server-like experiences where the the apps are just being developed faster than the infrastructures enabling that completely invisible. And I think you're going to see this kind of architecture-less, I'll put it out there that term architecture-less, environment where you don't need an architecture. It's just you code away. >> Yeah, yeah. We saw GitHub's mentioned in the keynote this morning. And I mean, low code, no code. I think your fingers right on the pulse there. >> Yeah. What did you guys see? Anything else you see? >> I think just the overall... To your point, Savannah, the energy. Definitely higher than last year. When I saw those standing ovations, people really come in together around the sense of community and what they've accomplished especially in the last two plus years of being remote. They did a great job of involving a lot of folks, some of whom are going to be on the program with us this week that did remote parts of the keynote. One of our guests on today from Vitess was talking about the successes and the graduation of their program so that the sense of community, but also not just the sense of it, the actual demonstration of it was also quite palpable this morning, and I think that's something that I'm excited for us to hear about with our guests on the program this week. >> Yeah, and I think the big story coming out so far as the show starts is the developers are in charge. They're going to set the pace for all the ops, data ops, security ops, all operations. And then the co-located events that were held Monday and Tuesday prior to kickoff today. You saw WebAssembly's come out of the woodwork as it got a lot of attention. Two startups got funded heavily on Series A. You're starting to see that project really work well. That's going to be an additional to the container market. So, interesting to see how Docker reacts to that. Red Hat's doing great. ServiceMeshCon was phenomenal. I saw Solo.iOS got massive traction with those guys. So like Service Mesh, WebAssembly, you can start to see the dots connecting. You're starting to see this layer below Kubernetes and then a layer above Kubernetes developing. So I think it's going to be great for applications and great for the infrastructure. I think we'll see how it comes out and all these companies we have on here are all about faster, more integrated, some very, very interesting to see. So far, so good. >> You guys talked about in your highlight session last week or so. Excited to hear about the end users, the customer stories. That's what I'm interested in understanding as well. It's why it resonates with me when I see brands that I recognize. Well, I use it every day. How are they using containers and Kubernetes? How are they actually not just using it to deploy their app, their technologies, that we all expect are going to be up 24/7, but how are they also contributing to the development of it? So I'm really excited to hear those end users. >> We're going to have Lockheed Martin. And we wrote a story on SiliconANGLE, the Red Hat, Lockheed Martin, real innovation on the edge. You're starting to see educate with the edge. It's really the industrial edge coming to be big. It'd be very interesting to see. >> Absolutely, we got Ford Motor Company coming on as well. I always loved stories, Savannah, that are history of companies. Ford's been around since 1903. How is a company that- >> Well, we're in the home of Ford- as well here. >> We are. How they evolved digitally? What are they doing to enable the developers to be those influencers that John says? It's going to be them. >> They're a great example of a company that's always been on the forefront, too. I mean, they had a head of VRs 25 years ago when most people didn't even know what VR was going to stand for. So, I can't wait for that one. You tease the Docker interview coming up very well, John. I'm excited for that one. One last thing I want to bring up that I think is really refreshing and it's reflected right here on this stage is you talked about the inclusion. I think there's a real commitment to diversity here. You can see the diversity stats on CNCF's website. It's right there on KubeCon. At the bottom, there's a link in every email I've gotten highlighting that. We've got two women on this stage all week which is very exciting. And the opening keynote was a woman. So quite frankly, I am happy as a female in this industry to see a bit more representation. And I do appreciate just on the note of being inclusive, it's not just about gender or age, it's also about the way that CNCF thinks about your experience since we're in this kind of pandemic transitional period. They've got little pins. Last year, we had bracelets depending on your level of comfort. Equivocally like a stoplight which is... I just think it's really nice and sensitive and that attention to detail makes people feel comfortable. Which is why we have the community energy that we have. >> Yeah, and being 12 years in the business... With theCUBE, we've been 12 years in the business, seven years with KubeCon and Cloud Native, I really appreciate the Linux Foundation including me as I get older. (Lisa and Savannah laugh) >> Savannah: That's a good point. >> Ageism were, "Hey!" Thank you. >> There was a lot of representation. You talked about females and so often we go to shows and there's very few females. Some companies are excellent at it. But from an optics perspective, to me it stands out. There was great representation across. There was disabled people on stage, people of color, women, men of all ages. It was very well-orchestrated. >> On the demographic- >> And sincere. >> Yeah, yeah. >> And the demographics, too. On the age side, it's lower too. You're starting to see younger... I mean, high school, college representation. I saw a lot of college students last night. I saw on the agenda sessions targeting universities. I mean, I'm telling you this is reaching down. Open source now is so great. It's growing so fast. It's continuing to thunder away. And with success, it's just getting better and better. In fact, we were talking last night about at some point we might not have to write code. Just glue it together. And that's why I think the supply chain and security thing is an issue. But this is why it's so great. Anyone can code and I think there's a lot of learning to have. So, I think we'll continue to do our job to extract the signal from the noise. So, thanks for the kickoff. Good commentary. Thank you. All right. >> Of course. >> Let's get started. Day one of three days of live coverage here at KubeCon + CloudNativeCon. I'm John Furrier with Lisa Martin, and Savannah Peterson. Be back with more coverage starting right now. (gentle upbeat music)

>> Announcer: From the Cube's studios in Palo Alto in Boston, bringing you data-driven insights from The Cube and ETR. This is "Breaking Analysis" with Dave Vellante. >> Exactly one week after Pat Gelsinger's announcement of his plans to reinvent Intel. Arm announced version nine of its architecture and laid out its vision for the next decade. We believe this vision is extremely strong as it combines an end-to-end capability from Edge to Cloud, to the data center, to the home and everything in between. Arms aspirations are ambitious and powerful. Leveraging its business model, ecosystem and software compatibility with previous generations. Hello every one and welcome to this week's Wikibon Cube Insights powered by ETR. And this breaking analysis will explain why we think this announcement is so important and what it means for Intel and the broader technology landscape. We'll also share with you some feedback that we received from the Cube Community on last week's episode and a little inside baseball on how Intel, IBM, Samsung, TSMC and the U.S. government might be thinking about the shifting landscape of semiconductor technology. Now, there were two notable announcements this week that were directly related to Intel's announcement of March 23rd. The Armv9 news and TSMC's plans to invest a $100 billion in chip manufacturing and development over the next three years. That is a big number. It appears to tramp Intel's plan $20 billion investment to launch two new fabs in the U.S. starting in 2024. You may remember back in 2019, Samsung pledged to invest a $116 billion to diversify its production beyond memory trip, memory chips. Why are all these companies getting so aggressive? And won't this cause a glut in chips? Well, first, China looms large and aims to dominate its local markets, which in turn is going to confer advantages globally. The second, there's a huge chip shortage right now. And the belief is that it's going to continue through the decade and possibly beyond. We are seeing a new inflection point in the demand as we discussed last week. Stemming from digital, IOT, cloud, autos in new use cases in the home as so well presented by Sarjeet Johal in our community. As to the glut, these manufacturers believe that demand will outstrip supply indefinitely. And I understand that a lack of manufacturing capacity is actually more deadly than an oversupply. Look, if there's a glut, manufacturers can cut production and take the financial hit. Whereas capacity constraints mean you can miss entire cycles of growth and really miss out on the demand and the cost reductions. So, all these manufacturers are going for it. Now let's talk about Arm, its approach and the announcements that it made this week. Now last week, we talked about how Pat Gelsinger his vision of a system on package was an attempt to leapfrog system on chip SOC, while Arm is taking a similar system approach. But in our view, it's even broader than the vision laid out by Pat at Intel. Arm is targeting a wide variety of use cases that are shown here. Arm's fundamental philosophy is that the future will require highly specialized chips and Intel as you recall from Pat's announcement, would agree. But Arm historically takes an ecosystem approach that is different from Intel's model. Arm is all about enabling the production of specialized chips to really fit a specific application. For example, think about the amount of AI going on iPhones. They move if I remember from fingerprint to face recognition. This requires specialized neural processing units, NPUs that are designed by Apple for that particular use case. Arm is facilitating the creation of these specialized chips to be designed and produced by the ecosystem. Intel on the other hand has historically taken a one size fits all approach. Built around the x86. The Intel's design has always been about improving the processor. For example, in terms of speed, density, adding vector processing to accommodate AI, et cetera. And Intel does all the design and the manufacturing in any specialization for the ecosystem is done by Intel. Much of the value, that's added from the ecosystem is frankly been bending metal or adding displays or other features at the margin. But, the advantage is that the x86 architecture is well understood. It's consistent, reliable, and let's face it. Most enterprise software runs on x86. So, but very, very different models historically, which we heard from Gelsinger last week they're going to change with a new trusted foundry strategy. Now let's go through an example that might help explain the power of Arm's model. Let's say, your AWS and you're doing graviton. Designing graviton and graviton2. Or Apple, designing the M1 chip, or Tesla designing its own chip, or any other company in in any one of these use cases that are shown here. Tesla is a really good example. In order to optimize for video processing, Tesla needed to add specialized code firmware in the NPU for it's specific use case within autos. It was happy to take off the shelf CPU or GPU or whatever, and leverage Arm's standards there. And then it added its own value in the NPU. So the advantage of this model is Tesla could go from tape out in less or, or, or or in less than a year versus get the tape out in less than a year versus what would normally take many years. Arm is, think of Arm is like customize a Lego blocks that enable unique value add by the ecosystem with a much faster time to market. So like I say, the Tesla goes from logical tape out if you will, to Samsung and then says, okay run this against your manufacturing process. And it should all work as advertised by Arm. Tesla, interestingly, just as an aside chose the 14 nanometer process to keep its costs down. It didn't need the latest and greatest density. Okay, so you can see big difference in philosophies historically between Arm and Intel. And you can see Intel vectoring toward the Arm model based on what Gelsinger said last week for its foundry business. Essentially it has to. Now, Arm announced a new Arm architecture, Armv9. v9 is backwards compatible with previous generations. Perhaps Arm learned from Intel's failed, Itanium effort for those remember that word. Had no backward compatibility and it really floundered. As well, Arm adds some additional capabilities. And today we're going to focus on the two areas that have highlighted, machine learning piece and security. I'll take note of the call out, 300 billion chips. That's Arm's vision. That's a lot. And we've said, before, Arm's way for volumes are 10X those of x86. Volume, we sound like a broken record. Volume equals cost reduction. We'll come back to that a little bit later. Now let's have a word on AI and machine learning. Arm is betting on AI and ML. Big as are many others. And this chart really shows why, it's a graphic that shows ETR data and spending momentum and pervasiveness in the dataset across all the different sectors that ETR tracks within its taxonomy. Note that ML/AI gets the top spot on the vertical axis, which represents net score. That's a measure of spending momentum or spending velocity. The horizontal axis is market share presence in the dataset. And we give this sector four stars to signify it's consistent lead in the data. So pretty reasonable bet by Arm. But the other area that we're going to talk about is security. And its vision day, Arm talked about confidential compute architecture and these things called realms. Note in the left-hand side, showing data traveling all over the different use cases and around the world and the call-out from the CISO below, it's a large public airline CISO that spoke at an ETR Venn round table. And this individual noted that the shifting end points increase the threat vectors. We all know that. Arm said something that really resonated. Specifically, they said today, there's far too much trust on the OS and the hypervisor that are running these applications. And their broad access to data is a weakness. Arm's concept of realms as shown in the right-hand side, underscores the company strategy to remove the assumption that privileged software. Like the hypervisor needs to be able to see the data. So by creating realms, in a virtualized multi-tenant environment, data can be more protected from memory leaks which of course is a major opportunity for hackers that they exploit. So it's a nice concept in a way for the system to isolate attendance data from other users. Okay, we want, we want to share some feedback that we got last week from the community on our analysis of Intel. A tech exec from city pointed out that, Intel really didn't miss a mobile, as we said, it really missed smartphones. In fact, whell, this is a kind of a minor distinction, it's important to recognize we think. Because Intel facilitated WIFI with Centrino, under the direction of Paul Alini. Who by the way, was not an engineer. I think he was the first non-engineer to be the CEO of Intel. He was a marketing person by background. Ironically, Intel's work in wifi connectivity enabled, actually enabled the smartphone revolution. And maybe that makes the smartphone missed by Intel all that more egregious, I don't know. Now the other piece of feedback we received related to our IBM scenario and our three-way joint venture prediction bringing together Intel, IBM, and Samsung in a triumvirate where Intel brings the foundry and it's process manufacturing. IBM brings its dis-aggregated memory technology and Samsung brings its its volume and its knowledge of of volume down the learning curve. Let's start with IBM. Remember we said that IBM with power 10 has the best technology in terms of this notion of dis-aggregating compute from memory and sharing memory in a pool across different processor types. So a few things in this regard, IBM when it restructured its micro electronics business under Ginni Rometty, catalyzed the partnership with global foundries and you know, this picture in the upper right it shows the global foundries facility outside of Albany, New York in Malta. And the partnership included AMD and Samsung. But we believe that global foundries is backed away from some of its contractual commitments with IBM causing a bit of a rift between the companies and leaving a hole in your original strategy. And evidently AMD hasn't really leaned in to move the needle in any way and so the New York foundry, is it a bit of a state of limbo with respect to its original vision. Now, well, Arvind Krishna was the face of the Intel announcement. It clearly has deep knowledge of IBM semiconductor strategy. Dario Gill, we think is a key player in the mix. He's the senior vice president director of IBM research. And it is in a position to affect some knowledge sharing and maybe even knowledge transfer with Intel possibly as it relates to disaggregated architecture. His questions remain as to how open IBM will be. And how protected it will be with its IP. It's got, as we said, last week, it's got to have an incentive to do so. Now why would IBM do that? Well, it wants to compete more effectively with VMware who has done a great job leveraging x86 and that's the biggest competitor in threat to open shift. So Arvind needs Intel chips to really execute on IBM's cloud strategy. Because almost all of IBM's customers are running apps on x86. So IBM's cloud and hybrid cloud. Strategy really need to leverage that Intel partnership. Now Intel for its part has great FinFET technology. FinFET is a tactic goes beyond CMOs. You all mainframes might remember when IBM burned the boat on ECL, Emitter-coupled Logic. And then moved to CMOs for its mainframes. Well, this is the next gen beyond, and it could give Intel a leg up on AMD's chiplet intellectual properties. Especially as it relates to latency. And there could be some benefits there for IBM. So maybe there's a quid pro quo going on. Now, where it really gets interesting is New York Senator, Chuck Schumer, is keen on building up an alternative to Silicon Valley in New York now it is Silicon Alley. So it's possible that Intel, who by the way has really good process technology. This is an aside, it really allowed TSMC to run the table with the whole seven nanometers versus 10 minute nanometer narrative. TSMC was at seven nanometer. Intel was at 10 nanometer. And really, we've said in the past that Intel's 10 nanometer tech is pretty close to TSMC seven. So Intel's ahead in that regard, even though in terms of, you know, the intervener thickness density, it's it's not, you know. These are sort of games that the semiconductor companies play, but you know it's possible that Intel with the U.S. government and IBM and Samsung could make a play for that New York foundry as part of Intel's trusted foundry strategy and kind of reshuffle that deck in Albany. Sounds like a "Game of Thrones," doesn't it? By the way, TSMC has been so consumed servicing Apple for five nanometer and eventually four nanometer that it's dropped the ball on some of its other's customers, namely Nvidia. And remember, a long-term competitiveness and cost reductions, they all come down to volume. And we think that Intel can't get to volume without an Arm strategy. Okay, so maybe the JV, the Joint Venture that we talked about, maybe we're out on a limb there and that's a stretch. And perhaps Samsung's not willing to play ball, given it's made huge investments in fabs and infrastructure and other resources, locally, but we think it's still viable scenario because we think Samsung definitely would covet a presence in the United States. No good to do that directly but maybe a partnership makes more sense in terms of gaining ground on TSMC. But anyway, let's say Intel can become a trusted foundry with the help of IBM and the U.S. government. Maybe then it could compete on volume. Well, how would that work? Well, let's say Nvidia, let's say they're not too happy with TSMC. Maybe with entertain Intel as a second source. Would that do it? In and of itself, no. But what about AWS and Google and Facebook? Maybe this is a way to placate the U.S. government and call off the antitrust dogs. Hey, we'll give Intel Foundry our business to secure America's semiconductor leadership and future and pay U.S. government. Why don't you chill out, back off a little bit. Microsoft even though, you know, it's not getting as much scrutiny from the U.S. government, it's anti trustee is maybe perhaps are behind it, who knows. But I think Microsoft would be happy to play ball as well. Now, would this give Intel a competitive volume posture? Yes, we think it would, for sure. If it can gain the trust of these companies and the volume we think would be there. But as we've said, currently, this is a very, very long shot because of the, the, the new strategy, the distance the difference in the Foundry business all those challenges that we laid out last week, it's going to take years to play out. But the dots are starting to connect in this scenario and the stakes are exceedingly high hence the importance of the U.S. government. Okay, that's it for now. Thanks to the community for your comments and insights. And thanks again to David Floyer whose analysis around Arm and semiconductors. And this work that he's done for the past decade is of tremendous help. Remember I publish each week on wikibon.com and siliconangle.com. And these episodes are all available as podcasts, just search for braking analysis podcast and you can always connect on Twitter. You can hit the chat right here or this live event or email me at david.vellante@siliconangle.com. Look, I always appreciate the comments on LinkedIn and Clubhouse. You can follow me so you're notified when we start a room and riff on these topics as well as others. And don't forget to check out etr.plus where all the survey data. This is Dave Vellante for the Cube Insights powered by ETR. Be well, and we'll see you next time. (cheerful music) (cheerful music)

>> From the Cube's studios in Palo Alto in Boston, bringing you data-driven insights from The Cube and ETR. This is "Breaking Analysis" with Dave Vellante. >> Exactly one week after Pat Gelsinger's announcement of his plans to reinvent Intel. Arm announced version nine of its architecture and laid out its vision for the next decade. We believe this vision is extremely strong as it combines an end-to-end capability from Edge to Cloud, to the data center, to the home and everything in between. Arms aspirations are ambitious and powerful. Leveraging its business model, ecosystem and software compatibility with previous generations. Hello every one and welcome to this week's Wikibon Cube Insights powered by ETR. And this breaking analysis will explain why we think this announcement is so important and what it means for Intel and the broader technology landscape. We'll also share with you some feedback that we received from the Cube Community on last week's episode and a little inside baseball on how Intel, IBM, Samsung, TSMC and the U.S. government might be thinking about the shifting landscape of semiconductor technology. Now, there were two notable announcements this week that were directly related to Intel's announcement of March 23rd. The Armv9 news and TSMC's plans to invest a $100 billion in chip manufacturing and development over the next three years. That is a big number. It appears to tramp Intel's plan $20 billion investment to launch two new fabs in the U.S. starting in 2024. You may remember back in 2019, Samsung pledged to invest a $116 billion to diversify its production beyond memory trip, memory chips. Why are all these companies getting so aggressive? And won't this cause a glut in chips? Well, first, China looms large and aims to dominate its local markets, which in turn is going to confer advantages globally. The second, there's a huge chip shortage right now. And the belief is that it's going to continue through the decade and possibly beyond. We are seeing a new inflection point in the demand as we discussed last week. Stemming from digital, IOT, cloud, autos in new use cases in the home as so well presented by Sarjeet Johal in our community. As to the glut, these manufacturers believe that demand will outstrip supply indefinitely. And I understand that a lack of manufacturing capacity is actually more deadly than an oversupply. Look, if there's a glut, manufacturers can cut production and take the financial hit. Whereas capacity constraints mean you can miss entire cycles of growth and really miss out on the demand and the cost reductions. So, all these manufacturers are going for it. Now let's talk about Arm, its approach and the announcements that it made this week. Now last week, we talked about how Pat Gelsinger his vision of a system on package was an attempt to leapfrog system on chip SOC, while Arm is taking a similar system approach. But in our view, it's even broader than the vision laid out by Pat at Intel. Arm is targeting a wide variety of use cases that are shown here. Arm's fundamental philosophy is that the future will require highly specialized chips and Intel as you recall from Pat's announcement, would agree. But Arm historically takes an ecosystem approach that is different from Intel's model. Arm is all about enabling the production of specialized chips to really fit a specific application. For example, think about the amount of AI going on iPhones. They move if I remember from fingerprint to face recognition. This requires specialized neural processing units, NPUs that are designed by Apple for that particular use case. Arm is facilitating the creation of these specialized chips to be designed and produced by the ecosystem. Intel on the other hand has historically taken a one size fits all approach. Built around the x86. The Intel's design has always been about improving the processor. For example, in terms of speed, density, adding vector processing to accommodate AI, et cetera. And Intel does all the design and the manufacturing in any specialization for the ecosystem is done by Intel. Much of the value, that's added from the ecosystem is frankly been bending metal or adding displays or other features at the margin. But, the advantage is that the x86 architecture is well understood. It's consistent, reliable, and let's face it. Most enterprise software runs on x86. So, but very, very different models historically, which we heard from Gelsinger last week they're going to change with a new trusted foundry strategy. Now let's go through an example that might help explain the power of Arm's model. Let's say, your AWS and you're doing graviton. Designing graviton and graviton2. Or Apple, designing the M1 chip, or Tesla designing its own chip, or any other company in in any one of these use cases that are shown here. Tesla is a really good example. In order to optimize for video processing, Tesla needed to add specialized code firmware in the NPU for it's specific use case within autos. It was happy to take off the shelf CPU or GPU or whatever, and leverage Arm's standards there. And then it added its own value in the NPU. So the advantage of this model is Tesla could go from tape out in less or, or, or or in less than a year versus get the tape out in less than a year versus what would normally take many years. Arm is, think of Arm is like customize a Lego blocks that enable unique value add by the ecosystem with a much faster time to market. So like I say, the Tesla goes from logical tape out if you will, to Samsung and then says, okay run this against your manufacturing process. And it should all work as advertised by Arm. Tesla, interestingly, just as an aside chose the 14 nanometer process to keep its costs down. It didn't need the latest and greatest density. Okay, so you can see big difference in philosophies historically between Arm and Intel. And you can see Intel vectoring toward the Arm model based on what Gelsinger said last week for its foundry business. Essentially it has to. Now, Arm announced a new Arm architecture, Armv9. v9 is backwards compatible with previous generations. Perhaps Arm learned from Intel's failed, Itanium effort for those remember that word. Had no backward compatibility and it really floundered. As well, Arm adds some additional capabilities. And today we're going to focus on the two areas that have highlighted, machine learning piece and security. I'll take note of the call out, 300 billion chips. That's Arm's vision. That's a lot. And we've said, before, Arm's way for volumes are 10X those of x86. Volume, we sound like a broken record. Volume equals cost reduction. We'll come back to that a little bit later. Now let's have a word on AI and machine learning. Arm is betting on AI and ML. Big as are many others. And this chart really shows why, it's a graphic that shows ETR data and spending momentum and pervasiveness in the dataset across all the different sectors that ETR tracks within its taxonomy. Note that ML/AI gets the top spot on the vertical axis, which represents net score. That's a measure of spending momentum or spending velocity. The horizontal axis is market share presence in the dataset. And we give this sector four stars to signify it's consistent lead in the data. So pretty reasonable bet by Arm. But the other area that we're going to talk about is security. And its vision day, Arm talked about confidential compute architecture and these things called realms. Note in the left-hand side, showing data traveling all over the different use cases and around the world and the call-out from the CISO below, it's a large public airline CISO that spoke at an ETR Venn round table. And this individual noted that the shifting end points increase the threat vectors. We all know that. Arm said something that really resonated. Specifically, they said today, there's far too much trust on the OS and the hypervisor that are running these applications. And their broad access to data is a weakness. Arm's concept of realms as shown in the right-hand side, underscores the company strategy to remove the assumption that privileged software. Like the hypervisor needs to be able to see the data. So by creating realms, in a virtualized multi-tenant environment, data can be more protected from memory leaks which of course is a major opportunity for hackers that they exploit. So it's a nice concept in a way for the system to isolate attendance data from other users. Okay, we want, we want to share some feedback that we got last week from the community on our analysis of Intel. A tech exec from city pointed out that, Intel really didn't miss a mobile, as we said, it really missed smartphones. In fact, whell, this is a kind of a minor distinction, it's important to recognize we think. Because Intel facilitated WIFI with Centrino, under the direction of Paul Alini. Who by the way, was not an engineer. I think he was the first non-engineer to be the CEO of Intel. He was a marketing person by background. Ironically, Intel's work in wifi connectivity enabled, actually enabled the smartphone revolution. And maybe that makes the smartphone missed by Intel all that more egregious, I don't know. Now the other piece of feedback we received related to our IBM scenario and our three-way joint venture prediction bringing together Intel, IBM, and Samsung in a triumvirate where Intel brings the foundry and it's process manufacturing. IBM brings its dis-aggregated memory technology and Samsung brings its its volume and its knowledge of of volume down the learning curve. Let's start with IBM. Remember we said that IBM with power 10 has the best technology in terms of this notion of dis-aggregating compute from memory and sharing memory in a pool across different processor types. So a few things in this regard, IBM when it restructured its micro electronics business under Ginni Rometty, catalyzed the partnership with global foundries and you know, this picture in the upper right it shows the global foundries facility outside of Albany, New York in Malta. And the partnership included AMD and Samsung. But we believe that global foundries is backed away from some of its contractual commitments with IBM causing a bit of a rift between the companies and leaving a hole in your original strategy. And evidently AMD hasn't really leaned in to move the needle in any way and so the New York foundry, is it a bit of a state of limbo with respect to its original vision. Now, well, Arvind Krishna was the face of the Intel announcement. It clearly has deep knowledge of IBM semiconductor strategy. Dario Gill, we think is a key player in the mix. He's the senior vice president director of IBM research. And it is in a position to affect some knowledge sharing and maybe even knowledge transfer with Intel possibly as it relates to disaggregated architecture. His questions remain as to how open IBM will be. And how protected it will be with its IP. It's got, as we said, last week, it's got to have an incentive to do so. Now why would IBM do that? Well, it wants to compete more effectively with VMware who has done a great job leveraging x86 and that's the biggest competitor in threat to open shift. So Arvind needs Intel chips to really execute on IBM's cloud strategy. Because almost all of IBM's customers are running apps on x86. So IBM's cloud and hybrid cloud. Strategy really need to leverage that Intel partnership. Now Intel for its part has great FinFET technology. FinFET is a tactic goes beyond CMOs. You all mainframes might remember when IBM burned the boat on ECL, Emitter-coupled Logic. And then moved to CMOs for its mainframes. Well, this is the next gen beyond, and it could give Intel a leg up on AMD's chiplet intellectual properties. Especially as it relates to latency. And there could be some benefits there for IBM. So maybe there's a quid pro quo going on. Now, where it really gets interesting is New York Senator, Chuck Schumer, is keen on building up an alternative to Silicon Valley in New York now it is Silicon Alley. So it's possible that Intel, who by the way has really good process technology. This is an aside, it really allowed TSMC to run the table with the whole seven nanometers versus 10 minute nanometer narrative. TSMC was at seven nanometer. Intel was at 10 nanometer. And really, we've said in the past that Intel's 10 nanometer tech is pretty close to TSMC seven. So Intel's ahead in that regard, even though in terms of, you know, the intervener thickness density, it's it's not, you know. These are sort of games that the semiconductor companies play, but you know it's possible that Intel with the U.S. government and IBM and Samsung could make a play for that New York foundry as part of Intel's trusted foundry strategy and kind of reshuffle that deck in Albany. Sounds like a "Game of Thrones," doesn't it? By the way, TSMC has been so consumed servicing Apple for five nanometer and eventually four nanometer that it's dropped the ball on some of its other's customers, namely Nvidia. And remember, a long-term competitiveness and cost reductions, they all come down to volume. And we think that Intel can't get to volume without an Arm strategy. Okay, so maybe the JV, the Joint Venture that we talked about, maybe we're out on a limb there and that's a stretch. And perhaps Samsung's not willing to play ball, given it's made huge investments in fabs and infrastructure and other resources, locally, but we think it's still viable scenario because we think Samsung definitely would covet a presence in the United States. No good to do that directly but maybe a partnership makes more sense in terms of gaining ground on TSMC. But anyway, let's say Intel can become a trusted foundry with the help of IBM and the U.S. government. Maybe then it could compete on volume. Well, how would that work? Well, let's say Nvidia, let's say they're not too happy with TSMC. Maybe with entertain Intel as a second source. Would that do it? In and of itself, no. But what about AWS and Google and Facebook? Maybe this is a way to placate the U.S. government and call off the antitrust dogs. Hey, we'll give Intel Foundry our business to secure America's semiconductor leadership and future and pay U.S. government. Why don't you chill out, back off a little bit. Microsoft even though, you know, it's not getting as much scrutiny from the U.S. government, it's anti trustee is maybe perhaps are behind it, who knows. But I think Microsoft would be happy to play ball as well. Now, would this give Intel a competitive volume posture? Yes, we think it would, for sure. If it can gain the trust of these companies and the volume we think would be there. But as we've said, currently, this is a very, very long shot because of the, the, the new strategy, the distance the difference in the Foundry business all those challenges that we laid out last week, it's going to take years to play out. But the dots are starting to connect in this scenario and the stakes are exceedingly high hence the importance of the U.S. government. Okay, that's it for now. Thanks to the community for your comments and insights. And thanks again to David Floyer whose analysis around Arm and semiconductors. And this work that he's done for the past decade is of tremendous help. Remember I publish each week on wikibon.com and siliconangle.com. And these episodes are all available as podcasts, just search for braking analysis podcast and you can always connect on Twitter. You can hit the chat right here or this live event or email me at david.vellante@siliconangle.com. Look, I always appreciate the comments on LinkedIn and Clubhouse. You can follow me so you're notified when we start a room and riff on these topics as well as others. And don't forget to check out etr.plus where all the survey data. This is Dave Vellante for the Cube Insights powered by ETR. Be well, and we'll see you next time. (cheerful music) (cheerful music)

>> Live, from Toronto, Canada, it's theCUBE! Covering Global Cloud and Blockchain Summit 2018, brought to you by theCUBE. >> So, welcome to the Global Cloud and Blockchain Summit. I'm about to hand you over to John Furrier, who is the Co-Founder and Co-CEO of SiliconANGLE Media and Executive Editor at theCUBE, he's about to do a Fireside Chat with Al and Mathew, I'll let him introduce you to them as well. He's also involved in a major blockchain project himself, so he's going to get into that with those guys as well. So, and tomorrow we start at nine, in the meantime, enjoy the evening, enjoy the food, enjoy the chat, and I'll let you go. >> Okay. Hello? Thank you Ruth, appreciate it, thanks everyone for being part of this panel, Fireside Chat, want to make it loose, but high impact for you guys, I know, having some cocktails, having a good time. If there's any questions during, then at the end we'll pass the mic around, but. We want to have a conversation, kind of like we always do down in the lobby bar, just talking about crypto and cloud, and we ended up talking about cloud computing and crypto a lot because those are two areas that are kind of converging, and the purpose of this event. So we really wanted to share some thoughts around those two massively growing markets, one is already growing, it's continuing to be great: the cloud, and blockchain certainly is changing everything. These two important topics, we want to flesh them out, Al Burgio is the Serial Entrepreneur/Founder of DigitalBits, he's founded companies both in cloud and blockchain, so he brings a great perspective. And Matt Roszak, leading crypto investor, entrepreneur and advocate, well known in the crypto space for goin' way back, I think you gave a couple bitcoins to some very famous people early on, we'll get into that a little bit later. So guys, thanks for being part of the panel and Fireside. First question is: we know how big the money is, I mean the money is crypto is is flowin' around the world, and cloud computing we've seen specifically, and certainly in coverage now with Amazon's success, Amazon Web Services, and Microsoft and others. Trillions of dollars being disrupted in the traditional kind of the enterprise, data center area, and blockchain is doing that too, so we want to get into that. But first, before we get into it, I want you guys to take a minute to explain for the folks, just to set the context, the kinds of projects you're working on. Now Al, you have DigitalBits, Matt you're investing and you're finding a lot of interesting token dynamics. So just take a minute. Al, start. >> (mic off) So-- Everybody hear me okay? Alright, perfect. Well thanks for that lovely intro. Yes, my name is Al Burgio, I'm, I've founded a few companies, as John mentioned. Before the cloud there was internet, (light laugh) and so it started for me in the late '90s in the e-commerce era. But more recently I pioneered what's known as Interconnection 2.0, and I did that with the company called Console, for those that may know PCCW, recently it was acquired by PCCW. And with that we disrupted the way networks at the core of the internet were connected together More recently I've founded the DigitalBits project, and now DigitalBits blockchain network, and with that, you can kind of think of that as the trading and transaction layer for the points economy and other digital assets, and you can do a lot of really interesting thing with that, it's really about bringing blockchain to the masses. >> Matt, what're you workin' on? >> So, Matthew Roszak, Co-Founder and Chairman of Bloq. Bloq is a enterprise software company, we do two things, the premise is the tokenization of things, so we think the money identity, new layers of the internet are going to be tokenized. And so, we go to market in two ways, one is through Bloq Enterprise, and these are all the software layers you need to to connect to tokenized networks, so think a wallet, a node, a router, etc. And then Bloq Labs we build, and partner with, some of the leading tokenize networks and applications, so we build a connective tissue and then we actually build these new networks. I started this space as an investor over five/six years ago, investing in some of the best entrepreneurs and technologists in the space build a great network. But I love building companies, and so my Co-Founder and I, Jeff Garzik, built Bloq two and a half years ago. And then lastly, also serve of Chairman of the Chamber of Digital Commerce, so, so if you believe in these new tokenized money layers, identity layers, etc, regulation comes into play. Certainly today from an institutional adoption level, and so if you care about this space, you need to spend time to kind of help that dialogue improve; this technology moves way faster than folks in DC and elsewhere, so. >> And the project that we're workin' on at SiliconANGLE, is we've tokenized our media platform, and we're opening it up to a token model, and have kind of changed the game. So all three of us have projects, want to put those in context, we build everything on Amazon Web Services, so, the view of the cloud, we also cover it. The cloud computing market is booming, we see that Amazon Web Services numbers empower the earnings for Amazon's company, obviously Apple's trillion dollar evaluation those are clear case studies; but blockchain could potentially disrupt it all, and Al, I want to get your thoughts, because even today in the news at Microsoft Azure, which is their big cloud provider, announced blockchain as a service. And folks that are in either the data center business or in cloud know the shift that's happening in the IT world, but no ones really connected the dots on where blockchain intersects, and also, is it an opportunity for the cloud guys, what's the landscape look like, so. What's your thoughts on that, how are they connected, what does it mean, how does a cloud company maintain their relevance and competitiveness with blockchain? >> Well, just pointing on the fact that, you know, today we had that new Microsoft, the Azure cloud, their support and evangelism for blockchain. You know, a company, I think it's very important that this isn't an ICO, two kids in a garage saying their doing something blockchain this is a massive, multi-billion dollar company; and making a decision like that is not trivial, it's many, many departments, a lot of resources, before such a thing's announced. So, that's, not only is it validation, but it's a leading indicator as to this trend, that this is clearly something that's important. And a lot of people, if you're not paying attention, you need to be paying attention, including if you're in the cloud industry, 'cause many companies obviously do compete with, with Microsoft and AWS, so. It may be still early, but it's not that early, in light of the news that we saw today. With that, I would say that, a lot of the parallels I like to kind of, if I was an infrastructure provider I'd look at this from the standpoint of the emergence of Linux when it first came on the scene. What was important for companies like Red Hat to be successful, they had competition at the time, and you had shortages of Linux, let's say engineers, and what have you. And so, a company like Red Hat built a business around that, and they did that by how they kind of surfaced and validated themselves to the enterprise of that era, was partnering with hardware companies, so, it was Intel, IBM, and then Dell, HP, and they all followed, and then all of a sudden, which version of Linux do you want to use? It's Red Hat, you're paying for that support, you're paying Red Hat. And, you know, then they had their hockey stick moment. Today, you know, it's not about hardware companies per se, it's about the cloud, right? So cloud is the new hardware per se, and many enterprises obviously are looking at cloud computing companies and cloud computing providers, infrastructure providers, as the company that they need to support them with the infrastructure that they use, or sorry the technologies that they use, right? Because they're not necessarily supporting these things and making sure that they're always on within the basement of that enterprise, they're depending, or outsourcing, to depending on these managed IT providers. This was very important that whatever technologies they're using in the lab, that ultimately their infrastructure partners are able to support the implementation, the integration, the ongoing support of these technologies. So if you think of blockchain like an operating system or a database technology, or whatever you want to call it, it's important that you're able to really identify these key trends, and be able to support your customer and what they're going to need, and ultimately for them, they can't have a clog in their digital supply chain, right? So, it's clearly emerging. Microsoft is validating that today, you know, clearly they have the data, that they're seeing for their existing enterprise customers, and they don't want to lose them. >> Yeah, but remember when cloud came out; you and I have talked about this many times Al that it wasn't easy to use, I remember when Amazon Web Services came out, it was just basically, it was hard to command line, basically you had to use it, so, it became easier now, it's so easy and consumable. Blockchain, similar growing pains, but, we don't want to judge it too early with the opportunity that it has, it's going to get easier, what're your thoughts? And it has to scale by the way, Amazon, at a large scale. >> Yeah, I mean-- >> So blockchain has to scale and be easier, your thoughts? >> Another kind of way to think of it is, to not necessarily think of cloud computing, but the evolution the internet went, you know, in Internet 1.0, you know, we went through this dial-up modem era, things were very raw back then; great visions we had of the future, like, it's going to be amazing for video one day! But, not during dial-up modem era, and eventually, you know, it eventually happened. And user interfaces improved, and tool sets improved and so forth. You know, fast forward to today, we have all of that innovation to leverage, so things will move a lot faster with blockchain, it did start very raw, but it's, it's moving much faster than anything we've seen definitely in the '90s and in the last decade, so. It's just, you know, it's a matter of moments, not years. >> And I think Al brings up a great point on leverage, because Amazon leverages infrastructure to a point where it's larger than Google, Azure, and IBM's public cloud combined, and so yeah, massive leverage there. And so, when these big cloud providers provide this blockchain as a service, it is instrumented and built on top of their existing infrastructure, not necessarily on blockchain infrastructure. So, it's an interesting dynamic where they're putting it on top of existing infrastructure that's there, but what's being build right now is the decentralized Amazon Web Services. So you have every layer of Amazon being re-imagined, like, and incentivized so you have distributed compute and access and storage and database. And so, what will be interesting to see is that, given this massive opportunity, will Amazon and some of these other incumbent cloud providers become the provisioning networks of the future? Of all this new decentralized resources that get, again, if you want storage, you have to start having smarts to say: if I'm going to go to Sia or Filecoin or Genaro or Storj, compute, etc; you have to start being a provisioning layer on top of that to kind of, you know, make that blockchain essentially work. So, it'll be interesting to see the transition 'cause today the lightweight versions to say yeah, I have a blockchain as a service strategy, and that's like, well done, and check the box. Now, the question is how far in this new world will they go down? And, as it gets more decentralized, as universities and governments, corporations, plug their access utility into these networks, and to see how that changes. That is much bigger than the Amazon of today. >> I think that's an interesting point, I want to just drill down on that if you don't mind, 'cause I think that's a fundamental observation that every layer's going to be decentralized. The questions I think I'm asking and I'm seeing is: How does it all work together? And then what's the priorities? And the old model was easy; got to get the infrastructure, got to get servers, (laughs lightly) and you know, work your way up to the top of the stack. What cloud brings also is that: a software developer can whip up an application, maybe a dApp on a test network and go viral, and the next thing you know they have a great opportunity, and then they got to build down. So the question is: What are you seeing in terms of priorities on stacks, portions of the stack that are being decentralized and tokenized, do you see patterns, trends, as an investor, is there a hotter (laughs) area than others, how do you look at that? >> Well, I think it's, it's in motion right now it's, like I said, every layer of AWS is getting thought through in how to create these digital cooperatives, I have excess storage, I'm going to contribute it to this network, and I'm going to get paid in tokens when a user uses that storage network, and pays for it in those native tokens and so that, coupled with all the other layers, is happening. From a user perspective, we may not want to be going to pick a database provider, a storage, a compute, etc, we're likely going to say: I want a provisioning layer, and provision this and execute this, much like if we, you know, there'll be new provisioning layers for moving money, I don't care if routes through Lightning or Litecoin or Doge or whatever, as long as the value gets across the pond or the app gets provisioned appropriately based on you know, time, security, and cost, and whatever other tendance are important, that's all I care about, but; given the depth and the market for all that, I think it'll be interesting to see how these are developed with the provisioning layers, and I would think Amazon or Azure, the future of that is, is more provisioning than actually going and doing all that at the end of the day. >> That's great. I want to get your thoughts guys on innovation. My good friend Andy Kessler wrote an op-ed in today's Wall Street Journal around, an article around the government, the US government getting involved. You know, there's Twitter, Facebook, the big platforms, in terms of how they're handling their media, but it brings up a good point that with more regulation, there's less innovation. You mentioned some things outside the United States, it's a global cloud, cloud's operating globally with regions, it's a global fabric. Startups are really hot in this area so; how do you view the ecosystems of startups, in terms of being innovative, things happening that you think that're good, and things that aren't good, obviously I'm not a big of the government getting involved, and managing startups, the ecosystems but, blockchain has a lot of alpha entrepreneurs jumping in, you've looked at all the top ventures, the legit ventures, they're all alpha entrepreneurs, multi-time serial entrepreneurs, they see the opportunity and they go for it. Is the startup environment good, is there enough innovation opportunities, what're you thoughts on the opportunity to be innovative? >> Yeah, Al and I were just talking about this before the panel here, and were talking about our travels in Asia, and when we go there it is 10, 100 X of energy and get-it factor, and capital, and the markets are just wildly more vibrant than you know, going to some typical markets here in San Fran and New York in North America, and, so it's interesting to see that when you heat map the world, what's really happening. And you know, people are always saying: oh well this, this FinTech, or InsurTech, or whatever tech, is going to make a dent in Silicon Valley or Wall Street. This technology, this new frontier, is definitely going to do that. I think some of that will get put into more focus based on regulation, and there's two things that will happen; there's obviously a lot of whippersnapper countries that are promoting a safe place to innovate with crypto, I think Malta, Gibraltar, Barbados, etc, and there were-- >> Even Bermuda's getting in on the mix now. >> Yeah! I mean so there's no shortage of that, and so, and obviously this ecosystem outpaces the pace of regulation and then we'll see like the US doing something, or you know, other fast followers to try and catch up, and say hey, we're going to do the cryptocurrency act of 2022, miners get free power, tax-free, you know crypto trading, you know just try and play catch up. 'Cause it's kind of hard in the last year or 18 months we've seen this ecosystem go from this groundswell to this now institutional discussion; and how do you back end the the banking, the custody, all these form factors that are still relatively absent. And so, you know, we're right in the middle of it. >> It's a whole new way, you got to follow the money, right? Al, you and I talked about this; capital markets, you know entrepreneurs need to raise money and that's a good thing, you need to get capital to do stuff. >> Yeah, this is a new phenomenon that the world has never experienced before, it's awesomeness when it comes to capital formation; you know, without capital formation there is no innovation. And so the fact that more capital can be raised, it's the ultimate crowd sourcing in such an efficient period of time, capital being able, the ability to track capital from various different corners of the world, and deploy that capital to try to fuel innovation. Of course, you know, not all startups or what have you succeed, but that was true yesterday, right? You know, 90% of startups fail, but they all will give it some meaningful amounts of checks, people were employed and innovation was tried; and every once in a while something emerges that's amazing. If you can do that faster, right, when you have the opportunity to produce more and more innovation. And, of course with something so new as cryptocurrency, things like ICOs and what have you, people may kind of refer to it as the wild wild West, it's not, it's an evolution. And you have-- >> It's still the wild west though, you got to admit. (laughs) >> Well, it is but, we're getting better at it, right? As a world, this isn't the Silicon Valley community getting better at venture capital or some other part of the United States or Canada getting better at venture capital; this is the world as a whole getting better at capital formation. >> Yeah, that's a great point. >> In the new way of capital formation. >> And I wanted to just get an observation on that. I moved to Silicon Valley 20 years ago, and I love it there, for venture capital and new startups, it's the best place in the world. And I've seen people try to replicate Silicon Valley, we're the Silicon Valley of Canada, we're the Silicon Valley of the East or Europe, and it's always been hard to replicate, because it was a venture model, and you needed venture capitalists and you need money, you need a community, the culture, the failure, the starting over, and just, you know, gettin' back on the horse kind of thing. Crypto is the first time that I've seen the replica of that Silicon Valley dynamic, in a new way, because the money's flowing, (laughs) and there's community involved in crypto, crypto has a big community aspect to it. Do you guys see that as well? I mean I'm seeing, outside the United States, a lot of activity. Is that something that you're seeing? >> So, the first time we saw, well, last time we saw everybody trying to replicate Silicon Valley was first internet, you know, there was Silicon Swamp, there was Silicon Alley, there was silicon this-- >> Prairie. >> Every city was >> Silicon Beach. >> A silicon version of something, and then the capital evaporated, right? We had a mass correction happen. What wasn't being disrupted was value exchange, right, and so this is being created now, it is now possible for this to happen, and it's happening, we're seeing amazing things, Matt said, you know, in Asia. It's a truly awesome force, if anybody has an opportunity to go, they should go, it's unbelievable to experience it, and it really opens your eyes. >> And you've lived through a lot of investments during those .com days and through history now, you've seen a lot of different things. Your observations with the current state of the capital formation, startup landscapes, the global ecosystem around crypto and how it's different from say venture or classic rolling up companies and those kinds of things? >> Yeah, you hear a lot of this, you know, we're in a bubble, it's speculative, etc. And I think that when you look back at history of infrastructure, whether it's railroads, telephony, internet, and now crypto and blockchain, it's interesting, like, if you said: it would take this amount of money to innovate and come out the other end of internet with this kind of infrastructure, these kinds of applications, with these kinds of lessons learned, nobody would sign up for that number, right? It needs this fear, and greed, and all the other effervescence of markets to kind of come out the other end and have innovation. I think we're going through a very similar dynamic here with crypto and blockchain where you know, everything's getting tokenized, everything's getting decentralized. We're talking about fundamental things like money, you know, it's not like we're talking about pet food and women's shoes and airline tickets, we are talking about money, identity, things that will enable like other curves to really come into focus like in and out of things and the kind of compounding of intersections when some of these things get right is pretty extraordinary. And so, but I like what Al said in terms of capital formation and that friction to get from, you know, idea to capital to building, is getting compressed Yes, there will be edge cases of people taking advantage of that, but at the other end of this flow will be some amazing innovation. >> What do you guys think about the, if you had to answer the question with one answer, of what is the high order bit of why blockchain's so important? For me, I see it, from my standpoint, I'll just start, I see it making inefficient things more efficient for any use case, and that's being re-imagined, which is everything from IOT or whatever. Efficiency is a big thing, at least I see that. What do you guys see as a high order bit in terms of you know, the one thing that you'd say blockchain really impacts the world in terms of you know, impact, financial, etc? >> Well, I think with decentralization and all these things that we're seeing it's kind of evened the playing field. It's allowing for participation where parts of the world were unable to participate. And it's doing a whole lot of things in that area. And that's truly awesome, to really grow the economy, grow the global market, and the number of participants in that market in all areas. That's the ultimate trend at what's happening here. >> And your information? >> Absolutely, and I think there's two things, there's this blockchain dialogue, and then there's this crypto decentralization, tokenization dialogue, and on the blockchain side you have lots of companies engaging in blockchain and trying to figure out how it applies to their business, and you hear everything from McKinsey and Goldman saying financial services will save 100 billion dollars in operating expenses by applying blockchain technology, and that's great. That is probably low in terms of what they'll save, it's, to me, is just not the point of the technology, I think that when you kind of distill that down to say hey, for a group of folks to use this technology as a shared services thing to lower opex a trading settlement and decrease that, that's great, that is a step stone to creating these tokenized economies, these digital cooperatives. Meaning you contribute something and then you get something back, and it's measured in the value that this token is, like a barometric kind of value of how healthy that ecosystem is. And so, regulated public enterprises, and EC consortiums around insurance and financial services and banking, that is all fantastic, and that gets them in the pool, gets them exercising on what blockchain is, what it isn't, how they apply it, but it's, at the end of the day for them it's cost reduction The minute there's growth or IP, or disruption on the table, they're all going back to their boardrooms to say: hey let's do this, this, or that, but, if there's a way, my favorite class in college was industrial organization, and it sounds weird but, it was, it kind of told ya like how to dissect an industry, you know, what makes them competitive, who the market leaders are, and then, if you overlay like blockchain networks with tokens, with incentives, interesting things could happen, right? And so that future is going to be real interesting to see how market leaders think about how to tokenize their network, how to be, how to say: no I don't want to own this whole industrial network, I have to engage with some other participants and make sure everybody is incentivized to climb on board. So that I think is going to be more of the interesting part than just blockchain-ifying a workflow. >> Well let's just quickly drill down on that, token economics, what you're getting to. So let's assume blockchain just happens, as evolution of technology, let's just assume for a second that it's going to happen in a big way, it's private, public, hybrid chains, with all that good stuff happening, but the token economics is where the business value starts to be extracted, so the question for you is: How do you describe that to someone to look for, what are the key elements of token economics? When does it matter, when is it in play, and how should they be thinking about it? >> Yeah, I mean token economic design and getting a flywheel going to create a network and network effects is really important. You could have great technology, but Al could be a better marketer, and he gets tokens adopted better, and his network will do better because, you know, he was better able to get people to adopt and market a particular, you know, layer application. And so, it's really important to think about how you get that flywheel going, and how you get that kindling going on a particularly new ecosystem, and get users adoption and growth. That is really hard to do these days because some people don't even know what Bitcoin is, let alone to say I'm going to tokenize this layer, and every time you contribute, every time you take an action, you're going to get rewarded for it, and you're share the value of this network. >> Can you give me a good example of what's happening today that you can point to and say: that's a great example of token economics? >> Well, you see, I mean the most basic one is shared file storage, right? You know, it's like the Filecoin, Sia, Genaro model where, you know, you contribute you know, the unused storage in your laptop or your university data center or a corporate data center, and you say I'm going to contribute this, and when it's used I get these tokens and, you know at the end of the day or week or year you see what these tokens are worth, and was that worth your contribution? And so as these markets develop, and as utility develops, we'll see what that holds. >> Al, you got an example you could share? DigitalBits is a good use case obviously. >> Actually, I'm not going to use DigitalBits (John laughs) just to be neutral. This is one that Matt will know very well, definitely better than I, but one that I've-- the simpler something is, the easier it is for people to understand, and its like oh that makes sense, you know. You know, Binance is one that's very simple, you know it's a payment token, if you pay with some other currency, you pay, you know, Pricex, if you pay in the next few years with their token, you'll get the service at a discount. And in addition to that, they're using a percentage of profits, I think it's every quarter, to buy back up to, ultimately up to, 50% of tokens that are in circulation. So, you know, it's driving value, and driving return, in essence, if I can use that word. So for a user it's simple to understand, for someone that likes to speculate it's easy for someone to understand in terms of how the whole model works, so it's not some insanely complicated mathematical equation, that we can yes we can trust the math. And so in some cases, some adoption is going to just be, you know, attract participants based on simplicity. In other cases the math is important, and people will care about that, so, you know not all things are necessarily equal, and not necessarily one method is right, but there are some simple examples out there that that have proven to be successful. >> That's awesome, one last question, before we open it up if anyone has any questions. If anyone has any questions, if they want to come up, grab the microphone, and ask the three of us if you've got anything on your mind. And while you're thinking about that I'll get the final question for these guys is: A lot of people ask me hey, I want to be on the right side of history, what side of the street should I be on when the reality comes down that decentralization, blockchain, token economics, decentralized applications, becomes the norm, and that re-imagining actually happens? I don't want to be on the wrong side of history. What should I be doing, how should I be thinking differently, who should I be following, what should I be paying attention to? How do you answer that question? >> I think, at the basic level, you know, turn off your phone, lock your door, and study this technology for a day, it's the best advice I could give. Two: buy some crypto. Once you kind of have crypto on your phone, in your wallet, something changes in your brain, I think you just feel like you-- >> You check the prices every day. (all laugh) >> You lose a lot of sleep. And then after that, you know, I think you start engaging in this space in a very different way. So I think starting small, starting basic, is an important tenet. And then, what's amazing about this space is that it attracts the best and brightest out of industry, and law, and government, and technology, and you name it, and I'm always fascinated the people that show up and they're like yeah, I'm in a 20 year, you know, veteran in this space and I want to get into blockchain, it just attracts some of the best and brightest. And, I think we're going to see a lot of experience coming into the space, you know, this has been a, what I'd say a bottoms up groundswell of crypto and blockchain and the evolution of the space. And I think we're starting to see more some more mature folks come in the space to to add some history and perspective and helpin' the build out of this, and to build a lot of these networks. I think that the kind of intersection of both is going to be very healthy for the space. >> Al, your thoughts? >> Definitely agree with Matt. Definitely to lock yourself up and just try to absorb information, everyone has access to the internet, there's plenty of information. If you don't like to read go watch a few YouTube videos, just people explaining the stuff, it's really fascinating, the various different use cases and so forth. You definitely have to buy some, and, you know, whether it's five dollars worth, just go through the whole experience of being able to trade something of value that a few years ago didn't exist, and be able to trade it for something else of value is a pretty phenomenal experience. Then trying to go buy something with it, it's even more of a fascinating experience, I just bought something that used, again, something that didn't exist a few years ago. But, what I would add to that as well, you really have to get out there; if you keep surrounding yourself with people saying aw, this is, eh, whatever, >> It's never going to work. >> It's crazy, it's for criminals, and all that fun stuff. You're going to be last place. So coming to conferences, obviously future's conference you're going to meet a lot of interesting, great people, and that consistent experience, you'll learn something every time. You know, at the end of the day, I remember, I'm sure all three of us remember, with the birth of the internet there was many people that said you know the internet thing, it's crap, it's for kids, you know. And we had first movers, we had willing followers, and then the unwilling followed, you don't want to end up being-- >> The unwilling followers. >> Yeah, the unwilling. >> Alright. Does anyone have any questions they'd like to ask? Come on up. Yeah. We're recording, so we want to get it on film. >> So I have two questions. The first one is for you, Al: Two years ago I interviewed with IIX before it was Console, and I want to know why you didn't hire me? (Sparse laughs) No I'm kidding! That was a joke. Actually, I thought each of you brought up some good points, minus you Al. (chuckles) I'm just kidding. But what I really wanted to ask you guys is: so you talk a lot about this, the tokenized economy and kind of the roadmap and the things to get there, you talk about sediment layer, right, Fiat to crypto, sediment layer, your identity protocols, your dApps, X, Y, Z, right? The whole web 3.0 stack, I want each of you, or I want at least input from both of you or all of you, what are the hurdles to getting to a full adoption of web 3.0 stack, and make a bold prediction on the timing before we have a full web 3.0 stack that we use every day. >> That is a awesome question actually, timelines. You could be, being in technology, being in venture, you could be right, and you could be off by three, five, seven, 10 years, and be so wrong, right? And then at your retirement dinner you could say: I was right, but Tommy wasn't right. So, this is really hard technology, in terms of building systems that are distributed, creating the economic models, the incentive models, it takes a lot to go right in the intersection of all this. But it's not a question like is this happening? No, this is happening, this is like, it's in motion. The timelines are going to be a little elusive, I'm way more pragmatic, I was one of the early guys in the early internet, and you know everything was going to be .com and awesome and fantastic. But the timelines were a little elusive then, right? You know, it's like when was, people are thinking of today's Amazon was going to be the 2005 Amazon, you know, it's like, that took about another decade to get there, right? And people could easily just buy stuff and a drone or a UPS guy would just deliver it, and so, similar things apply today. And you know at the same time we all have a super computer in our pocket, and so it's a lot different. At the same time we're dealing with trusted mediums right? The medium of money, the medium of identity, all these different things they're, they're things that you know if I say download Instagram, and let's share cat pictures or whatever, it's not a big deal, our trust is really low for that, let's do it. For money, it's a different mental state, it's a different dynamic, especially if you're an individual, a government, or an enterprise, you go through a whole different adoption curve on that, so, you know, it is at grand scale five to 10 years, right? In any meaningful way. And so we still have a lot of work to do. >> My answer to that question, it's a good one, your question was a good one, my answer's a little bit weird because it's multi-generational. The first generation pivot was when the internet was born was because of standards, right? The government had investment. The OSI model, open system interconnect, actually never happened, the seven layers didn't get standardized, only a few key ones did; that created a lot of great things. And then when the we came out, that was very interesting protocol development there, the TCP/IP stuff, I mean HTP stuff. I don't see the standardization happening, because cloud flipped the stack model upside down because Amazon and these guys let the software developers drive the value. It used to be infrastructure drove the value of what software could do, then software became so proliferated that that drove the value of the infrastructure, so the whole cloud computing equation is making the infrastructure programmable for the first time, not the other way around, so. The cloud phenomenon's all about software driving the value, and that's happening, so. It's interesting because with blockchain you can almost do levels of services in a cloud-like way with crypto, I mean with blockchain and token economics, and have a partial stack. So think that this whole web 3.0 might be something that no one's every seen before. So, that's kind of my answer, I don't really know if that's going to be right or not, but just looking at the future, connecting the dots, it's probably not going to look like what we've seen before, and if the cloud's an indicator it's probably going to be some weird looking stack where certain sections are working, and then evolution might fill in the other ones, so. I mean, that's my take, I mean, but standards will play a role, the communities will have to get involved around certain things, and I think that's a timeless concept. >> Timing. >> Oh, timing. I think it's going to be pretty quick, I think if you look at the years it took for internet, and then the web, everything's being compressed down, but I think it's going to be much shorter. If it was a 20 year cycle in the past, that gets shortened down to 15 with the internet, and this could be five years. So five to 10 years, that could be the impact in my mind. The question I always ask is: what year will banks no longer be involved in anything? Is that 20 years or 10 years? (laughs) Exactly, so, yeah, follow the money. >> So I would say that in terms of trying to keep your finger on the pulse with things and how you kind of things, see things evolve; things are definitely moving a lot faster, you know in the past you would probably say seven to 10, I'm not sure if I would say five, sorry five to 10, it definitely feels to me that it's five max til we could start to see some of these key things fall into place, so. >> So could you answer the first question? >> What was the first question? >> Why didn't you hire me? (audience cringes) >> We've met before? Sorry. (all laugh) >> I have a question, this is Dave Vellante, Co-Host of theCUBE. And I want to pick up on something John you just said, and Matt you were talking about Goldman Sachs and Morgan Stanley, it's not about them saving hundreds of millions of dollars, it's really about them transforming business, so. And John, you just asked the question about banks, I want to actually get your answer to this: Will traditional banks, in your opinion, lose control of payment systems? Not withstanding your bias. (laughter) >> Yeah, I am definitely biased on this. But, I mean, I've been in front of the C-suite of banks, credit card companies, etc, and I said, you know, in about a decade, the center of what you do and how you make money is going to be zero. And, 'cause there'll be networks, and ways to transmit money that'll be by far cheaper, or will be subsidized by other networks, meaning, and those networks are Apple, Amazon, Alibaba, you know, Tencent, whatever networks that're out there, that're engaging in collaboration and commerce and everything else, they will give away payments as just a courtesy, like people give away messaging or email or something, as a courtesy to that network, and will harden that network, and it'll be built and based on blockchain technology and cryptocurrencies, so they don't necessarily have to worry about, you know, kind of subtle payments. But these new networks will start to encroach on banks, the banks are not worried about other banks today, the banks should be worried about these new networks that're being developed. >> How many people still have a home phone line? >> That was elegant, I like that. >> You know, I mean there's a generation of people that still like going to banks, they'll keep them in business for a while. But I think that comes to an end. >> I mean, when we covered a lot of the big data market when it started, the argument was mobile will kill the banks outlets, and now with ATMs there's more bank, more baking branches than ever before, so I think the services piece is interesting. >> And also, if you look at even the cloud basis, the software as a service, SaaS space, a decade, decade and a half ago, you would ask SAP, Oracle, what have you, what's your cloud strategy? And they'd be like cloud? That's just more efficient delivery model, not interested. 90 some billion dollars of M and A later, SAP, Oracle, etc, are cloud companies, right? And so, if banks kind of get into that same mode to say well, yeah, we need to play catch up and buy digital currency exchanges and multi-currency wallets, and this infrastructure and plumbing to be relevant in the next world, that would be interesting. But I think technology companies have as much an advantage to do that as as financial services companies, so it'll be interesting to see who kind of goes into that, goes into the crypto ecosystem to make that their own. >> It's interesting. We were talking before we came on and the OSS market, operational support systems is booming, and that's traditionally been these big operational outsource companies would manage big projects, but, if you look at in the first half of 2018, there's been a greater than 20 billion dollar commercial exits of companies through private equity merchants, IPOs, around OSS, and that's where we see operational things happening, CoreOS, Alfresco, MuleSoft, Pivotal went public, Magneto, GitHub, Treasure Data, Fastly, Elastic, DataStax, they're all in the pipeline. These are all companies that aren't cloud, they're like running stuff in cloud, so, this could be a tell sign that potentially the the blockchain operating market is going to be potentially a big one. >> Yeah, and then even look at BitMate, the world's largest miner in crypto. So, they did about a billion dollars in profit last year, did about a billion dollars in profit just in the first quarter going public, just raised a billion dollars last month, at a reportedly 50 to 70 billion dollar evaluation in Hong Kong in the next month, and the amount of money they'll raise will eclipse what Facebook raised. And so I think the institutional, the hardware, the cloud computing, the whole ecosystem starts to like resonate and think about this space a lot differently, and we need these milestones, we need these, whether they're room huddles or data points to kind of like think about how this is going to affect your business and what you do tomorrow morning. >> Any more questions from the crowd? Audience? Okay, great, well thanks for attending, appreciate you guys watching and listening, and guys thanks for the conversation; cloud and blockchain convergence. Collision course, or is it going to happen nicely, Al? >> Yeah, I think it's going to be a convergence, I don't see it necessarily as a collision course. >> And a lot of money to be made on this opportunity these days, and cloud convergence with blockchain. >> I concur with Al, I think there's going to be convergence, I think us most smarter players will engage and figure out their models in this new crypto and tokenized era. >> Thanks so much guys, appreciate it, give these guys a round of applause. (audience applause) Thank you very much. (bubbly music)

>> Narrator: From the computer museum in Mountain View, California, it's theCUBE. Covering ACG Silicon Valley Grow Awards brought to you by ACG Silicon Valley. >> Hey welcome back everybody, Jeff Frick here with theCUBE, we're in Mountain View, California at the ACGSV awards, the grow awards, 14th annual. We've been coming for a couple of years, about 300 people celebrating, really, there's a lot of networking, it's an interesting organization. Check it out, we're excited to have our next guest, he's Nick O'Keefe, partner of Arnold and Porter. Nick, great to see you. >> Likewise, great seeing you, great to talk to you. >> So we were talking a little bit off camera, you came to Silicon Valley in 2000, and were saying you seen a lot of changes in those 18 years. >> Yeah it's phenomenal, it's epitomized by the great gathering that we have here today. As I was saying earlier, when I came, I worked in Silicon Alley. Silicon Valley was sort of a bigger version of Silicon Alley and it's just kept growing. You know, the practice between East Coast and West Coast is converged. I mean, there's some of the biggest most successful companies in the world are based here now, and some of the biggest deals. It's just incredible in a short period of time how that's happened. As I was saying earlier, you know, one of the things that really opened my mind, opened my eyes to how successful Silicon Valley is, is I opened up the Middle East offices to another law firm right around the time of the Great Recession. And it's seems like every country is trying to emulate Silicon Valley. We advised on how they can replicate it, what kind of laws they'd have to put in place, what kind of ecosystem they'd have to build. And there's just something really unique here that's really difficult to emulate in different countries-- >> Right because it's all industries. Right, all industries tend to aggregate and congregate around a usually a specific location, or one or two. You think of financial services in New York and London. Because you get the people, and those people leave and start new companies. You have the schools that drive people in their associates. It's tough, it's tough to replicate a whole ecosystem if you don't have all those components, and then, as it gels for a awhile, I think the barriers to entry become even higher. So, you get different versions of it, but really not the same. >> Yeah that's right, I mean, we have all the ingredients here, we have the great educational institutions, you know, Berkeley, Stanford. You have the financial institutions or the venture money. Very sophisticated population, it's just wonderful living here. Just so many smart people around, you can't just lift them up and put them somewhere else, they all have ties in the community. It's just very tough. What's interesting about financial services you mentioned, typically that's a New York-based practice, but with Fintech, you're seeing some of that migrate over here. Cryptocurrencies, a lot of that technology is being developed here, and that's really a convergence of financial services and tech, and Silicon Valley is the hub of that. >> Yeah, I really think that Stanford and Cal don't get enough credit. And Santa Clara and some of the other schools, but those two particularly, because they attract really great talent. They come, their weather's great, they've got a culture of innovation, they've got very nice connections with the local business community, so people don't leave. So you got this constant influx of smart people, and they stay, where a lot of other places, even great academic institutions don't necessarily have the business climate, the weather climate, or kind of the ecosystem to keep their brightest, it's there locally. So I think that's just a huge driver. >> Yeah absolutely, I completely agree. And there's, even if they don't stay, they still maintain their ties here. You know, people all over the world come to study here, as you're indicating. You know, I'm doing a deal currently with some Chinese people who did graduate research locally, and they formed a very successful start-up in China, where currently, we're doing a deal with. And the fact that Stanford, they couldn't be where they were if they hadn't gone through Stanford, and they develop ties with the region, and with the companies in the regions, so they're very much, sort of a diaspora of Silicon Valley, the way they've operated it. >> Right, what is your take on China? 'Cause to me, China's the big competitor. That's the one, I think, where there's the potential because they got a huge internal market, they're really good at fast following, and you look at Alibaba Cloud, and some of the big, big players over there. I think that's really where the biggest threat to the current US incumbents is going to come. >> It's very interesting, it's sort of two, two faceted. On the one hand, obviously, a huge population, and as the country develops, I mean, ultimately within the fairly near future, the Gross National Product is expected to overtake the US. But you have sort of a different culture, and they have the same challenges as everyone else does, this sort of replicating Silicon Valley, I don't think they'll ever take Silicon Valley, you know, take the crown away from them. And I think, what I'm seeing now in a couple of deals is, so the current administration is obviously trying to defend the US trade position, but it's having deleterious effects in that it's preventing Silicon Valley companies from growing and from doing deals. You know, a lot of the Chinese funds they're lucky to invest in the US, where there's currently some regulations that are expected to be proposed next month that could inhibit Chinese investment in the US. Now that's not good for Silicon Valley, so the attempt is to, sort of, protect the US economy, but, you know, I can see certain effects that are happening that are not helpful. It's interesting, there's sort of a symbiotic relationship between development here in the US, and development in other countries, and it's difficult to fight it 'cause you're going to have weird effects. You know, I think the US, it's just a unique country. You know, I think it'll always be unique, and I personally, I don't have a fear that China is going to somehow usurp the position the US occupies, or India, or other huge country, I'm just very polished on Silicon Valley, and the US generally. >> Yeah it is amazing 'cause I've been here a little longer than you, and it just, it just keeps reinventing, right? It's just wave after wave after wave, it was originally silicon and microprocessors, and then it's software, and then it's IOT. And now, you see all the automotive people have innovation centers here. So wave after wave after wave, just continues to come, and then we're going to have, you know, 5G, and it's this whole move to asymptomatically approaching zero cost of store, compute, and networking, and infinite, basically, amounts of those on tap. It really opens up a huge opportunity. >> It really does, yeah, and it's, a lot of it's going to come from here. >> Alright Nick, well thanks for taking a few minutes of your time, and stopping by. >> You bet, my pleasure. >> Alright he's Nick O'Keefe, I'm Jeff Frick, you're watching theCUBE, from the ACGSV awards, Grow Awards in Mountain View, California. Thanks for watching. (digital music)

>> Commentator: Live from Stanford University it's theCUBE covering the Women in Data Science Conference 2017. (jazzy music) >> Hi, welcome back to theCUBE. I'm Lisa Martin live at Stanford University at the second annual Women in Data Science WiDS tech conference. We are here with Ann Rosenberg from SAP. She's the VP head of Global SAP Alliances and SAP Next-Gen. Ann, welcome to the program. >> Thank you so much. >> So SAP is a sponsor of WiDS. Talk to us a little bit about that, and why is it so important for SAP to be involved in this great womens organization. >> So first of all, in my role as working with SAP's relationship to academia and also building up innovation network we see that data science is a very, very key skill set, and we also would like to see many more women get involved into this. Actually (mumbling) right now as we speak we are at the same time in 20 different countries around the world, 24 events we have. So we are both in Berlin, we are in New York, we are all over the world. So it's very important. I call it kind of a movement what we are doing here. It's important that all over the world that we inspire women to go into data science and into tech in general. So it is important thing for SAP. First of all, we need a lot of data science interested people. You also need our entire SAP ecosystem to go out to universities and be able to recruit a data science student both from a diversity perspective, whatever you are a female or a man of course. >> Absolutely, you're right. This is a very inspiring event. It's something that you can really actually feel. You're hearing a lot of applause from the speakers. When you're looking enabling even SAP people to go out and educate and recruit data scientists, what are some of the key skills that you're looking for as the next generation of data scientists? >> This is an interesting thing because you can say that you need like a very strong technical skill set, but we see more and more, and I saw that after I moved to Silicon Valley for two years that also the whole thing about design thinking, the combination of design thinking and data science is becoming something which is extremely important, but also the whole topic about empathy and also, so when you build solution you need to have this whole purpose driven in mindset. So I think what we're seeing more and more is that it's great to be a great data science, but it takes more than that. And that's what I see Stanford and Berkeley are doing a lot, that they're kind of mixing up kind of like the classes. And so you can be a strong data science, but at the same time you also have the whole design thinking background. That's some of the things that we look for at SAP. >> And that's great. We're hearing more and more of that, other skills, critical thinking, being able to not only analyze and interpret the information, but apply it and explain it in a way that really reflects the value. So I know that you have a career, you've been in industry, but you've also been a lecturer. Is this career that you're doing now, this job in alliances and next-gen for SAP sort of a match made in heaven in terms of your background? >> I actually love that question, probably the best question I ever got because it is definitely my dream job. When I was teaching in Copenhagen for some years ago I saw the mind of young people. I saw the thesis, the best of master thesis. I saw what they were able to do, and I'm an old management consultant, and I kept on thinking that the quality of work, the quality of ideas and ideations that the students come with were something that the industry could benefit so much from. So I always wanted to do this matchmaking between the industries and the mind of young people. And it's actually right now I see that it's started kind of, what I at least saw for the last two years that the industries that go to academia, go to universities to educate or to students to work on new ideas. And of course in Silicon Valley this has been going on for some time now, but we see all over the world. And the network that I'm responsible for at SAP, we work in more than 106 countries around the world, with 3,100 universities. And what I really want to do now, I call it the Silicon Valleys of the world where you are mapping the industries with academia with the accelerators and start ups. It's just an incredible innovation network, and this is what I see is just so much growing right now. So it's a great opportunity for academia, but equally also for the industry. >> I love that. Something that caught my eye, I was doing some research, and April 2016 SAP announced a collaboration with the White House's Computer Science for All Initiative. Tell us about that. >> I mean the whole DNA of SAP is in education. And therefore we do support a number of entity around the world. Whatever we talk about building up a skill set within data science, building skill set in design thinking, or in any kind of development skills is really, really important for us. So we do a lot of work together with the governments around the world. Whatever you talk about the host communication, for example, we have programs called Young Thinkers, Beatick, where you go out to high schools or you go into academia, to universities. So when this institute came up, we of course went in and said we want to support this. So if I look at United States, so we have a huge amount of universities part of the network that I'm driving with my team. So we have data curriculums, education material, we have train to train our faculties, boot camps. We do hackathons, coach games. We do around 1,200 to 1,600 hackathon coach games per year around the world. We engage with the industries out to the universities. So therefore it was a perfect match for us to kind of support this institute. >> Fantastic. Are there any things that SAP does as we look at the conference where we are, this Women in Data Science, are there things that you're doing specifically to help SAP, maybe even universities bring in more females into the programs, whether it's a university program or into SAP? >> Yeah, so for SAP in our whole recruiting process we definitely are looking into that. There is a great mix between female and male people who get hired into the company, but we also, it all start with that you actually inspire young women to go into a data science education or into a development education. So my team, we actually go in before SAP recruiting get involved where we, that's why we build up the strong relationships with universities where we inspire young women, like we do at this event here to why should they go in and have a career like this. So therefore you can see there's a lot of pre=work we need to be done for us to be able to go in and go into the recruiting process afterwards. So SAP do a lot of course in the United States, but all over the world to inspire young women to go into tech. And SAP does what we see today all over the world we have huge amount of female from SAP, female speakers at all our events who stand as role models to show that they are women, they are working for SAP, and are very, very strong female speakers and are female role models for all young women to get involved. So we do a lot of stuff to show that to the next generation of data science of whatever it is in tech. >> Yeah, and I can imagine that that's quite symbiotic. It's probably a really nice thing for that female speaker to be able to have the opportunity to share what she's doing, what she's working on, but also probably nice for her to have the opportunity to be a mentor and to help influence someone else's career. So you mentioned accelerators a minute ago, and I wanted to understand a little bit more about SAP Next-Gen Consulting, this collaboration of SAP with accelerators or start ups. How are you partnering to help accelerate innovation, and who is geared towards? Is it geared more towards student? Or is SAP also helping current business leaders to evolve and really drive digital transformation within their companies? >> So the big (mumbling) I'm working on right now too is as mentioned you said SAP Next-Gen is called SAP Next-Gen Innovation With Purpose. So it's linked to the 17 U.N. global goals. We've seen from now in Silicon Valley when you innovate you actually make innovation web purposes included. And that's why we kind of agreed on in SAP why don't we make an innovation network where the main focus is that all the innovation we get out of this is purpose driven linked to the 17 global goals. Like the event here is the goal number five, gender equality. In that network we actually do the matchmaking between academia. We look at all the disrupted new technologies, experience the technologies like machine learning like what's being discussed a lot here, block chain IOT. And then we look at the industry out there because the industries, they need all the new ideas and how to work with all the new opportunities that technology can provide, but then we also look into accelerator start ups. The huge amount, and often when you're in Silicon Valley you kind of think this is the world of the start ups of the world. So when you travel around the world, that's we we looked into a lot the last two years. We call the Silicon Valleys of the world, any big city around the world, or even smaller cities, they have tech hub. So you have Ferline Valley, you have Silicon Roundabout in London, you have Silicon Alley in New York, and that is where there is a huge amount of gravity of start ups and accelerators. And when you begin to link them together with the university network of the world and together with the industry network of the world, you suddenly realize that there is an incredible activity of creativity and ideations and start ups, and you can begin to group that into industries. And that give industries the opportunity not only to develop solution inside the company, but kind of like go in and tap into that incredible innovation network. So we work a lot with seeding in start up, early start ups into corporates, and also crowd source out to academia and the mind of young people all Next-Gen Consulting project where you similar work with students at universities on projects. It could be big data science project. It could be new applications. So I see like as the next generation type of consultancy and research what is happening in that whole network. But that is really what SAP Next-Gen is, but it is linked to the 17 U.N. global goals. It is innovation with purpose, which I'm really happy to see because I think when you build innovation, you really think about in the bigger, the whole (mumbling) thing that we know from singularity. You should think about a bigger purpose of what you're doing. >> Right, right. It sounds like though that this Next-Gen Consulting is built on a foundation of collaboration and sharing. >> It is, it is, and we have three Next-Gen lab types we set up. In this year we built, last year, we are a new year now, we built 20 Next-Gen labs at university campuses and at SAP locations. And here in the new year more labs is being set up. We are opening up a big lab in New York. We just recently opened up one in Valdov at SAP's headquarter. We have one here in Silicon Valley, and then we have a number of universities around the world where SAP's customers go in and work with academia, with educators and students because what do you do today if you're in industry? You need to find students who are strong in machine learning and all the new technologies, right? So there's a huge need for in industry now to engage with academia, an incredible opportunity for both sides. >> Right, and one last question. Who are you, in the spirit of collaboration, who do you collaborate back with at SAP corporate? Who are all the beneficiaries or the influencers of Next-Gen Consulting? >> So I collaborate, inside SAP I collaborate, SAP have a number of, we have ICN, Innovation Center Network. We have our start up focus program. We have a number of innovation, the labs, a number of basically do all our software developments, so they're heavily involved. We have our whole go to market organization with all our SAP customers and industry, I call them clubs. And then externally is of course academia, universities, and then it is the start up communities, accelerators and of course, the industry. So it is really like a matchmaking. That's like, when people ask me what do you do, and I'm a matchmaker. That's really what I am. (Lisa laughs) >> I like that, a matchmaker of technology and people all over. So you're on the planning committee for WiDS. Wrapping things up here, what does this event mean to you in terms of what you've heard today? And what are you excited about for next year's event? >> So for me, one year ago when I heard about this year I kind of said this is important, this is very important. And it's not just an event, it's a movement. And so that was where I went in and said you know, we want to be part of this, but it must be more than just an event here. It's staying for the need to be much more than that. And this is where we all teamed up, all the sponsors together with ISMIE, and we said okay, let us crowd source it out, let us live stream it out much more than ever. And this is also what the assignment is now, that we to so many locations. This is just the beginning. Next year is going to be even bigger, and it's not like that we will wait to next year. We this week announced the SAP Next-Gen global challenges linked to the 17 U.N. global goals. So we are inspiring everybody to go in and work on those global challenges, and one of them is goal number five, which is linked to this event here. So for us and for me this is just the beginning, and next year is going to be even bigger. But we are going to do so many event and activity up to next year. My team in APJ, because of the Chinese New Year, have already been planned coming up here. >> Lisa: Fantastic. >> And we have been doing pre-event, (mumbling) events. So again, it is a movement, and it's going to be big. That's for sure. >> I completely can feel that within you. And you're going to be driving this momentum to make the movement even louder, ever more visible next year. >> Ann: Yeah. >> Well Ann, thank you so much for joining us on The Cube. We're happy to have you. >> Thank you so much for the opportunity. >> And we thank you for watching The Cube. I am Lisa Martin. We are live at Stanford University at the second annual Women in Data Science Conference. Stick around, we'll be right back. (jazzy music)